EXHIBIT 4
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ASSET BACKED FUNDING CORPORATION,
Depositor
OPTION ONE MORTGAGE CORPORATION,
Master Servicer
and
▇▇▇▇▇ FARGO BANK, N.A.,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of October 1, 2004
ABFC 2004-OPT5 Trust
ABFC Asset-Backed Certificates, Series 2004-OPT5
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms..................................................
Section 1.02 Accounting.....................................................
Section 1.03 Rights of the NIMS Insurer.....................................
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
Originator or the Seller.......................................
Section 2.04 [Reserved].....................................................
Section 2.05 Representations, Warranties and Covenants of the Master
Servicer.......................................................
Section 2.06 Representations and Warranties of the Depositor................
Section 2.07 Issuance of Certificates and the Uncertificated
Regular Interests..............................................
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01 Master Servicer to Act as Servicer.............................
Section 3.02 Collection of Mortgage Loan Payments...........................
Section 3.03 Realization Upon Defaulted Mortgage Loans......................
Section 3.04 Collection Account, Distribution Account and Reserve Accounts..
Section 3.05 Permitted Withdrawals From the Collection Account..............
Section 3.06 Establishment of Escrow Accounts; Deposits in Escrow Accounts..
Section 3.07 Permitted Withdrawals From Escrow Account......................
Section 3.08 Payment of Taxes, Insurance and Other Charges; Collections
Thereunder.....................................................
Section 3.09 Transfer of Accounts...........................................
Section 3.10 Maintenance of Hazard Insurance................................
Section 3.11 Maintenance of Mortgage Impairment Insurance Policy............
Section 3.12 Fidelity Bond, Errors and Omissions Insurance..................
Section 3.13 Title, Management and Disposition of REO Property..............
Section 3.14 Due-on-Sale Clauses; Assumption and Substitution Agreements....
Section 3.15 Notification of Adjustments....................................
Section 3.16 Optional Purchases of Mortgage Loans by Master Servicer........
Section 3.17 Trustee to Cooperate; Release of Files.........................
Section 3.18 Servicing Compensation.........................................
Section 3.19 Annual Statement as to Compliance..............................
Section 3.20 Annual Independent Certified Public Accountants' Reports.......
Section 3.21 Access to Certain Documentation and Information Regarding the
Mortgage Loans.................................................
Section 3.22 Duties of Credit Risk Manager..................................
Section 3.23 Obligations of the Master Servicer in Respect of Compensating
Interest.......................................................
Section 3.24 Obligations of the Master Servicer in Respect of Mortgage
Interest Rates and Monthly Payments............................
Section 3.25 Investment of Funds in the Collection Account and the
Distribution Account...........................................
Section 3.26 Liability of Master Servicer; Indemnification..................
Section 3.27 Reports of Foreclosure and Abandonment of Mortgaged Properties.
Section 3.28 Protection of Assets...........................................
Section 3.29 Limitation of Liability of the Credit Risk Manager.............
Section 3.30 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............................................
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates...............................................
Section 5.02 Registration of Transfer and Exchange of Certificates..........
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates..............
Section 5.04 Persons Deemed Owners..........................................
Section 5.05 Appointment of Paying Agent....................................
ARTICLE VI
THE SERVICER AND THE DEPOSITOR
Section 6.01 Liability of the Master Servicer and the Depositor.............
Section 6.02 Merger or Consolidation of, or Assumption of the Obligations
of, the Master Servicer or the Depositor.......................
Section 6.03 Limitation on Liability of the Master Servicer and Others......
Section 6.04 Master Servicer Not to Resign..................................
Section 6.05 Delegation of Duties...........................................
ARTICLE VII
DEFAULT
Section 7.01 Servicer Events of Termination.................................
Section 7.02 Trustee to Act; Appointment of Successor.......................
Section 7.03 Waiver of Defaults.............................................
Section 7.04 Notification to Certificateholders.............................
Section 7.05 Survivability of Master Servicer Liabilities...................
ARTICLE VIII
THE TRUSTEE
Section 8.01 Duties of Trustee..............................................
Section 8.02 Certain Matters Affecting the Trustee..........................
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans..........
Section 8.04 Trustee May Own Certificates...................................
Section 8.05 Trustee Fees and Expenses......................................
Section 8.06 Eligibility Requirements for Trustee...........................
Section 8.07 Resignation or Removal of Trustee..............................
Section 8.08 Successor Trustee..............................................
Section 8.09 Merger or Consolidation of Trustee.............................
Section 8.10 Appointment of Co-Trustee or Separate Trustee..................
Section 8.11 Limitation of Liability........................................
Section 8.12 Trustee May Enforce Claims Without Possession of Certificates..
Section 8.13 Suits for Enforcement..........................................
Section 8.14 Waiver of Bond Requirement.....................................
Section 8.15 Waiver of Inventory, Accounting and Appraisal Requirement......
ARTICLE IX
REMIC AND GRANTOR TRUST ADMINISTRATION
Section 9.01 REMIC Administration...........................................
Section 9.02 Prohibited Transactions and Activities.........................
Section 9.03 Indemnification with Respect to Certain Taxes and Loss of
REMIC Status...................................................
Section 9.04 REO Property...................................................
Section 9.05 Grantor Trust Administration...................................
ARTICLE X
TERMINATION
Section 10.01 Termination....................................................
Section 10.02 Additional Termination Requirements............................
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment......................................................
Section 11.02 Recordation of Agreement; Counterparts.........................
Section 11.03 Limitation on Rights of Certificateholders.....................
Section 11.04 Governing Law; Jurisdiction....................................
Section 11.05 Notices........................................................
Section 11.06 Severability of Provisions.....................................
Section 11.07 Article and Section References.................................
Section 11.08 Notice to the Rating Agencies and the NIMS Insurer.............
Section 11.09 Further Assurances.............................................
Section 11.10 Third Party Beneficiary........................................
Section 11.11 Acts of Certificateholders.....................................
EXHIBITS:
Exhibit A-1 Form of Class A-1 Certificates
Exhibit A-2 Form of Class A-2 Certificates
Exhibit A-3 Form of Class A-3 Certificates
Exhibit A-4 Form of Class A-4 Certificates
Exhibit 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 C-1 Form of Class CE Certificates
Exhibit C-2 Form of Class P Certificates
Exhibit C-3 Form of Class R Certificates
Exhibit D-1 Group 1 Mortgage Loan Schedule
Exhibit D-2 Group 2 Mortgage Loan Schedule
Exhibit E Form of Request for Release
Exhibit F-1 Form of Trustee's Initial Certification
Exhibit F-2 Form of Trustee's Final Certification
Exhibit F-3 Form of Receipt of Mortgage Note
Exhibit G Mortgage Loan Purchase Agreement
Exhibit H Form of Lost Note Affidavit
Exhibit I Form of ERISA Representation
Exhibit J-1 Form of Investment Letter (Non-Rule 144A)
Exhibit J-2 Form of Rule 144A Investment Letter
Exhibit K Form of Class R Certificate Transfer Affidavit
Exhibit L Form of Transferor Certificate
Exhibit M Monthly Information Provided by Master Servicer
Exhibit N Form of Yield Maintenance Agreements
Exhibit O Form of Certification
Exhibit P-1 Form of Certification of the Trustee to be Provided to Depositor
Exhibit P-2 Form of Certification of the Master Servicer to be Provided to
Depositor
ASSET BACKED FUNDING CORPORATION, as depositor (the "Depositor"),
OPTION ONE MORTGAGE CORPORATION, as servicer (the "Master Servicer"), and ▇▇▇▇▇
FARGO BANK, N.A., as trustee (the "Trustee") are entering into this Pooling and
Servicing Agreement, dated as of October 1, 2004 (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 fourteen
Classes of Certificates, designated as (i) the Class A-1, Class A-2, Class A-3
and Class A-4 Certificates, (ii) the Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6 and Class M-7 Certificates, (iii) the Class CE
Certificates, (iv) the Class P Certificates and (v) the Class R Certificate.
REMIC 1
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement (but exclusive of the Yield Maintenance
Agreements, the Reserve Accounts, 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 Pass-Through Uncertificated Latest Possible
Designation Rate Balance Maturity Date
----------- ---- ------- -------------
LT1AA Variable (2) $659,924,743.68 September 25, 2034
LT1A1 Variable (2) $4,656,965.00 September 25, 2034
LT1A2 Variable (2) $726,910.00 September 25, 2034
LT1A3 Variable (2) $346,535.00 September 25, 2034
LT1A4 Variable (2) $330,120.00 September 25, 2034
LT1M1 Variable (2) $269,355.00 September 25, 2034
LT1M2 Variable (2) $185,180.00 September 25, 2034
LT1M3 Variable (2) $50,505.00 September 25, 2034
LT1M4 Variable (2) $50,500.00 September 25, 2034
LT1M5 Variable (2) $40,405.00 September 25, 2034
LT1M6 Variable (2) $23,570.00 September 25, 2034
LT1M7 Variable (2) $20,200.00 September 25, 2034
LT1ZZ Variable (2) $6,767,606.91 September 25, 2034
LT1SUB Variable (2) $10,348.85 September 25, 2034
LT1GRP Variable (2) $103,488.15 September 25, 2034
LT2SUB Variable (2) $3,119.06 September 25, 2034
LT2GRP Variable (2) $31,190.36 September 25, 2034
LT1XX Variable (2) $673,244,449.16 September 25, 2034
(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 shall make an election to treat the
segregated pool of assets consisting of the REMIC 1 Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 2." The Class R-2 Interest represents the sole class of
"residual interests" in REMIC 2 for purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class designation,
Certificate Interest Rate and Original Class Certificate Principal Balance for
each Class of Certificates comprising the interests in the Trust Fund created
hereunder:
Original Class
Certificate Certificate Assumed Final
Class Principal Balance Interest Rate Maturity Dates
----- ----------------- ------------- --------------
A-1 $931,393,000.00 (1) June 25, 2034
A-2 $145,382,000.00 (2) June 25, 2025
A-3 $69,307,000.00 (3) September 25, 2030
A-4 $66,024,000.00 (4) June 25, 2034
M-1 $53,871,000.00 (5) March 25, 2034
M-2 $37,036,000.00 (6) December 25, 2033
M-3 $10,101,000.00 (7) July 25, 2033
M-4 $10,100,000.00 (8) March 25, 2033
M-5 $8,081,000.00 (9) August 25, 2032
M-6 $4,714,000.00 (10) July 25, 2031
M-7 $4,040,000.00 (11) December 25, 2029
CE (12) (12) N/A
P ▇/▇ ▇/▇ ▇/▇
▇ ▇/▇ ▇/▇ ▇/▇
Total $1,340,049,000.00
(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-3 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class A-3
Pass-Through Rate and (ii) the Group 2 Cap for such Distribution Date.
(4) Interest will accrue on the Class A-4 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class A-4
Pass-Through Rate and (ii) the Group 2 Cap for such Distribution Date.
(5) 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.
(6) 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.
(7) 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.
(8) 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.
(9) 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.
(10) 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.
(11) 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.
(12) Solely for REMIC purposes, the Class CE Certificates will (i) have an
Original Class Certificate Principal Balance equal to the Initial
Overcollateralization Amount and (ii) will bear interest on their Notional
Amount.
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement or in the Preliminary Statement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. Interest on all Classes of REMIC 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.
"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 Class A-1 Reserve Account, the Group 2-A Reserve Account, the Class M
Reserve Account or the Escrow Account.
"Accrued Certificate Interest": With respect to each Distribution
Date and Class of Certificates, an amount equal to the interest accrued at the
Certificate Interest Rate described opposite such Class in the table in the
Preliminary Statement during the related Interest Accrual Period on the
Certificate Principal Balance of such Class of Certificates, reduced by such
Class' Interest Percentage of Relief Act Interest Shortfalls for such
Distribution Date.
"Adjustable-Rate Mortgage Loan": A Mortgage Loan which has a rate at
which interest accrues that adjusts based on the Index plus a related Gross
Margin, as set forth and subject to the limitations in the related Mortgage
Note.
"Adjustment Date": With respect to each Adjustable-Rate Mortgage
Loan, each adjustment date on which the Mortgage Interest Rate of an
Adjustable-Rate Mortgage Loan changes pursuant to the related Mortgage Note. The
first Adjustment Date following the Cut-off Date as to each Adjustable-Rate
Mortgage Loan is set forth in the Mortgage Loan Schedules.
"Advance": As to any Mortgage Loan, any advance made by the Master
Servicer in respect of any Distribution Date pursuant to Section 4.07.
"Adverse REMIC Event": As defined in Section 9.01(f) hereof.
"Affiliate": With respect to any Person, any other Person
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise and "controlling" and "controlled"
shall have meanings correlative to the foregoing.
"Aggregate Overcollateralization Release Amount": With respect to
any Distribution Date, the lesser of (i) the Principal Remittance Amount and
(ii) the Overcollateralization Release Amount.
"Agreement": This Pooling and Servicing Agreement and all
amendments and supplements hereto.
"Applicable Regulations": As to any Mortgage Loan, all federal,
state and local laws, statutes, rules and regulations applicable thereto.
"Applied Realized Loss Amount": With respect to each Distribution
Date, the excess, if any, of 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.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect or
record the sale of the Mortgage.
"Assumed Final Maturity Date": As to each Class of Certificates, the
date set forth as such in the Preliminary Statement.
"Available Funds": As to any Distribution Date, an amount equal to
the excess of (i) the sum of (a) the aggregate of the Monthly Payments due
during the related Collection Period and received on or prior to the related
Determination Date by the Master 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 Master Servicer
for such Distribution Date and (f) any Reimbursement Amount or Subsequent
Recovery deposited into the Collection Account during the related Prepayment
Period over (ii) the sum of (a) amounts reimbursable or payable to the Master
Servicer pursuant to Sections 3.05 or 6.03, (b) amounts reimbursable or payable
to the Trustee pursuant to Section 8.05 (other than Trustee Fees) or Section
9.01(c), (c) Stayed Funds, (d) the Servicing Fee and (e) amounts deposited in
the Collection Account or the Distribution Account, as the case may be, in
error.
"Bankruptcy Code": Title 11 of the United States Code, as amended.
"Book-Entry Certificates": Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant," or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.02 hereof). On the Closing
Date, the Class A-1, Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-4, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6 and Class M-7 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.
"Cap": Any of the Group 1 Cap, the Group 2 Cap or the Pool Cap.
"Cap Amount": With respect to each Distribution Date and each Class
of Class M Certificates, the product of (i) the Class M Yield Maintenance
Agreement Payment for such Distribution Date and (ii) a fraction, the numerator
of which is the Certificate Principal Balance of such Class immediately prior to
such Distribution Date and the denominator of which is the aggregate Certificate
Principal Balance of the Class M Certificates immediately prior to such
Distribution Date.
"Cap Carryover Amount": If on any Distribution Date, the Accrued
Certificate Interest for any Offered Certificate and the Class M-7 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).
"Certificate": Any Regular Certificate, Class P Certificate or
Class R 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 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 Class R Certificates) and any
Distribution Date, the Original Class Certificate Principal Balance (a) reduced
by the sum of (i) all amounts actually distributed in respect of principal of
such Class on all prior Distribution Dates and (ii) Applied Realized Loss
Amounts allocated thereto 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 Class R Certificates do not have a Certificate
Principal Balance. With respect to any Certificate (other than a Class CE, Class
P or Class R Certificate) of a Class and any Distribution Date, the portion of
the Certificate Principal Balance of such Class represented by such Certificate
equal to the product of the Percentage Interest evidenced by such Certificate
and the Certificate Principal Balance of such Class.
"Certificate Register" and "Certificate Registrar": The register
maintained and registrar appointed pursuant to Section 5.02 hereof.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or non-U.S. Person shall not be a Holder of the Class
R Certificate for any purpose hereof.
"Certification": As defined in Section 3.31(b) hereof.
"Class": Collectively, Certificates or REMIC Regular Interests which
have the same priority of payment and bear the same class designation and the
form of which is identical except for variation in the Percentage Interest
evidenced thereby.
"Class A-1 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 0.350% per annum, and (ii) following the
Optional Termination Date, 0.700% per annum.
"Class A-1 Pass-Through Rate": For each Distribution Date, a rate
per annum equal to One-Month LIBOR as of the related LIBOR Determination Date,
plus the Class A-1 Certificate Margin.
"Class A-1 Reserve Account": The trust account created and
maintained by the Trustee pursuant to Section 3.04(g) which shall be entitled
"Class A-1 Reserve Account, ▇▇▇▇▇ Fargo Bank, N.A., as Trustee, in trust for
registered Holders of the Class A-1 Certificates of the ABFC 2004-OPT5 Trust,
ABFC Asset-Backed Certificates, Series 2004-OPT5" and which must be an Eligible
Account. Amounts on deposit in the Class A-1 Reserve Account shall not be
invested. The Class A-1 Reserve Account shall not be an asset of any REMIC
formed under this Agreement.
"Class A-1 Yield Maintenance Agreement": The yield maintenance
agreement between the Trustee, on behalf of the Trust, and the Class A-1 Yield
Maintenance Agreement Provider substantially in the form attached hereto as
Exhibit N. The Class A-1 Yield Maintenance Agreement shall not be an asset of
any REMIC formed under this Agreement.
"Class A-1 Yield Maintenance Agreement Payment": On each
Distribution Date through the Distribution Date in August 2008, the amount equal
to the product of (a) the excess of the lesser of (i) One-Month LIBOR and (ii)
the applicable ceiling rate for such Distribution Date over the strike rate for
such Distribution Date, in each case as set forth on the schedule attached to
the confirmation to the Class A-1 Yield Maintenance Agreement, (b) the product
of the cap notional amount and the scale factor for such Distribution Date, both
as set forth on the schedule attached to the confirmation to the Class A-1 Yield
Maintenance Agreement and (c) a fraction, the numerator of which is the actual
number of days elapsed since the previous Distribution Date (or the Closing
Date, in the case of the first Distribution Date) to but excluding the current
Distribution Date and the denominator of which is 360.
"Class A-1 Yield Maintenance Agreement Provider": WestLB AG, New
York Branch and any successor thereto.
"Class A-2 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 0.190% per annum, and (ii) following the
Optional Termination Date, 0.380% per annum.
"Class A-2 Pass-Through Rate": For each Distribution Date, a rate
per annum equal to One-Month LIBOR as of the related LIBOR Determination Date,
plus the Class A-2 Certificate Margin.
"Class A-3 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 0.370% per annum, and (ii) following the
Optional Termination Date, 0.740% per annum.
"Class A-3 Pass-Through Rate": For each Distribution Date, a rate
per annum equal to One-Month LIBOR as of the related LIBOR Determination Date,
plus the Class A-3 Certificate Margin.
"Class A-4 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 0.625% per annum, and (ii) following the
Optional Termination Date, 1.250% per annum.
"Class A-4 Pass-Through Rate": For each Distribution Date, a rate
per annum equal to One-Month LIBOR as of the related LIBOR Determination Date,
plus the Class A-4 Certificate Margin.
"Class A Certificate": Any one of the Certificates with an "A"
designated on the face thereof substantially in the form annexed hereto as
Exhibits ▇-▇, ▇-▇, ▇-▇ and A-4, executed by the Trustee on behalf of the Trust
and authenticated and delivered by the Certificate Registrar, representing the
right to distributions as set forth herein and therein.
"Class A Certificateholders": Collectively, the Holders of the
Class A Certificates.
"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, 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 paid pursuant to Section 4.02(b)(xxiv),
(ii) any remaining Aggregate Overcollateralization Release Amounts, (iii) the
aggregate of amounts remaining in the Reserve Accounts after the distributions
in Section 3.04(g)(i)(A) through Section 3.04(g)(i)(E).
"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 B-5, Exhibit B-6 and
Exhibit B-7, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
"Class M Certificateholders": Collectively, the Holders of the
Class M Certificates.
"Class M Reserve Account": The trust account created and maintained
by the Trustee pursuant to Section 3.04(g) which shall be entitled "Class M
Reserve Account, ▇▇▇▇▇ Fargo Bank, N.A., as Trustee, in trust for registered
Holders of the Class M Certificates of the ABFC 2004-OPT5 Trust, ABFC
Asset-Backed Certificates, Series 2004-OPT5" and which must be an Eligible
Account. Amounts on deposit in the Class M Reserve Account shall not be
invested. The Class M Reserve Account shall not be an asset of any REMIC formed
under this Agreement.
"Class M Yield Maintenance Agreement": The yield maintenance
agreement between the Trustee, on behalf of the Trust, and the Class M Yield
Maintenance Agreement Provider substantially in the form attached hereto as
Exhibit N. The Class M Yield Maintenance Agreement shall not be an asset of any
REMIC formed under this Agreement.
"Class M Yield Maintenance Agreement Payment": On each Distribution
Date through the Distribution Date in January 2012, the amount equal to the
product of (a) the excess of the lesser of (i) One-Month LIBOR and (ii) the
applicable ceiling rate for such Distribution Date over the strike rate for such
Distribution Date, in each case as set forth on the schedule attached to the
confirmation to the Class M Yield Maintenance Agreement, (b) the product of the
cap notional amount and the scale factor for such Distribution Date, both as set
forth on the schedule attached to the confirmation to the Class M Yield
Maintenance Agreement and (c) a fraction, the numerator of which is the actual
number of days elapsed since the previous Distribution Date (or the Closing
Date, in the case of the first Distribution Date) to but excluding the current
Distribution Date and the denominator of which is 360.
"Class M Yield Maintenance Agreement Provider": WestLB AG, New York
Branch and any successor thereto.
"Class M-1 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.750% per annum, and (ii) following
the Optional Termination Date, 1.125% per annum.
"Class M-1 Pass-Through Rate": For each Distribution Date, One-Month
LIBOR as of the related LIBOR Determination Date, plus the Class M-1 Certificate
Margin.
"Class M-1 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the Certificate Principal Balances of
the Class A Certificates (after taking into account the payment of the 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) 88.00% and
(ii) the Pool Balance as of the last day of the related Collection Period and
(B) the Pool Balance as of the last day of the related Collection Period minus
the product of 0.50% and the Cut-off Date Aggregate Principal Balance.
"Class M-1 Realized Loss Amortization Amount": As to the Class M-1
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-1 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (iv) hereof, in each case
for such Distribution Date.
"Class M-2 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 1.450% per annum, and (ii) following the
Optional Termination Date, 2.175% per annum.
"Class M-2 Pass-Through Rate": For each Distribution Date, One-Month
LIBOR as of the related LIBOR Determination Date, plus the Class M-2 Certificate
Margin.
"Class M-2 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the Certificate Principal Balances of
the Class A Certificates (after taking into account the payment of the 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) 93.50% and (ii) the Pool Balance as of the last day of the
related Collection Period and (B) the Pool Balance as of the last day of the
related Collection Period minus the product of 0.50% and the Cut-off Date
Aggregate Principal Balance.
"Class M-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, 1.650% per annum, and (ii) following
the Optional Termination Date, 2.475% per annum.
"Class M-3 Pass-Through Rate": For each Distribution Date, One-Month
LIBOR as of the related LIBOR Determination Date, plus the Class M-3 Certificate
Margin.
"Class M-3 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the 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) 95.00% and (ii)
the Pool Balance as of the last day of the related Collection Period and (B) the
Pool Balance as of the last day of the related Collection Period minus the
product of 0.50% and the Cut-off Date Aggregate Principal Balance.
"Class M-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, 2.150% per annum, and (ii) following the
Optional Termination Date, 3.225% per annum.
"Class M-4 Pass-Through Rate": For each Distribution Date, One-Month
LIBOR as of the related LIBOR Determination Date, plus the Class M-4 Certificate
Margin.
"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)
96.50% and (ii) the Pool Balance as of the last day of the related Collection
Period and (B) the Pool Balance as of the last day of the related Collection
Period minus the product of 0.50% and the Cut-off Date Aggregate Principal
Balance.
"Class M-4 Realized Loss Amortization Amount": As to the Class M-4
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-4 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xiii) hereof, in each
case for such Distribution Date.
"Class M-5 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 3.000% per annum, and (ii) following the
Optional Termination Date, 4.500% per annum.
"Class M-5 Pass-Through Rate": For each Distribution Date, One-Month
LIBOR as of the related LIBOR Determination Date, plus the Class M-5 Certificate
Margin.
"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) 97.70% and (ii) the Pool Balance as of the last day of
the related Collection Period and (B) the Pool Balance as of the last day of the
related Collection Period minus the product of 0.50% and the Cut-off Date
Aggregate Principal Balance.
"Class M-5 Realized Loss Amortization Amount": As to the Class M-5
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-5 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xvi) hereof, in each
case for such Distribution Date.
"Class M-6 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 3.500% per annum, and (ii) following the
Optional Termination Date, 5.250% per annum.
"Class M-6 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the related LIBOR Determination Date, plus
the Class M-6 Certificate Margin and (b) the Pool Maximum Rate Cap.
"Class M-6 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Certificate Principal
Balances of the Class A Certificates (after taking into account the payment of
the Senior Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the payment of
the Class M-3 Principal Distribution Amount on such Distribution Date), (v) the
Certificate Principal Balance of the Class M-4 Certificates (after taking into
account the payment of the Class M-4 Principal Distribution Amount on such
Distribution Date), (vi) the Certificate Principal Balance of the Class M-5
Certificates (after taking into account the payment of the Class M-5 Principal
Distribution Amount on such Distribution Date) and (vii) the Certificate
Principal Balance of the Class M-6 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 98.40% and (ii)
the Pool Balance as of the last day of the related Collection Period and (B) the
Pool Balance as of the last day of the related Collection Period minus the
product of 0.50% and the Cut-off Date Aggregate Principal Balance.
"Class M-6 Realized Loss Amortization Amount": As to the Class M-6
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-6 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xix) hereof, in each
case for such Distribution Date.
"Class M-7 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 3.500% per annum, and (ii) following the
Optional Termination Date, 5.250% per annum.
"Class M-7 Pass-Through Rate": For each Distribution Date, One-Month
LIBOR as of the related LIBOR Determination Date, plus the Class M-7 Certificate
Margin.
"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 the
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 99.00% and (ii) the Pool Balance as of the last day of the
related Collection Period and (B) the Pool Balance as of the last day of the
related Collection Period minus the product of 0.50% and the Cut-off Date
Aggregate Principal Balance.
"Class 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 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 and
REMIC 2. The Class R Certificate represents the ownership of the Class R-1
Interest and the Class R-2 Interest.
"Class R-1 Interest": The uncertificated residual interest in REMIC
1.
"Class R-2 Interest": The uncertificated residual interest in REMIC
2.
"Closing Date": October 14, 2004.
"Code": The Internal Revenue Code of 1986, as it may be amended
from time to time.
"Collection Account": The account or accounts created and maintained
by the Master Servicer pursuant to Section 3.04(a), which shall be entitled
"Collection Account, Option One Mortgage Corporation, as Master Servicer for the
Trust under the Pooling and Servicing Agreement dated as of October 1, 2004
among Asset Backed Funding Corporation, as Depositor, Option One Mortgage
Corporation, as Master Servicer, and ▇▇▇▇▇ Fargo Bank, N.A., as Trustee, in
trust for registered Holders of ABFC 2004-OPT5 Trust, ABFC Asset-Backed
Certificates, Series 2004-OPT5," 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.
"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
October 14, 2004, between The Murrayhill Company, as 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 2004-OPT5 and (ii)
for all other purposes, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Client Manager-ABFC, Series 2004-OPT5 or at such other address as the
Trustee may designate from time to time by notice to the Certificateholders, the
Depositor and the Master Servicer.
"Corresponding Classes": With respect to REMIC 1 and REMIC 2, the
following Classes shall be Corresponding Classes:
Corresponding REMIC 1 Classes Corresponding REMIC 2 Classes
LT1A1 Class A-1 Certificates
LT1A2 Class A-2 Certificates
LT1A3 Class A-3 Certificates
LT1A4 Class A-4 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
"Credit Risk Manager": The Murrayhill Company, a Colorado
corporation.
"Credit Risk Manager Fee": The fee payable to the Credit Risk
Manager on each Distribution Date for its services as Credit Risk Manager, in an
amount equal to the product of (i) one-twelfth of the Credit Risk Manager Fee
Rate and (ii) the Pool Balance as of the opening of business on the first day of
the related Collection Period.
"Credit Risk Manager Fee Rate": With respect to any Distribution
Date, 0.0150% per annum.
"Credit Risk Management Agreement": The Credit Risk Management
Agreement between the Master Servicer and the Credit Risk Manager dated as of
October 14, 2004.
"Cut-off Date": October 1, 2004.
"Cut-off Date Aggregate Principal Balance": The aggregate of the
Cut-off Date Principal Balances of the Mortgage Loans.
"Cut-off Date Principal Balance": With respect to any Mortgage Loan,
the unpaid principal balance thereof as of the Cut-off Date after application of
funds received or advanced on or before such date (or as of the applicable date
of substitution with respect to an Eligible Substitute Mortgage Loan).
"DBRS": Dominion Bond Rating Service, Inc., and its successors, and
if such company shall for any reason no longer perform the functions of a
securities rating agency, "DBRS" shall be deemed to refer to any other
"nationally recognized statistical rating organization" as set forth on the most
current list of such organizations released by the Commission.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
"Defective Mortgage Loan": A Mortgage Loan replaced or to be
replaced by one or more Eligible Substitute Mortgage Loans.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.
