EXHIBIT 4.1
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ASSET BACKED FUNDING CORPORATION,
Depositor
OPTION ONE MORTGAGE CORPORATION,
Servicer
and
▇▇▇▇▇ FARGO BANK, N.A.,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of July 1, 2006
ABFC 2006-OPT1 Trust
Asset Backed Funding Corporation Asset-Backed Certificates,
Series 2006-OPT1
================================================================================
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms...............................................
Section 1.02 Accounting..................................................
Section 1.03 Rights of the NIMS Insurer..................................
Section 1.04 Fiscal Year.................................................
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 Originators or the Seller...............................
Section 2.04 Conveyance of the Additional Group 3 Mortgage Loans.........
Section 2.05 Representations, Warranties and Covenants of the
Servicer....................................................
Section 2.06 Representations and Warranties of the Depositor.............
Section 2.07 Issuance of Certificates and the Uncertificated
Regular Interests...........................................
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01 Servicer to Act as Servicer.................................
Section 3.02 Collection of Mortgage Loan Payments........................
Section 3.03 Realization Upon Defaulted Mortgage Loans...................
Section 3.04 Collection Account and Distribution 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 Subservicing; Enforcement of the Obligations of the
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 Assessments of Compliance; Attestation 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 Servicer in Respect of
Compensating Interest.......................................
Section 3.24 Obligations of the Servicer in Respect of Mortgage
Interest Rates and Monthly Payments.........................
Section 3.25 Investment of Funds in the Collection Account and
the Distribution Account....................................
Section 3.26 Liability of Servicer; Indemnification......................
Section 3.27 Reports of Foreclosure and Abandonment of Mortgaged
Properties..................................................
Section 3.28 Protection of Assets........................................
Section 3.29 Limitation of Liability of the Credit Risk Manager..........
Section 3.30 No Personal Solicitation....................................
Section 3.31 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.........................................
Section 4.09 Swap Account................................................
Section 4.10 Group 3 Pre-Funding Account.................................
Section 4.11 Cap Carryover Reserve Account...............................
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 Servicer and the Depositor.................
Section 6.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer or the Depositor...............
Section 6.03 Limitation on Liability of the Servicer and Others..........
Section 6.04 Servicer Not to Resign......................................
Section 6.05 Delegation of Duties........................................
ARTICLE VII
DEFAULT
Section 7.01 Servicer Events of Termination..............................
Section 7.02 Trustee to Act; Appointment of Successor....................
Section 7.03 Waiver of Defaults..........................................
Section 7.04 Notification to Certificateholders..........................
Section 7.05 Survivability of Servicer Liabilities.......................
ARTICLE VIII
THE TRUSTEE
Section 8.01 Duties of Trustee...........................................
Section 8.02 Certain Matters Affecting the Trustee.......................
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.......
Section 8.04 Trustee May Own Certificates................................
Section 8.05 Trustee Compensation 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 and the NIMS Insurer..........
Section 11.09 Further Assurances..........................................
Section 11.10 Third Party Beneficiary.....................................
Section 11.11 Acts of Certificateholders..................................
Section 11.12 Insolvency..................................................
Section 11.13 Regulation AB Compliance; Intent of Parties;
Reasonableness..............................................
EXHIBITS:
Exhibit A-1 Form of Class A-1 Certificates
Exhibit A-2 Form of Class A-2 Certificates
Exhibit A-3A Form of Class A-3A Certificates
Exhibit A-3B Form of Class A-3B Certificates
Exhibit A-3C1 Form of Class A-3C1 Certificates
Exhibit A-3C2 Form of Class A-3C2 Certificates
Exhibit A-3D Form of Class A-3D Certificates
Exhibit B-1 Form of Class M-1 Certificates
Exhibit B-2 Form of Class M-2 Certificates
Exhibit B-3 Form of Class M-3 Certificates
Exhibit B-4 Form of Class M-4 Certificates
Exhibit B-5 Form of Class M-5 Certificates
Exhibit B-6 Form of Class M-6 Certificates
Exhibit B-7 Form of Class M-7 Certificates
Exhibit B-8 Form of Class M-8 Certificates
Exhibit B-9 Form of Class M-9 Certificates
Exhibit B-10 Form of Class B Certificates
Exhibit C-1 Form of Class CE Certificates
Exhibit C-2 Form of Class P Certificates
Exhibit C-3 Form of Class R Certificates
Exhibit C-4 Form of Class R-X Certificates
Exhibit D Addresses for Requesting Mortgage Loan Schedule
Exhibit E Form of Request for Release of Documents
Exhibit F-1 Form of Trustee's Initial Certification
Exhibit F-2 Form of Trustee's Final Certification
Exhibit F-3 Form of Receipt of Mortgage Note
Exhibit G Mortgage Loan Purchase Agreement
Exhibit H Form of Lost Note Affidavit
Exhibit I Form of ERISA Representation
Exhibit J-1 Form of Investment Letter (Non-Rule 144A)
Exhibit J-2 Form of Rule 144A Investment Letter
Exhibit K Form of Residual Certificate Transfer Affidavit
Exhibit L Form of Transferor Certificate
Exhibit M Monthly Information Delivered by Servicer
Exhibit N Form of Interest Rate Swap Agreement
Exhibit O Form of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification
Exhibit P-1 Form of Certification to be Provided by the Trustee to
Depositor
Exhibit P-2 Form of Certification of the Servicer to be Provided
by the Servicer to Depositor
Exhibit Q Servicing Criteria to be Addressed in Assesment of Compliance
Exhibit R-1 Additional Form 10-D Information
Exhibit R-2 Additional Form 10-K Information
Exhibit R-3 Form 8-K Information
Exhibit S Form of Additional Transfer Instrument
Exhibit T Form of Addition Notice
Exhibit U Additional Disclosure Notification
Exhibit V Form of Additional Mortgage Loan Purchase Agreement
ASSET BACKED FUNDING CORPORATION, as depositor (the
"Depositor"), OPTION ONE MORTGAGE CORPORATION, as servicer (the "Servicer"), and
▇▇▇▇▇ FARGO BANK, N.A., as trustee (the "Trustee") are entering into this
Pooling and Servicing Agreement, dated as of July 1, 2006 (the "Agreement").
PRELIMINARY STATEMENT
The Depositor intends to sell pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple Classes,
which in the aggregate will evidence the entire beneficial ownership interest in
the Trust Fund created hereunder. The Certificates will consist of twenty-one
Classes of Certificates, designated as (i) the Class A-1, Class A-2, Class A-3A,
Class A-3B, Class A-3C1, Class A-3C2 and Class A-3D Certificates, (ii) the Class
M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8
and Class M-9 Certificates, (iii) the Class B Certificates, (iv) the Class CE
Certificates, (v) the Class P Certificates and (vi) the Class R and Class R-X
Certificates.
REMIC 1
As provided herein, the Trustee will make an election to treat
the segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement (but exclusive of the Group 3
Pre-Funding Account, the Interest Rate Swap Agreement, the Swap Account, the Cap
Carryover Amounts, the Prepayment Charges, the Originator Prepayment Charge
Payment Amounts and the Servicer Prepayment Charge Payment Amounts) as a real
estate investment conduit (a "REMIC") for federal income tax purposes, and such
segregated pool of assets will be designated as "REMIC 1." The Class R-1
Interest will represent the sole class of "residual interests" in REMIC 1 for
purposes of the REMIC Provisions under federal income tax law. The following
table irrevocably sets forth the designation, the Uncertificated REMIC 1
Pass-Through Rate, the initial Uncertificated Principal Balance, and solely for
purposes of satisfying Treasury Regulations Section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" for each of the REMIC 1 Regular Interests. None
of the REMIC 1 Regular Interests will be certificated.
Uncertificated Initial
REMIC 1 Uncertificated Latest Possible Maturity
Designation Pass-Through Rate Balance Date(1)
I-1 Variable(2) $230,065,450 Sept. 25, 2036
I-2 Variable(2) $229,953,819 Sept. 25, 2036
I-3 Variable(2) $622,143,497 Sept. 25, 2036
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(1) Solely for purposes of Treasury Regulations Section 1.860G-1(a)(4)(iii),
the Distribution Date in the month following the maturity date for the
Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each REMIC 1 Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC 1
Pass-Through Rate" herein.
REMIC 2
As provided herein, the Trustee will make an election to treat
the segregated pool of assets consisting of the REMIC 1 Regular Interests as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC 2." The Class R-2 Interest will represent the sole class
of "residual interests" in REMIC 2 for purposes of the REMIC Provisions under
federal income tax law. The following table irrevocably sets forth the
designation, the Uncertificated REMIC 2 Pass-Through Rate, the initial
Uncertificated Balance, and solely for purposes of satisfying Treasury
Regulations Section 1.860G-1(a)(4)(iii), the "latest possible maturity date" for
each of the REMIC 2 Regular Interests. None of the REMIC 2 Regular Interests
will be certificated.
Uncertificated REMIC 2
Pass-Through Initial Uncertificated Latest Possible
Designation Rate Balance Maturity Date(1)
----------- ---------------------- ---------------------- ------------------------
I-1-A (2) $818,164.66 September 25, 2036
I-1-B (2) $818,164.66 September 25, ▇▇▇▇
▇-▇-▇ (2) $1,072,013.37 September 25, 2036
I-2-B (2) $1,072,013.37 September 25, ▇▇▇▇
▇-▇-▇ (2) $1,325,841.25 September 25, 2036
I-3-B (2) $1,325,841.25 September 25, ▇▇▇▇
▇-▇-▇ (2) $1,578,047.53 September 25, 2036
I-4-B (2) $1,578,047.53 September 25, ▇▇▇▇
▇-▇-▇ (2) $1,826,980.45 September 25, 2036
I-5-B (2) $1,826,980.45 September 25, ▇▇▇▇
▇-▇-▇ (2) $2,070,908.39 September 25, 2036
I-6-B (2) $2,070,908.39 September 25, ▇▇▇▇
▇-▇-▇ (2) $2,308,161.51 September 25, 2036
I-7-B (2) $2,308,161.51 September 25, ▇▇▇▇
▇-▇-▇ (2) $2,537,013.18 September 25, 2036
I-8-B (2) $2,537,013.18 September 25, ▇▇▇▇
▇-▇-▇ (2) $2,755,764.97 September 25, 2036
I-9-B (2) $2,755,764.97 September 25, 2036
I-10-A (2) $2,953,676.43 September 25, 2036
I-10-B (2) $2,953,676.43 September 25, 2036
I-11-A (2) $3,135,192.45 September 25, 2036
I-11-B (2) $3,135,192.45 September 25, 2036
I-12-A (2) $3,039,327.10 September 25, 2036
I-12-B (2) $3,039,327.10 September 25, 2036
I-13-A (2) $2,939,577.58 September 25, 2036
I-13-B (2) $2,939,577.58 September 25, 2036
I-14-A (2) $2,843,103.02 September 25, 2036
I-14-B (2) $2,843,103.02 September 25, 2036
I-15-A (2) $2,749,795.97 September 25, 2036
I-15-B (2) $2,749,795.97 September 25, 2036
I-16-A (2) $2,659,552.12 September 25, 2036
I-16-B (2) $2,659,552.12 September 25, 2036
I-17-A (2) $2,572,271.25 September 25, 2036
I-17-B (2) $2,572,271.25 September 25, 2036
I-18-A (2) $2,487,855.89 September 25, 2036
I-18-B (2) $2,487,855.89 September 25, 2036
I-19-A (2) $2,406,211.73 September 25, 2036
I-19-B (2) $2,406,211.73 September 25, 2036
I-20-A (2) $2,327,248.12 September 25, 2036
I-20-B (2) $2,327,248.12 September 25, 2036
I-21-A (2) $2,250,876.81 September 25, 2036
I-21-B (2) $2,250,876.81 September 25, 2036
I-22-A (2) $2,177,012.67 September 25, 2036
I-22-B (2) $2,177,012.67 September 25, 2036
I-23-A (2) $55,530,673.73 September 25, 2036
I-23-B (2) $55,530,673.73 September 25, 2036
I-24-A (2) $476,450.54 September 25, 2036
I-24-B (2) $476,450.54 September 25, 2036
I-25-A (2) $512,459.93 September 25, 2036
I-25-B (2) $512,459.93 September 25, 2036
I-26-A (2) $472,986.90 September 25, 2036
I-26-B (2) $472,986.90 September 25, 2036
I-27-A (2) $299,142.47 September 25, 2036
I-27-B (2) $299,142.47 September 25, 2036
I-28-A (2) $231,369.15 September 25, 2036
I-28-B (2) $231,369.15 September 25, 2036
I-29-A (2) $223,228.03 September 25, 2036
I-29-B (2) $223,228.03 September 25, 2036
I-30-A (2) $215,384.88 September 25, 2036
I-30-B (2) $215,384.88 September 25, 2036
I-31-A (2) $207,828.72 September 25, 2036
I-31-B (2) $207,828.72 September 25, 2036
I-32-A (2) $200,548.63 September 25, 2036
I-32-B (2) $200,548.63 September 25, 2036
I-33-A (2) $193,534.39 September 25, 2036
I-33-B (2) $193,534.39 September 25, 2036
I-34-A (2) $186,775.80 September 25, 2036
I-34-B (2) $186,775.80 September 25, 2036
I-35-A (2) $640,380.05 September 25, 2036
I-35-B (2) $640,380.05 September 25, 2036
I-36-A (2) $474,895.49 September 25, 2036
I-36-B (2) $474,895.49 September 25, 2036
I-37-A (2) $137,357.86 September 25, 2036
I-37-B (2) $137,357.86 September 25, 2036
I-38-A (2) $132,755.86 September 25, 2036
I-38-B (2) $132,755.86 September 25, 2036
I-39-A (2) $128,315.86 September 25, 2036
I-39-B (2) $128,315.86 September 25, 2036
I-40-A (2) $124,032.23 September 25, 2036
I-40-B (2) $124,032.23 September 25, 2036
I-41-A (2) $119,898.90 September 25, 2036
I-41-B (2) $119,898.90 September 25, 2036
I-42-A (2) $115,910.57 September 25, 2036
I-42-B (2) $115,910.57 September 25, 2036
I-43-A (2) $112,061.91 September 25, 2036
I-43-B (2) $112,061.91 September 25, 2036
I-44-A (2) $108,347.82 September 25, 2036
I-44-B (2) $108,347.82 September 25, 2036
I-45-A (2) $104,763.32 September 25, 2036
I-45-B (2) $104,763.32 September 25, 2036
I-46-A (2) $101,303.82 September 25, 2036
I-46-B (2) $101,303.82 September 25, 2036
I-47-A (2) $97,964.65 September 25, 2036
I-47-B (2) $97,964.65 September 25, 2036
I-48-A (2) $94,741.56 September 25, 2036
I-48-B (2) $94,741.56 September 25, 2036
I-49-A (2) $91,630.30 September 25, 2036
I-49-B (2) $91,630.30 September 25, 2036
I-50-A (2) $88,626.61 September 25, 2036
I-50-B (2) $88,626.61 September 25, 2036
I-51-A (2) $85,726.99 September 25, 2036
I-51-B (2) $85,726.99 September 25, 2036
I-52-A (2) $82,927.29 September 25, 2036
I-52-B (2) $82,927.29 September 25, 2036
I-53-A (2) $80,224.21 September 25, 2036
I-53-B (2) $80,224.21 September 25, 2036
I-54-A (2) $77,614.04 September 25, 2036
I-54-B (2) $77,614.04 September 25, 2036
I-55-A (2) $75,093.59 September 25, 2036
I-55-B (2) $75,093.59 September 25, 2036
I-56-A (2) $72,659.45 September 25, 2036
I-56-B (2) $72,659.45 September 25, 2036
I-57-A (2) $70,308.86 September 25, 2036
I-57-B (2) $70,308.86 September 25, 2036
I-58-A (2) $68,038.43 September 25, 2036
I-58-B (2) $68,038.43 September 25, 2036
I-59-A (2) $663,241.54 September 25, 2036
I-59-B (2) $663,241.54 September 25, 2036
I-60-A (2) $1,498,924.15 September 25, 2036
I-60-B (2) $1,498,924.15 September 25, 2036
II-1-A (2) $817,767.67 September 25, 2036
II-1-B (2) $817,767.67 September 25, 2036
II-2-A (2) $1,071,493.21 September 25, 2036
II-2-B (2) $1,071,493.21 September 25, 2036
II-3-A (2) $1,325,197.93 September 25, 2036
II-3-B (2) $1,325,197.93 September 25, 2036
II-4-A (2) $1,577,281.84 September 25, 2036
II-4-B (2) $1,577,281.84 September 25, 2036
II-5-A (2) $1,826,093.98 September 25, 2036
II-5-B (2) $1,826,093.98 September 25, 2036
II-6-A (2) $2,069,903.56 September 25, 2036
II-6-B (2) $2,069,903.56 September 25, 2036
II-7-A (2) $2,307,041.56 September 25, 2036
II-7-B (2) $2,307,041.56 September 25, 2036
II-8-A (2) $2,535,782.19 September 25, 2036
II-8-B (2) $2,535,782.19 September 25, 2036
II-9-A (2) $2,754,427.83 September 25, 2036
II-9-B (2) $2,754,427.83 September 25, 2036
II-10-A (2) $2,952,243.26 September 25, 2036
II-10-B (2) $2,952,243.26 September 25, 2036
II-11-A (2) $3,133,671.21 September 25, 2036
II-11-B (2) $3,133,671.21 September 25, 2036
II-12-A (2) $3,037,852.37 September 25, 2036
II-12-B (2) $3,037,852.37 September 25, 2036
II-13-A (2) $2,938,151.25 September 25, 2036
II-13-B (2) $2,938,151.25 September 25, 2036
II-14-A (2) $2,841,723.51 September 25, 2036
II-14-B (2) $2,841,723.51 September 25, 2036
II-15-A (2) $2,748,461.73 September 25, 2036
II-15-B (2) $2,748,461.73 September 25, 2036
II-16-A (2) $2,658,261.67 September 25, 2036
II-16-B (2) $2,658,261.67 September 25, 2036
II-17-A (2) $2,571,023.15 September 25, 2036
II-17-B (2) $2,571,023.15 September 25, 2036
II-18-A (2) $2,486,648.74 September 25, 2036
II-18-B (2) $2,486,648.74 September 25, 2036
II-19-A (2) $2,405,044.20 September 25, 2036
II-19-B (2) $2,405,044.20 September 25, 2036
II-20-A (2) $2,326,118.90 September 25, 2036
II-20-B (2) $2,326,118.90 September 25, 2036
II-21-A (2) $2,249,784.65 September 25, 2036
II-21-B (2) $2,249,784.65 September 25, 2036
II-22-A (2) $2,175,956.36 September 25, 2036
II-22-B (2) $2,175,956.36 September 25, 2036
II-23-A (2) $55,503,729.47 September 25, 2036
II-23-B (2) $55,503,729.47 September 25, 2036
II-24-A (2) $476,219.36 September 25, 2036
II-24-B (2) $476,219.36 September 25, 2036
II-25-A (2) $512,211.28 September 25, 2036
II-25-B (2) $512,211.28 September 25, 2036
II-26-A (2) $472,757.40 September 25, 2036
II-26-B (2) $472,757.40 September 25, 2036
II-27-A (2) $298,997.32 September 25, 2036
II-27-B (2) $298,997.32 September 25, 2036
II-28-A (2) $231,256.89 September 25, 2036
II-28-B (2) $231,256.89 September 25, 2036
II-29-A (2) $223,119.72 September 25, 2036
II-29-B (2) $223,119.72 September 25, 2036
II-30-A (2) $215,280.37 September 25, 2036
II-30-B (2) $215,280.37 September 25, 2036
II-31-A (2) $207,727.88 September 25, 2036
II-31-B (2) $207,727.88 September 25, 2036
II-32-A (2) $200,451.32 September 25, 2036
II-32-B (2) $200,451.32 September 25, 2036
II-33-A (2) $193,440.48 September 25, 2036
II-33-B (2) $193,440.48 September 25, 2036
II-34-A (2) $186,685.17 September 25, 2036
II-34-B (2) $186,685.17 September 25, 2036
II-35-A (2) $640,069.32 September 25, 2036
II-35-B (2) $640,069.32 September 25, 2036
II-36-A (2) $474,665.07 September 25, 2036
II-36-B (2) $474,665.07 September 25, 2036
II-37-A (2) $137,291.21 September 25, 2036
II-37-B (2) $137,291.21 September 25, 2036
II-38-A (2) $132,691.45 September 25, 2036
II-38-B (2) $132,691.45 September 25, 2036
II-39-A (2) $128,253.60 September 25, 2036
II-39-B (2) $128,253.60 September 25, 2036
II-40-A (2) $123,972.05 September 25, 2036
II-40-B (2) $123,972.05 September 25, 2036
II-41-A (2) $119,840.72 September 25, 2036
II-41-B (2) $119,840.72 September 25, 2036
II-42-A (2) $115,854.32 September 25, 2036
II-42-B (2) $115,854.32 September 25, 2036
II-43-A (2) $112,007.53 September 25, 2036
II-43-B (2) $112,007.53 September 25, 2036
II-44-A (2) $108,295.25 September 25, 2036
II-44-B (2) $108,295.25 September 25, 2036
II-45-A (2) $104,712.49 September 25, 2036
II-45-B (2) $104,712.49 September 25, 2036
II-46-A (2) $101,254.67 September 25, 2036
II-46-B (2) $101,254.67 September 25, 2036
II-47-A (2) $97,917.12 September 25, 2036
II-47-B (2) $97,917.12 September 25, 2036
II-48-A (2) $94,695.59 September 25, 2036
II-48-B (2) $94,695.59 September 25, 2036
II-49-A (2) $91,585.84 September 25, 2036
II-49-B (2) $91,585.84 September 25, 2036
II-50-A (2) $88,583.61 September 25, 2036
II-50-B (2) $88,583.61 September 25, 2036
II-51-A (2) $85,685.39 September 25, 2036
II-51-B (2) $85,685.39 September 25, 2036
II-52-A (2) $82,887.05 September 25, 2036
II-52-B (2) $82,887.05 September 25, 2036
II-53-A (2) $80,185.29 September 25, 2036
II-53-B (2) $80,185.29 September 25, 2036
II-54-A (2) $77,576.39 September 25, 2036
II-54-B (2) $77,576.39 September 25, 2036
II-55-A (2) $75,057.15 September 25, 2036
II-55-B (2) $75,057.15 September 25, 2036
II-56-A (2) $72,624.20 September 25, 2036
II-56-B (2) $72,624.20 September 25, 2036
II-57-A (2) $70,274.75 September 25, 2036
II-57-B (2) $70,274.75 September 25, 2036
II-58-A (2) $68,005.41 September 25, 2036
II-58-B (2) $68,005.41 September 25, 2036
II-59-A (2) $662,919.73 September 25, 2036
II-59-B (2) $662,919.73 September 25, 2036
II-60-A (2) $1,498,196.85 September 25, 2036
II-60-B (2) $1,498,196.85 September 25, 2036
III-1-A (2) $2,212,482.67 September 25, 2036
III-1-B (2) $2,212,482.67 September 25, 2036
III-2-A (2) $2,898,940.92 September 25, 2036
III-2-B (2) $2,898,940.92 September 25, 2036
III-3-A (2) $3,585,342.82 September 25, 2036
III-3-B (2) $3,585,342.82 September 25, 2036
III-4-A (2) $4,267,359.62 September 25, 2036
III-4-B (2) $4,267,359.62 September 25, 2036
III-5-A (2) $4,940,524.57 September 25, 2036
III-5-B (2) $4,940,524.57 September 25, 2036
III-6-A (2) $5,600,155.05 September 25, 2036
III-6-B (2) $5,600,155.05 September 25, 2036
III-7-A (2) $6,241,735.44 September 25, 2036
III-7-B (2) $6,241,735.44 September 25, 2036
III-8-A (2) $6,860,596.63 September 25, 2036
III-8-B (2) $6,860,596.63 September 25, 2036
III-9-A (2) $7,452,145.70 September 25, 2036
III-9-B (2) $7,452,145.70 September 25, 2036
III-10-A (2) $7,987,338.31 September 25, 2036
III-10-B (2) $7,987,338.31 September 25, 2036
III-11-A (2) $8,478,194.34 September 25, 2036
III-11-B (2) $8,478,194.34 September 25, 2036
III-12-A (2) $8,218,955.03 September 25, 2036
III-12-B (2) $8,218,955.03 September 25, 2036
III-13-A (2) $7,949,212.17 September 25, 2036
III-13-B (2) $7,949,212.17 September 25, 2036
III-14-A (2) $7,688,325.47 September 25, 2036
III-14-B (2) $7,688,325.47 September 25, 2036
III-15-A (2) $7,436,004.31 September 25, 2036
III-15-B (2) $7,436,004.31 September 25, 2036
III-16-A (2) $7,191,966.71 September 25, 2036
III-16-B (2) $7,191,966.71 September 25, 2036
III-17-A (2) $6,955,941.59 September 25, 2036
III-17-B (2) $6,955,941.59 September 25, 2036
III-18-A (2) $6,727,665.37 September 25, 2036
III-18-B (2) $6,727,665.37 September 25, 2036
III-19-A (2) $6,506,883.07 September 25, 2036
III-19-B (2) $6,506,883.07 September 25, 2036
III-20-A (2) $6,293,349.48 September 25, 2036
III-20-B (2) $6,293,349.48 September 25, 2036
III-21-A (2) $6,086,826.03 September 25, 2036
III-21-B (2) $6,086,826.03 September 25, 2036
III-22-A (2) $5,887,082.47 September 25, 2036
III-22-B (2) $5,887,082.47 September 25, 2036
III-23-A (2) $150,166,170.30 September 25, 2036
III-23-B (2) $150,166,170.30 September 25, 2036
III-24-A (2) $1,288,418.60 September 25, 2036
III-24-B (2) $1,288,418.60 September 25, 2036
III-25-A (2) $1,385,795.28 September 25, 2036
III-25-B (2) $1,385,795.28 September 25, 2036
III-26-A (2) $1,279,052.21 September 25, 2036
III-26-B (2) $1,279,052.21 September 25, 2036
III-27-A (2) $808,941.72 September 25, 2036
III-27-B (2) $808,941.72 September 25, 2036
III-28-A (2) $625,668.96 September 25, 2036
III-28-B (2) $625,668.96 September 25, 2036
III-29-A (2) $603,653.74 September 25, 2036
III-29-B (2) $603,653.74 September 25, 2036
III-30-A (2) $582,444.26 September 25, 2036
III-30-B (2) $582,444.26 September 25, 2036
III-31-A (2) $562,010.89 September 25, 2036
III-31-B (2) $562,010.89 September 25, 2036
III-32-A (2) $542,324.05 September 25, 2036
III-32-B (2) $542,324.05 September 25, 2036
III-33-A (2) $523,356.12 September 25, 2036
III-33-B (2) $523,356.12 September 25, 2036
III-34-A (2) $505,079.53 September 25, 2036
III-34-B (2) $505,079.53 September 25, 2036
III-35-A (2) $1,731,717.13 September 25, 2036
III-35-B (2) $1,731,717.13 September 25, 2036
III-36-A (2) $1,284,213.44 September 25, 2036
III-36-B (2) $1,284,213.44 September 25, 2036
III-37-A (2) $371,443.43 September 25, 2036
III-37-B (2) $371,443.43 September 25, 2036
III-38-A (2) $358,998.69 September 25, 2036
III-38-B (2) $358,998.69 September 25, 2036
III-39-A (2) $346,992.04 September 25, 2036
III-39-B (2) $346,992.04 September 25, 2036
III-40-A (2) $335,408.23 September 25, 2036
III-40-B (2) $335,408.23 September 25, 2036
III-41-A (2) $324,230.87 September 25, 2036
III-41-B (2) $324,230.87 September 25, 2036
III-42-A (2) $313,445.61 September 25, 2036
III-42-B (2) $313,445.61 September 25, 2036
III-43-A (2) $303,038.06 September 25, 2036
III-43-B (2) $303,038.06 September 25, 2036
III-44-A (2) $292,994.42 September 25, 2036
III-44-B (2) $292,994.42 September 25, 2036
III-45-A (2) $283,301.20 September 25, 2036
III-45-B (2) $283,301.20 September 25, 2036
III-46-A (2) $273,946.01 September 25, 2036
III-46-B (2) $273,946.01 September 25, 2036
III-47-A (2) $264,916.23 September 25, 2036
III-47-B (2) $264,916.23 September 25, 2036
III-48-A (2) $256,200.34 September 25, 2036
III-48-B (2) $256,200.34 September 25, 2036
III-49-A (2) $247,786.86 September 25, 2036
III-49-B (2) $247,786.86 September 25, 2036
III-50-A (2) $239,664.28 September 25, 2036
III-50-B (2) $239,664.28 September 25, 2036
III-51-A (2) $231,823.12 September 25, 2036
III-51-B (2) $231,823.12 September 25, 2036
III-52-A (2) $224,252.16 September 25, 2036
III-52-B (2) $224,252.16 September 25, 2036
III-53-A (2) $216,942.50 September 25, 2036
III-53-B (2) $216,942.50 September 25, 2036
III-54-A (2) $209,884.07 September 25, 2036
III-54-B (2) $209,884.07 September 25, 2036
III-55-A (2) $203,068.25 September 25, 2036
III-55-B (2) $203,068.25 September 25, 2036
III-56-A (2) $196,485.85 September 25, 2036
III-56-B (2) $196,485.85 September 25, 2036
III-57-A (2) $190,129.39 September 25, 2036
III-57-B (2) $190,129.39 September 25, 2036
III-58-A (2) $183,989.66 September 25, 2036
III-58-B (2) $183,989.66 September 25, 2036
III-59-A (2) $1,793,539.23 September 25, 2036
III-59-B (2) $1,793,539.23 September 25, 2036
III-60-A (2) $4,053,394.00 September 25, 2036
III-60-B (2) $4,053,394.00 September 25, 2036
---------------------
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the Distribution Date in the month following the maturity date for the
Mortgage Loan with the latest possible maturity date has been designated
as the "latest possible maturity date" for each REMIC 2 Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC 2
Pass-Through Rate" herein.
REMIC 3
As provided herein, the Trustee will make an election to treat
the segregated pool of assets consisting of the REMIC 2 Regular Interests as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC 3." The Class R-3 Interest will represent the sole class
of "residual interests" in REMIC 3 for purposes of the REMIC Provisions under
federal income tax law. The following table irrevocably sets forth the
designation, the Uncertificated REMIC 3 Pass-Through Rate, the initial
Uncertificated Balance or Uncertificated Notional Amount, and solely for
purposes of satisfying Treasury Regulations Section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" for each of the REMIC 3 Regular Interests. None
of the REMIC 3 Regular Interests will be certificated.
Initial Uncertificated
Uncertificated Balance or
REMIC 3 Uncertificated Latest Possible Maturity
Designation Pass-Through Rate Notional Amount (3) Date(1)
----------- ----------------- ---------------------- ------------------------
LT1AA Variable(2) $530,259,755.34 September 25, 2036
LT1A1 Variable(2) $835,135.00 September 25, 2036
LT1A2 Variable(2) $834,730.00 September 25, 2036
LT1A3A Variable(2) $1,223,505.00 September 25, 2036
LT1A3B Variable(2) $398,590.00 September 25, 2036
LT1A3C1 Variable(2) $375,000.00 September 25, 2036
LT1A3C2 Variable(2) $167,475.00 September 25, 2036
LT1A3D Variable(2) $93,815.00 September 25, 2036
LT1M1 Variable(2) $286,770.00 September 25, 2036
LT1M2 Variable(2) $275,955.00 September 25, 2036
LT1M3 Variable(2) $100,100.00 September 25, 2036
LT1M4 Variable(2) $116,280.00 September 25, 2036
LT1M5 Variable(2) $105,560.00 September 25, 2036
LT1M6 Variable(2) $81,165.00 September 25, 2036
LT1M7 Variable(2) $102,805.00 September 25, 2036
LT1M8 Variable(2) $62,225.00 September 25, 2036
LT1M9 Variable(2) $75,750.00 September 25, 2036
LT1B Variable(2) $100,100.00 September 25, 2036
LT1ZZ Variable(2) $5,586,667.66 September 25, 2036
LT1SUB Variable(2) $6,303.85 September 25, 2036
LT1GRP Variable(2) $23,006.55 September 25, 2036
LT2SUB Variable(2) $6,300.78 September 25, 2036
LT2GRP Variable(2) $22,995.38 September 25, 2036
LT3SUB Variable(2) $17,046.65 September 25, 2036
LT3GRP Variable(2) $62,214.35 September 25, 2036
LT1XX Variable(2) $540,943,515.45 September 25, 2036
LTIO Variable(2) $541,081,383.00 September 25, 2036
---------------------
(1) For purposes of Treasury Regulations Section 1.860G-1(a)(4)(iii), the
Distribution Date in the month following the maturity date for the Mortgage
Loan with the latest maturity date has been designated as the "latest
possible maturity date" for each REMIC 3 Regular Interest and each Class of
Regular Certificates.
(2) Calculated in accordance with the definition of "Uncertificated REMIC 3
Pass-Through Rate" herein.
(3) REMIC 3 Regular Interest LTIO will not have an Uncertificated Balance, but
will accrue interest on its Uncertificated Notional Amount, as defined
herein.
REMIC 4
As provided herein, the Trustee shall make an election to treat
the segregated pool of assets consisting of the REMIC 3 Regular Interests as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC 4." The Class R-4 Interest represents the sole class of
"residual interests" in REMIC 4 for purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class
designation, Original Certificate Principal Balance, Certificate Interest Rate
and Assumed Final Maturity Date for each Class of Certificates comprising the
interests in the Trust Fund created hereunder:
Original Certificate Certificate Interest Assumed Final
Class Principal Balance Rate Maturity Date
---------------- -------------------- ---------------------- ------------------------
A-1 $167,027,000.00 (1) September 25, 2036
A-2 $166,946,000.00 (2) September 25, 2036
A-3A $244,701,000.00 (3) September 25, 2036
A-3B $79,718,000.00 (4) September 25, 2036
A-3C1 $75,000,000.00 (5) September 25, 2036
A-3C2 $33,495,000.00 (6) September 25, 2036
A-3D $18,763,000.00 (7) September 25, 2036
M-1 $57,354,000.00 (8) September 25, 2036
M-2 $55,191,000.00 (9) September 25, 2036
M-3 $20,020,000.00 (10) September 25, 2036
M-4 $23,256,000.00 (11) September 25, 2036
M-5 $21,112,000.00 (12) September 25, 2036
M-6 $16,233,000.00 (13) September 25, 2036
M-7 $20,561,000.00 (14) September 25, 2036
M-8 $12,445,000.00 (15) September 25, 2036
M-9 $15,150,000.00 (16) September 25, 2036
B $20,020,000.00 (17) September 25, 2036
CE Interest (18) (18) September 25, 2036
Swap IO Interest (19) (20) September 25, ▇▇▇▇
▇ ▇/▇ ▇/▇ ▇/▇
---------------------
(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 A-3A Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class A-3A
Pass-Through Rate and (ii) the Group 3 Cap for such Distribution Date.
(4) Interest will accrue on the Class A-3B Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class A-3B
Pass-Through Rate and (ii) the Group 3 Cap for such Distribution Date.
(5) Interest will accrue on the Class A-3C1 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class A-3C1
Pass-Through Rate and (ii) the Group 3 Cap for such Distribution Date.
(6) Interest will accrue on the Class A-3C2 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class A-3C2
Pass-Through Rate and (ii) the Group 3 Cap for such Distribution Date.
(7) Interest will accrue on the Class A-3D Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class A-3D
Pass-Through Rate and (ii) the Group 3 Cap for such Distribution Date.
(8) 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.
(9) 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.
(10) 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.
(11) 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.
(12) 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.
(13) 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.
(14) Interest will accrue on the Class M-7 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class M-7
Pass-Through Rate and (ii) the Pool Cap for such Distribution Date.
(15) Interest will accrue on the Class M-8 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class M-8
Pass-Through Rate and (ii) the Pool Cap for such Distribution Date.
(16) Interest will accrue on the Class M-9 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class M-9
Pass-Through Rate and (ii) the Pool Cap for such Distribution Date.
(17) 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.
(18) Solely for REMIC purposes, the Class CE Interest will (i) have an Original
Certificate Principal Balance equal to the Initial Overcollateralization
Amount and (ii) will bear interest on its Notional Amount at its
Pass-Through Rate.
(19) For federal income tax purposes, the Swap IO Interest will not have an
Original Certificate Principal Balance, but will have a notional amount
equal to the Uncertificated Notional Amount of REMIC 3 Regular Interest
LTIO.
(20) For federal income tax purposes, the Swap IO Interest will not have a
Certificate Interest Rate, but will be entitled to 100% of the amounts
distributed on REMIC 3 Regular Interest LTIO.
Interest will accrue on the regular interests represented by the
Offered Certificates and Class B Certificates at their respective REMIC 4
Pass-Through Rates.
REMIC 5
As provided herein, the Trustee shall make an election to treat
the segregated pool of assets consisting of the Class CE Interest and the Swap
IO Interest as a REMIC for federal income tax purposes, and such segregated pool
of assets will be designated as "REMIC 5." The Class R-Certificate represents
the sole class of "residual interests" in REMIC 5 for purposes of the REMIC
Provisions.
The following table sets forth (or describes) the Class
designation, Original Certificate Principal Balance, Certificate Interest Rate
and Assumed Final Maturity Date for the Class of Certificates comprising the
interests in the Trust Fund created hereunder:
Original Certificate Certificate Interest Assumed Final
Class Principal Balance Rate Maturity Date(1)
----- -------------------- ---------------------- ------------------
CE N/A(2) Variable(3) September 25, 2036
R-X N/A N/A N/A
---------------------
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the Distribution Date following the maturity date for the Mortgage Loan
with the latest maturity date has been designated as the "latest possible
maturity date" for each Class of Certificates that represents one or more
of the "regular interests" in REMIC 5.
(2) Solely for REMIC purposes, the Class CE Certificates will have an Original
Certificate Principal Balance equal to the Initial Overcollateralization
Amount.
(3) The Class CE Certificates will be entitled to 100% of amounts distributed
on the Class CE Interest and the Swap IO Interest.
In addition, the Trust shall issue the Class P Certificates,
which shall be issued by the Grantor Trust.
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement or in the Preliminary Statement,
the following words and phrases, unless the context otherwise requires, shall
have the meanings specified in this Article. Interest on all Classes of REMIC 1
Regular Interests will be calculated on the basis of a 360-day year consisting
of twelve 30-day months. Interest on all Regular Certificates will be calculated
on the basis of the actual number of days in the related Interest Accrual Period
and a 360-day year.
"10-K Filing Deadline": As defined in Section 3.31(c) hereof.
"1933 Act": The Securities Act of 1933, as amended.
"60+ Day Delinquent Loan": Each Mortgage Loan (including each
Mortgage Loan in foreclosure and each Mortgage Loan for which the Mortgagor has
filed for bankruptcy after the Closing Date) with respect to which any portion
of a Monthly Payment is, as of the last day of the prior Collection Period, two
months or more past due and each Mortgage Loan relating to an REO Property.
"Account": Any of the Collection Account, the Distribution
Account, the Swap Account or the Escrow Account.
"Accrued Certificate Interest": With respect to each
Distribution Date and Class of Certificates, an amount equal to the interest
accrued at the Certificate Interest Rate described opposite such Class in the
table in the Preliminary Statement (or in the case of the regular interests
represented thereby, at the related REMIC 4 Pass-Through Rate) during the
related Interest Accrual Period on the Certificate Principal Balance of such
Class of Certificates, reduced by such Class' Interest Percentage of Relief Act
Interest Shortfalls for such Distribution Date.
"Additional Disclosure Notification": As defined in Section
3.31(b) hereof.
"Addition Notice": With respect to the transfer of Additional
Group 3 Mortgage Loans to the Trust Fund pursuant to Section 2.04, a notice of
the Depositor's designation of the Additional Group 3 Mortgage Loans to be sold
to the Trust Fund and the aggregate Principal Balance of such Additional Group 3
Mortgage Loans as of the Subsequent Cut-off Date. The Addition Notice shall be
given not later than three Business Days prior to the related Additional
Transfer Date and shall be substantially in the form attached hereto as Exhibit
T.
"Additional Form 10-D Information": As defined in Section
3.31(b) hereof.
"Additional Form 10-K Information": As defined in Section
3.31(c) hereof.
"Additional Group 3 Mortgage Loan": A Mortgage Loan sold by the
Depositor to the Trust Fund pursuant to Section 2.04 and included in Loan Group
3, such Mortgage Loan being identified on the Mortgage Loan Schedule delivered
pursuant to an Additional Transfer Instrument.
"Additional Mortgage Loan Purchase Agreements": The agreements
between the Depositor and the Seller, regarding the transfer of the Additional
Group 3 Mortgage Loans by the Sponsor to the Depositor, substantially in the
form attached hereto as Exhibit V.
"Additional Servicer": A Subcontractor engaged by the Servicer,
the Trustee or a custodian that is a "servicer" within the meaning of Item 1101
of Regulation AB and meets any of the criteria in Item 1108(a)(2)(i), (ii) or
(iii) of Regulation AB.
"Additional Transfer Date": With respect to each Additional
Transfer Instrument, the date on which the related Additional Group 3 Mortgage
Loans are sold to the Trust Fund.
"Additional Transfer Instrument": Each Additional Transfer
Instrument, dated as of the related Additional Transfer Date, executed by the
Trustee and the Depositor substantially in the form attached hereto as Exhibit S
by which Additional Group 3 Mortgage Loans are transferred to the Trust Fund.
"Adjustable-Rate Mortgage Loan": A Mortgage Loan which has a
rate at which interest accrues that adjusts based on the Index plus a related
Gross Margin, as set forth and subject to the limitations in the related
Mortgage Note.
"Adjustment Date": With respect to each Adjustable-Rate Mortgage
Loan, each adjustment date on which the Mortgage Interest Rate of an
Adjustable-Rate Mortgage Loan changes pursuant to the related Mortgage Note. The
first Adjustment Date following the Cut-off Date (or Subsequent Cut-off Date
with respect to each Additional Group 3 Mortgage Loan) for each Adjustable-Rate
Mortgage Loan is set forth in the Mortgage Loan Schedules.
"Advance": As to any Mortgage Loan, any advance made by the
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": Any Subordinated Applied
Realized Loss Amount.
"Assessment of Compliance": As defined in Section 3.20(a)
hereof.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect or
record the sale of the Mortgage.
"Assumed Final Maturity Date": As to each Class of Certificates,
the date set forth as such in the Preliminary Statement.
"Attestation Report": As defined in Section 3.20(b) hereof.
"Available Funds": As to any Distribution Date, an amount equal
to the excess of (i) the sum of (a) the aggregate of the Monthly Payments due
during the related Collection Period and received on or prior to the related
Determination Date by the Servicer, (b) Liquidation Proceeds, Insurance
Proceeds, Condemnation Proceeds, Principal Prepayments, Substitution Adjustment
Amounts, the Purchase Price for any repurchased Mortgage Loan, the Termination
Price with respect to the termination of the Trust pursuant to Section 10.01
hereof and other unscheduled recoveries of principal and interest (excluding
Prepayment Charges, Originator Prepayment Charge Payment Amounts, Servicer
Prepayment Charge Payment Amounts and Prepayment Interest Excess) in respect of
the Mortgage Loans during the related Prepayment Period, (c) the aggregate of
any amounts received in respect of an REO Property deposited in the Collection
Account for such Distribution Date, (d) any Compensating Interest for such
Distribution Date, (e) the aggregate of any Advances made by the Servicer for
such Distribution Date, (f) any Reimbursement Amount or Subsequent Recovery
deposited into the Collection Account during the related Prepayment Period and
(g) with respect to the Distribution Date immediately following the end of the
Funding Period, any amounts in the Group 3 Pre-Funding Account after giving
effect to any purchase of Additional Group 3 Mortgage Loans over (ii) the sum of
(a) amounts reimbursable or payable to the Servicer pursuant to Sections 3.05 or
6.03, (b) amounts reimbursable or payable to the Trustee pursuant to Section
8.05 or Section 9.01(c), (c) amounts payable hereunder to the Credit Risk
Manager, (d) Stayed Funds, (e) the Servicing Fee and (f) amounts deposited in
the Collection Account or the Distribution Account, as the case may be, in
error.
"Balloon Loan": A Mortgage Loan that provides for a Balloon
Payment.
"Balloon Payment": A payment of the unamortized principal
balance of a Mortgage Loan in a single payment at the maturity of such Mortgage
Loan that is substantially greater than the preceding Monthly Payment.
"Bankruptcy Code": Title 11 of the United States Code, as
amended.
"Book-Entry Certificates": Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant," or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.02 hereof). On the Closing
Date, the Offered Certificates and Class B 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 Florida, the State of California, the Commonwealth of Pennsylvania
or any city in which the Corporate Trust Office of the Trustee is located are
authorized or obligated by law or executive order to be closed provided,
however, with respect to distributions on Certificates, "Business Day" shall
mean any day other than a Saturday, a Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law or
executive order to be closed.
"Cap": Any of the Group 1 Cap, the Group 2 Cap, the Group 3 Cap
or the Pool Cap.
"Cap Carryover Amount": If on any Distribution Date, the Accrued
Certificate Interest for any Offered Certificate and the Class B Certificates is
based upon the related 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 such related 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).
"Cap Carryover Reserve Account": The account or accounts created
and maintained pursuant to Section 4.11 hereof.
"Certificate": Any Regular Certificate, Class P Certificate or
Residual Certificate.
"Certificate Custodian": Initially, ▇▇▇▇▇ Fargo Bank, N.A.;
thereafter any other Certificate Custodian acceptable to the Depository and
selected by the Trustee.
"Certificate Interest Rate": With respect to each Distribution
Date and Class of Certificates, the per annum rate described in the table under
the captions "REMIC 4" and "REMIC 5" in the Preliminary Statement during the
related Interest Accrual Period on the Certificate Principal Balance.
"Certificate Owner": With respect to each Book-Entry
Certificate, any beneficial owner thereof.
"Certificate Principal Balance": With respect to any Class of
Certificates (other than the Class CE, Class P and Residual Certificates) and
any Distribution Date, the Original Certificate Principal Balance (a) reduced by
the sum of (i) all amounts actually distributed in respect of principal of such
Class on all prior Distribution Dates and (ii) Applied Realized Loss Amounts
allocated thereto for previous Distribution Dates and (b) increased by any
Subsequent Recoveries allocated to such Class for previous Distribution Dates.
The Class CE, Class P and Residual Certificates do not have a Certificate
Principal Balance. With respect to any Certificate (other than a Class CE, Class
P or Residual Certificate) of a Class and any Distribution Date, the portion of
the Certificate Principal Balance of such Class represented by such Certificate
equal to the product of the Percentage Interest evidenced by such Certificate
and the Certificate Principal Balance of such Class.
"Certificate Register" and "Certificate Registrar": The register
maintained and registrar appointed pursuant to Section 5.02 hereof.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or non-U.S. Person shall not be a Holder of any
Residual Certificate for any purpose hereof.
"Class": Collectively, Certificates or REMIC Regular Interests
which have the same priority of payment and bear the same class designation and
the form of which is identical except for variation in the Percentage Interest
evidenced thereby.
"Class A Certificate": Any one of the Certificates with an "A"
designated on the face thereof substantially in the form annexed hereto as
Exhibits ▇-▇, ▇-▇, ▇-▇▇, ▇-▇▇, ▇-▇▇▇, ▇-▇▇▇ and A-3D, executed by the Trustee on
behalf of the Trust and authenticated and delivered by the Certificate
Registrar, representing the right to distributions as set forth herein and
therein.
"Class A Certificateholders": Collectively, the Holders of the
Class A Certificates.
"Class A-1 Certificate Margin": For each Distribution Date (i)
on or prior to the Optional Termination Date, 0.140% per annum, and (ii)
following the Optional Termination Date, 0.280% per annum.
"Class A-1 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to 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.
"Class A-2 Certificate Margin": For each Distribution Date (i)
on or prior to the Optional Termination Date, 0.140% per annum, and (ii)
following the Optional Termination Date, 0.280% per annum.
"Class A-2 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to 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.
"Class A-3A Certificate Margin": For each Distribution Date (i)
on or prior to the Optional Termination Date, 0.040% per annum, and (ii)
following the Optional Termination Date, 0.080% per annum.
"Class A-3A Pass-Through Rate": For each Distribution Date, a
per annum rate equal to the lesser of (i) One-Month LIBOR as of the related
LIBOR Determination Date, plus the Class A-3A Certificate Margin and (ii) the
Group 3 Maximum Rate Cap.
"Class A-3B Certificate Margin": For each Distribution Date (i)
on or prior to the Optional Termination Date, 0.090% per annum, and (ii)
following the Optional Termination Date, 0.180% per annum.
"Class A-3B Pass-Through Rate": For each Distribution Date, a
per annum rate equal to the lesser of (i) One-Month LIBOR as of the related
LIBOR Determination Date, plus the Class A-3B Certificate Margin and (ii) the
Group 3 Maximum Rate Cap.
"Class A-3C1 Certificate Margin": For each Distribution Date (i)
on or prior to the Optional Termination Date, 0.150% per annum, and (ii)
following the Optional Termination Date, 0.300% per annum.
"Class A-3C1 Pass-Through Rate": For each Distribution Date, a
per annum rate equal to the lesser of (i) One-Month LIBOR as of the related
LIBOR Determination Date, plus the Class A-3C1 Certificate Margin and (ii) the
Group 3 Maximum Rate Cap.
"Class A-3C2 Certificate Margin": For each Distribution Date (i)
on or prior to the Optional Termination Date, 0.150% per annum, and (ii)
following the Optional Termination Date, 0.300% per annum.
"Class A-3C2 Pass-Through Rate": For each Distribution Date, a
per annum rate equal to the lesser of (i) One-Month LIBOR as of the related
LIBOR Determination Date, plus the Class A-3C2 Certificate Margin and (ii) the
Group 3 Maximum Rate Cap.
"Class A-3D Certificate Margin": For each Distribution Date (i)
on or prior to the Optional Termination Date, 0.240% per annum, and (ii)
following the Optional Termination Date, 0.480% per annum.
"Class A-3D Pass-Through Rate": For each Distribution Date, a
per annum rate equal to the lesser of (i) One-Month LIBOR as of the related
LIBOR Determination Date, plus the Class A-3D Certificate Margin and (ii) the
Group 3 Maximum Rate Cap.
"Class B Certificates:" Any one of the Certificates with a "B"
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-10, 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 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 2.500% per annum, and (ii) following
the Optional Termination Date, 3.750% per annum.
"Class B Pass-Through Rate": For each Distribution Date, a per
annum rate equal to the lesser of (i) One-Month LIBOR as of the related LIBOR
Determination Date, plus the Class B Certificate Margin and (ii) the Pool
Maximum Rate Cap.
"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), (viii)
the Certificate Principal Balance of the Class M-7 Certificates (after taking
into account the payment of the Class M-7 Principal Distribution Amount on such
Distribution Date), (ix) the Certificate Principal Balance of the Class M-8
Certificates (after taking into account the payment of the Class M-8 Principal
Distribution Amount on such Distribution Date), (x) the Certificate Principal
Balance of the Class M-9 Certificates (after taking into account the payment of
the Class M-9 Principal Distribution Amount on such Distribution Date) and (xi)
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) 93.50%
and (ii) the sum of the Pool Balance as of the last day of the related
Collection Period after giving effect to Principal Prepayments in the related
Prepayment Period and any amounts remaining in the Group 3 Pre-Funding Account
and (b) the amount by which the Pool Balance as of the last day of the related
Collection Period after giving effect to Principal Prepayments in the related
Prepayment Period exceeds the product of (i) 0.50% and (ii) the sum of (a) the
Pool Balance on the Cut-off Date and (b) the Original Group 3 Pre-Funded Amount.
"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 (xxxi) hereof, in each
case for such Distribution Date.
"Class CE Certificates": Any one of the Class CE Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-1, executed by the 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, (x) the sum of (i) the interest accrued on such Class CE
Certificate at its Pass-Through Rate calculated on its Notional Amount less the
amount (without duplication) of Cap Carryover Amounts, (ii) the
Overcollateralization Release Amount and (iii) amounts distributable in respect
of the Swap IO Interest less (y) any Net Swap Payments or Swap Termination
Payments paid to the Swap Provider for such Distribution Date.
"Class CE Uncertificated Principal Balance": As of any date of
determination, the Initial Overcollateralization Amount minus the sum of (i) any
Realized Losses allocated thereto and (ii) any amounts distributed (or deemed
distributed) to the Class CE Certificates with respect thereto.
"Class M Certificate": Any one of the Certificates with an "M"
designated on the face thereof substantially in the form annexed hereto as
Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, Exhibit B-4, Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇,
▇▇▇▇▇▇▇ ▇-▇, Exhibit B-8 and Exhibit B-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 M Certificateholders": Collectively, the Holders of the
Class M Certificates.
"Class M-1 Certificate Margin": For each Distribution Date (i)
on or prior to the Optional Termination Date, 0.280% per annum, and (ii)
following the Optional Termination Date, 0.420% per annum.
"Class M-1 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to 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.
"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 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)
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) 55.80% and (ii) the sum of the Pool Balance as of the last day of
the related Collection Period after giving effect to Principal Prepayments in
the related Prepayment Period and any amounts remaining in the Group 3
Pre-Funding Account and (b) the amount by which the Pool Balance as of the last
day of the related Collection Period after giving effect to Principal
Prepayments in the related Prepayment Period exceeds the product of (i) 0.50%
and (ii) the sum of (a) the Pool Balance on the Cut-off Date and (b) the
Original Group 3 Pre-Funded Amount.
"Class M-1 Realized Loss Amortization Amount": As to the Class
M-1 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-1 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (iv) hereof, in each case
for such Distribution Date.
"Class M-2 Certificate Margin": For each Distribution Date (i)
on or prior to the Optional Termination Date, 0.290% per annum, and (ii)
following the Optional Termination Date, 0.435% per annum.
"Class M-2 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to 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.
"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 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) 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) 66.00% and (ii) the sum of the Pool Balance as
of the last day of the related Collection Period after giving effect to
Principal Prepayments in the related Prepayment Period and any amounts remaining
in the Group 3 Pre-Funding Account and (b) the amount by which the Pool Balance
as of the last day of the related Collection Period after giving effect to
Principal Prepayments in the related Prepayment Period exceeds the product of
(i) 0.50% and (ii) the sum of (a) the Pool Balance on the Cut-off Date and (b)
the Original Group 3 Pre-Funded Amount.
"Class M-2 Realized Loss Amortization Amount": As to the Class
M-2 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-2 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (vii) hereof, in each
case for such Distribution Date.
"Class M-3 Certificate Margin": For each Distribution Date (i)
on or prior to the Optional Termination Date, 0.310% per annum, and (ii)
following the Optional Termination Date, 0.465% per annum.
"Class M-3 Pass-Through Rate": For each Distribution Date, a per
annum rate equal 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.
"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) 69.70% and
(ii) the sum of the Pool Balance as of the last day of the related Collection
Period after giving effect to Principal Prepayments in the related Prepayment
Period and any amounts remaining in the Group 3 Pre-Funding Account and (b) the
amount by which the Pool Balance as of the last day of the related Collection
Period after giving effect to Principal Prepayments in the related Prepayment
Period exceeds the product of (i) 0.50% and (ii) the sum of (a) the Pool Balance
on the Cut-off Date and (b) the Original Group 3 Pre-Funded Amount.
"Class M-3 Realized Loss Amortization Amount": As to the Class
M-3 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-3 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (x) hereof, in each case
for such Distribution Date.
"Class M-4 Certificate Margin": For each Distribution Date (i)
on or prior to the Optional Termination Date, 0.360% per annum, and (ii)
following the Optional Termination Date, 0.540% per annum.
"Class M-4 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to 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.
"Class M-4 Principal Distribution Amount": As of any
Distribution Date on or after the Stepdown Date and as long as a Trigger Event
is not in effect, the excess of (x) the sum of (i) the sum of the Certificate
Principal Balances of the Class A Certificates (after taking into account the
payment of the Senior Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date) and (v) the Certificate Principal Balance of the Class M-4 Certificates
immediately prior to such Distribution Date over (y) the lesser of (a) the
product of (i) 74.00% and (ii) the sum of the Pool Balance as of the last day of
the related Collection Period after giving effect to Principal Prepayments in
the related Prepayment Period and any amounts remaining in the Group 3
Pre-Funding Account and (b) the amount by which the Pool Balance as of the last
day of the related Collection Period after giving effect to Principal
Prepayments in the related Prepayment Period exceeds the product of (i) 0.50%
and (ii) the sum of (a) the Pool Balance on the Cut-off Date and (b) the
Original Group 3 Pre-Funded Amount.
"Class M-4 Realized Loss Amortization Amount": As to the Class
M-4 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-4 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xiii) hereof, in each
case for such Distribution Date.
"Class M-5 Certificate Margin": For each Distribution Date (i)
on or prior to the Optional Termination Date, 0.380% per annum, and (ii)
following the Optional Termination Date, 0.570% per annum.
"Class M-5 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to 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.
"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) 77.90% and (ii) the sum of the Pool Balance
as of the last day of the related Collection Period after giving effect to
Principal Prepayments in the related Prepayment Period and any amounts remaining
in the Group 3 Pre-Funding Account and (b) the amount by which the Pool Balance
as of the last day of the related Collection Period after giving effect to
Principal Prepayments in the related Prepayment Period exceeds the product of
(i) 0.50% and (ii) the sum of (a) the Pool Balance on the Cut-off Date and (b)
the Original Group 3 Pre-Funded Amount.
"Class M-5 Realized Loss Amortization Amount": As to the Class
M-5 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-5 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xvi) hereof, in each
case for such Distribution Date.
"Class M-6 Certificate Margin": For each Distribution Date (i)
on or prior to the Optional Termination Date, 0.430% per annum, and (ii)
following the Optional Termination Date, 0.645% per annum.
"Class M-6 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to 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.
"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) 80.90% and
(ii) the sum of the Pool Balance as of the last day of the related Collection
Period after giving effect to Principal Prepayments in the related Prepayment
Period and any amounts remaining in the Group 3 Pre-Funding Account and (b) the
amount by which the Pool Balance as of the last day of the related Collection
Period after giving effect to Principal Prepayments in the related Prepayment
Period exceeds the product of (i) 0.50% and (ii) the sum of (a) the Pool Balance
on the Cut-off Date and (b) the Original Group 3 Pre-Funded Amount.
"Class M-6 Realized Loss Amortization Amount": As to the Class
M-6 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-6 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xix) hereof, in each
case for such Distribution Date.
"Class M-7 Certificate Margin": For each Distribution Date (i)
on or prior to the Optional Termination Date, 0.800% per annum, and (ii)
following the Optional Termination Date, 1.200% per annum.
"Class M-7 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to the lesser of (i) One-Month LIBOR as of the related LIBOR
Determination Date, plus the Class M-7 Certificate Margin and (ii) the Pool
Maximum Rate Cap.
"Class M-7 Principal Distribution Amount": As of any
Distribution Date on or after the Stepdown Date and as long as a Trigger Event
is not in effect, the excess of (x) the sum of (i) the sum of the Certificate
Principal Balances of the Class A Certificates (after taking into account the
payment of the Senior Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date) and (viii) the Certificate Principal Balance of the Class M-7 Certificates
immediately prior to such Distribution Date over (y) the lesser of (a) the
product of (i) 84.70% and (ii) the sum of the Pool Balance as of the last day of
the related Collection Period after giving effect to Principal Prepayments in
the related Prepayment Period and any amounts remaining in the Group 3
Pre-Funding Account and (b) the amount by which the Pool Balance as of the last
day of the related Collection Period after giving effect to Principal
Prepayments in the related Prepayment Period exceeds the product of (i) 0.50%
and (ii) the sum of (a) the Pool Balance on the Cut-off Date and (b) the
Original Group 3 Pre-Funded Amount.
"Class M-7 Realized Loss Amortization Amount": As to the Class
M-7 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-7 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xxii) hereof, in each
case for such Distribution Date.
"Class M-8 Certificate Margin": For each Distribution Date (i)
on or prior to the Optional Termination Date, 0.920% per annum, and (ii)
following the Optional Termination Date, 1.380% per annum.
"Class M-8 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to the lesser of (i) One-Month LIBOR as of the related LIBOR
Determination Date, plus the Class M-8 Certificate Margin and (ii) the Pool
Maximum Rate Cap.
"Class M-8 Principal Distribution Amount": As of any
Distribution Date on or after the Stepdown Date and as long as a Trigger Event
is not in effect, the excess of (x) the sum of (i) the sum of the Certificate
Principal Balances of the Class A Certificates (after taking into account the
payment of the Senior Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date) and (ix) the Certificate Principal Balance of
the Class M-8 Certificates immediately prior to such Distribution Date over (y)
the lesser of (a) the product of (i) 87.00% and (ii) the sum of the Pool Balance
as of the last day of the related Collection Period after giving effect to
Principal Prepayments in the related Prepayment Period and any amounts remaining
in the Group 3 Pre-Funding Account and (b) the amount by which the Pool Balance
as of the last day of the related Collection Period after giving effect to
Principal Prepayments in the related Prepayment Period exceeds the product of
(i) 0.50% and (ii) the sum of (a) the Pool Balance on the Cut-off Date and (b)
the Original Group 3 Pre-Funded Amount.
"Class M-8 Realized Loss Amortization Amount": As to the Class
M-8 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-8 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xxv) hereof, in each
case for such Distribution Date.
"Class M-9 Certificate Margin": For each Distribution Date (i)
on or prior to the Optional Termination Date, 1.800% per annum, and (ii)
following the Optional Termination Date, 2.700% per annum.
"Class M-9 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to the lesser of (i) One-Month LIBOR as of the related LIBOR
Determination Date, plus the Class M-9 Certificate Margin and (ii) the Pool
Maximum Rate Cap.
"Class M-9 Principal Distribution Amount": As of any
Distribution Date on or after the Stepdown Date and as long as a Trigger Event
is not in effect, the excess of (x) the sum of (i) the sum of the Certificate
Principal Balances of the Class A Certificates (after taking into account the
payment of the Senior Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date), (ix) the Certificate Principal Balance of the
Class M-8 Certificates (after taking into account the payment of the Class M-8
Principal Distribution Amount on such Distribution Date) and (x) the Certificate
Principal Balance of the Class M-9 Certificates immediately prior to such
Distribution Date over (y) the lesser of (a) the product of (i) 89.80% and (ii)
the sum of the Pool Balance as of the last day of the related Collection Period
after giving effect to Principal Prepayments in the related Prepayment Period
and any amounts remaining in the Group 3 Pre-Funding Account and (b) the amount
by which the Pool Balance as of the last day of the related Collection Period
after giving effect to Principal Prepayments in the related Prepayment Period
exceeds the product of (i) 0.50% and (ii) the sum of (a) the Pool Balance on the
Cut-off Date and (b) the Original Group 3 Pre-Funded Amount.
"Class M-9 Realized Loss Amortization Amount": As to the Class
M-9 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-9 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xxviii) hereof, in each
case for such Distribution Date.
"Class P Certificate": Any one of the Certificates with a "P"
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-2, executed by the 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-3
and evidencing the ownership of the Residual Interest in each of REMIC 1, REMIC
2, REMIC 3 and REMIC 4. The Class R Certificate represents the ownership of the
Class R-1 Interest, the Class R-2 Interest, the Class R-3 Interest and the Class
R-4 Interest.
"Class R-X Certificate": The Class R-X 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-4
and evidencing the ownership of the Residual Interest in REMIC 5.
"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.
"Closing Date": August 10, 2006.
"Code": The Internal Revenue Code of 1986, as it may be amended
from time to time.