"Definitive Certificates": As defined in Section 5.02(c) hereof.
"Delinquent": Any Mortgage Loan 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 Master
Servicer under this Agreement) shall not be considered to Directly Operate an
REO Property solely because the Trustee (or the Master Servicer under this
Agreement) establishes rental terms, chooses tenants, enters into or renews
leases, deals with taxes and insurance, or makes decisions as to repairs or
capital expenditures with respect to such REO Property.
"Disqualified Organization": A "disqualified organization" under
Section 860E of the Code, which as of the Closing Date is any of: (i) the United
States, any state or political subdivision thereof, any possession of the United
States, any foreign government, any international organization, or any agency or
instrumentality of any of the foregoing, (ii) any organization (other than a
cooperative described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code unless such organization is subject to the tax
imposed by Section 511 of the Code, (iii) any organization described in Section
1381(a)(2)(C) of the Code, or (iv) any other Person so designated by the Trustee
based upon an Opinion of Counsel provided by nationally recognized counsel to
the Trustee that the holding of an ownership interest in the Class R Certificate
by such Person may cause the Trust Fund or any Person having an ownership
interest in any Class of Certificates (other than such Person) to incur
liability for any federal tax imposed under the Code that would not otherwise be
imposed but for the transfer of an ownership interest in the Class R Certificate
to such Person. A corporation will not be treated as an instrumentality of the
United States or of any state or political subdivision thereof if all of its
activities are subject to tax and a majority of its board of directors is not
selected by a governmental unit. The term "United States," "state" and
"international organization" shall have the meanings set forth in Section 7701
of the Code.
"Distribution Account": The trust account or accounts created and
maintained by the Trustee pursuant to Section 3.04(b), which shall be entitled
"Distribution Account, ▇▇▇▇▇ Fargo Bank, N.A., as Trustee, in trust for the
registered Holders of ABFC 2004-OPT5 Trust, ABFC Asset-Backed Certificates,
Series 2004-OPT5" 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 November 2004.
"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, "R-1" by DBRS and "F-1+" by Fitch (or comparable ratings if
S&P, DBRS and Fitch are not the Rating Agencies) by each of the Rating Agencies
at the time any amounts are held on deposit therein, (ii) an account or accounts
the deposits in which are fully insured by the FDIC, (iii) a trust account or
accounts maintained with the trust department of a federal or state chartered
depository institution, national banking association or trust company acting in
its fiduciary capacity or (iv) an account otherwise acceptable to each Rating
Agency without reduction or withdrawal of their then current ratings of the
Certificates as evidenced by a letter from each Rating Agency to the Trustee 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 Master 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 DBRS 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 A or higher by DBRS,
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 Section 3.03 of the 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 or Group 2 Mortgage Loan must be replaced by an Eligible
Substitute Mortgage Loan that will be a Group 1 Mortgage Loan or Group 2
Mortgage Loan, as applicable.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"ERISA-Restricted Certificates": Any of the Class CE, Class P and
Class R Certificates.
"Escrow Account": The account or accounts created and maintained
pursuant to Section 3.06.
"Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water rates, mortgage insurance premiums, fire and hazard insurance
premiums and other payments required to be escrowed by the Mortgagor with the
mortgagee pursuant to any Mortgage Loan.
"Estate in Real Property": A fee simple estate in a parcel of real
property.
"Exchange Act": The Securities Exchange Act of 1934, as amended.
"Expense Fee Rate": The sum of (i) the Trustee Fee Rate, (ii) the
Servicing Fee Rate, (iii) the Credit Risk Manager Fee Rate and (iv) with respect
to an MI Mortgage Loan, the Mortgage Insurance Premium Rate.
"Extended Period": As defined in Section 9.04(b).
"Extra Principal Distribution Amount": As of any Distribution Date,
the lesser of (x) the Monthly Excess Interest Amount for such Distribution Date
and (y) the Overcollateralization Deficiency for such Distribution Date.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"Fidelity Bond": Shall have the meaning assigned thereto in Section
3.12.
"Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
(i) purchased by the Originator or the Seller pursuant to or as contemplated by
Section 2.03, (ii) purchased by the Master Servicer pursuant to Section 3.16 or
(iii) purchased by the Majority Class CE Certificateholders or the Master
Servicer pursuant to Section 10.01), a determination made by the Master Servicer
that all Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds and
other payments or recoveries which the Master Servicer, in its reasonable good
faith judgment, expects to be finally recoverable in respect thereof have been
so recovered. The Master Servicer shall maintain records, prepared by a
Servicing Officer, of each Final Recovery Determination made thereby.
"Fitch": Fitch Ratings and its successors, and if such company shall
for any reason no longer perform the functions of a securities rating agency,
"Fitch" shall be deemed to refer to any other "nationally recognized statistical
rating organization" as set forth on the most current list of such organizations
released by the Commission.
"Fixed-Rate Mortgage Loan": A Mortgage Loan which has a constant
annual rate at which interest accrues in accordance with the provisions of the
related Mortgage Note.
"Foreclosure Price": The amount reasonably expected to be received
from the sale of the related Mortgaged Property net of any expenses associated
with foreclosure proceedings.
"Form 10-K": As defined in Section 3.31(a) hereof.
"Grantor Trust": That portion of the Trust exclusive of REMIC 1 and
REMIC 2 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 M-7
Certificates to receive Cap Carryover Amounts, (c) each Yield Maintenance
Agreement, the Reserve Accounts and the beneficial interest of the Class CE
Certificates with respect thereto and (d) 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": As of any Distribution Date and the Class A-1
Certificates, a per annum rate, adjusted by multiplying such rate by a fraction
equal to 30 over the actual number of days in the related Interest Accrual
Period, equal to the Weighted Average Net Mortgage Interest Rate for the Group 1
Mortgage Loans.
"Group 1 Interest Remittance Amount": As of any Distribution Date,
the sum, without duplication, of (i) all interest due and collected or advanced
with respect to the related Collection Period on the Group 1 Mortgage Loans
received by the Master Servicer on or prior to the Determination Date for such
Distribution Date (less the Servicing Fee, amounts available for reimbursement
of Advances and Servicing Advances pursuant to Section 3.05 and expenses
reimbursable pursuant to Section 6.03), (ii) all Compensating Interest paid by
the Master Servicer on the related Distribution Date with respect to such
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 such Mortgage Loans received
during the related Prepayment Period and (iv) the portion of any Reimbursement
Amount relating to such Mortgage Loans received during the related Prepayment
Period.
"Group 1 Mortgage Loan": Each Mortgage Loan listed on Exhibit D-1
hereto.
"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 lesser of (a) the Certificate Principal Balance of the Class
A-1 Certificates immediately prior to such Distribution Date and (b) the Group 1
Principal Percentage of the Principal Distribution Amount 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 such Distribution Date over (b) the lesser of (x) the product of (1)
80.00% and (2) the aggregate Principal Balance of the Group 1 Mortgage Loans as
of the last day of the related Collection 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 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-A Reserve Account": The trust account created and
maintained by the Trustee pursuant to Section 3.04(g) which shall be entitled
"Group 2-A Reserve Account, ▇▇▇▇▇ Fargo Bank, N.A., as Trustee, in trust for
registered Holders of the Class A-2, Class A-3 and Class A-4 Certificates of the
ABFC 2004-OPT5 Trust, ABFC Asset-Backed Certificates, Series 2004-OPT5" and
which must be an Eligible Account. Amounts on deposit in the Group 2-A Reserve
Account shall not be invested. The Group 2-A Reserve Account shall not be an
asset of any REMIC formed under this Agreement.
"Group 2-A Yield Maintenance Agreement": The yield maintenance
agreement between the Trustee, on behalf of the Trust, and the Group 2-A Yield
Maintenance Agreement Provider substantially in the form attached hereto as
Exhibit N. The Group 2-A Yield Maintenance Agreement shall not be an asset of
any REMIC formed under this Agreement.
"Group 2-A Yield Maintenance Agreement Payment": On each
Distribution Date through the Distribution Date in June 2007, the amount equal
to the product of (a) the excess of the lesser of (i) One-Month LIBOR and (ii)
the applicable ceiling rate for such Distribution Date over the strike rate for
such Distribution Date, in each case as set forth on the schedule attached to
the confirmation to the Group 2-A Yield Maintenance Agreement, (b) the product
of the cap notional amount and the scale factor for such Distribution Date, both
as set forth on the schedule attached to the confirmation to the Group 2-A Yield
Maintenance Agreement and (c) a fraction, the numerator of which is the actual
number of days elapsed since the previous Distribution Date (or the Closing
Date, in the case of the first Distribution Date) to but excluding the current
Distribution Date and the denominator of which is 360.
"Group 2-A Yield Maintenance Agreement Provider": WestLB AG, New
York Branch and any successor thereto.
"Group 2 Cap": As of any Distribution Date and the Class A-2, Class
A-3 and Class A-4 Certificates, a per annum rate, adjusted by multiplying such
rate by a fraction equal to 30 over the actual number of days in the related
Interest Accrual Period, equal to the Weighted Average Net Mortgage Interest
Rate for the Group 2 Mortgage Loans.
"Group 2 Interest Remittance Amount": As of any Distribution Date,
the sum, without duplication, of (i) all interest due and collected or advanced
with respect to the related Collection Period on the Group 2 Mortgage Loans
received by the Master Servicer on or prior to the Determination Date for such
Distribution Date (less the Servicing Fee, amounts available for reimbursement
of Advances and Servicing Advances pursuant to Section 3.05 and expenses
reimbursable pursuant to Section 6.03), (ii) all Compensating Interest paid by
the Master Servicer on the related Distribution Date with respect to such
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 such Mortgage Loans received
during the related Prepayment Period and (iv) the portion of any Reimbursement
Amount relating to such Mortgage Loans received during the related Prepayment
Period.
"Group 2 Mortgage Loan": Each Mortgage Loan listed on Exhibit D-2
hereto.
"Group 2 Principal Percentage": With respect to any Distribution
Date and the Class A-2, Class A-3 and Class A-4 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 lesser of (a) the aggregate Certificate Principal Balance of the
Class A-2, Class A-3 and Class A-4 Certificates immediately prior to such
Distribution Date and (b) the Group 2 Principal Percentage of the Principal
Distribution Amount 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, Class A-3 and Class A-4 Certificates
immediately prior to such Distribution Date over (b) the lesser of (x) the
product of (1) 80.00% and (2) the aggregate Principal Balance of the Group 2
Mortgage Loans as of the last day of the related Collection 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 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 Subordinate Amount" for any Distribution Date and (i) the
Group 1 Mortgage Loans, will be equal to the greater of zero and 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 and (ii)
the Group 2 Mortgage Loans, will be equal to the greater of zero and 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 aggregate Certificate Principal
Balance of the Class A-2, Class A-3 and Class A-4 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 Master Servicer
and their respective Affiliates, (ii) does not have any direct financial
interest in or any material indirect financial interest in the Depositor or the
Master Servicer or any Affiliate thereof, and (iii) is not connected with the
Depositor or the Master Servicer or any Affiliate thereof as an officer,
employee, promoter, underwriter, trustee, partner, director or Person performing
similar functions; provided, however, that a Person shall not fail to be
Independent of the Depositor or the Master Servicer or any Affiliate thereof
merely because such Person is the beneficial owner of 1% or less of any class of
securities issued by the Depositor or the Master Servicer or any Affiliate
thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than the
Master Servicer) that would be an "independent contractor" with respect to the
Trust Fund within the meaning of Section 856(d)(3) of the Code if the Trust Fund
were a real estate investment trust (except that the ownership tests set forth
in that section shall be considered to be met by any Person that owns, directly
or indirectly, 35 percent or more of any Class of Certificates), so long as the
Trust Fund does not receive or derive any income from such Person and provided
that the relationship between such Person and the Trust Fund is at arm's length,
all within the meaning of Treasury Regulations Section 1.856-4(b)(5), or (ii)
any other Person (including the Master Servicer) if the Trustee has received an
Opinion of Counsel, which Opinion of Counsel shall be an expense of the Trust
Fund, to the effect that the taking of any action in respect of any REO Property
by such Person, subject to any conditions therein specified, that is otherwise
herein contemplated to be taken by an Independent Contractor will not cause such
REO Property to cease to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code (determined without regard to the exception
applicable for purposes of Section 860D(a) of the Code), or cause any income
realized in respect of such REO Property to fail to qualify as Rents from Real
Property.
"Index": With respect to each Adjustable-Rate Mortgage Loan and with
respect to each related Adjustment Date, the index as specified in the related
Mortgage Note.
"Initial Certificate Principal Balance": With respect to any
Certificate of a Class other than a Class CE, Class P or Class R Certificate,
the amount designated "Initial Certificate Principal Balance" on the face
thereof.
"Initial Overcollateralization Amount": $6,736,191.19.
"Insurance Proceeds": Proceeds of the Mortgage Insurance Policy, any
title policy, hazard policy or other insurance policy covering a Mortgage Loan,
to the extent such proceeds are not to be applied to the restoration of the
related Mortgaged Property or released to the Mortgagor in accordance with the
procedures that the Master Servicer would follow in servicing mortgage loans
held for its own account, subject to the terms and conditions of the related
Mortgage Note and Mortgage.
"Insurer": PMI Mortgage Insurance Co. and its successors or any
replacement thereto.
"Interest Accrual Period": With respect to any Distribution Date and
the Offered Certificates and the Class M-7 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 November 25, 2004).
"Interest Carry Forward Amount": For any Class of Certificates
(other than the Class CE, Class P and Class R Certificates) and any Distribution
Date, the sum of (a) the excess, if any, of the Accrued Certificate Interest and
any Interest Carry Forward Amount for the prior Distribution Date, over the
amount in respect of interest actually distributed on such Class on such prior
Distribution Date and (b) interest on such excess at the applicable Certificate
Interest Rate for the actual number of days elapsed on the basis of a 360-day
year since the prior Distribution Date.
"Interest Percentage": With respect to any Class of Certificates 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 and the Group 2 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
in 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 M-7 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 Master Servicer has determined, in
accordance with the servicing procedures specified herein, as of the end of the
related Prepayment Period, that all Liquidation Proceeds, Condemnation Proceeds
and Insurance Proceeds which it expects to recover with respect to the
liquidation of the Mortgage Loan or disposition of the related REO Property have
been recovered.
"Liquidation Proceeds": The amount (other than amounts received in
respect of the rental of any REO Property prior to REO Disposition) received by
the Master Servicer in connection with (i) the taking of all or a part of a
Mortgaged Property by exercise of the power of eminent domain or condemnation or
(ii) the liquidation of a defaulted Mortgage Loan by means of a trustee's sale,
foreclosure sale or otherwise.
"Liquidation Report": The report with respect to a Liquidated
Mortgage Loan in such form as is agreed to by the Master Servicer and the
Trustee listing (i) the sale price of the related Mortgaged Property or amount
of the REO Disposition, (ii) the amount of any Realized Loss (or gain) with
respect to such Liquidated Mortgage Loan, (iii) the expenses relating to the
liquidation of such Liquidated Mortgage Loan and (iv) such other information as
is agreed to by the Master Servicer and the Trustee.
"Loan Group": Any of Loan Group 1 or Loan Group 2.
"Loan Group 1": The Group 1 Mortgage Loans.
"Loan Group 2": The Group 2 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 1 Regular Interest
LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1
Regular Interest LT1A4, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest
LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1
Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6, REMIC 1 Regular Interest
LT1M7 and REMIC 1 Regular Interest LT1ZZ, (i) with the rate on each such REMIC
Regular Interest (other than REMIC 1 Regular Interest LT1ZZ) subject to a cap
equal to the Pass-Through Rate of its Corresponding Class (taking into account
in determining any such Pass-through Rate the imposition of the Group 1 Cap, the
Group 2 Cap or the Pool Cap, as applicable, as described in footnotes (1)
through (9) to the table in the Preliminary Statement relating to the
Certificates) for the purposes of this calculation and (ii) with the rate on
REMIC 1 Regular Interest LT1ZZ subject to a cap of zero for the purpose of this
calculation; provided, however, that for this purpose, calculations of the
Uncertificated REMIC 1 Pass-Through Rate and the related caps with respect to
each such REMIC Regular Interest (other than REMIC 1 Regular Interest LT1ZZ)
shall be multiplied by a fraction, the numerator of which is the actual number
of days in the Interest Accrual Period and the denominator of which is 30.
"Master Servicer": Option One Mortgage Corporation, a California
corporation, or any successor servicer appointed as herein provided, in its
capacity as Master Servicer hereunder.
"Maximum LT1ZZ Uncertificated Accrued Interest Deferral Amount":
With respect to any Distribution Date, the excess of (a) accrued interest at the
Uncertificated REMIC 1 Pass-Through Rate applicable to REMIC 1 Regular Interest
LT1ZZ for such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1ZZ minus the REMIC 1
Overcollateralized Amount, in each case for such Distribution Date, over (b)
Uncertificated Accrued Interest on REMIC 1 Regular Interest LT1A1, REMIC 1
Regular Interest LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular Interest
LT1A4, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1
Regular Interest LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1 Regular Interest
LT1M5, REMIC 1 Regular Interest LT1M6 and REMIC 1 Regular Interest LT1M7 each
subject to a cap equal to the 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 1 Pass-Through Rate and the
related caps with respect to Uncertificated Accrued Interest on REMIC 1 Regular
Interest LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest LT1A3,
REMIC 1 Regular Interest LT1A4, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular
Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest LT1M4,
REMIC 1 Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6 and REMIC 1
Regular Interest LT1M7 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.
"MI Mortgage Loan": A Mortgage Loan listed on the Mortgage Loan
Schedules as being covered by the Mortgage Insurance Policy.
"Minimum Mortgage Interest Rate": With respect to each
Adjustable-Rate Mortgage Loan, the percentage set forth in the related Mortgage
Note as the minimum Mortgage Interest Rate thereunder.
"Monthly Excess Cashflow Amount": The sum of the Monthly Excess
Interest Amount, the Overcollateralization Release Amount and (without
duplication) any portion of the Principal Distribution Amount remaining after
principal distributions on the Offered Certificates and the Class M-7
Certificates.
"Monthly Excess Interest Amount": With respect to each Distribution
Date, the amount, if any, by which the Interest Remittance Amount for such
Distribution Date exceeds the aggregate amount distributed on such Distribution
Date pursuant to paragraphs (i) through (xii) under Section 4.01.
"Monthly Form 8-K": As defined in Section 3.31(a) hereof.
"Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is payable
by the related Mortgagor from time to time under the related Mortgage Note,
determined: (a) after giving effect to (i) any Deficient Valuation and/or Debt
Service Reduction with respect to such Mortgage Loan and (ii) any reduction in
the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act or similar state laws; (b) without giving effect to any extension
granted or agreed to by the Master Servicer pursuant to Section 3.01; and (c) on
the assumption that all other amounts, if any, due under such Mortgage Loan are
paid when due.
"Mortgage": The mortgage, deed of trust or other instrument creating
a first or second lien on, or first or second priority security interest in, a
Mortgaged Property securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Insurance Policy": The Mortgage Insurance Policy issued by
the Insurer with respect to the MI Mortgage Loans.
"Mortgage Insurance Premium": With respect to each MI Mortgage Loan
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 Mortgage Insurance Premium
Rate on the same principal amount on which interest on such MI Mortgage Loan
accrues for such calendar month plus any applicable premium taxes on MI Mortgage
Loans located in West Virginia and Kentucky.
"Mortgage Insurance Premium Rate": With respect to each MI Mortgage
Loan, the applicable loan-level rate per annum set forth on the Mortgage Loan
Schedules.
"Mortgage Interest Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, which rate (i) in
the case of each Fixed-Rate Mortgage Loan shall remain constant at the rate set
forth in the applicable Mortgage Loan Schedule as the Mortgage Interest Rate in
effect immediately following the Cut-off Date and (ii) in the case of each
Adjustable-Rate Mortgage Loan (A) as of any date of determination until the
first Adjustment Date following the Cut-off Date shall be the rate set forth in
the applicable Mortgage Loan Schedule as the Mortgage Interest Rate in effect
immediately following the Cut-off Date and (B) as of any date of determination
thereafter shall be the rate as adjusted on the most recent Adjustment Date, to
equal the sum, rounded as provided in the Mortgage Note, of the Index,
determined as set forth in the related Mortgage Note, plus the related Gross
Margin subject to the limitations set forth in the related Mortgage Note. With
respect to each Mortgage Loan that becomes an REO Property, as of any date of
determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgage Loan became an REO Property.
"Mortgage Loan": Each mortgage loan transferred and assigned to the
Trustee pursuant to Section 2.01 or Section 2.03(d) as from time to time held as
a part of the Trust Fund, the Mortgage Loans so held being identified in the
Mortgage Loan Schedules.
"Mortgage Loan Purchase Agreement": The agreement between the Seller
and the Depositor, dated as of October 1, 2004, regarding the transfer of the
Mortgage Loans by the Seller to or at the direction of the Depositor.
"Mortgage Loan Schedule": As of any date with respect to the
Mortgage Loans, the lists of such Mortgage Loans included in the Trust Fund on
such date, separately identifying the Fixed-Rate Mortgage Loans and the
Adjustable-Rate Mortgage Loans, attached hereto as Exhibits D-1 and D-2. The
Mortgage Loan Schedules shall set forth the following information with respect
to each Mortgage Loan:
(1) the Mortgage Loan identifying number;
(2) the state and zip code of the Mortgaged Property;
(3) the type of Residential Dwelling constituting the Mortgaged
Property;
(4) the occupancy status of the Mortgaged Property at origination;
(5) the original months to maturity;
(6) the date of origination;
(7) the first payment date;
(8) the stated maturity date;
(9) the stated remaining months to maturity;
(10) the original principal amount of the Mortgage Loan;
(11) the Principal Balance of each Mortgage Loan as of the Cut-off
Date;
(12) the Mortgage Interest Rate of the Mortgage Loan as of the
Cut-off Date;
(13) the current principal and interest payment of the Mortgage Loan
as of the Cut-off Date;
(14) the contractual interest paid to date of the Mortgage Loan;
(15) the 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;
(27) a code indicating whether the Mortgage Loan is an MI Mortgage
Loan;
(28) the applicable Mortgage Insurance Premium Rate for each MI
Mortgage Loan; and
(29) 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, 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 Master 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 Exhibits
D-1 and D-2 from time to time, and any REO Properties acquired in respect
thereof.
"Mortgaged Property": The underlying property securing a Mortgage
Loan, including any REO Property, consisting of an Estate in Real Property
improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Liquidation Proceeds": With respect to any Liquidated Mortgage
Loan or any other disposition of related Mortgaged Property (including REO
Property) the related Liquidation Proceeds net of unreimbursed Advances,
unreimbursed Servicing Advances, Servicing Fees and any other accrued and unpaid
servicing fees received and retained in connection with the liquidation of such
Mortgage Loan or Mortgaged Property.
"Net Mortgage Interest Rate": With respect to any Mortgage Loan,
the Mortgage Interest Rate borne by such Mortgage Loan minus the Expense Fee
Rate.
"New Lease": Any lease of REO Property entered into on behalf of the
Trust, including any lease renewed or extended on behalf of the Trust if the
Trust has the right to renegotiate the terms of such lease.
"NIMS Insurer": Any insurer that is guaranteeing certain payments
under notes secured by collateral which includes all or a portion of the Class
CE, Class P and Class R 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 Master Servicer, will not or, in the
case of a proposed Advance or Servicing Advance, would not be ultimately
recoverable from Late Collections on such Mortgage Loan as provided herein.
"Notional Amount": With respect to the Class CE Certificates, an
amount equal to the aggregate principal balance of the REMIC 1 Regular
Interests.
"Offered Certificates": The Class A-1, Class A-2, Class ▇-▇, ▇▇▇▇▇
▇-▇, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class M-6
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 Master Servicer, the
Seller, the Insurer or the Depositor, as applicable.
"One-Month LIBOR": With respect to each Interest Accrual Period, the
rate determined by the Trustee on the related LIBOR Determination Date on the
basis of the offered rate for one-month United States dollar deposits, as such
rate appears on the Telerate Page 3750, as of 11:00 a.m. (London time) on such
LIBOR Determination Date. If no such quotations are available on an LIBOR
Determination Date, One-Month LIBOR for the related Interest Accrual Period will
be established by the Trustee as follows:
(i) If on such LIBOR Determination Date two or more Reference Banks
provide such offered quotations, One-Month LIBOR for the related Interest
Accrual Period shall be the arithmetic mean of such offered quotations
(rounded upwards if necessary to the nearest whole multiple of 0.001%);
(ii) If on such LIBOR Determination Date fewer than two Reference
Banks provide such offered quotations, One-Month LIBOR for the related
Interest Accrual Period shall be the arithmetic mean of the rates quoted
by one or more major banks in New York City, selected by the Trustee after
consultation with the Depositor 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 M-7 Certificates; and
(iii) If no such quotations can be obtained, One-Month LIBOR for the
related Interest Accrual Period shall be One-Month LIBOR for the prior
Distribution Date.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be a salaried counsel for the Depositor or the Master Servicer
except that any opinion of counsel relating to (a) the qualification of any
REMIC as a REMIC or (b) compliance with the REMIC Provisions must be an opinion
of Independent counsel.
"Optional Termination Date": The first Distribution Date on which
the Majority Class CE Certificateholders or, if such holder is the Seller or is
an affiliate of the Seller, the Master Servicer, may opt to terminate the
Mortgage Pool pursuant to Section 10.01.
"Original Class Certificate Principal Balance": With respect to each
Class of Certificates, the Certificate Principal Balance thereof on the Closing
Date, as set forth opposite such Class in the Preliminary Statement, except with
respect to (i) the Class P and Class R Certificates, which have an Original
Class Certificate Principal Balance of zero and (ii) the Class CE Certificates,
which, solely for REMIC purposes, have an Original Class Certificate Principal
Balance equal to the Initial Overcollateralization Amount.
"Originator": Option One Mortgage Corporation and its successors.
"Originator Mortgage Loan Purchase Agreement": The Flow Sale and
Servicing Agreement, dated as of April 29, 2004, as amended, by and among the
Seller, as purchaser, Option One Mortgage Corporation and its affiliates, as
sellers.
"Originator Prepayment Charge Payment Amount": The amount payable by
the Originator pursuant to Section 4.22 of the Originator Mortgage Loan Purchase
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 Pool Balance as of the last day of the related
Collection Period over (y) the aggregate Certificate Principal Balance of all
Classes of Offered Certificates and the Class M-7 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 M-7 Certificates resulting from
the distribution of the Principal Distribution Amount (but not the Extra
Principal Distribution Amount) on such Distribution Date, but prior to taking
into account any Applied Realized Loss Amounts on such Distribution Date.
"Overcollateralization Release Amount": With respect to any
Distribution Date after the Stepdown Date on which a Trigger Event is not in
effect, the excess, if any, of (i) the Overcollateralization Amount for such
Distribution Date, assuming that 100% of the Principal Remittance Amount is
applied as a principal payment on the Offered Certificates and the Class M-7
Certificates on such Distribution Date, over (ii) the Targeted
Overcollateralization Amount for such Distribution Date. With respect to any
Distribution Date on which a Trigger Event is in effect, the
Overcollateralization Release Amount will be zero.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.
"Pass-Through Rate": Any of the Class A-1 Pass-Through Rate, the
Class A-2 Pass-Through Rate, the Class A-3 Pass-Through Rate, the Class A-4
Pass-Through Rate, the Class 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 and the Class M-7
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 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
(M) below, and the denominator of which is the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC 1 Regular Interest
LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1
Regular Interest LT1A4, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest
LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1
Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6, REMIC 1 Regular Interest
LT1M7 and REMIC 1 Regular Interest LT1ZZ. For purposes of calculating the
Pass-Through Rate for the Class CE Certificates, the numerator is equal to the
sum of the following components:
(A) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1AA minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1AA;
(B) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1A1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A1;
(C) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1A2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A2;
(D) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1A3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A3;
(E) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1A4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A4;
(F) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1M1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M1;
(G) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1M2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M2;
(H) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1M3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M3;
(I) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1M4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M4;
(J) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1M5 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M5;
(K) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1M6 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M6; and
(L) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1M6 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M7; and
(M) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1ZZ minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1ZZ.
"Paying Agent": Any paying agent appointed pursuant to
Section 5.05.
"Percentage Interest": With respect to any Certificate (other than a
Class CE, Class P or Class R Certificate), a fraction, expressed as a
percentage, the numerator of which is the Initial Certificate Principal Balance,
as the case may be, represented by such Certificate and the denominator of which
is the Original Class Certificate Principal Balance of the related Class. With
respect to a Class CE or Class P Certificate, the portion of the Class evidenced
thereby, expressed as a percentage, as stated on the face of such Certificate;
provided, however, that the sum of all such percentages for each such Class
totals 100%. With respect to the Class R Certificate, 100%.
"Periodic Rate Cap": With respect to each Adjustable-Rate Mortgage
Loan and any Adjustment Date therefor, the fixed percentage set forth in the
related Mortgage Note, which is the maximum amount by which the Mortgage
Interest Rate for such Mortgage Loan may increase or decrease (without regard to
the Maximum Mortgage Interest Rate or the Minimum Mortgage Interest Rate) on
such Adjustment Date from the Mortgage Interest Rate in effect immediately prior
to such Adjustment Date.