"Collection Account": The account or accounts created and
maintained by the Servicer pursuant to Section 3.04(a), which shall be entitled
"Collection Account, Option One Mortgage Corporation, as Servicer for the Trust
under the Pooling and Servicing Agreement dated as of July 1, 2006 among Asset
Backed Funding Corporation, as Depositor, Option One Mortgage Corporation, as
Servicer, and ▇▇▇▇▇ Fargo Bank, N.A., as Trustee, in trust for registered
Holders of ABFC 2006-OPT1 Trust, Asset Backed Funding Corporation Asset-Backed
Certificates, Series 2006-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.
"Combined Loan-to-Value Ratio": For any Mortgage Loan, the
fraction, expressed as a percentage, the numerator of which is the sum of (i)
the Principal Balance of the Mortgage Loan at origination and (ii) the principal
balance of the senior mortgage loan, if any, on the date of origination of the
Mortgage Loan and the denominator of which is the Value of the related Mortgaged
Property.
"Commission": The United States Securities and Exchange
Commission.
"Compensating Interest": As defined in Section 3.23 hereof.
"Compliance Statement": As defined in Section 3.19 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.
"Consulting Agreement": The Consulting Agreement, dated as of
August 10, 2006, between the Credit Risk Manager and the Depositor.
"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, ▇▇▇▇▇ Fargo Center, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇, Attention: Client Manager-ABFC, Series 2006-OPT1 and (ii)
for all other purposes, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Client Manager-ABFC, Series 2006-OPT1 or at such other address as the
Trustee may designate from time to time by notice to the Certificateholders, the
Depositor and the 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
----------------------------- -----------------------------
LT1A1 Class A-1 Certificates
LT1A2 Class A-2 Certificates
LT1A3A Class A-3A Certificates
LT1A3B Class A-3B Certificates
LT1A3C1 Class A-3C1 Certificates
LT1A3C2 Class A-3C2 Certificates
LT1A3D Class A-3D Certificates
LT1M1 Class M-1 Certificates
LT1M2 Class M-2 Certificates
LT1M3 Class M-3 Certificates
LT1M4 Class M-4 Certificates
LT1M5 Class M-5 Certificates
LT1M6 Class M-6 Certificates
LT1M7 Class M-7 Certificates
LT1M8 Class M-8 Certificates
LT1M9 Class M-9 Certificates
LT1B Class B Certificates
"Credit Enhancement Percentage": For any Distribution Date and
any Class of Certificates, the percentage obtained by dividing (x) the sum of
(i) the aggregate Certificate Principal Balance of the Class or Classes of
Certificates with a lower distributions priority than such Class before taking
into account the distribution of the Principal Distribution Amount on such
Distribution Date and (ii) the Overcollateralization Amount after taking into
account the distribution of the Principal Distribution Amount as of the prior
Distribution Date by (y) the sum of the (i) Pool Balance as of the last day of
the related Collection Period after giving effect to Principal Prepayments in
the related Prepayment Period and (ii) any amount remaining in the Group 3
Pre-Funding Account.
"Credit Risk Manager": ▇▇▇▇▇▇▇ Fixed Income Services Inc., 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, 0.0150% per annum.
"Credit Risk Management Agreement": The Credit Risk Management
Agreement between the Servicer and the Credit Risk Manager dated as of August
10, 2006.
"Cut-off Date": July 1, 2006.
"Cut-off Date Principal Balance": With respect to any Mortgage
Loan, the unpaid Principal Balance thereof as of the Cut-off Date, with respect
to each Initial Mortgage Loan, or as of the Subsequent Cut-off Date, with
respect to each Additional Group 3 Mortgage Loan, as applicable, 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.
"Deemed Material and Adverse Representation": As such term is
defined in the Option One Sale Agreement.
"Defective Mortgage Loan": A Mortgage Loan replaced or to be
replaced by one or more Eligible Substitute Mortgage Loans.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.
"Definitive Certificates": As defined in Section 5.02(c) hereof.
"Delinquent": Any Mortgage Loan with respect to which the
Monthly Payment due on a Due Date is not made by the close of business on the
next scheduled Due Date for such Mortgage Loan.
"Depositor": Asset Backed Funding Corporation, a Delaware
corporation, or any successor in interest.
"Depository": The initial depository shall be The Depository
Trust Company, whose nominee is Cede & Co., or any other organization registered
as a "clearing agency" pursuant to Section 17A of the Exchange Act. The
Depository shall initially be the registered Holder of the Book-Entry
Certificates. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(3) of the Uniform Commercial Code of the State of New
York.
"Depository Participant": A broker, dealer, bank or other
financial institution or other person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date": With respect to any Distribution Date, the
15th day of the calendar month in which such Distribution Date occurs or, if
such 15th day is not a Business Day, the Business Day immediately preceding such
15th day.
"Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by the Trust other than
through an Independent Contractor; provided, however, that the Trustee (or the
Servicer under this Agreement) shall not be considered to Directly Operate an
REO Property solely because the Trustee (or the Servicer under this Agreement)
establishes rental terms, chooses tenants, enters into or renews leases, deals
with taxes and insurance, or makes decisions as to repairs or capital
expenditures with respect to such REO Property.
"Disqualified Organization": A "disqualified organization" under
Section 860E of the Code, which as of the Closing Date is any of: (i) the United
States, any state or political subdivision thereof, any possession of the United
States, any foreign government, any international organization, or any agency or
instrumentality of any of the foregoing, (ii) any organization (other than a
cooperative described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code unless such organization is subject to the tax
imposed by Section 511 of the Code, (iii) any organization described in Section
1381(a)(2)(C) of the Code, or (iv) any other Person so designated by the Trustee
based upon an Opinion of Counsel provided by nationally recognized counsel to
the Trustee that the holding of an ownership interest in a Residual Certificate
by such Person may cause the Trust Fund or any Person having an ownership
interest in any Class of Certificates (other than such Person) to incur
liability for any federal tax imposed under the Code that would not otherwise be
imposed but for the transfer of an ownership interest in a Residual Certificate
to such Person. A corporation will not be treated as an instrumentality of the
United States or of any state or political subdivision thereof if all of its
activities are subject to tax and a majority of its board of directors is not
selected by a governmental unit. The term "United States," "state" and
"international organization" shall have the meanings set forth in Section 7701
of the Code.
"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, ▇▇▇▇▇ Fargo Bank, N.A., as Trustee, in trust for
the registered Holders of ABFC 2006-OPT1 Trust, Asset Backed Funding Corporation
Asset-Backed Certificates, Series 2006-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 August 2006.
"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, "F-1+" by Fitch or "P-1" by ▇▇▇▇▇'▇ (or comparable ratings
if S&P, Fitch and ▇▇▇▇▇'▇ 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
and the NIMS Insurer. Eligible Accounts may bear interest.
"Eligible Investments": Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
regardless of whether issued or managed by the Depositor, the Servicer, the NIMS
Insurer, 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 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, A+ or higher by Fitch and A2 or higher by ▇▇▇▇▇'▇, 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) that, if rated by each Rating Agency, are rated in its
highest rating category (if so rated by such Rating Agency); and
(vii) if previously confirmed in writing to the Trustee and
consented to by the NIMS Insurer, any other demand, money market or time
deposit, or any other obligation, security or investment, as may be acceptable
to the Rating Agencies in writing as an eligible investment of funds backing
securities having ratings equivalent to its highest initial rating of the Senior
Certificates;
provided, that no instrument described hereunder shall evidence either the right
to receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provide a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations.
"Eligible Substitute Mortgage Loan": A mortgage loan substituted
for a Defective Mortgage Loan pursuant to the terms of this Agreement which
must, on the date of such substitution, (i) have an outstanding principal
balance (or in the case of a substitution of more than one Mortgage Loan for a
Defective Mortgage Loan, an aggregate principal balance) not in excess of the
then outstanding principal balance of the Defective Mortgage Loan as of the Due
Date in the calendar month during which the substitution occurs, (ii) be of the
same type (fixed-rate or adjustable-rate) and have a Mortgage Interest Rate not
less than the Mortgage Interest Rate of the Defective Mortgage Loan and not more
than 2% in excess of the Mortgage Interest Rate of such Defective Mortgage Loan
and, with respect to an Adjustable-Rate Mortgage Loan, have the same Index as
the Defective Mortgage Loan and have a Gross Margin equal to or greater than the
Defective Mortgage Loan, (iii) have a FICO Score not less than the Defective
Mortgage Loan, (iv) have a remaining term to maturity not more than one year
earlier and not later than the remaining term to maturity of the Defective
Mortgage Loan, (v) have a Combined Loan-to-Value Ratio as of the date of
substitution not greater than the Combined Loan-to-Value Ratio of the Defective
Mortgage Loan as of such date, (vi) have a Prepayment Charge at least equal in
amount of that of the Defective Mortgage Loan and (vii) conform to each
representation and warranty set forth in the applicable section of the
applicable Originator Mortgage Loan Purchase Agreement and 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 balance, the Mortgage Interest
Rates described in clause (ii) hereof shall be determined on the basis of
weighted average Mortgage Interest Rates, the terms described in clause (iv)
hereof shall be determined on the basis of weighted average remaining term to
maturity, the Combined Loan-to-Value Ratios described in clause (v) 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 (vii) 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, Group 2 Mortgage Loan or Group 3 Mortgage Loan must
be replaced by an Eligible Substitute Mortgage Loan that will be a Group 1
Mortgage Loan, Group 2 Mortgage Loan or Group 3 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 Residual Certificates.
"Escrow Account": The account or accounts created and maintained
pursuant to Section 3.06.
"Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water rates, mortgage insurance premiums, fire and hazard insurance
premiums and other payments required to be escrowed by the Mortgagor with the
mortgagee pursuant to any Mortgage Loan.
"Estate in Real Property": A fee simple estate in a parcel of
real property.
"Exchange Act": The Securities Exchange Act of 1934, as amended.
"Expense Fee Rate": The sum of (i) the Servicing Fee Rate and
(ii) the Credit Risk Manager Fee Rate.
"Extended Period": As defined in Section 9.04(b) hereof.
"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": As defined in Section 3.12 hereof.
"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 applicable Originator or the Seller pursuant to or as
contemplated by Section 2.03 or (ii) purchased by the Majority Class CE
Certificateholders or the Servicer pursuant to Section 10.01), a determination
made by the Servicer that all Insurance Proceeds, Condemnation Proceeds,
Liquidation Proceeds and other payments or recoveries which the Servicer, in its
reasonable good faith judgment, expects to be finally recoverable in respect
thereof have been so recovered. The Servicer shall maintain records, prepared by
a Servicing Officer, of each Final Recovery Determination made thereby.
"Fitch": Fitch Ratings and its successors, and if such company
shall for any reason no longer perform the functions of a securities rating
agency, "Fitch" shall be deemed to refer to any other "nationally recognized
statistical rating organization" as set forth on the most current list of such
organizations released by the 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.
"Fixed Swap Payment": With respect to any Distribution Date, an
amount equal to the product of (x) 5.345%, (y) the notional amount for that
Distribution Date set forth in the Interest Rate Swap Agreement and (z) a
fraction, the numerator of which is 30 (or, for the first Distribution Date, the
number of days elapsed from the Closing Date to but excluding the first
Distribution Date), and the denominator of which is 360.
"Floating Swap Payment": With respect to any Distribution Date,
an amount equal to the product of (i) Swap LIBOR, (ii) the notional amount for
that Distribution Date set forth in the Interest Rate Swap Agreement and (iii) a
fraction, the numerator of which is the actual number of days elapsed from and
including the previous Distribution Date to but excluding the current
Distribution Date (or, for the first Distribution Date, the actual number of
days elapsed from the Closing Date to but excluding the first Distribution
Date), and the denominator of which is 360.
"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.
"Form 8-K": As defined in Section 3.31(a) hereof.
"Form 8-K Information": As defined in Section 3.31(d) hereof.
"Form 10-D": As defined in Section 3.31(a) hereof.
"Form 10-K": As defined in Section 3.31(a) hereof.
"Funding Period": The period beginning on the Closing Date and
ending on the earlier to occur of (a) the date upon which the amount on deposit
in the Group 3 Pre-Funding Account has been reduced to zero or (b) August 30,
2006.
"Grantor Trust": That portion of the Trust exclusive of any
REMIC created hereunder consisting of (a) the Prepayment Charges, any Originator
Prepayment Charge Payment Amounts and any Servicer Prepayment Charge Payment
Amounts and the right of the Class P Certificateholders to receive such
Prepayment Charges, Originator Prepayment Charge Payment Amounts and Servicer
Prepayment Charge Payment Amounts, (b) the right of the Offered Certificates and
the Class B Certificates to receive Cap Carryover Amounts, (c) the Interest Rate
Swap Agreement, the Swap Account, the Cap Carryover Reserve Account and the
beneficial interest of the Class CE Certificates with respect thereto, (d) the
Group 3 Pre-Funding Account and (e) the obligation of the Class CE Certificates
to pay Cap Carryover Amounts.
"Gross Margin": With respect to each Adjustable-Rate Mortgage
Loan, the fixed percentage set forth in the related Mortgage Note that is added
to the Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Interest Rate for such Mortgage
Loan.
"Group 1 Cap": For any Distribution Date and for the Class A-1
Certificates, (a) a per annum rate (subject to adjustment based on the actual
number of days elapsed in the related Interest Accrual Period) equal to the
Weighted Average Net Mortgage Interest Rate for the Group 1 Mortgage Loans minus
(b) a percentage, expressed as a per annum rate (subject to an adjustment based
on the actual number of days elapsed in the related Interest Accrual Period),
calculated as a fraction, the numerator of which is the sum of (i) any Net Swap
Payment owed to the Swap Provider and (ii) any Swap Termination Payment owed to
the Swap Provider (other than any Swap Termination Payment resulting from a Swap
Provider Trigger Event) and the denominator of which is the Pool Balance as of
the first day of the related Collection Period.
"Group 1 Interest Remittance Amount": As of any Distribution
Date, the excess of (A) 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 Servicer on or prior to the Determination
Date for such Distribution Date (less the Servicing Fee for such Mortgage Loans,
amounts available for reimbursement of Advances and Servicing Advances pursuant
to Section 3.05, expenses reimbursable pursuant to Section 6.03 and
indemnification payments pursuant to Sections 3.26 and 8.05), (ii) all
Compensating Interest paid by the Servicer on the related Distribution Date with
respect to the Group 1 Mortgage Loans, (iii) the portion of any payment in
connection with any Principal Prepayment (other than any Prepayment Interest
Excess), substitution, Purchase Price, Termination Price, Insurance Proceeds or
Net Liquidation Proceeds relating to interest with respect to the Group 1
Mortgage Loans received during the related Prepayment Period and (iv) the
portion of any Reimbursement Amount relating to interest on such Mortgage Loans
received during the related Prepayment Period over (B) the product of (x) any
amounts payable to the Swap Provider (including any Net Swap Payment and any
Swap Termination Payment owed to the Swap Provider but excluding any Swap
Termination Payment owed to the Swap Provider resulting from a Swap Provider
Trigger Event) and (y) a fraction, the numerator of which is the aggregate
Principal Balance of the Group 1 Mortgage Loans as of the first day of the
related Collection Period and the denominator of which is equal to the Pool
Balance as of the first day of the related Collection Period.
"Group 1 Maximum Rate Cap": As of any Distribution Date and the
Class A-1 Certificates, (a) a per annum rate (subject to adjustment based on the
actual number of days elapsed in the related Interest Accrual Period) equal to
the Weighted Average Net Maximum Mortgage Interest Rates for the Group 1
Mortgage Loans minus (b) a percentage, expressed as a per annum rate (subject to
an adjustment based on the actual number of days elapsed in the related Interest
Accrual Period), calculated as a fraction, the numerator of which is the sum of
(i) any Net Swap Payment owed to the Swap Provider and (ii) any Swap Termination
Payment owed to the Swap Provider (other than any Swap Termination Payment
resulting from a Swap Provider Trigger Event), and the denominator of which is
equal to the Pool Balance as of the first day of the related Collection Period
plus (c) a percentage, expressed as a per annum rate (subject to adjustment
based on the actual number of days elapsed in the related Interest Accrual
Period), calculated as a fraction, the numerator of which is equal to any Net
Swap Payment made by the Swap Provider and the denominator of which is equal to
the Pool Balance as of the first day of the related Collection Period.
"Group 1 Mortgage Loan": The Initial Group 1 Mortgage Loans.
"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 Principal Remittance Amount allocable to the Group
1 Mortgage Loans for such Distribution Date and the denominator of which is the
Principal Remittance Amount allocable to the Mortgage Loans for such
Distribution Date.
"Group 1 Senior Principal Distribution Amount": With respect to
any Distribution Date (i) before the Stepdown Date or as to which a Trigger
Event is in effect, the Group 1 Principal Percentage of the Principal
Distribution Amount (excluding any amount included in the Principal Distribution
Amount pursuant to clause (iii) of the definition thereof) and (ii) on or after
the Stepdown Date and as long as a Trigger Event is not in effect, the excess of
(a) the Certificate Principal Balance of the Class A-1 Certificates immediately
prior to that Distribution Date over (b) the lesser of (x) the product of (1)
45.20% and (2) the aggregate Principal Balance of the Group 1 Mortgage Loans as
of the last day of the related Collection Period after giving effect to
Principal Prepayments in the related Prepayment Period and (y) the amount by
which the aggregate Principal Balance of the Group 1 Mortgage Loans as of the
last day of the related Collection Period after giving effect to Principal
Prepayments in the related Prepayment Period exceeds the product of (1) 0.50%
and (2) the aggregate Principal Balance of the Group 1 Mortgage Loans on the
Cut-off Date.
"Group 2 Cap": For any Distribution Date and for the Class A-2
Certificates, (a) a per annum rate (subject to adjustment based on the actual
number of days elapsed in the related Interest Accrual Period) equal to the
Weighted Average Net Mortgage Interest Rate for the Group 2 Mortgage Loans,
minus (b) a percentage, expressed as a per annum rate (subject to an adjustment
based on the actual number of days elapsed in the related Interest Accrual
Period), calculated as a fraction, the numerator of which is the sum of (i) any
Net Swap Payment owed to the Swap Provider and (ii) any Swap Termination Payment
owed to the Swap Provider (other than any Swap Termination Payment resulting
from a Swap Provider Trigger Event) and the denominator of which is the Pool
Balance as of the first day of the related Collection Period.
"Group 2 Interest Remittance Amount": As of any Distribution
Date, the excess of (A) 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 Servicer on or prior to the Determination
Date for such Distribution Date (less the Servicing Fee for such Mortgage Loans,
amounts available for reimbursement of Advances and Servicing Advances pursuant
to Section 3.05, expenses reimbursable pursuant to Section 6.03 and
indemnification payments pursuant to Sections 3.26 and 8.05), (ii) all
Compensating Interest paid by the Servicer on the related Distribution Date with
respect to the Group 2 Mortgage Loans, (iii) the portion of any payment in
connection with any Principal Prepayment (other than any Prepayment Interest
Excess), substitution, Purchase Price, Termination Price, Insurance Proceeds or
Net Liquidation Proceeds relating to interest with respect to the Group 2
Mortgage Loans received during the related Prepayment Period and (iv) the
portion of any Reimbursement Amount relating to interest on such Mortgage Loans
received during the related Prepayment Period over (B) the product of (x) any
amounts payable to the Swap Provider (including any Net Swap Payment and any
Swap Termination Payment owed to the Swap Provider but excluding any Swap
Termination Payment owed to the Swap Provider resulting from a Swap Provider
Trigger Event) and (y) a fraction, the numerator of which is the aggregate
Principal Balance of the Group 2 Mortgage Loans as of the first day of the
related Collection Period and the denominator of which is equal to the Pool
Balance as of the first day of the related Collection Period.
"Group 2 Maximum Rate Cap": As of any Distribution Date and the
Class A-2 Certificates, (a) a per annum rate (subject to adjustment based on the
actual number of days elapsed in the related Interest Accrual Period) equal to
the Weighted Average Net Maximum Mortgage Interest Rates for the Group 2
Mortgage Loans minus (b) a percentage, expressed as a per annum rate (subject to
an adjustment based on the actual number of days elapsed in the related Interest
Accrual Period), calculated as a fraction, the numerator of which is the sum of
(i) any Net Swap Payment owed to the Swap Provider and (ii) any Swap Termination
Payment owed to the Swap Provider (other than any Swap Termination Payment
resulting from a Swap Provider Trigger Event), and the denominator of which is
equal to the Pool Balance as of the first day of the related Collection Period
plus (c) a percentage, expressed as a per annum rate (subject to adjustment
based on the actual number of days elapsed in the related Interest Accrual
Period), calculated as a fraction, the numerator of which is equal to any Net
Swap Payment made by the Swap Provider and the denominator of which is equal to
the Pool Balance as of the first day of the related Collection Period.
"Group 2 Mortgage Loan": The Initial Group 2 Mortgage Loans.
"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 Principal Remittance Amount allocable to the Group
2 Mortgage Loans for such Distribution Date and the denominator of which is the
Principal Remittance Amount allocable to the Mortgage Loans for such
Distribution Date.
"Group 2 Senior Principal Distribution Amount": With respect to
any Distribution Date (i) before the Stepdown Date or as to which a Trigger
Event is in effect, the Group 2 Principal Percentage of the Principal
Distribution Amount (excluding any amount included in the Principal Distribution
Amount pursuant to clause (iii) of the definition thereof) and (ii) on or after
the Stepdown Date and as long as a Trigger Event is not in effect, the excess of
(a) the aggregate Certificate Principal Balance of the Class A-2 Certificates
immediately prior to that Distribution Date over (b) the lesser of (x) the
product of (1) 45.20% and (2) the aggregate Principal Balance of the Group 2
Mortgage Loans as of the last day of the related Collection Period after giving
effect to Principal Prepayments in the related Prepayment Period and (y) the
amount by which the aggregate Principal Balance of the Group 2 Mortgage Loans as
of the last day of the related Collection Period after giving effect to
Principal Prepayments in the related Prepayment Period exceeds the product of
(1) 0.50% and (2) the aggregate Principal Balance of the Group 2 Mortgage Loans
on the Cut-off Date.
"Group 3 Cap": For any Distribution Date and for the Class A-3A,
Class A-3B, A-3C1, Class A-3C2 and Class A-3D Certificates, (a) a per annum rate
(subject to adjustment based on the actual number of days elapsed in the related
Interest Accrual Period) equal to the Weighted Average Net Mortgage Interest
Rate for the Group 3 Mortgage Loans minus (b) a percentage, expressed as a per
annum rate (subject to an adjustment based on the actual number of days elapsed
in the related Interest Accrual Period), calculated as a fraction, the numerator
of which is the sum of (i) the Net Swap Payment owed to the Swap Provider and
(ii) any Swap Termination Payment owed to the Swap Provider (other than any Swap
Termination Payment resulting from a Swap Provider Trigger Event) and the
denominator of which is the Pool Balance as of the first day of the related
Collection Period.
"Group 3 Interest Remittance Amount": As of any Distribution
Date, the excess of (A) the sum, without duplication, of (i) all interest due
and collected or advanced with respect to the related Collection Period on the
Group 3 Mortgage Loans received by the Servicer on or prior to the Determination
Date for such Distribution Date (less the Servicing Fee for such Mortgage Loans,
amounts available for reimbursement of Advances and Servicing Advances pursuant
to Section 3.05, expenses reimbursable pursuant to Section 6.03 and
indemnification payments pursuant to Sections 3.26 and 8.05), (ii) all
Compensating Interest paid by the Servicer on the related Distribution Date with
respect to the Group 3 Mortgage Loans, (iii) the portion of any payment in
connection with any Principal Prepayment (other than any Prepayment Interest
Excess), substitution, Purchase Price, Termination Price, Insurance Proceeds or
Net Liquidation Proceeds relating to interest with respect to the Group 3
Mortgage Loans received during the related Prepayment Period and (iv) the
portion of any Reimbursement Amount relating to interest on such Mortgage Loans
received during the related Prepayment Period over (B) the product of (x) any
amounts payable to the Swap Provider (including any Net Swap Payment and any
Swap Termination Payment owed to the Swap Provider but excluding any Swap
Termination Payment owed to the Swap Provider resulting from a Swap Provider
Trigger Event) and (y) a fraction, the numerator of which is the aggregate
Principal Balance of the Group 3 Mortgage Loans as of the first day of the
related Collection Period and the denominator of which is equal to the Pool
Balance as of the first day of the related Collection Period.
"Group 3 Maximum Rate Cap": As of any Distribution Date and the
Class A-3A, Class A-3B, A-3C1, Class A-3C2 and Class A-3D Certificates, (a) a
per annum rate (subject to adjustment based on the actual number of days elapsed
in the related Interest Accrual Period) equal to the Weighted Average Net
Maximum Mortgage Interest Rates for the Group 3 Mortgage Loans, minus (b) a
percentage, expressed as a per annum rate (subject to an adjustment based on the
actual number of days elapsed in the related Interest Accrual Period),
calculated as a fraction, the numerator of which is the sum of (i) any Net Swap
Payment owed to the Swap Provider and (ii) any Swap Termination Payment owed to
the Swap Provider (other than any Swap Termination Payment resulting from a Swap
Provider Trigger Event), and the denominator of which is equal to the Pool
Balance as of the first day of the related Collection Period plus (c) a
percentage, expressed as a per annum rate (subject to adjustment based on the
actual number of days elapsed in the related Interest Accrual Period),
calculated as a fraction, the numerator of which is equal to any Net Swap
Payment made by the Swap Provider and the denominator of which is equal to the
Pool Balance as of the first day of the related Collection Period.
"Group 3 Mortgage Loan": The Initial Group 3 Mortgage Loans and
any Additional Group 3 Mortgage Loans.
"Group 3 Pre-Funding Account": The account established and
maintained pursuant to Section 4.10.
"Group 3 Principal Percentage": With respect to any Distribution
Date and the Class A-3A, Class A-3B, Class A-3C1, Class A-3C2 and Class A-3D
Certificates, the percentage equivalent to a fraction, the numerator of which is
the Principal Remittance Amount allocable to the Group 3 Mortgage Loans for such
Distribution Date and the denominator of which is the Principal Remittance
Amount allocable to the Mortgage Loans for such Distribution Date.
"Group 3 Senior Principal Distribution Amount": With respect to
any Distribution Date (i) before the Stepdown Date or as to which a Trigger
Event is in effect, the sum of (a) the Group 3 Principal Percentage of the
Principal Distribution Amount (excluding any amount included in the Principal
Distribution Amount pursuant to clause (iii) of the definition thereof) and (b)
on the Distribution Date immediately following the end of the Funding Period,
any amount remaining in the Group 3 Pre-Funding Account after giving effect to
any purchase of Additional Group 3 Mortgage Loans and (ii) on or after the
Stepdown Date and as long as a Trigger Event is not in effect, the sum of (a)
the excess of (I) the sum of the Certificate Principal Balances of the Class
A-3A, Class A-3B, Class A-3C1, Class A-3C2 and Class A-3D Certificates
immediately prior to that Distribution Date over (II) the lesser of (x) the
product of (1) 45.20% and (2) the sum of (A) the aggregate Principal Balance of
the Group 3 Mortgage Loans as of the last day of the related Collection Period
after giving effect to Principal Prepayments in the related Prepayment Period
and (B) any amounts remaining in the Group 3 Pre-Funding Account and (y) the
amount by which the aggregate Principal Balance of the Group 3 Mortgage Loans as
of the last day of the related Collection Period after giving effect to
Principal Prepayments in the related Prepayment Period exceeds the product of
(1) 0.50% and (2) the sum of (A) the aggregate Principal Balance of the Group 3
Mortgage Loans on the Cut-off Date and (B) the Original Group 3 Pre-Funded
Amount and (b) on the Distribution Date immediately following the end of the
Funding Period, any amount remaining in the Group 3 Pre-Funding Account after
giving effect to any purchase of Additional Group 3 Mortgage Loans.
"Group Subordinate Amount" for any Distribution Date and (i) the
Group 1 Mortgage Loans, will be equal to the excess of the aggregate Principal
Balance of the Group 1 Mortgage Loans as of the first day of the related
Collection Period over the Certificate Principal Balance of the Class A-1
Certificates immediately prior to such Distribution Date, (ii) the Group 2
Mortgage Loans, will be equal to the excess of the aggregate Principal Balance
of the Group 2 Mortgage Loans as of the first day of the related Collection
Period over the Certificate Principal Balance of the Class A-2 Certificates
immediately prior to such Distribution Date and (iii) the Group 3 Mortgage
Loans, will be equal to the excess of (a) the sum of the aggregate Principal
Balance of the Group 3 Mortgage Loans as of the first day of the related
Collection Period and the amount (if any) in the Group 3 Pre-Funding Account
over (b) the aggregate Certificate Principal Balance of the Class A-3A, Class
A-3B, Class A-3C1, Class A-3C2 and Class A-3D Certificates immediately prior to
such Distribution Date.
"Indenture": An indenture relating to the issuance of net
interest margin notes secured by the Class CE Certificates and the Class P
Certificates, which may or may not be guaranteed by the NIMS Insurer.
"Independent": When used with respect to any specified Person,
any such Person who (i) is in fact independent of the Depositor, the Servicer
and their respective Affiliates, (ii) does not have any direct financial
interest in or any material indirect financial interest in the Depositor or the
Servicer or any Affiliate thereof, and (iii) is not connected with the Depositor
or the Servicer or any Affiliate thereof as an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing similar functions;
provided, however, that a Person shall not fail to be Independent of the
Depositor or the Servicer or any Affiliate thereof merely because such Person is
the beneficial owner of 1% or less of any class of securities issued by the
Depositor or the Servicer or any Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than the
Servicer) that would be an "independent contractor" with respect to the Trust
Fund within the meaning of Section 856(d)(3) of the Code if the Trust Fund were
a real estate investment trust (except that the ownership tests set forth in
that section shall be considered to be met by any Person that owns, directly or
indirectly, 35 percent or more of any Class of Certificates), so long as the
Trust Fund does not receive or derive any income from such Person and provided
that the relationship between such Person and the Trust Fund is at arm's length,
all within the meaning of Treasury Regulations Section 1.856-4(b)(5), or (ii)
any other Person (including the Servicer) if the Trustee has received an Opinion
of Counsel, which Opinion of Counsel shall be an expense of the Trust Fund, to
the effect that the taking of any action in respect of any REO Property by such
Person, subject to any conditions therein specified, that is otherwise herein
contemplated to be taken by an Independent Contractor will not cause such REO
Property to cease to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code (determined without regard to the exception
applicable for purposes of Section 860D(a) of the Code), or cause any income
realized in respect of such REO Property to fail to qualify as Rents from Real
Property.
"Index": With respect to each Adjustable-Rate Mortgage Loan and
with respect to each related Adjustment Date, the index as specified in the
related Mortgage Note.
"Initial Certificate Principal Balance": With respect to any
Certificate of a Class other than a Class CE, Class P or Residual Certificate,
the amount designated "Initial Certificate Principal Balance" on the face
thereof.
"Initial Group 1 Mortgage Loan": Each Group 1 Mortgage Loan
included in the Trust Fund on the Closing Date and listed on the Mortgage Loan
Schedule. The aggregate Principal Balance of the Initial Group 1 Mortgage Loans
as of the Cut-off Date is equal to $230,065,449.86.
"Initial Group 2 Mortgage Loan": Each Group 2 Mortgage Loan
included in the Trust Fund on the Closing Date and listed on Mortgage Loan
Schedule. The aggregate Principal Balance of the Initial Group 2 Mortgage Loans
as of the Cut-off Date is equal to $229,953,819.39.
"Initial Group 3 Mortgage Loan": Each Group 3 Mortgage Loan
included in the Trust Fund on the Closing Date and listed on Mortgage Loan
Schedule. The aggregate Principal Balance of the Initial Group 3 Mortgage Loans
as of the Cut-off Date is equal to $528,008,647.09.
"Initial Mortgage Loan": Any of the Initial Group 1 Mortgage
Loans, Initial Group 2 Mortgage Loans or Initial Group 3 Mortgage Loans.
"Initial Overcollateralization Amount": $35,170,766.21.
"Interest Rate Swap Agreement": The 1992 ISDA Master Agreement
(Multicurrency-Cross Border) dated as of August 10, 2006 (together with the
schedule thereto, the Master Agreement) between Bank of America, National
Association and the Trustee, and a confirmation of the same date, which
supplements and forms part of the Master Agreement, substantially in the form
attached hereto as Exhibit N.
"Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy covering a Mortgage Loan, to the extent such
proceeds are not to be applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the procedures that the
Servicer would follow in servicing mortgage loans held for its own account,
subject to the terms and conditions of the related Mortgage Note and Mortgage.
"Interest Accrual Period": With respect to any Distribution Date
and the Offered Certificates and the Class B Certificates, the period from the
preceding Distribution Date to the day prior to the current Distribution Date
(or, in the case of the first Distribution Date, the period from the Closing
Date through August 25, 2006).
"Interest Carry Forward Amount": For any Class of Certificates
(other than the Class CE, Class P and Residual Certificates) and any
Distribution Date, the sum of (a) the excess, if any, of the Accrued Certificate
Interest for such Distribution Date over the amount in respect of interest
actually distributed on such Class for such Distribution Date, (b) any remaining
unpaid Interest Carry Forward Amount from prior Distribution Dates and (c)
interest on such remaining Interest Carry Forward Amount referred to in clause
(b) at the applicable Certificate Interest Rate on the basis of the actual
number of days elapsed since the prior Distribution Date.
"Interest Percentage": With respect to any Class of Certificates
and any Distribution Date, the ratio (expressed as a decimal carried to six
places) of the Accrued Certificate Interest for such Class to the sum of the
Accrued Certificate Interest for all Classes, in each case with respect to such
Distribution Date, without regard to shortfalls caused by the Relief Act or
similar state laws.
"Interest Remittance Amount": As of any Determination Date, the
sum of the Group 1 Interest Remittance Amount, the Group 2 Interest Remittance
Amount and the Group 3 Interest Remittance Amount.
"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 and the Class B Certificates, (i) for the first Distribution Date,
the second LIBOR Business Day preceding the Closing Date and (ii) for each
subsequent Distribution Date, the second LIBOR Business Day prior to the
immediately preceding Distribution Date.
"Liquidated Mortgage Loan": As to any Distribution Date, any
Mortgage Loan in respect of which the Servicer has determined, in accordance
with the servicing procedures specified herein, as of the end of the related
Prepayment Period, that all Liquidation Proceeds, 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 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 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 Servicer and the Trustee.
"Loan Group": Any of Loan Group 1, Loan Group 2 or Loan Group 3.
"Loan Group 1": The Group 1 Mortgage Loans.
"Loan Group 2": The Group 2 Mortgage Loans.
"Loan Group 3": The Group 3 Mortgage Loans.
"Losses": As defined in Section 9.03.
"Lost Note Affidavit": With respect to any Mortgage Loan as to
which the original Mortgage Note has been permanently lost or destroyed and has
not been replaced, an affidavit from the Seller certifying that the original
Mortgage Note has been lost, misplaced or destroyed (together with a copy of the
related Mortgage Note and indemnifying the Trust against any loss, cost or
liability resulting from the failure to deliver the original Mortgage Note) in
the form of Exhibit H hereto.
"Majority Certificateholders": The Holders of Certificates
evidencing at least 51% of the Voting Rights.
"Majority Class CE Certificateholders": The Holders of Class CE
Certificates evidencing at least a 51% Percentage Interest in the Class CE
Certificates.
"Marker Rate": With respect to the Class CE Certificates and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the Uncertificated REMIC Pass-Through Rates for REMIC 3 Regular Interest
LT1A1, REMIC 3 Regular Interest LT1A2, REMIC 3 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, REMIC 3
Regular Interest LT1A3B, REMIC 3 Regular Interest LT1A3C1, REMIC 3 Regular
Interest LT1A3C2, REMIC 3 Regular Interest LT1A3D, REMIC 3 Regular Interest
LT1M1, REMIC 3 Regular Interest LT1M2, REMIC 3 Regular Interest LT1M3, REMIC 3
Regular Interest LT1M4, REMIC 3 Regular Interest LT1M5, REMIC 3 Regular Interest
LT1M6, REMIC 3 Regular Interest LT1M7, REMIC 3 Regular Interest LT1M8, REMIC 3
Regular Interest LT1M9, REMIC 3 Regular Interest LT1B and REMIC 3 Regular
Interest LT1ZZ, (i) with the rate on each such REMIC Regular Interest (other
than REMIC 3 Regular Interest LT1ZZ) subject to a cap equal to the REMIC 4
Pass-Through Rate of its Corresponding Class (taking into account in determining
any such Pass-Through Rate the imposition of the Group 1 Cap, the Group 2 Cap,
the Group 3 Cap or the Pool Cap, as applicable, calculated as described in the
definition of REMIC 4 Pass-Through Rate) for the purposes of this calculation
and (ii) with the rate on REMIC 3 Regular Interest LT1ZZ subject to a cap of
zero for the purpose of this calculation; provided, however, that for this
purpose, calculations of the Uncertificated REMIC 3 Pass-Through Rate and the
related caps with respect to each such REMIC Regular Interest (other than REMIC
3 Regular Interest LT1ZZ) shall be multiplied by a fraction, the numerator of
which is the actual number of days in the Interest Accrual Period and the
denominator of which is 30.
"Maximum LT1ZZ Uncertificated Accrued Interest Deferral Amount":
With respect to any Distribution Date, the excess of (a) accrued interest at the
Uncertificated REMIC 3 Pass-Through Rate applicable to REMIC 3 Regular Interest
LT1ZZ for such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC 3 Regular Interest LT1ZZ minus the REMIC 3
Overcollateralized Amount, in each case for such Distribution Date, over (b)
Uncertificated Accrued Interest on REMIC 3 Regular Interest LT1A1, REMIC 3
Regular Interest LT1A2, REMIC 3 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, REMIC 3 Regular
Interest LT1A3B, REMIC 3 Regular Interest LT1A3C1, REMIC 3 Regular Interest
LT1A3C2, REMIC 3 Regular Interest LT1A3D, REMIC 3 Regular Interest LT1M1, REMIC
3 Regular Interest LT1M2, REMIC 3 Regular Interest LT1M3, REMIC 3 Regular
Interest LT1M4, REMIC 3 Regular Interest LT1M5, REMIC 3 Regular Interest LT1M6,
REMIC 3 Regular Interest LT1M7, REMIC 3 Regular Interest LT1M8, REMIC 3 Regular
Interest LT1M9 and REMIC 3 Regular Interest LT1B, each subject to a cap equal to
the REMIC 4 Pass-Through Rate of the related Corresponding Class for the purpose
of this calculation; provided, however, that for this purpose, calculations of
the Uncertificated REMIC 3 Pass-Through Rate and the related caps with respect
to Uncertificated Accrued Interest on REMIC 3 Regular Interest LT1A1, REMIC 3
Regular Interest LT1A2, REMIC 3 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, REMIC 3 Regular
Interest LT1A3B, REMIC 3 Regular Interest LT1A3C1, REMIC 3 Regular Interest
LT1A3C2, REMIC 3 Regular Interest LT1A3D, REMIC 3 Regular Interest LT1M1, REMIC
3 Regular Interest LT1M2, REMIC 3 Regular Interest LT1M3, REMIC 3 Regular
Interest LT1M4, REMIC 3 Regular Interest LT1M5, REMIC 3 Regular Interest LT1M6,
REMIC 3 Regular Interest LT1M7, REMIC 3 Regular Interest LT1M8, REMIC 3 Regular
Interest LT1M9 and REMIC 3 Regular Interest LT1B shall be multiplied by a
fraction, the numerator of which is the actual number of days in the Interest
Accrual Period and the denominator of which is 30.
"Maximum Mortgage Interest Rate": With respect to each
Adjustable-Rate Mortgage Loan, the percentage set forth in the related Mortgage
Note as the maximum Mortgage Interest Rate thereunder.
"MERS": As defined in Section 2.01 hereof.
"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 Allocation": As defined in Section
4.02(b).
"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 and the Class B
Certificates.
"Monthly Excess Interest Amount": With respect to each
Distribution Date, the amount, if any, by which the related Interest Remittance
Amount for such Distribution Date exceeds the aggregate amount distributed on
such Distribution Date pursuant to paragraphs (i) through (xv) under Section
4.01.
"Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction
in the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act or similar state laws; (b) without giving effect to any extension
granted or agreed to by the Servicer pursuant to Section 3.01; and (c) on the
assumption that all other amounts, if any, due under such Mortgage Loan are paid
when due.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc., and its successors,
and if such company shall for any reason no longer perform the functions of a
securities rating agency, "Moody's" shall be deemed to refer to any other
"nationally recognized statistical rating organization" as set forth on the most
current list of such organizations released by the Securities and Exchange
Commission.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first or second lien on, or first or second priority security
interest in, a Mortgaged Property securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage 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) and any Additional
Transfer Instrument 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 July 1, 2006, regarding the transfer of
the Mortgage Loans by the Seller to or at the direction of the Depositor,
substantially in the form attached hereto as Exhibit G.
"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, as supplemented by each schedule of Additional
Group 3 Mortgage Loans attached to an Additional Transfer Instrument. 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
from the Cut-off Date (or Subsequent Cut-off Date,
with respect to an Additional Group 3 Mortgage Loan)
based on the original amortization schedule;
(10) the original principal amount of the
Mortgage Loan;
(11) the Principal Balance of each Mortgage
Loan as of the Cut-off Date (or Subsequent Cut-off
Date, with respect to an Additional Group 3 Mortgage
Loan);
(12) the Mortgage Interest Rate of the
Mortgage Loan as of the Cut-off Date (or Subsequent
Cut-off Date, with respect to an Additional Group 3
Mortgage Loan);
(13) the current principal and interest
payment of the Mortgage Loan as of the Cut-off Date
(or Subsequent Cut-off Date, with respect to an
Additional Group 3 Mortgage Loan);
(14) the contractual interest paid to date of
the Mortgage Loan;
(15) the Combined Loan-to-Value Ratio at
origination and as of the Cut-off Date;
(16) a code indicating the loan performance
status of the Mortgage Loan as of the Cut-off Date;
(17) a code indicating the Index that is
associated with such Mortgage Loan;
(18) the Gross Margin;
(19) the Periodic Rate Cap;
(20) the Minimum Mortgage Interest Rate;
(21) the Maximum Mortgage Interest Rate;
(22) a code indicating whether the Mortgage
Loan has a Prepayment Charge and the type of
Prepayment Charge and the term;
(23) the first Adjustment Date immediately
following the Cut-off Date;
(24) the rate adjustment frequency;
(25) the payment adjustment frequency;
(26) the purpose of the Mortgage Loan; and
(27) a code indicating whether the Mortgage
Loan is a second lien.
The Mortgage Loan Schedules shall set forth the following
information, as of the Cut-off Date (or Subsequent Cut-off Date, with respect to
an Additional Group 3 Mortgage Loan), 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 and a copy of such amended
Mortgage Loan Schedules shall be furnished by the Servicer to the NIMS Insurer.
With respect to any Eligible Substitute Mortgage Loan, Cut-off Date shall refer
to the applicable date of substitution.
"Mortgage Note": The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on the
Mortgage Loan Schedules 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 (x) each
Adjustable-Rate Mortgage Loan, the applicable Maximum Mortgage Interest Rate and
(y) each Fixed-Rate Mortgage Loan, the Mortgage Interest Rate for such Mortgage
Loan, in each case less 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.
"Net Swap Payment": With respect to a Distribution Date (i) in
the case of payments made by the Trust, the excess, if any, of (x) the Fixed
Swap Payment for such Distribution Date over (y) the Floating Swap Payment for
such Distribution Date and (ii) in the case of payments made by the Swap
Provider, the excess, if any, of (x) the Floating Swap Payment for such
Distribution Date over (y) the Fixed Swap Payment for such Distribution Date.
"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.
"NIMS Insurer": Any insurer that is guaranteeing certain
payments under notes secured by collateral which includes all or a portion of
the Class CE and Class P Certificates.
"Nonrecoverable Advance": Any Advance or Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan that, in
the good faith business judgment of the Servicer, will not or, in the case of a
proposed Advance or Servicing Advance, would not be ultimately recoverable from
Late Collections on such Mortgage Loan as provided herein.
"Notional Amount": With respect to any Distribution Date and the
Class CE Interest and Class CE Certificates, an amount equal to the aggregate
principal balance of the REMIC 1 Regular Interests for such Distribution Date.
"Offered Certificates": The Class A-1, Class A-2, Class A-3A,
Class A-3B, Class A-3C1, Class A-3C2, Class A-3D, Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9
Certificates.
"Officers' Certificate": A certificate signed by the Chairman of
the Board, the Vice Chairman of the Board, the President, a vice president
(however denominated) or a principal, and by the Treasurer, the Secretary, or
one of the assistant treasurers or assistant secretaries of the Servicer, the
Seller or the Depositor, as applicable.
"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 interbank offered rate for one-month United States dollar
deposits in the London market as such rate appears on the Telerate Page 3750, as
of 11:00 a.m. (London time) on such LIBOR Determination Date. If such rate does
not appear on that page (or such other page as may replace that page on that
service, or if such service is no longer offered, another service for displaying
One-Month LIBOR or comparable rates as selected by the Trustee) on a LIBOR
Determination Date, One-Month LIBOR for the related Interest Accrual Period will
be the Reference Bank Rate, determined by the Trustee as follows:
(i) If on such LIBOR Determination Date two or more Reference
Banks provide Reference Bank Rates, One-Month LIBOR for the related
Interest Accrual Period shall be the arithmetic mean of such Reference
Bank Rates (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 Reference Bank Rates, 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 and the NIMS Insurer,
as of 11:00 A.M., New York City time, on such date for loans in U.S.
Dollars to leading European banks for a period of one month in amounts
approximately equal to the aggregate Certificate Principal Balance of
the Offered Certificates and 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 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.
"Option One Sale Agreement": The Flow Sale and Servicing
Agreement, dated as of July 28, 2006, as it may be amended from time to time, by
and among the Seller, as purchaser, Option One Mortgage Corporation and its
affiliates, as sellers.
"Optional Termination Date": The first Distribution Date on
which the NIMS Insurer, if any, or if there is no NIMS Insurer, the Majority
Class CE Certificateholders or, if such holder is the Seller or is an affiliate
of the Seller, the Servicer, may opt to terminate the Mortgage Pool pursuant to
Section 10.01.
"Original Certificate Principal Balance": With respect to each
Class of Certificates, the Certificate Principal Balance thereof on the Closing
Date, as set forth opposite such Class in the Preliminary Statement, except with
respect to (i) the Class P and Residual Certificates, which have an Original
Certificate Principal Balance of zero and (ii) the Class CE Certificates, which,
solely for REMIC purposes, have an Original Certificate Principal Balance equal
to the Initial Overcollateralization Amount.
"Original Group 3 Pre-Funded Amount": The amount deposited by
the Depositor in the Group 3 Pre-Funding Account on the Closing Date, which
amount is $94,134,849.87.
"Originator": Either Option One Mortgage Corporation or Ownit
Mortgage, as the case may be, or their successors in interest.
"Originator Mortgage Loan Purchase Agreement": Either (i) the
Option One Sale Agreement or (ii) the Ownit Sale Agreement.
"Originator Prepayment Charge Payment Amount": The amount
payable by (i) Option One Mortgage Corporation pursuant to Section 4.22 of the
Option One Sale Agreement or (ii) Ownit Mortgage pursuant to Section 9.03 of the
Ownit Sale Agreement in respect of certain Prepayment Charges that are not
collected from the Mortgagor.
"Overcollateralization Amount": As of any Distribution Date, the
excess, if any, of (x) the sum of (i) the Pool Balance as of the last day of the
related Collection Period after giving effect to Principal Prepayments in the
related Prepayment Period and (ii) any funds on deposit in the Group 3
Pre-Funding Account on the related Determination Date over (y) the aggregate
Certificate Principal Balance of all Classes of Offered Certificates and the
Class B Certificates (after taking into account all distributions of principal
on such Distribution Date and the increase of any Certificate Principal Balance
as a result of Subsequent Recoveries).
"Overcollateralization Deficiency": As of any Distribution Date,
the excess, if any, of (x) the Targeted Overcollateralization Amount for such
Distribution Date over (y) the Overcollateralization Amount for such
Distribution Date, calculated for this purpose after taking into account the
reduction on such Distribution Date of the Certificate Principal Balances of all
Classes of Offered Certificates and the Class B 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 on or after the Stepdown Date on which a Trigger Event is not
in effect, the lesser of (x) the Principal Remittance Amount for such
Distribution Date and (y) the excess, if any, of (i) the Overcollateralization
Amount for such Distribution Date, assuming that 100% of the Principal
Remittance Amount is applied as a principal distribution on the Offered
Certificates and the Class B 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.
"Ownit Mortgage": Ownit Mortgage Solutions, Inc. or its
successor in interest.
"Ownit Sale Agreement": The Mortgage Loan Purchase and
Warranties Agreement, dated as of March 1, 2005, by and between Bank of America,
National Association, as purchaser, and Ownit Mortgage, as seller and the
related Memoranda of Sale, dated as of March 17, 2005, as amended by the
Assignment, Assumption and Recognition Agreement, dated August 10, 2006, among
the Depositor, Bank of America, National Association, the Trustee, the Servicer,
and Ownit Mortgage.
"Pass-Through Rate": Any of the Class A-1 Pass-Through Rate,
Class A-2 Pass-Through Rate, the Class A-3A Pass-Through Rate, the Class A-3B
Pass-Through Rate, the Class A-3C1 Pass-Through Rate, Class A-3C2 Pass-Through
Rate, the Class A-3D Pass-Through Rate, the Class M-1 Pass-Through Rate, the
Class M-2 Pass-Through Rate, the Class M-3 Pass-Through Rate, the Class M-4
Pass-Through Rate, the Class M-5 Pass-Through Rate, the Class M-6 Pass-Through
Rate, the Class M-7 Pass-Through Rate, the Class M-8 Pass-Through Rate, the
Class M-9 Pass-Through Rate and the Class B Pass-Through Rate; and in the case
of any Regular Interest, the Pass-Through Rate set forth in the definition
thereof.
With respect to the Class CE Interest and the Class CE
Certificates and any Distribution Date, a per annum rate equal to the percentage
equivalent of a fraction, the numerator of which is the sum of the amounts
calculated pursuant to clauses (A) through (S) below, and the denominator of
which is the aggregate of the Uncertificated Principal Balances of REMIC 3
Regular Interest LT1AA, REMIC 3 Regular Interest LT1A1, REMIC 3 Regular Interest
LT1A2, REMIC 3 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, REMIC 3 Regular Interest LT1A3B, REMIC 3
Regular Interest LTA3C1, REMIC 3 Regular Interest LT1A3C2, REMIC 3 Regular
Interest LT1A3D, REMIC 3 Regular Interest LT1M1, REMIC 3 Regular Interest LT1M2,
REMIC 3 Regular Interest LT1M3, REMIC 3 Regular Interest LT1M4, REMIC 3 Regular
Interest LT1M5, REMIC 3 Regular Interest LT1M6, REMIC 3 Regular Interest LT1M7,
REMIC 3 Regular Interest LT1M8, REMIC 3 Regular Interest LT1M9, REMIC 3 Regular
Interest LT1B and REMIC 3 Regular Interest LT1ZZ. For purposes of calculating
the Pass-Through Rate for the Class CE Interest and the Class CE Certificates,
the numerator is equal to the sum of the following components:
(A) the Uncertificated REMIC 3 Pass-Through Rate for
REMIC 3 Regular Interest LT1AA minus the Marker Rate,
applied to an amount equal to the Uncertificated Principal
Balance of REMIC 3 Regular Interest LT1AA;
(B) the Uncertificated REMIC 3 Pass-Through Rate for
REMIC 3 Regular Interest LT1A1 minus the Marker Rate,
applied to an amount equal to the Uncertificated Principal
Balance of REMIC 3 Regular Interest LT1A1;
(C) the Uncertificated REMIC 3 Pass-Through Rate for
REMIC 3 Regular Interest LT1A2 minus the Marker Rate,
applied to an amount equal to the Uncertificated Principal
Balance of REMIC 3 Regular Interest LT1A2;
(D) the Uncertificated REMIC 3 Pass-Through Rate for
REMIC 3 Regular Interest LT1A3A minus the Marker Rate,
applied to an amount equal to the Uncertificated Principal
Balance of REMIC 3 Regular Interest LT1A3A;
(E) the Uncertificated REMIC 3 Pass-Through Rate for
REMIC 3 Regular Interest LT1A3B minus the Marker Rate,
applied to an amount equal to the Uncertificated Principal
Balance of REMIC 3 Regular Interest LT1A3B;
(F) the Uncertificated REMIC 3 Pass-Through Rate for
REMIC 3 Regular Interest LT1A3C1 minus the Marker Rate,
applied to an amount equal to the Uncertificated Principal
Balance of REMIC 3 Regular Interest LT1A3C1;
(G) the Uncertificated REMIC 3 Pass-Through Rate for
REMIC 3 Regular Interest LT1A3C2 minus the Marker Rate,
applied to an amount equal to the Uncertificated Principal
Balance of the REMIC 3 Regular Interest LT1A3C2;
(H) the Uncertificated REMIC 3 Pass-Through Rate for
REMIC 3 Regular Interest LT1A3D minus the Marker Rate,
applied to an amount equal to the Uncertificated Principal
Balance of the REMIC 3 Regular Interest LT1A3D;
(I) the Uncertificated REMIC 3 Pass-Through Rate for
REMIC 3 Regular Interest LT1M1 minus the Marker Rate,
applied to an amount equal to the Uncertificated Principal
Balance of REMIC 3 Regular Interest LT1M1;
(J) the Uncertificated REMIC 3 Pass-Through Rate for
REMIC 3 Regular Interest LT1M2 minus the Marker Rate,
applied to an amount equal to the Uncertificated Principal
Balance of REMIC 3 Regular Interest LT1M2;
(K) the Uncertificated REMIC 3 Pass-Through Rate for
REMIC 3 Regular Interest LT1M3 minus the Marker Rate,
applied to an amount equal to the Uncertificated Principal
Balance of REMIC 3 Regular Interest LT1M3;
(L) the Uncertificated REMIC 3 Pass-Through Rate for
REMIC 3 Regular Interest LT1M4 minus the Marker Rate,
applied to an amount equal to the Uncertificated Principal
Balance of REMIC 3 Regular Interest LT1M4;
(M) the Uncertificated REMIC 3 Pass-Through Rate for
REMIC 3 Regular Interest LT1M5 minus the Marker Rate,
applied to an amount equal to the Uncertificated Principal
Balance of REMIC 3 Regular Interest LT1M5;
(N) the Uncertificated REMIC 3 Pass-Through Rate for
REMIC 3 Regular Interest LT1M6 minus the Marker Rate,
applied to an amount equal to the Uncertificated Principal
Balance of REMIC 3 Regular Interest LT1M6;
(O) the Uncertificated REMIC 3 Pass-Through Rate for
REMIC 3 Regular Interest LT1M7 minus the Marker Rate,
applied to an amount equal to the Uncertificated Principal
Balance of REMIC 3 Regular Interest LT1M7;
(P) the Uncertificated REMIC 3 Pass-Through Rate for
REMIC 3 Regular Interest LT1M8 minus the Marker Rate,
applied to an amount equal to the Uncertificated Principal
Balance of REMIC 3 Regular Interest LT1M8;
(Q) the Uncertificated REMIC 3 Pass-Through Rate for
REMIC 3 Regular Interest LT1M9 minus the Marker Rate,
applied to an amount equal to the Uncertificated Principal
Balance of REMIC 3 Regular Interest LT1M9;
(R) the Uncertificated REMIC 3 Pass-Through Rate for
REMIC 3 Regular Interest LT1B minus the Marker Rate,
applied to an amount equal to the Uncertificated Principal
Balance of REMIC 3 Regular Interest LT1B; and
(S) the Uncertificated REMIC 3 Pass-Through Rate for
REMIC 3 Regular Interest LT1ZZ minus the Marker Rate,
applied to an amount equal to the Uncertificated Principal
Balance of REMIC 3 Regular Interest LT1ZZ.
With respect to the Swap IO Interest, the Swap IO Interest shall
not have a Pass-Through Rate, but interest for such Regular Interest and each
Distribution Date shall be an amount equal to 100% of the amounts distributable
to REMIC 3 Regular Interest LTIO for such Distribution Date.
"Paying Agent": Any paying agent appointed pursuant to Section
5.05.
"Percentage Interest": With respect to any Certificate (other
than a Class CE, Class P or Residual Certificate), a fraction, expressed as a
percentage, the numerator of which is the Initial Certificate Principal Balance,
as the case may be, represented by such Certificate and the denominator of which
is the Original Certificate Principal Balance of the related Class. With respect
to a Class CE or Class P Certificate, the portion of the Class evidenced
thereby, expressed as a percentage, as stated on the face of such Certificate;
provided, however, that the sum of all such percentages for each such Class
totals 100%. With respect to a Residual Certificate, 100%.
"Periodic Rate Cap": With respect to each Adjustable-Rate
Mortgage Loan and any Adjustment Date therefor, the fixed percentage set forth
in the related Mortgage Note, which is the maximum amount by which the Mortgage
Interest Rate for such Mortgage Loan may increase or decrease (without regard to
the Maximum Mortgage Interest Rate or the Minimum Mortgage Interest Rate) on
such Adjustment Date from the Mortgage Interest Rate in effect immediately prior
to such Adjustment Date.
"Permitted Transferee": Any transferee of a Residual Certificate
other than a Disqualified Organization, a non-U.S. Person or a U.S. Person with
respect to whom income on a Residual Certificate is attributable to a foreign
permanent establishment or fixed base, within the meaning of an applicable
income tax treaty, of such Person or any other U.S. Person.
"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, a per annum rate, equal
to the weighted average of the Group 1 Cap, the Group 2 Cap and Group 3 Cap,
weighted on the basis of the related Group Subordinate Amount. For federal
income tax purposes, the economic equivalent of such rate shall be expressed as
the weighted average of the REMIC 3 Pass-Through Rate on (a) REMIC 3 Regular
Interest LT1SUB, subject to a cap and floor equal to the Weighted Average Net
Mortgage Interest Rates of the Group 1 Mortgage Loans, (b) REMIC 3 Regular
Interest LT2SUB, subject to a cap and floor equal to the Weighted Average Net
Mortgage Interest Rates of the Group 2 Mortgage Loans and (c) REMIC 3 Regular
Interest LT3SUB, subject to a cap and floor equal to the Weighted Average Net
Mortgage Interest Rates of the Group 3 Mortgage Loans, weighted on the basis of
the Uncertificated Balance of such REMIC 3 Regular Interests.
"Pool Maximum Rate Cap": As of any Distribution Date, a per
annum rate, equal to the weighted average of the Group 1 Maximum Rate Cap, the
Group 2 Maximum Rate Cap and the Group 3 Maximum Rate Cap, weighted on the basis
of the related Group Subordinate Amount.
"Prepayment Charge": With respect to any Prepayment Period, any
prepayment premium, penalty or charge collected by the 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 Originator Prepayment Charge Payment Amount or
Servicer Prepayment Charge Payment Amount).
"Prepayment Interest Excess": With respect to any Distribution
Date, for each Mortgage Loan that was the subject of a Principal Prepayment in
full during the portion of the related Prepayment Period beginning on the first
day of the calendar month in which such Distribution Date occurs through the
Determination Date of the calendar month in which such Distribution Date occurs,
an amount equal to interest (to the extent received) at the applicable Mortgage
Interest Rate (net of the Servicing Fee Rate) on the amount of such Principal
Prepayment for the number of days commencing on the first day of the calendar
month in which such Distribution Date occurs and ending on the date on which
such prepayment is so applied.
"Prepayment Interest Shortfall": With respect to any
Distribution Date, for each Mortgage Loan that was the subject of a Principal
Prepayment during the portion of the related Prepayment Period occurring in the
prior calendar month that was applied by the Servicer to reduce the outstanding
Principal Balance of such Mortgage Loan on a date preceding the related Due
Date, an amount equal to interest at the applicable Mortgage Interest Rate (net
of the Servicing Fee Rate) on the amount of such Principal Prepayment for the
number of days commencing on the date on which the Principal Prepayment is
applied and ending on the last day of the calendar month in which applied.
"Prepayment Period": With respect to any Distribution Date, the
period commencing on the day after the Determination Date in the calendar month
preceding the calendar month in which such Distribution Date occurs (or, in the
case of the first Distribution Date, on July 1, 2006) and ending on the
Determination Date in the calendar month in which such Distribution Date occurs.
"Principal Balance": As to any Mortgage Loan and any day, other
than a Liquidated Mortgage Loan, the related Cut-off Date Principal Balance,
minus the sum of (i) all collections and other amounts credited against the
principal balance of any such Mortgage Loan, (ii) the principal portion of
Advances, (iii) any Deficient Valuation and (iv) any principal reduction
resulting from a Servicer Modification. For purposes of this definition, a
Liquidated Mortgage Loan shall be deemed to have a Principal Balance equal to
the Principal Balance of the related Mortgage Loan as of the final recovery of
related Liquidation Proceeds and a Principal Balance of zero thereafter. As to
any REO Property and any day, the Principal Balance of the related Mortgage Loan
immediately prior to such Mortgage Loan becoming REO Property minus any REO
Principal Amortization received with respect thereto on or prior to such day.
"Principal Distribution Amount": As to any Distribution Date,
the sum of (i) the Principal Remittance Amount minus the Overcollateralization
Release Amount, if any, (ii) the Extra Principal Distribution Amount, if any and
(iii) with respect to the Distribution Date in September 2006, the amount, if
any, remaining in the Group 3 Pre-Funding Account after the Funding Period.
"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 excess (less amounts
available for reimbursement of Advances and Servicing Advances pursuant to
Section 3.05 and expenses and indemnification payments pursuant to Section 6.03
and Section 8.05) of (A): the sum of (i) each payment of principal on a Mortgage
Loan due during the related Collection Period and received by the Servicer on or
prior to the related Determination Date, and any Advances with respect thereto,
(ii) all full and partial Principal Prepayments received by the Servicer during
the related Prepayment Period, (iii) Insurance Proceeds, Net Liquidation
Proceeds and Subsequent Recoveries allocable to principal actually collected by
the Servicer during the related Prepayment Period, (iv) with respect to
Defective Mortgage Loans repurchased with respect to such Prepayment Period, the
portion of the Purchase Price allocable to principal, (v) any Substitution
Adjustment Amounts received during the related Prepayment Period, and (vi) on
the Distribution Date on which the Trust is to be terminated in accordance with
Section 10.01 hereof, that portion of the Termination Price in respect of
principal over (B) to the extent any amounts payable to the Swap Provider
(including any Net Swap Payment and any Swap Termination Payment owed to the
Swap Provider but excluding any Swap Termination Payment owed to the Swap
Provider resulting from a Swap Provider Trigger Event) exceed the Interest
Remittance Amount for such Distribution Date (without giving effect to clause
(B) of the definitions of "Group 1 Interest Remittance Amount," "Group 2
Interest Remittance Amount" and "Group 3 Interest Remittance Amount").
"Private Certificates": Any of the Class B, Class CE, Class P
and Residual Certificates.
"Prospectus Supplement": That certain Prospectus Supplement
dated August 8, 2006 relating to the public offering of the Offered
Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03 or
10.01, an amount equal to the sum of (i) 100% of the Principal Balance thereof
as of the date of purchase (or such other price as provided in Section 10.01),
(ii) in the case of a Mortgage Loan, accrued interest on such Principal Balance
at the applicable Mortgage Interest Rate in effect from time to time from the
Due Date as to which interest was last covered by a payment by the Mortgagor or
an Advance by the Servicer, which payment or Advance had as of the date of
purchase been distributed pursuant to Section 4.01, through the end of the
calendar month in which the purchase is to be effected, (iii) any unreimbursed
Servicing Advances and Advances and any unpaid Servicing Fees allocable to such
Mortgage Loan or REO Property, (iv) any amounts previously withdrawn from the
Collection Account in respect of such Mortgage Loan or REO Property pursuant to
Section 3.13 and (v) in the case of a Mortgage Loan required to be purchased
pursuant to Section 2.03, expenses reasonably incurred or to be incurred by the
Servicer or the Trustee in respect of the breach or defect giving rise to the
purchase obligation.