"Permitted Transferee": Any transferee of a Class R Certificate
other than a Disqualified Organization, a non-U.S. Person or a U.S. Person with
respect to whom income on the Class R Certificate is attributable to a foreign
permanent establishment or fixed base, within the meaning of an applicable
income tax treaty, of such Person or any other U.S. Person.
"Person": Any individual, corporation, partnership, joint venture,
association, joint stock company, trust, limited liability company,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pool Balance": As of any date of determination, the aggregate
Principal Balance of the Mortgage Loans.
"Pool Cap": As of any Distribution Date, a per annum rate, adjusted
by multiplying such rate by a fraction equal to 30 over the actual number of
days in the related Interest Accrual Period, equal to the weighted average of
the Group 1 Cap and the Group 2 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 1 Remittance
Rate on (a) REMIC 1 Regular Interest LT1SUB, subject to a cap and floor equal to
the Weighted Average Net Mortgage Interest Rates of the Group 1 Mortgage Loans
and (b) REMIC 1 Regular Interest LT2SUB, subject to a cap and floor equal to the
Weighted Average Net Mortgage Interest Rates of the Group 2 Mortgage Loans,
weighted on the basis of the Uncertificated Balance of such REMIC 1 Regular
Interest.
"Prepayment Charge": With respect to any Prepayment Period, any
prepayment premium, penalty or charge collected by the Master Servicer from a
Mortgagor in connection with any voluntary Principal Prepayment in full pursuant
to the terms of the related Mortgage Note as from time to time held as a part of
the Trust Fund, the Prepayment Charges so held being identified in the Mortgage
Loan Schedules (other than any 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 Master 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 October 1, 2004) 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, and (ii) the Extra Principal Distribution Amount, if
any.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the full
amount of scheduled interest due on any Due Date in any month or months
subsequent to the month of prepayment.
"Principal Remittance Amount": With respect to any Distribution
Date, to the extent of funds available therefor, the sum (less amounts available
for reimbursement of Advances and Servicing Advances pursuant to Section 3.05
and expenses reimbursable pursuant to Section 6.03) of: (i) each payment of
principal on a Mortgage Loan due during the related Collection Period and
received by the Master Servicer on or prior to the related Determination Date,
and any Advances with respect thereto, (ii) all full and partial Principal
Prepayments received by the Master Servicer during the related Prepayment
Period, (iii) Insurance Proceeds, Net Liquidation Proceeds and Subsequent
Recoveries allocable to principal actually collected by the Master Servicer
during the related Prepayment Period, (iv) with respect to Defective Mortgage
Loans repurchased with respect to such Prepayment Period, the portion of the
Purchase Price allocable to principal, (v) any Substitution Adjustment Amounts
received during the related Prepayment Period and (vi) on the Distribution Date
on which the Trust is to be terminated in accordance with Section 10.01 hereof,
that portion of the Termination Price in respect of principal.
"Private Certificates": Any of the Class M-7, Class CE, Class P and
Class R Certificates.
"Prospectus Supplement": That certain Prospectus Supplement dated
October 12, 2004 relating to the public offering of the Offered Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO Property
to be purchased pursuant to or as contemplated by Section 2.03 or 10.01, 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 Master Servicer, which payment or Advance had as of the date of
purchase been distributed pursuant to Section 4.01, through the end of the
calendar month in which the purchase is to be effected, (iii) any unreimbursed
Servicing Advances and Advances and any unpaid Servicing Fees allocable to such
Mortgage Loan or REO Property, (iv) any amounts previously withdrawn from the
Collection Account in respect of such Mortgage Loan or REO Property pursuant to
Section 3.13 and (v) in the case of a Mortgage Loan required to be purchased
pursuant to Section 2.03, expenses reasonably incurred or to be incurred by the
Master Servicer or the Trustee in respect of the breach or defect giving rise to
the purchase obligation.
"Rating Agency or Rating Agencies": DBRS, 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 Master Servicer.
"Realized Loss": With respect to a Liquidated Mortgage Loan, the
amount by which the remaining unpaid principal balance of the Mortgage Loan
exceeds the amount of Net Liquidation Proceeds applied to the principal balance
of the related Mortgage Loan. With respect to any Mortgage Loan, a Deficient
Valuation or a reduction in the Principal Balance thereof resulting from a
Servicer Modification.
"Realized Loss Amortization Amount": Any of the Class M-1 Realized
Loss Amortization Amount, the Class M-2 Realized Loss Amortization Amount, the
Class M-3 Realized Loss Amortization Amount, the Class M-4 Realized Loss
Amortization Amount, the Class M-5 Realized Loss Amortization Amount, the Class
M-6 Realized Loss Amortization Amount and the Class M-7 Realized Loss
Amortization Amount.
"Record Date": With respect to all of the 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 Private Certificates, the last
Business Day of the month immediately preceding the month in which the related
Distribution Date occurs.
"Reference Banks": Those banks (i) with an established place of
business in London, England, (ii) not controlling, under the control of or under
common control with the Depositor or the Trustee, (iii) whose quotations appear
on the Telerate Page 3750 on the relevant LIBOR Determination Date and (iv)
which have been designated as such by the Trustee; provided, however, that if
fewer than two of such banks provide a One-Month LIBOR rate, then any leading
banks selected by the Trustee which are engaged in transactions in United States
dollar deposits in the international Eurocurrency market.
"Regular Certificate": Any of the Offered Certificates, the Class
M-7 Certificates and the Class CE Certificates.
"Reimbursement Amount": With respect to any Mortgage Loan, any costs
or damages incurred by the Trust in connection with a breach of the Originator's
representation set forth in Section 3.03(i) or 3.03(ddd) of the Originator
Mortgage Loan Purchase Agreement.
"Related Documents": With respect to any Mortgage Loan, the related
Mortgage Notes, Mortgages and other related documents.
"Relief Act": The Servicemembers Civil Relief Act, as 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 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) 50% of the sum of
the aggregate Principal Balance of the Mortgage Loans and related REO Properties
then outstanding and (ii) the Uncertificated REMIC 1 Pass-Through Rate for REMIC
1 Regular Interest LT1AA minus the Marker Rate, divided by (b) 12.
"REMIC 1 Marker Allocation Percentage": 50% of any amount payable
from or loss attributable to the Mortgage Loans, which shall be allocated to
REMIC 1 Regular Interest LT1AA, REMIC 1 Regular Interest LT1A1, REMIC 1 Regular
Interest LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular Interest LT1A4,
REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular
Interest LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1 Regular Interest LT1M5,
REMIC 1 Regular Interest LT1M6, REMIC 1 Regular Interest LT1M7 and REMIC 1
Regular Interest LT1ZZ.
"REMIC 1 Overcollateralization Target Amount": 0.50% of the
Targeted Overcollateralization Amount.
"REMIC 1 Overcollateralized Amount": With respect to any date of
determination, (i) 0.50% of the aggregate Uncertificated Principal Balances of
the REMIC 1 Regular Interests minus (ii) the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1A1, REMIC 1 Regular Interest
LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular Interest LT1A4, REMIC 1
Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest
LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1
Regular Interest LT1M6 and REMIC 1 Regular Interest LT1M7, in each case as of
such date of determination.
"REMIC 1 Principal Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) 50% of the
aggregate Principal Balance of the Mortgage Loans and related REO Properties
then outstanding and (ii) 1 minus a fraction, the numerator of which is two
times the aggregate of the Uncertificated Principal Balances of REMIC 1 Regular
Interest LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest LT1A3,
REMIC 1 Regular Interest LT1A4, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular
Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest LT1M4,
REMIC 1 Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6 and REMIC 1
Regular Interest LT1M7 and the denominator of which is the aggregate of the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1A1, REMIC 1
Regular Interest LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular Interest
LT1A4, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1
Regular Interest LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1 Regular Interest
LT1M5, REMIC 1 Regular Interest LT1M6, REMIC 1 Regular Interest LT1M7 and REMIC
1 Regular Interest LT1ZZ.
"REMIC 1 Regular Interest LT1AA": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1AA
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1A1": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A1
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1A2": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A2
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1A3": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A3
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1A4": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A4
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M1": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1M1
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M2": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1M2
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M3": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1M3
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M4": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1M4
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M5": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1M5
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M6": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1M6
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M7": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1M7
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1SUB": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1SUB
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1GRP": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1GRP
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT2SUB": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT2SUB
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT2GRP": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT2GRP
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1XX": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1XX
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1ZZ": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1ZZ
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interests": REMIC 1 Regular Interest LT1AA, REMIC 1
Regular Interest LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest
LT1A3, REMIC 1 Regular Interest LT1A4, REMIC 1 Regular Interest LT1M1, REMIC 1
Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest
LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6, REMIC 1
Regular Interest LT1M7, REMIC 1 Regular Interest LT1SUB, REMIC 1 Regular
Interest LT1GRP, REMIC 1 Regular Interest LT2SUB, REMIC 1 Regular Interest
LT2GRP, REMIC 1 Regular Interest LT1XX and REMIC 1 Regular Interest LT1ZZ.
"REMIC 1 Sub WAC Allocation Percentage": 50% of any amount payable
or loss attributable from the Mortgage Loans, which shall be allocated to REMIC
1 Regular Interest LT1SUB, REMIC 1 Regular Interest LT1GRP, REMIC 1 Regular
Interest LT2SUB, REMIC 1 Regular Interest LT2GRP and REMIC 1 Regular Interest
LT1XX.
"REMIC 1 Subordinated Balance Ratio": The ratio among the
Uncertificated Principal Balances of each REMIC 1 Regular Interest ending with
the designation "SUB," equal to the ratio among, with respect to each such REMIC
1 Regular Interest, the excess of (x) the aggregate Principal Balance of the
Mortgage Loans in the related Loan Group over (y) the current Certificate
Principal Amount of the Class A Certificates in the related Loan Group.
"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 REMIC 1 Regular Interest or any of the
Certificates (other than the Class P and Class R Certificates).
"Remittance Report": A report prepared by the Master 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 Master Servicer pursuant to
Section 3.13 for unpaid Servicing Fees in respect of the related Mortgage Loan
and unreimbursed Servicing Advances and Advances in respect of such REO Property
or the related Mortgage Loan.
"REO Property": A Mortgaged Property acquired by the Master Servicer
on behalf of the Trust through foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.13.
"Request for Release": A release signed by a Servicing Officer, in
the form of Exhibit E attached hereto.
"Reserve Account": Any of the Class A-1 Reserve Account, the
Group 2-A Reserve Account or the Class M Reserve Account.
"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 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.
"Seller": Bank of America, N.A., or its successor in interest, in
its capacity as seller under the Mortgage Loan Purchase Agreement.
"Senior Certificates": The Class A-1, Class A-2, Class A-3 and
Class A-4 Certificates.
"Senior Enhancement Percentage": For any Distribution Date, the
percentage obtained by dividing (x) the sum of (i) the aggregate Certificate
Principal Balance of the Subordinated Certificates before taking into account
the distribution of the Principal Distribution Amount on such Distribution Date
and (ii) the Overcollateralization Amount as of the prior Distribution Date by
(y) the Pool Balance as of the last day of the related Collection Period.
"Senior Principal Distribution Amount": For any Distribution Date,
the sum of the Group 1 Senior Principal Distribution Amount and the Group 2
Senior Principal Distribution Amount.
"Senior Specified Enhancement Percentage": On any date of
determination thereof, 20.00%.
"Servicer Event of Termination": One or more of the events
described in Section 7.01.
"Servicer Modification": A modification to the terms of a Mortgage
Loan, in accordance with the terms of Section 3.01, as to which the Mortgagor is
in default or as to which, in the judgment of the Master Servicer, default is
reasonably foreseeable.
"Servicer Prepayment Charge Payment Amount": The amount payable by
the Master Servicer in respect of any waived Prepayment Charges pursuant to
Section 3.01, which amount shall be equal to the difference between the amount
of Prepayment Charge due by a Mortgagor before any waiver and the actual amount
of the Prepayment Charge that was paid by the Mortgagor.
"Servicer Remittance Date": With respect to any Distribution Date,
one Business Day prior to such Distribution Date.
"Servicing Advances": All customary, reasonable and necessary "out
of pocket" costs and expenses incurred by the Master Servicer (including
reasonable attorneys' fees and disbursements) in the performance of its
servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration, inspection and protection of the Mortgaged Property,
(ii) any enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of the REO Property and (iv) compliance with the
obligations under Section 3.08.
"Servicing Fee": With respect to each Mortgage Loan (including each
REO Property) and for any calendar month, an amount equal to one month's
interest (or in the event of any payment of interest which accompanies a
Principal Prepayment in full made by the Mortgagor during such calendar month,
interest for the number of days covered by such payment of interest) at the
Servicing Fee Rate on the same principal amount on which interest on such
Mortgage Loan accrues for such calendar month.
"Servicing Fee Rate": With respect to each Mortgage Loan, 0.30% per
annum for the first 10 calendar months, 0.40% per annum for the 11th through
30th calendar months, and 0.65% per annum for all calendar months thereafter.
"Servicing Officer": Any representative or officer of the Master
Servicer involved in, or responsible for, the administration and servicing of
Mortgage Loans, whose name and specimen signature appear on a list of servicing
officers furnished by the Master Servicer to the Trustee and the Depositor on
the Closing Date, as such list may from time to time be amended.
"Servicing Standard": The standards set forth in Section 3.01.
"Similar Law": As defined in Section 5.02(d) hereof.
"Startup Day": As defined in Section 9.01(b) hereof.
"Stayed Funds": Any payment required to be made under the terms of
the Certificates and this Agreement but which is not remitted by the Master
Servicer because the Master Servicer is the subject of a proceeding under the
Bankruptcy Code and the making of such remittance is prohibited by Section 362
of the Bankruptcy Code.
"Stepdown Date": The earlier to occur of (i) the Distribution Date
on which the aggregate Certificate Principal Balance of the Class A Certificates
is reduced to zero and (ii) the later to occur of (x) the Distribution Date in
November 2007 and (y) the Distribution Date on which the Senior Enhancement
Percentage is greater than or equal to the Senior Specified Enhancement
Percentage.
"Subordinated Certificates": The Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class CE and Class R Certificates.
"Subsequent Recovery": Any amount (net of reimbursable expenses)
received on a Mortgage Loan subsequent to such Mortgage Loan being determined to
be a Liquidated Mortgage Loan that resulted in a Realized Loss in a prior month.
"Substitution Adjustment Amount": As defined in Section 2.03(d)
hereof.
"Targeted Overcollateralization Amount": As of any Distribution
Date, (x) prior to the Stepdown Date, 0.50% of the Cut-off Date Aggregate
Principal Balance and (y) on and after the Stepdown Date, (i) if a Trigger Event
has not occurred, the greater of (A) 1.00% of the Pool Balance as of the last
day of the related Collection Period and (B) 0.50% of the Cut-off Date Aggregate
Principal Balance and (ii) if a Trigger Event has occurred, the Targeted
Overcollateralization Amount for the immediately preceding Distribution Date.
"Tax Matters Person": The tax matters person appointed pursuant to
Section 9.01(e) hereof.
"Tax Returns": The federal income tax returns on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of the REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed on behalf of the Trust for each of the two REMICs created
pursuant to this Agreement under the REMIC Provisions, together with any and all
other information reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.
"Telerate Page 3750": The display page currently so designated on
the Moneyline Telerate Service (or such other page as may replace the Telerate
Page 3750 page on that service for the purpose of displaying London interbank
offered rates of major banks).
"Termination Price": As defined in Section 10.01(a) hereof.
"Trigger Event": With respect to any Distribution Date, if (i) the
three-month rolling average of 60+ Day Delinquent Loans equals or exceeds 80.00%
of the Senior Enhancement Percentage or (ii) the aggregate amount of Realized
Losses incurred since the Cut-off Date through the last day of the related
Collection Period (reduced by the aggregate amount of Subsequent Recoveries
received since the Cut-off Date through the last day of the related Collection
Period) divided by the Cut-off Date Aggregate Principal Balance exceeds the
applicable percentages set forth below with respect to such Distribution Date:
Distribution Date Occurring In Percentage
------------------------------ ----------
November 2007 through October 2008 1.75%
November 2008 through October 2009 2.40%
November 2009 through October 2010 2.75%
November 2010 and thereafter 3.00%
"Trust": ABFC 2004-OPT5 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 two 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
(including the Mortgage Insurance Policy) and any proceeds thereof, (iv) the
Depositor's rights under the Originator Mortgage Loan Purchase Agreement and the
Mortgage Loan Purchase Agreement (including any security interest created
thereby), (v) the Trustee's rights under each Yield Maintenance Agreement and
(vi) the Collection Account, the Distribution Account and the Reserve Accounts
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.
"Trustee Fee": With respect to any Distribution Date, the product of
(x) one-twelfth of the Trustee Fee Rate and (y) the aggregate of the Principal
Balances of all Mortgage Loans as of the opening of business on the first day of
the related Collection Period.
"Trustee Fee Rate": With respect to any Distribution Date, 0.0085%
per annum.
"Uncertificated Accrued Interest": With respect to each REMIC 1
Regular Interest on each Distribution Date, an amount equal to one month's
interest at the related Uncertificated REMIC 1 Pass-Through Rate on the
Uncertificated Principal Balance of such REMIC Regular Interest. In each case,
Uncertificated Accrued Interest will be reduced by any Prepayment Interest
Shortfalls and Relief Act Interest Shortfalls (allocated to such REMIC Regular
Interests based on their respective entitlements to interest irrespective of any
Prepayment Interest Shortfalls and Relief Act Interest Shortfalls for such
Distribution Date).
"Uncertificated Principal Balance": The amount of any REMIC 1
Regular Interest outstanding as of any date of determination. As of the Closing
Date, the Uncertificated Balance of each REMIC 1 Regular Interest shall equal
the amount set forth in the Preliminary Statement hereto as its initial
uncertificated balance. On each Distribution Date, the Uncertificated Principal
Balance of each REMIC 1 Regular Interest shall be reduced by all distributions
of principal made on such REMIC 1 Regular Interest on such Distribution Date
pursuant to Section 4.08 and, if and to the extent necessary and appropriate,
shall be further reduced on such Distribution Date by Realized Losses as
provided in Section 4.08(b). The Uncertificated Balance of REMIC 1 Regular
Interest LT1ZZ shall be increased by interest deferrals as provided in Section
4.08(a)(i). The Uncertificated Balance of each REMIC 1 Regular Interest shall
never be less than zero.
"Uncertificated REMIC 1 Pass-Through Rate": With respect to REMIC 1
Regular Interest LT1AA, REMIC 1 Regular Interest LT1A1, REMIC 1 Regular Interest
LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular Interest LT1A4, REMIC 1
Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest
LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1
Regular Interest LT1M6, REMIC 1 Regular Interest LT1M7, REMIC 1 Regular Interest
LT1ZZ, REMIC 1 Regular Interest LT1SUB, REMIC 1 Regular Interest LT2SUB and
REMIC 1 Regular Interest LT1XX, the Weighted Average Net Mortgage Rate of the
Mortgage Loans. With respect to REMIC 1 Regular Interest LT1GRP, the Weighted
Average Net Mortgage Rate of the Group 1 Mortgage Loans. With respect REMIC 1
Regular Interest LT2GRP, the Weighted Average Net Mortgage Interest Rate of the
Group 2 Mortgage Loans.
"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 and Class M-7 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)
the lesser of (a) an amount determined by an appraisal done at origination of
the Mortgage Loan or (b) an amount determined by a review appraisal conducted by
the Originator, if such review appraisal determines an appraised value more than
10% lower than the original appraised value thereof, in the case of a Mortgage
Loan with a Combined Loan-to-Value Ratio less than or equal to 80%, or more than
5% lower than the original appraised value thereof, in the case of a Mortgage
Loan with a Combined Loan-to-Value Ratio greater than 80%, as determined by the
appraisal referred to in clause (i)(a) above; and (ii) the purchase price paid
for the related 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 upon clause (i) above.
"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 M-7 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 M-7 Certificates then outstanding. The Voting
Rights allocated to each such Class of Certificates shall be allocated among all
holders of each such Class in proportion to the outstanding Certificate
Principal Balance of such Certificates; provided, however, that any Certificate
registered in the name of the Master Servicer, the Depositor or the Trustee or
any of their respective affiliates shall not be included in the calculation of
Voting Rights; provided that only such Certificates as are known by a
Responsible Officer of the Trustee to be so registered will be so excluded. 1%
of all the Voting Rights will be allocated to the Holders of each of the Class
CE and Class P Certificates. The Class R Certificates shall have no Voting
Rights.
"Weighted Average Net Mortgage Rate": The weighted average (based on
Principal Balance as of the first day of the related Collection Period or, in
the case of the first Distribution Date, the Cut-Off Date) of the Net Mortgage
Interest Rates of the Mortgage Loans, the Group 1 Mortgage Loans or the Group 2
Mortgage Loans, as applicable, expressed for each such Mortgage Loan as an
annual rate and calculated on the basis of twelve months consisting of 30 days
each and a 360-day year.
"Written Order to Authenticate": A written order by which the
Depositor directs the Trustee to execute, authenticate and deliver the
Certificates.
"Yield Maintenance Agreement": Any of the Class A-1 Yield
Maintenance Agreement, the Group 2-A Yield Maintenance Agreement or the Class M
Yield Maintenance Agreement.
"Yield Maintenance Agreement Payment": Any of the Class A-1 Yield
Maintenance Agreement Payment, Group 2-A Yield Maintenance Agreement Payment
or the Class M Yield Maintenance Agreement Payment.
"Yield Maintenance Agreement Provider": Any of the Class A-1
Yield Maintenance Agreement Provider, Group 2-A Yield Maintenance Agreement
Provider or the Class M Yield Maintenance Agreement Provider.
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.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee, on
behalf of the Trust, without recourse for the benefit of the Certificateholders
all the right, title and interest of the Depositor, including any security
interest therein for the benefit of the Depositor, in and to (i) each Mortgage
Loan identified on the Mortgage Loan Schedules, including the related Cut-off
Date Principal Balance, all interest accruing thereon after the Cut-off Date and
all collections in respect of interest and principal due after the Cut-off Date;
(ii) property which secured each such Mortgage Loan and which has been acquired
by foreclosure or deed in lieu of foreclosure; (iii) its interest in any
insurance policies in respect of the Mortgage Loans; (iv) all other assets
included or to be included in the Trust Fund; (v) all proceeds of any of the
foregoing; (vi) the rights of the Depositor under the Consulting Agreement; and
(vii) the rights of the Depositor under the Originator Mortgage Loan Purchase
Agreement and the Mortgage Loan Purchase Agreement. Such assignment includes all
interest and principal due to the Depositor or the Master Servicer after the
Cut-off Date with respect to the Mortgage Loans.
In connection with such transfer and assignment, the Depositor does
hereby deliver to, and deposit with the Trustee, or its designated agent, the
following documents or instruments with respect to each Mortgage Loan (a
"Mortgage File") so transferred and assigned:
(i) the original Mortgage Note, endorsed 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, in form and substance
acceptable for recording. The Mortgage shall be assigned in blank;
(iv) an original copy of any intervening assignment of Mortgage
showing a complete chain of assignments;
(v) the original or a certified copy of lender's title insurance
policy; and
(vi) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any.
The Trustee agrees to execute and deliver to the Depositor on or
prior to the Closing Date an acknowledgment of receipt of the original Mortgage
Note (with any exceptions noted), substantially in the form attached as Exhibit
F-3 hereto.
If any of the documents referred to in Section 2.01(ii), (iii) or
(iv) above has as of the Closing Date been submitted for recording but either
(x) has not been returned from the applicable public recording office or (y) has
been lost or such public recording office has retained the original of such
document, the obligations of the Depositor to deliver such documents shall be
deemed to be satisfied upon (1) delivery to the Trustee no later than the
Closing Date, of a copy of each such document certified by the Seller in the
case of (x) above or the applicable public recording office in the case of (y)
above to be a true and complete copy of the original that was submitted for
recording and (2) if such copy is certified by the Seller, delivery to the
Trustee, promptly upon receipt thereof of either the original or a copy of such
document certified by the applicable public recording office to be a true and
complete copy of the original. The Depositor shall deliver or cause to be
delivered to the Trustee promptly upon receipt thereof any other documents
constituting a part of a Mortgage File received with respect to any Mortgage
Loan, including, but not limited to, any original documents evidencing an
assumption or modification of any Mortgage Loan.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Seller
shall have 120 days to cure such defect or 150 days following the Closing Date,
in the case of missing Mortgages or Assignments or deliver such missing document
to the Trustee. If the Seller does not cure such defect or deliver such missing
document within such time period, the Seller shall either repurchase or
substitute for such Mortgage Loan in accordance with Section 2.03.
The Depositor herewith delivers to the Trustee executed copies of
the Originator Mortgage Loan Purchase Agreement and the Mortgage Loan Purchase
Agreement.
It is agreed and understood by the parties hereto that it is not
intended that any mortgage loan be included in the Trust that is a "High-Cost
Home Loan" as defined in either (i) the New Jersey Home Ownership Act effective
November 27, 2003 or (ii) the New Mexico Home Loan Protection Act effective
January 1, 2004.
Section 2.02 Acceptance by Trustee.
The Trustee acknowledges the receipt of, subject to the provisions
of Section 2.01 and subject to the review described below and any exceptions
noted on the exception report described in the next paragraph below, the
documents referred to in Section 2.01 above and all other assets included in the
definition of "Trust Fund" and declares that it holds and will hold such
documents and the other documents delivered to it constituting a Mortgage File,
and that it holds or will hold all such assets and such other assets included in
the definition of "Trust Fund" in trust for the exclusive use and benefit of all
present and future Certificateholders.
The Trustee agrees, for the benefit of the Certificateholders, to
review each Mortgage File within 60 days after the Closing Date (or, with
respect to any document delivered after the Startup Day, within 60 days of
receipt and with respect to any Qualified Substitute Mortgage, within 60 days
after the assignment thereof) and to certify in substantially the form attached
hereto as Exhibit F-1 that, as to each Mortgage Loan listed in the Mortgage Loan
Schedules (other than any Mortgage Loan paid in full or any Mortgage Loan
specifically identified in the exception report annexed thereto as not being
covered by such certification), (i) all documents required to be delivered to it
pursuant to Section 2.01 of this Agreement are in its possession, (ii) such
documents have been reviewed by it and have not been mutilated, damaged or torn
and relate to such Mortgage Loan and (iii) based on its examination and only as
to the foregoing, the information set forth in the Mortgage Loan Schedules that
corresponds to items (1), (2), (3), (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 Master 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
Master Servicer. In addition, upon the discovery by the Originator, the Seller,
the Depositor, the NIMS Insurer, the Trustee or the Master Servicer (or upon
receipt by the Trustee of written notification of such breach) of a breach of
any of the representations and warranties made by the Originator in the
Originator Mortgage Loan Purchase Agreement or the Seller in the Mortgage Loan
Purchase Agreement in respect of any Mortgage Loan which materially adversely
affects such Mortgage Loan or the interests of the related Certificateholders in
such Mortgage Loan, the party discovering such breach shall give prompt written
notice to the other parties.
The Depositor and the Trustee intend that the assignment and
transfer herein contemplated constitute a sale of the Mortgage Loans and the
Related Documents, conveying good title thereto free and clear of any liens and
encumbrances, from the Depositor to the Trustee and that such property not be
part of the Depositor's estate or property of the Depositor in the event of any
insolvency by the Depositor. In the event that such conveyance is deemed to be,
or to be made as security for, a loan, the parties intend that the Depositor
shall be deemed to have granted and does hereby grant to the Trustee, on behalf
of the Trust, a first priority perfected security interest in all of the
Depositor's right, title and interest in and to the Mortgage Loans and the
Related Documents, and that this Agreement shall constitute a security agreement
under applicable law.
The Trustee is hereby directed to execute and deliver, on behalf of
the Trust, the Class A-1 Yield Maintenance Agreement, Group 2-A Yield
Maintenance Agreement and Class M Yield Maintenance Agreement.
Section 2.03 Repurchase or Substitution of Mortgage Loans by the
Originator 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 Originator or the Seller of any representation or warranty
under the Originator Mortgage Loan Purchase Agreement or the 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 Originator or the Seller, as the case may be, the Master 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 Originator or the Seller, as applicable,
cure such breach within 90 days from the date the Originator or the Seller, as
the case may be, was notified of such breach. If the Seller does not deliver
such missing document or cure such defect or if the Originator or the Seller, as
applicable, does not cure such breach in all material respects during such
period, the Trustee shall enforce the Originator's or the Seller's obligation,
as the case may be, under the Originator Mortgage Loan Purchase Agreement or the
Mortgage Loan Purchase Agreement, as applicable, and cause the 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 Master Servicer of such
deposit, shall release to the 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 the Originator or the Seller,
as applicable, shall furnish to it and as shall be necessary to vest in the
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 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
Originator Mortgage Loan Purchase Agreement and the Mortgage Loan Purchase
Agreement that are made to the best of the Originator's or the Seller's
knowledge, as applicable, or as to which the Originator or the Seller, as the
case may be, has no knowledge, if it is discovered by the Depositor, the Master
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 the
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 Originator Mortgage Loan Purchase Agreement and the 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 Originator
and the Seller set forth in this Section 2.03(a) to cure, substitute for or
repurchase a Mortgage Loan pursuant to the Originator Mortgage Loan Purchase
Agreement or the 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 Mortgage Loan Purchase
Agreement.