"Rating Agency or Rating Agencies": Fitch, ▇▇▇▇▇'▇ 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 Commission and designated by the Depositor, notice of which
designation shall be given to the Trustee and the Servicer.
"Realized Loss": With respect to a Liquidated Mortgage Loan, the
amount by which the remaining unpaid principal balance of the Mortgage Loan
exceeds the amount of Net Liquidation Proceeds applied to the principal balance
of the related Mortgage Loan. With respect to any Mortgage Loan, a Deficient
Valuation or a reduction in the Principal Balance thereof resulting from a
Servicer Modification.
"Realized Loss Amortization Amount": Any of the Class M-1
Realized Loss Amortization Amount, the Class M-2 Realized Loss Amortization
Amount, the Class M-3 Realized Loss Amortization Amount, the Class M-4 Realized
Loss Amortization Amount, the Class M-5 Realized Loss Amortization Amount, the
Class M-6 Realized Loss Amortization Amount, the Class M-7 Realized Loss
Amortization Amount, the Class M-8 Realized Loss Amortization Amount, the Class
M-9 Realized Loss Amortization Amount and the Class B Realized Loss Amortization
Amount.
"Record Date": With respect to all of the Offered and Class B
Certificates (other than the Private Certificates), the Business Day immediately
preceding such Distribution Date; provided, however, that if any such
Certificate becomes a Definitive Certificate, the Record Date for such
Certificate shall be the last Business Day of the month immediately preceding
the month in which the related Distribution Date occurs. With respect to the
Class CE, Class P and Residual Certificates, the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
"Reference Bank Rate": With respect to each Interest Accrual
Period, the rates at which deposits in U.S. Dollars are offered by the Reference
Banks as of 11:00 A.M., London time, on the related LIBOR Determination Date to
prime banks in the London interbank market for a period of one month in amounts
approximately equal to the aggregate Certificate Principal Balance of the
Offered Certificates and the Class B Certificates.
"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, the
Class B Certificates and the Class CE Certificates.
"Regulation AB": Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or
by the staff of the Commission, or as may be provided by the Commission or its
staff from time to time.
"Regulation FD" Regulation ▇▇, ▇▇ C.F.R. ss.ss.243.100-243.103,
as such may be amended from time to time.
"Reimbursement Amount": With respect to any Mortgage Loan, any
costs or damages incurred by the Trust in connection with a breach of (i) Ownit
Mortgage's representations and warranties set forth in clauses (g), (tt), (uu),
(vv) or (nnn) of Section 9.02 of the Ownit Sale Agreement or (ii) a breach of
Option One Mortgage Corporation's representations and warranties set forth in
Section 3.03(i) or 3.03(ddd) of the Option One Sale Agreement.
"Related Documents": With respect to any Mortgage Loan, the
related Mortgage Notes, Mortgages and other related documents.
"Relevant Servicing Criteria": The Servicing Criteria applicable
to the various parties, as set forth on Exhibit Q attached hereto. For
clarification purposes, multiple parties can have responsibility for the same
Relevant Servicing Criteria. With respect to a Servicing Function Participant
engaged by the Trustee or the Servicer, the term "Relevant Servicing Criteria"
may refer to a portion of the Relevant Servicing Criteria applicable to the
Servicer or the Trustee.
"Relief Act": The Servicemembers Civil Relief Act, as it may be
amended from time to time.
"Relief Act Interest Shortfall": With respect to any
Distribution Date, for any Mortgage Loan with respect to which there has been a
reduction in the amount of interest collectible thereon for the most recently
ended Collection Period as a result of the application of the Relief Act or
similar state laws, the amount by which (i) interest collectible on such
Mortgage Loan during such Collection Period is less than (ii) one month's
interest on the Principal Balance of such Mortgage Loan at the Mortgage Interest
Rate for such Mortgage Loan before giving effect to the application of the
Relief Act or similar state laws.
"REMIC": A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"REMIC 1 Regular Interest": Any of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
"regular interest" in REMIC 1. Each REMIC 1 Regular Interest shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto. The
designations for the respective REMIC 1 Regular Interests are set forth in the
Preliminary Statement hereto. The REMIC 1 Regular Interests consist of REMIC 1
Regular Interest I-1, REMIC 1 Regular Interest I-2 and REMIC 1 Regular Interest
I-3.
"REMIC 2 Group 1 Regular Interests": REMIC 2 Regular Interest
I-1-A through REMIC 2 Regular Interest I-60-B as designated in the Preliminary
Statement hereto.
"REMIC 2 Group 2 Regular Interests": REMIC 2 Regular Interest
II-1-A through REMIC 2 Regular Interest II-60-B as designated in the Preliminary
Statement hereto.
"REMIC 2 Group 3 Regular Interests": REMIC 2 Regular Interest
III-1-A through REMIC 2 Regular Interest III-60-B as designated in the
Preliminary Statement hereto.
"REMIC 2 Regular Interest": Any of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
"regular interest" in REMIC 2. Each REMIC 2 Regular Interest shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto. The
designations for the respective REMIC 2 Regular Interests are set forth in the
Preliminary Statement hereto. The REMIC 2 Regular Interests consist of the REMIC
2 Group 1 Regular Interests, REMIC 2 Group 2 Regular Interests and REMIC 2 Group
3 Regular Interests.
"REMIC 3 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) 50% of the sum of
the aggregate Principal Balance of the Mortgage Loans and related REO Properties
then outstanding and (ii) the Uncertificated REMIC 3 Pass-Through Rate for REMIC
3 Regular Interest LT1AA minus the Marker Rate, divided by (b) 12.
"REMIC 3 Marker Allocation Percentage": 50% of any amount
payable from or loss attributable to the Mortgage Loans (in the case of
interest, less the interest distributable on the REMIC 3 Regular Interest LTIO),
which shall be allocated to REMIC 3 Regular Interest LT1AA, REMIC 3 Regular
Interest LT1A1, REMIC 3 Regular Interest LT1A2, REMIC 3 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
REMIC 3 Regular Interest LT1A3B, REMIC 3 Regular Interest LT1A3C1, REMIC 3
Regular Interest LT1A3C2, REMIC 3 Regular Interest LT1A3D, REMIC 3 Regular
Interest LT1M1, REMIC 3 Regular Interest LT1M2, REMIC 3 Regular Interest LT1M3,
REMIC 3 Regular Interest LT1M4, REMIC 3 Regular Interest LT1M5, REMIC 3 Regular
Interest LT1M6, REMIC 3 Regular Interest LT1M7, REMIC 3 Regular Interest LT1M8,
REMIC 3 Regular Interest LT1M9, REMIC 3 Regular Interest LT1B and REMIC 3
Regular Interest LT1ZZ.
"REMIC 3 Overcollateralization Target Amount": 0.50% of the
Targeted Overcollateralization Amount.
"REMIC 3 Overcollateralized Amount": With respect to any date of
determination, (i) 0.50% of the aggregate Uncertificated Principal Balances of
the REMIC 3 Regular Interests minus (ii) the aggregate of the Uncertificated
Principal Balances of REMIC 3 Regular Interest LT1A1, REMIC 3 Regular Interest
LT1A2, REMIC 3 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, REMIC 3 Regular Interest LT1A3B, REMIC 3
Regular Interest LT1A3C1, REMIC 3 Regular Interest LT1A3C2, REMIC Regular
Interest LT1A3D, REMIC 3 Regular Interest LT1M1, REMIC 3 Regular Interest LT1M2,
REMIC 3 Regular Interest LT1M3, REMIC 3 Regular Interest LT1M4, REMIC 3 Regular
Interest LT1M5, REMIC 3 Regular Interest LT1M6, REMIC 3 Regular Interest LT1M7,
REMIC 3 Regular Interest LT1M8, REMIC 3 Regular Interest LT1M9 and REMIC 3
Regular Interest LT1B, in each case as of such date of determination.
"REMIC 3 Principal Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) 50% of the
aggregate Principal Balance of the Mortgage Loans and related REO Properties
then outstanding and (ii) 1 minus a fraction, the numerator of which is two
times the aggregate of the Uncertificated Principal Balances of REMIC 3 Regular
Interest LT1A1, REMIC 3 Regular Interest LT1A2, REMIC 3 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
REMIC 3 Regular Interest LT1A3B, REMIC 3 Regular Interest LT1A3C1, REMIC 3
Regular Interest LT1A3C2, REMIC 3 Regular Interest LT1A3D, REMIC 3 Regular
Interest LT1M1, REMIC 3 Regular Interest LT1M2, REMIC 3 Regular Interest LT1M3,
REMIC 3 Regular Interest LT1M4, REMIC 3 Regular Interest LT1M5, REMIC 3 Regular
Interest LT1M6, REMIC 3 Regular Interest LT1M7, REMIC 3 Regular Interest LT1M8,
REMIC 3 Regular Interest LT1M9 and REMIC 3 Regular Interest LT1B, and the
denominator of which is the aggregate of the Uncertificated Principal Balances
of REMIC 3 Regular Interest LT1A1, REMIC 3 Regular Interest LT1A2, REMIC 3
Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, REMIC 3 Regular Interest LT1A3B, REMIC 3 Regular
Interest LT1A3C1, REMIC 3 Regular Interest LT1A3C2, REMIC 3 Regular Interest
LT1A3D, REMIC 3 Regular Interest LT1M1, REMIC 3 Regular Interest LT1M2, REMIC 3
Regular Interest LT1M3, REMIC 3 Regular Interest LT1M4, REMIC 3 Regular Interest
LT1M5, REMIC 3 Regular Interest LT1M6, REMIC 3 Regular Interest LT1M7, REMIC 3
Regular Interest LT1M8, REMIC 3 Regular Interest LT1M9, REMIC 3 Regular Interest
LT1B and REMIC 3 Regular Interest LT1ZZ.
"REMIC 3 Regular Interest LT1AA": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT1AA
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT1A1": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT1A1
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT1A2": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT1A2
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT1A3A": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT1A3B": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT1A3B
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT1A3C1": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT1A3C1
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT1A3C2": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT1A3C2
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT1A3D": One of the separate
non-certificated beneficial ownership interest sin REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT1A3D
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT1B": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT1B shall
accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT1GRP": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT1GRP
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT1M1": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT1M1
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT1M2": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT1M2
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT1M3": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT1M3
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT1M4": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT1M4
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT1M5": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT1M5
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT1M6": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT1M6
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT1M7": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT1M7
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT1M8": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT1M8
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT1M9": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT1M9
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT1SUB": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT1SUB
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT2GRP": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT2GRP
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT2SUB": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT2SUB
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT3GRP": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT3GRP
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT3SUB": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT3SUB
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT1XX": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT1XX
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LT1ZZ": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LT1ZZ
shall accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interest LTIO": One of the separate
non-certificated beneficial ownership interests in REMIC 3 issued hereunder and
designated as a Regular Interest in REMIC 3. REMIC 3 Regular Interest LTIO shall
accrue interest at the related Uncertificated REMIC 3 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 3 Regular Interests": REMIC 3 Regular Interest LT1AA,
REMIC 3 Regular Interest LT1A1, REMIC 3 Regular Interest LT1A2, REMIC 3 Regular
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, REMIC 3 Regular Interest LT1A3B, REMIC 3 Regular Interest
LT1A3C1, REMIC 3 Regular Interest LT1A3C2, REMIC 3 Regular Interest LT1A3D,
REMIC 3 Regular Interest LT1M1, REMIC 3 Regular Interest LT1M2, REMIC 3 Regular
Interest LT1M3, REMIC 3 Regular Interest LT1M4, REMIC 3 Regular Interest LT1M5,
REMIC 3 Regular Interest LT1M6, REMIC 3 Regular Interest LT1M7, REMIC 3 Regular
Interest LT1M8, REMIC 3 Regular Interest LT1M9, REMIC 3 Regular Interest LT1B,
REMIC 3 Regular Interest LT1SUB, REMIC 3 Regular Interest LT1GRP, REMIC 3
Regular Interest LT2SUB, REMIC 3 Regular Interest LT2GRP, REMIC 3 Regular
Interest LT3SUB, REMIC 3 Regular Interest LT3GRP, REMIC 3 Regular Interest
LT1XX, REMIC 3 Regular Interest LT1ZZ and REMIC 3 Regular Interest LTIO.
"REMIC 3 Sub WAC Allocation Percentage": 50% of any amount
payable or loss attributable from the Mortgage Loans (in the case of interest,
less the interest distributable on the REMIC 3 Regular Interest LTIO), which
shall be allocated to REMIC 3 Regular Interest LT1SUB, REMIC 3 Regular Interest
LT1GRP, REMIC 3 Regular Interest LT2SUB, REMIC 3 Regular Interest LT2GRP, REMIC
3 Regular Interest LT3SUB, REMIC 3 Regular Interest LT3GRP and REMIC 3 Regular
Interest LT1XX.
"REMIC 3 Subordinated Balance Ratio": The ratio among the
Uncertificated Principal Balances of each REMIC 3 Regular Interest ending with
the designation "SUB," equal to the ratio among, with respect to each such REMIC
3 Regular Interest, the excess of (x) the aggregate Principal Balance of the
Mortgage Loans in the related Loan Group over (y) the aggregate current
Certificate Principal Balance of the Class A Certificates in the related Loan
Group.
"REMIC 4 Pass-Through Rate": With respect to the Class A-1
Certificates, the rate specified in footnote (1) under the heading "REMIC 4" in
the Preliminary Statement hereto, without taking into account (i) clause (b)(ii)
of the definition of "Group 1 Cap" or (ii) clause (b)(ii) and clause (c) of the
definition of "Group 1 Maximum Rate Cap." With respect to the Class A-2
Certificates, the rate specified in footnote (2) under the heading "REMIC 4" in
the Preliminary Statement hereto, without taking into account (i) clause (b)(ii)
of the definition of "Group 2 Cap" or (ii) clause (b)(ii) and clause (c) of the
definition of "Group 2 Maximum Rate Cap." With respect to the Class A-3A, Class
A-3B, Class A-3C1, Class A-3C2 and Class A-3D Certificates, the rate specified
in footnote (3), (4), (5), (6) or (7), as applicable, under the heading "REMIC
4" in the Preliminary Statement hereto, without taking into account (i) clause
(b)(ii) of the definition of "Group 3 Cap" or (ii) clause (b)(ii) and clause (c)
of the definition of "Group 3 Maximum Rate Cap." With respect to the Class M and
Class B Certificates, the rate specified in footnotes (8) through (17), as
applicable, under the heading "REMIC 4" in the Preliminary Statement hereto,
provided that (A) the definition of "Pool Cap" shall be calculated without
taking into account clause (b)(ii) of the definition of each of "Group 1 Cap,"
"Group 2 Cap" and "Group 3 Cap" and (B) the definition of "Pool Maximum Rate
Cap" shall be calculated without taking into account clause (b)(ii ) and clause
(c) of the definition of each of "Group 1 Maximum Rate Cap," "Group 2 Maximum
Rate Cap" and "Group 3 Maximum Rate Cap."
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits which appear at Section
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations and rulings promulgated thereunder, as the foregoing
may be in effect from time to time.
"REMIC Regular Interest": Any of the REMIC 1 Regular Interests,
REMIC 2 Regular Interests, REMIC 3 Regular Interests, the Swap IO Interest, the
Class CE Interest or any of the Certificates (other than the Class P and
Residual Certificates), exclusive of the right to receive Cap Carryover Amounts
and, in the case of the Class CE Interest, exclusive of the obligation to pay
Cap Carryover Amounts and Net Swap Payments and the right to receive Net Swap
Payments from the Swap Provider.
"Remittance Report": A report prepared by the Servicer and
delivered to the Trustee and the NIMS Insurer 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 Servicer pursuant to Section
3.13 for unpaid Servicing Fees in respect of the related Mortgage Loan and
unreimbursed Servicing Advances and Advances in respect of such REO Property or
the related Mortgage Loan.
"REO Property": A Mortgaged Property acquired by the Servicer on
behalf of the Trust through foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.13.
"Reportable Event": As defined in Section 3.31(d) hereof.
"Request for Release": A release signed by a Servicing Officer,
in the form of Exhibit E attached hereto.
"Residential Dwelling": Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a ▇▇▇▇▇▇ ▇▇▇ 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 Certificates": Either of the Class R or Class R-X
Certificates.
"Residual Interest": The sole Class of "residual interests" in
each REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": 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 ▇▇▇▇▇▇-▇▇▇▇
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 Commission.
"▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification": As defined in Section 3.31(b)
hereof.
"Securities Act": The Securities Act of 1933, as amended, and
the rules and regulations thereunder.
"Schedule of Additional Mortgage Loans": With respect to any
Additional Transfer Instrument, the schedule of Additional Group 3 Mortgage
Loans set forth in Attachment B to such Additional Transfer Instrument.
"Seller": Bank of America, National Association, 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 A-3A,
Class A-3B, Class A-3C1, Class A-3C2 and Class A-3D Certificates.
"Senior Principal Distribution Amount": For any Distribution
Date, the sum of the Group 1 Senior Principal Distribution Amount, the Group 2
Senior Principal Distribution Amount and the Group 3 Senior Principal
Distribution Amount.
"Servicer": Option One Mortgage Corporation, a California
corporation, or any successor servicer appointed as herein provided, in its
capacity as Servicer hereunder.
"Servicer Event of Termination": One or more of the events
described in Section 7.01.
"Servicer Modification": A modification to the terms of a
Mortgage Loan, in accordance with the terms of Section 3.01, as to which the
Mortgagor is in default or as to which, in the judgment of the Servicer, default
is reasonably foreseeable.
"Servicer Prepayment Charge Payment Amount": The amount payable
by the 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": The 20th day of each month beginning
in August 2006 (or, if such day is not a Business Day, the preceding Business
Day).
"Servicing Advances": All customary, reasonable and necessary
"out of pocket" costs and expenses incurred by the 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 Criteria": The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as such may be amended from time to time, which as of
the Closing Date are listed on Exhibit Q hereto.
"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, 0.30%
per annum for the first 10 calendar months following the Cut-off Date, 0.40% per
annum for the 11th through 30th calendar months following the Cut-off Date, and
0.65% per annum for all calendar months thereafter.
"Servicing Function Participant": Any Subservicer, subcontractor
or other Person engaged by the Servicer or the Trustee that is participating in
the servicing function with respect to the Mortgage Loans, within the meaning of
Item 1122 of Regulation AB.
"Servicing Officer": Any representative or officer of the
Servicer involved in, or responsible for, the administration and servicing of
Mortgage Loans, whose name and specimen signature appear on a list of servicing
officers furnished by the Servicer to the Trustee and the Depositor on the
Closing Date, as such list may from time to time be amended.
"Servicing Standard": The standards set forth in Section 3.01
hereof.
"Similar Law": As defined in Section 5.02(d) hereof.
"Sponsor": Bank of America, National Association.
"Startup Day": As defined in Section 9.01(b) hereof.
"Stayed Funds": Any payment required to be made under the terms
of the Certificates and this Agreement but which is not remitted by the Servicer
because the Servicer is the subject of a proceeding under the Bankruptcy Code
and the making of such remittance is prohibited by Section 362 of the Bankruptcy
Code.
"Stepdown Date": The earlier to occur of (i) the Distribution
Date following the Distribution Date on which the aggregate Certificate
Principal Balance of the Senior Certificates is reduced to zero and (ii) the
later to occur of (x) the Distribution Date in August 2009 and (y) the
Distribution Date on which the Credit Enhancement Percentage for the Senior
Certificates is greater than or equal to 54.80%.
"Subcontractor": Any vendor, subcontractor or other Person that
is not responsible for the overall servicing (as "servicing" is commonly
understood by participants in the mortgage-backed securities market) of the
Mortgage Loans but performs one or more discrete functions identified in Item
1122(d) of Regulation AB with respect to the Mortgage Loans under the direction
or authority of the Servicer, a Subservicer or the Trustee.
"Subordinated Applied Realized Loss Amount": With respect to
each Distribution Date, the excess, if any, of the aggregate of (a) the
Certificate Principal Balances of the Certificates (after taking into account
the distribution of the Principal Distribution Amount on such Distribution Date
and any increase in any Certificate Principal Balance as a result of Subsequent
Recoveries) over (b) the Pool Balance as of the end of the related Collection
Period after giving effect to Principal Prepayments in the related Prepayment
Period.
"Subordinated Certificates": The Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class B,
Class CE and Residual Certificates.
"Subordination Depletion Date": The Distribution Date on which
(i) the aggregate Certificate Principal Balance of the Class M and Class B
Certificates has been reduced to zero and (ii) the Overcollateralization Amount
is reduced to zero.
"Subsequent Cut-off Date": With respect to the Additional Group
3 Mortgage Loans sold to the Trust Fund pursuant to an Additional Transfer
Instrument, the later of (i) the first day of the month in which the related
Additional Transfer Date occurs or (ii) the date of origination of such Mortgage
Loan.
"Subsequent Recovery": Any amount (net of reimbursable expenses)
received on a Mortgage Loan subsequent to such Mortgage Loan being determined to
be a Liquidated Mortgage Loan that resulted in a Realized Loss in a prior month.
"Subservicer": Any Person that services Mortgage Loans on behalf
of the Servicer and is responsible for the performance (whether directly or
through Subservicers or Subcontractors) of some or all of the material servicing
functions required to be performed by the Servicer under this Agreement, with
respect to some or all of the Mortgage Loans, that are identified in Item
1122(d) of Regulation AB.
"Subservicing Agreement": Any subservicing agreement between the
Servicer and any Subservicer relating to servicing and/or administration of
certain Mortgage Loans as provided in Section 3.16.
"Substitution Adjustment Amount": As defined in Section 2.03(d)
hereof.
"Swap Account": The account or accounts created and maintained
pursuant to Section 4.09. The Swap Account must be an Eligible Account.
"Swap Interest Shortfall Amount": Any shortfall of interest with
respect to any Class of Certificates resulting from the application of the
related Cap due to a discrepancy between the Uncertificated Notional Amount of
the Swap IO Interest and the scheduled notional amount pursuant to the Interest
Rate Swap Agreement.
"Swap IO Interest": The regular interest in REMIC 4 entitled to
the amounts set forth in the Preliminary Statement hereto.
"Swap LIBOR": As to any Distribution Date, LIBOR (as determined
pursuant to the Interest Rate Swap Agreement with respect to such Distribution
Date).
"Swap Provider": Bank of America, National Association.
"Swap Provider Trigger Event": A Swap Termination Payment that
is triggered upon: (i) an Event of Default under the Interest Rate Swap
Agreement with respect to which the Swap Provider is a Defaulting Party (as
defined in the Interest Rate Swap Agreement) or (ii) a Termination Event under
the Interest Rate Swap Agreement with respect to which the Swap Provider is the
sole Affected Party (as defined in the Interest Rate Swap Agreement) or (iii) an
Additional Termination Event under the Interest Rate Swap Agreement with respect
to which the Swap Provider is the sole Affected Party.
"Swap Termination Payment": The payment due under the Interest
Rate Swap Agreement upon the early termination of the Interest Rate Swap
Agreement.
"Targeted Overcollateralization Amount": As of any Distribution
Date, (x) prior to the Stepdown Date, 3.25% of the sum of (i) the Pool Balance
of the Initial Mortgage Loans on the Cut-off Date and (ii) the amount on deposit
in the Group 3 Pre-Funding Account on the Closing Date and (y) on and after the
Stepdown Date, (i) if a Trigger Event has not occurred, the greater of (a) 6.50%
of the sum of the Pool Balance as of the last day of the related Collection
Period after giving effect to Principal Prepayments in the related Prepayment
Period and any amounts remaining in the Group 3 Pre-Funding Account and (b)
0.50% of the sum of (I) the Pool Balance of the Initial Mortgage Loans on the
Cut-off Date and (II) the amount on deposit in the Group 3 Pre-Funding Account
on the Closing Date and (ii) if a Trigger Event has occurred, the Targeted
Overcollateralization Amount for the immediately preceding Distribution Date.
"Tax Matters Person": The tax matters person or persons
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 five 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 Reuters 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": On any Distribution Date, a Trigger Event has
occurred if
(i) the three-month rolling average of 60+ Day Delinquent Loans
(as a percentage of the Pool Balance as of the last day of the related
Collection Period) equals or exceeds the applicable percentages of the
Credit Enhancement Percentage as set forth below for the most senior
class of Class A, Class M and Class B Certificates then outstanding;
Class Percentage
---------------------- ----------
Class A Certificates 29.20%
Class M-1 Certificates 36.20%
Class M-2 Certificates 47.06%
Class M-3 Certificates 52.81%
Class M-4 Certificates 61.53%
Class M-5 Certificates 72.40%
Class M-6 Certificates 83.77%
Class M-7 Certificates 104.57%
Class M-8 Certificates 123.08%
Class M-9 Certificates 156.86%
Class B Certificates 246.15%
or (ii) the aggregate amount of Realized Losses incurred since the Cut-off Date
through the last day of the related Collection Period (reduced by the aggregate
amount of Subsequent Recoveries received since the Cut-off Date through the last
day of the related Collection Period) divided by the Pool Balance of the Initial
Mortgage Loans on the Cut-off Date plus the Original Group 3 Pre-Funded Amount
exceeds the applicable percentages set forth below with respect to that
Distribution Date:
Distribution Date Occurring In Percentage
------------------------------ -----------------------------------------
August 2008 through July 2009 1.70% for the first month, plus an
additional 1/12th of 2.10% for each month
thereafter
August 2009 through July 2010 3.80% for the first month, plus an
additional 1/12th of 2.15% for each month
thereafter
August 2010 through July 2011 5.95% for the first month, plus an
additional 1/12th of 1.70% for each month
thereafter
August 2011 through July 2012 7.65% for the first month, plus an
additional 1/12th of 0.85% for each month
thereafter
August 2012 and thereafter 8.50%
"Trust": ABFC 2006-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 five 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 each Originator Mortgage
Loan Purchase Agreement, the Mortgage Loan Purchase Agreement (including any
security interest created thereby) and any Additional Mortgage Loan Purchase
Agreement, (v) the Trustee's rights under the Interest Rate Swap Agreement and
(vi) the Collection Account, the Distribution Account, the Swap Account, the Cap
Carryover 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": ▇▇▇▇▇ Fargo Bank, N.A., a national banking
association, or any successor Trustee appointed as herein provided.
"Uncertificated Accrued Interest": With respect to each REMIC 1
Regular Interest, REMIC 2 Regular Interest or REMIC 3 Regular Interest on each
Distribution Date, an amount equal to one month's interest at the related
Uncertificated REMIC 1 Pass-Through Rate, Uncertificated REMIC 2 Pass-Through
Rate or Uncertificated REMIC 3 Pass-Through Rate, as applicable on the
Uncertificated Principal Balance of such REMIC Regular Interest. In each case,
Uncertificated Accrued Interest will be reduced by any Prepayment Interest
Shortfalls and Relief Act Interest Shortfalls (allocated to such REMIC Regular
Interests based on their respective entitlements to interest irrespective of any
Prepayment Interest Shortfalls and Relief Act Interest Shortfalls for such
Distribution Date).
"Uncertificated Notional Amount": With respect to REMIC 3
Regular Interest LTIO and each Distribution Date listed below, the aggregate
Uncertificated Balance of the REMIC 2 Regular Interests ending with the
designation "A" listed below:
Distribution Date REMIC 2 Regular Interests
----------------- ----------------------------------------------------------------------------
1 I-1-A through I-60-A, II-1-A through II-60-A and III-1-A through III-60-A
2 I-2-A through I-60-A, II-2-A through II-60-A and III-2-A through III-60-A
3 I-3-A through I-60-A, II-3-A through II-60-A and III-3-A through III-60-A
4 I-4-A through I-60-A, II-4-A through II-60-A and III-4-A through III-60-A
5 I-5-A through I-60-A, II-5-A through II-60-A and III-5-A through III-60-A
6 I-6-A through I-60-A, II-6-A through II-60-A and III-6-A through III-60-A
7 I-7-A through I-60-A, II-7-A through II-60-A and III-7-A through III-60-A
8 I-8-A through I-60-A, II-8-A through II-60-A and III-8-A through III-60-A
9 I-9-A through I-60-A, II-9-A through II-60-A and III-9-A through III-60-A
10 I-10-A through I-60-A, II-10-A through II-60-A and III-10-A through III-60-A
11 I-11-A through I-60-A, II-11-A through II-60-A and III-11-A through III-60-A
12 I-12-A through I-60-A, II-12-A through II-60-A and III-12-A through III-60-A
13 I-13-A through I-60-A, II-13-A through II-60-A and III-13-A through III-60-A
14 I-14-A through I-60-A, II-14-A through II-60-A and III-14-A through III-60-A
15 I-15-A through I-60-A, II-15-A through II-60-A and III-15-A through III-60-A
16 I-16-A through I-60-A, II-16-A through II-60-A and III-16-A through III-60-A
17 I-17-A through I-60-A, II-17-A through II-60-A and III-17-A through III-60-A
18 I-18-A through I-60-A, II-18-A through II-60-A and III-18-A through III-60-A
19 I-19-A through I-60-A, II-19-A through II-60-A and III-19-A through III-60-A
20 I-20-A through I-60-A, II-20-A through II-60-A and III-20-A through III-60-A
21 I-21-A through I-60-A, II-21-A through II-60-A and III-21-A through III-60-A
22 I-22-A through I-60-A, II-22-A through II-60-A and III-22-A through III-60-A
23 I-23-A through I-60-A, II-23-A through II-60-A and III-23-A through III-60-A
24 I-24-A through I-60-A, II-24-A through II-60-A and III-24-A through III-60-A
25 I-25-A through I-60-A, II-25-A through II-60-A and III-25-A through III-60-A
26 I-26-A through I-60-A, II-26-A through II-60-A and III-26-A through III-60-A
27 I-27-A through I-60-A, II-27-A through II-60-A and III-27-A through III-60-A
28 I-28-A through I-60-A, II-28-A through II-60-A and III-28-A through III-60-A
29 I-29-A through I-60-A, II-29-A through II-60-A and III-29-A through III-60-A
30 I-30-A through I-60-A, II-30-A through II-60-A and III-30-A through III-60-A
31 I-31-A through I-60-A, II-31-A through II-60-A and III-31-A through III-60-A
32 I-32-A through I-60-A, II-32-A through II-60-A and III-32-A through III-60-A
33 I-33-A through I-60-A, II-33-A through II-60-A and III-33-A through III-60-A
34 I-34-A through I-60-A, II-34-A through II-60-A and III-34-A through III-60-A
35 I-35-A through I-60-A, II-35-A through II-60-A and III-35-A through III-60-A
36 I-36-A through I-60-A, II-36-A through II-60-A and III-36-A through III-60-A
37 I-37-A through I-60-A, II-37-A through II-60-A and III-37-A through III-60-A
38 I-38-A through I-60-A, II-38-A through II-60-A and III-38-A through III-60-A
39 I-39-A through I-60-A, II-39-A through II-60-A and III-39-A through III-60-A
40 I-40-A through I-60-A, II-40-A through II-60-A and III-40-A through III-60-A
41 I-41-A through I-60-A, II-41-A through II-60-A and III-41-A through III-60-A
42 I-42-A through I-60-A, II-42-A through II-60-A and III-42-A through III-60-A
43 I-43-A through I-60-A, II-43-A through II-60-A and III-43-A through III-60-A
44 I-44-A through I-60-A, II-44-A through II-60-A and III-44-A through III-60-A
45 I-45-A through I-60-A, II-45-A through II-60-A and III-45-A through III-60-A
46 I-46-A through I-60-A, II-46-A through II-60-A and III-46-A through III-60-A
47 I-47-A through I-60-A, II-47-A through II-60-A and III-47-A through III-60-A
48 I-48-A through I-60-A, II-48-A through II-60-A and III-48-A through III-60-A
49 I-49-A through I-60-A, II-49-A through II-60-A and III-49-A through III-60-A
50 I-50-A through I-60-A, II-50-A through II-60-A and III-50-A through III-60-A
51 I-51-A through I-60-A, II-51-A through II-60-A and III-51-A through III-60-A
52 I-52-A through I-60-A, II-52-A through II-60-A and III-52-A through III-60-A
53 I-53-A through I-60-A, II-53-A through II-60-A and III-53-A through III-60-A
54 I-54-A through I-60-A, II-54-A through II-60-A and III-54-A through III-60-A
55 I-55-A through I-60-A, II-55-A through II-60-A and III-55-A through III-60-A
56 I-56-A through I-60-A, II-56-A through II-60-A and III-56-A through III-60-A
57 I-57-A through I-60-A, II-57-A through II-60-A and III-57-A through III-60-A
58 I-58-A through I-60-A, II-58-A through II-60-A and III-58-A through III-60-A
59 I-59-A through I-60-A, II-59-A through II-60-A and III-59-A through III-60-A
60 I-60-A, II-60-A and III-60-A
thereafter $0.00
With respect to the Swap IO Interest and any Distribution Date,
an amount equal to the Uncertificated Notional Amount of the REMIC 3 Regular
Interest LTIO.
"Uncertificated Principal Balance": The amount of any REMIC 1
Regular Interest, REMIC 2 Regular Interest or REMIC 3 Regular Interest
outstanding as of any date of determination. As of the Closing Date, the
Uncertificated Balance of each REMIC 1 Regular Interest, REMIC 2 Regular
Interest and REMIC 3 Regular Interest shall equal the amount set forth in the
Preliminary Statement hereto as its initial uncertificated balance. On each
Distribution Date, the Uncertificated Principal Balance of each REMIC 1 Regular
Interest, REMIC 2 Regular Interest or REMIC 3 Regular Interest shall be reduced
by all distributions of principal made on such REMIC 1 Regular Interest, REMIC 2
Regular Interest or REMIC 3 Regular Interest, as applicable, on such
Distribution Date pursuant to Section 4.08 and, if and to the extent necessary
and appropriate, shall be further reduced on such Distribution Date by Realized
Losses as provided in Section 4.08(b). The Uncertificated Balance of REMIC 3
Regular Interest LT1ZZ shall be increased by interest deferrals as provided in
Section 4.08(a)(i). The Uncertificated Balance of each REMIC 1 Regular Interest,
REMIC 2 Regular Interest or REMIC 3 Regular Interest, as applicable, shall never
be less than zero.
"Uncertificated REMIC 1 Pass-Through Rate": With respect to
REMIC 1 Regular Interest I-1, the Weighted Average Net Mortgage Interest Rates
on the Group 1 Mortgage Loans as of the first day of the month preceding the
month in which the Distribution Date. With respect to REMIC 1 Regular Interest
I-2, the Weighted Average Net Mortgage Interest Rates on the Group 2 Mortgage
Loans as of the first day of the month preceding the month in which the
Distribution Date. With respect to REMIC 1 Regular Interest I-3, the Weighted
Average Net Mortgage Interest Rates on the Group 3 Mortgage Loans as of the
first day of the month preceding the month in which the Distribution Date.
"Uncertificated REMIC 2 Pass-Through Rate": With respect to each
REMIC 2 Group I Regular Interest ending with the designation "A," a per annum
rate equal to the Weighted Average Net Mortgage Interest Rate of Loan Group 1
multiplied by 2, subject to a maximum rate of 10.690%. With respect to each
REMIC 2 Group I Regular Interest ending with the designation "B," the greater of
(x) a per annum rate equal to the excess, if any, of (i) 2 multiplied by the
Weighted Average Net Mortgage Interest Rate of Loan Group 1 over (ii) 10.690%
and (y) 0.00%. With respect to each REMIC 2 Group II Regular Interest ending
with the designation "A," a per annum rate equal to the Weighted Average Net
Mortgage Interest Rate of Loan Group 2 multiplied by 2, subject to a maximum
rate of 10.690%. With respect to each REMIC 2 Group II Regular Interest ending
with the designation "B," the greater of (x) a per annum rate equal to the
excess, if any, of (i) 2 multiplied by the Weighted Average Net Mortgage
Interest Rate of Loan Group 2 over (ii) 10.690% and (y) 0.00%. With respect to
each REMIC 2 Group III Regular Interest ending with the designation "A," a per
annum rate equal to the Weighted Average Net Mortgage Interest Rate of Loan
Group 3 multiplied by 2, subject to a maximum rate of 10.690%. With respect to
each REMIC 2 Group III Regular Interest ending with the designation "B," the
greater of (x) a per annum rate equal to the excess, if any, of (i) 2 multiplied
by the Weighted Average Net Mortgage Interest Rate of Loan Group 3 over (ii)
10.690% and (y) 0.00%.
"Uncertificated REMIC 3 Pass-Through Rate": With respect to
REMIC 3 Regular Interest LT1AA, REMIC 3 Regular Interest LT1A1, REMIC 3 Regular
Interest LT1A2, REMIC 3 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, REMIC 3 Regular Interest
LT1A3B, REMIC 3 Regular Interest LT1A3C1, REMIC 3 Regular Interest LT1A3C2,
REMIC 3 Regular Interest LT1A3D, REMIC 3 Regular Interest LT1M1, REMIC 3 Regular
Interest LT1M2, REMIC 3 Regular Interest LT1M3, REMIC 3 Regular Interest LT1M4,
REMIC 3 Regular Interest LT1M5, REMIC 3 Regular Interest LT1M6, REMIC 3 Regular
Interest LT1M7, REMIC 3 Regular Interest LT1M8, REMIC 3 Regular Interest LT1M9,
REMIC 3 Regular Interest LT1B, REMIC 3 Regular Interest LT1ZZ, REMIC 3 Regular
Interest LT1SUB, REMIC 3 Regular Interest LT2SUB, REMIC 3 Regular Interest
LT3SUB and REMIC 3 Regular Interest LT1XX, a per annum rate (but not less than
zero) equal to the weighted average of (x) with respect to REMIC 2 Regular
Interests ending with the designation "B," the weighted average of the
Uncertificated REMIC 2 Pass-Through Rates for such REMIC 2 Regular Interests,
weighted on the basis of the Uncertificated Balance of such REMIC 2 Regular
Interests for each such Distribution Date and (y) with respect to REMIC 2
Regular Interests ending with the designation "A," for each Distribution Date
listed below, the weighted average of the rates listed below for each such REMIC
2 Regular Interest listed below, weighted on the basis of the Uncertificated
Balance of each such REMIC 2 Regular Interest for each such Distribution Date:
Distribution
Date REMIC 2 Regular Interest Pass-Through Rate
------------ ------------------------ ------------------------------------------------
1 I-1-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
2 I-2-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-2-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate Uncertificated REMIC 2 Pass-Through Rate
III-2-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate Uncertificated REMIC 2 Pass-Through Rate
I-1-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A Uncertificated REMIC 2 Pass-Through Rate
3 I-3-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-3-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-3-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A and I-2-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A and II-2-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A and III-2-A Uncertificated REMIC 2 Pass-Through Rate
4 I-4-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-4-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-4-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-3-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-3-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-3-A Uncertificated REMIC 2 Pass-Through Rate
5 I-5-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-5-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-5-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-4-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-4-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-4-A Uncertificated REMIC 2 Pass-Through Rate
6 I-6-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-6-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-6-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-5-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-5-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-5-A Uncertificated REMIC 2 Pass-Through Rate
7 I-7-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-7-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-7-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-6-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-6-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-6-A Uncertificated REMIC 2 Pass-Through Rate
8 I-8-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-8-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-8-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-7-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-7-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-7-A Uncertificated REMIC 2 Pass-Through Rate
9 I-9-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-9-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-9-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-8-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-8-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-8-A Uncertificated REMIC 2 Pass-Through Rate
10 I-10-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-10-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-10-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-9-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-9-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-9-A Uncertificated REMIC 2 Pass-Through Rate
11 I-11-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-11-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-11-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-10-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-10-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-10-A Uncertificated REMIC 2 Pass-Through Rate
12 I-12-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-12-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-12-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-11-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-11-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-11-A Uncertificated REMIC 2 Pass-Through Rate
13 I-13-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-13-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-13-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-12-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-12-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-12-A Uncertificated REMIC 2 Pass-Through Rate
14 I-14-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-14-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-14-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-13-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-13-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-13-A Uncertificated REMIC 2 Pass-Through Rate
15 I-15-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-15-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-15-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-14-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-14-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-14-A Uncertificated REMIC 2 Pass-Through Rate
16 I-16-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-16-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-16-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-15-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-15-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-15-A Uncertificated REMIC 2 Pass-Through Rate
17 I-17-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-17-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-17-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-16-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-16-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-16-A Uncertificated REMIC 2 Pass-Through Rate
18 I-18-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-18-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-18-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-17-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-17-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-17-A Uncertificated REMIC 2 Pass-Through Rate
19 I-19-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-19-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-19-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-18-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-18-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-18-A Uncertificated REMIC 2 Pass-Through Rate
20 I-20-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-20-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-20-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-19-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-19-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-19-A Uncertificated REMIC 2 Pass-Through Rate
21 I-21-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-21-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-21-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-20-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-20-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-20-A Uncertificated REMIC 2 Pass-Through Rate
22 I-22-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-22-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-22-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-21-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-21-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-21-A Uncertificated REMIC 2 Pass-Through Rate
23 I-23-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-23-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-23-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-22-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-22-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-22-A Uncertificated REMIC 2 Pass-Through Rate
24 I-24-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-24-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-24-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-23-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-23-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-23-A Uncertificated REMIC 2 Pass-Through Rate
25 I-25-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-25-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-25-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-24-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-24-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-24-A Uncertificated REMIC 2 Pass-Through Rate
26 I-26-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-26-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-26-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-25-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-25-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-25-A Uncertificated REMIC 2 Pass-Through Rate
27 I-27-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-27-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-27-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-26-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-26-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-26-A Uncertificated REMIC 2 Pass-Through Rate
28 I-28-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-28-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-28-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-27-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-27-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-27-A Uncertificated REMIC 2 Pass-Through Rate
29 I-29-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-29-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-29-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-28-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-28-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-28-A Uncertificated REMIC 2 Pass-Through Rate
30 I-30-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-30-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-30-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-29-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-29-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-29-A Uncertificated REMIC 2 Pass-Through Rate
31 I-31-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-31-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-31-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-30-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-30-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-30-A Uncertificated REMIC 2 Pass-Through Rate
32 I-32-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-32-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-32-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-31-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-31-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-31-A Uncertificated REMIC 2 Pass-Through Rate
33 I-33-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-33-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-33-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-32-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-32-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-32-A Uncertificated REMIC 2 Pass-Through Rate
34 I-34-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-34-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-34-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-33-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-33-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-33-A Uncertificated REMIC 2 Pass-Through Rate
35 I-35-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-35-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-35-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-34-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-34-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-34-A Uncertificated REMIC 2 Pass-Through Rate
36 I-36-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-36-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-36-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-35-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-35-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-35-A Uncertificated REMIC 2 Pass-Through Rate
37 I-37-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-37-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-37-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-36-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-36-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-36-A Uncertificated REMIC 2 Pass-Through Rate
38 I-38-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-38-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-38-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-37-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-37-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-37-A Uncertificated REMIC 2 Pass-Through Rate
39 I-39-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-39-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-39-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-38-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-38-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-38-A Uncertificated REMIC 2 Pass-Through Rate
40 I-40-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-40-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-40-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-39-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-39-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-39-A Uncertificated REMIC 2 Pass-Through Rate
41 I-41-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-41-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-41-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-40-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-40-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-40-A Uncertificated REMIC 2 Pass-Through Rate
42 I-42-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-42-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-42-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-41-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-41-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-41-A Uncertificated REMIC 2 Pass-Through Rate
43 I-43-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-43-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-43-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-42-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-42-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-42-A Uncertificated REMIC 2 Pass-Through Rate
44 I-44-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-44-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-44-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-43-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-43-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-43-A Uncertificated REMIC 2 Pass-Through Rate
45 I-45-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-45-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-45-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-44-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-44-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-44-A Uncertificated REMIC 2 Pass-Through Rate
46 I-46-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-46-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-46-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-45-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-45-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-45-A Uncertificated REMIC 2 Pass-Through Rate
47 I-47-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-47-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-47-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-46-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-46-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-46-A Uncertificated REMIC 2 Pass-Through Rate
48 I-48-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-48-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-48-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-47-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-47-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-47-A Uncertificated REMIC 2 Pass-Through Rate
49 I-49-A and I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-49-A and II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-49-A and III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-48-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-48-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-48-A Uncertificated REMIC 2 Pass-Through Rate
50 I-50-A and I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-50-A and II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-50-A and III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-49-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-49-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-49-A Uncertificated REMIC 2 Pass-Through Rate
51 I-51-A and I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-51-A and II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-51-A and III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-50-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-50-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-50-A Uncertificated REMIC 2 Pass-Through Rate
52 I-52-A and I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-52-A and II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-52-A and III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-51-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-51-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-51-A Uncertificated REMIC 2 Pass-Through Rate
53 I-53-A and I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-53-A and II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-53-A and III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-52-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-52-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-52-A Uncertificated REMIC 2 Pass-Through Rate
54 I-54-A and I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-54-A and II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-54-A and III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-53-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-53-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-53-A Uncertificated REMIC 2 Pass-Through Rate
55 I-55-A and I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-55-A and II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-55-A and III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-54-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-54-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-54-A Uncertificated REMIC 2 Pass-Through Rate
56 I-56-A and I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-56-A and II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-56-A and III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-55-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-55-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-55-A Uncertificated REMIC 2 Pass-Through Rate
57 I-57-A and I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-57-A and II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-57-A and III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-56-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-56-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-56-A Uncertificated REMIC 2 Pass-Through Rate
58 I-58-A and I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-58-A and II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-58-A and III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-57-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-57-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-57-A Uncertificated REMIC 2 Pass-Through Rate
59 I-59-A and I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-59-A and II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-59-A and III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-58-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-58-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-58-A Uncertificated REMIC 2 Pass-Through Rate
60 I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-59-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-59-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-59-A Uncertificated REMIC 2 Pass-Through Rate
thereafter I-1-A through I-60-A Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-60-A Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-60-A Uncertificated REMIC 2 Pass-Through Rate
With respect to REMIC 3 Regular Interest LT1GRP, a per annum rate
(but not less than zero) equal to the weighted average of (x) with respect to
REMIC 2 Group I Regular Interests ending with the designation "B," the weighted
average of the Uncertificated REMIC 2 Pass-Through Rates for such REMIC 2
Regular Interests, weighted on the basis of the Uncertificated Balance of each
such REMIC 2 Regular Interest for each such Distribution Date and (y) with
respect to REMIC 2 Group I Regular Interests ending with the designation "A,"
for each Distribution Date listed below, the weighted average of the rates
listed below for such REMIC 2 Regular Interests listed below, weighted on the
basis of the Uncertificated Balance of each such REMIC 2 Regular Interest for
each such Distribution Date:
Distribution
Date REMIC 2 Regular Interest Rate
------------ ------------------------ ------------------------------------------------
1 I-1-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
2 I-2-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A Uncertificated REMIC 2 Pass-Through Rate
3 I-3-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A and I-2-A Uncertificated REMIC 2 Pass-Through Rate
4 I-4-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-3-A Uncertificated REMIC 2 Pass-Through Rate
5 I-5-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-4-A Uncertificated REMIC 2 Pass-Through Rate
6 I-6-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-5-A Uncertificated REMIC 2 Pass-Through Rate
7 I-7-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-6-A Uncertificated REMIC 2 Pass-Through Rate
8 I-8-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-7-A Uncertificated REMIC 2 Pass-Through Rate
9 I-9-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-8-A Uncertificated REMIC 2 Pass-Through Rate
10 I-10-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-9-A Uncertificated REMIC 2 Pass-Through Rate
11 I-11-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-10-A Uncertificated REMIC 2 Pass-Through Rate
12 I-12-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-11-A Uncertificated REMIC 2 Pass-Through Rate
13 I-13-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-12-A Uncertificated REMIC 2 Pass-Through Rate
14 I-14-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-13-A Uncertificated REMIC 2 Pass-Through Rate
15 I-15-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-14-A Uncertificated REMIC 2 Pass-Through Rate
16 I-16-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-15-A Uncertificated REMIC 2 Pass-Through Rate
17 I-17-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-16-A Uncertificated REMIC 2 Pass-Through Rate
18 I-18-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-17-A Uncertificated REMIC 2 Pass-Through Rate
19 I-19-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-18-A Uncertificated REMIC 2 Pass-Through Rate
20 I-20-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-19-A Uncertificated REMIC 2 Pass-Through Rate
21 I-21-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-20-A Uncertificated REMIC 2 Pass-Through Rate
22 I-22-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-21-A Uncertificated REMIC 2 Pass-Through Rate
23 I-23-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-22-A Uncertificated REMIC 2 Pass-Through Rate
24 I-24-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-23-A Uncertificated REMIC 2 Pass-Through Rate
25 I-25-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-24-A Uncertificated REMIC 2 Pass-Through Rate
26 I-26-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-25-A Uncertificated REMIC 2 Pass-Through Rate
27 I-27-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-26-A Uncertificated REMIC 2 Pass-Through Rate
28 I-28-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-27-A Uncertificated REMIC 2 Pass-Through Rate
29 I-29-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-28-A Uncertificated REMIC 2 Pass-Through Rate
30 I-30-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-29-A Uncertificated REMIC 2 Pass-Through Rate
31 I-31-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-30-A Uncertificated REMIC 2 Pass-Through Rate
32 I-32-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-31-A Uncertificated REMIC 2 Pass-Through Rate
33 I-33-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-32-A Uncertificated REMIC 2 Pass-Through Rate
34 I-34-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-33-A Uncertificated REMIC 2 Pass-Through Rate
35 I-35-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-34-A Uncertificated REMIC 2 Pass-Through Rate
36 I-36-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-35-A Uncertificated REMIC 2 Pass-Through Rate
37 I-37-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-36-A Uncertificated REMIC 2 Pass-Through Rate
38 I-38-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-37-A Uncertificated REMIC 2 Pass-Through Rate
39 I-39-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-38-A Uncertificated REMIC 2 Pass-Through Rate
40 I-40-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-39-A Uncertificated REMIC 2 Pass-Through Rate
41 I-41-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-40-A Uncertificated REMIC 2 Pass-Through Rate
42 I-42-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-41-A Uncertificated REMIC 2 Pass-Through Rate
43 I-43-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-42-A Uncertificated REMIC 2 Pass-Through Rate
44 I-44-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-43-A Uncertificated REMIC 2 Pass-Through Rate
45 I-45-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-44-A Uncertificated REMIC 2 Pass-Through Rate
46 I-46-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-45-A Uncertificated REMIC 2 Pass-Through Rate
47 I-47-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-46-A Uncertificated REMIC 2 Pass-Through Rate
48 I-48-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-47-A Uncertificated REMIC 2 Pass-Through Rate
49 I-49-A and I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-48-A Uncertificated REMIC 2 Pass-Through Rate
50 I-50-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-49-A Uncertificated REMIC 2 Pass-Through Rate
51 I-51-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-50-A Uncertificated REMIC 2 Pass-Through Rate
52 I-52-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-51-A Uncertificated REMIC 2 Pass-Through Rate
53 I-53-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-52-A Uncertificated REMIC 2 Pass-Through Rate
54 I-54-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-53-A Uncertificated REMIC 2 Pass-Through Rate
55 I-55-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-54-A Uncertificated REMIC 2 Pass-Through Rate
56 I-56-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-55-A Uncertificated REMIC 2 Pass-Through Rate
57 I-57-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-56-A Uncertificated REMIC 2 Pass-Through Rate
58 I-58-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-57-A Uncertificated REMIC 2 Pass-Through Rate
59 I-59-A and I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-58-A Uncertificated REMIC 2 Pass-Through Rate
60 I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
I-1-A through I-59-A Uncertificated REMIC 2 Pass-Through Rate
thereafter I-1-A through I-60-A Uncertificated REMIC 2 Pass-Through Rate
With respect to REMIC 3 Regular Interest LT2GRP, a per annum
rate (but not less than zero) equal to the weighted average of (x) with respect
to REMIC 2 Group II Regular Interests ending with the designation "B," the
weighted average of the Uncertificated REMIC 2 Pass-Through Rates for such REMIC
2 Regular Interests, weighted on the basis of the Uncertificated Balance of each
such REMIC 2 Regular Interest for each such Distribution Date and (y) with
respect to REMIC 2 Group II Regular Interests ending with the designation "A,"
for each Distribution Date listed below, the weighted average of the rates
listed below for such REMIC 2 Regular Interests listed below, weighted on the
basis of the Uncertificated Balance of each such REMIC 2 Regular Interest for
each such Distribution Date:
Distribution
Date REMIC 2 Regular Interest Rate
------------ ------------------------ ------------------------------------------------
1 II-1-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
2 II-2-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A Uncertificated REMIC 2 Pass-Through Rate
3 II-3-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A and II-2-A Uncertificated REMIC 2 Pass-Through Rate
4 II-4-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-3-A Uncertificated REMIC 2 Pass-Through Rate
5 II-5-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-4-A Uncertificated REMIC 2 Pass-Through Rate
6 II-6-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-5-A Uncertificated REMIC 2 Pass-Through Rate
7 II-7-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-6-A Uncertificated REMIC 2 Pass-Through Rate
8 II-8-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-7-A Uncertificated REMIC 2 Pass-Through Rate
9 II-9-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-8-A Uncertificated REMIC 2 Pass-Through Rate
10 II-10-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-9-A Uncertificated REMIC 2 Pass-Through Rate
11 II-11-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-10-A Uncertificated REMIC 2 Pass-Through Rate
12 II-12-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-11-A Uncertificated REMIC 2 Pass-Through Rate
13 II-13-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-12-A Uncertificated REMIC 2 Pass-Through Rate
14 II-14-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-13-A Uncertificated REMIC 2 Pass-Through Rate
15 II-15-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-14-A Uncertificated REMIC 2 Pass-Through Rate
16 II-16-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-15-A Uncertificated REMIC 2 Pass-Through Rate
17 II-17-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-16-A Uncertificated REMIC 2 Pass-Through Rate
18 II-18-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-17-A Uncertificated REMIC 2 Pass-Through Rate
19 II-19-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-18-A Uncertificated REMIC 2 Pass-Through Rate
20 II-20-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-19-A Uncertificated REMIC 2 Pass-Through Rate
21 II-21-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-20-A Uncertificated REMIC 2 Pass-Through Rate
22 II-22-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-21-A Uncertificated REMIC 2 Pass-Through Rate
23 II-23-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-22-A Uncertificated REMIC 2 Pass-Through Rate
24 II-24-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-23-A Uncertificated REMIC 2 Pass-Through Rate
25 II-25-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-24-A Uncertificated REMIC 2 Pass-Through Rate
26 II-26-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-25-A Uncertificated REMIC 2 Pass-Through Rate
27 II-27-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-26-A Uncertificated REMIC 2 Pass-Through Rate
28 II-28-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-27-A Uncertificated REMIC 2 Pass-Through Rate
29 II-29-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-28-A Uncertificated REMIC 2 Pass-Through Rate
30 II-30-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-29-A Uncertificated REMIC 2 Pass-Through Rate
31 II-31-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-30-A Uncertificated REMIC 2 Pass-Through Rate
32 II-32-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-31-A Uncertificated REMIC 2 Pass-Through Rate
33 II-33-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-32-A Uncertificated REMIC 2 Pass-Through Rate
34 II-34-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-33-A Uncertificated REMIC 2 Pass-Through Rate
35 II-35-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-34-A Uncertificated REMIC 2 Pass-Through Rate
36 II-36-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-35-A Uncertificated REMIC 2 Pass-Through Rate
37 II-37-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-36-A Uncertificated REMIC 2 Pass-Through Rate
38 II-38-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-37-A Uncertificated REMIC 2 Pass-Through Rate
39 II-39-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-38-A Uncertificated REMIC 2 Pass-Through Rate
40 II-40-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-39-A Uncertificated REMIC 2 Pass-Through Rate
41 II-41-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-40-A Uncertificated REMIC 2 Pass-Through Rate
42 II-42-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-41-A Uncertificated REMIC 2 Pass-Through Rate
43 II-43-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-42-A Uncertificated REMIC 2 Pass-Through Rate
44 II-44-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-43-A Uncertificated REMIC 2 Pass-Through Rate
45 II-45-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-44-A Uncertificated REMIC 2 Pass-Through Rate
46 II-46-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-45-A Uncertificated REMIC 2 Pass-Through Rate
47 II-47-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-46-A Uncertificated REMIC 2 Pass-Through Rate
48 II-48-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-47-A Uncertificated REMIC 2 Pass-Through Rate
49 II-49-A and II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-48-A Uncertificated REMIC 2 Pass-Through Rate
50 II-50-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-49-A Uncertificated REMIC 2 Pass-Through Rate
51 II-51-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-50-A Uncertificated REMIC 2 Pass-Through Rate
52 II-52-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-51-A Uncertificated REMIC 2 Pass-Through Rate
53 II-53-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-52-A Uncertificated REMIC 2 Pass-Through Rate
54 II-54-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-53-A Uncertificated REMIC 2 Pass-Through Rate
55 II-55-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-54-A Uncertificated REMIC 2 Pass-Through Rate
56 II-56-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-55-A Uncertificated REMIC 2 Pass-Through Rate
57 II-57-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-56-A Uncertificated REMIC 2 Pass-Through Rate
58 II-58-A through II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-57-A Uncertificated REMIC 2 Pass-Through Rate
59 II-59-A and II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-58-A Uncertificated REMIC 2 Pass-Through Rate
60 II-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
II-1-A through II-59-A Uncertificated REMIC 2 Pass-Through Rate
thereafter II-1-A through II-60-A Uncertificated REMIC 2 Pass-Through Rate
With respect to REMIC 3 Regular Interest LT3GRP, a per annum
rate (but not less than zero) equal to the weighted average of (x) with respect
to REMIC 2 Group III Regular Interests ending with the designation "B," the
weighted average of the Uncertificated REMIC 2 Pass-Through Rates for such REMIC
2 Regular Interests, weighted on the basis of the Uncertificated Balance of each
such REMIC 2 Regular Interest for each such Distribution Date and (y) with
respect to REMIC 2 Group III Regular Interests ending with the designation "A,"
for each Distribution Date listed below, the weighted average of the rates
listed below for such REMIC 2 Regular Interests listed below, weighted on the
basis of the Uncertificated Balance of each such REMIC 2 Regular Interest for
each such Distribution Date:
Distribution
Date REMIC 2 Regular Interest Rate
------------ ------------------------ ------------------------------------------------
1 III-1-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
2 III-2-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A Uncertificated REMIC 2 Pass-Through Rate
3 III-3-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A and III-2-A Uncertificated REMIC 2 Pass-Through Rate
4 III-4-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-3-A Uncertificated REMIC 2 Pass-Through Rate
5 III-5-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-4-A Uncertificated REMIC 2 Pass-Through Rate
6 III-6-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-5-A Uncertificated REMIC 2 Pass-Through Rate
7 III-7-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-6-A Uncertificated REMIC 2 Pass-Through Rate
8 III-8-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-7-A Uncertificated REMIC 2 Pass-Through Rate
9 III-9-A through III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-8-A Uncertificated REMIC 2 Pass-Through Rate
10 III-10-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-9-A Uncertificated REMIC 2 Pass-Through Rate
11 III-11-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-10-A Uncertificated REMIC 2 Pass-Through Rate
12 III-12-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-11-A Uncertificated REMIC 2 Pass-Through Rate
13 III-13-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-12-A Uncertificated REMIC 2 Pass-Through Rate
14 III-14-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-13-A Uncertificated REMIC 2 Pass-Through Rate
15 III-15-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-14-A Uncertificated REMIC 2 Pass-Through Rate
16 III-16-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-15-A Uncertificated REMIC 2 Pass-Through Rate
17 III-17-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-16-A Uncertificated REMIC 2 Pass-Through Rate
18 III-18-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-17-A Uncertificated REMIC 2 Pass-Through Rate
19 III-19-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-18-A Uncertificated REMIC 2 Pass-Through Rate
20 III-20-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-19-A Uncertificated REMIC 2 Pass-Through Rate
21 III-21-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-20-A Uncertificated REMIC 2 Pass-Through Rate
22 III-22-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-21-A Uncertificated REMIC 2 Pass-Through Rate
23 III-23-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-22-A Uncertificated REMIC 2 Pass-Through Rate
24 III-24-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-23-A Uncertificated REMIC 2 Pass-Through Rate
25 III-25-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-24-A Uncertificated REMIC 2 Pass-Through Rate
26 III-26-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-25-A Uncertificated REMIC 2 Pass-Through Rate
27 III-27-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-26-A Uncertificated REMIC 2 Pass-Through Rate
28 III-28-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-27-A Uncertificated REMIC 2 Pass-Through Rate
29 III-29-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-28-A Uncertificated REMIC 2 Pass-Through Rate
30 III-30-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-29-A Uncertificated REMIC 2 Pass-Through Rate
31 III-31-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-30-A Uncertificated REMIC 2 Pass-Through Rate
32 III-32-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-31-A Uncertificated REMIC 2 Pass-Through Rate
33 III-33-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-32-A Uncertificated REMIC 2 Pass-Through Rate
34 III-34-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-33-A Uncertificated REMIC 2 Pass-Through Rate
35 III-35-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-34-A Uncertificated REMIC 2 Pass-Through Rate
36 III-36-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-35-A Uncertificated REMIC 2 Pass-Through Rate
37 III-37-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-36-A Uncertificated REMIC 2 Pass-Through Rate
38 III-38-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-37-A Uncertificated REMIC 2 Pass-Through Rate
39 III-39-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-38-A Uncertificated REMIC 2 Pass-Through Rate
40 III-40-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-39-A Uncertificated REMIC 2 Pass-Through Rate
41 III-41-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-40-A Uncertificated REMIC 2 Pass-Through Rate
42 III-42-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-41-A Uncertificated REMIC 2 Pass-Through Rate
43 III-43-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-42-A Uncertificated REMIC 2 Pass-Through Rate
44 III-44-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-43-A Uncertificated REMIC 2 Pass-Through Rate
45 III-45-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-44-A Uncertificated REMIC 2 Pass-Through Rate
46 III-46-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-45-A Uncertificated REMIC 2 Pass-Through Rate
47 III-47-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-46-A Uncertificated REMIC 2 Pass-Through Rate
48 III-48-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-47-A Uncertificated REMIC 2 Pass-Through Rate
49 III-49-A and III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-48-A Uncertificated REMIC 2 Pass-Through Rate
50 III-50-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-49-A Uncertificated REMIC 2 Pass-Through Rate
51 III-51-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-50-A Uncertificated REMIC 2 Pass-Through Rate
52 III-52-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-51-A Uncertificated REMIC 2 Pass-Through Rate
53 III-53-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-52-A Uncertificated REMIC 2 Pass-Through Rate
54 III-54-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-53-A Uncertificated REMIC 2 Pass-Through Rate
55 III-55-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-54-A Uncertificated REMIC 2 Pass-Through Rate
56 III-56-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-55-A Uncertificated REMIC 2 Pass-Through Rate
57 III-57-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-56-A Uncertificated REMIC 2 Pass-Through Rate
58 III-58-A through 2 multiplied by Swap LIBOR, subject to a maximum
III-60-A rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-57-A Uncertificated REMIC 2 Pass-Through Rate
59 III-59-A and III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-58-A Uncertificated REMIC 2 Pass-Through Rate
60 III-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC 2 Pass-Through Rate
III-1-A through III-59-A Uncertificated REMIC 2 Pass-Through Rate
thereafter III-1-A through III-60-A Uncertificated REMIC 2 Pass-Through Rate
With respect to REMIC 3 Regular Interest LTIO and Distribution Dates 1 through
60, a per annum rate equal to the excess, if any, of (i) 10.690% minus (ii) 2
times Swap LIBOR.
"United States Person" or "U.S. Person": (i) A citizen or
resident of the United States, (ii) a corporation, partnership or other entity
treated as a corporation or partnership for United States federal income tax
purposes organized in or under the laws of the United States or any state
thereof or the District of Columbia (unless, in the case of a partnership,
Treasury Regulations provide otherwise), (iii) an estate the income of which is
includible in gross income for United States tax purposes, regardless of its
source, or (iv) a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more United
States persons have authority to control all substantial decisions of the trust.
Notwithstanding the preceding sentence, to the extent provided in Treasury
Regulations, certain Trusts in existence on August 20, 1996, and treated as
United States persons prior to such date, that elect to continue to be treated
as United States persons will also be a U.S. Person; provided, that for purposes
of the definition of a "Permitted Transferee," a U.S. Person shall not include
any person whose income is attributable to a foreign permanent establishment or
fixed base, within the meaning of an applicable income tax treaty, of such
Person or any other U.S. Person.
"Unpaid Realized Loss Amount": For any of the Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9
and Class B Certificates and as to any Distribution Date, the excess of (x) the
aggregate Applied Realized Loss Amounts allocated to such Class for all prior
Distribution Dates over (y) the sum of (a) the cumulative amount of any
Subsequent Recoveries allocated to such Class and (b) the aggregate Realized
Loss Amortization Amounts with respect to such Class for all prior Distribution
Dates.
"Value": With respect to any Mortgaged Property, the lesser of:
(i) an amount determined by an appraisal done at origination of the Mortgage
Loan; provided, however, such amount may be reduced to reflect the results of a
review of such appraisal in accordance with the related Originator's
underwriting guidelines and (ii) the purchase price paid for such Mortgaged
Property by the Mortgagor with the proceeds of the Mortgage Loan; provided,
however, that in the case of a refinanced Mortgage Loan, the value of the
Mortgaged Property is based solely on clause (i).
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. The Voting Rights allocated
among Holders of the Offered Certificates and the Class B Certificates shall be
98%, and shall be allocated among each such Class according to the fraction,
expressed as a percentage, the numerator of which is the aggregate Certificate
Principal Balance of all the Certificates of such Class then outstanding and the
denominator of which is the aggregate Certificate Principal Balance of all the
Offered Certificates and the Class B Certificates then outstanding. The Voting
Rights allocated to each such Class of Certificates shall be allocated among all
holders of each such Class in proportion to the outstanding Certificate
Principal Balance of such Certificates; provided, however, that any Certificate
registered in the name of the Servicer, the Depositor or the Trustee or any of
their respective affiliates shall not be included in the calculation of Voting
Rights; provided that only such Certificates as are known by a Responsible
Officer of the Trustee to be so registered will be so excluded. 1% of all the
Voting Rights will be allocated to the Holders of each of the Class CE and Class
P Certificates. The Residual Certificates shall have no Voting Rights.
"Weighted Average Net Maximum Mortgage Interest 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 Maximum Mortgage Interest Rates of the Mortgage Loans, the
Group 1 Mortgage Loans, the Group 2 Mortgage Loans or the Group 3 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.
"Weighted Average Net Mortgage Interest 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, the Group 2 Mortgage Loans or the Group 3 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. With respect to the Distribution Date in September 2006, the
Weighted Average Net Mortgage Interest Rate of the Group 3 Mortgage Loans shall
be multiplied by a fraction, the numerator of which is 528,008,647 and the
denominator of which is 622,143,497.
"Written Order to Authenticate": A written order by which the
Depositor directs the Trustee to execute, authenticate and deliver the
Certificates.
Section 1.02 Accounting.
Unless otherwise specified herein, for the purpose of any
definition or calculation, whenever amounts are required to be netted,
subtracted or added or any distributions are taken into account such definition
or calculation and any related definitions or calculations shall be determined
without duplication of such functions.
Section 1.03 Rights of the NIMS Insurer.
Each of the rights of the NIMS Insurer set forth in this
Agreement shall exist so long as (i) the NIMS Insurer has undertaken to
guarantee certain payments of notes issued pursuant to the Indenture and (ii)
any series of notes issued pursuant to the Indenture remains outstanding or the
NIMS Insurer is owed amounts in respect of its guarantee of payment on such
notes; provided, however, the NIMS Insurer shall not have any rights hereunder
(except pursuant to Section 11.01 in the case of clause (ii) below) during the
period of time, if any, that (i) the NIMS Insurer has not undertaken to
guarantee certain payments of notes issued pursuant to the Indenture or (ii) any
default has occurred and is continuing under the insurance policy issued by the
NIMS Insurer with respect to such notes.
Section 1.04 Fiscal Year
The fiscal year of the Trust will be the calendar year.
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 Initial 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 Initial 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 Initial Mortgage
Loans; (iv) all other assets included or to be included in the Trust Fund; (v)
all proceeds of any of the foregoing; (vi) the rights of the Depositor under the
Consulting Agreement; and (vii) the rights of the Depositor under each
Originator Mortgage Loan Purchase Agreement and the Mortgage Loan Purchase
Agreement. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
In connection with such transfer and assignment, the Depositor
does hereby deliver to, and deposit with the Trustee, or its designated agent,
the following documents or instruments with respect to each Initial Mortgage
Loan so transferred and assigned and the Depositor, shall, in accordance with
Section 2.04, deliver or caused to be delivered to the Trustee with respect to
each Additional Group 3 Mortgage Loan, the following documents or instruments (a
"Mortgage File") so transferred and assigned:
(i) the original Mortgage Note, endorsed in blank or with
respect to any lost Mortgage Note, an original Lost Note Affidavit,
together with a copy of the related Mortgage Note;
(ii) 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 (which may be in blank), in form
and substance acceptable for recording; provided, however, if the
related Mortgage has been recorded in the name of Mortgage Electronic
Registration Systems, Inc. ("MERS") or its designee, no Assignment in
favor of the Trustee will be required to be prepared or delivered and
instead, the Servicer shall take all actions as are necessary to cause
the Trust to be shown as the owner of the related Mortgage Loan on the
records of MERS for purposes of the system of recording transfers of
beneficial ownership of mortgages maintained by MERS;
(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 (i)
with respect to the Initial Mortgage Loans, on or prior to the Closing Date, an
acknowledgment of receipt of the original Mortgage Notes relating to the Initial
Mortgage Loans (with any exceptions noted), substantially in the form attached
as Exhibit F-3 hereto and (ii) with respect to the Additional Group 3 Mortgage
Loans, on or prior to the Additional Transfer Date, an acknowledgment of receipt
of the original Mortgage Notes relating to the Additional Group 3 Mortgage Loans
(with any exceptions noted).
If any of the documents referred to in Section 2.01(ii), (iii)
or (iv) above have as of the Closing Date (or the Additional Transfer Date, with
respect to the Additional Group 3 Mortgage Loans) 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 (or the Additional Transfer Date, with respect to the
Additional Group 3 Mortgage Loans), 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
(or Additional Transfer Date, with respect to the Additional Group 3 Mortgage
Loans), 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 herewith delivers to the Trustee executed copies
of the Originator Mortgage Loan Purchase Agreements and the Mortgage Loan
Purchase Agreement.
The Depositor hereby directs the Trustee to execute, deliver and
perform its obligations, on behalf of the Trust, under the Interest Rate Swap
Agreement and to make the representations of the Trust contained therein.
It is agreed and understood by the parties hereto that it is not
intended that any mortgage loan be included in the Trust that is a "High-Cost
Home Loan" as defined in any of (i) the New Jersey Home Ownership Act effective
November 27, 2003, (ii) the New Mexico Home Loan Protection Act, effective
January 1, 2004, (iii) the Massachusetts Predatory Home Loan Practices Act,
effective November 7, 2004 or (iv) the Indiana Home Loan Practices Act,
effective January 1, 2005.
Concurrently with the execution and delivery of this Agreement,
the Depositor shall deliver the Mortgage Loan Schedule to the Trustee and the
Servicer. The Depositor and the Trustee shall provide a copy of the Mortgage
Loan Schedule to any Certificateholders upon written request made to it at the
addresses set forth on Exhibit D, as the same may be amended from time to time
by written notice from such party to the other parties hereto.
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, with respect
to each Initial Mortgage Loan, or the Additional Transfer Date, with respect to
each Additional Group 3 Mortgage Loan (or, with respect to any document
delivered after the Startup Day (in the case of the Initial Mortgage Loans) or
the Additional Transfer Date (in the case of the Additional Group 3 Mortgage
Loans), within 60 days of receipt and with respect to any Eligible Substitute
Mortgage Loan, within 60 days after the assignment thereof) and to certify in
substantially the form attached hereto as Exhibit F-1 that, as to each Initial
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),
(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, the Servicer and the NIMS Insurer a
final certification in the form annexed hereto as Exhibit F-2 evidencing the
completeness of the Mortgage Files, with any applicable exceptions noted
thereon.
If in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to above, the Trustee
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, the NIMS Insurer and the
Servicer. In addition, upon the discovery by the Originators, the Seller, the
Depositor, the NIMS Insurer, the Trustee or the Servicer (or upon receipt by the
Trustee of written notification of such breach) of a breach of any of the
representations and warranties made by the related Originator in the applicable
Originator Mortgage Loan Purchase Agreement or the Seller in the Mortgage Loan
Purchase Agreement or an Additional 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.
Notwithstanding the foregoing, any breach of a Deemed Material and Adverse
Representation with respect to a Group 1 Mortgage Loan or Group 2 Mortgage Loan
shall automatically be deemed to materially and adversely affect such Mortgage
Loan or the interest of the related Certificateholders therein.
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 Initial 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 Originators or the Seller.
(a) Upon discovery or receipt of written notice of any
materially defective document in, or that a document is missing from, a Mortgage
File or of the breach by the Originators or the Seller of any representation or
warranty under the related Originator Mortgage Loan Purchase Agreement, the
Mortgage Loan Purchase Agreement or Additional Mortgage Loan Purchase Agreement,
as applicable, in respect of any Mortgage Loan which materially adversely
affects the value of such Mortgage Loan, Prepayment Charge or the interest
therein of the Certificateholders, the Trustee shall promptly notify the
applicable Originator or the Seller, as the case may be, the Servicer and the
NIMS Insurer of such defect, missing document or breach and request that, in the
case of a defective or missing document, the Seller cure such defect or deliver
such missing document within 120 days from the date the Seller was notified of
such missing document or defect or, in the case of a beach of a representation
or warranty, request the related Originator or the Seller, as applicable, cure
such breach within 90 days from the date the applicable Originator or the
Seller, as the case may be, was notified of such breach. Notwithstanding the
foregoing, any breach of a Deemed Material and Adverse Representation with
respect to a Group 1 Mortgage Loan or Group 2 Mortgage Loan shall automatically
be deemed to materially and adversely affect such Mortgage Loan or the interest
of the related Certificateholders therein. If the Seller does not deliver such
missing document or cure such defect or if the related Originator or the Seller,
as applicable, does not cure such breach in all material respects during such
period, the Trustee shall enforce such Originator's or the Seller's obligation,
as the case may be, under the applicable Originator Mortgage Loan Purchase
Agreement or the Mortgage Loan Purchase Agreement, or Additional Mortgage Loan
Purchase Agreement as applicable, and cause such Originator or the Seller, as
applicable, to repurchase such Mortgage Loan from the Trust Fund at the Purchase
Price on or prior to the Determination Date following the expiration of such
period (subject to Section 2.03(d)). The Purchase Price for the repurchased
Mortgage Loan shall be deposited in the Collection Account, and the Trustee,
upon receipt of written notice from the Servicer of such deposit, shall release
to the related Originator or the Seller, as applicable, the related Mortgage
File and shall execute and deliver such instruments of transfer or assignment,
in each case without recourse, as such Originator or the Seller, as applicable,
shall furnish to it and as shall be necessary to vest in such Originator or the
Seller, as the case may be, any Mortgage Loan released pursuant hereto and the
Trustee shall have no further responsibility with regard to such Mortgage File.
In lieu of repurchasing any such Mortgage Loan as provided above, the related
Originator or the Seller, as the case may be, may cause such Mortgage Loan to be
removed from the Trust Fund (in which case it shall become a Defective Mortgage
Loan) and substitute one or more Eligible Substitute Mortgage Loans in the
manner and subject to the limitations set forth in Section 2.03(c).
With respect to the representations and warranties set forth in
the applicable Originator Mortgage Loan Purchase Agreement, the Mortgage Loan
Purchase Agreement or the Additional Mortgage Loan Purchase Agreement that are
made to the best of the related Originator's or the Seller's knowledge, as
applicable, or as to which such Originator or the Seller, as the case may be,
has no knowledge, if it is discovered by the Depositor, the Servicer, the NIMS
Insurer 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 such Originator's or the Seller's lack
of knowledge with respect to the substance of such representation and warranty
being inaccurate at the time the representation or warranty was made, such
inaccuracy shall be deemed a breach of the applicable representation or
warranty.
It is understood and agreed that the representations and
warranties set forth in the applicable Originator Mortgage Loan Purchase
Agreement, the Mortgage Loan Purchase Agreement or Additional Mortgage Loan
Purchase Agreement shall survive delivery of the Mortgage Files to the Trustee
and the Closing Date and shall inure to the benefit of the Certificateholders
notwithstanding any restrictive or qualified endorsement or assignment. It is
understood and agreed that the obligations of the Originators and the Seller set
forth in this Section 2.03(a) to cure, substitute for or repurchase a Mortgage
Loan pursuant to the related Originator Mortgage Loan Purchase Agreement, the
Mortgage Loan Purchase Agreement or Additional Mortgage Loan Purchase Agreement,
as applicable, and to pay the Reimbursement Amount constitute the sole remedies
available to the Certificateholders and to the Trustee on their behalf
respecting a breach of the representations and warranties contained in the
Originator Mortgage Loan Purchase Agreement, Mortgage Loan Purchase Agreement
and Additional Mortgage Loan Purchase Agreement.
The representations and warranties of the applicable Originator
with respect to the Mortgage Loans in the respective Originator Mortgage Loan
Purchase Agreement, which have been assigned to the Trustee hereunder, were made
as of the dates specified in the applicable Originator Mortgage Loan Purchase
Agreement. To the extent that any fact, condition or event with respect to a
Mortgage Loan constitutes a breach of both (i) a representation or warranty of
the applicable Originator under the respective Originator Mortgage Loan Purchase
Agreement and (ii) a representation or warranty of the Seller under the Mortgage
Loan Purchase Agreement or Additional Mortgage Loan Purchase Agreement (other
than Seller's representations with respect to predatory and abusive lending laws
in Section 3.01(k) and 3.01(s) of the Mortgage Loan Purchase Agreement), the
only right or remedy of the Trustee or of any Certificateholder shall be the
Trustee's right to enforce the obligations of the applicable Originator under
any applicable representation or warranty made by it. The Trustee acknowledges
that the Seller shall have no obligation or liability with respect to any breach
of a representation or warranty made by it with respect to the Mortgage Loans
(except as otherwise set forth in this paragraph) if the fact, condition or
event constituting such breach also constitutes a breach of a representation or
warranty made by the applicable Originator in the respective Originator Mortgage
Loan Purchase Agreement, without regard to whether such Originator fulfills its
contractual obligations in respect of such representation or warranty. In
addition, to the extent that any fact, condition or event with respect to a
Mortgage Loan constitutes a breach of both (x) the Option One Mortgage
Corporation's representation with respect to predatory and abusive lending laws
in Section 3.03(i) or 3.03(ddd) of the Option One Sale Agreement or Ownit
Mortgage's representations and warranties set forth in clauses (g), (tt), (uu),
(vv) or (nnn) of Section 9.02 of the Ownit Sale Agreement and (y) the Seller's
representation with respect to predatory and abusive lending laws in Section
3.01(k) or 3.01(s) of the Mortgage Loan Purchase Agreement, such Originator
shall be obligated to pay the Reimbursement Amount relating to such Mortgage
Loan, and, to the extent such Originator fails to do so, the Trustee shall be
entitled to enforce the Seller's obligation to pay such Reimbursement Amount. In
any event, the Reimbursement Amount shall be delivered to the Servicer for
deposit into the Collection Account within 10 days from the date the Seller was
notified by the Trustee of the Reimbursement Amount.
(b) Within 90 days of the earlier of discovery by the Servicer
or receipt of notice by the Servicer of the breach of any representation,
warranty or covenant of the Servicer set forth in Section 2.05 which materially
and adversely affects the interests of the Certificateholders in any Mortgage
Loan, the Servicer shall cure such breach in all material respects.
(c) Any substitution of Eligible Substitute Mortgage Loans for
Defective Mortgage Loans made pursuant to Section 2.03(a) must be effected prior
to the last Business Day that is within two years after the Closing Date. As to
any Defective Mortgage Loan for which an Originator or the Seller substitutes an
Eligible Substitute Mortgage Loan or Loans, such substitution shall be effected
by such Originator or the Seller, as applicable, delivering to the Trustee 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
Servicer and the NIMS Insurer, with respect to such Eligible Substitute Mortgage
Loan or Loans, a certification substantially in the form attached hereto as
Exhibit F-1, with any applicable exceptions noted thereon. Within one year of
the date of substitution, the Trustee shall deliver to the Servicer and the NIMS
Insurer a certification substantially in the form of Exhibit F-2 hereto with
respect to such Eligible Substitute Mortgage Loan or Loans, with any applicable
exceptions noted thereon. Monthly Payments due with respect to Eligible
Substitute Mortgage Loans in the month of substitution are not part of the Trust
Fund and will be retained by the related Originator or the Seller, as
applicable. 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, an Originator or the
Seller, as the case may be, shall thereafter be entitled to retain all amounts
subsequently received in respect of such Defective Mortgage Loan. The Depositor
shall give or cause to be given written notice to the Certificateholders and the
NIMS Insurer that such substitution has taken place, shall amend the applicable
Mortgage Loan Schedule to reflect the removal of such Defective Mortgage Loan
from the terms of this Agreement and the substitution of the Eligible Substitute
Mortgage Loan or Loans and shall deliver a copy of such amended Mortgage Loan
Schedule to the Trustee and the NIMS Insurer. Upon such substitution, such
Eligible Substitute Mortgage Loan or Loans shall constitute part of the Mortgage
Pool and shall be subject in all respects to the terms of this Agreement and, in
the case of a substitution effected by an Originator or the Seller, the
applicable Originator Mortgage Loan Purchase Agreement or the Mortgage Loan
Purchase Agreement or Additional Mortgage Loan Purchase Agreement, as the case
may be, including, in the case of a substitution effected by such Originator or
the Seller, all applicable representations and warranties thereof included in
such Originator Mortgage Loan Purchase Agreement, Mortgage Loan Purchase
Agreement or Additional Mortgage Loan Purchase Agreement, as the case may be, as
of the date of substitution.
For any month in which an Originator or the Seller substitutes
one or more Eligible Substitute Mortgage Loans for one or more Defective
Mortgage Loans, the 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
related Originator or the Seller, as the case may be, will deliver or cause to
be delivered to the Servicer for deposit in the Collection Account an amount
equal to the Substitution Adjustment Amount, if any, and the Trustee, upon
receipt of the related Eligible Substitute Mortgage Loan or Loans and notice by
the Servicer of such deposit, shall release to such Originator or the Seller, as
applicable, the related Mortgage File or Files and shall execute and deliver
such instruments of transfer or assignment, in each case without recourse, as
such Originator or the Seller, as the case may be, shall deliver to it and as
shall be necessary to vest therein any Defective Mortgage Loan released pursuant
hereto. In addition, such Originator or the Seller, as applicable, shall obtain
at its own expense and deliver to the Trustee and the NIMS Insurer an Opinion of
Counsel to the effect that such substitution will not cause (a) any federal tax
to be imposed on the Trust Fund, including without limitation, any federal tax
imposed on "prohibited transactions" under Section 860F(a)(l) of the Code or on
"contributions after the startup date" under Section 860G(d)(l) of the Code, or
(b) any REMIC 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 an Originator, the Seller, the Servicer,
the NIMS Insurer 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, such Originator or the
Seller, as applicable, shall repurchase or, subject to the limitations set forth
in Section 2.03(c), substitute one or more Eligible Substitute Mortgage Loans
for the affected Mortgage Loan within 90 days of the earlier of discovery or
receipt of such notice with respect to such affected Mortgage Loan. In addition,
upon discovery that a Mortgage Loan is defective in a manner that would cause it
to be a "defective obligation" within the meaning of Treasury Regulations
relating to REMICs, such Originator or the Seller, as the case may be, shall
cure the defect or make the required purchase or substitution no later than 90
days after the discovery of the defect. Any such repurchase or substitution
shall be made in the same manner as set forth in Section 2.03(a). The Trustee
shall reconvey to such Originator or the Seller, as applicable, 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.
(e) If a Mortgagor is forty-five (45) days or more delinquent with respect to a
Mortgage Loan's first Monthly Payment that was due the Seller after its initial
purchase under the Option One Sale Agreement, the Servicer, at the Seller's
option, shall repurchase such Mortgage Loan at the purchase price set forth in
the Option One Sale Agreement plus accrued and unpaid interest thereon from the
date to which interest was last paid through the last day of the month in which
such repurchase takes place at the applicable Mortgage Loan Remittance Rate (as
such term is defined in the Option One Sale Agreement); provided, however, the
Servicer's obligation to repurchase any such Mortgage Loan pursuant to this
paragraph shall expire 150 days following the related Closing Date (as such term
is defined in the Option One Sale Agreement)."
Section 2.04 Conveyance of the Additional Group 3 Mortgage
Loans.
(a) Subject to the conditions set forth in paragraph (b) below,
in consideration of the Trustee's delivery on the Additional Transfer Dates to
or upon the order of the Depositor of all or a portion of the balance of funds
in the Group 3 Pre-Funding Account, the Depositor shall on any Additional
Transfer Date sell, transfer, assign, set over and convey without recourse to
the Trust Fund but subject to the other terms and provisions of this Agreement
all of the right, title and interest of the Depositor in and to (i) the
Additional Group 3 Mortgage Loans identified on the Schedule of Additional
Mortgage Loans attached to the related Additional Transfer Instrument delivered
by the Depositor on such Additional Transfer Date, (ii) all interest accruing
thereon on and after the Subsequent Cut-off Date and all collections in respect
of interest and principal due after the Subsequent Cut-off Date and (iii) all
items with respect to such Additional Group 3 Mortgage Loans to be delivered
pursuant to Section 2.01 and the other items in the related Mortgage Files;
provided, however, that the Depositor reserves and retains all right, title and
interest in and to principal received and interest accruing on the Additional
Group 3 Mortgage Loans prior to the related Subsequent Cut-off Date. The
transfer to the Trustee for deposit in the Mortgage Pool by the Depositor of the
Additional Group 3 Mortgage Loans identified on the Schedule of Additional
Mortgage Loans shall be absolute and is intended by the Depositor, the Servicer,
the Trustee and the Certificateholders to constitute and to be treated as a sale
of the Additional Group 3 Mortgage Loans by the Depositor to the Trust Fund. The
related Mortgage File for each Additional Group 3 Mortgage Loan shall be
delivered to the Trustee at least three Business Days prior to the related
Additional Transfer Date.
The purchase price paid by the Trustee from amounts released
from the Group 3 Pre-Funding Account shall be one-hundred percent (100%) of the
aggregate Principal Balance of the related Additional Group 3 Mortgage Loans so
transferred (as identified on the Mortgage Loan Schedule provided by the
Depositor). This Agreement shall constitute a fixed-price purchase contract in
accordance with Section 860G(a)(3)(A)(ii) of the Code.
(b) The Depositor shall transfer to the Trustee for deposit in
the Mortgage Pool the Additional Group 3 Mortgage Loans and the other property
and rights related thereto as described in paragraph (a) above, and the Trustee
shall release funds from the Group 3 Pre-Funding Account only upon the
satisfaction of each of the following conditions on or prior to the related
Additional Transfer Date:
(i) the Depositor shall have provided the Trustee, the NIMS
Insurer and the Rating Agencies with a timely Addition Notice and shall
have provided any information reasonably requested by the Trustee with
respect to the Additional Group 3 Mortgage Loans;
(ii) the Depositor shall have delivered to the Trustee and the
NIMS Insurer a duly executed Additional Transfer Instrument, which shall
include a Schedule of Additional Mortgage Loans listing the Additional
Group 3 Mortgage Loans, and the Depositor, shall have delivered a
computer file containing such schedule to the Trustee at least three
Business Days prior to the related Additional Transfer Date;
(iii) as of each Additional Transfer Date, as evidenced by
delivery of the Additional Transfer Instrument, substantially in the
form of Exhibit S the Depositor shall not be insolvent nor shall it have
been rendered insolvent by such transfer nor shall it be aware of any
pending insolvency;
(iv) such sale and transfer shall not result in a material
adverse tax consequence to the Trust Fund or the Certificateholders;
(v) the Funding Period shall not have terminated;
(vi) the Depositor shall not have selected the Additional Group
3 Mortgage Loans in a manner that it believed to be adverse to the
interests of the Certificateholders;
(vii) the Depositor shall have delivered to the Trustee and the
NIMS Insurer an Additional Transfer Instrument confirming the
satisfaction of the conditions precedent specified in this Section 2.04
and, pursuant to the Additional Transfer Instrument, assigned to the
Trustee without recourse for the benefit of the Certificateholders all
the right, title and interest of the Depositor, in, to and under the
Additional Mortgage Loan Purchase Agreement, to the extent of the
Additional Group 3 Mortgage Loans;
(viii) with respect to the last Additional Transfer Date, the
Depositor shall have delivered to the Trustee and the NIMS Insurer a
letter from an Independent accountant (with copies provided to each
Rating Agency) stating that the characteristics of the Additional Group
3 Mortgage Loans conform to the characteristics set forth in clauses (i)
through (xi) of paragraph (c) below and to the characteristics set forth
in paragraph (d) below; and
(ix) the Depositor shall have received the consent of the NIMS
Insurer, if any, to the transfer of such Additional Group 3 Mortgage
Loans.
(c) The obligation of the Trust Fund to purchase an Additional
Group 3 Mortgage Loan on any Additional Transfer Date is subject to the
satisfaction of the conditions set forth in the following paragraphs and the
accuracy of the following representations and warranties with respect to each
Additional Group 3 Mortgage Loan determined as of the applicable Subsequent
Cut-off Date: (i) such Additional Group 3 Mortgage Loan may not be 30 or more
days delinquent as of the last day of the month preceding the Subsequent Cut-off
Date; (ii) the original term to stated maturity of such Additional Group 3
Mortgage Loan will not be less than 120 months and will not exceed 360 months;
(iii) the Additional Group 3 Mortgage Loan may not provide for negative
amortization; (iv) such Additional Group 3 Mortgage Loan will not have a
Combined Loan-to-Value Ratio greater than 100.00%; (v) all of the Additional
Group 3 Mortgage Loans will have, as of the Subsequent Cut-off Date, a weighted
average term to stated maturity not in excess of 360 months; (vi) each
Additional Group 3 Mortgage Loan that is a Fixed-Rate Mortgage Loan shall have a
Mortgage Interest Rate that is not less than 3.000% or greater than 14.700%;
(vii) each Additional Group 3 Mortgage Loan shall have been serviced by the
Servicer since origination or the date of purchase; (viii) each Additional Group
3 Mortgage Loan shall have a first payment date occurring on or before September
1, 2006 and shall include 30 days of interest thereon, (ix) each Additional
Group 3 Mortgage Loan that is an Adjustable-Rate Mortgage Loan shall have a
Gross Margin not less than 0.500%, a Maximum Mortgage Interest Rate not less
than 9.500% and a Minimum Mortgage Interest Rate not less than 5.500% and (xii)
such Additional Group 3 Mortgage Loan shall have been underwritten in accordance
with the criteria set forth under "Underwriting Standards" in the Prospectus
Supplement.
(d) Following the purchase of any Additional Group 3 Mortgage
Loan by the Trust, no Group 3 Mortgage Loan (including such Additional Group 3
Mortgage Loans) shall have as of the Subsequent Cut-off Date: (i) a Mortgage
Interest Rate less than 3.000% per annum or greater than 14.700% per annum; (ii)
a Combined Loan-to-Value Ratio greater than 100.00%; (iii) a Principal Balance
greater than $1,700,000; or (iv) a FICO score less than 500. In addition, no
Adjustable-Rate Mortgage Loan in Group 3 will have a Gross Margin less than
0.500% per annum and all of the Group 3 Mortgage Loans will have a weighted
average original term to stated maturity of not more than 360 months.
(e) Notwithstanding the foregoing, any Additional Group 3
Mortgage Loan may be rejected by (i) the NIMS Insurer or (ii) any Rating Agency
if the inclusion of any such Additional Group 3 Mortgage Loan would adversely
affect the ratings of any Class of Certificates. At least one Business Day prior
to the Additional Transfer Date, each Rating Agency shall notify the Trustee as
to which Additional Group 3 Mortgage Loans, if any, shall not be included in the
transfer on the Additional Transfer Date; provided, however, that the Depositor
shall have delivered to each Rating Agency at least three Business Days prior to
such Additional Transfer Date a computer file acceptable to each Rating Agency
describing the characteristics specified in paragraphs (c) and (d) above.
(f) In connection with the transfer and assignment of the
Additional Group 3 Mortgage Loans, the Depositor shall satisfy the document
delivery requirements set forth in Section 2.01 hereof.
Section 2.05 Representations, Warranties and Covenants of the
Servicer.
The Servicer hereby represents, warrants and covenants to the
Trustee, for the benefit of each of the Trustee and the Certificateholders and
to the Depositor and the NIMS Insurer that as of the Closing Date or as of such
date specifically provided herein:
(i) The 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 Servicer to conduct its
business as it is presently conducted, and is licensed, qualified and in
good standing in the states where the Mortgaged Property is located if
the laws of such state require licensing or qualification in order to
conduct business of the type conducted by the Servicer or to ensure the
enforceability or validity of each Mortgage Loan; the Servicer has the
power and authority to execute and deliver this Agreement and to perform
in accordance herewith; the execution, delivery and performance of this
Agreement (including all instruments of transfer to be delivered
pursuant to this Agreement) by the Servicer and the consummation of the
transactions contemplated hereby have been duly and validly authorized;
and all requisite corporate action has been taken by the Servicer to
make this Agreement valid and binding upon the Servicer in accordance
with its terms;
(ii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Servicer and
will not result in the breach of any term or provision of the articles
of incorporation or by-laws of the Servicer or result in the breach of
any term or provision of, or conflict with or constitute a default under
or result in the acceleration of any obligation under, any agreement,
indenture or loan or credit agreement or other instrument to which the
Servicer or its property is subject, or result in the violation of any
law, rule, regulation, order, judgment or decree to which the Servicer
or its property is subject;
(iii) The Servicer is an approved seller/servicer of
conventional residential mortgage loans for ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ 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 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 ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, and
no event has occurred, including but not limited to a change in
insurance coverage, which would make the Servicer unable to comply with
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac eligibility requirements or which would
require notification to either ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac;
(iv) This Agreement, and all documents and instruments
contemplated hereby which are executed and delivered by the Servicer,
constitute and will constitute valid, legal and binding obligations of
the Servicer, enforceable in accordance with their respective terms,
except as the enforcement thereof may be limited by applicable
bankruptcy, 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 Servicer does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant
contained in this Agreement;
(vi) There is no action, suit, proceeding or investigation
pending or, to its knowledge, threatened against the Servicer that,
either individually or in the aggregate, may result in any material
adverse change in the business, operations, financial condition,
properties or assets of the Servicer, or in any material impairment of
the right or ability of the Servicer to carry on its business
substantially as now conducted, or in any material liability on the part
of the Servicer, or that would draw into question the validity or
enforceability of this Agreement or of any action taken or to be taken
in connection with the obligations of the Servicer contemplated herein,
or that would be likely to impair materially the ability of the Servicer
to perform under the terms of this Agreement;
(vii) No consent, approval or order of any court or governmental
agency or body is required for the execution, delivery and performance
by the Servicer of or compliance by the Servicer with this Agreement or
the consummation of the transactions contemplated by this Agreement,
except for such consents, approvals, authorizations and orders, if any,
that have been obtained;
(viii) No information in this Agreement provided by the Servicer
nor any information, certificate of an officer, statement furnished in
writing or report delivered to the Trustee by the Servicer in connection
with the transactions contemplated hereby contains or will contain any
untrue statement of a material fact or omits or will omit to state a
material fact necessary in order to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading;
(ix) The Servicer has fully furnished, and shall continue to
fully furnish for so long as it is servicing the Mortgage Loans
hereunder, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information on the
Mortgagor credit files to Equifax, Experian and Trans Union Credit
Information Company on a monthly basis;
(x) Except as otherwise disclosed in the Prospectus Supplement,
no legal or governmental proceedings are pending (or known to be
contemplated) against the Servicer that would be material to
Certificateholders;
(xi) Except as otherwise disclosed in the Prospectus Supplement,
the Servicer is not aware and has not received notice that any default,
early amortization or other performance triggering event has occurred as
to any other securitization due to any act or failure to act of the
Servicer under such securitization;
(xii) Except as otherwise disclosed in the Prospectus
Supplement, the Servicer has not been terminated as servicer in a
residential mortgage loan securitization, either due to a servicing
default or to application of a servicing performance test or trigger;
(xiii) Except as otherwise disclosed in the Prospectus
Supplement, no material noncompliance with the applicable servicing
criteria with respect to other securitizations of residential mortgage
loans involving the Servicer as a servicer has been disclosed or
reported by the Servicer within the past three (3) years;
(xiv) Except as otherwise disclosed in the Prospectus
Supplement, no material changes to the Servicer's policies or procedures
with respect to the servicing function it will perform under this
Agreement for mortgage loans of a type similar to the Mortgage Loans
have occurred during the three-year period immediately preceding the
date of this Agreement;
(xv) Except as otherwise disclosed in the Prospectus Supplement,
there is no material risk that the Servicer's financial condition could
affect one or more aspects of the performance by the Servicer of its
servicing obligations under this Agreement in a manner that could have a
material impact on the performance of the Mortgage Loans or the
Certificates; and
(xvi) Except as disclosed in the Prospectus Supplement, there
are no affiliations, relationships or transactions relating to the
Servicer and any party identified in Item 1119 of Regulation AB of the
type described therein.
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, the NIMS Insurer and the Certificateholders. Upon discovery by any of
the Depositor, the Servicer, the NIMS Insurer 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.
Upon discovery by any of the Depositor, the Servicer or the
Trustee of a breach of any of the representations and warranties set forth in
this Section 2.05, the party discovering such breach shall give prompt written
notice, which shall not exceed two days, to the other parties. The Trustee shall
consult with the Depositor to determine if any such breach is material and any
breach determined by the Depositor to be material shall be included by the
Trustee on the next Distribution Date Statement prepared pursuant to Section
4.06.
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 Servicer and the NIMS
Insurer as follows:
(i) This agreement constitutes a legal, valid and binding
obligation of the Depositor, enforceable against the Depositor in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a
proceeding at law or in equity);
(ii) Immediately prior to the sale and assignment by the
Depositor to the Trustee on behalf of the Trust of each Initial 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 Initial Mortgage Loans to the Trustee on
behalf of the Trust;
(iv) The Depositor has not transferred the Initial 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 Initial
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 Residual Certificates) in
minimum dollar denominations or $25,000 and integral dollar multiples of $1 in
excess. The Class CE and Class P Certificates are issuable only in minimum
Percentage Interests of 10%. Each Class of Residual Certificate is issuable only
as a single certificate. The Trustee acknowledges the issuance of the
uncertificated REMIC 1 Regular Interests and declares that it holds such regular
interests as assets of REMIC 2. The Trustee acknowledges the issuance of the
uncertificated REMIC 2 Regular Interests and declares that it hold such regular
interests as assets of REMIC 3. The Trustee acknowledges the issuance of the
uncertificated REMIC 3 Regular Interests and declares that it hold such regular
interests as assets of REMIC 4. The Trustee acknowledges the issuance of the
uncertificated Class CE Interest and declares that it hold such regular interest
as assets of REMIC 5. The Trustee acknowledges the obligation of the Class CE
Certificates to pay Cap Carryover Amounts, and declares that it holds the same
as assets of the Grantor Trust on behalf of the Holders of the Class A-1, Class
A-2, Class A-3A, Class A-3B, Class A-3C1, Class A-3C2, Class A-3D, Class M-1,
Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8,
Class M-9 and Class B Certificates, respectively, which shall be treated as
beneficially owning the right to receive the Cap Carryover Amounts from the
Grantor Trust. In addition to the assets described in the preceding sentence,
the assets of the Grantor Trust shall also include (i) Prepayment Charges, any
Originator Prepayment Charge Payment Amounts, any Servicer Prepayment Charge
Payment Amounts and the beneficial interest of the Class P Certificates with
respect thereto and (ii) the Interest Rate Swap Agreement, the Swap 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 Servicer to Act as Servicer.
The Servicer, as independent contract servicer, shall service
and administer the Mortgage Loans in accordance with this Agreement and the
normal and usual standards of practice of prudent mortgage servicers 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 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 Servicer may
waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if in the Servicer's reasonable and prudent
determination such waiver, modification, postponement or indulgence is not
materially adverse to the Certificateholders; provided, however, that the
Servicer shall not make future advances and, except as set forth in the
following sentence or Section 3.03, the Servicer shall not permit any
modification with respect to any Mortgage Loan that would (i) change the
Mortgage Interest Rate, defer or forgive the payment thereof of any principal or
interest payments, reduce the outstanding principal amount (except for actual
payments of principal) or extend the final maturity date with respect to such
Mortgage Loan, (ii) 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 Servicer, reasonably
foreseeable, the 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 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. The NIMS Insurer's prior
written consent shall be required for any modification, waiver or amendment if
the aggregate number of outstanding Mortgage Loans which have been modified,
waived or amended exceeds 5% of the number of Mortgage Loans as of the Cut-off
Date. Without limiting the generality of the foregoing, the Servicer shall
continue, and is hereby authorized and empowered to execute and deliver on
behalf of itself, and the Trustee, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
Mortgaged Property. The Servicer shall make all required Servicing Advances and
shall service and administer the Mortgage Loans in accordance with Applicable
Regulations, and shall provide to the Mortgagor any reports required to be
provided to them thereby. The Trustee shall execute and deliver to the Servicer
within at least fifteen (15) Business Day of receipt, upon request, any powers
of attorney furnished to it by the Servicer empowering the 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 Servicer
may request, necessary or appropriate to enable the 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 Servicer). Notwithstanding
anything contained herein to the contrary, the 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 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 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 Servicer.
The Servicer shall give prompt notice to the Trustee of any
action, of which the 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
Servicer may not waive any Prepayment Charge or portion thereof required by the
terms of the related Mortgage Note unless (i)(a) the 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 Servicer, maximize recovery of
Liquidation Proceeds for such Mortgage Loan, taking into account the value of
such Prepayment Charge, or (ii) 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. If the 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 Servicer,
other than as provided above, the Servicer shall, on 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.
In the event that a Prepayment Charge due with respect to any
Mortgage Loan is not timely received by the Servicer, the Servicer shall use
commercially reasonable efforts to determine whether the related Originator is
obligated to pay a related Originator Prepayment Charge Payment Amount, and if
the Servicer determines that a Originator Prepayment Charge Payment Amount is
due, the Servicer shall promptly notify the related Originator, and the Servicer
shall enforce the Originator's obligations to pay in a timely manner any such
Originator Prepayment Charge Payment Amounts and, to the extent that such
amounts are received by the Servicer, shall cause such amounts to be deposited
into the Collection Account within one Business Day of receipt.
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 Servicer will diligently collect all
payments due under each Mortgage Loan when the same shall become due and payable
and shall, to the extent such procedures shall be consistent with this Agreement
and Applicable Regulations, follow such collection procedures as it follows with
respect to mortgage loans comparable to the Mortgage Loans and held for its own
account. Further, the Servicer will take special care in ascertaining and
estimating 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 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 Servicer
shall have the right to review the status of the related forbearance plan and,
subject to the second paragraph of Section 3.01, may modify such forbearance
plan; including extending the Mortgage Loan repayment date for a period of one
year or reducing the Mortgage Interest Rate up to 50 basis points.
In connection with a foreclosure or other conversion, the
Servicer shall exercise such rights and powers vested in it hereunder and use
the same degree of care and skill in its exercise as prudent mortgage servicers
would exercise or use under the circumstances in the conduct of their own
affairs and consistent with Applicable Regulations and the Servicing Standards,
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 Servicer has received actual
notice of, or has actual knowledge of, the presence of any toxic or hazardous
substance on the related Mortgaged Property, the Servicer shall not either (i)
obtain title to such Mortgaged Property as a result of or in lieu of foreclosure
or otherwise, or (ii) otherwise acquire possession of, or take any other action
with respect to, such Mortgaged Property if, as a result of any such action, the
Trust would be considered to hold title to, to be a mortgagee-in-possession of,
or to be an owner or operator of such Mortgaged Property within the meaning of
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, or any comparable law, unless the Servicer
has received the prior written consent of the NIMS Insurer and has received a
prudent report prepared by a Person who regularly conducts environmental audits
using customary industry standards, that:
A. such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic interest of
the Certificateholders to take such actions as are necessary to bring the
Mortgaged Property into compliance therewith; and
B. there are no circumstances present at such Mortgaged Property
relating to the use, management or disposal of any hazardous substances,
hazardous materials, hazardous wastes, or petroleum-based materials for which
investigation, testing, monitoring, containment, clean-up or remediation could
be required under any federal, state or local law or regulation, or that if any
such materials are present for which such action could be required, that it
would be in the best economic interest of the Certificateholders to take such
actions with respect to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this
Section 3.03 shall be advanced by the Servicer, subject to the Servicer's right
to be reimbursed therefor from the Collection Account as provided in Section
3.05(iv).
If the Servicer determines, as described above, that it is in
the best economic interest of the Certificateholders to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes, or petroleum-based materials affecting any such Mortgaged Property, then
the Servicer shall take such action as it deems to be in the best economic
interest of the Certificateholders. The cost of any such compliance,
containment, clean-up or remediation shall be advanced by the Servicer, subject
to the Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.05.
Section 3.04 Collection Account and Distribution Account.
(a) The Servicer shall segregate and hold all funds collected
and received pursuant to each Mortgage Loan separate and apart from any of its
own funds and general assets and shall establish and maintain one or more
Collection Accounts. Each Collection Account shall be an Eligible Account.
The Servicer shall deposit or cause to be deposited on a daily
basis and in no event more than one Business Day after receipt thereof in the
clearing account (which must be an Eligible Account) in which it customarily
deposits payments and collections on mortgage loans in connection with its
mortgage loan servicing activities, and shall thereafter deposit in the
Collection Account, in no event more than one Business Day after deposit of such
funds in the clearing account, and retain therein, the following payments and
collections received or made by it after the Cut-off Date, with respect to the
Initial Mortgage Loans, or the Subsequent Cut-off Date, with respect to the
Additional Group 3 Mortgage Loans (other than in respect of principal and
interest due on or before the Cut-off Date or Subsequent Cut-off Date, as
applicable):
(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 and
any Prepayment Interest Excess;
(iii) all Liquidation Proceeds and any Subsequent Recoveries;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Section 3.10, other than proceeds to be held in
the Escrow Account and applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance with the
Servicer's normal servicing procedures, the loan documents or applicable
law;
(v) all Condemnation Proceeds affecting any Mortgaged Property
which are not released to the Mortgagor in accordance with the
Servicer's normal servicing procedures, the loan documents or applicable
law;
(vi) any amounts required to be deposited by the Servicer in
connection with any REO Property pursuant to Section 3.13;
(vii) all Prepayment Charges collected by the Servicer in
connection with the voluntary Principal Prepayment in full of any
Mortgage Loan, all Originator Prepayment Charge Payment Amounts paid by
the applicable Originator and all Servicer Prepayment Charge Payment
Amounts required to be paid by the Servicer pursuant to Section 3.01 in
connection with any such Principal Prepayment; and
(viii) all amounts required to be deposited by the Servicer
pursuant to Section 2.03.
Any interest paid on funds deposited in the Collection Account,
subject to Section 3.25, shall accrue to the benefit of the Servicer and the
Servicer shall be entitled to retain and withdraw such interest from the
Collection Account pursuant to Section 3.05(v). The foregoing requirements for
deposit from the Collection Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of late payment charges, bad check fees, prepayment charges that are not
Prepayment Charges, Originator Prepayment Charge Payment Amounts or Servicer
Prepayment Charge Payment Amounts, assumption fees and other similar fees need
not be deposited by the Servicer in the Collection Account. Amounts deposited in
the Collection Account in error may be withdrawn by the 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 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 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 Originator
Prepayment Charge Payment Amount or any Servicer Prepayment Charge Payment
Amount. Amounts in the Distribution Account shall be deemed to be held on behalf
of the Grantor Trust and the related REMICs 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 8.05 and Section 9.01(c) prior to the distribution of any amounts on
deposit to the Certificateholders; provided, however, the Trustee shall provide
the Depositor, the NIMS Insurer and the Servicer with a written account of such
amounts five Business Days prior to withdrawing such funds. In connection with
any failure by the Servicer to make any remittance required to be made by the
Servicer to the Trustee for deposit in 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
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 Eligible Investments in accordance with the provisions set
forth in Section 3.25. The Servicer shall give notice to the Trustee and the
NIMS Insurer of the location of the Collection Account maintained by it when
established and prior to any change thereof. The Trustee shall give notice to
the Servicer, the NIMS Insurer and the Depositor of the location of the
Distribution Account when established and prior to any change thereof.
(d) In the event the Servicer shall deliver to the Trustee for
deposit in the Distribution Account any amount not required to be deposited
therein, it may at any time request that the Trustee withdraw such amount from
the Distribution Account and remit to the Servicer any such amount, any
provision herein to the contrary notwithstanding. In addition, the Servicer
shall deliver to the Trustee from time to time for deposit, and the Trustee
shall so deposit, in the Distribution Account in respect of REMIC 1:
(i) any Advances, as required pursuant to Section 4.07;
(ii) any Stayed Funds, as soon as permitted by the federal
bankruptcy court having jurisdiction in such matters;
(iii) any amounts required to be delivered by the Servicer to
the Trustee for deposit in the Distribution Account 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 Servicer
pursuant to Section 3.11 in connection with the deductible clause in any
blanket hazard insurance policy, such deposit being made from the
Servicer's own funds, without reimbursement therefor.
(e) Promptly upon receipt of any Stayed Funds, whether from the
Servicer, a trustee in bankruptcy, or federal bankruptcy court or other source,
the Trustee shall notify the Servicer of such receipt and deposit such funds in
the Distribution Account, subject to withdrawal thereof as permitted hereunder.
In addition, the Trustee shall deposit in the Distribution Account any amounts
required to be deposited pursuant to Section 3.25(b) in connection with losses
realized on Eligible Investments with respect to funds held in the Distribution
Account.
(f) Any Prepayment Charges, Originator Prepayment Charge Payment
Amounts 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.
Section 3.05 Permitted Withdrawals From the Collection
Account.
The Servicer may, from time to time, withdraw from the
Collection Account for the following purposes:
(i) to remit to the Trustee for deposit in the Distribution
Account the amounts required to be so remitted pursuant to Section
3.04(b) or permitted to be so remitted pursuant to the first sentence of
Section 3.04(d);
(ii) to reimburse itself for (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 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 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), (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(a)(ii) and (c) any Prepayment Interest Excess;
(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 Servicer shall deposit in the
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from the Collection Account, any provision herein
to the contrary notwithstanding.
Section 3.06 Establishment of Escrow Accounts; Deposits in
Escrow Accounts.
The Servicer shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan which constitute Escrow Payments
separate and apart from any of its own funds and general assets and shall
establish and maintain one or more Escrow Accounts (which may be evidenced by a
letter agreement), in the form of time deposit or demand accounts. A copy of
such letter agreement shall be furnished to the Trustee upon request. The Escrow
Account shall be an Eligible Account.
The Servicer shall deposit or cause to be deposited on a daily
basis and in no event more than one Business Day after receipt thereof in the
clearing account (which must be an Eligible Account) in which it customarily
deposits payments and collections on mortgage loans in connection with its
mortgage loan servicing activities, and shall thereafter deposit in the Escrow
Account or Accounts, in no event more than one Business Day after deposit of
such funds in the clearing account, and retain therein, (i) all Escrow Payments
collected on account of the Mortgage Loans, for the purpose of effecting timely
payment of any such items as required under the terms of this Agreement, and
(ii) all Insurance Proceeds which are to be applied to the restoration or repair
of any Mortgaged Property. The Servicer shall make withdrawals therefrom only to
effect such payments as are required under this Agreement, and for such other
purposes as shall be set forth in, or in accordance with, Section 3.07. The
Servicer shall be entitled to retain any interest paid on funds deposited in the
Escrow Account by the depository institution other than interest on escrowed
funds required by law to be paid to the Mortgagor and, to the extent required by
the related Mortgage Loan or Applicable Regulations, the Servicer shall pay
interest on escrowed funds to the Mortgagor notwithstanding that the Escrow
Account is non-interest bearing or that interest paid thereon is insufficient
for such purposes.
Section 3.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by the Servicer
(i) to effect timely payments of ground rents, taxes, assessments, water rates,
fire, flood and hazard insurance premiums and comparable items 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 Servicer for any Servicing Advance
made by the Servicer with respect to a related Mortgage Loan but only from
amounts received on the related Mortgage Loan which represent late payments or
Late Collections of Escrow Payments thereunder 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 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 Servicer shall pay
to the Mortgagor interest on funds in the Escrow Account, to the extent required
by the related Mortgage Loan or Applicable Regulations, and to the extent that
interest earned on funds in the Escrow Account is insufficient, shall pay such
interest from its own funds, without any reimbursement therefor.
In the event the Servicer shall deposit in the Escrow Account
any amount not required to be deposited therein, it may at any time withdraw
such amount from the Escrow Account, any provision herein to the contrary
notwithstanding.
Section 3.08 Payment of Taxes, Insurance and Other Charges;
Collections Thereunder.
With respect to each Mortgage Loan that provides for Escrow
Payments, the Servicer shall maintain accurate records reflecting the status of
ground rents, taxes, assessments, water rates and other charges which are or may
become a lien upon the Mortgaged Property and the status of 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 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, the Servicer will
advance or cause to be advanced funds necessary to avoid the lapse of insurance
coverage on the Mortgaged Property and to assure that no Mortgaged Property is
lost to a tax sale or foreclosure as a result of a tax lien.
Section 3.09 Transfer of Accounts.
The Servicer may transfer the Collection Account and the Escrow
Account to a different depository institution from time to time. Upon such
transfer, the Servicer shall deliver to the Trustee, the NIMS Insurer and the
Depositor, a certification or letter agreement, as the case may be, as required
pursuant to Sections 3.04 and 3.06.
Section 3.10 Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each 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
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 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 Servicer under any such policies other than
amounts to be deposited in the Escrow Account and applied to the restoration or
repair of the Mortgaged Property or REO Property, or released to the Mortgagor
in accordance with the Servicer's normal servicing procedures, shall be
deposited in the Collection Account, subject to withdrawal pursuant to Section
3.05. It is understood and agreed that no earthquake or other additional
insurance is required to be maintained by the Servicer or the Mortgagor or
maintained on property acquired in respect of the Mortgage Loan, other than
pursuant to such Applicable Regulations as shall at any time be in force and as
shall require such additional insurance. All such policies shall be endorsed
with standard mortgagee clauses with loss payable to the Servicer and shall
provide for at least thirty days prior written notice of any cancellation,
reduction in the amount of or material change in coverage to the Servicer. The
Servicer shall not interfere with the Mortgagor's freedom of choice in selecting
either his insurance carrier or agent, provided, however, that the Servicer
shall not accept any such insurance policies from insurance companies unless
such companies currently reflect a general policy rating of B: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 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
Servicer shall, in the event that there shall not have been maintained on the
related Mortgaged Property or REO Property a policy complying with Section 3.10,
and there shall have been a loss which would have been covered by such policy,
deliver to the Trustee for deposit in the Distribution Account the amount not
otherwise payable under the blanket policy because of such deductible clause,
which amount shall not be reimbursable to the Servicer from the Trust Fund. In
connection with its activities as servicer of the Mortgage Loans, the Servicer
agrees to prepare and present, on behalf of the Trustee, claims under any such
blanket policy in a timely fashion in accordance with the terms of such policy.
Upon request of the Trustee, the Servicer shall cause to be delivered to the
Trustee a certified true copy of such policy and a statement from the insurer
thereunder that such policy shall in no event be terminated or materially
modified without thirty days prior written notice to the Trustee.
Section 3.12 Fidelity Bond, Errors and Omissions Insurance.
The Servicer shall maintain, at its own expense, a blanket
fidelity bond (the "Fidelity Bond") and an errors and omissions insurance
policy, with broad coverage with financially responsible companies on all
officers, employees or other persons acting in any capacity with regard to the
Mortgage Loans to handle funds, money, documents and papers relating to the
Mortgage Loans. The Fidelity Bond and errors and omissions insurance shall be in
the form of the Mortgage Banker's Blanket Bond and shall protect and insure the
Servicer against losses, including forgery, theft, embezzlement, fraud, errors
and omissions and negligent acts of such persons. Such Fidelity Bond shall also
protect and insure the Servicer against losses in connection with the failure to
maintain any insurance policies required pursuant to this Agreement and the
release or satisfaction of a Mortgage Loan without having obtained payment in
full of the indebtedness secured thereby. No provision of this Section 3.12
requiring the Fidelity Bond and errors and omissions insurance shall diminish or
relieve the Servicer from its duties and obligations as set forth in this
Agreement. The minimum coverage under any such bond and insurance policy shall
be at least equal to the corresponding amounts required by ▇▇▇▇▇▇ ▇▇▇ in the
▇▇▇▇▇▇ Mae MBS Selling and Servicing Guide or by ▇▇▇▇▇▇▇ Mac in the ▇▇▇▇▇▇▇ Mac
Servicer's Guide. Upon request of the Trustee or the NIMS Insurer, the Servicer
shall cause to be delivered to the requesting party a certified true copy of the
Fidelity Bond and errors and omissions insurance policy and a statement from the
surety and the insurer that such Fidelity Bond and errors and omissions
insurance policy shall in no event be terminated or materially modified without
thirty days' prior written notice to the Trustee.
Section 3.13 Title, Management and Disposition of REO
Property.
(a) In the event that title to a Mortgaged Property is acquired
in foreclosure or by deed in lieu of foreclosure, the deed or certificate of
sale shall be taken (pursuant to a limited power of attorney to be provided by
the Trustee to the Servicer) in the name of the Trustee 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 Servicer from an attorney duly licensed to
practice law in the state where the REO Property is located. Any Person or
Persons holding such title other than the Trustee shall acknowledge in writing
that such title is being held as nominee for the benefit of the Trustee.
(b) In the event that the Trust Fund acquires any REO Property
as aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such REO Property before the end of
the third 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 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 (other than the Class P 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 Servicer has agreed to indemnify and
hold harmless the Trust Fund with respect to the imposition of any such taxes.
The Servicer shall manage, conserve, protect and operate each
REO Property for the Certificateholders and the Trust Fund solely for the
purpose of its prompt disposition and sale in a manner which does not cause such
REO Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or result in the receipt by the related REMIC of
any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code, or any "net income from foreclosure property" which
is subject to taxation under the REMIC Provisions. The Servicer shall cause each
REO Property to be inspected promptly upon the acquisition of title thereto and
shall cause each REO Property to be inspected at least annually thereafter. The
Servicer shall make or cause to be made a written or electronic report of each
such inspection. Such reports shall be retained in the Mortgage File and copies
thereof shall be forwarded by the Servicer to the Trustee upon request. The
Servicer shall attempt to sell the same (and may temporarily rent the same) on
such terms and conditions as the Servicer deems to be in the best interest of
the Certificateholders and the Trust Fund.
With respect to each REO Property, the Servicer shall account
separately for each REO Property with respect to all funds collected and
received in connection with the operation of such REO Property.
The Servicer shall deposit or cause to be deposited, on a daily
basis, within 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 Servicer.
The Servicer shall furnish to the Trustee, on each Servicer
Remittance Date, an operating statement for each REO Property covering the
operation of each REO Property for the previous month. Such operating statement
shall be accompanied by such other information as the Trustee shall reasonably
request.
The Servicer shall use its best efforts to dispose of the REO
Property as promptly as is practically consistent with protecting the
Certificateholders' interests.
Each REO Disposition shall be carried out by the Servicer at
such price and upon such terms and conditions as the Servicer deems to be in the
best interest of the Certificateholders. If as of the date title to any REO
Property was acquired by the Servicer there were outstanding unreimbursed
Servicing Advances, Servicing Fees and Advances with respect to the REO
Property, the Servicer, upon an REO Disposition of such REO Property, shall be
entitled to reimbursement for any related unreimbursed Servicing Advances,
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
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 Servicer to the
effect that such sale shall not cause any REMIC constituting part of the Trust
Fund to fail to qualify as a REMIC).
Section 3.14 Due-on-Sale Clauses; Assumption and Substitution
Agreements.
When a Mortgaged Property has been or is about to be conveyed by
the Mortgagor, the Servicer shall, to the extent it has knowledge of such
conveyance or prospective conveyance, exercise its rights to accelerate the
maturity of the related Mortgage Loan under any "due-on-sale" clause contained
in the related Mortgage or Mortgage Note; provided, however, that the Servicer
shall not exercise any such right if the "due-on-sale" clause, in the reasonable
belief of the Servicer, is not enforceable under applicable law. In such event,
the Servicer shall make reasonable efforts to enter into an assumption and
modification agreement with the Person to whom such property has been or is
about to be conveyed, pursuant to which such Person becomes liable under the
Mortgage Note and, unless prohibited by applicable law or the Mortgage, the
Mortgagor remains liable thereon. If the foregoing is not permitted under
applicable law, the Servicer is authorized to enter into a substitution of
liability agreement with such Person, pursuant to which the original Mortgagor
is released from liability and such Person is substituted as Mortgagor and
becomes liable under the Note; provided that no such substitution will be
permitted unless such person satisfies the underwriting criteria of the 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 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 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 Servicer shall be responsible for
recording any such assumption or substitution agreements. In connection with any
such assumption or substitution agreement, the Monthly Payment on the related
Mortgage Loan shall not be changed but shall remain as in effect immediately
prior to the assumption or substitution, the stated maturity or outstanding
principal amount of such Mortgage Loan shall not be changed nor shall any
required monthly payments of principal or interest be deferred or forgiven. Any
fee collected by the Servicer for consenting to any such conveyance or entering
into an assumption or substitution agreement shall be retained by or paid to the
Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or any assumption which the Servicer may be
restricted by law from preventing, for any reason whatsoever.
Section 3.15 Notification of Adjustments.
On each Adjustment Date, the Servicer shall make Mortgage
Interest Rate adjustments for each Adjustable-Rate Mortgage Loan in compliance
with the requirements of the related Mortgage and Mortgage Note and Applicable
Regulations. The Servicer shall execute and deliver the notices required by each
Mortgage and Mortgage Note and Applicable Regulations regarding Mortgage
Interest Rate adjustments. Upon the discovery by the Servicer or the Trustee
that the Servicer has failed to adjust or has incorrectly adjusted a Mortgage
Interest Rate or a Monthly Payment pursuant to the terms of the related Mortgage
Note and Mortgage, the Servicer shall deliver to the Trustee for deposit in the
Distribution Account from its own funds the amount of any interest loss caused
thereby without reimbursement therefor; provided, however, the Servicer shall be
held harmless with respect to any Mortgage Interest Rate adjustments made by any
servicer prior to the Servicer.
Section 3.16 Subservicing; Enforcement of the Obligations of
the Servicer
The Servicer shall not hire or otherwise utilize the services of
any Subservicer to fulfill any of the obligations of the Servicer as servicer
under this Agreement unless the Servicer complies with the provisions of this
Section 3.16 and the proposed Subservicer (i) is an institution which is an
approved ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac Seller/Servicer as indicated in writing, (ii)
represents and warrants that it is in compliance with the laws of each state as
necessary to enable it to perform its obligations under such subservicing
agreement and (iii) is acceptable to the NIMS Insurer.
The Servicer shall give prior written notice to the Trustee, the
Depositor and the NIMS Insurer of the appointment of any Subservicer and shall
furnish to the Trustee, the Depositor and the NIMS Insurer a copy of any related
subservicing agreement. For purposes of this Agreement, the Servicer shall be
deemed to have received payments on Mortgage Loans immediately upon receipt by
any Subservicer of such payments. Any such subservicing agreement shall be
consistent with and not violate the provisions of this Agreement. Each
subservicing agreement shall provide that a successor Servicer or the Trustee
shall have the option to terminate such agreement without payment of any fees if
the predecessor Servicer is terminated or resigns. The Servicer shall cause any
Subservicer used by the Servicer (or by any Subservicer) to comply with the
provisions of this Section 3.16 and with Sections 3.19, 3.20 and 3.31 of this
Agreement (and shall amend, with the consent of the parties hereto, Exhibit Q to
reflect such Subservicer's Assessment of Compliance with the Servicing Criteria)
to the same extent as if such Subservicer were the Servicer. The Servicer shall
be responsible for obtaining from each such Subservicer and delivering to the
applicable Persons any Assessment of Compliance and related Attestation Report
required to be delivered by such Subservicer under Sections 3.19 and 3.20 and
any certification required to be delivered under Section 3.31 to the Person that
will be responsible for signing the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification, in each case
as and when required to be delivered.
Subject to the conditions set forth in this Section 3.16, the
Servicer is permitted to utilize one or more Subcontractors to perform certain
of its obligations hereunder. The Servicer shall promptly upon request provide
to the Depositor a written description (in form and substance satisfactory to
the Depositor) of the role and function of each Subcontractor utilized by the
Servicer, specifying (i) the identity of each such Subcontractor that is a
Servicing Function Participant and (ii) which elements of the Servicing Criteria
will be addressed in Assessments of Compliance provided by each Servicing
Function Participant. As a condition to the utilization by the Servicer of any
Servicing Function Participant, the Servicer shall cause any such Servicing
Function Participant for the benefit of the Depositor to comply with the
provisions of Section 3.19 and 3.20 of this Agreement to the same extent as if
such Servicing Function Participant were the Servicer. The Servicer shall be
responsible for obtaining from each such Servicing Function Participant and
delivering to the applicable Persons any Assessment of Compliance and related
Attestation Report required to be delivered by such Servicing Function
Participant under Section 3.20, in each case as and when required to be
delivered.
Notwithstanding the foregoing, if the Servicer engages a
Subcontractor in connection with the performance of any of its duties under this
Agreement, the Servicer shall be responsible for determining whether such
Subcontractor is an Additional Servicer.
Notwithstanding any subservicing agreement or the provisions of
this Agreement relating to agreements or arrangements between the Servicer and a
Subservicer or a Subcontractor or reference to actions taken through a
Subservicer, Subcontractor or otherwise, the Servicer shall remain obligated and
primarily liable to the Trustee and the Certificateholders for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
subservicing agreements or arrangements or by virtue of indemnification from the
Subservicer or the Subcontractor and to the same extent and under the same terms
and conditions as if the Servicer alone were servicing and administering the
Mortgage Loans. The Servicer shall be entitled to enter into any agreement with
a Subservicer or Subcontractor for indemnification of the Servicer by such
Subservicer or Subcontractor and nothing contained in this Agreement shall be
deemed to limit or modify such indemnification.
The Servicer shall indemnify the Depositor, the Sponsor and the
Trustee and any of their directors, officers, employees or agents and hold them
harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and any other costs, fees and expenses that any of them may sustain in any way
related to the failure of the Servicer to perform any of its obligations under
Section 3.16, Section 3.19, Section 3.20 or Section 3.31.
Section 3.17 Trustee to Cooperate; Release of Files.