The representations and warranties of the Originator with respect to
the Mortgage Loans in the Originator Mortgage Loan Purchase Agreement, which
have been assigned to the Trustee hereunder, were made as of the dates specified
in the 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 Originator under the Originator Mortgage
Loan Purchase Agreement and (ii) a representation or warranty of the Seller
under the 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(t) 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 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
Originator in the Originator Mortgage Loan Purchase Agreement, without regard to
whether the 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
Originator's representation with respect to predatory and abusive lending laws
in Section 3.03(i) or 3.03(ddd) of the Originator Mortgage Loan Purchase
Agreement and (y) the Seller's representation with respect to predatory and
abusive lending laws in Section 3.01(k) or 3.01(t) of the Mortgage Loan Purchase
Agreement, the Originator shall be obligated to pay the Reimbursement Amount
relating to such Mortgage Loan, and, to the extent the 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 Master 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 Master
Servicer or receipt of notice by the Master Servicer of the breach of any
representation, warranty or covenant of the Master Servicer set forth in Section
2.05 which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the Master Servicer shall cure such
breach in all material respects.
(c) Any substitution of Eligible Substitute Mortgage Loans for
Defective Mortgage Loans made pursuant to Section 2.03(a) must be effected prior
to the last Business Day that is within two years after the Closing Date. As to
any Defective Mortgage Loan for which the Originator or the Seller substitutes
an Eligible Substitute Mortgage Loan or Loans, such substitution shall be
effected by the 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
Master 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 Master
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 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, the 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 the Originator or
the Seller, the Originator Mortgage Loan Purchase Agreement or the Mortgage Loan
Purchase Agreement, as the case may be, including, in the case of a substitution
effected by the Originator or the Seller, all applicable representations and
warranties thereof included in the Originator Mortgage Loan Purchase Agreement
or the Mortgage Loan Purchase Agreement, as the case may be, as of the date of
substitution.
For any month in which the Originator or the Seller substitutes one
or more Eligible Substitute Mortgage Loans for one or more Defective Mortgage
Loans, the Master Servicer will determine the amount (the "Substitution
Adjustment Amount"), if any, by which the aggregate Purchase Price of all such
Defective Mortgage Loans exceeds the aggregate, as to each such Eligible
Substitute Mortgage Loan, of the principal balance thereof as of the date of
substitution, together with one month's interest on such principal balance at
the applicable Net Mortgage Interest Rate. On the date of such substitution, the
Originator or the Seller, as the case may be, will deliver or cause to be
delivered to the Master Servicer for deposit in the Collection Account an amount
equal to the Substitution Adjustment Amount, if any, and the Trustee, upon
receipt of the related Eligible Substitute Mortgage Loan or Loans and notice by
the Master Servicer of such deposit, shall release to the 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 the 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, the 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 the Originator, the Seller, the Master
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, the
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, the 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 the 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.
Section 2.04 [Reserved].
Section 2.05 Representations, Warranties and Covenants of the Master
Servicer.
The Master Servicer hereby represents, warrants and covenants to the
Trustee, for the benefit of each of the Trustee and the Certificateholders and
to the Depositor and the NIMS Insurer that as of the Closing Date or as of such
date specifically provided herein:
(i) The Master Servicer is a corporation duly organized, validly
existing and in good standing under the laws of the State of California
and has all licenses necessary to carry on its business as now being
conducted, except for such licenses, certificates and permits the absence
of which, individually or in the aggregate, would not have a material
adverse effect on the ability of the Master Servicer to conduct its
business as it is presently conducted, and is licensed, qualified and in
good standing in the states where the Mortgaged Property is located if the
laws of such state require licensing or qualification in order to conduct
business of the type conducted by the Master Servicer or to ensure the
enforceability or validity of each Mortgage Loan; the Master Servicer has
the power and authority to execute and deliver this Agreement and to
perform in accordance herewith; the execution, delivery and performance of
this Agreement (including all instruments of transfer to be delivered
pursuant to this Agreement) by the Master Servicer and the consummation of
the transactions contemplated hereby have been duly and validly
authorized; and all requisite corporate action has been taken by the
Master Servicer to make this Agreement valid and binding upon the Master
Servicer in accordance with its terms;
(ii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer
and will not result in the breach of any term or provision of the articles
of incorporation or by-laws of the Master Servicer or result in the breach
of any term or provision of, or conflict with or constitute a default
under or result in the acceleration of any obligation under, any
agreement, indenture or loan or credit agreement or other instrument to
which the Master Servicer or its property is subject, or result in the
violation of any law, rule, regulation, order, judgment or decree to which
the Master Servicer or its property is subject;
(iii) The Master Servicer is an approved seller/servicer of
conventional residential mortgage loans for ▇▇▇▇▇▇ ▇▇▇ 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 Master Servicer is a HUD approved mortgagee pursuant to Section
203 of the National Housing Act and is in good standing to sell mortgage
loans to and service mortgage loans for ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, and no
event has occurred, including but not limited to a change in insurance
coverage, which would make the Master Servicer unable to comply with
▇▇▇▇▇▇ 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 Master Servicer, constitute
and will constitute valid, legal and binding obligations of the Master
Servicer, enforceable in accordance with their respective terms, except as
the enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally (whether considered in a
proceeding at law or in equity);
(v) The Master Servicer does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement;
(vi) There is no action, suit, proceeding or investigation pending
or, to its knowledge, threatened against the Master Servicer that, either
individually or in the aggregate, may result in any material adverse
change in the business, operations, financial condition, properties or
assets of the Master Servicer, or in any material impairment of the right
or ability of the Master Servicer to carry on its business substantially
as now conducted, or in any material liability on the part of the Master
Servicer, or that would draw into question the validity or enforceability
of this Agreement or of any action taken or to be taken in connection with
the obligations of the Master Servicer contemplated herein, or that would
be likely to impair materially the ability of the Master Servicer to
perform under the terms of this Agreement;
(vii) No consent, approval or order of any court or governmental
agency or body is required for the execution, delivery and performance by
the Master Servicer of or compliance by the Master Servicer with this
Agreement or the consummation of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations and orders,
if any, that have been obtained; and
(viii) No information in this Agreement provided by the Master
Servicer nor any information, certificate of an officer, statement
furnished in writing or report delivered to the Trustee by the Master
Servicer in connection with the transactions contemplated hereby contains
or will contain any untrue statement of a material fact or omits or will
omit to state a material fact necessary in order to make the statements
contained therein, in light of the circumstances under which they were
made, not misleading.
(ix) The Master Servicer has fully furnished, and shall continue to
fully furnish for so long as it is servicing the Mortgage Loans hereunder,
in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information on the Mortgagor credit
files to Equifax, Experian and Trans Union Credit Information Company on a
monthly basis.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.05 shall survive delivery of the Mortgage
Files to the Trustee and shall inure to the benefit of the Trustee, the
Depositor, the NIMS Insurer and the Certificateholders. Upon discovery by any of
the Depositor, the Master 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.
Section 2.06 Representations and Warranties of the Depositor.
The Depositor represents and warrants to the Trust and the Trustee
on behalf of the Certificateholders and to the Master Servicer 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 Mortgage Loan, the Depositor
had good and marketable title to each Mortgage Loan (insofar as such title
was conveyed to it by the Seller) subject to no prior lien, claim,
participation interest, mortgage, security interest, pledge, charge or
other encumbrance or other interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred all
right, title interest in the Mortgage Loans to the Trustee on behalf of
the Trust;
(iv) The Depositor has not transferred the Mortgage Loans to the
Trustee on behalf of the Trust with any intent to hinder, delay or defraud
any of its creditors;
(v) The Depositor has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware,
with full corporate power and authority to own its assets and conduct its
business as presently being conducted;
(vi) The Depositor is not in violation of its certificate of
incorporation or by-laws or in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Depositor is a party or by which it or its
properties may be bound, which default might result in any material
adverse changes in the financial condition, earnings, affairs or business
of the Depositor or which might materially and adversely affect the
properties or assets, taken as a whole, of the Depositor;
(vii) The execution, delivery and performance of this Agreement by
the Depositor, and the consummation of the transactions contemplated
thereby, do not and will not result in a material breach or violation of
any of the terms or provisions of, or, to the knowledge of the Depositor,
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Depositor is a
party or by which the Depositor is bound or to which any of the property
or assets of the Depositor is subject, nor will such actions result in any
violation of the provisions of the certificate of incorporation or by-laws
of the Depositor or, to the best of the Depositor's knowledge without
independent investigation, any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Depositor or any of its properties or assets (except for such conflicts,
breaches, violations and defaults as would not have a material adverse
effect on the ability of the Depositor to perform its obligations under
this Agreement);
(viii) To the best of the Depositor's knowledge without any
independent investigation, no consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency
or body of the United States or any other jurisdiction is required for the
issuance of the Certificates, or the consummation by the Depositor of the
other transactions contemplated by this Agreement, except such consents,
approvals, authorizations, registrations or qualifications as (a) may be
required under State securities or Blue Sky laws, (b) have been previously
obtained or (c) the failure of which to obtain would not have a material
adverse effect on the performance by the Depositor of its obligations
under, or the validity or enforceability of, this Agreement; and
(ix) There are no actions, proceedings or investigations pending
before or, to the Depositor's knowledge, threatened by any court,
administrative agency or other tribunal to which the Depositor is a party
or of which any of its properties is the subject: (a) which if determined
adversely to the Depositor would have a material adverse effect on the
business, results of operations or financial condition of the Depositor;
(b) asserting the invalidity of this Agreement or the Certificates; (c)
seeking to prevent the issuance of the Certificates or the consummation by
the Depositor of any of the transactions contemplated by this Agreement,
as the case may be; (d) which might materially and adversely affect the
performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement.
Section 2.07 Issuance of Certificates and the Uncertificated Regular
Interests.
The Trustee acknowledges the assignment to it of the Mortgage Loans
and the delivery to it of the Mortgage Files, subject to the provisions of
Sections 2.01 and 2.02, and the Trustee acknowledges the assignment to it of all
other assets included in the Trust Fund, receipt of which is hereby
acknowledged. Concurrently with such assignment and delivery and in exchange
therefor, the Trustee, pursuant to the Written Order to Authenticate executed by
an officer of the Depositor, has executed, and the Certificate Registrar has
authenticated and delivered to or upon the order of the Depositor, the
Certificates (other than the Class CE, Class P and Class R Certificates) in
minimum dollar denominations or $25,000 and integral dollar multiples of $1 in
excess. The Class CE and Class P Certificates are issuable only in minimum
Percentage Interests of 10%. The Class R Certificate is issuable only as a
single certificate. The Trustee acknowledges the issuance of the uncertificated
REMIC 1 Regular Interests and declares that it hold such regular interests as
assets of REMIC 2. The Trustee acknowledges the obligation of the Class CE
Certificates to pay Cap Carryover Amounts, and declares that it hold the same as
assets of the Grantor Trust on behalf of the Holders of the Class A-1, Class
A-2, Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5, Class M-6 and Class M-7 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 Yield Maintenance Agreements, the Reserve Accounts
and the beneficial interest of the Class CE Certificates with respect thereto,
subject to the obligation to pay Cap Carryover Amounts. The interests evidenced
by the Certificates constitute the entire beneficial ownership interest in the
Trust Fund.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01 Master Servicer to Act as Servicer.
The Master Servicer, as independent contract servicer, shall service
and administer the Mortgage Loans in accordance with this Agreement and the
normal and usual standards of practice of prudent mortgage servicers servicing
similar mortgage loans and, to the extent consistent with such terms, in the
same manner in which it services and administers similar mortgage loans for its
own portfolio, and shall have full power and authority, acting alone, to do or
cause to be done any and all things in connection with such servicing and
administration which the Master Servicer may deem necessary or desirable and
consistent with the terms of this Agreement (the "Servicing Standard").
Consistent with the terms of this Agreement, the Master Servicer may
waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if in the Master Servicer's reasonable and prudent
determination such waiver, modification, postponement or indulgence is not
materially adverse to the Certificateholders; provided, however, that the Master
Servicer shall not make future advances and, except as set forth in the
following sentence or Section 3.03, the Master Servicer shall not permit any
modification with respect to any Mortgage Loan that would (i) change the
Mortgage Interest Rate, defer or forgive the payment thereof of any principal or
interest payments, reduce the outstanding principal amount (except for actual
payments of principal) or extend the final maturity date with respect to such
Mortgage Loan, (ii) affect adversely the status of any REMIC constituting part
of the Trust Fund as a REMIC, (iii) cause any such REMIC to be subject to a tax
on "prohibited transactions" or "contributions" pursuant to the REMIC Provisions
or (iv) cause any MI Mortgage Loan to not be covered by the Mortgage Insurance
Policy unless the Combined Loan-to-Value Ratio is less than 60%. In the event
that the Mortgagor is in default with respect to the Mortgage Loan or such
default is, in the judgment of the Master Servicer, reasonably foreseeable, the
Master Servicer may permit a modification of such Mortgage Loan to reduce the
Principal Balance thereof and/or extend the term, but not beyond the latest
maturity date of any other Mortgage Loan. Notwithstanding the foregoing, the
Master Servicer shall not permit any modification with respect to any Mortgage
Loan that would both (x) effect an exchange or reissuance of such Mortgage Loan
under Section 1.860G-2(b) of the Treasury Regulations and (y) cause any REMIC
constituting part of the Trust Fund to fail to qualify as a REMIC under the Code
or the imposition of any tax on "prohibited transactions" or "contributions"
after the Startup Day under the REMIC Provisions. 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. In addition, with respect to each MI Mortgage Loan that was subject to a
Servicer Modification, the Master Servicer shall provide the Insurer with
written notice of such modification which shall include the nature of such
modification. Without limiting the generality of the foregoing, the Master
Servicer shall continue, and is hereby authorized and empowered to execute and
deliver on behalf of itself, and the Trustee, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
Mortgaged Property. The Master Servicer shall make all required Servicing
Advances and shall service and administer the Mortgage Loans in accordance with
Applicable Regulations, and shall provide to the Mortgagor any reports required
to be provided to them thereby. The Trustee shall execute and deliver to the
Master Servicer within at least fifteen (15) Business Day of receipt, upon
request, any powers of attorney furnished to it by the Master Servicer
empowering the Master Servicer to execute and deliver instruments of
satisfaction or cancellation, or of partial or full release or discharge, and to
foreclose upon or otherwise liquidate any Mortgaged Property, and to appeal,
prosecute or defend in any court action relating to the Mortgage Loans or the
Mortgaged Properties, in accordance with this Agreement, and the Trustee shall
execute and deliver such other documents as the Master Servicer may request,
necessary or appropriate to enable the Master Servicer to service and administer
the Mortgage Loans and carry out its duties hereunder, in each case in
accordance with Servicing Standard (and the Trustee shall have no liability for
misuse of any such powers of attorney by the Master Servicer). Notwithstanding
anything contained herein to the contrary, the Master Servicer shall not without
the Trustee's written consent: (i) initiate any action, suit or proceeding
solely under the Trustee's name without indicating the Master Servicer's
representative capacity or (ii) take any action with the intent to cause, and
which results in, the Trustee being registered to do business in any state.
In servicing and administering the Mortgage Loans, the Master
Servicer shall employ procedures including collection procedures and exercise
the same care that it customarily employs and exercises in servicing and
administering mortgage loans for its own account giving due consideration to
accepted mortgage servicing practices of prudent lending institutions and the
Certificateholders' reliance on the Master Servicer.
The Master Servicer shall give prompt notice to the Trustee of any
action, of which the Master Servicer has actual knowledge, to (i) assert a claim
against the Trust Fund or (ii) assert jurisdiction over the Trust Fund.
Notwithstanding anything in this Agreement to the contrary, in the
event of a voluntary Principal Prepayment in full of a Mortgage Loan, the Master
Servicer may not waive any Prepayment Charge or portion thereof required by the
terms of the related Mortgage Note unless (i)(a) the Master Servicer determines
that such waiver is standard and customary in servicing similar mortgage loans,
(b) such waiver relates to a default or a reasonably foreseeable default and (c)
would, in the reasonable judgment of the Master Servicer, maximize recovery of
Liquidation Proceeds for such Mortgage Loan, taking into account the value of
such Prepayment Charge, or (ii) 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 Master Servicer has waived or
does not collect all or a portion of a Prepayment Charge relating to a voluntary
Principal Prepayment in full due to any action or omission of the Master
Servicer, other than as provided above, the Master Servicer shall, 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 addition, the Master Servicer shall administer the Mortgage
Insurance Policy on behalf of itself, the Depositor, the NIMS Insurer and the
Trustee for the benefit of the Certificateholders, when it is necessary to make
claims and receive payments under the Mortgage Insurance Policy. Any amounts
collected by the Master Servicer under the Mortgage Insurance Policy shall be
deposited in the Collection Account not later than two Business Days following
receipt thereof. The Master Servicer shall take whatever action is appropriate
to maximize the amounts payable under the Mortgage Insurance Policy and to
service the MI Mortgage Loans in the manner required by the Mortgage Insurance
Policy. The Master Servicer shall prepare and submit all claims eligible for
submission under the Mortgage Insurance Policy and shall perform all of the
obligations of the insured under the Mortgage Insurance Policy. In the event the
Insurer pays a claim under the Mortgage Insurance Policy and subsequently
determines the claim should not have been paid due to (i) materially inaccurate
information provided to the Insurer by the Depositor or (ii) a breach of a
representation or warranty made to the Insurer by the Depositor, which, in
either case, the Insurer reasonably determines is material to coverage of such
MI Mortgage Loan, the Master Servicer shall, upon receipt by the Depositor, the
Master Servicer and the Trustee of an Officer's Certificate of the Insurer
detailing the reason for rescission of coverage, reimburse the Insurer as set
forth in Section 3.05(vii) hereof; provided, however, none of the Depositor, the
Trustee or the Master Servicer shall have any obligation to contest the
Insurer's determination of materiality. If the Mortgage Insurance Policy is
terminated for any reason other than the exhaustion of its coverage, or if the
financial strength rating of the Insurer is reduced to below investment grade,
the Master Servicer will use its best efforts to obtain a comparable policy from
an insurer that is acceptable to the Rating Agencies. The replacement policy
will provide coverage equal to the then remaining coverage of the Mortgage
Insurance Policy, if available. However, if the premium cost of a replacement
policy exceeds the premium cost of the Mortgage Insurance Policy, the coverage
amount of the replacement policy will be reduced so that its premium cost will
not exceed the premium cost of the Mortgage Insurance Policy.
In the event that a Prepayment Charge due with respect to any
Mortgage Loan is not timely received by the Master Servicer, the Master Servicer
shall use commercially reasonable efforts to determine whether the Originator is
obligated to pay a related Originator Prepayment Charge Payment Amount, and if
the Master Servicer determines that a Originator Prepayment Charge Payment
Amount is due, the Master Servicer shall promptly notify the Originator, and the
Master 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 Master 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 Master Servicer will diligently collect all
payments due under each Mortgage Loan when the same shall become due and payable
and shall, to the extent such procedures shall be consistent with this Agreement
and Applicable Regulations, follow such collection procedures as it follows with
respect to mortgage loans comparable to the Mortgage Loans and held for its own
account. Further, the Master Servicer will take special care in ascertaining and
estimating on escrowed Mortgage Loans annual ground rents, taxes, assessments,
water rates, fire and hazard insurance premiums, mortgage insurance premiums,
and all other charges that, as provided in the Mortgage, will become due and
payable to that end that the installments payable by the Mortgagors will be
sufficient to pay such charges as and when they become due and payable.
Section 3.03 Realization Upon Defaulted Mortgage Loans.
In the event that any payment due under any Mortgage Loan is not
paid when the same becomes due and payable, or in the event the Mortgagor fails
to perform any other covenant or obligation under the Mortgage Loan and such
failure continues beyond any applicable grace period, the Master Servicer shall
take such action as it shall deem to be in the best interest of the
Certificateholders. With respect to any defaulted Mortgage Loan, the Master
Servicer shall have the right to review the status of the related forbearance
plan and, subject to the second paragraph of Section 3.01, may modify such
forbearance plan; including extending the Mortgage Loan repayment date for a
period of one year or reducing the Mortgage Interest Rate up to 50 basis points.
In connection with a foreclosure or other conversion, the Master
Servicer shall exercise such rights and powers vested in it hereunder and use
the same degree of care and skill in its exercise as prudent mortgage servicers
would exercise or use under the circumstances in the conduct of their own
affairs and consistent with Applicable Regulations and the Servicing Standards,
including, without limitation, advancing funds for the payment of taxes and
insurance premiums.
Notwithstanding the foregoing provisions of this Section 3.03, with
respect to any Mortgage Loan as to which the Master Servicer has received actual
notice of, or has actual knowledge of, the presence of any toxic or hazardous
substance on the related Mortgaged Property, the Master Servicer shall not
either (i) obtain title to such Mortgaged Property as a result of or in lieu of
foreclosure or otherwise, or (ii) otherwise acquire possession of, or take any
other action with respect to, such Mortgaged Property if, as a result of any
such action, the Trust would be considered to hold title to, to be a
mortgagee-in-possession of, or to be an owner or operator of such Mortgaged
Property within the meaning of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time, or any
comparable law, unless the Master Servicer has 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 Master Servicer, subject to the Master
Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.05(iv).
If the Master Servicer determines, as described above, that it is in
the best economic interest of the Certificateholders to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes, or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Certificateholders. The cost of any such compliance,
containment, clean-up or remediation shall be advanced by the Master Servicer,
subject to the Master Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.05.
Section 3.04 Collection Account, Distribution Account and Reserve
Accounts.
(a) The Master Servicer shall segregate and hold all funds collected
and received pursuant to each Mortgage Loan separate and apart from any of its
own funds and general assets and shall establish and maintain one or more
Collection Accounts. Each Collection Account shall be an Eligible Account.
The Master Servicer shall deposit 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
Mortgage Loans (other than in respect of principal and interest due on or before
the Cut-off Date):
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Interest Rate less the Servicing Fee Rate;
(iii) all Liquidation Proceeds 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 Master
Servicer's normal servicing procedures, the loan documents or applicable
law;
(v) all Condemnation Proceeds affecting any Mortgaged Property which
are not released to the Mortgagor in accordance with the Master Servicer's
normal servicing procedures, the loan documents or applicable law;
(vi) any amounts required to be deposited by the Master Servicer in
connection with any REO Property pursuant to Section 3.13;
(vii) all Prepayment Charges collected by the Master Servicer in
connection with the voluntary Principal Prepayment in full of any Mortgage
Loan, all Originator Prepayment Charge Payment Amounts paid by the
Originator and all Servicer Prepayment Charge Payment Amounts required to
be paid by the Master Servicer pursuant to Section 3.01 in connection with
any such Principal Prepayment; and
(viii) all amounts required to be deposited by the Master 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 Master Servicer and
the Master Servicer shall be entitled to retain and withdraw such interest from
the Collection Account pursuant to Section 3.05(v). The foregoing requirements
for deposit from the Collection Account shall be exclusive, it being understood
and agreed that, without limiting the generality of the foregoing, payments in
the nature of late payment charges, bad check fees, prepayment charges that are
not Prepayment Charges, Originator Prepayment Charge Payment Amounts or Servicer
Prepayment Charge Payment Amounts, assumption fees and other similar fees need
not be deposited by the Master Servicer in the Collection Account. Amounts
deposited in the Collection Account in error may be withdrawn by the Master
Servicer at any time.
(b) On behalf of the Trust Fund, the Trustee shall establish and
maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Certificateholders. On behalf of
the Trust Fund, the Master Servicer shall deliver to the Trustee in immediately
available funds for deposit in the Distribution Account by 1:00 p.m. New York
time on the Servicer Remittance Date, (i) that portion of the Available Funds
(calculated without regard to the references in the definition thereof to
amounts that may be deposited to the Distribution Account from a different
source as provided herein) then on deposit in the Collection Account, (ii) the
amount of all Prepayment Charges collected by the Master Servicer in connection
with the voluntary Principal Prepayment in full of any of the Mortgage Loans
then on deposit in the Collection Account (other than any such Prepayment
Charges received after the related Prepayment Period) and (iii) any 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 related REMICs and the Grantor Trust in accordance with the REMIC
distributions set forth in Section 4.08. The Trustee shall be entitled to
withdraw from the Distribution Account any amounts owing to it pursuant to
Section 8.05 and Section 9.01(c) prior to the distribution of any amounts on
deposit to the Certificateholders; provided, however, in the case of amounts
owing to it other than the Trustee Fee, the Trustee shall provide the Depositor,
the NIMS Insurer and the Master Servicer with a written account of such amounts
five Business Days prior to withdrawing such funds. In connection with any
failure by the Master Servicer to make any remittance required to be made by the
Master Servicer to the 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
Master Servicer shall pay to the Trustee for the account of the Trustee interest
at the prime rate of United States money center commercial banks as published in
The Wall Street Journal on any amount not timely remitted from and including the
day such remittance was required to be made to, but not including, the day on
which such remittance was actually made.
(c) Funds in the Collection Account and the Distribution Account may
be invested in Eligible Investments in accordance with the provisions set forth
in Section 3.25. The Master 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 Master 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 Master Servicer shall deliver to the Trustee
for deposit in the Distribution Account any amount not required to be deposited
therein, it may at any time request that the Trustee withdraw such amount from
the Distribution Account and remit to the Master Servicer any such amount, any
provision herein to the contrary notwithstanding. In addition, the Master
Servicer shall deliver to the Trustee from time to time for deposit, and the
Trustee shall so deposit, in the Distribution Account in respect of REMIC 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 Master 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 Master Servicer
pursuant to Section 3.11 in connection with the deductible clause in any
blanket hazard insurance policy, such deposit being made from the Master
Servicer's own funds, without reimbursement therefor.
(e) Promptly upon receipt of any Stayed Funds, whether from the
Master Servicer, a trustee in bankruptcy, or federal bankruptcy court or other
source, the Trustee shall notify the Master Servicer of such receipt and deposit
such funds in the Distribution Account, subject to withdrawal thereof as
permitted hereunder. In addition, the Trustee shall deposit in the Distribution
Account any amounts required to be deposited pursuant to Section 3.25(b) in
connection with losses realized on 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.
(g) (i) The Trustee shall establish and maintain the Class A-1
Reserve Account, held in trust for the benefit of the Holders of the Class A-1
Certificates. The Trustee shall deposit in the Class A-1 Reserve Account on the
date received by it, any Class A-1 Yield Maintenance Agreement Payment received
from the Class A-1 Yield Maintenance Agreement Provider for the related
Distribution Date. The Trustee shall establish and maintain the Group 2-A
Reserve Account, held in trust for the benefit of the Holders of the Class A-2,
Class A-3 and Class A-4 Certificates. The Trustee shall deposit in the Group 2-A
Reserve Account on the date received by it, any Group 2-A Yield Maintenance
Agreement Payment received from the Group 2-A Yield Maintenance Agreement
Provider for the related Distribution Date. The Trustee shall establish and
maintain the Class M Reserve Account, held in trust for the benefit of the
Holders of the Class M Certificates. The Trustee shall deposit in the Class M
Reserve Account on the date received by it, any Class M Yield Maintenance
Agreement Payment received from the Class M Yield Maintenance Agreement Provider
for the related Distribution Date. On each Distribution Date, the Trustee shall
withdraw from the Class A-1 Reserve Account any Class A-1 Yield Maintenance
Agreement Payment, shall withdraw from the Group 2-A Reserve Account any Group
2-A Yield Maintenance Agreement Payment and shall withdraw from the Class M
Reserve Account any Class M Yield Maintenance Agreement Payment and apply them
in the following order of priority:
(A) to the Class A-1 Certificates from the Class A-1 Reserve
Account, any remaining unpaid Cap Carryover Amount for such Class
for such Distribution Date (after distributions to the Class A-1
Certificates pursuant to Section 4.02(b) hereof);
(B) concurrently, to the Class A-2, Class A-3 and Class A-4
Certificates from the Group 2-A Reserve Account, pro rata in
accordance with their Certificate Principal Balances immediately
prior to the Distribution Date, any remaining unpaid Cap Carryover
Amounts for such Classes for such Distribution Date (after
distributions to the Class A-2, Class A-3 and Class A-4 Certificates
pursuant to Section 4.02(b) hereof);
(C) to the Class M Certificates from the Class M Reserve
Account, in each case only up to the Class M Cap Amount for the
related Class, any remaining unpaid Cap Carryover Amounts for such
Classes for such Distribution Date (after distributions to the Class
M Certificates pursuant to Section 4.02(b) hereof), distributed
sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class M-4,
Class M-5, Class M-6 and Class M-7 Certificates;
(D) concurrently, to the Class A-2, Class A-3 and Class A-4
Certificates, from the Group 2-A Reserve Account, pro rata in
accordance with the remaining unpaid Cap Carryover Amounts for such
Classes for such Distribution Date, any remaining unpaid Cap
Carryover Amounts for such Classes for such Distribution Date (after
distributions to the Class A-2, Class A-3 and Class A-4 Certificates
pursuant to Section 4.02(b) hereof and clause (B) above);
(E) to the Class M Certificates from the Class M Reserve
Account, any remaining unpaid Cap Carryover Amounts without regard
to the Class M Cap Amount for such Classes for such Distribution
Date (after distributions pursuant to Section 4.02(b) hereof and
clause (C) above) distributed sequentially, to the Class ▇-▇, ▇▇▇▇▇
▇-▇, Class M-3, Class M-4, Class M-5, Class M-6 and Class M-7
Certificates; and
(F) to the Class CE Certificates, any remaining amounts on
deposit in the Reserve Accounts.