(a) Upon the payment in full of any Mortgage Loan (including any
liquidation of such Mortgage Loan through foreclosure or otherwise, or the
receipt by the Servicer of a notification that payment in full will be escrowed
in a manner customary for such purposes), the Servicer shall deliver to the
Trustee, 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 Servicer), in trust, to (i) the Servicer, or (ii) such other
party identified in the related Request for Release. The Trustee agrees to
indemnify the 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 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 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 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 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
Servicer. Such receipt shall obligate the Servicer to return the Mortgage File
to the Trustee when the need therefor by the Servicer no longer exists unless
the Mortgage Loan shall be liquidated, in which case, upon receipt of a Request
for Release evidencing such liquidation, the receipt shall be released by the
Trustee to the Servicer.
(c) Subject to Section 3.01, the Servicer shall have the right
to accept applications of Mortgagors for consent to (i) partial releases of
Mortgages, (ii) alterations, (iii) removal, demolition or division of properties
subject to Mortgages, (iv) modifications, and (v) second mortgage subordination
agreements. No application for approval shall be considered by the Servicer
unless: (w) it has received an Opinion of Counsel, addressed to the Trustee
(which opinion shall not be an expense of the Trustee or the Trust Fund) that
such sale, disposition, substitution, acquisition or contribution will not
affect adversely the status of any REMIC constituting part of the Trust Fund as
a REMIC or cause any REMIC constituting part of the Trust Fund to be subject to
a tax on "prohibited transactions" or "contributions" pursuant to the REMIC
Provisions; (x) the provisions of the related Note and Mortgage have been
complied with; (y) the Combined Loan-to-Value Ratio and debt-to-income ratio
after any release does not exceed the maximum Combined Loan-to-Value Ratio and
debt-to-income ratio established in accordance with the underwriting standards
of the Mortgage Loans; and (z) the lien priority of the related Mortgage is not
affected. Upon receipt by the Trustee of a Servicing Officer's certificate
setting forth the action proposed to be taken in respect of a particular
Mortgage Loan and certifying that the criteria set forth in the immediately
preceding sentence have been satisfied, the Trustee shall execute and deliver to
the Servicer the consent or partial release so requested by the Servicer. A
proposed form of consent or partial release, as the case may be, shall accompany
any Servicing Officer's certificate delivered by the Servicer pursuant to this
paragraph.
Section 3.18 Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall
be entitled to retain the amount of the Servicing Fee with respect to each
Mortgage Loan (including REO Properties) and any Prepayment Interest Excess. The
Servicer shall be entitled to retain additional servicing compensation in the
form of release fees, bad check charges, assumption fees, modification or
extension fees, late payment charges, prepayment charges that are not Prepayment
Charges, Originator Prepayment Charge Payment Amounts 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.
The Trustee and the Servicer shall deliver, and shall cause each
Additional Servicer engaged by it to deliver, or otherwise make available to the
Depositor, the NIMS Insurer, the Trustee and each Rating Agency, no later than
March 15th of each calendar year beginning in 2007, an officers' certificate in
the form required by Item 1123 of Regulation AB (each, a "Compliance
Statement"), signed by an officer of such party, stating, as to the signer
thereof, that (a) a review of the activities of such party during the preceding
calendar year or portion thereof and of the performance of such party under this
Agreement, or, in the case of an Additional Servicer, such other applicable
agreement, has been made by such officer or under such officer's supervision
and (b) to the best of such officers' knowledge, based on such review, such
party has fulfilled all of its obligations under this Agreement, or, in the case
of an Additional Servicer, such other applicable agreement in all material
respects throughout such year or portion thereof, or, if there has been a
failure to fulfill any such obligation in any material respect, specifying each
such failure known to such officer and the nature and status thereof. Each such
Compliance Statement shall contain no restrictions or limitations on its use.
The obligations of the Servicer and the Trustee under this Section apply to each
entity that acted as Servicer or Trustee, as applicable, during the applicable
period, whether or not such entity is acting as Servicer or Trustee at the time
such Compliance Statement is required to be delivered.
Section 3.20 Assessments of Compliance; Attestation Reports.
(a) Each of the Servicer and the Trustee, at its own expense,
shall furnish, and shall cause any Servicing Function Participant engaged by it
to furnish, at such party's expense, to the Trustee, the NIMS Insurer and the
Depositor in electronic form, on or before March 15th of each calendar year
beginning in 2007, a report on an assessment of compliance (each, an "Assessment
of Compliance") with the Servicing Criteria applicable to it that contains (A) a
statement by such party of its responsibility for assessing compliance with the
Servicing Criteria applicable to it, (B) a statement that such party used the
Servicing Criteria to assess compliance with the Servicing Criteria applicable
to it, (C) such party's assessment of compliance with the Servicing Criteria
applicable to it as of and for the fiscal year covered by the Form 10-K required
to be filed pursuant to Section 3.31, including, if there has been any material
instance of noncompliance with the Servicing Criteria applicable to it, an
identification of each such failure and the nature and status thereof, (D) a
statement that a registered public accounting firm has issued an Attestation
Report on such party's Assessment of Compliance with the Servicing Criteria
applicable to such party as of and for such period and (E) a statement as to
which of the Servicing Criteria, if any, are not applicable to such party, which
statement shall be based on the activities it performs with respect to
asset-backed securities transactions taken as a whole involving such party, that
are backed by the same asset type as the Mortgage Loans.
Each such Assessment of Compliance shall be addressed to the
Depositor and the Trustee and signed by an authorized officer of the applicable
party, and shall address each of the Relevant Servicing Criteria set forth on
Exhibit Q hereto, or as set forth in the notification furnished to the Depositor
and the Trustee pursuant to Section 3.20(c). The Servicer and the Trustee hereby
acknowledge and agree that their respective Assessments of Compliance will cover
the items identified on Exhibit Q hereto as being covered by such party. The
parties to this Agreement acknowledge that where a particular Servicing
Criterion has multiple components, each party's assessment of compliance (and
related Attestation of Compliance) will relate only to those components that are
applicable to such party. Promptly after receipt of such Assessments of
Compliance, the Trustee shall confirm that the Assessments of Compliance, taken
individually address the applicable Servicing Criteria for each party as set
forth on Exhibit Q and notify the Depositor of any exceptions.
(b) Each of the Servicer and the Trustee, at its own expense,
shall cause, and shall cause any Servicing Function Participant engaged by it,
at such party's expense, to cause, on or before March 15th of each year,
commencing in 2007, a registered public accounting firm (which may also render
other services to the Servicer, the Trustee, or such other Servicing Function
Participants, as the case may be) and that is a member of the American Institute
of Certified Public Accountants to furnish electronically a report (an
"Attestation Report") to the Trustee and the Depositor (with a hard copy to
follow within 10 calendar days), to the effect that (i) it has obtained a
representation regarding certain matters from the management of such party,
which includes an assertion that such party has complied with the Servicing
Criteria applicable to it, and (ii) on the basis of an examination conducted by
such firm in accordance with standards for attestation engagements issued or
adopted by the Public Company Accounting Oversight Board, it is expressing an
opinion as to whether such party's Assessment of Compliance with the Servicing
Criteria was fairly stated in all material respects, or it cannot express an
overall opinion regarding such party's Assessment of Compliance with the
Servicing Criteria. In the event that an overall opinion cannot be expressed,
such registered public accounting firm shall state in such report why it was
unable to express such an opinion. Such report must be available for general use
and not contain restricted use language. If requested by the Depositor, such
report shall contain or be accompanied by a consent of such accounting firm to
inclusion or incorporation of such report in the Depositor's registration
statement on Form S-3 relating to the Offered Certificates and the Form 10-K for
the Trust.
Promptly after receipt of such Assessment of Compliance and
Attestation Report, the Trustee shall confirm that each Assessment of Compliance
is coupled with a related Attestation Report and shall notify the Depositor of
any exceptions.
(c) No later than 30 days following the end of each fiscal year
for the Trust for which a Form 10-K is required to be filed, (i) the Servicer
shall forward to the Trustee and Depositor the name of each Servicing Function
Participant engaged by it and what Servicing Criteria will be addressed in the
report on Assessment of Compliance prepared by such Servicing Function
Participant and (ii) the Trustee shall forward to the Depositor the name of each
Servicing Function Participant engaged by it and what Servicing Criteria will be
addressed in the report on Assessment of Compliance prepared by such Servicing
Function Participant, in each case to the extent of any change from the prior
year's notice, if any. When the Servicer and the Trustee submit their respective
Assessment of Compliance to the Depositor, the Servicer and/or Trustee, as
applicable, shall also at such time include the Assessment of Compliance and
Attestation Report of each Servicing Function Participant engaged by the
Servicer and/or Trustee, as applicable.
(d) Beginning with fiscal year 2008 and thereafter, none of the
Servicer, the Trustee or any Servicing Function Participant engaged by such
parties shall be required to deliver or cause the delivery of any such
Assessments of Compliance or Attestation Reports until April 15 unless such
party has received written notice from the Depositor that a Form 10-K is
required to be filed in respect of the Trust for the preceding fiscal year.
Section 3.21 Access to Certain Documentation and Information
Regarding the Mortgage Loans.
(a) The Servicer shall provide to the Trustee,
Certificateholders that are federally insured savings and loan associations, the
Office of Thrift Supervision, the FDIC and the supervisory agents and examiners
of each of the foregoing (which, in the case of supervisory agents and
examiners, may be required by applicable state and federal regulations) access
to the 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 Servicer designated by it.
(b) The Servicer, in its capacity as an Originator and Servicer,
shall afford the NIMS Insurer, upon reasonable advance notice, during normal
business hours, access to all records maintained by the Servicer in respect of
its rights and obligations hereunder and access to officers of the Servicer
responsible for such obligations. Upon request, the Servicer shall furnish to
the NIMS Insurer its most recent publicly available financial statements and
such other information relating to its capacity to perform its obligations under
this Agreement.
Section 3.22 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 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 Servicer in Respect of
Compensating Interest.
Not later than the close of business on each Servicer Remittance
Date, the Servicer shall deliver to the Trustee for deposit in the Distribution
Account an amount ("Compensating Interest") equal to the lesser of (A) the
aggregate of the Prepayment Interest Shortfalls on the Mortgage Loans for the
related Distribution Date resulting from Principal Prepayments in full on the
Mortgage Loans during the related Prepayment Period and (B) the aggregate
Servicing Fee received in the related Collection Period. The Servicer shall
apply Compensating Interest to offset any Prepayment Interest Shortfalls
resulting from Principal Prepayments in full on the Mortgage Loans. The Servicer
shall not have the right to reimbursement for any amounts remitted to the
Trustee in respect of Compensating Interest. Such amounts so remitted shall be
included in the Available Funds and distributed therewith on the next
Distribution Date. The Servicer shall not be obligated to pay Compensating
Interest with respect to Prepayment Interest Shortfalls resulting from partial
Principal Prepayments or Relief Act Interest Shortfalls.
Section 3.24 Obligations of the Servicer in Respect of
Mortgage
Interest Rates and Monthly Payments.
In the event that a shortfall in any collection on or liability
with respect to any Mortgage Loan results from or is attributable to adjustments
to Mortgage Interest Rates, Monthly Payments or Principal Balances that were
made by the Servicer in a manner not consistent with the terms of the related
Mortgage Note and this Agreement, the Servicer, upon discovery or receipt of
notice thereof, immediately shall deliver to the Trustee for deposit in the
Distribution Account from its own funds the amount of any such shortfall and
shall indemnify and hold harmless the Trust Fund, the Trustee, the Depositor and
any successor servicer in respect of any such liability. Such indemnities shall
survive the termination or discharge of this Agreement. Notwithstanding the
foregoing, this Section 3.24 shall not limit the ability of the 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 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 Eligible 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 or an Affiliate of the Trustee. All such
Eligible Investments shall be held to maturity, unless payable on demand. Any
investment of funds in an Investment Account shall be made in the name of the
Trustee or the Servicer, as applicable (in its capacity as such) or in the name
of a nominee of the Trustee. The Trustee shall be entitled to sole possession
(except with respect to investment direction of funds held in the Collection
Account) over each such investment and the income thereon, and any certificate
or other instrument evidencing any such investment shall be delivered directly
to the Trustee or its agent, together with any 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 an
Eligible Investment payable on demand, the Trustee shall at the direction of the
Servicer:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made
on the last day such Eligible 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 Eligible
Investment would not constitute an Eligible
Investment in respect of funds thereafter on
deposit in the Investment Account.
(b) All income and gain realized from the investment of funds in
the Collection Account shall be for the benefit of the Servicer. The Servicer
shall deposit in the Collection Account or (to the extent funds in the Escrow
Account are invested if permitted by applicable law) the Escrow Account, as
applicable, from its own funds the amount of any loss incurred in respect of any
such Eligible 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 from its own funds the amount
of any loss incurred on Eligible 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 Eligible Investment,
or if a default occurs in any other performance required under any Eligible
Investment, the Trustee may and, subject to Section 8.01 and Section 8.02(a)(v),
upon the request of the NIMS Insurer or 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 Eligible Investment included therein (except to the extent that the
Trustee is the obligor and has defaulted thereon).
Section 3.26 Liability of Servicer; Indemnification.
(a) Subject to clause (b) below and Section 6.03, the Servicer
(except the Trustee if it is required to succeed the Servicer hereunder)
indemnifies and holds the Trustee, the Depositor, the NIMS Insurer and the Trust
Fund harmless against any and all third party claims, losses, penalties, fines,
forfeitures, reasonable legal fees and related costs, judgments, and any other
costs, fees and expenses that the Trustee, the Depositor, the NIMS Insurer and
the Trust Fund may sustain in any way related to the failure of the Servicer to
perform its duties and service the Mortgage Loans in compliance with the
Servicing Standard, including, but not limited to the Servicer's obligation to
deliver any information, report, certification, accountants' letter or other
material required to comply with Regulation AB or (b) any material breach by the
Servicer or any of the representations and warranties contained in Section 2.05.
The Servicer shall immediately notify the Trustee, the NIMS Insurer and the
Depositor if a claim is made that may result in such claims, losses, penalties,
fines, forfeitures, legal fees or related costs, judgments, or any other costs,
fees and expenses, and the Servicer shall assume (with the consent of the
Trustee) the defense of any such claim and pay all expenses in connection
therewith, including reasonable counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against the Servicer, the
Trustee, the Depositor, the NIMS Insurer 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 NIMS Insurer, the Servicer, or
any of the directors, officers, employees or agents of the Depositor or the
Servicer shall be under any liability to the Trust Fund or the
Certificateholders for any action taken, or for refraining from the taking of
any action, in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositors, the
NIMS Insurer or the 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 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 NIMS Insurer, the Servicer and any director,
officer, employee or agent of the Depositor, the NIMS Insurer or the Servicer,
may rely in good faith on any document of any kind which, prima facie, is
properly executed and submitted by any appropriate Person with respect to any
matters arising hereunder. The Depositor, the Servicer, the NIMS Insurer and any
director, officer, employee or agent of the Depositor, the Servicer or the NIMS
Insurer shall be indemnified and held harmless by the Trust against any loss,
liability or expense incurred in connection with any legal action relating to
this Agreement or the Certificates, other than any loss, liability or expense
incurred in connection with any legal action incurred by reason of its
respective misfeasance, bad faith, fraud or negligence, a breach of a
representation or warranty made by such party hereunder or (in the case of the
Servicer) a breach of the Servicing Standard in the performance of its
respective duties or by reason of negligent disregard of its respective
obligations or duties hereunder. Neither the Depositor, the NIMS Insurer, nor
the Servicer shall be under any obligation to appear in, prosecute or defend any
legal action unless such action is related to its respective duties under this
Agreement and in its opinion does not expose it to any expense or liability;
provided, however, that the Depositor, the NIMS Insurer or the 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 Servicer's right to indemnity or reimbursement
pursuant to this Section shall survive any resignation or termination of the
Servicer pursuant to Section 6.04 or 7.01 with respect to any losses, expenses,
costs or liabilities arising prior to such resignation or termination (or
arising from events that occurred prior to such resignation or termination).
Section 3.27 Reports of Foreclosure and Abandonment of
Mortgaged Properties.
Beginning in 2006, the Servicer shall file the reports of
foreclosure and abandonment of any Mortgaged Property required by Section 6050J
of the Code with the Internal Revenue Service on or before the due date for any
such report. Not later than 90 days following the end of each calendar year,
beginning in 2006, the Servicer will deliver an Officer's Certificate to the
Trustee and the NIMS Insurer certifying its compliance with this Section 3.27.
The reports from the Servicer shall be in form and substance sufficient to meet
the reporting requirements imposed by such Section 6050J.
Section 3.28 Protection of Assets.
(a) Except for transactions and activities entered into in
connection with the securitization that is the subject of this Agreement, the
Trust is not authorized and has no power to:
(1) borrow money or issue debt;
(2) merge with another entity, reorganize, liquidate or
sell assets; or
(3) engage in any business or activities.
(b) Each party to this Agreement agrees that it will not file an
involuntary bankruptcy petition against the Trustee or the Trust Fund or
initiate any other form of insolvency proceeding until after the Certificates
have been paid.
Section 3.29 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 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
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 Servicer
pursuant to the applicable Credit Risk Management Agreement in the performance
of its duties thereunder and hereunder.
Section 3.30 No Personal Solicitation.
From and after the Closing Date, the 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 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 Servicer may (i)
with respect to each Adjustable Rate Mortgage Loan, solicit any Mortgagor 60
days prior to the later of the expiration of (a) any applicable prepayment
penalty period or (b) the applicable fixed-rate period and (ii) with respect to
each Fixed-Rate Mortgage Loan, solicit any Mortgagor 60 days prior to the later
of (a) the expiration of any applicable prepayment penalty period or (b) 24
months after its origination; provided, further, that the Servicer may solicit
any Mortgagor for whom the 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 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 Servicer prohibited from responding to unsolicited requests or
inquiries made by a Mortgagor or an agent of a Mortgagor. Furthermore, the
Servicer shall be permitted to include in its monthly statements to borrowers or
otherwise, statements regarding the availability of the Servicer's counseling
services with respect to refinancing mortgage loans.
Section 3.31 Periodic Filings.
(a) The Trustee and the Servicer shall reasonably cooperate with
the Depositor to enable the Depositor to satisfy its reporting requirements
under the Exchange Act and the parties hereto shall reasonably cooperate to
enable the Commission's requirements with respect to the Depositor to be met in
the event that the Commission issues additional interpretive guidelines or
promulgates rules or regulations, or in the event of any other change of law
that would require reporting arrangements or the allocation of responsibilities
with respect thereto, as described in this Section 3.31, to be conducted or
allocated in a different manner. Without limiting the generality of the
foregoing, the Trustee shall prepare on behalf of the Depositor any Current
Reports on Form 8-K (each, a "Form 8-K"), Distribution Reports on Form 10-D
(each, a "Form 10-D") and Annual Reports on Form 10-K (each, a "Form 10-K") as
required by the Exchange Act and the rules and regulations of the Commission
thereunder, the Depositor shall sign and the Trustee shall file (via the
Commission's Electronic Data Gathering and Retrieval System) such Forms on
behalf of the Depositor. Notwithstanding the foregoing, the Depositor shall
prepare, sign and file the Form 8-K in connection with the issuance of the
Certificates.
(b) Each Form 10-D shall be prepared and filed in the form and
substance as required by the Exchange Act by the Trustee within 15 days after
each Distribution Date (subject to permitted extensions under the Exchange Act)
and shall include a copy of the Distribution Date Statement for such
Distribution Date as an exhibit thereto. In addition, the Trustee shall include
under Item 1 of each Form 10-D any information required by Item 1121 of
Regulation AB to the extent relevant that is not included on the Distribution
Date Statement. Any information in addition to the Distribution Date Statement
and any other information required by Item 1121 of Regulation AB ("Additional
Form 10-D Information") shall be determined by the party preparing such
information as set forth on Exhibit R-1 hereto and the Trustee shall compile
such information pursuant to the following paragraph. The Trustee will have no
duty or liability for any failure hereunder to determine or prepare any
Additional Form 10-D Information, except to the extent of its obligations as set
forth in the next paragraph.
As set forth on Exhibit R-1 hereto, within five (5) calendar
days (or, solely in the case of Item 7 listed on Exhibit R-1, the greater of
five (5) calendar days or three (3) Business Days) after the related
Distribution Date, (i) the parties described on Exhibit R-1 shall be required to
provide to the Depositor and the Trustee, to the extent known by such parties,
in ▇▇▇▇▇-compatible format, or in such other form as otherwise agreed upon by
the Trustee and such party, any Additional Form 10-D Information, if applicable,
together with an Additional Disclosure Notification in the form of Exhibit U
hereto (an "Additional Disclosure Notification") and (ii) the Depositor will
approve, as to form and substance, or disapprove, as the case may be, the
inclusion of the Additional Form 10-D Information (other than with respect to
Additional Form 10-D Information provided by the Trustee). The Depositor will be
responsible for all reasonable fees and expenses assessed or incurred by the
Trustee in connection with including any Additional Form 10-D Information on
Form 10-D pursuant to this paragraph, including converting any such information
to an ▇▇▇▇▇-compatible format.
After preparing the Form 10-D, the Trustee shall forward
electronically a copy of the Form 10-D to the Depositor for review. No later
than 2 Business Days prior to the 15th calendar day after the related
Distribution Date, the Depositor shall sign the Form 10-D and return an
electronic or fax copy of such signed Form 10-D (with an original executed hard
copy to immediately follow) to the Trustee. If a Form 10-D cannot be filed on
time or if a previously filed Form 10-D needs to be amended, the Trustee will
follow the procedures set forth in Section 3.31(e). Form 10-D requires the
registrant to indicate (by checking "yes" or "no") that it "(1) has filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days." The Depositor hereby instructs the Trustee,
with respect to each Form 10-D, to check "yes" for each item unless the Trustee
has received timely prior written notice from the Depositor that the answer
should be "no" for an item. Promptly (but no later than one Business Day) after
filing with the Commission, the Trustee will make available on its internet
website a final executed copy of each Form 10-D. Each party to this Agreement
acknowledges that the performance by the Trustee of its duties under this
Section 3.31(b) related to the timely preparation, arrangement for execution and
filing of Form 10-D is contingent upon such parties strictly observing all
applicable deadlines in the performance of their duties under this Section
3.31(b). The Trustee shall have no liability for any loss, expense, damage or
claim arising out of or with respect to any failure to properly prepare and/or
timely file such Form 10-D, where such failure results from the Trustee's
inability or failure to obtain or receive, on a timely basis, any information
from any party hereto or any Servicing Function Participant or any party hereto
(other than the Trustee or any Servicing Function Participant utilized by the
Trustee) needed to prepare, arrange for execution or file such Form 10-D, not
resulting from its own negligence, bad faith or wilful misconduct.
(c) On or before 90 days after the end of each fiscal year of
the Trust (or such earlier date as may be required by the Exchange Act and the
rules and regulations of the Commission) (the "10-K Filing Deadline") commencing
in 2007, the Trustee shall prepare and file a Form 10-K, in form and substance
as required by applicable law or applicable Commission staff interpretations.
Each such Form 10-K shall include the following items, in each case to the
extent they have been delivered to the Trustee within the applicable time frames
set forth in this Agreement: (i) a Compliance Statement for the Trustee, the
Servicer and each Additional Servicer, as described under Section 3.19, (ii)(A)
the Assessment of Compliance for each of the Servicer, the Trustee and each
Servicing Function Participant, as described under Section 3.20, and (B) if the
Servicer's, the Trustee's or each Servicing Function Participant's Assessment of
Compliance described under Section 3.20 identifies any material instance of
noncompliance or is not included, disclosure identifying such instance of
noncompliance or disclosure that such report is not included and an explanation
thereof, as the case may be, (iii)(A) the registered public accounting firm
Attestation Report for the Servicer, the Trustee and each Servicing Function
Participant, as described under Section 3.20, and (B) if any registered public
accounting firm Attestation Report described under Section 3.20 identifies any
material instance of noncompliance or is not included, disclosure identifying
such instance of noncompliance or disclosure that such report is not included
and an explanation thereof, as the case may be, and (iv) a ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Certification. Any information in addition to (i) through (iv) above that is
required to be included on Form 10-K ("Additional Form 10-K Information") shall
be reported by the party responsible for preparing such information as set forth
on Exhibit R-2 hereto and the Trustee shall compile such information pursuant to
the following paragraph. The Trustee will have no duty or liability for any
failure hereunder to determine or prepare any Additional Form 10-K Information,
except to the extent of its obligations as set forth in the next paragraph.
As set forth on Exhibit R-2 hereto, no later than March 1st of
each year that the Trust is subject to the Exchange Act reporting requirements,
commencing in 2007 (i) the parties described in Exhibit R-2 shall be required to
provide to the Trustee and the Depositor, to the extent known by such applicable
parties, in ▇▇▇▇▇-compatible format, or in such other form as otherwise agreed
upon by the Trustee and such party, any Additional Form 10-K Information, if
applicable, together with an Additional Disclosure Notification and (ii) the
Depositor will approve, as to form and substance, or disapprove, as the case may
be, the inclusion of the Additional Form 10-K Information (other than with
respect to Additional Form 10-K Information provided by the Trustee). The
Depositor will be responsible for all reasonable fees and expenses assessed or
incurred by the Trustee in connection with including any Additional Form 10-K
Information on Form 10-K pursuant to this paragraph, including converting any
such information to an ▇▇▇▇▇-compatible format.
After preparing the Form 10-K, the Trustee shall forward
electronically a copy of the Form 10-K to the Depositor for review. No later
than the close of business on the fourth Business Day prior to the 10-K Filing
Deadline, a senior officer of the Depositor in charge of securitization shall
sign the Form 10-K and return an electronic or fax copy of such signed Form 10-K
to the Trustee. If a Form 10-K cannot be filed on time or if a previously filed
Form 10-K needs to be amended, the Trustee will follow the procedures set forth
in Section 3.31(e). The Depositor hereby instructs the Trustee, with respect to
each Form 10-K, to check "yes" for each item unless the Trustee has received
timely prior written notice from the Depositor that the answer should be "no"
for an item. Promptly (but no later than one Business Day) after filing with the
Commission, the Trustee will make available on its internet website a final
executed copy of each Form 10-K. The parties to this Agreement acknowledge that
the performance by the Trustee of its duties under this Section 3.31(c) relating
to the timely preparation and filing of Form 10-K is contingent upon such
parties (and any Additional Servicer or Servicing Function Participant) strictly
observing all applicable deadlines in the performance of their duties under this
Section 3.31, Section 3.19 and Section 3.20. The Trustee shall have no liability
for any loss, expense, damage, claim arising out of or with respect to any
failure to properly prepare and/or timely file such Form 10-K, where such
failure results from the Trustee's inability or failure to obtain or receive, on
a timely basis, any information from any party hereto or any Servicing Function
Participant (other than the Trustee or any Servicing Function Participant
utilized by the Trustee) needed to prepare, arrange for execution or file such
Form 10-K, not resulting from its own negligence, bad faith or willful
misconduct.
The Form 10-K shall also include a certification in the form
attached hereto as Exhibit O (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification"), which shall
be signed by a senior officer of the Depositor in charge of securitization. The
Depositor shall deliver the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification to the Trustee four (4)
Business Days prior to the latest date on which the Form 10-K may be timely
filed.
For so long as the Trust is subject to the reporting
requirements of the Exchange Act, the Trustee and the Servicer shall provide,
and shall cause any Servicing Function Participant engaged by it to provide, to
the Depositor, on or before March 15th of each year, commencing in March 2007,
and otherwise within a reasonable time upon request, a certification in the form
attached hereto as Exhibit P-1, in the case of the Trustee, and Exhibit P-2, in
the case of the Servicer. In the event the Trustee or the Servicer is terminated
or resigns pursuant to the terms of this Agreement, such Trustee or Servicer
shall provide a certification in the form attached hereto as Exhibit P-1, in the
case of the Trustee, or Exhibit P-2, in the case of the Servicer, with respect
to the period of time it was subject to this Agreement. In the event that prior
to the filing date of the Form 10-K in March of each year, the Trustee or the
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, the Servicer, the Sponsor and their officers, directors and
Affiliates from and against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments and other costs
and expenses arising out of or based upon (A) any inaccuracy in the Assessment
of Compliance with the Servicing Criteria pursuant to Section 3.20 provided by
the Trustee or any Servicing Function Participant appointed by the Trustee and
(B) any inaccuracy in the certification provided by the Trustee pursuant to this
Section 3.31(c), and (C) any breach by the Trustee of its obligations (or of the
obligations of any Servicing Function Participant appointed by the Trustee)
under Sections 3.20 and 3.31 or the Trustee's or such Servicing Function
Participant's negligence, bad faith or willful misconduct in connection
therewith and (ii) the Servicer shall indemnify and hold harmless the Depositor,
the Sponsor, the Trustee and their respective officers, directors, employees,
agents and Affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon (A) any inaccuracy in
the Assessment of Compliance with the Servicing Criteria pursuant to Section
3.20 provided by the Servicer or any Servicing Function Participant appointed by
the Servicer, (B) any inaccuracy in the certification provided by the Servicer
pursuant to this Section 3.31(c), and (C) any breach by the Servicer of its
obligations (or of the obligations of any Servicing Function Participant
appointed by the Servicer) under Sections 3.20 and 3.31 or the Servicer's or
such Servicing Function Participant'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, the Servicer, the
Trustee and the Sponsor and their officers, directors and Affiliates, then the
indemnifying party agrees that it shall contribute to the amount paid or payable
by the indemnified party and any of their officers, directors or Affiliates as a
result of the losses, claims, damages or liabilities of the indemnified party,
any of their officers, directors or Affiliates in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and each of
their officers, directors and Affiliates on the one hand and the indemnified
party on the other in connection with a breach of the indemnifying party's
obligations under this Section 3.31(c) or Section 3.20 or the indemnifying
party's negligence, bad faith or willful misconduct in connection therewith. The
Servicer hereby acknowledges and agrees that the Depositor and the Trustee are
relying on the Servicer's performance of its obligations under Sections 3.19,
3.20 and 3.31 in order to perform their respective obligations under this
Section 3.31.
(d) Within four (4) Business Days (or, in the case of any
information disclosed pursuant to Item 7.01 of Form 8-K, within the time period
required by Regulation FD) after the occurrence of an event requiring disclosure
on Form 8-K (each such event, a "Reportable Event"), and also if requested by
the Depositor, the Trustee shall prepare and file on behalf of the Trust any
Form 8-K, as required by the Exchange Act, provided that the Depositor shall
file the initial Form 8-K in connection with the issuance of the Certificates.
Any information related to a Reportable Event or that is otherwise required to
be included on Form 8-K other than the initial Form 8-K (such information, "Form
8-K Information") shall be reported to the Depositor and the Trustee by the
parties set forth on Exhibit R-3 hereto and compiled by the Trustee pursuant to
the following paragraph. The Trustee will have no duty or liability for any
failure hereunder to determine or prepare any Form 8-K Information or any Form
8-K, except to the extent of its obligations as set forth in the next paragraph.
As set forth on Exhibit R-3 hereto, for so long as the Trust is
subject to the Exchange Act reporting requirements, no later than 12:00 noon EST
on the second Business Day after the occurrence of a Reportable Event (i) the
parties described in Exhibit R-3 shall be required to provide to the Depositor
and the Trustee, to the extent known by such applicable parties, in
▇▇▇▇▇-compatible format, or in such other form as otherwise agreed upon by the
Trustee and such party, any Form 8-K Information, if applicable, together with
an Additional Disclosure Notification and (ii) the Depositor will approve, as to
form and substance, or disapprove, as the case may be, the inclusion of the
Additional Form 8-K Information (other than with respect to Additional Form 8-K
Information provided by the Trustee). The Depositor will be responsible for all
reasonable fees and expenses assessed or incurred by the Trustee in connection
with including any Form 8-K Information on Form 8-K pursuant to this paragraph,
including converting any such information to an ▇▇▇▇▇-compatible format.
After preparing the Form 8-K, the Trustee shall forward
electronically a draft copy of the Form 8-K to the Depositor for review,
verification and execution by the Depositor. No later than 12:00 noon EST on the
third Business Day after the Reportable Event, an officer of the Depositor shall
sign the Form 8-K and return an electronic or fax copy of such signed Form 8-K
(with an original executed hard copy to follow by overnight mail) to the
Trustee. Promptly (but no later than one Business Day) after filing with the
Commission, the Trustee will, make available on its internet website a final
executed copy of each Form 8-K prepared and filed by it. If a Form 8-K cannot be
filed on time or if a previously filed Form 8-K needs to be amended, the Trustee
will follow the procedures set forth in Section 3.31(e). The parties hereto
acknowledge that the performance by the Trustee of its duties under this Section
3.31(d) related to the timely preparation and filing of Form 8-K is contingent
upon the parties to this Agreement and any other Person obligated to provide
Form 8-K Information as set forth on Exhibit R-3 hereto, observing all
applicable deadlines in the performance of their duties under this Section
3.31(d). The Trustee shall have no liability for any loss, expense, damage or
claim arising out of or with respect to any failure to properly prepare and/or
timely file such Form 8-K, where such failure results from the Trustee's
inability or failure to obtain or receive, on a timely basis, any information
from any party hereto or any Servicing Function Participant (other than the
Trustee or any Servicing Function Participant utilized by the Trustee) needed to
prepare, arrange for execution or file such Form 8-K, not resulting from its own
negligence, bad faith or willful misconduct.
(e) In the event that the Trustee is unable to timely file with
the Commission all or any required portion of any Form 8-K, Form 10-D or Form
10-K required to be filed by this Agreement because required information was
either not delivered to it or delivered to it after the delivery deadlines set
forth in this Agreement or for any other reason, the Trustee will immediately
notify the Depositor. In the case of Form 10-D and Form 10-K, the Depositor,
Servicer and Trustee will cooperate to prepare and file a Form 12b-25 pursuant
to Rule 12b-25 of the Exchange Act. In the case of Form 8-K, the Trustee will,
upon receipt of all information required to be included on Form 8-K, file such
Form 8-K. Within 5 calendar days following the original due date of the Form
10-D, the Trustee shall prepare and file the related Form 10-D. Within 15
calendar days following the original due date of the Form 10-K, the Trustee
shall prepare and file the related Form 10-K. In the event that any previously
filed Form 8-K, Form 10-D or Form 10-K needs to be amended, the party to this
Agreement deciding that an amendment to such Form 8-K, Form 10-D or Form 10-K is
required will notify the Depositor, the Trustee and the Servicer and such
parties will cooperate to prepare any necessary Form 8-K/A, Form 10-D/A or Form
10-K/A. Any Form 12b-25 or any amendment to Form 10-D or Form 10-K shall be
signed by a senior officer of the Depositor. Any amendment to Form 8-K or any
Form 15 (as described in Section 3.31(g)) shall be signed by an officer of the
Depositor. The Depositor and Servicer acknowledge that the performance by the
Trustee of its duties under this Section 3.31(e) related to the timely
preparation and filing of a Form 12b-25 or any amendment to Form 8-K, Form 10-D
or Form 10-K is contingent upon the Servicer and the Depositor performing their
duties under this Section. The Trustee shall have no liability for any loss,
expense, damage, claim arising out of or with respect to any failure to properly
prepare and/or timely file any such Form 12b-25 or any amendments to Form 8-K,
Form 10-D or Form 10-K, where such failure results from the Trustee's inability
or failure to obtain or receive, on a timely basis, any information from any
other party hereto (other than the Trustee or any Servicing Function Participant
utilized by the Trustee) needed to prepare, arrange for execution or file such
Form 12b-25 or any amendments to Form 8-K, Form 10-D or Form 10-K, not resulting
from its own negligence, bad faith or willful misconduct.
(f) Upon any filing with the Commission, the Trustee shall
promptly deliver or otherwise make available to the Depositor a copy of any such
executed report, statement or information.
(g) The obligations set forth in paragraphs (a) through (f) of
this Section shall only apply with respect to periods for which the Trustee is
obligated to file reports on Form 8-K, 10-D or 10-K. Unless otherwise instructed
by the Depositor, on or prior to January 30th of the first year in which the
Trustee is permitted to do so under Section 15(d) of the Exchange Act and other
applicable law and regulations, the Trustee shall prepare (and the Depositor
shall execute) and file with the Commission a Form 15 Suspension Notification
with respect to the Trust, with a copy to the Depositor. If at the beginning of
any year after the filing of a Form 15 Suspension Notification, if the number of
Certificateholders of record exceeds the number set forth in Section 15(d) of
the Exchange Act or the regulations promulgated pursuant thereto which would
cause the Trust to again become subject to the reporting requirements of the
Exchange Act, the Trustee shall recommence preparing and filing reports on Form
8-K, 10-D and 10-K as required pursuant to this Section and the parties hereto
will again have the obligations set forth in paragraphs (a) through (f) of this
Section until such time as the Trustee is again able to file with the Commission
a Form 15 Suspension Notification with respect to the Trust.
(h) The Depositor, the Trustee and the Servicer shall notify the
Depositor and the Trustee of any proceedings of the type described in Item 1117
of Regulation AB, together with a description thereof, within five Business Days
of any such party's knowledge thereof. In addition, the Depositor, the Trustee
and the Servicer shall notify the Depositor and the Trustee of any affiliations
or relationships that develop following the Closing Date between the Depositor,
the Trustee or the Servicer and any of parties listed in Item 1119 of Regulation
AB, together with a description thereof, within five Business Days of any such
party's knowledge thereof.
(i) The Trustee, the Depositor and the Servicer shall reasonably
cooperate to enable the Commission's requirements with respect to the Trust to
be met in the event that the Commission issues additional interpretive
guidelines or promulgates rules or regulations, or in the event of any other
change of law that would require reporting arrangements or the allocation of
responsibilities with respect thereto, as described in this Section 3.31, to be
conducted or allocated in a different manner.
ARTICLE IV
FLOW OF FUNDS
Section 4.01 Interest Distributions.
On each Distribution Date, the Trustee shall withdraw from the
Distribution Account the Interest Remittance Amount and apply it in the
following order of priority (based upon the Mortgage Loan information provided
to it in the Remittance Report, upon which the Trustee may conclusively rely),
and the calculations required to be made by the Trustee, to the extent
available:
(i) to the Credit Risk Manager, the Credit Risk Manager Fee for
such Distribution Date;
(ii) concurrently, as follows:
(a) from the Group 1 Interest Remittance Amount, to the
Class A-1 Certificates, the Accrued Certificate Interest thereon
for such Distribution Date;
(b) from the Group 2 Interest Remittance Amount, to the
Class A-2 Certificates, the Accrued Certificate Interest thereon
for such Distribution Date; and
(c) concurrently, from the Group 3 Interest Remittance
Amount, to the Class A-3A, Class A-3B, Class A-3C1, Class A-3C2
and Class A-3D Certificates, pro rata based on the Accrued
Certificate Interest for each such Class, the applicable Accrued
Certificate Interest thereon for such Distribution Date;
(iii) concurrently, as follows:
(a) from the Group 1 Interest Remittance Amount, to the
Class A-1 Certificates, the Interest Carry Forward Amount
thereon for such Distribution Date;
(b) from the Group 2 Interest Remittance Amount, to the
Class A-2 Certificates, the Interest Carry Forward Amount
thereon for such Distribution Date; and
(c) concurrently, from the Group 3 Interest Remittance
Amount, to the Class A-3A, Class A-3B, Class A-3C1, Class A-3C2
and Class A-3D Certificates, pro rata based on the Interest
Carry Forward Amount for each such Class, the applicable
Interest Carry Forward Amount thereon for such Distribution
Date;
(iv) concurrently, as follows:
(a) if the Group 1 Interest Remittance Amount is
insufficient to pay the Class A-1 Certificates' Accrued
Certificate Interest for such Distribution Date pursuant to
Section 4.01(ii)(a) above, from the remaining Group 2 Interest
Remittance Amount and Group 3 Interest Remittance Amount, to the
Class A-1 Certificates, to cover such shortfall for such
Distribution Date;
(b) if the Group 2 Interest Remittance Amount is
insufficient to pay the Class A-2 Certificates' Accrued
Certificate Interest for such Distribution Date pursuant to
Section 4.01(ii)(b) above, from the remaining Group 1 Interest
Remittance Amount and Group 3 Interest Remittance Amount, to the
Class A-2 Certificates, to cover such shortfall for such
Distribution Date; and
(c) if the Group 3 Interest Remittance Amount is
insufficient to pay the Class A-3A, Class A-3B, Class A-3C1,
Class A-3C2 and Class A-3D Certificates' applicable Accrued
Certificate Interest for such Distribution Date pursuant to
Section 4.01(ii)(c) above, concurrently, from the remaining
Group 1 Interest Remittance Amount and Group 2 Interest
Remittance Amount, to the Class A-3A, Class A-3B, Class A-3C1,
Class A-3C2 and Class A-3D Certificates, pro rata based on the
remaining Accrued Certificate Interest for each such Class, 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 Certificates' Interest Carry
Forward Amount for such Distribution Date pursuant to Section
4.01(iii)(a) above, from the remaining Group 2 Interest
Remittance Amount and Group 3 Interest Remittance Amount, to the
Class A-1 Certificates, to cover such shortfall for such
Distribution Date;
(b) if the Group 2 Interest Remittance Amount is
insufficient to pay the Class A-2 Certificates' Interest Carry
Forward Amount for such Distribution Date pursuant to Section
4.01(iii)(b) above, from the remaining Group 1 Interest
Remittance Amount and Group 3 Interest Remittance Amount, to the
Class A-2 Certificates, to cover such shortfall for such
Distribution Date; and
(c) if the Group 3 Interest Remittance Amount is
insufficient to pay the Class A-3A, Class A-3B, Class A-3C1,
Class A-3C2 and Class A-3D Certificates' applicable Interest
Carry Forward Amount for such Distribution Date pursuant to
Section 4.01(iii)(c) above, concurrently, from the remaining
Group 1 Interest Remittance Amount and Group 2 Interest
Remittance Amount, to the Class A-3A, Class A-3B, Class A-3C1,
Class A-3C2 and Class A-3D Certificates, pro rata based on the
remaining Interest Carry Forward Amount for each such Class, 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 M-7 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(xiii) to the Class M-8 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(xiv) to the Class M-9 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(xv) to the Class B Certificates, the Accrued Certificate
Interest thereon for such Distribution Date; and
(xvi) 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.
Notwithstanding the foregoing, if two Groups are entitled to
receive any remaining Accrued Certificate Interest pursuant to clause (iv) of
this Section 4.01 (such Groups, the "Interest Shortfall Groups"), the amount
distributed pursuant to clause (iv) of this Section 4.01 to the Interest
Shortfall Groups will be paid to such Interest Shortfall Groups, pro rata based
on the remaining Accrued Certificate Interest for each such Interest Shortfall
Group.
Notwithstanding the foregoing, if two Groups are entitled to
receive any remaining Interest Carry Forward Amounts pursuant to clause (v) of
this Section 4.01 (such Groups, the "Interest Carry Forward Shortfall Groups"),
the amount distributed pursuant to clause (v) of this Section 4.01 to the
Interest Carry Forward Shortfall Groups will be paid to such Interest Carry
Forward Shortfall Groups, pro rata based on the remaining Interest Carry Forward
Amounts for each such Interest Carry Forward Shortfall Group
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, as follows:
first, concurrently, as follows:
(I) the Group 1 Senior Principal Distribution Amount,
to the Class A-1 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
(II) the Group 2 Senior Principal Distribution Amount,
to the Class A-2 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; and
(III) (A) with respect to any Distribution Date prior
to the Subordination Depletion Date, sequentially, the Group
3 Senior Principal Distribution Amount, as follows:
(1) sequentially, to the Class A-3A and
Class A-3B Certificates, in that order, until
the Certificate Principal Balances thereof have
been reduced to zero;
(2) concurrently, to the Class A-3C1 and
Class A-3C2 Certificates, pro rata based on the
Certificate Principal Balance of each such Class
prior to distributions on such Distribution
Date, until the Certificate Principal Balances
thereof have been reduced to zero; and
(3) to the Class A-3D Certificates,
until the Certificate Principal Balance thereof
has been reduced to zero; and
(B) with respect to any Distribution Date on or
after the Subordination Depletion Date, concurrently, the
Group 3 Senior Principal Distribution Amount, to the Class
A-3A, Class A-3B, Class A-3C1, Class A-3C2 and Class A-3D
Certificates, pro rata based on the Certificate Principal
Balance of each such Class prior to distributions on such
Distribution Date, until the Certificate Principal Balances
thereof have been reduced to zero;
second, concurrently, as follows:
(I) the Group 1 Senior Principal Distribution Amount
remaining after priority first of this Section 4.02(a)(i),
pro rata, as follows:
(A) to the Class A-2 Certificates, until the
Certificate Principal Balance thereof has been reduced
to zero; and
(B) (1) with respect to any Distribution Date
prior to the Subordination Depletion Date,
sequentially, as follows:
(a) sequentially, to the Class
A-3A and Class A-3B Certificates, in that
order, until the Certificate Principal
Balances thereof have been reduced to
zero;
(b) concurrently, to the Class
A-3C1 and Class A-3C2 Certificates, pro
rata based on the Certificate Principal
Balance of each such Class prior to
distributions on such Distribution Date,
until the Certificate Principal Balances
thereof have been reduced to zero; and
(c) to the Class A-3D
Certificates, until the Certificate
Principal Balance thereof has been reduced
to zero; and
(2) with respect to any Distribution Date
on or after the Subordination Depletion Date,
concurrently, to the Class A-3A, Class A-3B, Class
A-3C1, Class A-3C2 and Class A-3D Certificates, pro
rata based on the Certificate Principal Balance of each
such Class prior to distributions on such Distribution
Date, until the Certificate Principal Balances thereof
have been reduced to zero; and
(II) the Group 2 Senior Principal Distribution Amount
remaining after priority first of this Section 4.02(a)(i),
pro rata, as follows:
(A) to the Class A-1 Certificates, until the
Certificate Principal Balance thereof has been reduced
to zero;
(B) (1) with respect to any Distribution Date
prior to the Subordination Depletion Date,
sequentially, as follows:
(a) sequentially, to the Class
A-3A and Class A-3B Certificates, in that
order, until the Certificate Principal
Balances thereof have been reduced to
zero;
(b) concurrently, to the Class
A-3C1 and Class A-3C2 Certificates, pro
rata based on the Certificate Principal
Balance of each such Class prior to
distributions on such Distribution Date,
until the Certificate Principal Balances
thereof have been reduced to zero; and
(c) to the Class A-3D
Certificates, until the Certificate
Principal Balance thereof has been reduced
to zero; and
(2) with respect to any Distribution Date
on or after the Subordination Depletion Date,
concurrently, to the Class A-3A, Class A-3B, Class
A-3C1, Class A-3C2 and Class A-3D Certificates, pro
rata based on the Certificate Principal Balance of each
such Class prior to distributions on such Distribution
Date, until the Certificate Principal Balances thereof
have been reduced to zero; and
(III) the Group 3 Senior Principal Distribution Amount
remaining after priority first of this Section 4.02(a)(i),
concurrently, to the Class A-1 and Class A-2 Certificates,
pro rata based on the Certificate Principal Balance of each
such Class prior to distributions on such Distribution Date,
until the Certificate Principal Balances thereof have 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 M-7 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
tenth, to the Class M-8 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
eleventh, to the Class M-9 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
twelfth, to the Class B Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
thirteenth, any remaining Principal Distribution Amount will be
distributed as part of the Monthly Excess Cashflow Amount as set forth in
Section 4.02(b); and
(ii) on or after the Stepdown Date and as long as a Trigger
Event is not in effect, as follows:
first, concurrently, as follows:
(I) the Group 1 Senior Principal Distribution Amount,
to the Class A-1 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
(II) the Group 2 Senior Principal Distribution Amount,
to the Class A-2 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; and
(III) (A) with respect to any Distribution Date prior
to the Subordination Depletion Date, sequentially, the Group
3 Senior Principal Distribution Amount, as follows:
(1) sequentially, to the Class A-3A and
Class A-3B Certificates, in that order, until
the Certificate Principal Balances thereof have
been reduced to zero;
(2) concurrently, to the Class A-3C1 and
Class A-3C2 Certificates, pro rata based on the
Certificate Principal Balance of each such Class
prior to distributions on such Distribution
Date, until the Certificate Principal Balances
thereof have been reduced to zero; and
(3) to the Class A-3D Certificates,
until the Certificate Principal Balance thereof
has been reduced to zero; and
(B) with respect to any Distribution Date on or
after the Subordination Depletion Date, concurrently, the
Group 3 Senior Principal Distribution Amount to the Class
A-3A, Class A-3B, Class A-3C1, Class A-3C2 and Class A-3D
Certificates, pro rata based on the Certificate Principal
Balance of each such Class prior to distributions on such
Distribution Date, until the Certificate Principal Balances
thereof have been reduced to zero;
second, concurrently, as follows:
(I) the Group 1 Senior Principal Distribution Amount
remaining after priority first of this Section 4.02(a)(ii),
pro rata, as follows:
(A) to the Class A-2 Certificates, until the
Certificate Principal Balance thereof has been reduced
to zero, up to an amount equal to the Group 2 Senior
Principal Distribution Amount not paid pursuant to
priority first of this Section 4.02(a)(ii); and
(B) (1) with respect to any Distribution Date
prior to the Subordination Depletion Date,
sequentially, up to an amount equal to the Group 3
Senior Principal Distribution Amount not paid pursuant
to priority first of this Section 4.02(a)(ii), as
follows:
(a) sequentially, to the Class
A-3A and Class A-3B Certificates, in that
order, until the Certificate Principal
Balances thereof have been reduced to
zero;
(b) concurrently, to the Class
A-3C1 and Class A-3C2 Certificates, pro
rata based on the Certificate Principal
Balance of each such Class prior to
distributions on such Distribution Date,
until the Certificate Principal Balances
thereof have been reduced to zero; and
(c) to the Class A-3D
Certificates, until the Certificate
Principal Balance thereof has been reduced
to zero; and
(2) with respect to any Distribution Date
on or after the Subordination Depletion Date,
concurrently, to the Class A-3A, Class A-3B, Class
A-3C1, Class A-3C2 and Class A-3D Certificates, pro
rata based on the Certificate Principal Balance of each
such Class prior to distributions on such Distribution
Date, up to an amount equal to the Group 3 Senior
Principal Distribution Amount not paid pursuant to
priority first of this Section 4.02(a)(ii), until the
Certificate Principal Balances thereof have been
reduced to zero;
(II) the Group 2 Senior Principal Distribution Amount
remaining after priority first of this Section 4.02(a)(ii),
pro rata, as follows:
(A) to the Class A-1 Certificates, until the
Certificate Principal Balance thereof has been reduced
to zero, up to an amount equal to the Group 1 Senior
Principal Distribution Amount not paid pursuant to
priority first of this Section 4.02(a)(ii);
(B) (1) with respect to any Distribution Date
prior to the Subordination Depletion Date,
sequentially, up to an amount equal to the Group 3
Senior Principal Distribution Amount not paid pursuant
to priority first of this Section 4.02(a)(ii), as
follows:
(a) sequentially, to the Class
A-3A and Class A-3B Certificates, in that
order, until the Certificate Principal
Balances thereof have been reduced to
zero;
(b) concurrently, to the Class
A-3C1 and Class A-3C2 Certificates, pro
rata based on the Certificate Principal
Balance of each such Class prior to
distributions on such Distribution Date,
until the Certificate Principal Balances
thereof have been reduced to zero; and
(c) to the Class A-3D
Certificates, until the Certificate
Principal Balance thereof has been reduced
to zero; and
(2) with respect to any Distribution Date
on or after the Subordination Depletion Date,
concurrently, to the Class A-3A, Class A-3B, Class
A-3C1, Class A-3C2 and Class A-3D Certificates, pro
rata based on the Certificate Principal Balance of each
such Class prior to distributions on such Distribution
Date, up to an amount equal to the Group 3 Senior
Principal Distribution Amount not paid pursuant to
priority first of this Section 4.02(a)(ii), until the
Certificate Principal Balances thereof have been
reduced to zero;
(III) the Group 3 Senior Principal Distribution Amount
remaining after priority first of this Section 4.02(a)(ii),
pro rata, as follows:
(A) to the Class A-1 Certificates, until the
Certificate Principal Balance thereof has been reduced
to zero, up to an amount equal to the Group 1 Senior
Principal Distribution Amount not paid pursuant to
priority first of this Section 4.02(a)(ii) above; and
(B) to the Class A-2 Certificates, until the
Certificate Principal Balance thereof has been reduced
to zero, up to an amount equal to the Group 2 Senior
Principal Distribution Amount not paid pursuant to
priority first of this Section 4.02(a)(ii);
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 M-7 Certificates, up to the Class M-7
Principal Distribution Amount, until the Certificate Principal Balance thereof
has been reduced to zero;
tenth, to the Class M-8 Certificates, up to the Class M-8
Principal Distribution Amount, until the Certificate Principal Balance thereof
has been reduced to zero;
eleventh, to the Class M-9 Certificates, up to the Class M-9
Principal Distribution Amount, until the Certificate Principal Balance thereof
has been reduced to zero;
twelfth, 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
thirteenth, 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 (the "Monthly Excess Cashflow Allocation") on such Distribution Date:
(i) to the Senior Certificates, pro rata, any remaining
Accrued Certificate Interest for such Classes for that
Distribution Date;
(ii) to the Senior Certificates, pro rata, any Interest
Carry Forward Amounts for such Classes for that Distribution
Date;
(iii) to the Class M-1 Certificates, any remaining Accrued
Certificate Interest thereon for that Distribution Date;
(iv) to the Class M-1 Certificates, any Interest Carry
Forward Amount thereon for that Distribution Date;
(v) to the Class M-1 Certificates, any Class M-1 Realized
Loss Amortization Amount for that Distribution Date;
(vi) to the Class M-2 Certificates, any remaining Accrued
Certificate Interest thereon for that Distribution Date;
(vii) to the Class M-2 Certificates, any Interest Carry
Forward Amount thereon for that Distribution Date;
(viii) to the Class M-2 Certificates, any Class M-2 Realized
Loss Amortization Amount for that Distribution Date;
(ix) to the Class M-3 Certificates, any remaining Accrued
Certificate Interest thereon for that Distribution Date;
(x) to the Class M-3 Certificates, any Interest Carry
Forward Amount thereon for that Distribution Date;
(xi) to the Class M-3 Certificates, any Class M-3 Realized
Loss Amortization Amount for that Distribution Date;
(xii) to the Class M-4 Certificates, any remaining Accrued
Certificate Interest thereon for that Distribution Date;
(xiii) to the Class M-4 Certificates, any Interest Carry
Forward Amount thereon for that Distribution Date;
(xiv) to the Class M-4 Certificates, any Class M-4 Realized
Loss Amortization Amount for that Distribution Date;
(xv) to the Class M-5 Certificates, any remaining Accrued
Certificate Interest thereon for that Distribution Date;
(xvi) to the Class M-5 Certificates, any Interest Carry
Forward Amount thereon for that Distribution Date;
(xvii) to the Class M-5 Certificates, any Class M-5 Realized
Loss Amortization Amount for that Distribution Date;
(xviii) to the Class M-6 Certificates, any remaining Accrued
Certificate Interest thereon for that Distribution Date;
(xix) to the Class M-6 Certificates, any Interest Carry
Forward Amount thereon for that Distribution Date;
(xx) to the Class M-6 Certificates, any Class M-6 Realized
Loss Amortization Amount for that Distribution Date;
(xxi) to the Class M-7 Certificates, any remaining Accrued
Certificate Interest thereon for that Distribution Date;
(xxii) to the Class M-7 Certificates, any Interest Carry
Forward Amount thereon for that Distribution Date;
(xxiii) to the Class M-7 Certificates, any Class M-7
Realized Loss Amortization Amount for that Distribution Date;
(xxiv) to the Class M-8 Certificates, any remaining Accrued
Certificate Interest thereon for that Distribution Date;
(xxv) to the Class M-8 Certificates, any Interest Carry
Forward Amount thereon for that Distribution Date;
(xxvi) to the Class M-8 Certificates, any Class M-8 Realized
Loss Amortization Amount for that Distribution Date;
(xxvii) to the Class M-9 Certificates, any remaining Accrued
Certificate Interest thereon for that Distribution Date;
(xxviii) to the Class M-9 Certificates, any Interest Carry
Forward Amount thereon for that Distribution Date;
(xxix) to the Class M-9 Certificates, any Class M-9 Realized
Loss Amortization Amount for that Distribution Date;
(xxx) to the Class B Certificates, any remaining Accrued
Certificate Interest thereon for that Distribution Date;
(xxxi) to the Class B Certificates, any Interest Carry
Forward Amount thereon for that Distribution Date;
(xxxii) to the Class B Certificates, any Class B Realized
Loss Amortization Amount for that Distribution Date;
(xxxiii) to the Cap Carryover Reserve Account, an amount
equal to the aggregate of the Cap Carryover Amounts for such
Distribution Date;
(xxxiv) to the Swap Provider, any Swap Termination Payments
resulting from a Swap Provider Trigger Event; and
(xxxv) to pay 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
concurrently, to the Holder of the Residual Certificates in respect of the Class
R-1 Interest, any remaining amount in the Distribution Account on such date
after the application pursuant to Sections 4.01, 4.02(a) and 4.02(b)(i)-(xxxv).
(c) On each Distribution Date, after making the distributions of
the Interest Remittance Amount, Principal Distribution Amount and Monthly Excess
Cashflow as set forth above, the Trustee shall distribute the amount on deposit
in the Swap Account as follows:
first, to the Swap Provider, any Net Swap Payment owed to the
Swap Provider pursuant to the Interest Rate Swap Agreement for such Distribution
Date;
second, to the Swap Provider, any Swap Termination Payment
(other than a Swap Termination Payment resulting from a Swap Provider Trigger
Event) owed to the Swap Provider pursuant to the Interest Rate Swap Agreement
for such Distribution Date;
third, concurrently, to each Class of Class A Certificates, the
related Accrued Certificate Interest and Interest Carry Forward Amount remaining
undistributed after the distributions made pursuant to Sections 4.01 and
4.02(b), on a pro rata basis based on such respective remaining Accrued
Certificate Interest and Interest Carry Forward Amount;
fourth, sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class B
Certificates, in that order, the related Accrued Certificate Interest and
Interest Carry Forward Amount, to the extent remaining undistributed after the
distributions made pursuant to Section 4.01 and 4.02(b);
fifth, to the holders of the Class or Classes of Certificates
then entitled to receive distributions in respect of principal pursuant to the
priorities set forth in Section 4.02(a) for such Distribution Date, in an amount
necessary to restore the Overcollateralization Amount to the Targeted
Overcollateralization Amount as a result of current or prior Realized Losses for
such Distribution Date after taking into account distributions made pursuant to
Section 4.02(b);
sixth, to the Offered Certificates and Class B Certificates, to
pay Cap Carryover Amounts in the following order of priority, to the extent
remaining undistributed after distributions are made from the Cap Carryover
Reserve Account:
(i) concurrently, to the Class A Certificates, pro rata (based
on the remaining Cap Carryover Amount of each such Class) any remaining
Cap Carryover Amount for such Class; and
(ii) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class B
Certificates, in that order, any remaining Cap Carryover Amount for each
such Class;
seventh, sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class B
Certificates, in that order, to the extent of any remaining Realized Loss
Amortization Amount for each such Class; and
eighth, to the Class CE Certificates, any remaining amounts.
(d) On each Distribution Date, the Trustee shall withdraw any
amounts then on deposit in the Distribution Account that represent Prepayment
Charges collected by the Servicer in connection with the Principal Prepayment in
full of any of the Mortgage Loans, any Originator Prepayment Charge Payment
Amount or 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.
(e) Any amounts distributed to the Offered Certificates and the
Class B Certificates in respect of interest pursuant to Sections 4.02(c) above
which constitute Cap Carryover Amounts shall first be deemed distributed by
REMIC 4 as a distribution to the Class CE Interest and then a distribution by
REMIC 5 to the Class CE Certificates, and then distributed to the Offered
Certificates and the Class B Certificates from the Grantor Trust as payments on
notional principal contracts in the nature of cap contracts. Any remaining
amount with respect to the Class CE Certificates shall be treated as having been
distributed to the Holders of the Class CE Certificates from the Grantor Trust.
With respect to the Offered Certificates and the Class B Certificates, any
excess of the REMIC 4 Pass-Through Rate over the related Pass-Through Rate,
subject to the applicable Caps, shall be treated as received by those Classes
and then distributed to the Class CE Certificates and, to the extent applicable,
paid to the Swap Provider as a Net Swap Payment or Swap Termination Payment as
provided in Section 4.09(d).
(f) On each Distribution Date, Unpaid Realized Loss Amounts on
the Offered Certificates and the Class B Certificates will be reduced by the
amount of any Subsequent Recoveries received during the related Prepayment
Period in the same order as Realized Loss Amortization Amounts are paid to the
Offered Certificates and the Class B Certificates pursuant to Section 4.02(b)
above.
Section 4.03 Allocation of Losses.
Any Subordinated Applied Realized Loss Amount for a Distribution
Date will be allocated against the Class B, Class M-9, Class M-8, Class M-7,
Class M-6, Class M-5, Class M-4, Class M-3, Class M-2 and Class M-1
Certificates, until their respective Certificate Principal Balances have been
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 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 ▇▇▇.▇▇▇▇▇▇▇.▇▇▇, a statement (the "Distribution Date
Statement") as to the distributions made on such Distribution Date:
(i) the amount of the distribution made on such Distribution
Date to the Holders of each Class of Certificates allocable to
principal, separately identified and the amount of the distribution made
on such Distribution Date to the Holders of the Class P Certificates
allocable to Prepayment Charges, Originator Prepayment Charge Payment
Amounts and Servicer Prepayment Charge Payment Amounts;
(ii) the amount of the distribution made on such Distribution
Date to the Holders of each Class of Certificates allocable to interest
or Class CE Distributable Amount, separately identified;
(iii) the Overcollateralization Amount, the
Overcollateralization Release Amount, the Overcollateralization
Deficiency and the Targeted Overcollateralization Amount as of such
Distribution Date and the Monthly Excess Interest Amount and Monthly
Excess Cashflow Amount for such Distribution Date;
(iv) the aggregate amount of servicing compensation received by
the Servicer during the related Collection Period and the amount of
Compensating Interest paid by the Servicer;
(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,
the weighted average Mortgage Interest Rate of the Mortgage Loans as of
the related Due Date and number and aggregate Principal Balance of all
Additional Group 3 Mortgage Loans added during the preceding Prepayment
Period;
(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 of the REO Property as of
the close of business on the last Business Day of such calendar month
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) separately stated for each Loan Group, the aggregate amount
of Principal Prepayments made during the related Prepayment Period;
(xii) separately stated for each Loan Group, the aggregate
amount of Realized Losses incurred during the related Collection Period
and the cumulative amount of Realized Losses;
(xiii) the Certificate Principal Balance of each Class of
Certificates, after giving effect to the distributions, and allocations
of Subordinated Applied Realized Loss Amounts, made on such Distribution
Date, separately identifying any reduction thereof due to allocations of
Subordinated 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
Servicer pursuant to Section 3.23;
(xvi) 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 Swap Account or the Cap Carryover
Reserve Account on such Distribution Date;
(xvii) for the distribution occurring on the Distribution Date
immediately following the end of the Funding Period, the balance on
deposit in the Group 3 Pre-Funding Account that has not been used to
purchase Additional Group 3 Mortgage Loans and that is being distributed
to the related Class A Certificates as a mandatory distribution of
principal, if any, 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 Servicer, an Originator or the Seller during the
related Prepayment Period and indicating the section of this Agreement
or the applicable Originator Mortgage Loan Purchase Agreement, as
applicable, requiring or allowing the purchase of each such Mortgage
Loan;
(xxiv) the amount of the Credit Risk Manager Fee paid;
(xxv) 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, the Servicer Prepayment Charge Payment Amount paid by the
Servicer or the Originator Prepayment Charge Payment Amount paid by the
related Originator with respect to each such Mortgage Loan;
(xxvi) the amount of Subsequent Recoveries received during the
related Prepayment Period;
(xxvii) only for so long as the Trust is subject to the Exchange
Act reporting requirements, the Interest Rate Swap Agreement's
"significance percentage" of the Pool Balance;
(xxviii) the amount and recipient of any Net Swap Payments and
Swap Termination Payments;
(xxix) the date of such Distribution Date and the Determination
Date for such Distribution Date;
(xxx) any expenses or indemnification amounts paid by the Trust
Fund, the specific purpose of each payment and the parties to whom these
payments are made;
(xxxi) for each Class, the applicable Record Date and Interest
Accrual Period; and
(xxxii) unless such information is otherwise set forth in From
10-D relating to such Distribution Date, any material breaches of
representations and warranties relating to the Mortgage Loans or
material breaches of transaction covenants or representations and
warranties.
The Trustee may fully rely upon and shall have no liability with
respect to information with respect to the Mortgage Loans provided by the
Servicer.
In determining whether a breach of a representation or warranty
relating to the Mortgage Loans is material or whether a breach of a transaction
covenant or representation or warranty is material for purposes of subclause
(xxxii) above, the Trustee may consult with the Depositor and rely on the
Depositor's determination of materiality.
In the case of information furnished pursuant to subclauses (i),
(ii) and (xiii) above, the amounts shall be expressed in a separate section of
the report as a dollar amount for each Class for each $1,000 original dollar
amount as of the Cut-off Date.
The Trustee will also make available copies of the periodic
reports the Trustee prepares and files with the Commission, including
distribution reports on Form 10-D, annual reports on Form 10-K, current reports
on Form 8-K and amendments to these reports available through ▇▇▇.▇▇▇▇▇▇▇.▇▇▇
promptly (but no later than one Business Day) after the Trustee has filed such
reports with the Commission.
(b) Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to the NIMS Insurer and each Person who
at any time during the calendar year was a Certificateholder of a Regular
Certificate, if requested in writing by such Person, such information as is
reasonably necessary to provide to such Person a statement containing the
information set forth in subclauses (i), (ii), (xiv) and (xvi) above, aggregated
for such calendar year or applicable portion thereof during which such Person
was a Certificateholder. Such obligation of the 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 each
Residual 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 each
Residual Certificateholder by the Trustee pursuant to any requirements of the
Code as from time to time in force.
(d) For all purposes of this Agreement including, but not
limited to, providing the information set forth in clause (viii) of Section
4.06(a), with respect to any Mortgage Loan, delinquencies shall be determined
and reported based on the so-called "OTS" methodology for determining
delinquencies on mortgage loans similar to the Mortgage Loans. By way of
example, a Mortgage Loan would be one payment delinquent with respect to a
Monthly Payment due on a Due Date if such Monthly Payment is not made by the
close of business on the Mortgage Loan's next succeeding Due Date, and a
Mortgage Loan would be two payments delinquent with respect to such Monthly
Payment if such Monthly Payment were not made by the close of business on the
Mortgage Loan's second succeeding Due Date. The Servicer hereby represents and
warrants to the Depositor that this delinquency recognition policy is its
current policy and is not less restrictive than any delinquency recognition
policy established by the primary safety and soundness regulator, if any, of the
Servicer.
Section 4.07 Remittance Reports; Advances.
(a) On the third Business Day following each Determination Date
but in no event later than the 20th day of each month (or if such 20th day is
not a Business Day, the preceding Business Day), the Servicer shall deliver to
the Trustee and the NIMS Insurer by telecopy (or by such other means as the
Servicer, the NIMS Insurer and the Trustee may agree from time to time) a
Remittance Report with respect to the related Distribution Date. On the same
date, the Servicer shall electronically forward to the Trustee in such medium as
may be agreed between the 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 Servicer necessary in order for the
Trustee to perform the calculations necessary to make the distributions and
allocations contemplated by Section 4.01, 4.02, 4.03 and 4.11 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 Servicer.
(b) The amount of Advances to be made by the Servicer for any
Distribution Date shall equal, subject to Section 4.07(d), the sum of (i) the
aggregate amount of Monthly Payments (net of the related Servicing Fee), due
during the related Collection Period in respect of the 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 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 such Balloon Loan.
On or before 1:00 p.m. New York time on the Servicer Remittance
Date, the Servicer shall remit in immediately available funds to the Trustee for
deposit in the Distribution Account an amount equal to the aggregate amount of
Advances, if any, to be made in respect of the Mortgage Loans for the related
Distribution Date either (i) from its own funds, (ii) from the Collection
Account, to the extent of funds held therein for future distribution (in which
case it will cause to be made an appropriate entry in the records of the
Collection Account that amounts held for future distribution have been, as
permitted by this Section 4.07, used by the Servicer in discharge of any such
Advance) or (iii) in the form of any combination of (i) and (ii) aggregating the
total amount of Advances to be made by the Servicer with respect to the Mortgage
Loans. Any amounts held for future distribution and so used shall be
appropriately reflected in the Servicer's records and replaced by the Servicer
by deposit in the Collection Account on or before any future Servicer Remittance
Date to the extent that the Available Funds for the related Distribution Date
(determined without regard to Advances to be made on the Servicer Remittance
Date) shall be less than the total amount that would be distributed to the
Classes of Certificateholders pursuant to Section 4.01 and 4.02 on such
Distribution Date if such amounts held for future distributions had not been so
used to make Advances. The Trustee will provide notice to the Servicer and NIMS
Insurer by telecopy by the close of business on any Servicer Remittance Date in
the event that the amount remitted by the Servicer to the Trustee on such date
is less than the Advances required to be made by the Servicer for the related
Distribution Date, as set forth in the related Remittance Report.
(c) The obligation of the Servicer to make such Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan, shall continue until the
earlier of such time as the Trust acquires title to the related Mortgaged
Property or such Mortgage Loan is paid in full by the Mortgagor or disposed of
by the Trust, or until the recovery of all Liquidation Proceeds thereon.
(d) Notwithstanding anything herein to the contrary, no Advance
or Servicing Advance shall be required to be made hereunder by the Servicer if
such Advance would, if made, constitute a Nonrecoverable Advance. The
determination by the Servicer that it has made a Nonrecoverable Advance or that
any proposed Advance, if made, would constitute a Nonrecoverable Advance, shall
be evidenced by an Officers' Certificate of the Servicer delivered to the
Depositor, the NIMS Insurer and the Trustee. The Trustee shall be entitled to
conclusively rely upon any such determination by the Servicer.
Section 4.08 REMIC Distributions.
(a) On each Distribution Date, the Trustee shall cause in the
following order of priority, the following amounts to be distributed by REMIC 1
to REMIC 2 on account of the REMIC 1 Regular Interests or withdrawn from the
Distribution Account and distributed to the Holder of the Class R Certificate
(in respect of the Class R-1 Interest), as the case may be:
(i) With respect to the Group 1 Mortgage Loans, all
distributions of principal and interest thereon to the Class I-1
Interest;
(ii) With respect to the Group 2 Mortgage Loans, all
distributions of principal and interest thereon to the Class I-2
Interest; and
(iii) With respect to the Group 3 Mortgage Loans, all
distributions of principal and interest thereon to the Class I-3
Interest.
(b) (1) On each Distribution Date, the Trustee shall cause in
the following order of priority, the following amounts to be distributed by
REMIC 2 to REMIC 3 on account of the REMIC 2 Group 1 Regular Interests or
withdrawn from the Distribution Account and distributed to the Holder of the
Class R Certificate (in respect of the Class R-2 Interest), as the case may be:
(i) to each of REMIC 2 Regular Interest I-1-A through I-60-B,
pro rata, in an amount equal to (A) Uncertificated Accrued Interest for
such REMIC 2 Regular Interests for such Distribution Date, plus (B) any
amounts payable in respect thereof remaining unpaid from previous
Distribution Dates; and
(ii) to the extent of amounts remaining after the distributions
made pursuant to clause (i) above, payments of principal shall be
allocated to REMIC 2 Regular Interests I-1-A through I-60-B starting
with the lowest numerical denomination until the Uncertificated Balance
of each such REMIC 2 Regular Interest is reduced to zero, provided that,
for REMIC 2 Regular Interests with the same numerical denomination, such
payments of principal shall be allocated pro rata between such REMIC 2
Regular Interests.
(2) On each Distribution Date, the Trustee shall cause in
the following order of priority, the following amounts to be distributed by
REMIC 2 to REMIC 3 on account of the REMIC 2 Group 2 Regular Interests or
withdrawn from the Distribution Account and distributed to the Holders of the
Class R Certificate (in respect of the Class R-2 Interest), as the case may be:
(i) to each of REMIC 2 Regular Interest II-1-A through II-60-B,
pro rata, in an amount equal to (A) Uncertificated Accrued Interest for
such REMIC 2 Regular Interests for such Distribution Date, plus (B) any
amounts payable in respect thereof remaining unpaid from previous
Distribution Dates; and
(ii) to the extent of amounts remaining after the distributions
made pursuant to clause (i) above, payments of principal shall be
allocated REMIC 2 Regular Interests II-1-A through II-60-B starting with
the lowest numerical denomination until the Uncertificated Balance of
each such REMIC 2 Regular Interest is reduced to zero, provided that,
for REMIC 2 Regular Interests with the same numerical denomination, such
payments of principal shall be allocated pro rata between such REMIC 2
Regular Interests.
(3) On each Distribution Date, the Trustee shall cause in
the following order of priority, the following amounts to be distributed by
REMIC 2 to REMIC 3 on account of the REMIC 2 Group 3 Regular Interests or
withdrawn from the Distribution Account and distributed to the Holders of the
Class R Certificate (in respect of the Class R-2 Interest), as the case may be:
(i) to each of REMIC 2 Regular Interest III-1-A through
III-60-B, pro rata, in an amount equal to (A) Uncertificated
Accrued Interest for such REMIC 2 Regular Interests for such
Distribution Date, plus (B) any amounts payable in respect
thereof remaining unpaid from previous Distribution Dates;
and
(ii) to the extent of amounts remaining after the
distributions made pursuant to clause (i) above, payments of
principal shall be allocated to REMIC 2 Regular Interests
III-1-A through III-60-B starting with the lowest numerical
denomination until the Uncertificated Balance of each such
REMIC 2 Regular Interest is reduced to zero, provided that,
for REMIC 2 Regular Interests with the same numerical
denomination, such payments of principal shall be allocated
pro rata between such REMIC 2 Regular Interests.
(c) On each Distribution Date, the Trustee shall cause in the
following order of priority, the following amounts to be distributed by REMIC 3
to REMIC 4 on account of the REMIC 3 Regular Interests or withdrawn from the
Distribution Account and distributed to the Holder of the Class R Certificate
(in respect of the Class R-3 Interest), as the case may be:
(i) to REMIC 3 Regular Interest LTIO, in an amount equal to (A)
Uncertificated Accrued Interest for such REMIC 3 Regular Interest for
such Distribution Date, plus (B) any amounts in respect thereof
remaining unpaid from previous Distribution Dates; to REMIC 3 Regular
Interest LT1AA, REMIC 3 Regular Interest LT1A1, REMIC 3 Regular Interest
LT1A2, REMIC 3 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, REMIC 3 Regular Interest LT1A3B,
REMIC 3 Regular Interest LT1A3C1, REMIC 3 Regular Interest LT1A3C2,
REMIC 3 Regular Interest LT1A3D, REMIC 3 Regular Interest LT1M1, REMIC 3
Regular Interest LT1M2, REMIC 3 Regular Interest LT1M3, REMIC 3 Regular
Interest LT1M4, REMIC 3 Regular Interest LT1M5, REMIC 3 Regular Interest
LT1M6, REMIC 3 Regular Interest LT1M7, REMIC 3 Regular Interest LT1M8,
REMIC 3 Regular Interest LT1M9, REMIC 3 Regular Interest LT1B and REMIC
3 Regular Interest LT1ZZ, pro rata, in an amount equal to (A) the
Uncertificated Accrued Interest for such Distribution Date, plus (B) any
amounts in respect thereof remaining unpaid from previous Distribution
Dates. Amounts payable as Uncertificated Accrued Interest in respect of
REMIC 3 Regular Interest LT1ZZ shall be reduced and deferred when the
REMIC 3 Overcollateralized Amount is less than the REMIC 3
Overcollateralization Target Amount, by the lesser of (x) the amount of
such difference and (y) the Maximum LT1ZZ Uncertificated Accrued
Interest Deferral Amount and such amount will be payable to REMIC 3
Regular Interest LT1A1, REMIC 3 Regular Interest LT1A2, REMIC 3 Regular
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, REMIC 3 Regular Interest LT1A3B, REMIC 3 Regular
Interest LT1A3C1, REMIC 3 Regular Interest LT1A3C2, REMIC 3 Regular
Interest LT1A3D, REMIC 3 Regular Interest LT1M1, REMIC 3 Regular
Interest LT1M2, REMIC 3 Regular Interest LT1M3, REMIC 3 Regular Interest
LT1M4, REMIC 3 Regular Interest LT1M5, REMIC 3 Regular Interest LT1M6,
REMIC 3 Regular Interest LT1M7, REMIC 3 Regular Interest LT1M8, REMIC 3
Regular Interest LT1M9 and REMIC 3 Regular Interest LT1B, in the same
proportion as the Overcollateralization Deficiency is allocated to the
Corresponding Certificates, and REMIC 3 Regular Interest LT1ZZ shall be
increased by such amount;
(ii) to REMIC 3 Regular Interest LT1SUB, REMIC 3 Regular
Interest LT1GRP, REMIC 3 Regular Interest LT2SUB, REMIC 3 Regular
Interest LT2GRP, REMIC 3 Regular Interest LT3SUB, REMIC 3 Regular
Interest LT3GRP and REMIC 3 Regular Interest LT1XX, pro rata, in an
amount equal to (A) the Uncertificated Accrued Interest for such
Distribution Date, plus (B) any amounts in respect thereof remaining
unpaid from previous Distribution Dates;
(iii) to REMIC 3 Regular Interests, as a distribution of
principal, in an amount equal to the remainder of the REMIC 3 Marker
Allocation Percentage of Available Funds for such Distribution Date
after the distributions made pursuant to clause (i) above, allocated as
follows:
(1) to REMIC 3 Regular Interest LT1AA, 98.00% of
such remainder, until the Uncertificated Balance of such
Uncertificated REMIC 3 Regular Interest is reduced to
zero;
(2) to REMIC 3 Regular Interest LT1A1, REMIC 3
Regular Interest LT1A2, REMIC 3 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
REMIC 3 Regular Interest LT1A3B, REMIC 3 Regular
Interest LT1A3C1, REMIC 3 Regular Interest LT1A3C2,
REMIC 3 Regular Interest LT1A3D, REMIC 3 Regular
Interest LT1M1, REMIC 3 Regular Interest LT1M2, REMIC 3
Regular Interest LT1M3, REMIC 3 Regular Interest LT1M4,
REMIC 3 Regular Interest LT1M5, REMIC 3 Regular Interest
LT1M6, REMIC 3 Regular Interest LT1M7, REMIC 3 Regular
Interest LT1M8, REMIC 3 Regular Interest LT1M9, and
REMIC 3 Regular Interest LT1B, 1.00% of such remainder,
in the same proportion as principal payments are
allocated to the Corresponding Certificates, until the
Uncertificated Balances of such REMIC 3 Regular
Interests are reduced to zero; then
(3) to REMIC 3 Regular Interest LT1ZZ, 1.00% of
such remainder, until the Uncertificated Balance of such
REMIC 3 Regular Interest is reduced to zero;
provided, however, that (i) 98.00% and (ii) 2.00% of any
principal payments that are attributable to the
Overcollateralization Release Amount shall be allocated
to (i) REMIC 3 Regular Interest LT1AA and (ii) REMIC 3
Regular Interest LT1ZZ, respectively; and
(iv) to the Holders of REMIC 3 Regular Interests, in an amount
equal to the REMIC 3 Sub WAC Allocation Percentage of Available Funds
for such Distribution Date after the distributions made pursuant to
clause (i) above, such that distributions of principal shall be deemed
to be made to the REMIC 3 Regular Interests first, so as to keep the
Uncertificated Balance of each REMIC 3 Regular Interest ending with the
designation "GRP" equal to 0.01% of the aggregate Principal Balance of
the Mortgage Loans in the related group of Mortgage Loans; second, to
each REMIC 3 Regular Interest ending with the designation "SUB," so that
the Uncertificated Balance of each such REMIC 3 Regular Interest is
equal to 0.01% of the excess of (x) the aggregate Principal Balance of
the Mortgage Loans in the related group of Mortgage Loans over (y) the
aggregate current Certificate Principal Balance of the Class A
Certificates in the related group of Mortgage Loans (except that if any
such excess is a larger number than in the preceding distribution
period, the least amount of principal shall be distributed to such REMIC
3 Regular Interests such that the REMIC 3 Subordinated Balance Ratio is
maintained); and third, any remaining principal to REMIC 3 Regular
Interest LT1XX.
(d) On each Distribution Date, the Trustee shall cause all
distributions on the regular interests in REMIC 4, represented by the
Certificates (other than the Class CE, Class P and Residual Certificates) to be
distributed in amounts corresponding to the distributions on such Certificates,
provided that interest shall be computed at the REMIC 4 Pass-Through Rate.
(e) On each Distribution Date, the Trustee shall cause all
distributions on the Class CE Interest to be distributed by REMIC 4 to REMIC 5
for distributions in respect of the Class CE Certificates or as otherwise
distributable as set forth in Section 4.02(c) and (e). Any amount remaining in
the Distribution Account with respect to REMIC 5 on any Distribution Date shall
be distributed to the Holder of the Class R-X Certificate.
(f) The Trustee shall cause the following allocation of losses:
(i) The aggregate amount of any Prepayment Interest Shortfalls
and the aggregate amount of any Relief Act Interest Shortfalls incurred
in respect of the Mortgage Loans for any Distribution Date shall be
allocated first, (a) with respect to the Group 1 Mortgage Loans, to
REMIC 1 Regular Interest I-1, to the extent of one month's interest at
the then applicable respective Uncertificated REMIC 1 Pass-Through Rate
on the respective Uncertificated Balance of such REMIC 1 Regular
Interest, (b) with respect to the Group 2 Mortgage Loans, to REMIC 1
Regular Interest I-2, to the extent of one month's interest at the then
applicable respective Uncertificated REMIC 1 Pass-Through Rate on the
respective Uncertificated Balance of such REMIC 1 Regular Interest and
(c) with respect to the Group 3 Mortgage Loans, to REMIC 1 Regular
Interest I-3, to the extent of one month's interest at the then
applicable respective Uncertificated REMIC 1 Pass-Through Rate on the
respective Uncertificated Balance of such REMIC 1 Regular Interest.
(ii) The aggregate amount of any Prepayment Interest Shortfalls
and the aggregate amount of any Relief Act Interest Shortfalls incurred
in respect of the Loan Group 1 for any Distribution Date shall be
allocated first, to the REMIC 2 Group I Regular Interests ending with
the designation "B," pro rata, based on, and to the extent of, one
month's interest at the then applicable respective Uncertificated REMIC
2 Pass-Through Rates on the respective Uncertificated Balances of each
such REMIC 2 Regular Interest, and then, to REMIC 2 Group I Regular
Interests ending with the designation "A," pro rata based on, and to the
extent of, one month's interest at the then applicable respective
Uncertificated REMIC 2 Pass-Through Rates on the respective
Uncertificated Balances of each such REMIC 2 Regular Interest. The
aggregate amount of any Prepayment Interest Shortfalls and the aggregate
amount of any Relief Act Interest Shortfalls incurred in respect of the
Loan Group 2 for any Distribution Date shall be allocated first, to the
REMIC 2 Group II Regular Interests ending with the designation "B," pro
rata, based on, and to the extent of, one month's interest at the then
applicable respective Uncertificated REMIC 2 Pass-Through Rates on the
respective Uncertificated Balances of each such REMIC 2 Regular
Interest, and then, to REMIC 2 Group II Regular Interests ending with
the designation "A," pro rata, based on, and to the extent of, one
month's interest at the then applicable respective Uncertificated REMIC
2 Pass-Through Rates on the respective Uncertificated Balances of each
such REMIC 2 Regular Interest. The aggregate amount of any Prepayment
Interest Shortfalls and the aggregate amount of any Relief Act Interest
Shortfalls incurred in respect of the Loan Group 3 for any Distribution
Date shall be allocated first, to the REMIC 2 Group III Regular
Interests ending with the designation "B," pro rata, based on, and to
the extent of, one month's interest at the then applicable respective
Uncertificated REMIC 2 Pass-Through Rates on the respective
Uncertificated Balances of each such REMIC 2 Regular Interest, and then,
to REMIC 2 Group III Regular Interests ending with the designation "A,"
pro rata, based on, and to the extent of, one month's interest at the
then applicable respective Uncertificated REMIC 2 Pass-Through Rates on
the respective Uncertificated Balances of each such REMIC 2 Regular
Interest.
(iii) The REMIC 3 Marker Allocation Percentage of the aggregate
amount of any Prepayment Interest Shortfalls and the REMIC 3 Marker
Allocation Percentage of the aggregate amount of any Relief Act Interest
Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated among REMIC 3 Regular Interest
LT1AA, REMIC 3 Regular Interest LT1A1, REMIC 3 Regular Interest LT1A2,
REMIC 3 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, REMIC 3 Regular Interest LT1A3B, REMIC
3 Regular Interest LT1A3C1, REMIC 3 Regular Interest LT1A3C2, REMIC 3
Regular Interest LT1A3D, REMIC 3 Regular Interest LT1M1, REMIC 3 Regular
Interest LT1M2, REMIC 3 Regular Interest LT1M3, REMIC 3 Regular Interest
LT1M4, REMIC 3 Regular Interest LT1M5, REMIC 3 Regular Interest LT1M6,
REMIC 3 Regular Interest LT1M7, REMIC 3 Regular Interest LT1M8, REMIC 3
Regular Interest LT1M9, REMIC 3 Regular Interest LT1B and REMIC 3
Regular Interest LT1ZZ, pro rata, based on, and to the extent of, one
month's interest at the then applicable respective Uncertificated REMIC
3 Pass-Through Rate on the respective Uncertificated Balance of each
such REMIC 3 Regular Interest;
(iv) The REMIC 3 Sub WAC Allocation Percentage of the aggregate
amount of any Prepayment Interest Shortfalls and the REMIC 3 Sub WAC
Allocation Percentage of the aggregate amount of any Relief Act Interest
Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, to Uncertificated Accrued
Interest payable to REMIC 3 Regular Interest LT1SUB, REMIC 3 Regular
Interest LT1GRP, REMIC 3 Regular Interest LT2SUB, REMIC 3 Regular
Interest LT2GRP, REMIC 3 Regular Interest LT3SUB, REMIC 3 Regular
Interest LT3GRP and REMIC 3 Regular Interest LT1XX, pro rata, based on,
and to the extent of, one month's interest at the then applicable
respective Uncertificated REMIC 3 Pass-Through Rate on the respective
Uncertificated Balance of each such REMIC 3 Regular Interest;
(v) Any remaining Prepayment Interest Shortfalls and Relief Act
Shortfalls in REMIC 3 for any Distribution Date shall be allocated to
the REMIC 3 Regular Interest LTIO.
(vi) The aggregate amount of any Prepayment Interest Shortfalls
and the aggregate amount of any Relief Act Interest Shortfalls allocated
to the Class CE Interest in REMIC 4 shall be allocated to REMIC 5 in
respect of the Class CE Certificates;
(vii) With respect to the REMIC 1 Regular Interests, (A) all
Realized Losses on the Group 1 Mortgage Loans shall be allocated shall
be allocated by the Trustee on each Distribution Date to REMIC 1 Regular
Interest I-1, until the Uncertificated Balance of such REMIC 1 Regular
Interest has been reduced to zero; (B) all Realized Losses on the Group
2 Mortgage Loans shall be allocated by the Trustee on each Distribution
Date to REMIC 1 Regular Interest I-2, until the Uncertificated Balance
of such REMIC 1 Regular Interest has been reduced to zero and (C) all
Realized Losses on the Group 3 Mortgage Loans shall be allocated by the
Trustee on each Distribution Date to REMIC 1 Regular Interest I-3, until
the Uncertificated Balance of such REMIC 1 Regular Interest has been
reduced to zero.
(viii) With respect to the REMIC 2 Regular Interests, all
Realized Losses on the Group 1 Mortgage Loans shall be allocated by the
Trustee on each Distribution Date to REMIC 2 Regular Interest I-1-A
through REMIC 2 Regular Interest I-60-B, starting with the lowest
numerical denomination until such REMIC 2 Regular Interest has been
reduced to zero, provided that, for REMIC 2 Regular Interests with the
same numerical denomination, such Realized Losses shall be allocated,
pro rata, between such REMIC 2 Regular Interests. All Realized Losses on
the Group 2 Mortgage Loans shall be allocated by the Trustee on each
Distribution Date to REMIC 2 Regular Interest II-1-A through REMIC 2
Regular Interest II-60-B, starting with the lowest numerical
denomination until such REMIC 2 Regular Interest has been reduced to
zero, provided that, for REMIC 2 Regular Interests with the same
numerical denomination, such Realized Losses shall be allocated, pro
rata, between such REMIC 2 Regular Interests. All Realized Losses on the
Group 3 Mortgage Loans shall be allocated by the Trustee on each
Distribution Date to REMIC 2 Regular Interest III-1-A through REMIC 2
Regular Interest III-60-B, starting with the lowest numerical
denomination until such REMIC 2 Regular Interest has been reduced to
zero, provided that, for REMIC 2 Regular Interests with the same
numerical denomination, such Realized Losses shall be allocated, pro
rata, between such REMIC 2 Regular Interests.
(ix) The REMIC 3 Marker Allocation Percentage of all Realized
Losses on the Mortgage Loans shall be allocated by the Trustee on each
Distribution Date to the following REMIC 3 Regular Interests in the
specified percentages, as follows: first, to Uncertificated Accrued
Interest payable to REMIC 3 Regular Interest LT1AA and REMIC 3 Regular
Interest LT1ZZ up to an aggregate amount equal to the REMIC 3 Interest
Loss Allocation Amount, 98% and 2%, respectively; second, to the
Uncertificated Balances of REMIC 3 Regular Interest LT1AA and REMIC 3
Regular Interest LT1ZZ up to an aggregate amount equal to the REMIC 3
Principal Loss Allocation Amount, 98% and 2%, respectively; third, to
the Uncertificated Balances of REMIC 3 Regular Interest LT1AA, REMIC 3
Regular Interest LT1B and REMIC 3 Regular Interest LT1ZZ, 98%, 1% and
1%, respectively, until the Uncertificated Balance of REMIC 3 Regular
Interest LT1B has been reduced to zero, fourth, to the Uncertificated
Balances of REMIC 3 Regular Interest LT1AA, REMIC 3 Regular Interest
LT1M9 and REMIC 3 Regular Interest LT1ZZ, 98%, 1% and 1%, respectively,
until the Uncertificated Balance of REMIC 3 Regular Interest LT1M9 has
been reduced to zero; fifth, to the Uncertificated Balances of REMIC 3
Regular Interest LT1AA, REMIC 3 Regular Interest LT1M8 and REMIC 3
Regular Interest LT1ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Balance of REMIC 3 Regular Interest LT1M8 has been
reduced to zero; sixth to the Uncertificated Balances of REMIC 3 Regular
Interest LT1AA, REMIC 3 Regular Interest LT1M7 and REMIC 3 Regular
Interest LT1ZZ, 98%, 1% and 1%, respectively, until the Uncertificated
Balance of REMIC 3 Regular Interest LT1M7 has been reduced to zero;
seventh, to the Uncertificated Balances of REMIC 3 Regular Interest
LT1AA, REMIC 3 Regular Interest LT1M6 and REMIC 3 Regular Interest
LT1ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance of
REMIC 3 Regular Interest LT1M6 has been reduced to zero; eighth, to the
Uncertificated Balances of REMIC 3 Regular Interest LT1AA, REMIC 3
Regular Interest LT1M5 and REMIC 3 Regular Interest LT1ZZ, 98%, 1% and
1%, respectively, until the Uncertificated Balances of REMIC 3 Regular
Interest LT1M5 has been reduced to zero; ninth, to the Uncertificated
Balances of REMIC 3 Regular Interest LT1AA, REMIC 3 Regular Interest
LT1M4 and REMIC 3 Regular Interest LT1ZZ, 98%, 1% and 1%, respectively,
until the Uncertificated Balances of REMIC 3 Regular Interest LT1M4 has
been reduced to zero; tenth, to the Uncertificated Balances of REMIC 3
Regular Interest LT1AA, REMIC 3 Regular Interest LT1M3 and REMIC 3
Regular Interest LT1ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Balances of REMIC 3 Regular Interest LT1M3 has been
reduced to zero; eleventh, to the Uncertificated Balances of REMIC 3
Regular Interest LT1AA, REMIC 3 Regular Interest LT1M2 and REMIC 3
Regular Interest LT1ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Balances of REMIC 3 Regular Interest LT1M2 has been
reduced to zero; twelfth, to the Uncertificated Balances of REMIC 3
Regular Interest LT1AA, REMIC 3 Regular Interest LT1M1 and REMIC 3
Regular Interest LT1ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Balances of REMIC 3 Regular Interest LT1M1 has been
reduced to zero;
(x) The REMIC 3 Sub WAC Allocation Percentage of all Realized
Losses shall be applied after all distributions have been made on each
Distribution Date first, so as to keep the Uncertificated Balance of
each REMIC 3 Regular Interest ending with the designation "GRP" equal to
0.01% of the aggregate Principal Balance of the Mortgage Loans in the
related Loan Group; second, to each REMIC 3 Regular Interest ending with
the designation "SUB," so that the Uncertificated Balance of each such
REMIC 3 Regular Interest is equal to 0.01% of the excess of (x) the
aggregate Principal Balance of the Mortgage Loans in the related Loan
Group over (y) the aggregate current Certificate Principal Balances of
the Class A Certificates in the related group of Mortgage Loans (except
that if any such excess is a larger number than in the preceding
distribution period, the least amount of Realized Losses shall be
applied to such REMIC 3 Regular Interests such that the REMIC 3
Subordinated Balance Ratio is maintained); and third, any remaining
Realized Losses shall be allocated to REMIC 3 Regular Interest LT1XX;
and
(xi) All Realized Losses on the Class CE Interest in respect of
REMIC 4 shall be allocated shall be allocated by the Trustee on each
Distribution Date to REMIC 5 and the Class CE Certificates.
(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.
Section 4.09 Swap Account.
(a) No later than the Closing Date, the Trustee shall establish
and maintain a separate, segregated trust account to be titled, "▇▇▇▇▇ Fargo
Bank, N.A. as Trustee, in trust for the registered holders of Asset Backed
Funding Corporation Asset-Backed Certificates, Series 2006-OPT1--Swap Account."
Such account shall be an Eligible Account and funds on deposit therein shall be
held separate and apart from, and shall not be commingled with, any other
moneys, including, without limitation, other moneys of the Trustee held pursuant
to this Agreement. Amounts therein shall be held uninvested.
(b) On the Business Day prior to each Distribution Date, prior
to any distribution to any Certificate, the Trustee shall deposit into the Swap
Account: (i) the amount of any Net Swap Payment or Swap Termination Payment
(other than any Swap Termination Payment resulting from a Swap Provider Trigger
Event) owed to the Swap Provider (after taking into account any upfront payment
received from the counterparty to a replacement interest rate swap agreement)
from Available Funds and (ii) amounts received by the Trustee, for distribution
in accordance with Section 4.02(c). For federal income tax purposes, any amounts
paid to the Swap Provider on the Business Day prior to each Distribution Date
shall be deemed paid, pursuant to Section 4.08 hereof (i) from REMIC 1 to REMIC
2, pro rata to the REMIC 1 Regular Interests based on the Uncertificated Accrued
Interest thereon, (ii) then from REMIC 2 to REMIC 3 , pro rata to the REMIC 2
Regular Interests based on Uncertificated Accrued Interest thereon, (iii) then
from REMIC 3 to REMIC 4 in respect of the Class LTIO Interest, (iv) then from
REMIC 4 to REMIC 5 in respect of the Swap IO Interest, and (v) then from the
Class CE Certificates to the Swap Provider in respect of the Net Swap Payment
due to the Swap Provider on such Distribution Date. To the extent the payment
provided for in the preceding sentence is less than the amount of the Net Swap
Payment due to the Swap Provider on such Distribution Date, such additional
amounts shall be deemed paid in a manner similar to the deemed payments provided
in the preceding sentence to the Holders of the Offered Certificates and the
Class B Certificates in respect of the Class IO Distribution Amount (as defined
in Section 4.09(d) below), and then shall be deemed paid to the Class CE
Certificates pursuant to the notional principal contract described in Section
4.09(d) below and then to the Swap Provider. Any amounts deemed paid by any
REMIC created hereunder pursuant to the preceding two sentences shall not be
duplicated by any payments deemed made pursuant to Section 4.08 on the
succeeding Distribution Date. Any Swap Termination Payment triggered by a Swap
Provider Trigger Event owed to the Swap Provider pursuant to the Interest Rate
Swap Agreement will be subordinated to distributions to the Holders of the Class
A Certificates, Class B Certificates, and Class M Certificates and shall be paid
as set forth under Section 4.02(b)(xxxiv).
(c) For federal income tax purposes, the Swap Account shall be
owned by the Holders of the Class CE Certificates.
(d) The Trustee shall treat the Holders of Certificates (other
than the Class P, Class CE and Residual Certificates) as having entered into a
notional principal contract with respect to the Holders of the Class CE
Certificates. Pursuant to each such notional principal contract, all Holders of
Certificates (other than the Class P, Class CE and Residual Certificates) shall
be treated as having agreed to pay, on each Distribution Date, to the Holder of
the Class CE Certificates an aggregate amount equal to the excess, if any, of
(i) the amount payable on such Distribution Date on the Regular Interest in
REMIC 4 corresponding to such Class of Certificates over (ii) the amount payable
on such Class of Certificates on such Distribution Date (such excess, a "Class
IO Distribution Amount"). A Class IO Distribution Amount payable from interest
collections shall be allocated pro rata among such Certificates based on the
excess of (a) the amount of interest otherwise payable to such Certificates over
(ii) the amount of interest payable to such Certificates at a per annum rate
equal to the applicable Cap, and a Class IO Distribution Amount payable from
principal collections shall be allocated to the most subordinate Class of
Certificates with an outstanding principal balance to the extent of such
balance. In addition, pursuant to such notional principal contract, the Holders
of the Class CE Certificates shall be treated as having agreed to pay Cap
Carryover Amounts to the Holders of the Certificates (other than the Class CE,
Class P and Residual Certificates), in accordance with the terms of this
Agreement. Any payments to the Certificates from amounts deemed received in
respect of this notional principal contract shall not be payments with respect
to a Regular Interest in a REMIC within the meaning of Code Section 860G(a)(1).
However, any payment from the Certificates (other than the Class CE, Class P and
Residual Certificates) of a Class IO Distribution Amount shall be treated for
tax purposes as having been received by the Holders of such Certificates in
respect of their interests in REMIC 4 and as having been paid by such Holders to
the Trustee pursuant to the notional principal contract. Thus, each Certificate
(other than the Class P and Residual Certificates) shall be treated as
representing not only ownership of Regular Interests in REMIC 4, but also
ownership of an interest in, and obligations with respect to, a notional
principal contract.
Section 4.10 Group 3 Pre-Funding Account.
(a) No later than the Closing Date, the Trustee shall establish
and maintain a segregated trust account that is an Eligible Account, which shall
be titled "Group 3 Pre-Funding Account, ▇▇▇▇▇ Fargo Bank, N.A., as trustee, in
trust for the registered Holders of ABFC 2006-OPT1 Trust, Asset Backed Funding
Corporation Asset-Backed Certificates, Series 2006-OPT1" (the "Group 3
Pre-Funding Account"). The Trustee shall, promptly upon receipt, deposit in the
Group 3 Pre-Funding Account and retain therein the Original Group 3 Pre-Funded
Amount remitted on the Closing Date to the Trustee by the Depositor. Funds
deposited in the Group 3 Pre-Funding Account shall be held in trust by the
Trustee for the Certificateholders for the uses and purposes set forth herein.
(b) Funds in the Group 3 Pre-Funding Account will remain
uninvested. For federal income tax purposes, the Depositor shall be the owner of
Group 3 Pre-Funding Account and shall report all items of income, deduction,
gain or loss arising therefrom.
(c) Amounts on deposit in the Group 3 Pre-Funding Account shall
be withdrawn by the Trustee as follows:
(i) On any Additional Transfer Date, the Trustee shall withdraw
from the Group 3 Pre-Funding Account an amount equal to 100% of the
aggregate Principal Balance of the Additional Group 3 Mortgage Loans
transferred and assigned to the Trustee for deposit in the Mortgage Pool
on such Additional Transfer Date and pay such amount to or upon the
order of the Depositor upon satisfaction of the conditions set forth in
Section 2.04 with respect to such transfer and assignment;
(ii) If the amount on deposit in the Group 3 Pre-Funding Account
has not been reduced to zero during the Funding Period, on the day
immediately following the termination of the Funding Period, the Trustee
shall deposit into the Distribution Account any amounts remaining in the
Group 3 Pre-Funding Account for distribution in accordance with the
terms hereof;
(iii) To withdraw any amount not required to be deposited in the
Group 3 Pre-Funding Account or deposited therein in error; and
(iv) To clear and terminate the Group 3 Pre-Funding Account upon
the earlier to occur of (A) the Distribution Date immediately following
the end of the Funding Period and (B) the termination of this Agreement,
with any amounts remaining on deposit therein being paid to the Holders
of the Certificates then entitled to distributions in respect of
principal.
Withdrawals pursuant to clauses (i), (ii) and (iii) shall be
treated as contributions of cash to REMIC 1 on the date of withdrawal.
Section 4.11 Cap Carryover Reserve Account
On the Closing Date, the Trustee will establish the Cap
Carryover Reserve Account (the "Cap Carryover Reserve Account"), which account
will remain uninvested, held in trust for the benefit of the Holders of the
Offered Certificates and Class B Certificates. The Cap Carryover Reserve Account
will be an asset of the Trust but not of any REMIC. On each Distribution Date,
Cap Carryover Amounts available pursuant to clause (xxxiii) of Section 4.02(b)
will be deposited into the Cap Carryover Reserve Account. On such Distribution
Date, the Trustee shall withdraw such Cap Carryover Amounts on deposit and apply
them, sequentially, as follows:
first, concurrently, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-3A,
Class A-3B, Class A-3C1, Class A-3C2 and Class A-3D Certificates, pro rata
(based on the Cap Carryover Amount for each such Class), any Cap Carryover
Amount for such Class; and
second, sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class B
Certificates, any Cap Carryover Amount for such Class.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
Each of the Class A-1, Class A-2, Class A-3A, Class A-3B, Class
A-3C1, Class A-3C2, Class A-3D, Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class B, Class CE, Class
P and Residual Certificates shall be substantially in the forms annexed hereto
as exhibits, and shall, on original issue, be executed by the Trustee and
authenticated and delivered by the Certificate Registrar to or upon the receipt
of a Written Order to Authenticate from the Depositor concurrently with the sale
and assignment to the Trustee of the Trust Fund. Each Class of the Offered
Certificates and the Class B Certificates shall be initially evidenced by one or
more Certificates representing a Percentage Interest with a minimum dollar
denomination of $25,000 and integral multiples of $1 in excess thereof. The
Class CE and Class P Certificates are issuable only in minimum Percentage
Interests of 10%. Each Residual 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
and the Class B Certificates shall be Book-Entry Certificates. The Class CE,
Class P and Residual Certificates shall not be Book-Entry Certificates but shall
be issued in fully registered certificate form.
Section 5.02 Registration of Transfer and Exchange of
Certificates.
(a) The Certificate Registrar shall cause to be kept at the
Corporate Trust Office of the Trustee a Certificate Register in which, subject
to such reasonable regulations as it may prescribe, the Certificate Registrar
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Trustee shall initially serve
as Certificate Registrar for the purpose of registering Certificates and
transfers and exchanges of Certificates as herein provided. The Trustee as
Certificate Registrar shall be subject to the same standards of care,
limitations on liability and rights to indemnity as the Trustee, and the
provisions of Sections 8.01, 8.02, 8.03, 8.04, 8.05, 8.14, 8.15 and 8.16 shall
apply to the Certificate Registrar to the same extent as they apply to the
Trustee. Any Certificate Registrar appointed in accordance with this Section
5.02(a) may at any time resign by giving at least 30 days' advance written
notice of resignation to the Trustee, the Servicer and the Depositor, such
resignation to become effective upon appointment of a successor Certificate
Registrar.
Upon surrender for registration of transfer of any Certificate
at any office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph and, in the case of the Residual
Certificates, 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 the Depository advises the Trustee in writing that the
Depository is no longer willing or able to discharge properly its
responsibilities as Depository and the Trustee or the Depositor is unable to
locate a qualified successor. 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
Trust's expense, execute on behalf of the Trust and the Certificate Registrar
shall authenticate definitive, fully registered certificates (the "Definitive
Certificates"). None of the Depositor or the Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Certificates, the Trustee, the Certificate Registrar, the Servicer, any Paying
Agent and the Depositor shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder.
(d) Except with respect to 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-2)
under the 1933 Act, the Certificate Registrar and the Depositor shall require a
written Opinion of Counsel (which may be in-house counsel) acceptable to and in
form and substance reasonably satisfactory to the Certificate Registrar and the
Depositor that such transfer may be made pursuant to an exemption, describing
the applicable exemption and the basis therefor, from the 1933 Act or is being
made pursuant to the 1933 Act, which Opinion of Counsel shall not be an expense
of the Certificate Registrar or the Depositor or (ii) the Certificate Registrar
shall require the transferor to execute a transferor certificate (in
substantially the form attached hereto as Exhibit L) and the transferee to
execute an investment letter (in substantially the form attached hereto as
Exhibit J-1 or J-2 (in the case of the Class P, Class CE or Residual
Certificates) or in the form of Exhibit J-2 (in the case of Class B
Certificates)) 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. For purposes of clause (ii)
of this Section 5.02(d) the representations required in any transferor
certificate (substantially in the form of Exhibit L hereto) and any investment
letter (substantially in the form of Exhibit J-2 hereto) shall be deemed to have
made in connection with the transfer of any Private Certificate that is a
Book-Entry Certificate.
No transfer of an ERISA-Restricted Certificate shall be made
unless the Certificate Registrar shall have received either (i) a representation
from the transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Certificate Registrar and the Depositor (such requirement is
satisfied only by the Certificate Registrar's receipt of a representation letter
from the transferee substantially in the form of Exhibit I hereto, as
appropriate), to the effect that such transferee is not an employee benefit plan
or arrangement subject to Section 406 of ERISA, a plan subject to Section 4975
of the Code or a plan subject to any federal, state or local law ("Similar Law")
materially similar to the foregoing provisions of ERISA or the Code, nor a
person acting on behalf of any such plan or arrangement nor using the assets of
any such plan or arrangement to effect such transfer other than, except in the
case of the Class P Certificates or the Residual Certificates, an insurance
company general account that is eligible for and meets all requirements for
relief under Sections I and III of PTCE 95-60 or (ii) (except in the case of the
Class P Certificates or the Residual Certificates) in the case of any such ERISA
Restricted Certificate presented for registration in the name of an employee
benefit plan subject to ERISA or a plan or arrangement subject to Section 4975
of the Code (or comparable provisions of any subsequent enactments), or a
trustee of any such plan or any other person acting on behalf of any such plan
or arrangement or using such plan's or arrangement's assets, an Opinion of
Counsel satisfactory to the Certificate Registrar, to the effect that the
purchase or holding of such ERISA Restricted Certificate will not constitute or
result in a non-exempt prohibited transaction within the meaning of ERISA,
Section 4975 of the Code or Similar Law and will not subject the Depositor, the
Servicer, the Trustee, the NIMS Insurer or the Certificate Registrar to any
obligation in addition to those expressly undertaken in this Agreement or to any
liability. For purposes of clause (i) of the preceding sentence, such
representation shall be deemed to have been made to the Certificate Registrar by
the acceptance by a Certificate Owner of the beneficial interest in any such
Class of ERISA-Restricted Certificates, unless the Certificate Registrar shall
have received from the transferee an alternative representation acceptable in
form and substance to the Depositor. Notwithstanding anything else to the
contrary herein, any purported transfer of an ERISA-Restricted Certificate to or
on behalf of an employee benefit plan subject to ERISA, Section 4975 of the Code
or Similar Law without the delivery to the Certificate Registrar of an Opinion
of Counsel satisfactory to the Certificate Registrar as described above shall be
void and of no effect.
For so long as the Interest Rate Swap Agreement is in existence,
each beneficial owner of a Certificate other than an ERISA Restricted
Certificate or any interest therein, shall be deemed to have represented, by
virtue of its acquisition or holding of such Certificate, or interest therein,
that either (i) it is not a Plan or (ii) (A) it is an "accredited investor" (as
defined in Rule 501(a) of Regulation D under the 1933 Act, as amended, and (B)
the acquisition and holding of such Certificate and the separate right to
receive payments from the Swap Account are eligible for the exemptive relief
available under Department of Labor Prohibited Transaction Class Exemption 84-14
(for transactions by independent "qualified professional asset managers"), 91-38
(for transactions by bank collective investment funds), 90-1 (for transactions
by insurance company pooled separate accounts), 95-60 (for transactions by
insurance company general accounts) or 96-23 (for transactions effected by
"in-house asset managers").
Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably appointed the Depositor or its designee as its attorney-in-fact
to negotiate the terms of any mandatory sale under clause (v) below and to
execute all instruments of transfer and to do all other things necessary in
connection with any such sale, and the rights of each Person acquiring any
Ownership Interest in a Residual Certificate are expressly subject to the
following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Certificate Registrar of any change or impending change in
its status as a Permitted Transferee.
(ii) No Person shall acquire an Ownership Interest in a Residual
Certificate unless such Ownership Interest is a pro rata undivided
interest.
(iii) In connection with any proposed transfer of any Ownership
Interest in a Residual Certificate, the Certificate Registrar shall as a
condition to registration of the transfer, require delivery to it, in
form and substance satisfactory to it, of each of the following:
A. an affidavit in the form of Exhibit K hereto from the
proposed transferee to the effect that, among other things, such transferee is a
Permitted Transferee and that it is not acquiring its Ownership Interest in a
Residual Certificate that is the subject of the proposed transfer as a nominee,
trustee or agent for any Person who is not a Permitted Transferee; and
B. a covenant of the proposed transferee to the effect that the
proposed transferee agrees to be bound by and to abide by the transfer
restrictions applicable to the Residual Certificates.
(iv) Any attempted or purported transfer of any Ownership
Interest in a Residual Certificate in violation of the provisions of
this Section shall be absolutely null and void and shall vest no rights
in the purported transferee. If any purported transferee shall, in
violation of the provisions of this Section, become the Holder of
Residual Certificate, then the prior Holder of such Residual Certificate
that is a Permitted Transferee shall, upon discovery that the
registration of transfer of such Residual Certificate was not in fact
permitted by this Section, be restored to all rights as Holder thereof
retroactive to the date of registration of transfer of such Residual
Certificate. The Certificate Registrar shall be under no liability to
any Person for any registration of transfer of a Residual Certificate
that is in fact not permitted by this Section or for making any
distributions due on such Residual Certificate to the Holder thereof or
taking any other action with respect to such Holder under the provisions
of this Agreement so long as the Certificate Registrar received the
documents specified in clause (iii). The Trustee shall be entitled to
recover from any Holder of a Residual Certificate that was in fact not a
Permitted Transferee at the time such distributions were made all
distributions made on such Residual Certificate. Any such distributions
so recovered by the Trustee shall be distributed and delivered by the
Trustee to the prior Holder of such Residual Certificate that is a
Permitted Transferee.
(v) If any Person other than a Disqualified Organization
acquires any Ownership Interest in a Residual Certificate in violation
of the restrictions in this Section, then the Certificate Registrar
shall have the right but not the obligation, without notice to the
Holder of a Residual Certificate or any other Person having an Ownership
Interest therein, to notify the Depositor to arrange for the sale of a
Residual Certificate. The proceeds of such sale, net of commissions
(which may include commissions payable to the Depositor or its
affiliates in connection with such sale), expenses and taxes due, if
any, will be remitted by the Trustee to the previous Holder of a
Residual Certificate that is a Permitted Transferee, except that in the
event that the Trustee determines that the Holder of a Residual
Certificate may be liable for any amount due under this Section or any
other provisions of this Agreement, the Trustee may withhold a
corresponding amount from such remittance as security for such claim.
The terms and conditions of any sale under this clause (v) shall be
determined in the sole discretion of the Trustee and it shall not be
liable to any Person having an Ownership Interest in a Residual
Certificate as a result of its exercise of such discretion.
(vi) If any Person other than a Permitted Transferee acquires
any Ownership Interest in a Residual Certificate in violation of the
restrictions in this Section, then the Trustee will provide to the
Internal Revenue Service, and to the persons specified in Sections
860E(e)(3) and (6) of the Code, information needed to compute the tax
imposed under Section 860E(e)(5) of the Code on transfers of residual
interests to disqualified organizations. The Trustee shall be entitled
to reasonable compensation for providing such information from the
person to whom it is provided.
The foregoing provisions of this Section shall cease to apply to transfers
occurring on or after the date on which there shall have been delivered to the
Certificate Registrar, in form and substance satisfactory to the Certificate
Registrar, (i) written notification from each Rating Agency that the removal of
the restrictions on Transfer set forth in this Section will not cause such
Rating Agency to downgrade its rating of the Certificates and (ii) an Opinion of
Counsel to the effect that such removal will not cause any REMIC created
hereunder to fail to qualify as a REMIC.
(e) No service charge shall be made for any registration of
transfer or exchange of Certificates of any Class, but the Certificate Registrar
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of Certificates.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled by the Certificate Registrar and disposed of
pursuant to its standard procedures.
Section 5.03 Mutilated, Destroyed, Lost or Stolen
Certificates.
If (i) any mutilated Certificate is surrendered to the
Certificate Registrar or the Certificate Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate and (ii) there
is delivered to the Trustee, the Depositor, the NIMS Insurer and the Certificate
Registrar such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Trustee or the Certificate
Registrar that such Certificate has been acquired by a bona fide purchaser, the
Trustee shall execute on behalf of the Trust, and the Certificate Registrar
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Percentage Interest. Upon the issuance of any new Certificate under
this Section, the Trustee or the Certificate Registrar may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee and the Certificate Registrar) in connection therewith.
Any duplicate Certificate issued pursuant to this Section, shall constitute
complete and indefeasible evidence of ownership in the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.
Section 5.04 Persons Deemed Owners.
The Servicer, the Depositor, the NIMS Insurer, the Trustee, the
Certificate Registrar, any Paying Agent and any agent of the Servicer, the
Depositor, the NIMS Insurer, the Certificate Registrar, any Paying Agent or the
Trustee may treat the Person, including a Depository, in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 4.01 and 4.02 and for all other
purposes whatsoever, and none of the Servicer, the Trust, the NIMS Insurer, the
Trustee nor any agent of any of them shall be affected by notice to the
contrary.
Section 5.05 Appointment of Paying Agent.
(a) 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, the NIMS Insurer and the Rating Agencies. The Trustee as Paying Agent
shall be subject to the same standards of care, limitations on liability and
rights to indemnity as the Trustee, and the provisions of Sections 8.01, 8.02,
8.03, 8.04, 8.05, 8.14, 8.15 and 8.16 shall apply to the Paying Agent to the
same extent as they apply to the Trustee. Any Paying Agent appointed in
accordance with this Section 5.05 may at any time resign by giving at least 30
days' advance written notice of resignation to the Trustee, the Servicer, the
NIMS Insurer 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 Servicer and the Depositor.
The Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by the
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 Servicer or the Depositor.
Any entity into which the Servicer or the Depositor may be
merged or consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Servicer or the Depositor shall be a party, or any
corporation succeeding to the business of the Servicer or the Depositor, shall
be the successor of the Servicer or the Depositor, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor servicer shall satisfy
all the requirements of Section 7.02 with respect to the qualifications of a
successor servicer. The Servicer and such successor or surviving Person shall
notify the Depositor and the Trustee of any such merger, conversion or
consolidation at least two Business Days prior to the effective date thereof and
shall provide the Depositor and the Trustee with all information required by the
Depositor to comply with its reporting obligation under Item 6.02 of Form 8-K
not later than the effective date of such merger, conversion or consolidation.
Section 6.03 Limitation on Liability of the Servicer and
Others.
Neither the Servicer nor any of the directors or officers or
employees or agents of the Servicer shall be under any liability to the Trust or
the Certificateholders for any action taken or for refraining from the taking of
any action by the Servicer in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect the
Servicer or any such Person against any liability which would otherwise be
imposed by reason of its willful misfeasance, bad faith or negligence in the
performance of duties of the Servicer or by reason of its reckless disregard of
its obligations and duties of the Servicer hereunder; provided, further, that
this provision shall not be construed to entitle the Servicer to indemnity in
the event that amounts advanced by the Servicer to retire any senior lien exceed
Liquidation Proceeds (in excess of related liquidation expenses) realized with
respect to the related Mortgage Loan. The Servicer and any director or officer
or employee or agent of the Servicer may rely in good faith on any document of
any kind prima facie properly executed and submitted by any Person respecting
any matters arising hereunder. The Servicer and any director or officer or
employee or agent of the Servicer shall be indemnified by the Trust and held
harmless against any loss, liability or expense incurred in connection with any
legal action relating to this Agreement or the Certificates, other than any
loss, liability or expense incurred by reason of its willful misfeasance, bad
faith or negligence in the performance of duties hereunder or by reason of its
reckless disregard of obligations and duties hereunder. The Servicer may
undertake any such action which it may deem necessary or desirable in respect of
this Agreement, and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, the reasonable
legal expenses and costs of such action and any liability resulting therefrom
shall be expenses, costs and liabilities of the Trust and the Servicer shall be
entitled to pay such expenses from the proceeds of the Trust or to be reimbursed
therefor pursuant to Section 3.05 upon presentation to the Trustee of
documentation of such expenses, costs and liabilities. The Servicer's right to
indemnity or reimbursement pursuant to this Section shall survive any
resignation or termination of the Servicer pursuant to Section 6.04 or 7.01 with
respect to any losses, expenses, costs or liabilities arising prior to such
resignation or termination (or arising from events that occurred prior to such
resignation or termination). This paragraph shall apply to the Servicer solely
in its capacity as Servicer hereunder and in no other capacities.
Section 6.04 Servicer Not to Resign.
Subject to the provisions of Section 7.01 and Section 6.02, the
Servicer shall not resign from the obligations and duties hereby imposed on it
except (i) upon determination that the performance of its obligations or duties
hereunder are no longer permissible under applicable law or are in material
conflict by reason of applicable law with any other activities carried on by it
or its subsidiaries or Affiliates, the other activities of the Servicer so
causing such a conflict being of a type and nature carried on by the Servicer or
its subsidiaries or Affiliates at the date of this Agreement or (ii) upon
satisfaction of the following conditions: (a) the Servicer has proposed a
successor servicer to the Trustee and the NIMS Insurer in writing and such
proposed successor servicer is reasonably acceptable to the Trustee and the NIMS
Insurer; and (b) each Rating Agency shall have delivered a letter to the Trustee
and the NIMS Insurer prior to the appointment of the successor servicer stating
that the proposed appointment of such successor servicer as Servicer hereunder
will not result in the reduction or withdrawal of the then current rating of the
Regular Certificates or the ratings that are in effect; provided, however, that
no such resignation by the Servicer shall become effective until such successor
servicer or, in the case of (i) above, the Trustee shall have assumed the
Servicer's responsibilities and obligations hereunder or the Trustee shall have
designated a successor servicer in accordance with Section 7.02. Any such
resignation shall not relieve the Servicer of responsibility for any of the
obligations specified in Sections 7.01 and 7.02 as obligations that survive the
resignation or termination of the Servicer. Any such determination permitting
the resignation of the Servicer shall be evidenced by an Opinion of Counsel to
such effect delivered to the Trustee and the NIMS Insurer.
Section 6.05 Delegation of Duties.
(a) In the ordinary course of business, the Servicer, subject to
the provisions of Section 3.16, at any time may delegate any of its duties
hereunder to any Person, including any of its Affiliates, who agrees to conduct
such duties in accordance with standards comparable to those set forth in
Section 3.01. Such delegation shall not relieve the Servicer of its liabilities
and responsibilities with respect to such duties and shall not constitute a
resignation within the meaning of Section 6.04. The Servicer shall provide the
Trustee, the NIMS Insurer and the Rating Agencies with 60 days prior written
notice prior to the delegation of any of its duties to any Person other than any
of the Servicer's Affiliates or their respective successors and assigns.
(b) The Servicer is hereby authorized, with the consent of the
NIMS Insurer, to enter into a financing or other facility (any such arrangement,
an "Advance Facility") under which (1) the Servicer assigns or pledges to
another Person (together with such Person's successors and assigns, an
"Advancing Person") the 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
Servicer pursuant to this Agreement. The 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 Servicer's behalf, the Servicer shall remain obligated pursuant to this
Agreement to make Advances and Servicing Advances pursuant to and as required by
this Agreement. If the 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 Servicer shall not be permitted to reimburse itself for Advances and/or
Servicing Advances, but instead the Servicer shall be required to remit amounts
collected that would otherwise be retained by the Servicer to reimburse it for
the amount of previously unreimbursed Advances ("Advance Reimbursements") and/or
previously unreimbursed Servicing Advances ("Servicing Advance Reimbursements"
and together with Advance Reimbursements, "Reimbursements") (in each case to the
extent such type of Reimbursements are 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 Reimbursements or Servicing Advance
Reimbursements be included in the "Available Funds" or distributed to
Certificateholders. If the terms of a facility proposed to be entered into with
an Advancing Person by the Servicer would not materially and adversely affect
the interests of any Certificateholder, then the NIMS Insurer shall not withhold
its consent to the Servicer's entering such facility.
Reimbursements shall consist solely of amounts in respect of
Advances and/or Servicing Advances made with respect to the Mortgage Loans for
which the Servicer would be permitted to reimburse itself in accordance with
this Agreement, assuming the 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 Reimbursements, nor shall the Depositor or the
Trustee have any responsibility to track or monitor the administration of the
Advance Facility or the payment of Reimbursements to the related Advancing
Person or Advance Facility Trustee. The Servicer shall maintain and provide to
any successor servicer and (upon request) the Trustee a detailed accounting on a
loan by loan basis as to amounts advanced by, pledged or assigned to, and
reimbursed to any 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 Reimbursements 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 Servicer to provide to
the related Advancing Person or Advance Facility Trustee loan by loan
information with respect to each Reimbursement 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 with respect to each Mortgage Loan. The Servicer shall remain
entitled to be reimbursed by the Advancing Person or Advance Facility Trustee
for all Advances and Servicing Advances funded by the Servicer to the extent the
related rights to be reimbursed therefor have not been assigned or pledged to an
Advancing Person.
The Servicer shall indemnify the Depositor, the Trustee, the
NIMS Insurer, 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 Servicer without the consent of any
Certificateholder but with the consent of the NIMS Insurer, provided such
amendment complies with Section 11.01 hereof. All reasonable costs and expenses
(including attorneys' fees) of each party hereto of any such amendment shall be
borne solely by the Servicer. Prior to entering into an Advance Facility, the
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 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 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 Servicer and the lender.
If the Servicer determines any such affiliate or third party
vendor would be a "servicer" within the meaning of Item 1101 of Regulation AB,
the Servicer shall not engage such affiliate or third party vendor unless it
provides the Trustee and the Depositor the information required by Section
1108(b) and 1108(c) of Regulation AB prior to such engagement.
In the event of any assignment of rights or delegation of duties
of the Servicer, the Trustee shall report such event on Form 8-K within four
Business Days after the effective date thereof provided that the Servicer
provides notice of such occurrence to the Trustee within 2 days of such
effective date.
ARTICLE VII
DEFAULT
Section 7.01 Servicer Events of Termination.
(a) If any one of the following events ("Servicer Events of
Termination") shall occur and be continuing:
(i) (A) The failure by the Servicer to make any Advance or to
pay Compensating Interest; or (B) any other failure by the Servicer to
deposit in the Collection Account or remit to the Trustee for deposit in
the Distribution Account any payment required to be made under the terms
of this Agreement, which failure continues unremedied for a period of
one Business Day after the first date on which (x) the Servicer has
knowledge of such failure or (y) written notice of such failure is given
to the Servicer; or
(ii) The failure by the Servicer to make any required Servicing
Advance which failure continues unremedied for a period of 30 days, or
the failure by the Servicer duly to observe or perform, in any material
respect, any other covenants, obligations or agreements of the Servicer
as set forth in this Agreement, which failure continues unremedied for a
period of 30 days, after the date (A) on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Servicer by the Trustee or the NIMS Insurer or by any Holder of a
Regular Certificate evidencing at least 25% of the Voting Rights or (B)
actual knowledge of such failure by a Servicing Officer of the Servicer;
or
(iii) The entry against the Servicer of a decree or order by a
court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a trustee, conservator, receiver or
liquidator in any insolvency, conservatorship, receivership,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding up or liquidation of its affairs, and
the continuance of any such decree or order unstayed and in effect for a
period of 60 days; or
(iv) The Servicer shall voluntarily go into liquidation, consent
to the appointment of a conservator or receiver or liquidator or similar
person in any insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings of or relating to the Servicer or
of or relating to all or substantially all of its property; or a decree
or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator,
receiver, liquidator or similar person in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings,
or for the winding-up or liquidation of its affairs, shall have been
entered against the Servicer and such decree or order shall have
remained in force undischarged, unbonded or unstayed for a period of 60
days; or the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of
any applicable insolvency or reorganization statute, make an assignment
for the benefit of its creditors or voluntarily suspend payment of its
obligations;
(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
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%; or
(vi) The failure of the Servicer to comply with Sections 3.19,
3.20 or 3.31 hereof (including with respect to any Additional Servicer,
Subservicer or Subcontractor engaged by the Servicer) (without any
regard to any cure period).
(b) Then, and in each and every such case, so long as a Servicer
Event of Termination shall not have been remedied within the applicable grace
period, (x) with respect solely to clause (i)(A) above, if such Advance is not
made by 2:00 P.M., New York time, on the Business Day immediately following the
Servicer Remittance Date, the Trustee may terminate all of the rights and
obligations of the Servicer under this Agreement and the Trustee, or a successor
servicer appointed in accordance with Section 7.02, shall immediately make such
Advance and assume, pursuant to Section 7.02, the duties of a successor servicer
and (y) in the case of (i)(B), (ii), (iii), (iv), (v) and (vi) above, the
Trustee shall, at the direction of the NIMS Insurer or Holders of each Class of
Regular Certificates evidencing Percentage Interests aggregating not less than
51%, by notice then given in writing to the Servicer (and to the Trustee if
given by Holders of Certificates), terminate all of the rights and obligations
of the Servicer as servicer under this Agreement. Any such notice to the
Servicer shall also be given to each Rating Agency, the NIMS Insurer and the
Depositor. On or after the receipt by the Servicer (and by the Trustee if such
notice is given by the Holders) of such written notice, all authority and power
of the Servicer under this Agreement, whether with respect to the Certificates
or the Mortgage Loans or otherwise, shall pass to and be vested in the Trustee
pursuant to and under this Section 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
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of each Mortgage Loan and Related
Documents or otherwise. The Servicer agrees to cooperate with the Trustee (or
the applicable successor servicer) in effecting the termination of the
responsibilities and rights of the Servicer hereunder, including, without
limitation, the delivery to the Trustee (or the applicable successor servicer)
of all documents and records requested by it to enable it to assume the
Servicer's functions under this Agreement within ten Business Days subsequent to
such notice, the transfer within one Business Day subsequent to such notice to
the Trustee (or the applicable successor servicer) for the administration by it
of all cash amounts that shall at the time be held by the Servicer and to be
deposited by it in the Collection Account, the Distribution Account or any
Escrow Account or that have been deposited by the Servicer in such accounts or
thereafter received by the Servicer with respect to the Mortgage Loans or any
REO Property received by the Servicer. All reasonable 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 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, and if such predecessor Servicer defaults in its obligation to pay
such costs, such costs shall be paid by the successor Servicer or the Trustee
(in which case the successor Servicer or the Trustee shall be entitled to
reimbursement therefor from the assets of the Trust).