(ii) The Trustee shall account for each Reserve Account as an asset
of a grantor trust under subpart E, part I of subchapter J of the Code and
not an asset of any REMIC created pursuant to this Agreement. The
beneficial owner of each Reserve Account is the Class CE
Certificateholder. For all federal tax purposes, amounts transferred or
reimbursed by REMIC 2 to any Reserve Account shall be treated as
distributions by the Trustee to the Class CE Certificateholder.
(iii) Any Cap Carryover Amounts paid by the Trustee pursuant to this
Section 3.04(g) to the Offered Certificates and the Class M-7 Certificates
shall be accounted for by the Trustee as amounts paid first to the Class
CE Certificates and then to the respective Class or Classes of Offered
Certificates and the Class M-7 Certificates from the Grantor Trust. In
addition, the Trustee shall account for the Offered Certificates' and the
Class M-7 Certificates' rights to receive payments of Cap Carryover
Amounts as rights in limited recourse interest rate cap contracts written
by the Class CE Certificates in favor of each Class of Offered
Certificates and the Class M-7 Certificates.
(iv) For federal tax return and information reporting, the right of
the Holders of the Offered Certificates and the Class M-7 Certificates to
receive payments under the Class A-1 Yield Maintenance Agreement, Group
2-A Yield Maintenance Agreement and Class M Yield Maintenance Agreement in
respect of any related Yield Maintenance Agreement Payments shall be
assigned a value of zero.
Section 3.05 Permitted Withdrawals From the Collection Account.
The Master Servicer may, from time to time, withdraw from the
Collection Account for the following purposes:
(i) to remit to the Trustee for deposit in the Distribution Account
the amounts required to be so remitted pursuant to Section 3.04(b) or
permitted to be so remitted pursuant to the first sentence of Section
3.04(d);
(ii) to reimburse itself for (a) any unreimbursed Advances to the
extent of amounts received which represent Late Collections (net of the
related Servicing Fees) of Monthly Payments, Liquidation Proceeds and
Insurance Proceeds on Mortgage Loans with respect to which such Advances
were made in accordance with the provisions of Section 4.07; (b) any
unreimbursed Advances with respect to the final liquidation of a Mortgage
Loan that are Nonrecoverable Advances, but only to the extent that Late
Collections, Liquidation Proceeds and Insurance Proceeds received with
respect to such Mortgage Loan are insufficient to reimburse the Master
Servicer for such unreimbursed Advances; or (c) subject to Section
4.07(b), any unreimbursed Advances to the extent of funds held in the
Collection Account for future distribution that were not included in
Available Funds for the preceding Distribution Date;
(iii) to reimburse itself for (a) any unpaid Servicing Fees, (b) any
unreimbursed Servicing Advances with respect to each Mortgage Loan, but
only to the extent of any Late Collections, Liquidation Proceeds,
Insurance Proceeds and condemnation proceeds received with respect to such
Mortgage Loan, and (c) any Servicing Advances with respect to the final
liquidation of a Mortgage Loan that are Nonrecoverable Advances, but only
to the extent that Late Collections, Liquidation Proceeds and Insurance
Proceeds received with respect to such Mortgage Loan are insufficient to
reimburse the Master Servicer for Servicing Advances;
(iv) to reimburse itself for any amounts paid or expenses incurred
pursuant to Section 3.03 (and not otherwise previously reimbursed);
(v) to pay to itself as servicing compensation (a) any interest
earned on funds in the Collection Account (all such interest to be
withdrawn monthly not later than each Servicer Remittance Date), (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);
(vii) to reimburse the Insurer for the amount of any claim (net of
the aggregate amount of premium paid to the Insurer with respect to the
related MI Mortgage Loan) paid by the Insurer prior to rescission of
coverage of the related MI Mortgage Loan as set forth in Section 3.01; and
(viii) to clear and terminate the Collection Account upon the
termination of this Agreement.
The foregoing requirements for withdrawal from the Collection
Account shall be exclusive. In the event the Master Servicer shall deposit in
the Collection Account any amount not required to be deposited therein, it may
at any time withdraw such amount from the Collection Account, any provision
herein to the contrary notwithstanding.
Section 3.06 Establishment of Escrow Accounts; Deposits in Escrow
Accounts.
The Master Servicer shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan which constitute Escrow Payments
separate and apart from any of its own funds and general assets and shall
establish and maintain one or more Escrow Accounts, in the form of time deposit
or demand accounts. A copy of such letter agreement shall be furnished to the
Trustee upon request. The Escrow Account shall be an Eligible Account.
The Master Servicer shall deposit 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 Master Servicer shall make withdrawals therefrom
only to effect such payments as are required under this Agreement, and for such
other purposes as shall be set forth in, or in accordance with, Section 3.07.
The Master Servicer shall be entitled to retain any interest paid on funds
deposited in the Escrow Account by the depository institution other than
interest on escrowed funds required by law to be paid to the Mortgagor and, to
the extent required by the related Mortgage Loan or Applicable Regulations, the
Master Servicer shall pay interest on escrowed funds to the Mortgagor
notwithstanding that the Escrow Account is non-interest bearing or that interest
paid thereon is insufficient for such purposes.
Section 3.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by the Master
Servicer (i) to effect timely payments of ground rents, taxes, assessments,
water rates, fire, flood and hazard insurance premiums and comparable items in a
manner and at a time that assures that the lien priority of the Mortgage is not
jeopardized (or, with respect to the payment of taxes, in a manner and at a time
that avoids the loss of the Mortgaged Property due to a tax sale or the
foreclosure as a result of a tax lien), (ii) to reimburse the Master Servicer
for any Servicing Advance made by the Master Servicer with respect to a related
Mortgage Loan but only from amounts received on the related Mortgage Loan which
represent late payments or Late Collections of Escrow Payments thereunder with
respect to taxes and assessments and with respect to hazard insurance, (iii) to
refund to the Mortgagor any funds as may be determined to be overages, (iv) for
transfer to the Collection Account in accordance with the terms of this
Agreement, (v) for application to restoration or repair of the Mortgaged
Property, (vi) to pay to the Master Servicer, or to the Mortgagor to the extent
required by the related Mortgage Loan or Applicable Regulations, any interest
paid on the funds deposited in the Escrow Account, (vii) to clear and terminate
the Escrow Account on the termination of this Agreement, or (viii) to transfer
to the Collection Account any insurance proceeds. As part of its servicing
duties, the Master Servicer shall pay to the Mortgagor interest on funds in the
Escrow Account, to the extent required by the related Mortgage Loan or
Applicable Regulations, and to the extent that interest earned on funds in the
Escrow Account is insufficient, shall pay such interest from its own funds,
without any reimbursement therefor.
In the event the Master Servicer shall deposit in the Escrow Account
any amount not required to be deposited therein, it may at any time withdraw
such amount from the Escrow Account, any provision herein to the contrary
notwithstanding.
Section 3.08 Payment of Taxes, Insurance and Other Charges;
Collections Thereunder.
With respect to each Mortgage Loan that provides for Escrow
Payments, the Master Servicer shall maintain accurate records reflecting the
status of ground rents, taxes, assessments, water rates and other charges which
are or may become a lien upon the Mortgaged Property and the status of fire,
flood and hazard insurance coverage and shall obtain, from time to time, all
bills for the payment of such charges (including renewal premiums) and shall
effect payment of taxes, assessments, hazard insurance premiums, and comparable
items in a manner and at a time that assures that the lien priority of the
Mortgage is not jeopardized (or, with respect to the payment of taxes, in a
manner and at a time that avoids the loss of the Mortgaged Property due to a tax
sale or the foreclosure as a result of a tax lien). To the extent that the
Mortgage does not provide for Escrow Payments, the Master Servicer shall use its
best efforts to determine that any such payments are made by the Mortgagor at
the time they first become due. If any such payment has not been made, the
Master 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 Master Servicer may transfer the Collection Account and the
Escrow Account to a different depository institution from time to time. Upon
such transfer, the Master Servicer shall deliver to the Trustee, 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 Master Servicer shall cause to be maintained for each Mortgage
Loan fire and hazard insurance with extended coverage as is customary in the
area where the Mortgaged Property is located in an amount which is at least
equal to the lesser of (i) the amount necessary to fully compensate for any
damage or loss to the improvements which are a part of such property on a
replacement cost basis or (ii) the Principal Balance of the Mortgage Loan, in
each case in an amount not less than such amount as is necessary to prevent the
Mortgagor and/or the Mortgagee from becoming a co-insurer. If the Mortgaged
Property is in an area identified in the Federal Register by the Flood Emergency
Management Agency as having special flood hazards and flood insurance has been
made available, the Master Servicer will cause to be maintained a flood
insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration with a generally acceptable insurance carrier,
in an amount representing coverage not less than the least of (i) the Principal
Balance of the Mortgage Loan, (ii) the maximum insurable value of the
improvements securing such Mortgage Loan or (iii) the maximum amount of
insurance which is available under the National Flood Insurance Act of 1968, as
amended. The Master Servicer shall also maintain on the REO Property for the
benefit of the Certificateholders, (x) fire and hazard insurance with extended
coverage in an amount which is at least equal to the lesser of (i) 100% of the
maximum insurable value of the improvements securing the Mortgage Loan and (ii)
the outstanding Principal Balance of the Mortgage Loan at the time it became an
REO Property, (y) public liability insurance and, (z) to the extent required and
available under the National Flood Insurance Act of 1968, as amended, flood
insurance in an amount as provided above. Any amounts collected by the Master
Servicer under any such policies other than amounts to be deposited in the
Escrow Account and applied to the restoration or repair of the Mortgaged
Property or REO Property, or released to the Mortgagor in accordance with the
Master Servicer's normal servicing procedures, shall be deposited in the
Collection Account, subject to withdrawal pursuant to Section 3.05. It is
understood and agreed that no earthquake or other additional insurance is
required to be maintained by the Master Servicer or the Mortgagor or maintained
on property acquired in respect of the Mortgage Loan, other than pursuant to
such Applicable Regulations as shall at any time be in force and as shall
require such additional insurance. All such policies shall be endorsed with
standard mortgagee clauses with loss payable to the Master Servicer and shall
provide for at least thirty days prior written notice of any cancellation,
reduction in the amount of or material change in coverage to the Master
Servicer. The Master Servicer shall not interfere with the Mortgagor's freedom
of choice in selecting either his insurance carrier or agent, provided, however,
that the Master Servicer shall not accept any such insurance policies from
insurance companies unless such companies currently reflect a general policy
rating of B:III or better in Best's Key Rating Guide and are licensed to do
business in the state wherein the property subject to the policy is located.
Section 3.11 Maintenance of Mortgage Impairment Insurance Policy.
In the event that the Master Servicer shall obtain and maintain a
blanket policy issued by an insurer that has a general policy rating of B:III or
better in Best's Key Rating Guide insuring against hazard losses on all of the
Mortgage Loans, then, to the extent such policy provides coverage in an amount
equal to the amount required pursuant to Section 3.10 and otherwise complies
with all other requirements of Section 3.10, it shall conclusively be deemed to
have satisfied its obligations as set forth in Section 3.10, it being understood
and agreed that such policy may contain a deductible clause, in which case the
Master Servicer shall, in the event that there shall not have been maintained on
the related Mortgaged Property or REO Property a policy complying with Section
3.10, and there shall have been a loss which would have been covered by such
policy, deliver to the Trustee for deposit in the Distribution Account the
amount not otherwise payable under the blanket policy because of such deductible
clause, which amount shall not be reimbursable to the Master Servicer from the
Trust Fund. In connection with its activities as servicer of the Mortgage Loans,
the Master Servicer agrees to prepare and present, on behalf of the Trustee,
claims under any such blanket policy in a timely fashion in accordance with the
terms of such policy. Upon request of the Trustee, the Master Servicer shall
cause to be delivered to the Trustee a certified true copy of such policy and a
statement from the insurer thereunder that such policy shall in no event be
terminated or materially modified without thirty days prior written notice to
the Trustee.
Section 3.12 Fidelity Bond, Errors and Omissions Insurance.
The Master Servicer shall maintain, at its own expense, a blanket
fidelity bond (the "Fidelity Bond") and an errors and omissions insurance
policy, with broad coverage with financially responsible companies on all
officers, employees or other persons acting in any capacity with regard to the
Mortgage Loans to handle funds, money, documents and papers relating to the
Mortgage Loans. The Fidelity Bond and errors and omissions insurance shall be in
the form of the Mortgage Banker's Blanket Bond and shall protect and insure the
Master Servicer against losses, including forgery, theft, embezzlement, fraud,
errors and omissions and negligent acts of such persons. Such Fidelity Bond
shall also protect and insure the Master Servicer against losses in connection
with the failure to maintain any insurance policies required pursuant to this
Agreement and the release or satisfaction of a Mortgage Loan without having
obtained payment in full of the indebtedness secured thereby. No provision of
this Section 3.12 requiring the Fidelity Bond and errors and omissions insurance
shall diminish or relieve the Master Servicer from its duties and obligations as
set forth in this Agreement. The minimum coverage under any such bond and
insurance policy shall be at least equal to the corresponding amounts required
by ▇▇▇▇▇▇ ▇▇▇ 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 Master Servicer shall cause to be delivered to the requesting party
a certified true copy of the Fidelity Bond and errors and omissions insurance
policy and a statement from the surety and the insurer that such Fidelity Bond
and errors and omissions insurance policy shall in no event be terminated or
materially modified without thirty days' prior written notice to the Trustee.
Section 3.13 Title, Management and Disposition of REO Property.
(a) In the event that title to a Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken (pursuant to a limited power of attorney to be provided by the
Trustee to the Master Servicer) in the name of the Trustee or its nominee, on
behalf of the Certificateholders, or in the event the Trustee is not authorized
or permitted to hold title to real property in the state where the REO Property
is located, or would be adversely affected under the "doing business" or tax
laws of such state by so holding title, the deed or certificate of sale shall be
taken in the name of such Person or Persons as shall be consistent with an
Opinion of Counsel obtained by the Master Servicer from an attorney duly
licensed to practice law in the state where the REO Property is located. Any
Person or Persons holding such title other than the Trustee shall acknowledge in
writing that such title is being held as nominee for the benefit of the Trustee.
(b) In the event that the Trust Fund acquires any REO Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Master Servicer shall dispose of such REO Property before the
end of the third taxable year beginning after the year of its acquisition by the
Trust Fund for purposes of Section 860G(a)(8) of the Code unless the Master
Servicer has received a grant of extension from the Internal Revenue Service of
the above-mentioned grace period such that the holding by the Trust Fund of such
REO Property subsequent to such period will not: (i) result in the imposition of
any tax on "prohibited transactions" as defined in Section 860F of the Code; or
(ii) cause any REMIC constituting any part of the Trust Fund to fail to qualify
as a REMIC at any time that any Certificates (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 Master Servicer has agreed to indemnify
and hold harmless the Trust Fund with respect to the imposition of any such
taxes.
The Master Servicer shall manage, conserve, protect and operate each
REO Property for the Certificateholders and the Trust Fund solely for the
purpose of its prompt disposition and sale in a manner which does not cause such
REO Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or result in the receipt by the related REMIC of
any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code, or any "net income from foreclosure property" which
is subject to taxation under the REMIC Provisions. The Master Servicer shall
cause each REO Property to be inspected promptly upon the acquisition of title
thereto and shall cause each REO Property to be inspected at least annually
thereafter. The Master Servicer shall make or cause to be made a written or
electronic report of each such inspection. Such reports shall be retained in the
Mortgage File and copies thereof shall be forwarded by the Master Servicer to
the Trustee upon request. The Master Servicer shall attempt to sell the same
(and may temporarily rent the same) on such terms and conditions as the Master
Servicer deems to be in the best interest of the Certificateholders and the
Trust Fund.
With respect to each REO Property, the Master Servicer shall account
separately for each REO Property with respect to all funds collected and
received in connection with the operation of such REO Property.
The Master Servicer shall deposit or cause to be deposited, on a
daily basis, within one Business Day of receipt, in the Collection Account, all
revenues received with respect to each REO Property and shall withdraw therefrom
funds necessary for the proper operation, management and maintenance of the
related REO Property, including the cost of maintaining any hazard insurance
pursuant to Section 3.10 hereof and the fees of any managing agent acting on
behalf of the Master Servicer.
The Master Servicer shall furnish to the Trustee, on each Servicer
Remittance Date, an operating statement for each REO Property covering the
operation of each REO Property for the previous month. Such operating statement
shall be accompanied by such other information as the Trustee shall reasonably
request.
The Master Servicer shall use its best efforts to dispose of the REO
Property as promptly as is practically consistent with protecting the
Certificateholders' interests.
Each REO Disposition shall be carried out by the Master Servicer at
such price and upon such terms and conditions as the Master Servicer deems to be
in the best interest of the Certificateholders. If as of the date title to any
REO Property was acquired by the Master Servicer there were outstanding
unreimbursed Servicing Advances, Servicing Fees and Advances with respect to the
REO Property, the Master Servicer, upon an REO Disposition of such REO Property,
shall be entitled to reimbursement for any related unreimbursed Servicing
Advances, Servicing Fees and Advances from proceeds received in connection with
such REO Disposition. The proceeds from the REO Disposition, net of any payment
to the Master Servicer as provided above, shall be deposited in the Collection
Account for transfer to the Distribution Account on the succeeding Servicer
Remittance Date in accordance with Section 3.04(a)(vi).
Any REO Disposition shall be for cash only (unless changes in the
REMIC Provisions made subsequent to the Startup Day allow a sale for other
consideration and an Opinion of Counsel is obtained by the Master Servicer to
the effect that such sale shall not cause any REMIC constituting part of the
Trust Fund to fail to qualify as a REMIC).
Section 3.14 Due-on-Sale Clauses; Assumption and Substitution
Agreements.
When a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Master Servicer shall, to the extent it has knowledge of such
conveyance or prospective conveyance, exercise its rights to accelerate the
maturity of the related Mortgage Loan under any "due-on-sale" clause contained
in the related Mortgage or Mortgage Note; provided, however, that the Master
Servicer shall not exercise any such right if the "due-on-sale" clause, in the
reasonable belief of the Master Servicer, is not enforceable under applicable
law. In such event, the Master Servicer shall make reasonable efforts to enter
into an assumption and modification agreement with the Person to whom such
property has been or is about to be conveyed, pursuant to which such Person
becomes liable under the Mortgage Note and, unless prohibited by applicable law
or the Mortgage, the Mortgagor remains liable thereon. If the foregoing is not
permitted under applicable law, the Master Servicer is authorized to enter into
a substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted as
Mortgagor and becomes liable under the Note; provided that no such substitution
will be permitted unless such person satisfies the underwriting criteria of the
Master Servicer and has a credit score at least equal to that of the original
Mortgagor. The Mortgage Loan, as assumed, shall conform in all respects to the
requirements, representations and warranties of this Agreement. The Master
Servicer shall not take or enter into any assumption and modification agreement,
however, unless (to the extent practicable under the circumstances) it shall
have received confirmation, in writing, of the continued effectiveness of any
applicable hazard insurance policy. The Master Servicer shall notify the Trustee
that any such assumption or substitution agreement has been completed by
forwarding to the Trustee the original copy of such assumption or substitution
agreement (indicating the Mortgage File to which it relates) which copy shall be
added by the Trustee to the related Mortgage File and which shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. The Master Servicer
shall be responsible for recording any such assumption or substitution
agreements. In connection with any such assumption or substitution agreement,
the Monthly Payment on the related Mortgage Loan shall not be changed but shall
remain as in effect immediately prior to the assumption or substitution, the
stated maturity or outstanding principal amount of such Mortgage Loan shall not
be changed nor shall any required monthly payments of principal or interest be
deferred or forgiven. Any fee collected by the Master Servicer for consenting to
any such conveyance or entering into an assumption or substitution agreement
shall be retained by or paid to the Master Servicer as additional servicing
compensation.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Master Servicer shall not be deemed to be in default, breach
or any other violation of its obligations hereunder by reason of any assumption
of a Mortgage Loan by operation of law or any assumption which the Master
Servicer may be restricted by law from preventing, for any reason whatsoever.
Section 3.15 Notification of Adjustments.
On each Adjustment Date, the Master Servicer shall make Mortgage
Interest Rate adjustments for each Adjustable-Rate Mortgage Loan in compliance
with the requirements of the related Mortgage and Mortgage Note and Applicable
Regulations. The Master Servicer shall execute and deliver the notices required
by each Mortgage and Mortgage Note and Applicable Regulations regarding Mortgage
Interest Rate adjustments. Upon the discovery by the Master Servicer or the
Trustee that the Master Servicer has failed to adjust or has incorrectly
adjusted a Mortgage Interest Rate or a Monthly Payment pursuant to the terms of
the related Mortgage Note and Mortgage, the Master Servicer shall deliver to the
Trustee for deposit in the Distribution Account from its own funds the amount of
any interest loss caused thereby without reimbursement therefor; provided,
however, the Master Servicer shall be held harmless with respect to any Mortgage
Interest Rate adjustments made by any servicer prior to the Master Servicer.
Section 3.16 Optional Purchases of Mortgage Loans by Master
Servicer.
The Master Servicer may, at its option, or at the direction of the
NIMS Insurer (which shall be at the expense of the NIMS Insurer), purchase a
Mortgage Loan or REO Property which becomes 90 or more days Delinquent or for
which the Master Servicer has accepted a deed in lieu of foreclosure. Prior to
purchase pursuant to this Section 3.16, the Master Servicer shall be required to
continue to make monthly advances pursuant to Section 4.07. The Master Servicer
shall not use any procedure in selecting Mortgage Loans to be purchased which is
materially adverse to the interests of the Certificateholders. The Master
Servicer shall purchase such Delinquent Mortgage Loan or REO Property at a price
equal to the Purchase Price. The Master Servicer will not be entitled to any
Servicing Fee with respect to any such purchased Mortgage Loan. Any such
purchase of a Mortgage Loan or REO Property pursuant to this Section 3.16 shall
be accomplished by delivery to the Trustee for deposit in the Distribution
Account of the amount of the Purchase Price. The Trustee shall immediately
effectuate the conveyance of such delinquent Mortgage Loan or REO Property to
the Master Servicer to the extent necessary, including the prompt delivery of
all documentation to the Master Servicer.
Section 3.17 Trustee to Cooperate; Release of Files.
(a) Upon the payment in full of any Mortgage Loan (including any
liquidation of such Mortgage Loan through foreclosure or otherwise, or the
receipt by the Master Servicer of a notification that payment in full will be
escrowed in a manner customary for such purposes), the Master Servicer shall
deliver to the Trustee, in written form (with two executed copies) or electronic
form, of a completed "Request for Release" in the form of Exhibit E. Upon
receipt of such Request for Release of Documents, the Trustee shall promptly
release the related Mortgage File within three (3) Business Days via overnight
mail delivery (at the expense of the Master Servicer), in trust, to (i) the
Master Servicer, or (ii) such other party identified in the related Request for
Release. The Trustee agrees to indemnify the Master Servicer, out of its own
funds, for any loss, liability or expense (other than special, indirect,
punitive or consequential damages which will not be paid by the Trustee)
incurred by the Master Servicer as a direct result of the negligence or willful
misconduct by the Trustee in releasing the Mortgage File as provided above. Upon
any such payment in full, or the receipt of such notification that such funds
have been placed in escrow, the Trustee hereby authorizes and empowers the
Master Servicer to execute an instrument of satisfaction (or assignment of
Mortgage without recourse) regarding the Mortgaged Property relating to such
Mortgage, which instrument of satisfaction or assignment shall be delivered to
the Person or Persons entitled thereto against receipt therefor of payment in
full, it being understood and agreed that no expense incurred in connection with
such instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the Collection Account.
(b) From time to time and as appropriate in the servicing of any
Mortgage Loan, including, without limitation, foreclosure or other comparable
conversion of a Mortgage Loan or collection under any insurance policy relating
to a Mortgage Loan, the Trustee shall (except in the case of the payment or
liquidation pursuant to which the related Mortgage File is released to an escrow
agent or an employee, agent or attorney of the Trustee), upon written request of
the Master Servicer and delivery to the Trustee, in written form (with two
executed copies) or electronic form, of a "Request for Release" in the form of
Exhibit E signed by a Servicing Officer, release the related Mortgage File to
the Master Servicer within three (3) Business Days and shall execute such
documents as shall be necessary to the prosecution of any such proceedings,
including, without limitation, an assignment without recourse of the related
Mortgage to the Master Servicer. Such receipt shall obligate the Master Servicer
to return the Mortgage File to the Trustee when the need therefor by the Master
Servicer no longer exists unless the Mortgage Loan shall be liquidated, in which
case, upon receipt of a Request for Release evidencing such liquidation, the
receipt shall be released by the Trustee to the Master Servicer.
(c) Subject to Section 3.01, the Master Servicer shall have the
right to accept applications of Mortgagors for consent to (i) partial releases
of Mortgages, (ii) alterations, (iii) removal, demolition or division of
properties subject to Mortgages, (iv) modifications, and (v) second mortgage
subordination agreements. No application for approval shall be considered by the
Master Servicer unless: (w) it has received an Opinion of Counsel, addressed to
the Trustee (which opinion shall not be an expense of the Trustee or the Trust
Fund) that such sale, disposition, substitution, acquisition or contribution
will not affect adversely the status of any REMIC constituting part of the Trust
Fund as a REMIC or cause any REMIC constituting part of the Trust Fund to be
subject to a tax on "prohibited transactions" or "contributions" pursuant to the
REMIC Provisions; (x) the provisions of the related Note and Mortgage have been
complied with; (y) the 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 Master Servicer the consent or partial release so requested by the Master
Servicer. A proposed form of consent or partial release, as the case may be,
shall accompany any Servicing Officer's certificate delivered by the Master
Servicer pursuant to this paragraph.
Section 3.18 Servicing Compensation.
As compensation for its activities hereunder, the Master Servicer
shall be entitled to retain the amount of the Servicing Fee with respect to each
Mortgage Loan (including REO Properties) and any Prepayment Interest Excess. The
Master Servicer shall be entitled to retain additional servicing compensation in
the form of release fees, bad check charges, assumption fees, modification or
extension fees, late payment charges, prepayment charges that are not Prepayment
Charges, 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.
(a) Beginning in 2005, the Master Servicer, at its own expense, will
deliver to the Trustee, the NIMS Insurer and the Depositor, not later than March
10th of each calendar year, a Servicing Officer's certificate stating, as to
each signer thereof, that (i) a review of the activities of the Master Servicer
during such preceding calendar year and of performance under this Agreement has
been made under such officers' supervision, and (ii) to the best of such
officers' knowledge, based on such review, the Master Servicer has fulfilled all
its obligations under this Agreement for such year, or, if there has been a
default in the fulfillment of all such obligations, specifying each such default
known to such officers and the nature and status thereof including the steps
being taken by the Master Servicer to remedy such default.
(b) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and their receipt of such shall not
constitute constructive notice of any information contained therein or
determinable, from information contained therein, including the Master
Servicer's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
Section 3.20 Annual Independent Certified Public Accountants'
Reports.
(a) Beginning in 2005, not later than March 10th of each calendar
year, the Master Servicer, at its expense, shall cause a nationally recognized
firm of independent certified public accountants to furnish to the Trustee, the
Depositor, the NIMS Insurer and each Rating Agency, a report stating that (i) it
has obtained a letter of representation regarding certain matters from the
management of the Master Servicer which includes an assertion that the Master
Servicer has complied with certain minimum residential mortgage loan servicing
standards, identified in either the Uniform Single Attestation Program for
Mortgage Bankers established by the Mortgage Bankers Association of America or
the Audit Program for Mortgages serviced by ▇▇▇▇▇▇▇ Mac, with respect to the
servicing of residential mortgage loans during the most recently completed
calendar year and (ii) on the basis of an examination conducted by such firm in
accordance with standards established by the American Institute of Certified
Public Accountants, such representation is fairly stated in all material
respects, subject to such exceptions and other qualifications that may be
appropriate. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request, provided that such statement is delivered by the
Master Servicer to the Trustee.
(b) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and their receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Master Servicer's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
Section 3.21 Access to Certain Documentation and Information
Regarding the Mortgage Loans.
(a) The Master Servicer shall provide to the Trustee,
Certificateholders that are federally insured savings and loan associations, the
Office of Thrift Supervision, the FDIC and the supervisory agents and examiners
of each of the foregoing (which, in the case of supervisory agents and
examiners, may be required by applicable state and federal regulations) access
to the available documentation regarding the Mortgage Loans, such access being
afforded without charge but only upon reasonable advance request and during
normal business hours at the offices of the Master Servicer designated by it.
(b) The Master Servicer, in its capacity as Originator and Master
Servicer, shall afford the NIMS Insurer, upon reasonable advance notice, during
normal business hours, access to all records maintained by the Master Servicer
in respect of its rights and obligations hereunder and access to officers of the
Master Servicer responsible for such obligations. Upon request, the Master
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 Master Servicer for all information and data (including loss and
delinquency information and data) and loan-level information and data relating
to the servicing of the Mortgage Loans.
The Credit Risk Manager may be removed at any time by a vote of
Certificateholders holding Certificates evidencing at least 66 2/3% of the
aggregate Voting Rights of the Certificates. After any such termination, the
Credit Risk Manager shall have no further obligations hereunder, and shall no
longer be entitled to the Credit Risk Manager Fee.
Section 3.23 Obligations of the Master Servicer in Respect of
Compensating Interest.
Not later than the close of business on each Servicer Remittance
Date, the Master Servicer shall deliver to the Trustee for deposit in the
Distribution Account an amount ("Compensating Interest") equal to the lesser of
(A) the aggregate of the Prepayment Interest Shortfalls on the Mortgage Loans
for the related Distribution Date resulting from Principal Prepayments in full
on the Mortgage Loans during the related Prepayment Period and (B) the sum of
(i) its aggregate Servicing Fee received in the related Collection Period and
(ii) any Prepayment Interest Excess for the related Distribution Date. The
Master Servicer shall apply Compensating Interest to offset any Prepayment
Interest Shortfalls resulting from Principal Prepayments in full on the Mortgage
Loans. The Master Servicer shall not have the right to reimbursement for any
amounts remitted to the Trustee in respect of Compensating Interest. Such
amounts so remitted shall be included in the Available Funds and distributed
therewith on the next Distribution Date. The Master Servicer shall not be
obligated to pay Compensating Interest with respect to Prepayment Interest
Shortfalls resulting from partial Principal Prepayments or Relief Act Interest
Shortfalls.
Section 3.24 Obligations of the Master Servicer in Respect of
Mortgage Interest Rates and Monthly Payments.
In the event that a shortfall in any collection on or liability with
respect to any Mortgage Loan results from or is attributable to adjustments to
Mortgage Interest Rates, Monthly Payments or Principal Balances that were made
by the Master Servicer in a manner not consistent with the terms of the related
Mortgage Note and this Agreement, the Master Servicer, upon discovery or receipt
of notice thereof, immediately shall deliver to the Trustee for deposit in the
Distribution Account from its own funds the amount of any such shortfall and
shall indemnify and hold harmless the Trust Fund, the Trustee, the Depositor and
any successor servicer in respect of any such liability. Such indemnities shall
survive the termination or discharge of this Agreement. Notwithstanding the
foregoing, this Section 3.24 shall not limit the ability of the Master Servicer
to seek recovery of any such amounts from the related Mortgagor under the terms
of the related Mortgage Note, as permitted by law.
Section 3.25 Investment of Funds in the Collection Account and the
Distribution Account.
(a) The Master Servicer may direct any depository institution
maintaining the Collection Account and the Trustee may direct any depository
institution maintaining the Distribution Account (for purposes of this Section
3.25, each an "Investment Account"), to invest the funds in such Investment
Account in one or more 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 Master Servicer, as applicable (in its capacity as such) or in
the name of a nominee of the Trustee. The Trustee shall be entitled to sole
possession (except with respect to investment direction of funds held in the
Collection Account) over each such investment and the income thereon, and any
certificate or other instrument evidencing any such investment shall be
delivered directly to the Trustee or its agent, together with any document of
transfer necessary to transfer title to such investment to the Trustee or its
nominee. In the event amounts on deposit in an Investment Account are at any
time invested in an Eligible Investment payable on demand, the Trustee shall at
the direction of the Master Servicer:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on the
last day such 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 Master Servicer. The Master
Servicer shall deposit in the Collection Account or (to the extent funds in the
Escrow Account are invested if permitted by applicable law) the Escrow Account,
as applicable, 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 Master Servicer; Indemnification.
(a) Subject to clause (b) below and Section 6.03, the Master
Servicer (except the Trustee if it is required to succeed the Master Servicer
hereunder) indemnifies and holds the Trustee, the Depositor, 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 Master Servicer to perform its duties and service the
Mortgage Loans in compliance with the Servicing Standard. The Master Servicer
shall immediately notify the Trustee, 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 Master Servicer shall assume (with the consent of the
Trustee) the defense of any such claim and pay all expenses in connection
therewith, including reasonable counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against the Master Servicer,
the Trustee, the Depositor, 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 Master Servicer, or
any of the directors, officers, employees or agents of the Depositor or the
Master Servicer shall be under any liability to the Trust Fund or the
Certificateholders for any action taken, or for refraining from the taking of
any action, in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositors, the
NIMS Insurer or the Master Servicer or any such Person against any breach of
warranties or representations made by such party herein, or against any specific
liability imposed on the Master Servicer for a breach of the Servicing Standard
and/or this Agreement, or against any liability which would otherwise be imposed
by reason of its respective willful misfeasance, bad faith, fraud or negligence
in the performance of its duties or by reasons of negligent disregard of its
respective obligations or duties hereunder.
The Depositor, the NIMS Insurer, the Master Servicer and any
director, officer, employee or agent of the Depositor, the NIMS Insurer or the
Master Servicer, may rely in good faith on any document of any kind which, prima
facie, is properly executed and submitted by any appropriate Person with respect
to any matters arising hereunder. The Depositor, the Master Servicer, the NIMS
Insurer and any director, officer, employee or agent of the Depositor, the
Master 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 Master Servicer) a breach of the Servicing Standard in the
performance of its respective duties or by reason of negligent disregard of its
respective obligations or duties hereunder. Neither the Depositor, the NIMS
Insurer, nor the Master Servicer shall be under any obligation to appear in,
prosecute or defend any legal action unless such action is related to its
respective duties under this Agreement and in its opinion does not expose it to
any expense or liability; provided, however, that the Depositor, the NIMS
Insurer or the Master Servicer may in their discretion undertake any action
related to their obligations hereunder which they may deem necessary or
desirable with respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder. The Master
Servicer's right to indemnity or reimbursement pursuant to this Section shall
survive any resignation or termination of the Master Servicer pursuant to
Section 6.04 or 7.01 with respect to any losses, expenses, costs or liabilities
arising prior to such resignation or termination (or arising from events that
occurred prior to such resignation or termination).
Section 3.27 Reports of Foreclosure and Abandonment of Mortgaged
Properties.
Beginning in 2005, the Master Servicer shall file the reports of
foreclosure and abandonment of any Mortgaged Property required by Section 6050J
of the Code with the Internal Revenue Service on or before the due date for any
such report. Not later than 90 days following the end of each calendar year,
beginning in 2005, the Master 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 Master Servicer shall be in form and substance
sufficient to meet the reporting requirements imposed by such Section 6050J.
Section 3.28 Protection of Assets.
(a) Except for transactions and activities entered into in
connection with the securitization that is the subject of this Agreement, the
Trust is not authorized and has no power to:
(1) borrow money or issue debt;
(2) merge with another entity, reorganize, liquidate or sell assets;
or
(3) engage in any business or activities.
(b) Each party to this Agreement agrees that it will not file an
involuntary bankruptcy petition against the Trustee or the Trust Fund or
initiate any other form of insolvency proceeding until after the Certificates
have been paid.
Section 3.29 Limitation of Liability of the Credit Risk Manager.
Neither the Credit Risk Manager, nor any of the directors, officers,
employees or agents of the Credit Risk Manager, shall be under any liability to
the Depositor, the Master Servicer, the Trustee or the Certificateholders for
any action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, in reliance upon information provided by the Master
Servicer under the Credit Risk Management Agreement or for errors in judgment;
provided, however, that this provision shall not protect the Credit Risk Manager
or any such person against liability that would otherwise be imposed by reason
of willful malfeasance, bad faith or negligence in its performance of its duties
or by reason of reckless disregard for its obligations and duties under this
Agreement or the applicable Credit Risk Management Agreement. The Credit Risk
Manager and any director, officer, employee or agent of the Credit Risk Manager
may rely in good faith on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising hereunder, and may
rely in good faith upon the accuracy of information furnished by the Master
Servicer pursuant to the applicable Credit Risk Management Agreement in the
performance of its duties thereunder and hereunder.
Section 3.30 No Personal Solicitation.
From and after the Closing Date, the Master Servicer agrees that it
will not take any action or permit or cause any action to be taken by any of its
agents and Affiliates, or by any independent contractors or independent mortgage
brokerage companies on the Master Servicer's behalf, to personally, by
telephone, mail or electronic mail, solicit the Mortgagor under any Mortgage
Loan for the purpose of refinancing such Mortgage Loan; provided, that the
Master Servicer may solicit any Mortgagor for whom the Master Servicer has
received a request for verification of mortgage, a request for demand for
payoff, a mortgagor initiated written or verbal communication indicating a
desire to prepay the related Mortgage Loan, or the mortgagor initiates a title
search; provided further, it is understood and agreed that promotions undertaken
by the Master Servicer or any of its Affiliates which (i) concern optional
insurance products or other additional products or (ii) are directed to the
general public at large, including, without limitation, mass mailings based on
commercially acquired mailing lists, newspaper, radio and television
advertisements shall not constitute solicitation under this Section, nor is the
Master Servicer prohibited from responding to unsolicited requests or inquiries
made by a Mortgagor or an agent of a Mortgagor. Furthermore, the Master Servicer
shall be permitted to include in its monthly statements to borrowers or
otherwise, statements regarding the availability of the Master Servicer's
counseling services with respect to refinancing mortgage loans.
Section 3.31 Periodic Filings.
(a) The Trustee and the Master Servicer shall reasonably cooperate
with the Depositor in connection with the Trust's satisfying its reporting
requirements under the Exchange Act. Without limiting the generality of the
foregoing, the Trustee shall prepare on behalf of the Trust any monthly Current
Reports on Form 8-K (each, a "Monthly Form 8-K") and Annual Reports on Form 10-K
(each, a "Form 10-K") customary for similar securities as required by the
Exchange Act and the rules and regulations of the Commission thereunder, and the
Trustee shall sign (other than any Form 10-K) and file (via the Commission's
Electronic Data Gathering and Retrieval System) such Forms on behalf of the
Trust. The Depositor shall sign any Form 10-K.
(b) Each Monthly Form 8-K shall be filed by the Trustee within 15
days after each Distribution Date, including a copy of the Distribution Date
Statement for such Distribution Date as an exhibit thereto. Prior to March 30th
of each year (or such earlier date as may be required by the Exchange Act and
the rules and regulations of the Commission), the Trustee shall file a Form
10-K, in substance as required by applicable law or applicable Commission
staff's interpretations. Such Form 10-K shall include as exhibits the Master
Servicer's annual statement of compliance described under Section 3.19 and the
accountant's report described under Section 3.20, in each case, to the extent
they have been timely delivered to the Trustee. If they are not so timely
delivered, the Trustee shall file an amended Form 10-K including such documents
as exhibits reasonably promptly after they are delivered to the Trustee. The
Trustee shall have no liability with respect to any failure to properly prepare
or file such periodic reports resulting from or relating to the Trustee's
inability or failure to obtain any information not resulting from its own
negligence, willful misconduct or bad faith. The Form 10-K shall also include a
certification in the form attached hereto as Exhibit 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
three (3) Business Days prior to the latest date on which the Form 10-K may be
timely filed. The Trustee, the Depositor and the Master Servicer shall
reasonably cooperate to enable the Commission 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.
(c) Not later than five (5) Business Days prior to the latest date
on which the Form 10-K may be timely filed each year, (i) the Trustee shall sign
and deliver to the Depositor a certification (in the form attached hereto as
Exhibit P-1) for the benefit of the Depositor and its officers, directors and
Affiliates (provided, however, that the Trustee shall not undertake an analysis
of the accountant's report attached as an exhibit to the Form 10-K) and (ii) the
Master Servicer shall sign and deliver to the Depositor a certification (in the
form attached hereto as Exhibit P-2) for the benefit of the Depositor and its
officers, directors and Affiliates. In addition, (i) the Trustee shall also
indemnify and hold harmless the Depositor and its officers, directors and
Affiliates from and against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments and other costs
and expenses arising out of or based upon any inaccuracy in the certification
provided by the Trustee pursuant to this Section 3.31(c), any breach of the
Trustee's obligations under this Section 3.31(c) or the Trustee's negligence,
bad faith or willful misconduct in connection therewith and (ii) the Master
Servicer shall indemnify and hold harmless the Depositor and its officers,
directors and Affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon any inaccuracy in the
certification provided by the Master Servicer pursuant to this Section 3.31(c),
any breach of the Master Servicer's obligations under this Section 3.31(c) or
the Master Servicer's negligence, bad faith or willful misconduct in connection
therewith. If the indemnification provided for herein is unavailable or
insufficient to hold harmless the Depositor and its officers, directors and
Affiliates, then (i) the Trustee agrees that it shall contribute to the amount
paid or payable by the Depositor, its officers, directors or Affiliates as a
result of the losses, claims, damages or liabilities of the Depositor, its
officers, directors or Affiliates in such proportion as is appropriate to
reflect the relative fault of the Depositor and its officers, directors and
Affiliates on the one hand and the Trustee on the other in connection with a
breach of the Trustee's obligations under this Section 3.31(c) or the Trustee's
negligence, bad faith or willful misconduct in connection therewith and (ii) the
Master Servicer agrees that it shall contribute to the amount paid or payable by
the Depositor, its officers, directors or Affiliates as a result of the losses,
claims, damages or liabilities of the Depositor, its officers, directors or
Affiliates in such proportion as is appropriate to reflect the relative fault of
the Depositor and its officers, directors and Affiliates on the one hand and the
Master Servicer on the other in connection with a breach of the Master
Servicer's obligations under this Section 3.31(c) or the Master Servicer's
negligence, bad faith or willful misconduct in connection therewith. The Master
Servicer hereby acknowledges and agrees that the Depositor and the Trustee are
relying on the Master Servicer's performance of its obligations under Sections
3.19 and 3.20 in order to perform their respective obligations under this
Section 3.31.
(d) Upon any filing with the Commission, the Trustee shall promptly
deliver to the Depositor a copy of any such executed report, statement or
information.
(e) The obligations set forth in paragraphs (a) through (d) of this
Section shall only apply with respect to periods for which the Trustee is
obligated to file reports on Form 8-K or 10-K pursuant to paragraph (b) of this
Section. Upon request of the Depositor, the Trustee shall prepare, execute and
file with the Commission a Form 15 Suspension Notification with respect to the
Trust, and thereafter there shall be no further obligations under paragraphs (a)
through (d) of this Section commencing with the calendar year in which the Form
15 is filed (other than the obligations to be performed in such calendar year
that relate back to the prior calendar year).
ARTICLE IV
FLOW OF FUNDS
Section 4.01 Interest Distributions.
On each Distribution Date, the Trustee shall withdraw from the
Distribution Account the Interest Remittance Amount and apply it in the
following order of priority (based upon the Mortgage Loan information provided
to it in the Remittance Report, upon which the Trustee may conclusively rely),
and the calculations required to be made by the Trustee, to the extent
available:
(i) concurrently, to the Trustee, the Trustee Fee for such
Distribution Date, to the Credit Risk Manager, the Credit Risk Manager Fee
for such Distribution Date and to the Insurer, the Premium for such
Distribution Date, pro rata;
(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; and
(b) concurrently, from the Group 2 Interest Remittance Amount
to the Class A-2, Class A-3 and Class A-4 Certificates, pro rata,
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; and
(b) concurrently, from the Group 2 Interest Remittance Amount
to the Class A-2, Class A-3 and Class A-4 Certificates, pro rata,
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, to the Class A-1
Certificates, to cover such shortfall for such Distribution Date;
and
(b) if the Group 2 Interest Remittance Amount is insufficient
to pay the Class A-2, Class A-3 and Class A-4 Certificates'
applicable Accrued Certificate Interest for such Distribution Date
pursuant to Section 4.01(ii)(b) above, concurrently, from the
remaining Group 1 Interest Remittance Amount, to the Class A-2,
Class A-3 and Class A-4 Certificates, pro rata, to cover such
shortfall for such Distribution Date;
(v) concurrently, as follows:
(a) if the Group 1 Interest Remittance Amount is insufficient
to pay the Class A-1 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, to the Class A-1
Certificates, to cover such shortfall for such Distribution Date;
and
(b) if the Group 2 Interest Remittance Amount is insufficient
to pay the Class A-2, Class A-3 and Class A-4 Certificates'
applicable Interest Carry Forward Amount for such Distribution Date
pursuant to Section 4.01(iii)(b) above, concurrently, from the
remaining Group 1 Interest Remittance Amount, to the Class A-2,
Class A-3 and Class A-4 Certificates, pro rata, to cover such
shortfall for such Distribution Date;
(vi) to the Class M-1 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date;
(vii) to the Class M-2 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(viii) to the Class M-3 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(ix) to the Class M-4 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date;
(x) to the Class M-5 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date;
(xi) to the Class M-6 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date; and
(xii) to the Class M-7 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date.
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:
(a) the Group 1 Senior Principal Distribution Amount to
the Class A-1 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; and
(b) sequentially, the Group 2 Senior Principal
Distribution Amount to the Class A-2, Class A-3 and Class A-4
Certificates, in that order, until the Certificate Principal
Balances thereof have been reduced to zero;
second, concurrently, as follows:
(a) sequentially, the Group 1 Senior Principal
Distribution Amount remaining after priority first of this
Section 4.02(a)(i), to the Class A-2, Class A-3 and Class A-4
Certificates, in that order, until the Certificate Principal
Balances thereof have been reduced to zero; and
(b) the Group 2 Senior Principal Distribution Amount
remaining after priority first of this Section 4.02(a)(i), to
the Class A-1 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
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; and
tenth, any remaining Principal Distribution Amount will be
distributed as part of the Monthly Excess Cashflow Amount as set
forth in Section 4.02(b).
(ii) on or after the Stepdown Date and as long as a Trigger Event is
not in effect, as follows:
first, concurrently, as follows:
(a) the Group 1 Senior Principal Distribution Amount to
the Class A-1 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; and
(b) sequentially, the Group 2 Senior Principal
Distribution Amount to the Class A-2, Class A-3 and Class A-4
Certificates, in that order, until the Certificate Principal
Balances thereof have been reduced to zero;
second, concurrently, as follows:
(a) sequentially, the Group 1 Senior Principal
Distribution Amount remaining after priority first of this
Section 4.02(a)(ii), to the Class A-2, Class A-3 and Class A-4
Certificates, in that order, until the Certificate Principal
Balances thereof have been reduced to zero; and
(b) the Group 2 Senior Principal Distribution Amount
remaining after priority first of this Section 4.02(a)(ii), to
the Class A-1 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
third, to the Class M-1 Certificates, up to the Class M-1
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
fourth, to the Class M-2 Certificates, up to the Class M-2
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
fifth, to the Class M-3 Certificates, up to the Class M-3
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
sixth, to the Class M-4 Certificates, up to the Class M-4
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
seventh, to the Class M-5 Certificates, up to the Class M-5
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
eighth, to the Class M-6 Certificates, up to the Class M-6
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
ninth, to the Class M-7 Certificates, up to the Class M-7
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero; and
tenth, any remaining Principal Distribution Amount will be
distributed as part of the Monthly Excess Cashflow Amount as set
forth in Section 4.02(b).
(b) On each Distribution Date, any Monthly Excess Cashflow Amount
shall be distributed, to the extent available, in the following order of
priority on such Distribution Date:
(i) to pay any remaining Accrued Certificate Interest for such
Distribution Date, pro rata, for the Class A Certificates;
(ii) to pay any Interest Carry Forward Amounts for such Distribution
Date, pro rata, for the Class A Certificates;
(iii) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-1 Certificates;
(iv) to pay the remaining Interest Carry Forward Amount, if any, for
the Class M-1 Certificates;
(v) to pay the Class M-1 Realized Loss Amortization Amount for such
Distribution Date;
(vi) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-2 Certificates;
(vii) to pay the remaining Interest Carry Forward Amount, if any,
for the Class M-2 Certificates;
(viii) to pay the Class M-2 Realized Loss Amortization Amount for
such Distribution Date;
(ix) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-3 Certificates;
(x) to pay the remaining Interest Carry Forward Amount, if any, for
the Class M-3 Certificates;
(xi) to pay the Class M-3 Realized Loss Amortization Amount for such
Distribution Date;
(xii) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-4 Certificates;
(xiii) to pay the remaining Interest Carry Forward Amount, if any,
for the Class M-4 Certificates;
(xiv) to pay the Class M-4 Realized Loss Amortization Amount for
such Distribution Date;
(xv) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-5 Certificates;
(xvi) to pay the remaining Interest Carry Forward Amount, if any,
for the Class M-5 Certificates;
(xvii) to pay the Class M-5 Realized Loss Amortization Amount for
such Distribution Date;
(xviii) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-6 Certificates;
(xix) to pay the remaining Interest Carry Forward Amount, if any,
for the Class M-6 Certificates;
(xx) to pay the Class M-6 Realized Loss Amortization Amount for such
Distribution Date;
(xxi) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-7 Certificates;
(xxii) to pay the remaining Interest Carry Forward Amount, if any,
for the Class M-7 Certificates;
(xxiii) to pay the Class M-7 Realized Loss Amortization Amount for
such Distribution Date;
(xxiv) first, to pay the Class A-1, Class A-2, Class A-3 and Class
A-4 Certificates, pro rata, and then to pay sequentially to the Class ▇-▇,
▇▇▇▇▇ ▇-▇, Class M-3, Class M-4, Class M-5, Class M-6 and Class M-7
Certificates, in that order, any Cap Carryover Amount for each such Class;
and
(xxv) 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 the Holder
of the Class R Certificate 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)-(xxv).
(c) On each Distribution Date, the Trustee shall withdraw any
amounts then on deposit in the Distribution Account that represent Prepayment
Charges collected by the Master Servicer in connection with the Principal
Prepayment in full of any of the Mortgage Loans, 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.
(d) Any amounts distributed to the Offered Certificates and the
Class M-7 Certificates in respect of interest pursuant to Sections 4.01(b)(xxiv)
which constitute Cap Carryover Amounts shall first be deemed distributed by
REMIC 2 as a distribution to the Class CE Certificates, and then distributed to
the Offered Certificates and the Class M-7 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 or any remaining
Yield Maintenance Agreement Payment shall be treated as having been distributed
to the Holders of the Class CE Certificates from the Grantor Trust.
(e) On each Distribution Date, Unpaid Realized Loss Amounts on the
Offered Certificates and the Class M-7 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 M-7 Certificates pursuant to Section 4.02(b)
above.
Section 4.03 Allocation of Losses.
Any Applied Realized Loss Amount for a Distribution Date will be
allocated against the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-5, Class M-4, Class M-3,
Class M-2 and Class M-1 Certificates, in that order and until the respective
Certificate Principal Balances thereof are reduced to zero.
Section 4.04 Method of Distribution.
The Trustee shall make distributions in respect of a Distribution
Date to each Certificateholder of record on the related Record Date (other than
as provided in Section 10.01 respecting the final distribution), in the case of
Certificateholders of the Certificates, by wire transfer in immediately
available funds to the account of the Person entitled thereto if such Person
shall have so notified the Trustee in writing at least five Business Days prior
to the Record Date immediately prior to such Distribution Date and is the
registered owner of such Certificates, or by check mailed by first class mail to
the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, provided that the Trustee may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Distributions among Certificateholders shall be made in proportion to the
Percentage Interests evidenced by the Certificates held by such
Certificateholders.
Section 4.05 Distributions on Book-Entry Certificates.
Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, which shall credit the amount of such distribution to
the accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing such
distribution to the Certificate Owners that it represents and to each indirect
participating brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be responsible for
disbursing funds to the Certificate Owners that it represents. All such credits
and disbursements with respect to a Book-Entry Certificate are to be made by the
Depository and the Depository Participants in accordance with the provisions of
the Certificates. None of the Trustee, the Depositor or the Master Servicer
shall have any responsibility therefor except as otherwise provided by
applicable law.
Section 4.06 Statements.
(a) On each Distribution Date, based on the Mortgage Loan
information contained in the Remittance Report, the Trustee shall prepare and
post on its website at ▇▇▇.▇▇▇▇▇▇▇.▇▇▇, 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
Master Servicer during the related Collection Period;
(v) the aggregate amount of Advances for the related Collection
Period, cumulative unreimbursed Advances and Servicing Advances and
cumulative Nonrecoverable Advances;
(vi) the Pool Balance, at the close of business at the end of the
related Collection Period; (vii) the number, weighted average remaining
term to maturity and weighted average Mortgage Interest Rate of the
Mortgage Loans as of the related Due Date;
(viii) the number and aggregate unpaid principal balance of Mortgage
Loans (a) 30 to 59 days past due on a contractual basis, (b) 60 to 89 days
past due on a contractual basis, (c) 90 or more days past due on a
contractual basis, (d) as to which foreclosure proceedings have been
commenced and (e) in bankruptcy as of the close of business on the last
day of the calendar month preceding such Distribution Date;
(ix) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number of such Mortgage
Loan, the unpaid Principal Balance 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
Realized Losses or Applied Realized Loss Amounts, as applicable, made on
such Distribution Date, separately identifying any reduction thereof due
to allocations of Realized Losses or Applied Realized Loss Amounts;
(xiv) the Accrued Certificate Interest in respect of each Class of
Certificates for such Distribution Date and any related Cap Carryover
Amounts, and the respective portions thereof, if any, remaining unpaid
following the distributions made in respect of such Certificates on such
Distribution Date;
(xv) the aggregate amount of any Prepayment Interest Shortfalls for
such Distribution Date, to the extent not covered by payments by the
Master Servicer pursuant to Section 3.23;
(xvi) the amount of the Trustee Fee paid;
(xvii) the Cap Carryover Amounts distributed on such Distribution
Date, the amounts remaining after giving effect to distributions thereof
on such Distribution Date and the amount of all Cap Carryover Amounts
covered by withdrawals from the Class A-1 Reserve Account, the Group 2-A
Reserve Account and Class M Reserve Account on such Distribution Date;
(xviii) any Overcollateralization Deficiency after giving effect to
the distribution of principal on such Distribution Date;
(xix) whether a Trigger Event has occurred and is continuing, and
the cumulative Realized Losses, as a percentage of the original Pool
Balance;
(xx) the Available Funds;
(xxi) the rate at which interest accrues for each Class of
Certificates for such Distribution Date;
(xxii) the information contained in the Liquidation Report for such
Distribution Date;
(xxiii) the aggregate Principal Balance of Mortgage Loans purchased
by the Master Servicer, the Originator or the Seller during the related
Prepayment Period and indicating the section of this Agreement requiring
or allowing the purchase of each such Mortgage Loan;
(xxiv) the aggregate Principal Balance of the Mortgage Loans
repurchased by the Master Servicer during the related Prepayment Period in
connection with Section 3.16;
(xxv) the amount of the Credit Risk Manager Fee paid;
(xxvi) the Mortgage Loan identifying number of each Mortgage Loan
with a Prepayment Charge that was the subject of a Principal Prepayment in
full during the related Collection Period, the Prepayment Charge listed on
each related Mortgage Note and the Prepayment Charge collected, the
Servicer Prepayment Charge Payment Amount paid by the Master Servicer or
the Originator Prepayment Charge Payment Amount paid by the Originator
with respect to each such Mortgage Loan;
(xxvii) the amount of any claims made, and any claims rejected,
under the Mortgage Insurance Policy during the related Collection Period
and the amount of any claims previously paid that are reimbursed to the
Insurer (net of the aggregate amount of Premium paid to the Insurer
hereunder) pursuant to Section 3.01; and
(xxviii) the amount of Subsequent Recoveries received during the
related Prepayment Period.
The Trustee may fully rely upon and shall have no liability with
respect to information with respect to the Mortgage Loans provided by the Master
Servicer.
In the case of information furnished pursuant to subclauses (i),
(ii) and (xiii) above, the amounts shall be expressed in a separate section of
the report as a dollar amount for each Class for each $1,000 original dollar
amount as of the Cut-off Date.
(b) Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to 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 (xvii) above,
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be prepared and furnished by the Trustee to Certificateholders
pursuant to any requirements of the Code as are in force from time to time.
(c) On each Distribution Date, the Trustee shall forward to the
Class R Certificateholder a copy of the reports forwarded to the Regular
Certificateholders in respect of such Distribution Date with such other
information as the Trustee deems necessary or appropriate. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be prepared and furnished to Class R
Certificateholder by the Trustee pursuant to any requirements of the Code as
from time to time in force.
Section 4.07 Remittance Reports; Advances.
(a) On the second Business Day following each Determination Date 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 Master Servicer shall deliver to
the Trustee and the NIMS Insurer by telecopy (or by such other means as the
Master 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 Master Servicer shall electronically forward to the Trustee in such
medium as may be agreed between the Master Servicer and the Trustee the
information set forth in such Remittance Report with respect to the related
Distribution Date and such information reasonably available to the Master
Servicer necessary in order for the Trustee to perform the calculations
necessary to make the distributions and allocations contemplated by Section
4.01, 4.02 and 4.03 and to prepare the Distribution Date Statement. The Trustee
shall not be responsible to recompute, recalculate or verify any information
provided to it by the Master Servicer.
(b) The amount of Advances to be made by the Master Servicer for any
Distribution Date shall equal, subject to Section 4.07(d), the sum of (i) the
aggregate amount of Monthly Payments (net of the related Servicing Fee), due
during the related Collection Period in respect of the Mortgage Loans, which
Monthly Payments were delinquent on a contractual basis as of the close of
business on the related Determination Date and (ii) with respect to each REO
Property, which REO Property was acquired during or prior to the related
Collection Period and as to which REO Property an REO Disposition did not occur
during the related Collection Period, an amount equal to the excess, if any, of
the REO Imputed Interest on such REO Property for such Collection Period, over
the net income from such REO Property transferred to the Distribution Account
pursuant to Section 3.13 for distribution on such Distribution Date.