Notwithstanding any termination of the activities of a Servicer
hereunder, the 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 Servicer (and the Trustee, if
notice is sent by the Holders) receives a notice of termination pursuant to
Section 7.01 or 6.04, the Trustee (or such other successor servicer as is
approved in accordance with this Agreement) shall be the successor in all
respects to the Servicer in its capacity as servicer under this Agreement and
the transactions set forth or provided for herein and shall be subject to all
the responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions hereof arising on and after its succession.
As compensation therefor, the Trustee (or such other successor servicer) shall
be entitled to such compensation as the Servicer would have been entitled to
hereunder if no such notice of termination had been given. Notwithstanding the
above, (i) if the Trustee is unwilling to act as successor servicer or (ii) if
the Trustee is legally unable so to act, the Trustee shall appoint or petition a
court of competent jurisdiction to appoint, any established housing and home
finance institution, bank or other mortgage loan or home equity loan servicer
having a net worth of not less than $50,000,000 as the successor to the Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer hereunder; provided, that the appointment of any
such successor servicer will not result in the qualification, reduction or
withdrawal of the ratings assigned to the Certificates or the ratings that are
in effect by the Rating Agencies as evidenced by a letter to such effect from
the Rating Agencies and that, in the case of a successor servicer appointed by
the Trustee, such successor servicer is reasonably acceptable to the NIMS
Insurer. Pending appointment of a successor to the Servicer hereunder, unless
the Trustee is prohibited by law from so acting, the Trustee shall act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the successor shall be entitled to receive compensation out of
payments on Mortgage Loans in an amount equal to the compensation which the
Servicer would otherwise have received pursuant to Section 3.18 (or such other
compensation as the Trustee and such successor shall agree, not to exceed the
Servicing Fee). The successor servicer shall be entitled to withdraw from the
Collection Account all costs and expenses associated with the transfer of the
servicing to the successor servicer, 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 Servicer to pay any deductible under an insurance policy
pursuant to Section 3.11 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 Servicer as
servicer shall during the term of its service as servicer continue to service
and administer the Mortgage Loans for the benefit of Certificateholders, and
maintain in force a policy or policies of insurance covering errors and
omissions in the performance of its obligations as Servicer hereunder and a
Fidelity Bond in respect of its officers, employees and agents to the same
extent as the Servicer is so required pursuant to Section 3.12.
(c) The predecessor Servicer and successor Servicer shall notify
the Depositor and Trustee of any such appointment at least two Business Days
prior to the effective date thereof and shall provide the Depositor and the
Trustee with all information required by the Depositor to comply with its
reporting obligation under Item 6.02 of Form 8-K not later than the effective
date of such appointment.
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, and with the
consent of the NIMS Insurer, waive any events permitting removal of the Servicer
as servicer pursuant to this Article VII, provided, however, that such Holders
may not waive a default in making a required distribution on a Certificate
without the consent of the Holder of such Certificate and the NIMS Insurer. 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 to the
Servicer pursuant to this Article VII or Section 6.04, the Trustee shall give
prompt written notice thereof to the Certificateholders at their respective
addresses appearing in the Certificate Register, the NIMS Insurer 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 the NIMS Insurer and all
Certificateholders notice of such occurrence unless such default or Servicer
Event of Termination shall have been waived or cured. Such notice shall be given
to the Rating Agencies promptly after any such occurrence.
Section 7.05 Survivability of Servicer Liabilities.
Notwithstanding anything herein to the contrary, upon
termination of the Servicer hereunder, any liabilities of the Servicer which
accrued prior to such termination shall survive such termination.
ARTICLE VIII
THE TRUSTEE
Section 8.01 Duties of Trustee.
(a) The Trustee, prior to the occurrence of a Servicer Event of
Termination of which a Responsible Officer of the Trustee shall have actual
knowledge and after the curing of all Servicer Events of Termination which may
have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If a Servicer Event of Termination has
occurred (which has not been cured) of which a Responsible Officer has actual
knowledge, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise,
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement; provided, however, that the
Trustee shall not be responsible for the accuracy or content of any resolution,
certificate, statement, opinion, report, document, order or other instrument
furnished by the Servicer, the Seller, the NIMS Insurer or the Depositor
hereunder. If any such instrument is found not to conform in any material
respect to the requirements of this Agreement, the Trustee 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 NIMS Insurer or the Majority
Certificateholders relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising or
omitting to exercise any trust or power conferred upon the Trustee under
this Agreement; and
(iv) the Trustee shall not be charged with knowledge of any
failure by the Servicer to comply with the obligations of the Servicer
referred to in clauses (i) and (ii) of Section 7.01(a) or any Servicer
Event of Termination unless a Responsible Officer of the Trustee at the
Corporate Trust Office obtains actual knowledge of such failure or the
Trustee receives written notice of such failure from the Servicer, the
NIMS Insurer or the Majority Certificateholders. In the absence of such
receipt of such notice, the Trustee may conclusively assume that there
is no Servicer Event of Termination.
The Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Servicer under this Agreement, except during such
time, if any, as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Servicer in accordance with the
terms of this Agreement.
The Trustee shall not have any duty (A) to see to 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.
(b) Upon its receipt from the Sponsor of the "significance
estimate" of the Interest Rate Swap Agreement provided in accordance with the
Mortgage Loan Purchase Agreement, the Trustee shall, on the basis of each such
"significance estimate," calculate the Interest Rate Swap Agreement's
"significance percentage" of the of the Pool Balance as of the date of such
"significance estimate" in accordance with Item 1115 of Regulation AB. For the
avoidance of doubt, such "significance percentage" shall be a fraction,
expressed as a percentage, the numerator of which is such "significance
estimate" and the denominator of which is the Pool Balance. Further, the Trustee
shall determine as of such date whether such "significance percentage" would
require disclosure of financial information with respect to the Swap Provider in
any report required to be filed with the Commission pursuant to Section 3.31,
and if it does, the Trustee shall make a written request of the Swap Provider
for such information in accordance with the Interest Rate Swap Agreement, not
later than the Business Day following the Business Day on which it receives the
related "significance estimate." Upon its receipt of such information, the
Trustee shall furnish such information to the Depositor and, if such information
is approved by the Depositor, shall include such information in the related
report as provided in Section 3.31. In the event the Trustee does not timely
receive such information it shall promptly notify the Depositor.
With respect to the failure of the Swap Provider to perform any
of its obligations under the Interest Rate Swap Agreement, the breach by the
Swap Provider of any of its representations and warranties made pursuant to the
Interest Rate Swap Agreement, or the termination of the Interest Rate Swap
Agreement, the Trustee shall send any notices and make any demands, on behalf of
the Trust, as are required under the Interest Rate Swap Agreement. The Trustee
shall cause any replacement swap provider to provide a copy of the related
replacement interest rate swap agreement to the Trustee and the Depositor.
Upon the occurrence of a Swap Early Termination (i) to the
extent that the Trustee receives a Swap Termination Payment from the Swap
Provider, if the Trustee acquires a replacement interest rate swap agreement,
the Trustee shall apply all or a portion of such Swap Termination Payment as may
be necessary to acquire a replacement swap provider under the replacement
interest rate swap agreement prior to distribution of such Swap Termination
Payment in accordance with the priorities set forth in this Agreement and (ii)
to the extent that a Swap Termination Payment is owed to the Swap Provider, if
the Trustee acquires a replacement interest rate swap agreement, the Trustee
shall apply all or a portion of the amount received from any replacement swap
provider under a replacement interest rate swap agreement to pay the Swap
Termination Payment owed to the Swap Provider.
(c) Subject to the conditions set forth in this Section 8.01(c),
the Trustee is permitted to utilize one or more Subcontractors to perform
certain of its obligations hereunder. The Trustee shall promptly upon request
provide to the Depositor a written description (in form and substance
satisfactory to the Depositor) of the role and function of each Subcontractor
utilized by the Trustee, specifying (i) the identity of each such Subcontractor
that is a Servicing Function Participant and (ii) which elements of the
Servicing Criteria will be addressed in Assessments of Compliance provided by
each Servicing Function Participant. As a condition to the utilization by the
Trustee of any Servicing Function Participant, the Trustee shall cause any such
Servicing Function Participant for the benefit of the Depositor to comply with
the provisions of Sections 3.20 and 3.31 of this Agreement to the same extent as
if such Servicing Function Participant were the Trustee. The Trustee shall be
responsible for obtaining from each such Servicing Function Participant and
delivering to the applicable Persons any Assessment of Compliance and related
Attestation Report required to be delivered by such Servicing Function
Participant under Section 3.31, in each case as and when required to be
delivered.
Notwithstanding the foregoing, if the Trustee engages a
Subcontractor in connection with the performance of any of its duties under this
Agreement, the Trustee shall be responsible for determining whether such
Subcontractor is an Additional Servicer.
The Trustee shall indemnify the Depositor and the Sponsor and
any of their directors, officers, employees or agents and hold them harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and any other
costs, fees and expenses that any of them may sustain in any way related to a
breach of the Trustee's obligation set forth in Section 8.01(b) or 8.01(c).
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 or
the NIMS Insurer pursuant to the provisions of this Agreement, unless
such Certificateholders or the NIMS Insurer 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 or the NIMS Insurer;
provided, however, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded
to it by the terms of this Agreement, the Trustee may require reasonable
indemnity against such cost, expense or liability as a condition to such
proceeding. The reasonable expense of every such examination shall be
paid by the Servicer or, if paid by the Trustee, shall be reimbursed by
the Servicer upon demand. Nothing in this clause (v) shall derogate from
the obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors;
(vi) the Trustee shall not be accountable, have any liability or
make any representation as to any acts or omissions hereunder of the
Servicer until such time as the Trustee may be required to act as
Servicer pursuant to Section 7.02;
(vii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such
agent, attorney or custodian appointed by it with due care; and
(viii) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act.
Section 8.03 Trustee Not Liable for Certificates or Mortgage
Loans.
The recitals contained herein and in the Certificates (other
than the authentication of the Trustee on the Certificates) shall be taken as
the statements of the Depositor, 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 Servicer, or for the use or application of any funds
paid to the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Servicer. The Trustee shall not at
any time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any Mortgage or any Mortgage Loan, or
the perfection and priority of any Mortgage or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the Trust
or its ability to generate the payments to be distributed to Certificateholders
under this Agreement, including, without limitation: the existence, condition
and ownership of any Mortgaged Property; the existence and enforceability of any
hazard insurance thereon (other than if the Trustee shall assume the duties of
the Servicer pursuant to Section 7.02); the validity of the assignment of any
Mortgage Loan to the Trustee or of any intervening assignment; the completeness
of any Mortgage Loan; the performance or enforcement of any Mortgage Loan (other
than if the Trustee shall assume the duties of the Servicer pursuant to Section
7.02); the compliance by the Depositor or the Servicer with any warranty or
representation made under this Agreement or in any related document or the
accuracy of any such warranty or representation prior to the Trustee's receipt
of notice or other discovery of any non-compliance therewith or any breach
thereof; any investment of monies by or at the direction of the Servicer or any
loss resulting therefrom, it being understood that the Trustee shall remain
responsible for any Trust property that it may hold in its individual capacity;
the acts or omissions of any of the Servicer (other than if the Trustee shall
assume the duties of the Servicer pursuant to Section 7.02), or any Mortgagor;
any action of the Servicer (other than if the Trustee shall assume the duties of
the Servicer pursuant to Section 7.02), taken in the name of the Trustee; the
failure of the Servicer to act or perform any duties required of it as agent of
the Trustee hereunder; or any action by the Trustee taken at the instruction of
the Servicer (other than if the Trustee shall assume the duties of the Servicer
pursuant to Section 7.02); provided, however, that the foregoing shall not
relieve the Trustee of its obligation to perform its duties under this
Agreement. The Trustee shall not have any responsibility for filing any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder.
Section 8.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates with the same rights as it would have if it
were not Trustee and may transact any banking and trust business with the
Servicer, the Depositor or their Affiliates.
Section 8.05 Trustee Compensation and Expenses.
The Trustee shall be entitled to investment income from amounts
on deposit in the Distribution Account as compensation for its services
hereunder. 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 "Baa1" or better by ▇▇▇▇▇'▇ and subject to supervision or
examination by federal or state authority. If such entity publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 8.06, the combined capital and surplus of such entity shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. The principal office of the Trustee (other than the
initial Trustee) shall be in a state with respect to which an Opinion of Counsel
has been delivered to such Trustee at the time such Trustee is appointed Trustee
to the effect that the Trust will not be a taxable entity under the laws of such
state. In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 8.06, the Trustee shall resign immediately
in the manner and with the effect specified in Section 8.07.
Section 8.07 Resignation or Removal of Trustee.
The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the Depositor, the
Servicer, the NIMS Insurer and each Rating Agency. Upon receiving such notice of
resignation, the Depositor shall promptly appoint a successor Trustee reasonably
acceptable to the NIMS Insurer 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 the NIMS Insurer, 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 or the NIMS Insurer may remove the Trustee. If
the Depositor or the NIMS Insurer removes the Trustee under the authority of the
immediately preceding sentence, the Depositor or the NIMS Insurer, as the case
may be, shall promptly appoint a successor Trustee (reasonably acceptable to the
NIMS Insurer if appointed by the Depositor) 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.
In addition, if (a) the Trustee fails to comply with its
obligations to deliver any Assessment of Compliance or Attestation Reports
required pursuant to Section 3.20 or (b) any Servicing Function Participant
engaged by the Trustee fails to comply with its obligations to deliver any
Assessment of Compliance or Attestation Reports, the Depositor may remove the
Trustee and 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 or the NIMS Insurer may at any
time remove the Trustee by written instrument or instruments delivered to the
Servicer, the Depositor, the NIMS Insurer and the Trustee; the Depositor shall
thereupon use its best efforts to appoint a successor Trustee reasonably
acceptable to the NIMS Insurer 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 NIMS Insurer, the
Rating Agencies, the Servicer and to its predecessor Trustee an instrument
accepting such appointment hereunder, and thereupon the resignation or removal
of the predecessor Trustee shall become effective, and such successor Trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
like effect as if originally named as Trustee. The Depositor, the Servicer and
the predecessor Trustee shall execute and deliver such instruments and do such
other things as may reasonably be required for fully and certainly vesting and
confirming in the successor Trustee all such rights, powers, duties and
obligations.
No successor Trustee shall accept appointment as provided in
this Section 8.08 unless at the time of such acceptance such successor Trustee
shall be eligible under the provisions of Section 8.06 and the appointment of
such successor Trustee shall not result in a downgrading of the Regular
Certificates by either Rating Agency, as evidenced by a letter from each Rating
Agency.
Upon acceptance of appointment by a successor Trustee as
provided in this Section 8.08, the successor Trustee shall mail notice of the
appointment of a successor Trustee hereunder to all Holders of Certificates at
their addresses as shown in the Certificate Register and to each Rating Agency.
The predecessor Trustee and successor Trustee shall notify the
Depositor of any such appointment at least two Business Days prior to the
effective date thereof and shall provide the Depositor with all information
required by the Depositor to comply with its reporting obligation under Item
6.02 of Form 8-K not later than the effective date of such appointment.
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; provided, however, that the Trustee and such surviving
Person shall notify the Depositor of any such merger, conversion or
consolidation and shall provide the Depositor with all information required by
the Depositor to comply with its reporting obligation under Item 6.02 of Form
8-K not later than the effective date of such merger, conversion or
consolidation.
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 and the NIMS Insurer to act as co-trustee or
co-trustees, jointly with the Trustee, or separate trustee or separate trustees,
of all or any part of the Trust, and to vest in such Person or Persons, in such
capacity and for the benefit of the Certificateholders, such title to the Trust,
or any part thereof, and, subject to the other provisions of this Section 8.10,
such powers, duties, obligations, rights and trusts as the Servicer and the
Trustee may consider necessary or desirable. Any such co-trustee or separate
trustee shall be subject to the written approval of the Servicer and the NIMS
Insurer. If the Servicer and the NIMS Insurer shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, or in
the case a 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 Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Servicer and the Trustee, acting jointly may at any
time accept the resignation of or remove any separate trustee or
co-trustee except that following the occurrence of a Servicer Event of
Termination, the Trustee acting alone may accept the resignation or
remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Depositor, the NIMS Insurer, the Rating Agencies and
the Servicer.
Any separate trustee or co-trustee may, at any time, constitute
the Trustee, its agent or attorney-in-fact, with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
Section 8.11 Limitation of Liability.
The Certificates are executed by the Trustee, not in its
individual capacity but solely as Trustee of the Trust, in the exercise of the
powers and authority conferred and vested in it by this Agreement. Each of the
undertakings and agreements made on the part of the Trustee in the Certificates
is made and intended not as a personal undertaking or agreement by the Trustee
but is made and intended for the purpose of binding only the Trust.
Section 8.12 Trustee May Enforce Claims Without Possession of
Certificates.
(a) All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee for the benefit of all
Holders of such Certificates, subject to the provisions of this Agreement. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursement and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Certificateholders in respect of
which such judgment has been recovered.
(b) The Trustee shall afford the Depositor, the Servicer, the
NIMS Insurer 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 Servicer, the
NIMS Insurer, the Depositor and such Certificateholder and shall make available
to the Servicer, the NIMS Insurer, the Depositor and such Certificateholder for
review and copying at the expense of the party requesting such copies, such
books, documents or records as may be requested with respect to the Trustee's
duties hereunder. The Depositor, the Servicer, the NIMS Insurer and the
Certificateholders shall not have any responsibility or liability for any action
or failure to act by the Trustee and are not obligated to supervise the
performance of the Trustee under this Agreement or otherwise.
Section 8.13 Suits for Enforcement.
In case a Servicer Event of Termination or other default by the
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 (i) make or cause to be made REMIC
elections for each of REMIC 1, REMIC 2, REMIC 3, REMIC 4 and REMIC 5 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, and (ii) file Form 8811, or
other applicable form, within 30 days of the Closing Date (or such other period
as may be allowed by applicable law), indicating the name, title, address and
telephone number of the Person who will serve as the representative of REMIC 4
and REMIC 5. 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 other than those expenses described in
clause (i) or (ii) above from the Trust.
(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 each of REMIC 1, REMIC 2, REMIC 3 and REMIC 4. The Holder of the
Class R-X Certificate shall be the Tax Matters Person with respect to REMIC 5.
The Trustee is irrevocably designated as and shall act as attorney-in-fact and
agent for each such Tax Matters Person. The Trustee, as agent for each such 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 each such Tax Matters Person, shall provide (i) to the
Treasury or other governmental authority such information as is necessary for
the application of any tax relating to the transfer of a Residual Certificate to
any disqualified person or organization and (ii) to the Certificateholders such
information or reports as are required by the Code or REMIC Provisions.
(f) The Trustee, the Servicer, and the Holders of Certificates
shall take any action or cause any REMIC 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 Servicer or the Holder of a
Residual 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, the NIMS Insurer and the
Servicer have received an Opinion of Counsel (at the expense of the party
seeking to take such action) to the effect that the contemplated action will not
endanger such status or result in the imposition of such a tax. In addition,
prior to taking any action with respect to any REMIC 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 a Residual
Certificate will consult with the Trustee, the NIMS Insurer and the Servicer, or
their respective designees, in writing, with respect to whether such action
could cause an Adverse REMIC Event to occur with respect to such REMIC, and no
such Person shall take any such action or cause such REMIC to take any such
action as to which the Trustee, the NIMS Insurer or the Servicer has advised it
in writing that an Adverse REMIC Event could occur.
(g) The Holder of a Residual 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 a Residual
Certificateholder, the Trustee shall pay any remaining REMIC taxes out of future
amounts otherwise distributable to the Holder of a Residual 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 Servicer shall enter into any
arrangement by which any REMIC will receive a fee or other compensation for
services.
(k) On or before April 15 of each calendar year, beginning in
2006, the Trustee shall deliver to each Rating Agency and the NIMS Insurer an
Officer's Certificate stating the Trustee's compliance with the provisions of
this Section 9.01.
Section 9.02 Prohibited Transactions and Activities.
None of the Depositor, the 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, or (v)
a repurchase of Mortgage Loans pursuant to Article II of this Agreement, nor
acquire any assets for any REMIC constituting part of the Trust Fund, nor sell
or dispose of any investments in the Distribution Account for gain, nor accept
any contributions to any REMIC constituting part of the Trust Fund after the
Closing Date, unless such party and the NIMS Insurer has received an Opinion of
Counsel (at the expense of the party causing such sale, disposition, or
substitution) that such disposition, acquisition, substitution, or acceptance
will not (a) affect adversely the status of such REMIC as a REMIC or of the
interests therein other than a Residual 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 Servicer of its duties and
obligations set forth herein, the Servicer shall indemnify the Holder of a
Residual Certificate against any and all losses, claims, damages, liabilities or
expenses ("Losses") resulting from such negligence; provided, however, that the
Servicer shall not be liable for any such Losses attributable to the action or
inaction of the Trustee, the Depositor or the Holder of a Residual Certificate,
as applicable, nor for any such Losses resulting from misinformation provided by
the Holder of a Residual Certificate on which the Servicer has relied. The
foregoing shall not be deemed to limit or restrict the rights and remedies of
the Holder of a Residual Certificate now or hereafter existing at law or in
equity. Notwithstanding the foregoing, however, in no event shall the Servicer
have any liability (1) for any action or omission that is taken in accordance
with and in compliance with the express terms of, or which is expressly
permitted by the terms of, this Agreement, (2) for any Losses other than arising
out of a negligent performance by the Servicer of its duties and obligations set
forth herein, and (3) for any special or consequential damages to
Certificateholders (in addition to payment of principal and interest on the
Certificates).
Section 9.04 REO Property.
(a) Subject to compliance with applicable laws and regulations
as shall at any time be in force, and notwithstanding any other provision of
this Agreement, the Servicer, acting on behalf of the Trust hereunder, shall not
rent, lease, or otherwise earn income on behalf of any REMIC 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 Servicer has advised, or has caused the applicable Servicer to advise, the
Trustee in writing to the effect that, under the REMIC Provisions, such action
would not adversely affect the status of any REMIC as a REMIC and any income
generated for such REMIC by the REO Property would not result in the imposition
of a tax upon such REMIC.
(b) The Servicer shall make reasonable efforts to sell any REO
Property for its fair market value. In any event, however, the Servicer shall
dispose of any REO Property before the close of the third calendar year
beginning after the year of its acquisition by the Trust Fund unless the
Servicer has received a grant of extension from the Internal Revenue Service to
the effect that, under the REMIC Provisions and any relevant proposed
legislation and under applicable state law, any REMIC constituting part of the
Trust Fund may hold REO Property for a longer period without adversely affecting
its REMIC status or causing the imposition of a Federal or state tax upon any
REMIC constituting part of the Trust Fund. If the Servicer has received such an
extension, then the Servicer shall continue to attempt to sell the REO Property
for its fair market value as determined in good faith by the Servicer for such
longer period as such extension permits (the "Extended Period"). If the Servicer
has not received such an extension and the Servicer is unable to sell the REO
Property within 33 months after its acquisition by the Trust Fund or if the
Servicer has received such an extension, and the Servicer is unable to sell the
REO Property within the period ending three months before the close of the
Extended Period, the Servicer shall, before the end of the applicable period,
(i) purchase such REO Property at a price equal to the REO Property's fair
market value as determined in good faith by the Servicer or (ii) auction the REO
Property to the highest bidder (which may be the Servicer) in an auction
reasonably designed to produce a fair price prior to the expiration of the
applicable period.
Section 9.05 Grantor Trust Administration.
The parties intend that the portions of the Trust Fund
consisting of (i) the right of the Class P Certificates to receive Prepayment
Charges, Originator Prepayment Charge Payment Amounts and Servicer Prepayment
Charge Payment Amounts, (ii) the right of the Offered Certificates and the Class
B Certificates to receive Cap Carryover Amounts and (iii) the Interest Rate Swap
Agreement, the Swap Account and the beneficial interest of the Class CE
Certificates with respect thereto 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 (x) to the Holders of the Offered Certificates and the
Class B Certificates, (y) to the Holders of the Class P Certificates and (z) 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
Servicer, the Depositor, the Trustee and the Certificate Registrar created
hereby (other than the obligation of the Trustee to make certain payments to
Certificateholders after the final Distribution Date and the obligation of the
Servicer to send certain notices as hereinafter set forth) shall terminate upon
notice to the Trustee upon the earliest of (i) the Distribution Date on which
the Certificate Principal Balance of each Class of Certificates has been reduced
to zero, (ii) the final payment or other liquidation of the last Mortgage Loan
in the Trust, and (iii) the optional purchase by the NIMS Insurer, if there is a
NIMS Insurer, or if there is no NIMS Insurer, the Majority Class CE
Certificateholders (or if such holder is the Seller, or an affiliate of the
Seller, the Servicer of the Mortgage Loans) as described below. Notwithstanding
the foregoing, in no event shall the trust created hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the United States to the Court of St.
▇▇▇▇▇, living on the date hereof.
The NIMS Insurer, if there is a NIMS Insurer, or if there is no
NIMS Insurer, the Majority Class CE Certificateholders (and, if such holder is
the Seller or an affiliate of the Seller, the Servicer of the Mortgage Loans)
may, at its option, terminate the Trust Fund and retire the Certificates on the
Distribution Date following the Distribution Date upon which the aggregate
current Pool Balance is less than 10% of the sum of the aggregate Pool Balance
of the Initial Mortgage Loans as of the Cut-off Date and the Original Group 3
Pre-Funded Amount by purchasing all of the outstanding Mortgage Loans and REO
Properties in the Trust Fund at a price equal to (i) the sum of the outstanding
Principal Balance of the Mortgage Loans and except to the extent previously
advanced by the Servicer, accrued and unpaid interest thereon at the weighted
average of the Mortgage Interest Rates through the end of the Collection Period
preceding the final Distribution Date plus unreimbursed Servicing Advances,
Advances and any unpaid Servicing Fees allocable to such Mortgage Loans, (ii)
the fair market value of the REO Properties as determined in good faith by the
Servicer and (iii) any Swap Termination Payment owed to the Swap Provider not
due to a Swap Provider Trigger Event pursuant to the Interest Rate Swap
Agreement (the "Termination Price"). If the NIMS Insurer or the Majority Class
CE Certificateholders (or, if the Majority Class CE Certificateholder is the
Seller or an affiliate of the Seller, the Servicer) is subject to regulation by
the OCC, the FDIC, the Federal Reserve or the Office of Thrift Supervision,
however, the option may not be exercised unless the aggregate fair market value
of the Mortgage Loans and REO Properties is greater than or equal to the
Termination Price. Notwithstanding the foregoing, no party may exercise this
optional purchase right unless any Reimbursement Amount owed to the Trust
pursuant to Section 2.03 hereof has been paid.
In connection with any such purchase pursuant to the preceding
paragraph, the Servicer shall deliver to the Trustee for deposit in the
Distribution Account all amounts then on deposit in the Collection Account (less
amounts permitted to be withdrawn by the Servicer pursuant to Section 3.07),
which deposit shall be deemed to have occurred immediately following such
purchase.
Any such purchase shall be accomplished by delivery 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 NIMS
Insurer, the Majority Class CE Certificateholders or the 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. Not
less than five (5) Business Days prior to such Determination Date relating to
such Distribution Date, the Trustee shall notify the Originators and the Seller
of the amount of any unpaid Reimbursement Amount owed to the Trust.
(c) Upon presentation and surrender of the Certificates, the
Trustee shall cause to be distributed to the Holders of the Certificates on the
Distribution Date for such final distribution, in proportion to the Percentage
Interests of their respective Class and to the extent that funds are available
for such purpose, an amount equal to the amount required to be distributed to
such Holders in accordance with the provisions of Sections 4.01 and 4.02 for
such Distribution Date.
(d) In the event that all Certificateholders shall not surrender
their Certificates for final payment and cancellation on or before such final
Distribution Date, the Trustee shall promptly following such date cause all
funds in the Distribution Account not distributed in final distribution to
Certificateholders to be withdrawn therefrom and credited to the remaining
Certificateholders by depositing such funds in a separate escrow account for the
benefit of such Certificateholders, and the Servicer 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, a Residual Certificateholder shall be entitled to
all unclaimed funds and other assets which remain subject hereto (except with
respect to the Class CE and Class P Certificates) and the Trustee upon transfer
of such funds shall be discharged of any responsibility for such funds, and all
other Certificateholders shall look to a Residual Certificateholder for payment.
Section 10.02 Additional Termination Requirements.
(a) In the event that the NIMS Insurer, the Majority Class CE
Certificateholders or the Servicer, as applicable, exercise 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 (other than
the Class P Certificates) are outstanding:
(i) The Trustee shall designate a date within 90 days prior to
the final Distribution Date as the date of adoption of plans of complete
liquidation of each of REMIC 1, REMIC 2, REMIC 3, REMIC 4 and REMIC 5
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 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 order of priority set forth in Section
4.02 and then to the Holders of the Class R Certificates, all cash on
hand in respect of the REMIC 1, REMIC 2, REMIC 3 and REMIC 4, or to the
Holders of the Class R-X Certificates, all cash on hand in respect of
the REMIC 5, 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 Servicer and the Trustee; with the consent of the NIMS Insurer
and without the consent of the Certificateholders, (i) to cure any ambiguity or
mistake, (ii) to correct, modify or supplement any provision herein which may be
inconsistent with any other provision herein or the Prospectus Supplement, (iii)
to make any other provisions with respect to matters or questions arising under
this Agreement, which shall not be inconsistent with the provisions of this
Agreement, (iv) to comply with any requirements imposed by the Code, (v) to
conform the obligations of the parties under this Agreement, or to add
obligations of the parties to this Agreement, if necessary, to comply with the
requirements of Regulation AB or (vi) to provide for the rights of the NIMS
Insurer; provided, however, that any such action listed in clause (iii) above
shall not adversely affect in any respect the interests of any
Certificateholder, as evidenced by (i) notice in writing to the Depositor, the
Servicer and the Trustee from the Rating Agencies that such action will not
result in the reduction or withdrawal of the rating of any outstanding Class of
Certificates with respect to which it is a Rating Agency, or (ii) an Opinion of
Counsel delivered to the Servicer and the Trustee.
In addition, this Agreement may be amended from time to time by
the Depositor, the Servicer and the Trustee, with the consent of the NIMS
Insurer and the Majority Certificateholders for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Swap Provider or
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 or the Swap
Provider 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 66 2/3%
of the Voting Rights evidenced by 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,
neither the Trustee nor the NIMS Insurer shall consent to any amendment to this
Agreement unless it shall have first received an Opinion of Counsel, delivered
by (and at the expense of) the Person seeking such Amendment, to the effect that
such amendment will not result in the imposition of a tax on any REMIC
constituting part of the Trust Fund pursuant to the REMIC Provisions or cause
any REMIC constituting part of the Trust Fund to fail to qualify as a REMIC at
any time that any Certificates (other than the Class P Certificates) are
outstanding and that the amendment is being made in accordance with the terms
hereof.
Notwithstanding any of the other provisions of this Section
11.01, none of the Depositor, the Servicer or the Trustee shall enter into any
amendment to Sections 4.01, 4.02 or 4.09 of this Agreement without the prior
written consent of the Swap Provider.
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 Servicer (but in no event at the expense of the Trustee),
otherwise at the expense of the Trust, a copy of such amendment and the Opinion
of Counsel referred to in the immediately preceding paragraph to the Servicer
and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 11.01 to approve the particular form of any proposed
amendment; instead it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Section 11.02 Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Servicer at the expense of the Trust, but only upon direction of
Certificateholders, accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
together constitute but one and the same instrument.
Section 11.03 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not (i)
operate to terminate this Agreement or the Trust, (ii) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust, or (iii) otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
Except as expressly provided for herein, no Certificateholder
shall have any right to vote or in any manner otherwise control the operation
and management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as herein provided, and unless also the Holders
of Certificates having not less than 51% 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, ▇▇▇▇▇ Fargo Bank, N.A., ▇.▇. ▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Services - ABFC 2006-OPT1
with a copy to: (i) ▇▇▇▇▇ Fargo Bank, N.A., ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Services - ABFC 2006-OPT1 and (ii)
▇▇▇▇▇ Fargo Bank, N.A., ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Services - ABFC 2006-OPT1, or such
other address as may hereafter be furnished to the Depositor, the NIMS Insurer
and the Servicer in writing by the Trustee, (b) in the case of the Depositor,
Asset Backed Funding Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ABFC Asset-Backed Certificates, Series
2006-OPT1, or such other address as may be furnished to the Servicer, the NIMS
Insurer and the Trustee in writing by the Depositor, (c) in the case of the
Servicer, Option One Mortgage Corporation, 3 Ada, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇, or such other address as
may be hereafter furnished to the Depositor, the NIMS Insurer and the Trustee by
the Servicer in writing and (d) in the case of the NIMS Insurer, such address
furnished to the Depositor, the Servicer and the Trustee in writing by the NIMS
Insurer. Any notice required or permitted to be mailed to a Certificateholder
shall be given by first class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Notice of any Servicer Event of
Termination shall be given by telecopy and by certified mail. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have duly been given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder shall also be mailed to the appropriate party in the manner
set forth above.
Section 11.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall for any reason whatsoever be held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.07 Article and Section References.
All article and section references used in this Agreement,
unless otherwise provided, are to articles and sections in this Agreement.
Section 11.08 Notice to the Rating Agencies and the NIMS
Insurer.
(a) Each of the Trustee and the Servicer shall be obligated to
use its best reasonable efforts promptly to provide notice to the Rating
Agencies and the NIMS Insurer with respect to each of the following of which a
Responsible Officer of the Trustee or the Servicer, as the case may be, has
actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Servicer Event of Termination that
has not been cured or waived;
(iii) the resignation or termination of the Servicer or the
Trustee;
(iv) the final payment to Holders of the Certificates of any
Class;
(v) any change in the location of any Account; and
(vi) if the Trustee is acting as successor servicer pursuant to
Section 7.02 hereof, any event that would result in the inability of the
Trustee to make Advances.
(vii) In addition, the Servicer shall promptly furnish to each
Rating Agency copies of the following:
(A) each annual statement as to compliance described in
Section 3.19 hereof;
(B) each annual independent public accountants'
servicing report described in Section 3.20 hereof; and
(C) each notice delivered pursuant to Section 7.01(a)
hereof which relates to the fact that the Servicer has not made
an Advance.
Any such notice pursuant to this Section 11.08 shall be in
writing and shall be deemed to have been duly given if personally delivered or
mailed by first class mail, postage prepaid, or by express delivery service to:
Fitch Ratings, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Managing Director, Residential Mortgage-Backed Securities; ▇▇▇▇▇'▇ Investors
Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Managing
Director, Residential Mortgage-Backed Securities; and Standard & Poor's, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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 Third Party Beneficiary.
Nothing in this Agreement or in the Certificates, expressed or
implied, shall give to any Person, other than the Certificateholders, the
parties hereto and the NIMS Insurer and their successors hereunder, any benefit
or any legal or equitable right, remedy or claim under this Agreement.
The NIMS Insurer shall be deemed a third-party beneficiary of
this Agreement to the same extent as if it were a party hereto, and shall have
the right to enforce the provisions of this Agreement directly against the
parties to this Agreement.
The Swap Provider shall be deemed an express third-party
beneficiary of this Agreement to the same extent as if it were a party hereto,
and shall have the right to enforce the provisions of this Agreement directly
against the parties to this Agreement.
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 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 Insolvency.
The Servicer, Depositor and Trustee shall each notify the
Depositor and the Trustee of any of the events enumerated in Item 1.03 of Form
8-K with respect to any of the Servicer, Depositor or Trustee at least two
Business Days prior to the effective date thereof and shall provide the
Depositor and the Trustee with all information required by the Depositor to
comply with its reporting obligation under Item 1.03 of Form 8-K not later than
the effective date of any such event.
Section 11.13 Regulation AB Compliance; Intent of Parties;
Reasonableness.
The parties hereto acknowledge that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise, and
agree to comply with requests made by the Depositor and the Trustee in good
faith for delivery of information under these provisions on the basis of
evolving interpretations of Regulation AB. In connection with the Trust, the
Servicer and the Trustee shall cooperate fully with the Depositor to deliver to
the Depositor and the Trustee (including its assignees or designees), any and
all statements, reports, certifications, records and any other information
available to such party and reasonably necessary in the good faith determination
of the Depositor and the Trustee to permit the Depositor to comply with the
provisions of Regulation AB, together with such disclosures relating to the
Servicer and the Trustee, as applicable, reasonably believed by the Depositor to
be necessary in order to effect such compliance.
IN WITNESS WHEREOF, the Depositor, the Servicer and the Trustee
have caused their names to be signed hereto by their respective officers
thereunto duly authorized, all as of the day and year first above written.
ASSET BACKED FUNDING
CORPORATION, as Depositor
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇
Title: Vice President
OPTION ONE MORTGAGE CORPORATION,
as Servicer
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
STATE OF )
) ss.:
COUNTY OF )
On the 10th day of August, 2006 before me, a notary public in
and for said State, personally appeared _______________ known to me to be a Vice
President of Asset Backed Funding Corporation, a Delaware corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
STATE OF MARYLAND )
) ss.:
COUNTY OF )
On the 10th day of August, 2006 before me, a notary public in
and for said State, personally appeared __________, known to me to be a Vice
President of ▇▇▇▇▇ Fargo Bank, N.A., a national banking association that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said association, and acknowledged to me that such
association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
STATE OF CALIFORNIA )
) ss.:
COUNTY OF )
On the 10th day of August, 2006 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 2006-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 and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2006-OPT1, Class A-1 Original Class Certificate Principal
Balance of the Class A-1 Certificates
Certificate Interest Rate: Floating as of the Closing Date: $167,027,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: July 1, 2006 $[__]
First Distribution Date: August 25, 2006 Servicer: Option One Mortgage
Corporation
No.
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
CUSIP: 00075Q AQ 5
Closing Date: August 10, 2006
ISIN: US00075QAQ55
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER ENTITY.
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
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 Certificate Interest Rate for the Class A-1 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class A-1 Certificate Margin, (ii) the
Group 1 Maximum Rate Cap and (iii) the Group 1 Cap. Interest will accrue on the
Class A-1 Certificates during each Interest Accrual Period at the Certificate
Interest Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class A-1 Certificates.
The Class A-1 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer and the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
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:
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
▇▇▇▇▇ FARGO BANK, N.A., as Certificate
Registrar
By:
--------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as -------------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT A-2
[FORM OF THE CLASS A-2 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
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 2006-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 and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2006-OPT1, Class A-2 Original Class Certificate Principal
Balance of the Class A-2 Certificates
Certificate Interest Rate: Floating as of the Closing Date: $166,946,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: July 1, 2006 $[__]
First Distribution Date: August 25, 2006 Servicer: Option One Mortgage
Corporation
No.
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
CUSIP: 00075Q AR 3
Closing Date: August 10, 2006
ISIN: US00075QAR39
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER ENTITY.
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
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 Certificate Interest Rate for the Class A-2 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class A-2 Certificate Margin, (ii) the
Group 2 Maximum Rate Cap and (iii) the Group 2 Cap. Interest will accrue on the
Class A-2 Certificates during each Interest Accrual Period at the Certificate
Interest Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class A-2 Certificates.
The Class A-2 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer and the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
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:
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
▇▇▇▇▇ FARGO BANK, N.A., as Certificate
Registrar
By:
--------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as -------------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT A-3A
[FORM OF THE CLASS A-3A 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 2006-OPT1, CLASS A-3A
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2006-OPT1, Class A-3A Original Class Certificate Principal
Balance of the Class A-3A Certificates
Certificate Interest Rate: Floating as of the Closing Date: $244,701,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: July 1, 2006 $[__]
First Distribution Date: August 25, 2006 Servicer: Option One Mortgage
Corporation
No.
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
CUSIP: 00075Q AA 0
Closing Date: August 10, 2006
ISIN: US00075QAA04
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class A-3A Certificates) in that certain beneficial ownership interest
evidenced by all the Class A-3A 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
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-3A Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class A-3A 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-3A
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 Certificate Interest Rate for the Class A-3A Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class A-3A Certificate Margin, (ii)
the Group 3 Maximum Rate Cap and (iii) the Group 3 Cap. Interest will accrue on
the Class A-3A Certificates during each Interest Accrual Period at the
Certificate Interest Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class A-3A Certificates.
The Class A-3A Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer and the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
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:
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
▇▇▇▇▇ FARGO BANK, N.A., as Certificate
Registrar
By:
--------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as -------------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT A-3B
[FORM OF THE CLASS A-3B 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 2006-OPT1, CLASS A-3B
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2006-OPT1, Class A-3B Original Class Certificate Principal
Balance of the Class A-3B Certificates
Certificate Interest Rate: Floating as of the Closing Date: $79,718,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: July 1, 2006 $[__]
First Distribution Date: August 25, 2006 Servicer: Option One Mortgage
Corporation
No.
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
Closing Date: August 10, 2006
CUSIP: 00075Q AB 8
ISIN: US00075QAB86
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER ENTITY.
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-3B Certificates) in that certain beneficial ownership interest
evidenced by all the Class A-3B 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
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-3B Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class A-3B 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-3B
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 Certificate Interest Rate for the Class A-3B Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class A-3B Certificate Margin, (ii)
the Group 3 Maximum Rate Cap and (iii) the Group 3 Cap. Interest will accrue on
the Class A-3B Certificates during each Interest Accrual Period at the
Certificate Interest Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class A-3B Certificates.
The Class A-3B Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer and the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
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:
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
▇▇▇▇▇ FARGO BANK, N.A., as Certificate
Registrar
By:
--------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as -------------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT A-3C1
[FORM OF THE CLASS A-3C1 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 2006-OPT1, CLASS A-3C1
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2006-OPT1, Class A-3C1 Original Class Certificate Principal
Balance of the Class A-3C1
Certificate Interest Rate: Floating Certificates as of the Closing Date:
$75,000,000.00
Date of Pooling and Servicing Agreement
and Cut-off Date: July 1, 2006 Initial Certificate Principal Balance:
$[__]
First Distribution Date: August 25, 2006
Servicer: Option One Mortgage
No. Corporation
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
CUSIP: 00075Q AS 1 Closing Date: August 10, 2006
ISIN: US00075QAS12
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class A-3C1 Certificates) in that certain beneficial ownership interest
evidenced by all the Class A-3C1 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
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-3C1 Certificates on such Distribution Date pursuant to the Agreement;
provided, however, that if any Class A-3C1 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-3C1
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 Certificate Interest Rate for the Class A-3C1 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class A-3C1 Certificate Margin, (ii)
the Group 3 Maximum Rate Cap and (iii) the Group 3 Cap. Interest will accrue on
the Class A-3C1 Certificates during each Interest Accrual Period at the
Certificate Interest Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class A-3C1 Certificates.
The Class A-3C1 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer and the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
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:
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
▇▇▇▇▇ FARGO BANK, N.A., as Certificate
Registrar
By:
--------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as -------------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT A-3C2
[FORM OF THE CLASS A-3C2 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 2006-OPT1, CLASS A-3C2
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2006-OPT1, Class A-3C2 Original Class Certificate Principal
Balance of the Class A-3C2
Certificate Interest Rate: Floating Certificates as of the Closing Date:
$33,495,000.00
Date of Pooling and Servicing Agreement
and Cut-off Date: July 1, 2006 Initial Certificate Principal Balance:
$[__]
First Distribution Date: August 25, 2006
Servicer: Option One Mortgage
No. Corporation
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
CUSIP: 00075Q AC 6 Closing Date: August 10, 2006
ISIN: US00075QAC69
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class A-3C2 Certificates) in that certain beneficial ownership interest
evidenced by all the Class A-3C2 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
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-3C2 Certificates on such Distribution Date pursuant to the Agreement;
provided, however, that if any Class A-3C2 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-3C2
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 Certificate Interest Rate for the Class A-3C2 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class A-3C2 Certificate Margin, (ii)
the Group 3 Maximum Rate Cap and (iii) the Group 3 Cap. Interest will accrue on
the Class A-3C2 Certificates during each Interest Accrual Period at the
Certificate Interest Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class A-3C2 Certificates.
The Class A-3C2 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer and the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
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:
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
▇▇▇▇▇ FARGO BANK, N.A., as Certificate
Registrar
By:
--------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as -------------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT A-3D
[FORM OF THE CLASS A-3D 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 2006-OPT1, CLASS A-3D
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2006-OPT1, Class A-3D Original Class Certificate Principal
Balance of the Class A-3D Certificates
Certificate Interest Rate: Floating as of the Closing Date: $18,763,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: July 1, 2006 $[__]
First Distribution Date: August 25, 2006 Servicer: Option One Mortgage
Corporation
No.
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
Closing Date: August 10, 2006
CUSIP: 00075Q AD 4
ISIN: US00075QAD43
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class A-3D Certificates) in that certain beneficial ownership interest
evidenced by all the Class A-3D 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
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-3D Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class A-3D 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-3D
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 Certificate Interest Rate for the Class A-3D Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class A-3D Certificate Margin, (ii)
the Group 3 Maximum Rate Cap and (iii) the Group 3 Cap. Interest will accrue on
the Class A-3D Certificates during each Interest Accrual Period at the
Certificate Interest Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class A-3D Certificates.
The Class A-3D Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer and the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
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:
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
▇▇▇▇▇ FARGO BANK, N.A., as Certificate
Registrar
By:
--------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as -------------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-1
[FORM OF CLASS M-1 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
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 2006-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 and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2006-OPT1, Class M-1 Original Class Certificate Principal
Balance of the Class M-1 Certificates
Certificate Interest Rate: Floating as of the Closing Date: $57,354,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: July 1, 2006 $[__]
First Distribution Date: August 25, 2006 Servicer: Option One Mortgage
Corporation
No.
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
Closing Date: August 10, 2006
CUSIP: 00075Q AE 2
ISIN: US00075QAE26
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-1 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-1 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-1 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-1 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date 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 Certificate Interest Rate for the Class M-1 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-1 Certificate Margin, (ii) the
Pool Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class
M-1 Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class M-1 Certificates.
The Class M-1 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection 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 Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
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:
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
▇▇▇▇▇ FARGO BANK, N.A., as Certificate
Registrar
By:
--------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as -------------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-2
[FORM OF CLASS M-2 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
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 2006-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 and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2006-OPT1, Class M-2 Original Class Certificate Principal
Balance of the Class M-2 Certificates
Certificate Interest Rate: Floating as of the Closing Date: $55,191,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: July 1, 2006 $[__]
First Distribution Date: August 25, 2006 Servicer: Option One Mortgage
Corporation
No.
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
Closing Date: August 10, 2006
CUSIP: 00075Q AF 9
ISIN: US00075QAF90
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER ENTITY.
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
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 Certificate Interest Rate for the Class M-2 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-2 Certificate Margin, (ii) the
Pool Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class
M-2 Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class M-2 Certificates.
The Class M-2 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection 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 Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
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:
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
▇▇▇▇▇ FARGO BANK, N.A., as Certificate
Registrar
By:
--------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as -------------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-3
[FORM OF CLASS M-3 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
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 2006-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 and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2006-OPT1, Class M-3 Original Class Certificate Principal
Balance of the Class M-3 Certificates
Certificate Interest Rate: Floating as of the Closing Date: $20,020,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: July 1, 2006 $[__]
First Distribution Date: August 25, 2006 Servicer: Option One Mortgage
Corporation
No.
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
Closing Date: August 10, 2006
CUSIP: 00075Q AG 7
ISIN: US00075QAG73
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-3 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-3 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-3 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-3 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date 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 Certificate Interest Rate for the Class M-3 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-3 Certificate Margin, (ii) the
Pool Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class
M-3 Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class M-3 Certificates.
The Class M-3 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection 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 Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
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:
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
▇▇▇▇▇ FARGO BANK, N.A., as Certificate
Registrar
By:
--------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as -------------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-4
[FORM OF CLASS M-4 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
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 2006-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 and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2006-OPT1, Class M-4 Original Class Certificate Principal
Balance of the Class M-4 Certificates
Certificate Interest Rate: Floating as of the Closing Date: $23,256,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: July 1, 2006 $[__]
First Distribution Date: August 25, 2006 Servicer: Option One Mortgage
Corporation
No.
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
Closing Date: August 10, 2006
CUSIP: 00075Q AH 5
ISIN: US00075QAH56
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-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
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 Certificate Interest Rate for the Class M-4 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-4 Certificate Margin, (ii) the
Pool Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class
M-4 Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class M-4 Certificates.
The Class M-4 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection 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 Certificates, 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 Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
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:
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
▇▇▇▇▇ FARGO BANK, N.A., as Certificate
Registrar
By:
--------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as -------------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-5
[FORM OF CLASS M-5 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
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 2006-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 and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2006-OPT1, Class M-5 Original Class Certificate Principal
Balance of the Class M-5 Certificates
Certificate Interest Rate: Floating as of the Closing Date: $21,112,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: July 1, 2006 $[__]
First Distribution Date: August 25, 2006 Servicer: Option One Mortgage
Corporation
No.
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
Closing Date: August 10, 2006
CUSIP: 00075Q AJ 1
ISIN: US00075QAJ13
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER ENTITY.
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
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 Certificate Interest Rate for the Class M-5 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-5 Certificate Margin, (ii) the
Pool Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class
M-5 Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class M-5 Certificates.
The Class M-5 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection 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 Certificates, 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 Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
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:
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
▇▇▇▇▇ FARGO BANK, N.A., as Certificate
Registrar
By:
--------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as -------------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-6
[FORM OF CLASS M-6 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
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 2006-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 and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2006-OPT1, Class M-6 Original Class Certificate Principal
Balance of the Class M-6 Certificates
Certificate Interest Rate: Floating as of the Closing Date: $16,233,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: July 1, 2006 $[__]
First Distribution Date: August 25, 2006 Servicer: Option One Mortgage
Corporation
No.
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
CUSIP: 00075Q AK 8
Closing Date: August 10, 2006
ISIN: US00075QAK85
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER ENTITY.
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
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 Certificate Interest Rate for the Class M-6 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-6 Certificate Margin, (ii) the
Pool Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class
M-6 Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class M-6 Certificates.
The Class M-6 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection 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 Certificates, 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 Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
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:
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
▇▇▇▇▇ FARGO BANK, N.A., as Certificate
Registrar
By:
--------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as -------------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-7
[FORM OF CLASS M-7 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
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, CLASS M-5 AND CLASS M-6 CERTIFICATES
AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2006-OPT1, CLASS M-7
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2006-OPT1, Class M-7 Original Class Certificate Principal
Balance of the Class M-7 Certificates
Certificate Interest Rate: Floating as of the Closing Date: $20,561,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: July 1, 2006 $[__]
First Distribution Date: August 25, 2006 Servicer: Option One Mortgage
Corporation
No.
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
CUSIP: 00075Q AL 6
Closing Date: August 10, 2006
ISIN: US00075QAL68
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER ENTITY.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-7 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-7 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
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-7 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-7 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the 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-7
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the 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 Certificate Interest Rate for the Class M-7 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-7 Certificate Margin, (ii) the
Pool Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class
M-7 Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class M-7 Certificates.
The Class M-7 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection 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 Certificates, Class M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates, 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 Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
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:
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
▇▇▇▇▇ FARGO BANK, N.A., as Certificate
Registrar
By:
--------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as -------------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-8
[FORM OF CLASS M-8 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
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, CLASS M-5, CLASS M-6 AND CLASS M-7
CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2006-OPT1, CLASS M-8
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2006-OPT1, Class M-8 Original Class Certificate Principal
Balance of the Class M-8 Certificates
Certificate Interest Rate: Floating as of the Closing Date: $12,445,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: July 1, 2006 $[__]
First Distribution Date: August 25, 2006 Servicer: Option One Mortgage
Corporation
No.
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
CUSIP: 00075Q AM 4
Closing Date: August 10, 2006
ISIN: US00075QAM42
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER ENTITY.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-8 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-8 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
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-8 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-8 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the 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-8
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the 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 Certificate Interest Rate for the Class M-8 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-8 Certificate Margin, (ii) the
Pool Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class
M-8 Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class M-8 Certificates.
The Class M-8 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection 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 Certificates, Class M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates, Class M-5 Certificates, Class M-6
Certificates and Class M-7 Certificates as described in the Pooling and
Servicing Agreement referred to herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
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:
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
▇▇▇▇▇ FARGO BANK, N.A., as Certificate
Registrar
By:
--------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as -------------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-9
[FORM OF CLASS M-9 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
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, CLASS M-5, CLASS M-6, CLASS M-7 AND
CLASS M-8 CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2006-OPT1, CLASS M-9
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2006-OPT1, Class M-9 Original Class Certificate Principal
Balance of the Class M-9 Certificates
Certificate Interest Rate: Floating as of the Closing Date: $15,150,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: July 1, 2006 $[__]
First Distribution Date: August 25, 2006 Servicer: Option One Mortgage
Corporation
No.
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
CUSIP: 00075Q AN 2
Closing Date: August 10, 2006
ISIN: US00075QAN25
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER ENTITY.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-9 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-9 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
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-9 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-9 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the 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-9
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the 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 Certificate Interest Rate for the Class M-9 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-9 Certificate Margin, (ii) the
Pool Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class
M-9 Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class M-9 Certificates.
The Class M-9 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection 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 Certificates, Class M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates, Class M-5 Certificates, Class M-6
Certificates, Class M-7 Certificates and Class M-8 Certificates as described in
the Pooling and Servicing Agreement referred to herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
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:
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
▇▇▇▇▇ FARGO BANK, N.A., as Certificate
Registrar
By:
--------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as -------------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-10
[FORM OF CLASS B 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, CLASS M-5, CLASS M-6, CLASS M-7,
CLASS M-8 AND CLASS M-9 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.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "1933 ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE
WITHOUT REGISTRATION THEREOF UNDER THE 1933 ACT MAY ONLY BE MADE IN A
TRANSACTION EXEMPTED FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT
AND IN ACCORDANCE WITH THE PROVISIONS OF THE POOLING AND SERVICING
AGREEMENT REFERENCED HEREIN.
UNDER CURRENT LAW THE PURCHASE AND HOLDING OF THIS CERTIFICATE BY OR ON
BEHALF OF ANY EMPLOYEE BENEFIT PLAN OR ARRANGEMENT, INCLUDING AN
INDIVIDUAL RETIREMENT ACCOUNT, SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), THE CODE OR ANY FEDERAL, STATE
OR LOCAL LAW ("SIMILAR LAW") WHICH IS SIMILAR TO ERISA OR THE CODE
(COLLECTIVELY, A "PLAN"), MAY RESULT IN "PROHIBITED TRANSACTIONS" WITHIN
THE MEANING OF ERISA, THE CODE OR SIMILAR LAW. TRANSFER OF THIS
CERTIFICATE WILL NOT BE MADE UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE
EITHER (I) A REPRESENTATION LETTER, IN FORM AND SUBSTANCE SATISFACTORY TO
THE TRUSTEE, STATING THAT (A) IT IS NOT, AND IS NOT ACTING ON BEHALF OF,
ANY SUCH PLAN OR USING THE ASSETS OF ANY SUCH PLAN TO EFFECT SUCH PURCHASE
OR (B) IF IT IS AN INSURANCE COMPANY, THAT THE SOURCE OF FUNDS USED TO
PURCHASE THIS CERTIFICATE IS AN "INSURANCE COMPANY GENERAL ACCOUNT" (AS
SUCH TERM IS DEFINED IN SECTION V(E) OF PROHIBITED TRANSACTION CLASS
EXEMPTION 95-60 ("PTE 95-60"), 60 FED. REG. 35925 (JULY 12, 1995)), THERE
IS NO PLAN WITH RESPECT TO WHICH THE AMOUNT OF SUCH GENERAL ACCOUNT'S
RESERVES AND LIABILITIES FOR THE CONTRACT(S) HELD BY OR ON BEHALF OF SUCH
PLAN AND ALL OTHER PLANS MAINTAINED BY THE SAME EMPLOYER (OR AFFILIATE
THEREOF AS DEFINED IN SECTION V(A)(1) OF PTE 95-60) OR BY THE SAME
EMPLOYEE ORGANIZATION EXCEEDS 10% OF THE TOTAL OF ALL RESERVES AND
LIABILITIES OF SUCH GENERAL ACCOUNT (AS SUCH AMOUNTS ARE DETERMINED UNDER
SECTION I(A) OF PTE 95-60) AT THE DATE OF ACQUISITION AND ALL PLANS THAT
HAVE AN INTEREST IN SUCH GENERAL ACCOUNT ARE PLANS TO WHICH PTE 95-60
APPLIES, OR (II) AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE SATISFACTORY
TO THE TRUSTEE, TO THE EFFECT THAT THE PURCHASE OR HOLDING OF THIS
CERTIFICATE BY OR ON BEHALF OF SUCH PLAN WILL NOT CONSTITUTE OR RESULT IN
A NON-EXEMPT PROHIBITED TRANSACTION WITHIN THE MEANING OF ERISA, SECTION
4975 OF THE CODE OR SIMILAR LAW AND WILL NOT SUBJECT THE DEPOSITOR, THE
SERVICER OR THE TRUSTEE TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN
IN THE POOLING AND SERVICING AGREEMENT. EACH PERSON WHO ACQUIRES THIS
CERTIFICATE OR ANY INTEREST THEREIN SHALL BE DEEMED TO HAVE MADE THE
REPRESENTATIONS REQUIRED BY THE REPRESENTATION LETTER REFERRED TO IN THE
PRECEDING SENTENCE, UNLESS SUCH PERSON SHALL HAVE PROVIDED SUCH
REPRESENTATION LETTER OR THE OPINION OF COUNSEL REFERRED TO IN THE
PRECEDING SENTENCE TO THE TRUSTEE. 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.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2006-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 and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2006-OPT1, Class B Original Class Certificate Principal
Balance of the Class B Certificates as
Certificate Interest Rate: Floating of the Closing Date: $20,020,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: July 1, 2006 $[__]
First Distribution Date: August 25, 2006 Servicer: Option One Mortgage
Corporation
No.
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
CUSIP: 00075Q AP 7
Closing Date: August 10, 2006
ISIN: US00075QAP72
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER ENTITY.
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 Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class B
Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class B 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 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 Certificate Interest Rate for the Class B Certificates for each
Distribution Date will be the least of (i) One-Month LIBOR as of the related
LIBOR Determination Date plus the Class B Certificate Margin, (ii) the Pool
Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class B
Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class 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
Certificates, Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates, Class M-5 Certificates, Class M-6
Certificates, Class M-7 Certificates, Class M-8 Certificates and Class M-9
Certificates as described in the Pooling and Servicing Agreement referred to
herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer 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, 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 (as to which, so
long as this Certificate is a Book-Entry Certificate, the representations and
agreements made therein will be deemed to have been made by the prospective
transferor and/or the prospective transferee, as applicable) certifying to the
Certificate Registrar the facts surrounding the transfer. 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 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 Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
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:
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
▇▇▇▇▇ FARGO BANK, N.A., as Certificate
Registrar
By:
--------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as -------------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT C-1
[FORM OF CLASS CE CERTIFICATES]
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A DIRECT
OR INDIRECT BENEFICIAL INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE
MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE") AND CERTAIN OTHER PROPERTY.
THIS CLASS CE CERTIFICATE IS SUBORDINATE TO THE CLASS A, CLASS M AND CLASS
B 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 2006-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 and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2006-OPT1, Class CE Servicer: Option One Mortgage
Corporation
Date of Pooling and Servicing Agreement
and Cut-off Date: July 1, 2006 Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
First Distribution Date: August 25, 2006 Closing Date: August 10, 2006
No.
Percentage Interest: 100%
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER ENTITY.
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 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 Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also 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 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, ▇▇▇▇▇ 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 Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
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:
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
Dated:
▇▇▇▇▇ FARGO BANK, N.A., as Certificate
Registrar
By:
--------------------------------------
Authorized Signatory
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as -------------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT C-2
[FORM OF CLASS P CERTIFICATE]
THIS CLASS P CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN
A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND
IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, SECTION 4975 OF THE CODE OR ANY
MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW
WILL BE REGISTERED.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2006-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 and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2006-OPT1, Class P Servicer: Option One Mortgage
Corporation
Date of Pooling and Servicing Agreement
and Cut-off Date: July 1, 2006 Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
First Distribution Date: August 25, 2006 Closing Date: August 10, 2006
No.
Percentage Interest: 100%
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER ENTITY.
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 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, Originator Prepayment Charge Payment Amounts
and Servicer Prepayment Charge Payment Amounts in the Distribution Account in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class P
Certificates on such Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the 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, Originator Prepayment Charge
Payment Amounts and Servicer Prepayment Charge Payment Amounts, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also 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 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, ▇▇▇▇▇ 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 Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar 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, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
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:
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
Dated:
▇▇▇▇▇ FARGO BANK, N.A., as Certificate
Registrar
By:
--------------------------------------
Authorized Signatory
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as -------------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT C-3
[FORM OF CLASS R CERTIFICATE]
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE
"RESIDUAL INTEREST" IN FOUR SEPARATE "REAL ESTATE MORTGAGE INVESTMENT
CONDUITS," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CLASS R CERTIFICATE IS SUBORDINATE TO THE CLASS A, CLASS M, CLASS B
AND CLASS CE 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 2006-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 and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2006-OPT1, Class R Servicer: Option One Mortgage
Corporation
Date of Pooling and Servicing Agreement
and Cut-off Date: July 1, 2006 Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
First Distribution Date: August 25, 2006 Closing Date: August 10, 2006
No.
Percentage Interest: 100%
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER ENTITY.
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 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 Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also 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 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, ▇▇▇▇▇ 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 five separate REMICs or cause the imposition of a tax
upon the Trust.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
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:
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is the one of the Certificates referred to in the
within-mentioned Agreement.
Dated:
▇▇▇▇▇ FARGO BANK, N.A., as Certificate
Registrar
By:
--------------------------------------
Authorized Signatory
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as -------------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT C-4
[FORM OF CLASS R-X CERTIFICATE]
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE
"RESIDUAL INTEREST" IN 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").
THIS CLASS R-X CERTIFICATE IS SUBORDINATE TO THE CLASS A, CLASS M, CLASS B
AND CLASS CE CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED HEREIN
AND IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS R-X CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH
TIME AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
THIS CLASS R-X CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN
A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND
IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO 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-X CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (1) AN AFFIDAVIT TO
THE CERTIFICATE REGISTRAR THAT SUCH TRANSFEREE IS NOT (A) THE UNITED
STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN
GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER THAN
A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM
THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS
SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE, (C) ANY
ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE (ANY SUCH
PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING
HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR (D) AN AGENT
OF A DISQUALIFIED ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER IS TO
IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (3) SUCH TRANSFEREE
SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL
CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN
THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF
THIS CLASS R-X CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO
LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE
A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED
TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THE
CLASS R-X CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO
HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS OF
SECTION 5.02(d) OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM
ACQUIRING BENEFICIAL OWNERSHIP OF THIS CLASS R-X CERTIFICATE.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2006-OPT1, CLASS R-X
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2006-OPT1, Class R-X Servicer: Option One Mortgage
Corporation
Date of Pooling and Servicing Agreement
and Cut-off Date: July 1, 2006 Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
First Distribution Date: August 25, 2006 Closing Date: August 10, 2006
No.
Percentage Interest: 100%
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER ENTITY.
This certifies that _______________________ is the registered owner
of 100% Percentage Interest in that certain beneficial ownership interest
evidenced by the Class R-X 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 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-X 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-X
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-X 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 Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also 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 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, ▇▇▇▇▇ 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 five separate REMICs or cause the imposition of a tax
upon the Trust.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
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:
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is the one of the Certificates referred to in the
within-mentioned Agreement.