On or before 1:00 p.m. New York time on the Servicer Remittance
Date, the Master Servicer shall remit in immediately available funds to the
Trustee for deposit in the Distribution Account an amount equal to the aggregate
amount of Advances, if any, to be made in respect of the Mortgage Loans for the
related Distribution Date either (i) from its own funds or (ii) from the
Collection Account, to the extent of funds held therein for future distribution
(in which case it will cause to be made an appropriate entry in the records of
the Collection Account that amounts held for future distribution have been, as
permitted by this Section 4.07, used by the Master Servicer in discharge of any
such Advance) or (iii) in the form of any combination of (i) and (ii)
aggregating the total amount of Advances to be made by the Master Servicer with
respect to the Mortgage Loans. Any amounts held for future distribution and so
used shall be appropriately reflected in the Master Servicer's records and
replaced by the Master Servicer by deposit in the Collection Account on or
before any future Servicer Remittance Date to the extent that the Available
Funds for the related Distribution Date (determined without regard to Advances
to be made on the Servicer Remittance Date) shall be less than the total amount
that would be distributed to the Classes of Certificateholders pursuant to
Section 4.01 and 4.02 on such Distribution Date if such amounts held for future
distributions had not been so used to make Advances. The Trustee will provide
notice to the Master Servicer and NIMS Insurer by telecopy by the close of
business on any Servicer Remittance Date in the event that the amount remitted
by the Master Servicer to the Trustee on such date is less than the Advances
required to be made by the Master Servicer for the related Distribution Date, as
set forth in the related Remittance Report.
(c) The obligation of the Master Servicer to make such Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan, shall continue until the
earlier of such time as the Trust acquires title to the related Mortgaged
Property or such Mortgage Loan is paid in full by the Mortgagor or disposed of
by the Trust, or until the recovery of all Liquidation Proceeds thereon.
(d) Notwithstanding anything herein to the contrary, no Advance or
Servicing Advance shall be required to be made hereunder by the Master Servicer
if such Advance would, if made, constitute a Nonrecoverable Advance. The
determination by the Master Servicer that it has made a Nonrecoverable Advance
or that any proposed Advance, if made, would constitute a Nonrecoverable
Advance, shall be evidenced by an Officers' Certificate of the Master Servicer
delivered to the Depositor, the NIMS Insurer and the Trustee. The Trustee shall
be entitled to conclusively rely upon any such determination by the Master
Servicer.
Section 4.08 REMIC Distributions.
(a) On each Distribution Date, the Trustee shall cause in the
following order of priority, the following amounts to be distributed by REMIC 1
to REMIC 2 on account of the REMIC 1 Regular Interests or withdrawn from the
Distribution Account and distributed to the Holders of the Class R Certificates
(in respect of the Class R-1 Interest), as the case may be:
(i) to Holders of REMIC 1 Regular Interest LT1AA, REMIC 1 Regular
Interest LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest
LT1A3, REMIC 1 Regular Interest LT1A4, REMIC 1 Regular Interest LT1M1,
REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1
Regular Interest LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1 Regular
Interest LT1M6, REMIC 1 Regular Interest LT1M7 and REMIC 1 Regular
Interest LT1ZZ, pro rata, in an amount equal to (A) the Uncertificated
Accrued Interest for such Distribution Date, plus (B) any amounts in
respect thereof remaining unpaid from previous Distribution Dates. Amounts
payable as Uncertificated Accrued Interest in respect of REMIC 1 Regular
Interest LT1ZZ shall be reduced and deferred when the REMIC 1
Overcollateralized Amount is less than the REMIC 1 Overcollateralization
Target Amount, by the lesser of (x) the amount of such difference and (y)
the Maximum LT1ZZ Uncertificated Accrued Interest Deferral Amount and such
amount will be payable to the Holders of REMIC 1 Regular Interest LT1A1,
REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1
Regular Interest LT1A4, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular
Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest
LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6 and
REMIC 1 Regular Interest LT1M7 in the same proportion as the
Overcollateralization Deficiency is allocated to the Corresponding
Certificates;
(ii) to Holders of REMIC 1 Regular Interest LT1SUB, REMIC 1 Regular
Interest LT1GRP, REMIC 1 Regular Interest LT2SUB, REMIC 1 Regular Interest
LT2GRP and REMIC 1 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 the Holders of REMIC 1 Regular Interests, in an amount
equal to the remainder of the REMIC 1 Marker Allocation Percentage of
Available Funds for such Distribution Date after the distributions made
pursuant to clause (i) above, allocated as follows:
(1) to REMIC 1 Regular Interest LT1AA, 98.00% of such
remainder, until the Uncertificated Principal Balance of such
Uncertificated REMIC 1 Regular Interest is reduced to zero;
(2) to REMIC 1 Regular Interest LT1A1, REMIC 1 Regular
Interest LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular
Interest LT1A4, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular
Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular
Interest LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1 Regular
Interest LT1M6 and REMIC 1 Regular Interest LT1M7, 1.00% of such
remainder, in the same proportion as principal payments are
allocated to the Corresponding Certificates, until the
Uncertificated Principal Balances of such REMIC 1 Regular Interests
are reduced to zero; then
(3) to REMIC 1 Regular Interest LT1ZZ, 1.00% of such
remainder, until the Uncertificated Principal Balance of such REMIC
1 Regular Interest is reduced to zero;
provided, however, that (i) 98.00% and (ii) 2.00% of any principal
payments that are attributable to an Aggregate Overcollateralization
Release Amount shall be allocated to (i) REMIC 1 Regular Interest
LT1AA and (ii) REMIC 1 Regular Interest LT1ZZ, respectively; and
(iv) to the Holders of REMIC 1 Regular Interests, in an amount equal
to the REMIC 1 Sub WAC Allocation Percentage of Available Funds for such
Distribution Date after the distributions made pursuant to clause (i)
above, such that distributions of principal shall be deemed to be made to
the REMIC 1 Regular Interests first, so as to keep the Uncertificated
Principal Balance of each REMIC 1 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 1 Regular Interest ending with the designation "SUB," so that the
Uncertificated Principal Balance of each such REMIC 1 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 1 Regular
Interests such that the REMIC 1 Subordinated Balance Ratio is maintained);
and third, any remaining principal to REMIC 1 Regular Interest LT1XX.
(b) The Trustee shall cause the following allocation of losses:
(i) The REMIC 1 Marker Allocation Percentage of the aggregate amount
of any Prepayment Interest Shortfalls and the REMIC 1 Marker Allocation
Percentage of the aggregate amount of any Relief Act Interest Shortfalls
incurred in respect of the Mortgage Loans for any Distribution Date shall
be allocated first, to Uncertificated Accrued Interest payable to REMIC 1
Regular Interest LT1AA and REMIC 1 Regular Interest LT1ZZ up to an
aggregate amount equal to the REMIC 1 Interest Loss Allocation Amount, 98%
and 2%, respectively, and thereafter among REMIC 1 Regular Interest LT1AA,
REMIC 1 Regular Interest LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1
Regular Interest LT1A3, REMIC 1 Regular Interest LT1A4, REMIC 1 Regular
Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest
LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1 Regular Interest LT1M5,
REMIC 1 Regular Interest LT1M6, REMIC 1 Regular Interest LT1M7 and REMIC 1
Regular Interest LT1ZZ pro rata based on, and to the extent of, one
month's interest at the then applicable respective Uncertificated REMIC 1
Pass-Through Rate on the respective Uncertificated Principal Balance of
each such REMIC 1 Regular Interest;
(ii) The REMIC 1 Sub WAC Allocation Percentage of the aggregate
amount of any Prepayment Interest Shortfalls and the REMIC 1 Sub WAC
Allocation Percentage of the aggregate amount of any Relief Act Interest
Shortfalls incurred in respect of the Mortgage Loans for any Distribution
Date shall be allocated first, to Uncertificated Accrued Interest payable
to REMIC 1 Regular Interest LT1SUB, REMIC 1 Regular Interest LT1GRP, REMIC
1 Regular Interest LT2SUB, REMIC 1 Regular Interest LT2GRP and REMIC 1
Regular Interest LT1XX, pro rata based on, and to the extent of, one
month's interest at the then applicable respective Uncertificated REMIC 1
Pass-Through Rate on the respective Uncertificated Principal Balance of
each such REMIC 1 Regular Interest;
(iii) The REMIC 1 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 1 Regular Interests in the
specified percentages, as follows: first, to Uncertificated Accrued
Interest payable to REMIC 1 Regular Interest LT1AA and REMIC 1 Regular
Interest LT1ZZ up to an aggregate amount equal to the REMIC 1 Interest
Loss Allocation Amount, 98% and 2%, respectively; second, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA and
REMIC 1 Regular Interest LT1ZZ up to an aggregate amount equal to the
REMIC 1 Principal Loss Allocation Amount, 98% and 2%, respectively; third,
to the Uncertificated Principal Balances of REMIC 1 Regular Interest
LT1AA, REMIC 1 Regular Interest LT1M7 and REMIC 1 Regular Interest LT1ZZ,
98%, 1% and 1%, respectively, until the Uncertificated Principal Balance
of REMIC 1 Regular Interest LT1M7 has been reduced to zero, fourth, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC
1 Regular Interest LT1M6 and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and
1%, respectively, until the Uncertificated Principal Balance of REMIC 1
Regular Interest LT1M6 has been reduced to zero; fifth, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC
1 Regular Interest LT1M5 and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and
1%, respectively, until the Uncertificated Principal Balance of REMIC 1
Regular Interest LT1M5 has been reduced to zero; sixth, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC
1 Regular Interest LT1M4 and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and
1%, respectively, until the Uncertificated Principal Balance of REMIC 1
Regular Interest LT1M4 has been reduced to zero; seventh to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC
1 Regular Interest LT1M3 and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and
1%, respectively, until the Uncertificated Principal Balance of REMIC 1
Regular Interest LT1M3 has been reduced to zero; eighth, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC
1 Regular Interest LT1M2 and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and
1%, respectively, until the Uncertificated Principal Balance of REMIC 1
Regular Interest LT1M2 has been reduced to zero; and ninth, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC
1 Regular Interest LT1M1 and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and
1%, respectively, until the Uncertificated Principal Balances of REMIC 1
Regular Interest LT1M1 has been reduced to zero; and
(iv) The REMIC 1 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 Principal
Balance of each REMIC 1 Regular Interest ending with the designation "GRP"
equal to 0.01% of the aggregate Stated Principal Balance of the Mortgage
Loans in the related Loan Group; second, to each REMIC 1 Regular Interest
ending with the designation "SUB," so that the Uncertificated Principal
Balance of each such REMIC 1 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 1 Regular Interests such that the REMIC 1
Subordinated Balance Ratio is maintained); and third, any remaining
Realized Losses shall be allocated to REMIC 1 Regular Interest LT1XX.
(c) With respect to REMIC 1, any increase in principal balance due
to a Subsequent Recovery shall be allocated as follows: 50% to REMIC 1 Regular
Interest LT1XX; 49% to REMIC 1 Regular Interest LT1AA; 0.5% to REMIC 1 Regular
Interest LT1ZZ; and 0.5% to each REMIC 1 Regular Interest that is a
Corresponding Class to any REMIC 2 Regular Interest that was increased as a
result of such Subsequent Recovery (provided, that if more than one REMIC 2
Regular Interest is so increased, such amount shall be allocated to the REMIC 1
Regular Interests that are Corresponding Classes in the same proportion as the
increase is allocated to the applicable REMIC 2 Regular Interests).
(d) Notwithstanding anything to the contrary contained herein, the
above distributions in this Section 4.08 (other than on the Certificates) are
deemed distributions, and distributions of funds from the Distribution Account
shall be made only in accordance with Sections 4.01 and 4.02 hereof.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
Each of the Class A-1, Class A-2, Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-1,
Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class CE,
Class P and Class R Certificates shall be substantially in the forms annexed
hereto as exhibits, and shall, on original issue, be executed by the Trustee and
authenticated and delivered by the Certificate Registrar to or upon the receipt
of a Written Order to Authenticate from the Depositor concurrently with the sale
and assignment to the Trustee of the Trust Fund. Each Class of the Offered
Certificates and the Class M-7 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%. The Class R Certificate is issuable only as a single
certificate.
The Certificates shall be executed on behalf of the Trust by manual
or facsimile signature on behalf of the Trustee by a Responsible Officer.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures were affixed, authorized to sign on behalf of
the Trustee shall bind the Trust, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of such
Certificate. No Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose, unless such Certificate shall have been
manually authenticated by the Certificate Registrar substantially in the form
provided for herein, and such authentication upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. Subject to Section 5.02(c), the Offered Certificates
and the Class M-7 Certificates shall be Book-Entry Certificates. The Class CE,
Class P and Class R Certificates shall not be Book-Entry Certificates but shall
be issued in fully registered certificate form.
Section 5.02 Registration of Transfer and Exchange of Certificates.
(a) The Certificate Registrar shall cause to be kept at the
Corporate Trust Office of the Trustee a Certificate Register in which, subject
to such reasonable regulations as it may prescribe, the Certificate Registrar
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Trustee shall initially serve
as Certificate Registrar for the purpose of registering Certificates and
transfers and exchanges of Certificates as herein provided. The Trustee as
Certificate Registrar shall be subject to the same standards of care,
limitations on liability and rights to indemnity as the Trustee, and the
provisions of Sections 8.01, 8.02, 8.03, 8.04, 8.05, 8.14, 8.15 and 8.16 shall
apply to the Certificate Registrar to the same extent as they apply to the
Trustee. Any Certificate Registrar appointed in accordance with this Section
5.02(a) may at any time resign by giving at least 30 days' advance written
notice of resignation to the Trustee, the Master Servicer and the Depositor,
such resignation to become effective upon appointment of a successor Certificate
Registrar.
Upon surrender for registration of transfer of any Certificate at
any office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph and, in the case of the Class R Certificate,
upon satisfaction of the conditions set forth below, the Trustee on behalf of
the Trust shall execute and the Certificate Registrar shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates of the same aggregate Percentage Interest.
At the option of the Certificateholders, Certificates may be
exchanged for other Certificates in authorized denominations and the same
aggregate Percentage Interests, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange, the Trustee shall execute on behalf of the Trust and
the Certificate Registrar shall authenticate and deliver the Certificates which
the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for registration of transfer or exchange
shall (if so required by the Trustee or the Certificate Registrar) be duly
endorsed by, or be accompanied by a written instrument of transfer satisfactory
to the Trustee and the Certificate Registrar duly executed by, the Holder
thereof or his attorney duly authorized in writing.
(b) Upon original issuance, the Book-Entry Certificates shall be
issued in the form of one or more typewritten certificates, to be delivered to
the Depository, the initial Depository, by, or on behalf of, the Depositor; or
to, and deposited with the Certificate Custodian, on behalf of the Depository,
if directed to do so pursuant to instructions from the Depository. Except as
provided in paragraph (c) below, the Book-Entry Certificates shall at all times
remain registered in the name of the Depository or its nominee and at all times:
(i) registration of such Certificates may not be transferred by the Trustee
except to another Depository; (ii) the Depository shall maintain book-entry
records with respect to the Certificate Owners and with respect to ownership and
transfers of such Certificates; (iii) ownership and transfers of registration of
such Certificates on the books of the Depository shall be governed by applicable
rules established by the Depository; (iv) the Depository may collect its usual
and customary fees, charges and expenses from its Depository Participants; (v)
the Trustee shall for all purposes deal with the Depository as representative of
the Certificate Owners of the Certificates for purposes of exercising the rights
of Holders under this Agreement, and requests and directions for and votes of
such representative shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; (vi) the Trustee may rely and shall be
fully protected in relying upon information furnished by the Depository with
respect to its Depository Participants and furnished by the Depository
Participants with respect to indirect participating firms and Persons shown on
the books of such indirect participating firms as direct or indirect Certificate
Owners; and (vii) the direct participants of the Depository shall have no rights
under this Agreement under or with respect to any of the Certificates held on
their behalf by the Depository, and the Depository may be treated by the Trustee
and its agents, employees, officers and directors as the absolute owner of the
Certificates for all purposes whatsoever.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owners. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners that it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures. The parties hereto
are hereby authorized to execute a Letter of Representations with the Depository
or take such other action as may be necessary or desirable to register a
Book-Entry Certificate to the Depository. In the event of any conflict between
the terms of any such Letter of Representation and this Agreement, the terms of
this Agreement shall control.
(c) If 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 Master Servicer, any
Paying Agent and the Depositor shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder.
(d) Except with respect to a transfer of the Private Certificates
between or among the Depositor, the Seller, their affiliates or both, no
transfer, sale, pledge or other disposition of any Private Certificate shall be
made unless such disposition is exempt from the registration requirements of the
Securities Act of 1933, as amended (the "1933 Act"), and any applicable state
securities laws or is made in accordance with the 1933 Act and laws. In the
event of any such transfer, (i) unless such transfer is made in reliance upon
Rule 144A (as evidenced by the investment letter delivered to the Certificate
Registrar, in substantially the form attached hereto as Exhibit J-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 Class R Certificate)
or in the form of Exhibit J-2 (in the case of Class M-7 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 or (ii) (except in the case
of the Class R Certificate) in the case of any such ERISA Restricted Certificate
presented for registration in the name of an employee benefit plan subject to
ERISA or a plan or arrangement subject to Section 4975 of the Code (or
comparable provisions of any subsequent enactments), or a trustee of any such
plan or any other person acting on behalf of any such plan or arrangement or
using such plan's or arrangement's assets, an Opinion of Counsel satisfactory to
the Certificate Registrar, to the effect that the purchase or holding of such
ERISA Restricted Certificate will not 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 Master 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.
Each Person who has or who acquires any Ownership Interest in the
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably appointed the Depositor or its designee as its attorney-in-fact
to negotiate the terms of any mandatory sale under clause (v) below and to
execute all instruments of transfer and to do all other things necessary in
connection with any such sale, and the rights of each Person acquiring any
Ownership Interest in the Class R Certificate are expressly subject to the
following provisions:
(i) Each Person holding or acquiring any Ownership Interest in the
Class R Certificate shall be a Permitted Transferee and shall promptly
notify the Certificate Registrar of any change or impending change in its
status as a Permitted Transferee.
(ii) No Person shall acquire an Ownership Interest in the Class R
Certificate unless such Ownership Interest is a pro rata undivided
interest.
(iii) In connection with any proposed transfer of any Ownership
Interest in the Class R Certificate, the Certificate Registrar shall as a
condition to registration of the transfer, require delivery to it, in form
and substance satisfactory to it, of each of the following:
A. an affidavit in the form of Exhibit K hereto from the proposed
transferee to the effect that, among other things, such transferee is a
Permitted Transferee and that it is not acquiring its Ownership Interest in the
Class R Certificate that is the subject of the proposed transfer as a nominee,
trustee or agent for any Person who is not a Permitted Transferee; and
B. a covenant of the proposed transferee to the effect that the
proposed transferee agrees to be bound by and to abide by the transfer
restrictions applicable to the Class R Certificate.
(iv) Any attempted or purported transfer of any Ownership Interest
in the Class R Certificate in violation of the provisions of this Section
shall be absolutely null and void and shall vest no rights in the
purported transferee. If any purported transferee shall, in violation of
the provisions of this Section, become the Holder of the Class R
Certificate, then the prior Holder of such Class R Certificate that is a
Permitted Transferee shall, upon discovery that the registration of
transfer of such Class R Certificate was not in fact permitted by this
Section, be restored to all rights as Holder thereof retroactive to the
date of registration of transfer of such Class R Certificate. The
Certificate Registrar shall be under no liability to any Person for any
registration of transfer of the Class R Certificate that is in fact not
permitted by this Section or for making any distributions due on such
Class R Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long as
the Certificate Registrar received the documents specified in clause
(iii). The Trustee shall be entitled to recover from any Holder of the
Class R Certificate that was in fact not a Permitted Transferee at the
time such distributions were made all distributions made on such Class R
Certificate. Any such distributions so recovered by the Trustee shall be
distributed and delivered by the Trustee to the prior Holder of such Class
R Certificate that is a Permitted Transferee.
(v) If any Person other than a Disqualified Organization acquires
any Ownership Interest in the Class R Certificate in violation of the
restrictions in this Section, then the Certificate Registrar shall have
the right but not the obligation, without notice to the Holder of the
Class R Certificate or any other Person having an Ownership Interest
therein, to notify the Depositor to arrange for the sale of the Class R
Certificate. The proceeds of such sale, net of commissions (which may
include commissions payable to the Depositor or its affiliates in
connection with such sale), expenses and taxes due, if any, will be
remitted by the Trustee to the previous Holder of the Class R Certificate
that is a Permitted Transferee, except that in the event that the Trustee
determines that the Holder of the Class R Certificate may be liable for
any amount due under this Section or any other provisions of this
Agreement, the Trustee may withhold a corresponding amount from such
remittance as security for such claim. The terms and conditions of any
sale under this clause (v) shall be determined in the sole discretion of
the Trustee and it shall not be liable to any Person having an Ownership
Interest in the Class R Certificate as a result of its exercise of such
discretion.
(vi) If any Person other than a Permitted Transferee acquires any
Ownership Interest in the Class R Certificate in violation of the
restrictions in this Section, then the Trustee will provide to the
Internal Revenue Service, and to the persons specified in Sections
860E(e)(3) and (6) of the Code, information needed to compute the tax
imposed under Section 860E(e)(5) of the Code on transfers of residual
interests to disqualified organizations. The Trustee shall be entitled to
reasonable compensation for providing such information from the person to
whom it is provided.
The foregoing provisions of this Section shall cease to apply to transfers
occurring on or after the date on which there shall have been delivered to the
Certificate Registrar, in form and substance satisfactory to the Certificate
Registrar, (i) written notification from each Rating Agency that the removal of
the restrictions on Transfer set forth in this Section will not cause such
Rating Agency to downgrade its rating of the Certificates and (ii) an Opinion of
Counsel to the effect that such removal will not cause any REMIC 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 Master Servicer, the Depositor, the NIMS Insurer, the Trustee,
the Certificate Registrar, any Paying Agent and any agent of the Master
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 Master 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.
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 Master 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 Master Servicer and the Depositor.
The Master Servicer shall be liable in accordance herewith only to
the extent of the obligations specifically imposed upon and undertaken by the
Master Servicer herein. The Depositor shall be liable in accordance herewith
only to the extent of the obligations specifically imposed upon and undertaken
by the Depositor.
Section 6.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Master Servicer or the Depositor.
Any entity into which the Master Servicer or the Depositor may be
merged or consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Master Servicer or the Depositor shall be a party, or
any corporation succeeding to the business of the Master Servicer or the
Depositor, shall be the successor of the Master Servicer or the Depositor, as
the case may be, hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; provided, however, that the successor servicer shall
satisfy all the requirements of Section 7.02 with respect to the qualifications
of a successor servicer.
Section 6.03 Limitation on Liability of the Master Servicer and
Others.
Neither the Master Servicer nor any of the directors or officers or
employees or agents of the Master Servicer shall be under any liability to the
Trust or the Certificateholders for any action taken or for refraining from the
taking of any action by the Master Servicer in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Master Servicer or any such Person against any liability
which would otherwise be imposed by reason of its willful misfeasance, bad faith
or negligence in the performance of duties of the Master Servicer or by reason
of its reckless disregard of its obligations and duties of the Master Servicer
hereunder; provided, further, that this provision shall not be construed to
entitle the Master Servicer to indemnity in the event that amounts advanced by
the Master Servicer to retire any senior lien exceed Liquidation Proceeds (in
excess of related liquidation expenses) realized with respect to the related
Mortgage Loan. The Master Servicer and any director or officer or employee or
agent of the Master Servicer may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Master Servicer and any director or officer or employee
or agent of the Master Servicer shall be indemnified by the Trust and held
harmless against any loss, liability or expense incurred in connection with any
legal action relating to this Agreement or the Certificates, other than any
loss, liability or expense incurred by reason of its willful misfeasance, bad
faith or negligence in the performance of duties hereunder or by reason of its
reckless disregard of obligations and duties hereunder. The Master Servicer may
undertake any such action which it may deem necessary or desirable in respect of
this Agreement, and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, the reasonable
legal expenses and costs of such action and any liability resulting therefrom
shall be expenses, costs and liabilities of the Trust and the Master Servicer
shall be entitled to pay such expenses from the proceeds of the Trust or to be
reimbursed therefor pursuant to Section 3.05 upon presentation to the Trustee of
documentation of such expenses, costs and liabilities. The Master Servicer's
right to indemnity or reimbursement pursuant to this Section shall survive any
resignation or termination of the Master Servicer pursuant to Section 6.04 or
7.01 with respect to any losses, expenses, costs or liabilities arising prior to
such resignation or termination (or arising from events that occurred prior to
such resignation or termination). This paragraph shall apply to the Master
Servicer solely in its capacity as Master Servicer hereunder and in no other
capacities.
Section 6.04 Master Servicer Not to Resign.
Subject to the provisions of Section 7.01 and Section 6.02, the
Master Servicer shall not resign from the obligations and duties hereby imposed
on it except (i) upon determination that the performance of its obligations or
duties hereunder are no longer permissible under applicable law or are in
material conflict by reason of applicable law with any other activities carried
on by it or its subsidiaries or Affiliates, the other activities of the Master
Servicer so causing such a conflict being of a type and nature carried on by the
Master Servicer or its subsidiaries or Affiliates at the date of this Agreement
or (ii) upon satisfaction of the following conditions: (a) the Master Servicer
has proposed a successor servicer to the Trustee 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
Master Servicer hereunder will not result in the reduction or withdrawal of the
then current rating of the Regular Certificates or the ratings that are in
effect; provided, however, that no such resignation by the Master Servicer shall
become effective until such successor servicer or, in the case of (i) above, the
Trustee shall have assumed the Master Servicer's responsibilities and
obligations hereunder or the Trustee shall have designated a successor servicer
in accordance with Section 7.02. Any such resignation shall not relieve the
Master Servicer of responsibility for any of the obligations specified in
Sections 7.01 and 7.02 as obligations that survive the resignation or
termination of the Master Servicer. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
to such effect delivered to the Trustee and the NIMS Insurer.
Section 6.05 Delegation of Duties.
(a) In the ordinary course of business, the Master Servicer at any
time may delegate any of its duties hereunder to any Person, including any of
its Affiliates, who agrees to conduct such duties in accordance with standards
comparable to those set forth in Section 3.01. Such delegation shall not relieve
the Master Servicer of its liabilities and responsibilities with respect to such
duties and shall not constitute a resignation within the meaning of Section
6.04. The Master Servicer shall provide the Trustee, 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 Master Servicer's Affiliates
or their respective successors and assigns.
(b) The Master 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 Master Servicer assigns
or pledges to another Person (together with such Person's successors and
assigns, an "Advancing Person") the Master Servicer's rights under this
Agreement to be reimbursed for any Advances or Servicing Advances and/or (2) an
Advancing Person agrees to fund some or all Advances and/or Servicing Advances
required to be made by the Master Servicer pursuant to this Agreement. The
Master Servicer shall notify each other party to this Agreement prior to or
promptly after entering into or terminating any Advance Facility.
Notwithstanding the existence of any Advance Facility under which an Advancing
Person agrees to fund Advances and/or Servicing Advances on the Master
Servicer's behalf, the Master Servicer shall remain obligated pursuant to this
Agreement to make Advances and Servicing Advances pursuant to and as required by
this Agreement. If the Master Servicer enters into an Advance Facility, and for
so long as an Advancing Person remains entitled to receive reimbursement for any
Advances and/or Servicing Advances, as applicable, pursuant to this Agreement,
then the Master Servicer shall not be permitted to reimburse itself for Advances
and/or Servicing Advances, but instead the Master Servicer shall be required to
remit amounts collected that would otherwise be retained by the Master Servicer
to reimburse it for 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 Master
Servicer would not materially and adversely affect the interests of any
Certificateholder, then the NIMS Insurer shall not withhold its consent to the
Master 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 Master Servicer would be permitted to reimburse itself in accordance
with this Agreement, assuming the Master Servicer had made the related
Advance(s) and/or Servicing Advance(s). Notwithstanding the foregoing, no Person
shall be entitled to reimbursement from funds held in the Collection Account for
future distribution to Certificateholders pursuant to this Agreement. None of
the Depositor or the Trustee shall have any duty or liability with respect to
the calculation or payment of any 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 Master Servicer shall maintain and
provide to any successor servicer and (upon request) the Trustee a detailed
accounting on a loan by loan basis as to amounts advanced by, pledged or
assigned to, and reimbursed to any Advancing Person. The successor servicer
shall be entitled to rely on any such information provided by the predecessor
servicer, and the successor servicer shall not be liable for any errors in such
information.
An Advancing Person who receives an assignment or pledge of the
rights to be reimbursed for Advances and/or Servicing Advances, and/or whose
obligations hereunder are limited to the funding of Advances and/or Servicing
Advances shall not be required to meet the criteria for qualification of a
subservicer set forth in this Agreement.
The documentation establishing any Advance Facility shall require
that 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 Master 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 Master Servicer shall
remain entitled to be reimbursed by the Advancing Person or Advance Facility
Trustee for all Advances and Servicing Advances funded by the Master Servicer to
the extent the related rights to be reimbursed therefor have not been assigned
or pledged to an Advancing Person.