Dated:
▇▇▇▇▇ FARGO BANK, N.A., as Certificate
Registrar
By:
--------------------------------------
Authorized Signatory
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as -------------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT D
Addresses for Requesting Mortgage Loan Schedule
In the case of the Depositor:
Asset Backed Funding Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ABFC Asset-Backed Certificates, Series 2006-OPT1
In the case of the Servicer:
Option One Mortgage Corporation
▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
In the case of the Trustee:
▇▇▇▇▇ Fargo Bank, N.A.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Services - ABFC 2006-OPT1
EXHIBIT E
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: ▇▇▇▇▇ Fargo Bank, N.A.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Client Manager - ABFC, Series 2006-OPT1
Re: Pooling and Servicing Agreement dated as of July 1, 2006 among Asset
Backed Funding Corporation, as depositor, Option One Mortgage
Corporation, as servicer, and ▇▇▇▇▇ Fargo Bank, N.A., 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
▇▇▇▇▇ Fargo Bank, N.A.
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
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Option One Mortgage Corporation
3 Ada
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Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of July 1, 2006 among Asset Backed Funding
Corporation, as depositor, Option One Mortgage Corporation, as
servicer, and ▇▇▇▇▇ Fargo Bank, N.A., as trustee, with respect to
ABFC Asset-Backed Certificates, Series 2006-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 the Mortgage Loan
Schedule, 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), (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.
▇▇▇▇▇ FARGO BANK, N.A.
as Trustee
By:__________________________________
Name:
Title:
EXHIBIT F-2
FORM OF TRUSTEE'S FINAL CERTIFICATION
[Date]
Asset Backed Funding Corporation
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Option One Mortgage Corporation
3 Ada
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Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of July 1, 2006, among Asset Backed Funding
Corporation, as depositor, Option One Mortgage Corporation, as
servicer, and ▇▇▇▇▇ Fargo Bank, N.A., as trustee, with respect to
ABFC Asset-Backed Certificates, Series 2006-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 on the Mortgage Loan Schedule (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.
▇▇▇▇▇ FARGO BANK, N.A.,
as Trustee
By:______________________________________
Name:
Title:
EXHIBIT F-3
FORM OF RECEIPT OF MORTGAGE NOTE
Asset Backed Funding Corporation
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Re: ABFC Asset-Backed Certificates, Series 2006-OPT1
Ladies and Gentlemen:
Pursuant to Section 2.01 of the Pooling and Servicing Agreement,
dated as of July 1, 2006, among Asset Backed Funding Corporation, as depositor,
Option One Mortgage Corporation, as Servicer, and ▇▇▇▇▇ Fargo Bank, N.A., as
trustee, we hereby acknowledge that, except as may be specified in any list of
exceptions attached hereto, either (i) we have received the original Mortgage
Note relating to each of the Mortgage Loans listed on the Mortgage Loan Schedule
or (ii) if such original Mortgage Note has been lost, a copy of such original
Mortgage Note, together with a lost note affidavit.
▇▇▇▇▇ FARGO BANK, N.A.,
as Trustee
By:______________________________________
Name:
Title:
EXHIBIT G
MORTGAGE LOAN PURCHASE AGREEMENT
[Included as Exhibit 4.2 to the Current Report on Form 8-K pursuant to
which this Pooling and Servicing Agreement is filed]
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 ▇▇▇▇▇
Fargo Bank, N.A., as trustee on behalf of ABFC Asset-Backed Certificates, Series
2006-OPT1, to accept the transfer of the above described loan from Seller.
Seller agrees to indemnify and hold harmless ▇▇▇▇▇ Fargo Bank, N.A.
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
▇▇▇▇▇ Fargo Bank, N.A.
Sixth and Marquette
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Attn: Client Manager - ABFC, Series 2006-OPT1
Asset Backed Funding Corporation
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Re: ABFC Asset-Backed Certificates, Series 2006-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 ▇▇▇▇▇ Fargo Bank, N.A., 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 R-X, 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 and Class R-X Certificate) shall deliver to the Certificate Registrar
and the Depositor an opinion of counsel (a "Benefit Plan Opinion") satisfactory
to the Certificate Registrar, and upon which the Certificate Registrar and the
Depositor shall be entitled to rely, to the effect that the purchase or holding
of such Certificate by the Transferee will not constitute or result in a
non-exempt prohibited transaction within the meaning of ERISA or Section 4975 of
the Code (or similar provisions of Similar Law) and will not subject the 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-1
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
Asset Backed Funding Corporation
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▇▇▇▇▇ Fargo Bank, N.A.
Sixth and Marquette
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Attn: Client Manager - ABFC, Series 2006-OPT1
Ladies and Gentlemen:
In connection with our acquisition of the ABFC Asset-Backed
Certificates, Series 2006-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
EXHIBIT J-2
FORM OF RULE 144A INVESTMENT LETTER
[DATE]
Asset Backed Funding Corporation
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▇▇▇▇▇ Fargo Bank, N.A.
Sixth and Marquette
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Attn: Client Manager - ABFC, Series 2006-OPT1
Re: ABFC Asset-Backed Certificates, Series 2006-OPT1
Ladies and Gentlemen:
In connection with our acquisition of the ABFC Asset-Backed
Certificates, Series 2006-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.
-------------------------
(1) Buyer must own and/or invest on a discretionary basis at least $__________
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $__________ in securities.
___ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State, territory
or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of
1974.
___ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.
___ Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940.
iii. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
iv. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
v. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
vi. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
_________________________________________
Print Name of Buyer
By:______________________________________
Name:
Title:
Date:____________________________________
ANNEX 2 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
___ The Buyer owned $____________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.
________________________________________
Print Name of Buyer or Adviser
By:_____________________________________
Name:
Title:
IF AN ADVISER:
________________________________________
Print Name of Buyer
Date:___________________________________
EXHIBIT K
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT
ABFC ASSET-BACKED CERTIFICATES, SERIES 2006-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][Class R-X]
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 ▇▇▇▇▇ Fargo Bank, N.A., 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 L to the Agreement (a "Transferor Certificate")
to the effect that such Transferee has no actual knowledge that the Person to
which the Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Certificate.
8. The Transferee's taxpayer identification number is
__________________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of Treasury regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
residual interest will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the transfer
was to impede the assessment or collection of tax.
11. That the Transferee will not cause income from the [Class
R][Class R-X] 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][Class R-X]
Certificate in a transfer intended to meet the safe harbor provisions of
Treasury Regulations Sections 1.860E-1(c), the Transferee has executed and
attached Attachment A hereto.
13. The Transferee is not an employee benefit plan that is subject
to ERISA or a plan that is subject to Section 4975 of the Code or a plan or
arrangement subject to any materially similar provisions of applicable federal,
state or local law, nor are we acting on behalf of such a plan.
IN WITNESS WHEREOF, the Transferee has caused this instrument to
be executed on its behalf, pursuant to authority of its Board of Directors,
by its duly authorized officer, duly attested, this ____ day of
__________________, 20__.
[NAME OF TRANSFEREE]
By:__________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above-named ____________ , known
or proved to me to be the same person who executed the foregoing instrument and
to be the ____________________ of the Transferee, and acknowledged that he
executed the same as his free act and deed and the free act and deed of the
Transferee.
Subscribed and sworn before me this ____ day of ________ , 20__.
________________________________________
NOTARY PUBLIC
My Commission expires the ____ day
of ________________, 20__.
ATTACHMENT A
to
AFFIDAVIT PURSUANT TO SECTION 860E(e)(4) OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
Check the appropriate box:
|_| The consideration paid to the Transferee to acquire the [Class R][Class R-X]
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][Class R-X] 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][Class R-X] 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][Class R-X]
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][Class R-X] 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][Class R-X]
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][Class R-X]
Certificate.
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE
[DATE]
▇▇▇▇▇ Fargo Bank, N.A.
Sixth and Marquette
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇
Attn: Client Manager - ABFC, Series 2006-OPT1
Asset Backed Funding Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: ABFC Asset-Backed Certificates, Series 2006-OPT1
Ladies and Gentlemen:
In connection with our disposition of the ABFC Asset-Backed
Certificates, Series 2006-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][Class R-X] Certificate, we have no
knowledge the Transferee is not a Permitted Transferee and (d) no purpose of the
proposed disposition of the [Class R][Class R-X] Certificate is to impede the
assessment or collection of tax.
Very truly yours,
[____________________]
By: ______________________________
EXHIBIT M
MONTHLY INFORMATION DELIVERED BY SERVICER
Column Name DESCRIPTION Decimal Comment Max Size
-----------------------------------------------------------------------------------------------------------------------------------
LOAN_NBR A unique identifier assigned to each loan Text up to 10 digits 10
by the originator.
SER_INVESTOR_NBR A value assigned by the Servicer to define Text up to 10 digits 20
a group of loans.
SERVICER_LOAN_NBR A unique number assigned to a loan by the Text up to 10 digits 10
Servicer. This may be different than the
LOAN_NBR.
BORR_NEXT _PAY_DUE_DATE The date at the end of processing cycle MM/DD/YYYY 10
that the Borrower's next payment is due to
the Servicer, as reported by Servicer.
NOTE_INT_RATE The loan interest rate as reported by the 4 Max length of 6 6
Servicer.
ACTL_END _PRIN_BAL The Borrower's actual principal balance at 2 No commas(,) or dollar signs ($) 11
the end of the processing cycle.
SCHED_END_PRIN_BAL The scheduled principal balance due to the 2 No commas(,) or dollar signs ($) 11
investors at the end of a processing cycle.
ACTL_BEG _PRIN_BAL The Borrower's actual principal balance at 2 No commas(,) or dollar signs ($) 11
the beginning of the processing cycle.
SCHED_BEG_PRIN_BAL The scheduled outstanding principal amount 2 No commas(,) or dollar signs ($) 11
due at the beginning of the cycle date to
be passed through to the investors.
SCHED_PAY_AMT The scheduled monthly principal and 2 No commas(,) or dollar signs ($) 11
scheduled interest payment that a Borrower
is expected to pay; P&I constant.
SCHED_PRIN_ AMT The scheduled principal amount as reported 2 No commas(,) or dollar signs ($) 11
by the Servicer for the current cycle.
SERV_CURT _AMT_1 The first curtailment amount to be applied. 2 No commas(,) or dollar signs ($) 11
SERV_CURT _AMT_2 The second curtailment amount to be 2 No commas(,) or dollar signs ($) 11
applied.
SERV_CURT _AMT_3 The third curtailment amount to be applied. 2 No commas(,) or dollar signs ($) 11
ACTION_CODE The standard FNMA numeric code used to Action Code Key: 15=Bankruptcy, 2
indicate the default/delinquent status of a ▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇,
particular loan. 63= Substitution, 65=Repurchase;
PIF_AMT The loan "paid in full" amount as reported 2 No commas(,) or dollar signs ($) 11
by the Servicer.
PIF_DATE The paid in full date as reported by the MM/DD/YYYY 10
Servicer.
SCHED_GROSS_INTEREST_AMT The amount of interest due on the 2 No commas(,) or dollar signs ($) 11
outstanding scheduled principal balance in
the current cycle.
LOAN_FEE_AMT The monthly loan fee amount expressed in 2 No commas(,) or dollar signs ($) 11
dollars and cents.
SERV_FEE_RATE The Servicer's fee rate for a loan as 4 Max length of 6 6
reported by the Servicer.
CR_LOSS_AMT The amount of loss that is classified as a 2 No commas(,) or dollar signs ($) 11
credit.
FRAUD_LOSS_AMT The amount of loss that is attributable to 2 No commas(,) or dollar signs ($) 11
a fraud claim.
BANKRUPTCY_LOSS_AMT The amount of loss due to bankruptcy. 2 No commas(,) or dollar signs ($) 11
SPH_LOSS_AMT The amount of loss that is classified as a 2 No commas(,) or dollar signs ($) 11
special hazard.
PREPAY_PENALTY_ AMT The penalty amount received when a Borrower 2 No commas(,) or dollar signs ($) 11
prepays on his loan as reported by the
Servicer.
PREPAY_PENALTY_ WAIVED The prepayment penalty amount for the loan 2 No commas(,) or dollar signs ($) 11
waived by the Servicer.
MOD_DATE The effective payment date of the MM/DD/YYYY 10
modification for the loan.
MOD_TYPE The modification type. Varchar - value can be alpha or 30
numeric
DELINQ_P&I_ADVANCE_AMT The current outstanding principal and 2 No commas(,) or dollar signs ($) 11
interest advances made by the Servicer.
EXHIBIT N
Form of Interest Rate Swap Agreement
[Included as Exhibit 10.4 to the Current Report on Form 8-K pursuant to
which this Pooling and Servicing Agreement is filed]
EXHIBIT O
Form of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification
ABFC 2006-OPT1 TRUST,
ASSET-BACKED CERTIFICATES, SERIES 2006-OPT1
I, [identify the certifying individual] of Asset Backed Funding
Corporation (the "Depositor"), certify that:
1. I have reviewed this report on Form 10-K, and all reports on Form 10-D
required to be filed in respect of the period covered by this report on
Form 10-K of the ABFC 2006-OPT1 Trust (the "Exchange Act Periodic
Reports");
2. Based on my knowledge, the Exchange Act Periodic Reports, taken as a
whole, do 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
with respect to the period covered by this report;
3. Based on my knowledge, all of the distribution, servicing and other
information required to be provided under Form 10-D for the period covered
by this report is included in the Exchange Act Periodic Reports;
4. Based on my knowledge and the servicer compliance statements required in
this report under Item 1123 of Regulation AB, and except as disclosed in
the Exchange Act Periodic Reports, the servicers have fulfilled their
obligations under the pooling and servicing agreement, dated August 10,
2006, among Asset Backed Funding Corporation, Option One Mortgage
Corporation and ▇▇▇▇▇ Fargo Bank, N.A.; and;
5. All of the reports on assessment of compliance with the servicing
criteria for asset-backed securities and their related attestation
reports on assessment of compliance with servicing criteria for
asset-backed securities required to be included in this report in
accordance with Item 1122 of Regulation AB and Exchange Act Rules
13a-18 and 15d-18 have been included as an exhibit to this report,
except as otherwise disclosed in this report. Any material instances of
noncompliance described in such reports have been disclosed in this
report on Form 10-K.
In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties: Option One
Mortgage Corporation and ▇▇▇▇▇ Fargo Bank, N.A.
By:______________________________________
Name:
Title:
EXHIBIT P-1
Form of Certification to be Provided by the Trustee to the Depositor
ABFC 2006-OPT1 TRUST,
ASSET-BACKED CERTIFICATES, SERIES 2006-OPT1
The Trustee hereby certifies 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 fiscal year [___]
(the "Annual Report"), and all reports on Form 10-D required to be filed
in respect of period covered by the Annual Report (collectively with the
Annual Report, the "Reports"), of the ABFC 2006-OPT1 Trust;
2. To my knowledge, the Reports, taken as a whole, do 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 with respect to the period covered by
the Annual Report; and
3. To my knowledge, the distribution information required to be provided by
the Trustee under the Pooling and Servicing Agreement, dated as of August
10, 2006, among Asset Backed Funding Corporation, as depositor, Option One
Mortgage Corporation, as Servicer (the "Servicer"), and ▇▇▇▇▇ Fargo Bank,
N.A., as trustee (the "Trustee") (the "Pooling and Servicing Agreement"),
for inclusion the Reports is included in the Report.
4. I am responsible for reviewing the activities performed by the Trustee
under the Pooling Agreement, and based on my knowledge and the compliance
review conducted in preparing the compliance statement of the Trustee
required in the Annual Report under Item 1123 of Regulation AB, and except
as disclosed in the Reports, the Trustee has fulfilled its obligations
under the Pooling Agreement in all material respects; and
5. The report on assessment of compliance with servicing criteria for
asset-backed securities of the Trustee and its related attestation
report on assessment of compliance with servicing criteria required to
be included in the Annual Report in accordance with Item 1122 of
Regulation AB and Exchange Act Rules 13a-18 and 15d-18 has been
included as an exhibit to the Annual Report. Any material instances of
non-compliance are described in such report and have been disclosed in
the Annual Report.
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By:____________________________________
Name:
Title:
EXHIBIT P-2
Form of Certification to be Provided by the Servicer to the Depositor
ABFC 2006-OPT1 TRUST,
ASSET-BACKED CERTIFICATES, SERIES 2006-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 servicer compliance statement of the Servicer and
the compliance statements of each Subservicer, if any, engaged by the
Servicer provided to the Depositor and the Trustee for the Trust's
fiscal year [___] in accordance with Item 1123 of Regulation AB (each a
"Compliance Statement"), the report on assessment of the Servicer's
compliance with the Servicing Criteria and reports on assessment of
compliance with Servicing Criteria of each Subservicer or
Subcontractor, if any, engaged or utilized by the Servicer provided to
the Depositor and the Trustee for the Trust's fiscal year [___] in
accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act
of 1934, as amended (the "Exchange Act") and Item 1122 of Regulation AB
(each a "Servicing Assessment"), the registered public accounting
firm's attestation report provided in accordance with Rules 13a-18 and
15d-18 under the Exchange Act and Section 1122(b) of Regulation AB
related to each Servicing Assessment (each a "Attestation Report"), and
all servicing reports, officer's certificates and other information
relating to the servicing of the Mortgage Loans by the Servicer during
20 that were delivered or caused to be delivered by the Servicer
pursuant to the Pooling and Servicing Agreement, dated as of August 10,
2006 (the "Agreement"), among Asset Backed Funding Corporation, as
depositor, Option One Mortgage Corporation, as servicer (the
"Servicer"), and ▇▇▇▇▇ Fargo Bank, N.A., as trustee (the "Trustee")
(collectively, the "Servicing Information");
2. Based on my knowledge, the Servicing Information taken as a whole, do 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 with
respect to the period covered by this report;
3. Based on my knowledge, all of the servicing information required to be
provided to the Trustee by the Servicer pursuant to the Agreement has been
provided to the Trustee;
4. I am responsible for reviewing the activities performed by the Servicer
and based upon my knowledge and the compliance review conducted in
preparing the servicer compliance statement required in this report under
Item 1123 of Regulation AB, and except as disclosed in the compliance
statement, the Servicer has fulfilled its obligations under the Agreement;
and
5. The Servicing Assessment of the Servicer and of each Subservicer or
Subcontractor, if any, engaged or utilized by the Servicer and its
related Attestation Report required to be included in the Annual Report
on Form 10-K for the Trust's fiscal year [___] in accordance with Item
1122 of Regulation AB and Exchange Act Rules 13a-18 and 15d-18 has been
provided to the Depositor and the Trustee. Any material instances of
non compliance are described in any such Servicing Assessment or
Attestation Report.
OPTION ONE MORTGAGE CORPORATION
By:______________________________________
Name:
Title:
EXHIBIT Q
Servicing Criteria to be Addressed in Assessment of Compliance
APPLICABLE
SERVICING
SERVICING CRITERIA CRITERIA
----------------------------------------------------------------------------------------------
Reference Criteria Servicer Trustee
----------------------------------------------------------------------------------------------
General Servicing Considerations
1122(d)(1)(i) Policies and procedures are instituted to monitor any X X
performance or other triggers and events of default in
accordance with the transaction agreements.
1122(d)(1)(ii) If any material servicing activities are outsourced to X X
third parties, policies and procedures are instituted
to monitor the third party's performance and
compliance with such servicing activities.
1122(d)(1)(iii) Any requirements in the transaction agreements to
maintain a back-up servicer for the mortgage loans are
maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in X
effect on the party participating in the servicing
function throughout the reporting period in the amount
of coverage required by and otherwise in accordance
with the terms of the transaction agreements.
Cash Collection and Administration
1122(d)(2)(i) Payments on mortgage loans are deposited into the X X
appropriate custodial bank accounts and related bank
clearing accounts no more than two business days
following receipt, or such other number of days
specified in the transaction agreements.
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an X X
obligor or to an investor are made only by authorized
personnel.
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, X X
cash flows or distributions, and any interest or other
fees charged for such advances, are made, reviewed and
approved as specified in the transaction agreements.
1122(d)(2)(iv) The related accounts for the transaction, such as cash X X
reserve accounts or accounts established as a form of
overcollateralization, are separately maintained
(e.g., with respect to commingling of cash) as set
forth in the transaction agreements.
1122(d)(2)(v) Each custodial account is maintained at a federally X X
insured depository institution as set forth in the
transaction agreements. For purposes of this
criterion, "federally insured depository institution"
with respect to a foreign financial institution means
a foreign financial institution that meets the
requirements of Rule 13k-1(b)(1) of the Securities
Exchange Act.
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent X X
unauthorized access.
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for X X
all asset-backed securities related bank accounts,
including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically
accurate; (B) prepared within 30 calendar days after
the bank statement cutoff date, or such other number
of days specified in the transaction agreements; (C)
reviewed and approved by someone other than the person
who prepared the reconciliation; and (D) contain
explanations for reconciling items. These reconciling
items are resolved within 90 calendar days of their
original identification, or such other number of days
specified in the transaction agreements.
Investor Remittances and Reporting
1122(d)(3)(i) Reports to investors, including those to be filed with X X
the Commission, are maintained in accordance with the
transaction agreements and applicable Commission
requirements. Specifically, such reports (A) are
prepared in accordance with timeframes and other terms
set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms
specified in the transaction agreements; (C) are filed
with the Commission as required by its rules and
regulations; and (D) agree with investors' or the
trustee's records as to the total unpaid principal
balance and number of mortgage loans serviced by the
Servicer.
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in X X
accordance with timeframes, distribution priority and
other terms set forth in the transaction agreements.
1122(d)(3)(iii) Disbursements made to an investor are posted within X X
two business days to the Servicer's investor records,
or such other number of days specified in the
transaction agreements.
1122(d)(3)(iv) Amounts remitted to investors per the investor reports X X
agree with cancelled checks, or other form of payment,
or custodial bank statements.
Pool Asset Administration
1122(d)(4)(i) Collateral or security on mortgage loans is maintained X X
as required by the transaction agreements or related
mortgage loan documents.
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as X X
required by the transaction agreements
1122(d)(4)(iii) Any additions, removals or substitutions to the asset X
pool are made, reviewed and approved in accordance
with any conditions or requirements in the transaction
agreements.
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, X
made in accordance with the related mortgage loan
documents are posted to the Servicer's obligor records
maintained no more than two business days after
receipt, or such other number of days specified in the
transaction agreements, and allocated to principal,
interest or other items (e.g., escrow) in accordance
with the related mortgage loan documents.
1122(d)(4)(v) The Servicer's records regarding the mortgage loans X
agree with the Servicer's records with respect to an
obligor's unpaid principal balance.
1122(d)(4)(vi) Changes with respect to the terms or status of an X
obligor's mortgage loans (e.g., loan modifications or
re-agings) are made, reviewed and approved by
authorized personnel in accordance with the
transaction agreements and related pool asset
documents.
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance X
plans, modifications and deeds in lieu of foreclosure,
foreclosures and repossessions, as applicable) are
initiated, conducted and concluded in accordance with
the timeframes or other requirements established by
the transaction agreements.
1122(d)(4)(viii) Records documenting collection efforts are maintained X
during the period a mortgage loan is delinquent in
accordance with the transaction agreements. Such
records are maintained on at least a monthly basis, or
such other period specified in the transaction
agreements, and describe the entity's activities in
monitoring delinquent mortgage loans including, for
example, phone calls, letters and payment rescheduling
plans in cases where delinquency is deemed temporary
(e.g., illness or unemployment).
1122(d)(4)(ix) Adjustments to interest rates or rates of return for X
mortgage loans with variable rates are computed based
on the related mortgage loan documents.
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such X
as escrow accounts): (A) such funds are analyzed, in
accordance with the obligor's mortgage loan documents,
on at least an annual basis, or such other period
specified in the transaction agreements; (B) interest
on such funds is paid, or credited, to obligors in
accordance with applicable mortgage loan documents and
state laws; and (C) such funds are returned to the
obligor within 30 calendar days of full repayment of
the related mortgage loans, or such other number of
days specified in the transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or X
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments,
provided that such support has been received by the
servicer at least 30 calendar days prior to these
dates, or such other number of days specified in the
transaction agreements.
1122(d)(4)(xii) Any late payment penalties in connection with any X
payment to be made on behalf of an obligor are paid
from the Servicer's funds and not charged to the
obligor, unless the late payment was due to the
obligor's error or omission.
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted X
within two business days to the obligor's records
maintained by the Servicer, or such other number of
days specified in the transaction agreements.
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts X X
are recognized and recorded in accordance with the
transaction agreements.
1122(d)(4)(xv) Any external enhancement or other support, identified X
in Item 1114(a)(1) through (3) or Item 1115 of
Regulation AB, is maintained as set forth in the
transaction agreements.
[OPTION ONE MORTGAGE CORPORATION] [▇▇▇▇▇ FARGO BANK, N.A.]
Date: _________________________
By:
Name: ________________________________
Title: ________________________________
EXHIBIT R-1
ADDITIONAL FORM 10-D INFORMATION
--------------------------------------------------------------------------------
Item on Form 10-D Party Responsible
Item 1: Distribution and Pool
Performance Information
Information included in the Servicer
Distribution Date Statement Trustee
Any information required by 1121 which Depositor
is NOT included on the Distribution
Date Statement
Item 2: Legal Proceedings
Any legal proceeding pending against
the following entities or their
respective property, that is material
to Certificateholders, including any
proceeding known to be contemplated by
governmental authorities:
o Issuing Entity (Trust Fund) Trustee and Servicer(1)
o Sponsor (Seller) Depositor
o Depositor Depositor
o Trustee Trustee
o Servicer Servicer
o 1110(b) Originator Depositor
o Any 1108(a)(3) Servicer (other than Servicer
the Servicer or Trustee)
o Any other party contemplated by Depositor
1100(d)(1)
Item 3: Sale of Securities and Use of Depositor
Proceeds
Information from Item 2(a) of Part II
of Form 10-Q:
With respect to any sale of securities
by the sponsor, depositor or issuing
entity, that are backed by the same
asset pool or are otherwise issued by
the issuing entity, whether or not
registered, provide the sales and use
of proceeds information in Item 701 of
Regulation S-K. Pricing information
can be omitted if securities were not
registered. If information has been
previously included in a Current
Report of Form 8-K, it need not be
furnished.
(1) To the extent the Servicer has actual
knowledge or should have actual
knowledge of such proceeding
Item 4: Defaults Upon Senior Trustee
Securities
Information from Item 3 of Part II of
Form 10-Q:
Report the occurrence of any Event of
Default (after expiration of any grace
period and provision of any required
notice)
Item 5: Submission of Matters to a Trustee
Vote of Security Holders
Information from Item 4 of Part II of
Form 10-Q
Item 6: Significant Obligors of Pool Depositor
Assets
Item 1112(b) - Significant Obligor
Financial Information*
*This information need only be
reported on the Form 10-D for the
distribution period in which updated
information is required pursuant to
the Item.
Item 7: Significant Enhancement
Provider Information
Item 1114(b)(2) - Credit Enhancement
Provider Financial Information*
o Determining applicable disclosure Depositor
threshold
o Requesting required financial Depositor
information (including any required
accountants' consent to the use
thereof) or effecting incorporation by
reference
Item 1115(b) - Derivative Counterparty
Financial Information*
o Determining current maximum probable Depositor
exposure
o Determining current significance Depositor, Trustee
percentage
o Requesting required financial Depositor
information (including any required
accountants' consent to the use
thereof) or effecting incorporation by
reference
*This information need only be
reported on the Form 10-D for the
distribution period in which updated
information is required pursuant to
the Items.
Item 8: Other Information
Disclose any information required to
be reported on Form 8-K during the Any party responsible for the
period covered by the Form 10-D but applicable Form 8-K Disclosure item
not reported
Item 9: Exhibits
Distribution Date Statement to Trustee
Certificateholders
Exhibits required by Item 601 of Depositor, unless previously filed
Regulation S-K under Current Report on Form 8-K
EXHIBIT R-2
ADDITIONAL FORM 10-K INFORMATION
ADDITIONAL FORM 10-K INFORMATION
--------------------------------------------------------------------------------
Item on Form 10-K Party Responsible
--------------------------------------------------------------------------------
Item 1B: Unresolved Staff Comments Depositor
Item 9B: Other Information Any party responsible for disclosure
Disclose any information required to items on Form 8-K
be reported on Form 8-K during the
fourth quarter covered by the Form
10-K but not reported
Item 15: Exhibits, Financial Trustee
Statement Schedules Depositor
Reg AB Item 1112(b): Significant
Obligors of Pool Assets
Significant Obligor Financial Depositor
Information*
*This information need only be
reported on the Form 10-D for the
distribution period in which updated
information is required pursuant to
the Item.
Reg AB Item 1114(b)(2): Credit
Enhancement Provider Financial
Information*
o Determining applicable disclosure Depositor
threshold
o Requesting required financial Depositor
information (including any required
accountants' consent to the use
thereof) or effecting incorporation by
reference
*This information need only be
reported on the Form 10-D for the
distribution period in which updated
information is required pursuant to
the Items.
Reg AB Item 1115(b): Derivative
Counterparty Financial Information*
o Determining current maximum probable Depositor
exposure
o Determining current significance Depositor, Trustee
percentage
o Requesting required financial Depositor
information (including any required
accountants' consent to the use
thereof) or effecting incorporation by
reference
*This information need only be
reported on the Form 10-D for the
distribution period in which updated
information is required pursuant to
the Items.
Reg AB Item 1117: Legal Proceedings
Any legal proceeding pending against
the following entities or their
respective property, that is material
to Certificateholders, including any
proceeding known to be contemplated by
governmental authorities:
o Issuing Entity (Trust Fund) Trustee and Servicer(1)
o Sponsor (Seller) Depositor
o Depositor Depositor
o Trustee Trustee
o Servicer Servicer
o 1110(b) Originator Depositor
o Any 1108(a)(3) Servicer (other than Servicer
the Servicer or Trustee)
o Any other party contemplated by Depositor
1100(d)(1)
(1) To the extent the Servicer has actual
knowledge or should have actual
knowledge of such proceeding.
Reg AB Item 1119: Affiliations and
Relationships
Whether (a) the Sponsor (Seller), Depositor as to (a) with respect to
Depositor or Issuing Entity is an the Depositor and the Sponsor
affiliate of the following parties,
and (b) to the extent known and Trustee and/or Servicer as to (a) with
material, any of the following parties respect to the Issuing Entity
are affiliated with one another:
o Servicer Servicer
o Trustee Trustee
o Any other 1108(a)(3) servicer Servicer
o Any 1110 Originator Depositor
o Any 1112(b) Significant Obligor Depositor
o Any 1114 Credit Enhancement Provider Depositor
o Any 1115 Derivate Counterparty Depositor
Provider
o Any other 1101(d)(1) material party Depositor
Whether there are any "outside the Depositor as to (a) with respect to
ordinary course business arrangements" the Depositor and the Sponsor
other than would be obtained in an
arm's length transaction between (a) Trustee and/or Servicer as to (a) with
the Sponsor (Seller), Depositor or respect to the Issuing Entity
Issuing Entity on the one hand, and
(b) any of the following parties (or
their affiliates) on the other hand,
that exist currently or within the
past two years and that are material
to a Certificateholder's understanding
of the Certificates:
o Servicer Servicer
o Trustee Trustee
o Any other 1108(a)(3) servicer Servicer
o Any 1110 Originator Depositor
o Any 1112(b) Significant Obligor Depositor
o Any 1114 Credit Enhancement Provider Depositor
o Any 1115 Derivate Counterparty Depositor
Provider
o Any other 1101(d)(1) material party Depositor
Whether there are any specific Depositor as to (a) with respect to
relationships involving the the Depositor and the Sponsor
transaction or the pool assets between
(a) the Sponsor (Seller), Depositor or Trustee and/or servicer as to (a) with
Issuing Entity on the one hand, and respect to the Issuing Entity
(b) any of the following parties (or
their affiliates) on the other hand,
that exist currently or within the
past two years and that are material:
o Servicer Servicer
o Trustee Trustee
o Any other 1108(a)(3) servicer Servicer
o Any 1110 Originator Depositor
o Any 1112(b) Significant Obligor Depositor
o Any 1114 Credit Enhancement Provider Depositor
o Any 1115 Derivate Counterparty Depositor
Provider
o Any other 1101(d)(1) material party Depositor
EXHIBIT R-3
FORM 8-K INFORMATION
--------------------------------------------------------------------------------
Item on Form 8-K Party Responsible
--------------------------------------------------------------------------------
Item 1.01- Entry into a Material All parties
Definitive Agreement
Disclosure is required regarding entry
into or amendment of any definitive
agreement that is material to the
securitization, even if depositor is
not a party.
Examples: servicing agreement,
custodial agreement.
Note: disclosure not required as to
definitive agreements that are fully
disclosed in the prospectus
Item 1.02- Termination of a Material All parties
Definitive Agreement
Disclosure is required regarding
termination of any definitive
agreement that is material to the
securitization (other than expiration
in accordance with its terms), even if
depositor is not a party.
Examples: servicing agreement,
custodial agreement.
Item 1.03- Bankruptcy or Receivership
Disclosure is required regarding the
bankruptcy or receivership, with
respect to any of the following:
o Sponsor (Seller) Depositor
o Depositor Depositor
o Servicer Servicer
o Affiliated Servicer Servicer
o Other Servicer servicing 20% or more Servicer
of the pool assets at the time of the
report
o Other material servicers Servicer
o Trustee Trustee
o Significant Obligor Depositor
o Credit Enhancer (10% or more) Depositor
o Derivative Counterparty Depositor
Item 2.04- Triggering Events that Depositor
Accelerate or Increase a Direct Servicer
Financial Obligation or an Obligation Trustee
under an Off-Balance Sheet Arrangement
Includes an early amortization,
performance trigger or other event,
including event of default, that would
materially alter the payment
priority/distribution of cash
flows/amortization schedule.
Disclosure will be made of events
other than waterfall triggers which
are disclosed in the monthly
statements to the certificateholders.
Item 3.03- Material Modification to Trustee
Rights of Security Holders
Disclosure is required of any material
modification to documents defining the
rights of Certificateholders,
including the Pooling and Servicing
Agreement.
Item 5.03- Amendments of Articles of Trustee
Incorporation or Bylaws; Change of Depositor
Fiscal Year
Disclosure is required of any
amendment "to the governing documents
of the issuing entity".
Item 6.01- ABS Informational and Depositor
Computational Material
Item 6.02- Change of Servicer or Trustee
Trustee Servicer
Requires disclosure of any removal,
replacement, substitution or addition
of any master servicer, affiliated
servicer, other servicer servicing 10%
or more of pool assets at time of
report, other material servicers or
trustee.
Reg AB disclosure about any new Trustee
servicer or master servicer is also Servicer
required.
Reg AB disclosure about any new Trustee
Trustee is also required.
Item 6.03- Change in Credit Depositor
Enhancement or External Support Trustee
Covers termination of any enhancement
in manner other than by its terms, the
addition of an enhancement, or a
material change in the enhancement
provided. Applies to external credit
enhancements as well as derivatives.
Reg AB disclosure about any new Depositor
enhancement provider is also required.
Item 6.04- Failure to Make a Required Trustee
Distribution
Item 6.05- Securities Act Updating Depositor
Disclosure
If any material pool characteristic
differs by 5% or more at the time of
issuance of the securities from the
description in the final prospectus,
provide updated Reg AB disclosure
about the actual asset pool.
If there are any new servicers or Depositor
originators required to be disclosed
under Regulation AB as a result of the
foregoing, provide the information
called for in Items 1108 and 1110
respectively.
Item 7.01- Reg FD Disclosure All parties
Item 8.01- Other Events Depositor
Any event, with respect to which
information is not otherwise called
for in Form 8-K, that the registrant
deems of importance to
certificateholders.
Item 9.01- Financial Statements and Depositor
Exhibits Trustee
EXHIBIT S
Form of Additional Transfer Instrument
ADDITIONAL TRANSFER INSTRUMENT
Pursuant to this Additional Transfer Instrument, dated August [ ], 2006
(the "Instrument"), between Asset Backed Funding Corporation (the "Depositor"),
as seller, and ▇▇▇▇▇ Fargo Bank, N.A., as trustee of the ABFC 2006-OPT1 Trust
(the "Trust"), as purchaser (the "Trustee"), and pursuant to the Pooling and
Servicing Agreement, dated as of July 1, 2006 (the "Pooling and Servicing
Agreement"), among the Depositor, Option One Mortgage Corporation, as servicer
(the "Servicer"), and the Trustee, the Depositor and the Trustee agree to the
sale by the Depositor and the purchase by the Trustee, on behalf of the Trust,
of the Mortgage Loans listed on the attached Schedule of Additional Group 3
Mortgage Loans set forth in Attachment B (the "Additional Group 3 Mortgage
Loans").
Capitalized terms used but not otherwise defined herein shall have the
meanings set forth in the Pooling and Servicing Agreement.
Section 1. Conveyance of Additional Group 3 Mortgage Loans.
(a) The Depositor, concurrently with the execution and delivery hereof,
does hereby sell, 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 Additional Group 3 Mortgage Loan, including all amounts due on the
Additional Group 3 Mortgage Loans including the related Cut-off Date Principal
Balance, all interest accruing thereon after the Subsequent Cut-off Date and all
collections in respect of interest and principal due after the Subsequent
Cut-off Date, and all items with respect to the Additional Group 3 Mortgage
Loans to be delivered pursuant to Section 2.01 of the Pooling and Servicing
Agreement; provided, however that the Depositor reserves and retains all right,
title and interest in and to amounts due on the Additional Group 3 Mortgage
Loans on or prior to the related Subsequent Cut-off Date, (ii) property which
secured each such Additional Group 3 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 Additional Group 3 Mortgage Loans; (iv) all
proceeds of any of the foregoing and (v) the rights of the Depositor under the
Additional Mortgage Loan Purchase Agreement. The Depositor, contemporaneously
with the delivery of this Agreement, has delivered or caused to be delivered to
the Trustee each item set forth in Section 2.01 of the Pooling and Servicing
Agreement. The transfer to the Trustee by the Depositor of the Additional Group
3 Mortgage Loans identified on Attachment B shall be absolute and is intended by
the Depositor, the Servicer, the Trustee and the Certificateholders to
constitute and to be treated as a sale by the Depositor to the Trust Fund.
(b) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee
without recourse for the benefit of the Certificateholders all the right, title
and interest of the Depositor, in, to and under the Additional Mortgage Loan
Purchase Agreement and the Depositor herewith delivers to the Trustee executed
copies of the Additional Mortgage Loan Purchase Agreement.
(c) The Trustee acknowledges the assignment to it of the Additional
Group 3 Mortgage Loans and the delivery to it of the related Mortgage Files,
subject to the provisions of Sections 2.01 and 2.02 of the Pooling and Servicing
Agreement.
(d) Additional terms of the sale are set forth on Attachment A hereto.
Section 2. Representations and Warranties; Conditions Precedent.
(a) The Depositor hereby confirms that each of the conditions precedent
and the representations and warranties set forth in Section 2.04 of the Pooling
and Servicing Agreement are satisfied as of the date hereof.
(b) The Depositor hereby confirms that each of the representations and
warranties in Section 2.06 of the Pooling and Servicing Agreement are true and
correct as of the date hereof, provided, however that any references in such
section to Mortgage Loan shall be deemed to refer to Additional Group 3 Mortgage
Loan.
(c) All terms and conditions of the Pooling and Servicing Agreement are
hereby ratified and confirmed; provided, however, that in the event of any
conflict, the provisions of this Instrument shall control over the conflicting
provisions of the Pooling and Servicing Agreement.
Section 3. Recordation of Instrument.
To the extent permitted by applicable law, this Instrument, or a
memorandum thereof if permitted under applicable law, is subject to recordation
in all appropriate public offices for real property records in all of the
counties or other comparable jurisdictions in which any or all of the properties
subject to the Mortgages are situated, and in any other appropriate public
recording office or elsewhere, such recordation to be effected by the Servicer
at the Certificateholders' expense on direction of the related
Certificateholders, but only when accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders or is necessary for the administration or servicing of
the Mortgage Loans.
Section 4. Governing Law.
This Instrument shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving
effect to principles of conflicts of law.
Section 5. Counterparts.
This Instrument may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same instrument.
Section 6. Successors and Assigns.
This Instrument shall inure to the benefit of and be binding upon the
Depositor and the Trustee and their respective successors and assigns.
ASSET BACKED FUNDING CORPORATION
By:________________________________________
Name:
Title:
▇▇▇▇▇ FARGO BANK, N.A., as Trustee for
Asset Backed Funding Corporation
Asset-Backed Certificates, Series
2006-OPT1
By:________________________________________
Name:
Title:
ATTACHMENT A
ADDITIONAL TERMS OF SALE
A. General
1. Subsequent Cut-off Date: August 1, 2006
2. Additional Transfer Date: August [ ], 2006
3. Aggregate Principal Balance of the Additional Group 3 Mortgage
Loans as of the Subsequent Cut-off Date: $[___________]
4. Purchase Price: 100.00%
B. The obligation of the Trust Fund to purchase an Additional Group 3
Mortgage Loan on any Additional Transfer Date is subject to the satisfaction of
the conditions set forth in the following paragraphs and the accuracy of the
following representations and warranties with respect to each Additional Group 3
Mortgage Loan determined as of the applicable Subsequent Cut-off Date: (i) such
Additional Group 3 Mortgage Loan is not 30 or more days delinquent as of the
last day of the month preceding the Subsequent Cut-off Date; (ii) the original
term to stated maturity of such Additional Group 3 Mortgage Loan is not less
than 120 months and does not exceed 360 months; (iii) the Additional Group 3
Mortgage Loan does not provide for negative amortization; (iv) such Additional
Group 3 Mortgage Loan does not have a Combined Loan-to-Value Ratio greater than
100.00%; (v) all of the Additional Group 3 Mortgage Loans have, as of the
Subsequent Cut-off Date, a weighted average term to stated maturity not in
excess of 360 months; (vi) each Additional Group 3 Mortgage Loan that is a
Fixed-Rate Mortgage Loan has a Mortgage Interest Rate that is not less than
3.000% or greater than 14.700%; (vii) each Additional Group 3 Mortgage Loan has
been serviced by the Servicer since origination or the date of purchase; (viii)
each Additional Group 3 Mortgage Loan has a first payment date occurring on or
before September 1, 2006 and will include 30 days of interest thereon, (ix) each
Additional Group 3 Mortgage Loan that is an Adjustable-Rate Mortgage Loan has a
Gross Margin not less than 0.500%, a Maximum Mortgage Interest Rate not less
than 9.500% and a Minimum Mortgage Interest Rate not less than 5.500% and (xii)
such Additional Group 3 Mortgage Loan has been underwritten in accordance with
the criteria set forth under "Underwriting Standards" in the Prospectus
Supplement.
C. Following the purchase of any Additional Group 3 Mortgage Loan by the
Trust, no Group 3 Mortgage Loan (including such Additional Group 3 Mortgage
Loans) has as of the Subsequent Cut-off Date: (i) a Mortgage Interest Rate less
than 3.000% per annum or greater than 14.700% per annum; (ii) a Combined
Loan-to-Value Ratio greater than 100.00%; (iii) a Principal Balance greater than
$1,700,000; or (iv) a credit score less than 500. In addition, no
Adjustable-Rate Mortgage Loan in Group 3 will have a Gross Margin less than
0.500% per annum and all of the Group 3 Mortgage Loans will have a weighted
average original term to stated maturity of not more than 360 months.
D. Notwithstanding the foregoing, any Additional Group 3 Mortgage Loan
may be rejected by (i) the NIMs Insurer, if any, or (ii) any Rating Agency if
the inclusion of such Additional Group 3 Mortgage Loan would adversely affect
the ratings on any class of Certificates.
ATTACHMENT B
SCHEDULE OF ADDITIONAL GROUP 3 MORTGAGE LOANS
EXHIBIT T
Form of Addition Notice
ADDITION NOTICE
[_________], 2006
▇▇▇▇▇ Fargo Bank, N.A.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services- ABFC 2006-OPT1
Re: Pooling and Servicing Agreement, dated as of
July 1, 2006 among Asset Backed Funding
Corporation, as Depositor, Option One Mortgage
Corporation, as Servicer, and ▇▇▇▇▇ Fargo Bank,
N.A., as Trustee.
Ladies and Gentlemen:
Pursuant to Section 2.04 of the referenced Pooling and Servicing
Agreement, Asset Backed Funding Corporation has designated Additional Group 3
Mortgage Loans to be sold to the Trust on [________], 2006, with an aggregate
Principal Balance of $[____________]. Capitalized terms not otherwise defined
herein have the meaning set forth in the Pooling and Servicing Agreement.
Please acknowledge your receipt of this notice by countersigning the
enclosed copy in the space indicated below and returning it to the attention of
the undersigned.
EXHIBIT U
Form of Additional Disclosure Notification
**SEND TO ▇▇▇▇▇ FARGO VIA FAX TO ▇▇▇-▇▇▇-▇▇▇▇ AND VIA EMAIL TO
▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇ AND VIA OVERNIGHT MAIL TO THE ADDRESS
IMMEDIATELY BELOW. SEND TO THE DEPOSITOR AT THE ADDRESS BELOW**
▇▇▇▇▇ Fargo Bank, N.A. as Trustee
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
[insert name and address of Depositor]
Attn: Corporate Trust Services - [DEAL NAME]-SEC REPORT PROCESSING
RE: **Additional Form [__] Disclosure**Required
Ladies and Gentlemen:
In accordance with Section [__] of the Pooling and Servicing Agreement,
dated as of [__] [__], 2006, among [__], as [__], [__], as [__], [___], as [___]
and [__], as [__]. The Undersigned, as [____], hereby notifies you that certain
events have come to our attention that [will][may] need to be disclosed on Form
[___].
Description of Additional Form [__ ] Disclosure:
List of Any Attachments hereto to be included in the Additional Form [__]
Disclosure:
Any inquiries related to this notification should be directed to [___],
phone number: [___]; email address: [___].
[NAME OF PARTY]
as [role]
By: __________________
Name:
Title:
EXHIBIT V
Additional Mortgage Loan Purchase Agreement
BANK OF AMERICA, NATIONAL ASSOCIATION,
as Seller
and
ASSET BACKED FUNDING CORPORATION,
as Purchaser
ADDITIONAL MORTGAGE LOAN PURCHASE AGREEMENT
Dated as of August [ ], 2006
Adjustable-Rate and Fixed-Rate Mortgage Loans
Asset Backed Funding Corporation Asset-Backed Certificates, Series 2006-OPT1
Table of Contents
Page
ARTICLE I.
DEFINITIONS
Section 1.01 Definitions................................................1
ARTICLE II.
SALE OF ADDITIONAL GROUP 3 MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 Sale of Additional Group 3 Mortgage Loans..................1
Section 2.02 Obligations of the Seller and Seller Upon
Sale.......................................................2
Section 2.03 Payment of Purchase Price for the
Additional Group 3 Mortgage Loans..........................4
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 Seller Representations and Warranties
Relating to the Additional Group 3 Mortgage
Loans......................................................4
Section 3.02 Seller Representations and Warranties
Relating to the Seller.....................................4
Section 3.03 Remedies for Breach of Representations and
Warranties.................................................4
ARTICLE IV.
SELLER'S COVENANTS
Section 4.01 Covenants of the Seller....................................5
ARTICLE V.
INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
Section 5.01 [Reserved]..................................................
ARTICLE VI.
TERMINATION
Section 6.01 Termination................................................6
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01 Amendment..................................................6
Section 7.02 Governing Law..............................................6
Section 7.03 Notices....................................................6
Section 7.04 Severability of Provisions.................................6
Section 7.05 Counterparts...............................................6
Section 7.06 Further Agreements.........................................7
Section 7.07 Intention of the Parties...................................7
Section 7.08 Successors and Assigns; Assignment of
Purchase Agreement.........................................7
ADDITIONAL MORTGAGE LOAN PURCHASE AGREEMENT, dated as of August [ ],
2006 (the "Agreement"), between Bank of America, National Association (the
"Seller") and Asset Backed Funding Corporation (the "Purchaser").
WITNESSETH
WHEREAS, the Seller is the owner of (a) the notes or other evidences
of indebtedness (the "Mortgage Notes") so indicated on Schedule I hereto
referred to below and (b) the other documents or instruments constituting the
Mortgage File (collectively, the "Additional Group 3 Mortgage Loans"); and
WHEREAS, the Seller, as of the date hereof, owns the mortgages (the
"Mortgages") on the properties (the "Mortgaged Properties") securing such
Additional Group 3 Mortgage Loans, including rights to (a) any property acquired
by foreclosure or deed in lieu of foreclosure or otherwise and (b) the proceeds
of any insurance policies covering the Additional Group 3 Mortgage Loans or the
Mortgaged Properties or the obligors on the Additional Group 3 Mortgage Loans;
and
WHEREAS, the parties hereto desire that the Seller sell the
Additional Group 3 Mortgage Loans to the Purchaser pursuant to the terms of this
Agreement; and
WHEREAS, pursuant to the terms of an Additional Transfer Instrument,
dated as of August [ ], 2006 (the "Additional Transfer Instrument"), between the
Purchaser, as depositor, and ▇▇▇▇▇ Fargo Bank, N.A., as trustee (the "Trustee"),
the Purchaser will convey the Additional Group 3 Mortgage Loans to ABFC
2006-OPT1 Trust (the "Trust").
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01 Definitions. All capitalized terms used but not defined
herein and below shall have the meanings assigned thereto in the Pooling and
Servicing Agreement, dated as of July 1, 2006 (the "Pooling and Servicing
Agreement"), among the Purchaser, as depositor, Option One Mortgage Corporation,
as servicer, and the Trustee.
ARTICLE II.
SALE OF ADDITIONAL GROUP 3 MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 Sale of Additional Group 3 Mortgage Loans. The Seller,
concurrently with the execution and delivery of this Agreement, does hereby
sell, assign, set over, and otherwise convey to the Purchaser, without recourse,
(i) all of its right, title and interest in and to each Additional Group 3
Mortgage Loan, including the related Cut-off Date Principal Balance, all
interest accruing thereon on or after the Subsequent Cut-off Date and all
collections in respect of interest and principal due after the Subsequent
Cut-off Date; (ii) property which secured such Additional Group 3 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 Additional Group 3
Mortgage Loans and (iv) all proceeds of any of the foregoing.
Section 2.02 Obligations of the Seller Upon Sale. In connection with any
transfer pursuant to Section 2.01 hereof, the Seller further agrees, at its own
expense on or prior to the Additional Transfer Date, (a) to cause its books and
records to indicate that the Additional Group 3 Mortgage Loans have been sold to
the Purchaser pursuant to this Agreement and (b) to deliver to the Purchaser and
the Trustee a computer file containing a true and complete list of all such
Additional Group 3 Mortgage Loans specifying for each such Additional Group 3
Mortgage Loan, as of the Subsequent Cut-off Date, (i) its account number and
(ii) its Cut-off Date Principal Balance. Such file, which forms a part of the
Mortgage Loan Schedule, shall also be marked as Schedule I to this Agreement and
is hereby incorporated into and made a part of this Agreement.
In connection with any conveyance by the Seller, the Seller shall
on behalf of the Purchaser deliver to, and deposit with the Trustee, as assignee
of the Purchaser, on or before the Additional Transfer Date, the following
documents or instruments with respect to each Additional Group 3 Mortgage Loan:
(i) the original Mortgage Note, endorsed in blank or with respect to
any lost Mortgage Note, an original Lost Note Affidavit, together
with a copy of the related Mortgage Note;
(ii) 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 (which may be in blank), in
form and substance acceptable for recording; provided, however, if
the related Mortgage has been recorded in the name of Mortgage
Electronic Registration Systems, Inc. ("MERS") or its designee, no
Assignment of Mortgage in favor of the Trustee will be required to
be prepared or delivered and instead, the Servicer shall take all
actions as are necessary to cause the Trust to be shown as the
owner of the related Mortgage Loan on the records of MERS for
purposes of the system of recording transfers of beneficial
ownership of mortgages maintained by MERS;
(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 Seller hereby confirms to the Purchaser and the Trustee that
it has caused the appropriate entries to be made in its general accounting
records to indicate that such Additional Group 3 Mortgage Loans have been
transferred to the Trustee and constitute part of the Trust in accordance with
the terms of the Pooling and Servicing Agreement.
If any of the documents referred to in Section 2.02(ii), (iii) or
(iv) above has as of the Additional Transfer Date been submitted for recording
but either (x) has not been returned from the applicable public recording office
or (y) has been lost or such public recording office has retained the original
of such document, the obligations of the Seller to deliver such documents shall
be deemed to be satisfied upon (1) delivery to the Trustee, no later than the
Additional Transfer 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 Seller 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 Additional
Group 3 Mortgage Loan, including, but not limited to, any original documents
evidencing an assumption or modification of any Additional Group 3 Mortgage
Loan.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Seller
shall have 120 days to cure such defect or deliver such missing document to the
Trustee or 150 days following the Additional Transfer Date, in the case of
missing Mortgages or Assignments of Mortgage (or within 90 days of the earlier
of Seller's discovery or receipt of notification if such defect would cause the
related Additional Group 3 Mortgage Loan not to be a "qualified mortgage" for
REMIC purposes or that the Additional Group 3 Mortgage Loan is defective in a
manner that would cause it to be a "defective obligation" within the meaning of
Treasury regulations relating to REMICs). If the Seller does not cure such
defect or deliver such missing document within such time period, the Seller
shall either repurchase or substitute for such Additional Group 3 Mortgage Loan
in accordance with Section 2.03 of the Pooling and Servicing Agreement.
The Purchaser hereby acknowledges its acceptance of all right,
title and interest to the Additional Group 3 Mortgage Loans and other property,
now existing and hereafter created, conveyed to it pursuant to Section 2.01.
The parties hereto intend that the transaction set forth herein be
a sale by the Seller to the Purchaser of all the Seller's right, title and
interest in and to the Additional Group 3 Mortgage Loans and other property
described above. In the event the transaction set forth herein is deemed not to
be a sale, the Seller hereby grants to the Purchaser a security interest in all
of the Seller's right, title and interest in, to and under the Additional Group
3 Mortgage Loans and other property described above, whether now existing or
hereafter created, to secure all of the Seller's obligations hereunder; and this
Agreement shall constitute a security agreement under applicable law.
Section 2.03 Payment of Additional Group 3 Mortgage Loans Purchase Price.
In consideration of the sale of the Additional Group 3 Mortgage
Loans from the Seller to the Purchaser on the Additional Transfer Date, the
Purchaser agrees to pay $[__________] on the Additional Transfer Date (the
"Additional Group 3 Mortgage Loans Purchase Price").
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 Seller Representations and Warranties Relating to the
Additional Group 3 Mortgage Loans.
The Seller and the Purchaser understand, acknowledge and agree
that, the representations and warranties set forth in this Section 3.01 are made
as of the Additional Transfer Date or as of the date specifically provided
herein.
The Seller hereby represents and warrants to the Purchaser with
respect to the Additional Group 3 Mortgage Loans that each of the
representations and warranties made by the Seller pursuant to Section 3.01 of
the Mortgage Loan Purchase Agreement, dated July 1, 2006 (the "MLPA") between
the Seller and the Purchaser, are true and correct as of the Additional Transfer
Date; provided, however, that any references in the MLPA to Cut-off Date shall
be a reference to Subsequent Cut-off Date herein, that any references in the
MLPA to Mortgage Loan shall be a reference to Additional Group 3 Mortgage Loan
herein and that any references in the MLPA to Closing Date shall be a reference
to Additional Transfer Date herein.
Section 3.02 Seller Representations and Warranties Relating to the
Seller.
The Seller represents, warrants and covenants to the Purchaser
that each of the representations and warranties made by the Seller pursuant to
Section 3.02 of the MLPA are true and correct as of the Additional Transfer
Date; provided, however, that any references in the MLPA to Cut-off Date shall
be a reference to Subsequent Cut-off Date, that any references in the MLPA to
Mortgage Loan shall be a reference to Additional Group 3 Mortgage Loan and that
any references in the MLPA to Closing Date shall be a reference to Additional
Transfer Date.
Section 3.03 Remedies for Breach of Representations and Warranties.
It is understood and agreed that the representations and
warranties set forth in Subsections 3.01 and 3.02 of the MLPA shall survive the
sale of the Additional Group 3 Mortgage Loans to the Purchaser and shall inure
to the benefit of the Purchaser, notwithstanding any restrictive or qualified
endorsement on any Mortgage Note or Assignment or the examination or lack of
examination of any Mortgage File. With respect to the representations and
warranties contained in the MLPA that are made to the knowledge or the best
knowledge of the Seller, or as to which the Seller has no knowledge, if it is
discovered that the substance of any such representation and warranty is
inaccurate and the inaccuracy materially and adversely affects the value of the
related Additional Group 3 Mortgage Loan, or the interest therein of the
Purchaser or the Purchaser's assignee, designee or transferee, 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
and warranty was made, such inaccuracy shall be deemed a breach of the
applicable representation and warranty and the Seller shall take such action
described in the following paragraphs of this Section 3.03 in respect of such
Additional Group 3 Mortgage Loan.
Upon discovery by either the Seller or the Purchaser of a breach
of any of the foregoing representations and warranties that materially and
adversely affects the value of the Additional Group 3 Mortgage Loans or the
interest of the Purchaser (or which materially and adversely affects the
interests of the Purchaser in the related Additional Group 3 Mortgage Loan in
the case of a representation and warranty relating to a particular Additional
Group 3 Mortgage Loan), the party discovering such breach shall give prompt
written notice to the other. Subject to the second paragraph of Section 3.01 of
the MLPA, within 90 days of the earlier of its discovery or its receipt of
notice of any breach of a representation or warranty, the Seller shall promptly
cure such breach in all material respects, or in the event such breach cannot be
cured, the Seller shall repurchase the affected Additional Group 3 Mortgage Loan
or cause the removal of such Mortgage Loan from the Trust Fund and substitute
for it one or more Eligible Substitute Mortgage Loans, in either case, in
accordance with Section 2.03 of the Pooling and Servicing Agreement.
It is understood and agreed that the representations and
warranties set forth in Sections 3.01 and 3.02 of the MLPA shall survive
delivery of the respective Mortgage Files to the Trustee on behalf of the
Purchaser.
It is understood and agreed that the obligations of the Seller set
forth in this Section 3.03 to cure, repurchase and substitute for a defective
Additional Group 3 Mortgage Loan constitute the sole remedy of the Purchaser
respecting a missing or defective document or a breach of the representations
and warranties contained in Section 3.01 or 3.02 of the MLPA.
ARTICLE IV.
SELLER'S COVENANTS
Section 4.01 Covenants of the Seller. The Seller hereby covenants that
except for the transfer hereunder, the Seller will not sell, pledge, assign or
transfer to any other Person, or grant, create, incur or assume or suffer to
exist any lien on any Additional Group 3 Mortgage Loan, or any interest therein;
the Seller will notify the Trustee, as assignee of the Purchaser, of the
existence of any lien on any Additional Group 3 Mortgage Loan immediately upon
discovery thereof, and the Seller will defend the right, title and interest of
the Trust, as assignee of the Purchaser, in, to and under the Additional Group 3
Mortgage Loans, against all claims of third parties claiming through or under
the Seller; provided, however, that nothing in this Section 4.01 shall prevent
or be deemed to prohibit the Seller from suffering to exist upon any of the
Additional Group 3 Mortgage Loans, any liens for municipal or other local taxes
and other governmental charges if such taxes or governmental charges shall not
at the time be due and payable or if the Seller shall currently be contesting
the validity thereof in good faith by appropriate proceedings and shall have set
aside on its books adequate reserves with respect thereto.
ARTICLE V.
[RESERVED]
ARTICLE VI
TERMINATION
Section 6.01 Termination. The respective obligations and responsibilities
of the Seller and the Purchaser created hereby shall terminate, except for the
Seller's indemnity obligations as provided herein upon the termination of the
Trust as provided in Article X of the Pooling and Servicing Agreement.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01 Amendment. This Agreement may be amended from time to time
by the Seller and the Purchaser, by written agreement signed by the Seller and
the Purchaser.
Section 7.02 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
Section 7.03 Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, postage prepaid, addressed as
follows: (i) if to the Seller, Bank of America, National Association, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel or
such other address as may hereafter be furnished to the Purchaser in writing by
the Seller and (ii) if to the Purchaser, Asset Backed Funding Corporation, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇, or such other address as may hereafter be furnished to the
Seller in writing by the Purchaser.
Section 7.04 Severability of Provisions. If any one or more of the
covenants, agreements, provisions of terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity of
enforceability of the other provisions of this Agreement.
Section 7.05 Counterparts. This Agreement may be executed in one or more
counterparts and by the different parties hereto on separate counterparts, each
of which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.
Section 7.06 Further Agreements. The Purchaser and the Seller each agree
to execute and deliver to the other such additional documents, instruments or
agreements as may be necessary or reasonable and appropriate to effectuate the
purposes of this Agreement or in connection with the issuance of any Series of
Certificates representing interests in the Additional Group 3 Mortgage Loans.
Section 7.07 Intention of the Parties. It is the intention of the parties
that the Purchaser is purchasing, and the Seller is selling, the Additional
Group 3 Mortgage Loans rather than pledging the Additional Group 3 Mortgage
Loans to secure a loan by the Purchaser to the Seller. Accordingly, the parties
hereto each intend to treat the transaction for federal income tax purposes and
all other purposes as a sale by the Seller, and a purchase by the Purchaser, of
the Additional Group 3 Mortgage Loans. The Purchaser will have the right to
review the Additional Group 3 Mortgage Loans and the related Mortgage Files to
determine the characteristics of the Additional Group 3 Mortgage Loans which
will affect the federal income tax consequences of owning the Additional Group 3
Mortgage Loans and the Seller will cooperate with all reasonable requests made
by the Purchaser in the course of such review.
Section 7.08 Successors and Assigns; Assignment of Purchase Agreement.
This Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, the Purchaser and the Trustee.
The obligations of the Seller under this Agreement cannot be assigned or
delegated to a third party without the consent of the Purchaser which consent
shall be at the Purchaser's sole discretion, except that the Purchaser
acknowledges and agrees that the Seller may assign its obligations hereunder to
any Person into which the Seller is merged or any corporation resulting from any
merger, conversion or consolidation to which the Seller is a party or any Person
succeeding to the business of the Seller. The parties hereto acknowledge that
the Purchaser is acquiring the Additional Group 3 Mortgage Loans for the purpose
of contributing them to a trust that will issue a series of Certificates
representing undivided interests in such Additional Group 3 Mortgage Loans. As
an inducement to the Purchaser to purchase the Additional Group 3 Mortgage
Loans, the Seller acknowledges and consents to the assignment by the Purchaser
to the Trustee of all of the Purchaser's rights against the Seller pursuant to
this Agreement insofar as such rights relate to Additional Group 3 Mortgage
Loans transferred to the Trustee and to the enforcement or exercise of any right
or remedy against the Seller pursuant to this Agreement by the Trustee. Such
enforcement of a right or remedy by the Trustee shall have the same force and
effect as if the right or remedy had been enforced or exercised by the Purchaser
directly.
Section 7.09 Survival. The representations and warranties incorporated by
reference in Sections 3.01 and 3.02 and the provisions of Article V hereof shall
survive the purchase of the Additional Group 3 Mortgage Loans hereunder.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed to this Additional Mortgage Loan Purchase Agreement by their
respective officers thereunto duly authorized as of the day and year first above
written.
ASSET BACKED FUNDING CORPORATION
By:________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇-▇▇▇▇▇▇
Title: Vice President
BANK OF AMERICA, NATIONAL
ASSOCIATION
By:_________________________________
Name: ▇▇▇▇▇ ▇. Good
Title: Vice President
SCHEDULE I
ADDITIONAL GROUP 3 MORTGAGE LOANS