The Master Servicer shall indemnify the Depositor, the Trustee, 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 Master 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 Master Servicer. Prior to entering into an Advance Facility,
the Master Servicer shall notify the lender under such facility in writing that:
(a) the Advances and/or Servicing Advances financed by and/or pledged to the
lender are obligations owed to the Master Servicer on a non-recourse basis
payable only from the cash flows and proceeds received under this Agreement for
reimbursement of Advances and/or Servicing Advances only to the extent provided
herein, and the Trustee and the Trust are not otherwise obligated or liable to
repay any Advances and/or Servicing Advances financed by the lender; (b) the
Master Servicer will be responsible for remitting to the lender the applicable
amounts collected by it as reimbursement for Advances and/or Servicing Advances
funded by the lender, subject to the restrictions and priorities created in this
Agreement; and (c) the Trustee shall not have any responsibility to track or
monitor the administration of the financing arrangement between the Master
Servicer and the lender.
ARTICLE VII
DEFAULT
Section 7.01 Servicer Events of Termination.
(a) If any one of the following events ("Servicer Events of
Termination") shall occur and be continuing:
(i) (A) The failure by the Master Servicer to make any Advance or to
pay Compensating Interest; or (B) any other failure by the Master 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 Master Servicer
has knowledge of such failure or (y) written notice of such failure is
given to the Master Servicer; or
(ii) The failure by the Master Servicer to make any required
Servicing Advance which failure continues unremedied for a period of 30
days, or the failure by the Master Servicer duly to observe or perform, in
any material respect, any other covenants, obligations or agreements of
the Master Servicer as set forth in this Agreement, which failure
continues unremedied for a period of 30 days, after the date (A) on which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Master Servicer by the Trustee or 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 Master Servicer; or
(iii) The entry against the Master Servicer of a decree or order by
a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a trustee, conservator, receiver or
liquidator in any insolvency, conservatorship, receivership, readjustment
of debt, marshalling of assets and liabilities or similar proceedings, or
for the winding up or liquidation of its affairs, and the continuance of
any such decree or order unstayed and in effect for a period of 60 days;
or
(iv) The Master Servicer shall voluntarily go into liquidation,
consent to the appointment of a conservator or receiver or liquidator or
similar person in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the Master
Servicer or of or relating to all or substantially all of its property; or
a decree or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator,
receiver, liquidator or similar person in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Master Servicer and such decree or order shall have remained
in force undischarged, unbonded or unstayed for a period of 60 days; or
the Master Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors or voluntarily suspend payment of its
obligations; or
(v) As of any Distribution Date, if the average for the related
Collection Period and the two preceding Collection Periods of the
fraction, expressed as a percentage, the numerator of which is (a) the
aggregate Principal Balance of 60+ Day Delinquent Loans and the
denominator of which is (b) the aggregate Principal Balance of the
Mortgage Loans, in the case of both (a) and (b), as of the last day of
each such Collection Period, exceeds 18%.
(b) Then, and in each and every such case, so long as a Servicer
Event of Termination shall not have been remedied within the applicable grace
period, (x) with respect solely to clause (i)(A) above, if such Advance is not
made by 2:00 P.M., New York time, on the Business Day immediately following the
Servicer Remittance Date, the Trustee may terminate all of the rights and
obligations of the Master Servicer under this Agreement and the Trustee, or a
successor servicer appointed in accordance with Section 7.02, shall immediately
make such Advance and assume, pursuant to Section 7.02, the duties of a
successor servicer and (y) in the case of (i)(B), (ii), (iii), (iv) and (v)
above, the Trustee shall, at the direction of the 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 Master Servicer (and
to the Trustee if given by Holders of Certificates), terminate all of the rights
and obligations of the Master Servicer as servicer under this Agreement. Any
such notice to the Master Servicer shall also be given to each Rating Agency,
the NIMS Insurer and the Depositor. On or after the receipt by the Master
Servicer (and by the Trustee if such notice is given by the Holders) of such
written notice, all authority and power of the Master Servicer under this
Agreement, whether with respect to the Certificates or the Mortgage Loans or
otherwise, shall pass to and be vested in the Trustee pursuant to and under this
Section or successor servicer appointed in connection with Section 7.02; and,
without limitation, the Trustee or successor servicer is hereby authorized and
empowered to execute and deliver, on behalf of the Master Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement of each Mortgage Loan and Related Documents or otherwise. The Master
Servicer agrees to cooperate with the Trustee (or the applicable successor
servicer) in effecting the termination of the responsibilities and rights of the
Master Servicer hereunder, including, without limitation, the delivery to the
Trustee (or the applicable successor servicer) of all documents and records
requested by it to enable it to assume the Master Servicer's functions under
this Agreement within ten Business Days subsequent to such notice, the transfer
within one Business Day subsequent to such notice to the Trustee (or the
applicable successor servicer) for the administration by it of all cash amounts
that shall at the time be held by the Master Servicer and to be deposited by it
in the Collection Account, the Distribution Account or any Escrow Account or
that have been deposited by the Master Servicer in such accounts or thereafter
received by the Master Servicer with respect to the Mortgage Loans or any REO
Property received by the Master Servicer. All reasonable out-of-pocket costs and
expenses (including attorneys' fees) incurred in connection with transferring
the servicing to the successor servicer and amending this Agreement to reflect
such succession as Master Servicer pursuant to this Section shall be paid by the
predecessor servicer (or if the predecessor servicer is the Trustee, the initial
servicer) upon presentation of reasonable documentation of such costs and
expenses, 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 Master
Servicer hereunder, the Master Servicer shall be entitled to receive payment of
all accrued and unpaid Servicing Fees and reimbursement for all outstanding
Advances and Servicing Advances properly made prior to the date of termination.
Section 7.02 Trustee to Act; Appointment of Successor.
(a) Within 90 days of the time the Master Servicer (and the Trustee,
if notice is sent by the Holders) receives a notice of termination pursuant to
Section 7.01 or 6.04, the Trustee (or such other successor servicer as is
approved in accordance with this Agreement) shall be the successor in all
respects to the Master Servicer in its capacity as servicer under this Agreement
and the transactions set forth or provided for herein and shall be subject to
all the responsibilities, duties and liabilities relating thereto placed on the
Master Servicer by the terms and provisions hereof arising on and after its
succession. As compensation therefor, the Trustee (or such other successor
servicer) shall be entitled to such compensation as the Master Servicer would
have been entitled to hereunder if no such notice of termination had been given.
Notwithstanding the above, (i) if the Trustee is unwilling to act as successor
servicer or (ii) if the Trustee is legally unable so to act, the Trustee shall
appoint or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution, bank or other mortgage loan or
home equity loan servicer having a net worth of not less than $50,000,000 as the
successor to the Master Servicer hereunder in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master Servicer hereunder;
provided, that the appointment of any such successor servicer will not result in
the qualification, reduction or withdrawal of the ratings assigned to the
Certificates or the ratings that are in effect by the Rating Agencies as
evidenced by a letter to such effect from the Rating Agencies 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 Master Servicer hereunder, unless the Trustee is prohibited by law from
so acting, the Trustee shall act in such capacity as hereinabove provided. In
connection with such appointment and assumption, the successor shall be entitled
to receive compensation out of payments on Mortgage Loans in an amount equal to
the compensation which the Master Servicer would otherwise have received
pursuant to Section 3.18 (or such other compensation as the Trustee and such
successor shall agree, not to exceed the Servicing Fee). The successor servicer
shall be entitled to withdraw from the Collection Account all costs and expenses
associated with the transfer of the servicing to the successor servicer,
including costs and expenses of the Trustee. The appointment of a successor
servicer shall not affect any liability of the predecessor servicer which may
have arisen under this Agreement prior to its termination as Master Servicer to
pay any deductible under an insurance policy pursuant to Section 3.11 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 Master Servicer as
servicer shall during the term of its service as servicer continue to service
and administer the Mortgage Loans for the benefit of Certificateholders, and
maintain in force a policy or policies of insurance covering errors and
omissions in the performance of its obligations as Master Servicer hereunder and
a Fidelity Bond in respect of its officers, employees and agents to the same
extent as the Master Servicer is so required pursuant to Section 3.12.
Section 7.03 Waiver of Defaults.
The Holders of Certificates entitled to at least 66 2/3% of the
Voting Rights allocated to the Classes of Certificates affected by a Servicer
Event of Termination may, on behalf of all Certificateholders, and with the
consent of the NIMS Insurer, waive any events permitting removal of the Master
Servicer as servicer pursuant to this Article VII, provided, however, that such
Holders may not waive a default in making a required distribution on a
Certificate without the consent of the Holder of such Certificate 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 Master
Servicer pursuant to this Article VII or Section 6.04, the Trustee shall give
prompt written notice thereof to the Certificateholders at their respective
addresses appearing in the Certificate Register, 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 Master Servicer Liabilities.
Notwithstanding anything herein to the contrary, upon termination of
the Master Servicer hereunder, any liabilities of the Master Servicer which
accrued prior to such termination shall survive such termination.
ARTICLE VIII
THE TRUSTEE
Section 8.01 Duties of Trustee.
The Trustee, prior to the occurrence of a Servicer Event of
Termination of which a Responsible Officer of the Trustee shall have actual
knowledge and after the curing of all Servicer Events of Termination which may
have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If a Servicer Event of Termination has
occurred (which has not been cured) of which a Responsible Officer has actual
knowledge, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise,
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement; provided, however, that that the
Trustee shall not be responsible for the accuracy or content of any resolution,
certificate, statement, opinion, report, document, order or other instrument
furnished by the Master Servicer, the Seller, 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 Master Servicer to comply with the obligations of the Master
Servicer referred to in clauses (i) and (ii) of Section 7.01(a) or any
Servicer Event of Termination unless a Responsible Officer of the Trustee
at the Corporate Trust Office obtains actual knowledge of such failure or
the Trustee receives written notice of such failure from the Master
Servicer, 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 Master Servicer under this Agreement, except during
such time, if any, as the Trustee shall be the successor to, and be vested with
the rights, duties, powers and privileges of, the Master Servicer in accordance
with the terms of this Agreement.
The Trustee shall not have any duty (A) to see 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.
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 Master Servicer or, if paid by
the Trustee, shall be reimbursed by the Master Servicer upon demand.
Nothing in this clause (v) shall derogate from the obligation of the
Master Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors;
(vi) the Trustee shall not be accountable, have any liability or
make any representation as to any acts or omissions hereunder of the
Master Servicer until such time as the Trustee may be required to act as
Master Servicer pursuant to Section 7.02;
(vii) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys or a custodian and the Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent, attorney or
custodian appointed by it with due care; and
(viii) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act.
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than
the authentication of the Trustee on the Certificates) shall be taken as the
statements of the 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 Master Servicer, or for the use or application of any
funds paid to the Master Servicer in respect of the Mortgage Loans or deposited
in or withdrawn from the Collection Account by the Master Servicer. The Trustee
shall not at any time have any responsibility or liability for or with respect
to the legality, validity and enforceability of any Mortgage or any Mortgage
Loan, or the perfection and priority of any Mortgage or the maintenance of any
such perfection and priority, or for or with respect to the sufficiency of the
Trust or its ability to generate the payments to be distributed to
Certificateholders under this Agreement, including, without limitation: the
existence, condition and ownership of any Mortgaged Property; the existence and
enforceability of any hazard insurance thereon (other than if the Trustee shall
assume the duties of the Master Servicer pursuant to Section 7.02); the validity
of the assignment of any Mortgage Loan to the Trustee or of any intervening
assignment; the completeness of any Mortgage Loan; the performance or
enforcement of any Mortgage Loan (other than if the Trustee shall assume the
duties of the Master Servicer pursuant to Section 7.02); the compliance by the
Depositor or the Master Servicer with any warranty or representation made under
this Agreement or in any related document or the accuracy of any such warranty
or representation prior to the Trustee's receipt of notice or other discovery of
any non-compliance therewith or any breach thereof; any investment of monies by
or at the direction of the Master Servicer or any loss resulting therefrom, it
being understood that the Trustee shall remain responsible for any Trust
property that it may hold in its individual capacity; the acts or omissions of
any of the Master Servicer (other than if the Trustee shall assume the duties of
the Master Servicer pursuant to Section 7.02), or any Mortgagor; any action of
the Master Servicer (other than if the Trustee shall assume the duties of the
Master Servicer pursuant to Section 7.02), taken in the name of the Trustee; the
failure of the Master Servicer to act or perform any duties required of it as
agent of the Trustee hereunder; or any action by the Trustee taken at the
instruction of the Master Servicer (other than if the Trustee shall assume the
duties of the Master Servicer pursuant to Section 7.02); provided, however, that
the foregoing shall not relieve the Trustee of its obligation to perform its
duties under this Agreement. The Trustee shall not have any responsibility for
filing any financing or continuation statement in any public office at any time
or to otherwise perfect or maintain the perfection of any security interest or
lien granted to it hereunder.
Section 8.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not Trustee and may transact any banking and trust business with the Master
Servicer, the Depositor or their Affiliates.
Section 8.05 Trustee Fees and Expenses.
The Trustee shall be entitled to the Trustee Fee (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust) for all services rendered by the Trustee in the exercise and
performance of any of the powers and duties hereunder. The Trustee shall
withdraw from the Distribution Account on each Distribution Date and pay to
itself the Trustee Fee. The Trust shall reimburse the Trustee for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Agreement (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence or bad faith or which is the
responsibility of Certificateholders or the Trustee hereunder. In addition, the
Trustee and its officers, directors, employees and agents shall be indemnified
by the Trust from, and held harmless against, any and all losses, liabilities,
damages, claims or expenses incurred in connection with any legal action
relating to this Agreement or the Certificates, other than any loss, liability
or expense incurred by reason of willful misfeasance, bad faith or negligence of
the Trustee in the performance of its duties hereunder or by reason of the
Trustee's reckless disregard of obligations and duties hereunder. This Section
shall survive termination of this Agreement or the resignation or removal of any
Trustee hereunder.
Section 8.06 Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be an entity duly organized
and validly existing under the laws of the United States of America or any state
thereof, authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000 and a minimum long-term
debt rating of BBB by Fitch and S&P or the equivalent or better by DBRS (if
rated thereby) and subject to supervision or examination by federal or state
authority. If such entity publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 8.06, the combined capital and
surplus of such entity shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. The principal
office of the Trustee (other than the initial Trustee) shall be in a state with
respect to which an Opinion of Counsel has been delivered to such Trustee at the
time such Trustee is appointed Trustee to the effect that the Trust will not be
a taxable entity under the laws of such state. In case at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
8.06, the Trustee shall resign immediately in the manner and with the effect
specified in Section 8.07.
Section 8.07 Resignation or Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Depositor, the Master
Servicer, 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.
The Majority Certificateholders or the NIMS Insurer may at any time
remove the Trustee by written instrument or instruments delivered to the Master
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 Master Servicer and to its predecessor Trustee an instrument
accepting such appointment hereunder, and thereupon the resignation or removal
of the predecessor Trustee shall become effective, and such successor Trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
like effect as if originally named as Trustee. The Depositor, the Master
Servicer and the predecessor Trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for fully and certainly
vesting and confirming in the successor Trustee all such rights, powers, duties
and obligations.
No successor Trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor Trustee shall
be eligible under the provisions of Section 8.06 and the appointment of such
successor Trustee shall not result in a downgrading of the Regular Certificates
by either Rating Agency, as evidenced by a letter from each Rating Agency.
Upon acceptance of appointment by a successor Trustee as provided in
this Section 8.08, the successor Trustee shall mail notice of the appointment of
a successor Trustee hereunder to all Holders of Certificates at their addresses
as shown in the Certificate Register and to each Rating Agency.
Section 8.09 Merger or Consolidation of Trustee.
Any entity into which the Trustee may be merged or converted or with
which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any entity
succeeding to the business of the Trustee, shall be the successor of the
hereunder, provided such entity shall be eligible under the provisions of
Section 8.06 and 8.08, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust or any Mortgaged Property may at the time be located, the
Depositor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee 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 Master Servicer and the Trustee may
consider necessary or desirable. Any such co-trustee or separate trustee shall
be subject to the written approval of the Master Servicer and the NIMS Insurer.
If the Master 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 Master Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Trust or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Master Servicer and the Trustee, acting jointly may at any
time accept the resignation of or remove any separate trustee or
co-trustee except that following the occurrence of a Servicer Event of
Termination, the Trustee acting alone may accept the resignation or remove
any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Depositor, the NIMS Insurer, the Rating Agencies and the Master Servicer.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor Trustee.
Section 8.11 Limitation of Liability.
The Certificates are executed by the Trustee, not in its individual
capacity but solely as Trustee of the Trust, in the exercise of the powers and
authority conferred and vested in it by this Agreement. Each of the undertakings
and agreements made on the part of the Trustee in the Certificates is made and
intended not as a personal undertaking or agreement by the Trustee but is made
and intended for the purpose of binding only the Trust.
Section 8.12 Trustee May Enforce Claims Without Possession of
Certificates.
(a) All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee for the benefit of all
Holders of such Certificates, subject to the provisions of this Agreement. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursement and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Certificateholders in respect of
which such judgment has been recovered.
(b) The Trustee shall afford the Depositor, the Master Servicer, 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 Master
Servicer, the NIMS Insurer, the Depositor and such Certificateholder and shall
make available to the Master 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 Master 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
Master Servicer hereunder shall occur and be continuing, the Trustee may proceed
to protect and enforce its rights and the rights of the Certificateholders under
this Agreement by a suit, action or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement contained in
this Agreement or in aid of the execution of any power granted in this Agreement
or for the enforcement of any other legal, equitable or other remedy, as the
Trustee, being advised by counsel, and subject to the foregoing, shall deem most
effectual to protect and enforce any of the rights of the Trustee and the
Certificateholders.
Section 8.14 Waiver of Bond Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee post a bond or other surety with any
court, agency or body whatsoever.
Section 8.15 Waiver of Inventory, Accounting and Appraisal
Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.
ARTICLE IX
REMIC AND GRANTOR TRUST ADMINISTRATION
Section 9.01 REMIC Administration.
(a) The Trustee shall (i) make or cause to be made REMIC elections
for each of REMIC 1 and REMIC 2 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 2. 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 REMIC, and the Trustee is irrevocably designated as and shall
act as attorney-in-fact and agent for such Tax Matters Person for each REMIC.
The Trustee, as agent for the Tax Matters Person, shall perform, on behalf of
each REMIC, all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions, or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, if required by the Code, the REMIC
Provisions, or other such guidance, the Trustee, as agent for the Tax Matters
Person, shall provide (i) to the Treasury or other governmental authority such
information as is necessary for the application of any tax relating to the
transfer of the Class R Certificate to any disqualified person or organization
and (ii) to the Certificateholders such information or reports as are required
by the Code or REMIC Provisions.
(f) The Trustee, the Master Servicer, and the Holders of
Certificates shall take any action or cause any REMIC formed under this
Agreement to take any action necessary to create or maintain the status of such
REMIC as a REMIC under the REMIC Provisions and shall assist each other as
necessary to create or maintain such status. None of the Trustee, the Master
Servicer or the Holder of the Class R Certificate shall take any action or cause
any REMIC formed under this Agreement to take any action or fail to take (or
fail to cause to be taken) any action that, under the REMIC Provisions, if taken
or not taken, as the case may be, could (i) endanger the status of such REMIC as
a REMIC or (ii) result in the imposition of a tax upon such REMIC (including but
not limited to the tax on prohibited transactions as defined in Code Section
860F(a)(2) and the tax on prohibited contributions set forth on Section 860G(d)
of the Code) (either such event, an "Adverse REMIC Event") unless the Trustee,
the NIMS Insurer and the Master Servicer have received an Opinion of Counsel (at
the expense of the party seeking to take such action) to the effect that the
contemplated action will not endanger such status or result in the imposition of
such a tax. In addition, prior to taking any action with respect to any REMIC
formed under this Agreement or the assets therein, or causing such REMIC to take
any action, which is not expressly permitted under the terms of this Agreement,
any Holder of the Class R Certificate will consult with the Trustee, the NIMS
Insurer and the Master Servicer, or their respective designees, in writing, with
respect to whether such action could cause an Adverse REMIC Event to occur with
respect to such REMIC, and no such Person shall take any such action or cause
such REMIC to take any such action as to which the Trustee, the NIMS Insurer or
the Master Servicer has advised it in writing that an Adverse REMIC Event could
occur.
(g) The Holder of the Class R Certificate shall pay when due any and
all taxes imposed on any REMIC formed under this Agreement by federal or state
governmental authorities, but only from amounts, if any, distributable thereon.
To the extent that such REMIC taxes are not paid by the Class R
Certificateholder, the Trustee shall pay any remaining REMIC taxes out of future
amounts otherwise distributable to the Holder of the Class R Certificate or, if
no such amounts are available, out of other amounts held in the Distribution
Account, and shall reduce amounts otherwise payable to Holders of the REMIC
Regular Interests or the Certificates, as the case may be.
(h) The Trustee, shall, for federal income tax purposes, maintain or
cause to be maintained books and records with respect to each REMIC formed under
this Agreement on a calendar year and on an accrual basis.
(i) No additional contributions of assets shall be made to any
REMIC, except as expressly provided in this Agreement with respect to Eligible
Substitute Mortgage Loans.
(j) Neither the Trustee nor the Master Servicer shall enter into any
arrangement by which any REMIC will receive a fee or other compensation for
services.
(k) On or before April 15 of each calendar year, beginning in 2005,
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.
(l) The Trustee shall treat (i) the rights of the Offered
Certificates and the Class M-7 Certificates to receive Cap Carryover Amounts as
a right in interest rate cap contracts written by the Class CE
Certificateholders in favor of the Holders of the Offered Certificates and the
Class M-7 Certificates and (ii) the rights of the Class CE Certificates under
the Class A-1 Yield Maintenance Agreement, Group 2-A Yield Maintenance Agreement
and Class M Yield Maintenance Agreement in accordance with the terms thereof and
shall assign such rights for federal tax return and information reporting a
value of zero. The Trustee shall account for such as property held separate and
apart from the regular interests it holds in each of the REMICs created
hereunder. The provisions of this paragraph are intended to satisfy the
requirements of Treasury Regulations Section 1.860G-2(i) for the treatment of
property rights coupled with regular interests to be separately respected and
shall be interpreted consistent with such regulation. On each Distribution Date,
to the extent the Offered Certificates and the Class M-7 Certificates receive
interest in excess of their Certificate Interest Rate, such interest will be
treated as distributed to the Class CE Certificates, together with any amounts
deposited in the Class A-1 Reserve Account in respect of the Class A-1 Yield
Maintenance Agreement, the Group 2-A Reserve Account in respect of the Group 2-A
Yield Maintenance Agreement and the Class M Reserve Account in respect of the
Class M Yield Maintenance Agreement, and then paid to the respective Classes of
Offered Certificates and the Class M-7 Certificates pursuant to the related
interest rate cap agreement.
Section 9.02 Prohibited Transactions and Activities.
None of the Depositor, the Master Servicer or the Trustee shall
sell, dispose of, or substitute for any of the Mortgage Loans, except in a
disposition pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the
bankruptcy of the Trust Fund, (iii) the termination of any REMIC pursuant to
Article X of this Agreement, (iv) a substitution pursuant to Article II of this
Agreement, (v) a repurchase of Mortgage Loans pursuant to Article II of this
Agreement or (vi) an optional purchase by the Master Servicer pursuant to
Section 3.16 of this Agreement, nor acquire any assets for any REMIC
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 the Class
R Certificate as the regular interests therein, (b) affect the distribution of
interest or principal on the Certificates, (c) result in the encumbrance of the
assets transferred or assigned to the Trust Fund (except pursuant to the
provisions of this Agreement) or (d) cause such REMIC to be subject to a tax on
prohibited transactions or prohibited contributions pursuant to the REMIC
Provisions.
Section 9.03 Indemnification with Respect to Certain Taxes and Loss
of REMIC Status.
In the event that any REMIC formed hereunder fails to qualify as a
REMIC, loses its status as a REMIC, or incurs federal, state or local taxes as a
result of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Master Servicer of its duties
and obligations set forth herein, the Master Servicer shall indemnify the Holder
of the Class R Certificate against any and all losses, claims, damages,
liabilities or expenses ("Losses") resulting from such negligence; provided,
however, that the Master Servicer shall not be liable for any such Losses
attributable to the action or inaction of the Trustee, the Depositor or the
Holder of the Class R Certificate, as applicable, nor for any such Losses
resulting from misinformation provided by the Holder of the Class R Certificate
on which the Master Servicer has relied. The foregoing shall not be deemed to
limit or restrict the rights and remedies of the Holder of the Class R
Certificate now or hereafter existing at law or in equity. Notwithstanding the
foregoing, however, in no event shall the Master Servicer have any liability (1)
for any action or omission that is taken in accordance with and in compliance
with the express terms of, or which is expressly permitted by the terms of, this
Agreement, (2) for any Losses other than arising out of a negligent performance
by the Master Servicer of its duties and obligations set forth herein, and (3)
for any special or consequential damages to Certificateholders (in addition to
payment of principal and interest on the Certificates).
Section 9.04 REO Property.
(a) Subject to compliance with applicable laws and regulations as
shall at any time be in force, and notwithstanding any other provision of this
Agreement, the Master Servicer, acting on behalf of the Trust hereunder, shall
not rent, lease, or otherwise earn income on behalf of any REMIC with respect to
any REO Property which might cause such REO Property to fail to qualify as
"foreclosure" property within the meaning of section 860G(a)(8) of the Code or
result in the receipt by any REMIC of any "income from non-permitted assets"
within the meaning of section 860F(a)(2) of the Code or any "net income from
foreclosure property" which is subject to tax under the REMIC Provisions unless
the Master Servicer has advised, or has caused the applicable Master Servicer to
advise, the Trustee in writing to the effect that, under the REMIC Provisions,
such action would not adversely affect the status of any REMIC as a REMIC and
any income generated for such REMIC by the REO Property would not result in the
imposition of a tax upon such REMIC.
(b) The Master Servicer shall make reasonable efforts to sell any
REO Property for its fair market value. In any event, however, the Master
Servicer shall dispose of any REO Property before the close of the third
calendar year beginning after the year of its acquisition by the Trust Fund
unless the Master Servicer has received a grant of extension from the Internal
Revenue Service to the effect that, under the REMIC Provisions and any relevant
proposed legislation and under applicable state law, any REMIC 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 Master Servicer has
received such an extension, then the Master Servicer shall continue to attempt
to sell the REO Property for its fair market value as determined in good faith
by the Master Servicer for such longer period as such extension permits (the
"Extended Period"). If the Master Servicer has not received such an extension
and the Master Servicer is unable to sell the REO Property within 33 months
after its acquisition by the Trust Fund or if the Master Servicer has received
such an extension, and the Master Servicer is unable to sell the REO Property
within the period ending three months before the close of the Extended Period,
the Master Servicer shall, before the end of the applicable period, (i) purchase
such REO Property at a price equal to the REO Property's fair market value as
determined in good faith by the Master Servicer or (ii) auction the REO Property
to the highest bidder (which may be the Master Servicer) in an auction
reasonably designed to produce a fair price prior to the expiration of the
applicable period.
Section 9.05 Grantor Trust Administration.
The parties intend that the portions of the Trust Fund consisting of
the right of the Class P Certificates to receive Prepayment Charges, Originator
Prepayment Charge Payment Amounts and Servicer Prepayment Charge Payment
Amounts, the right of the Offered Certificates and the Class M-7 Certificates to
receive Cap Carryover Amounts, the Reserve Accounts and the right of the Class
CE Certificates to receive Yield Maintenance Agreement Payments subject to the
obligation of the Class CE Certificates to pay Cap Carryover Amounts, shall be
treated as a "grantor trust" under the Code, and the provisions hereof shall be
interpreted consistently with this intention. In furtherance of such intention,
the Trustee shall furnish or cause to be furnished (i) to the Holders of the
Offered Certificates and the Class M-7 Certificates, (ii) to the Holders of the
Class P Certificates and (iii) to the Holder of the Class CE Certificates and
shall file or cause to be filed with the Internal Revenue Service together with
Form 1041 or such other form as may be applicable, their allocable shares of
income and expenses with respect to the property held by the Grantor Trust, at
the time or times and in the manner required by the Code.
ARTICLE X
TERMINATION
Section 10.01 Termination.
(a) The respective obligations and responsibilities of the Master
Servicer, the Depositor, the Trustee and the Certificate Registrar created
hereby (other than the obligation of the Trustee to make certain payments to
Certificateholders after the final Distribution Date and the obligation of the
Master Servicer to send certain notices as hereinafter set forth) shall
terminate upon notice to the Trustee upon the earliest of (i) the Distribution
Date on which the Certificate Principal Balance of each Class of Certificates
has been reduced to zero, (ii) the final payment or other liquidation of the
last Mortgage Loan in the Trust, and (iii) the optional purchase by the 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 Master Servicer of the Mortgage Loans) as described
below. Notwithstanding the foregoing, in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, 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 Master Servicer of the Mortgage Loans)
may, at its option, terminate the Trust Fund and retire the Certificates on the
next succeeding Distribution Date upon which the aggregate current Pool Balance
is less than 10% of the aggregate Pool Balance of the Mortgage Loans as of the
Cut-off Date by purchasing all of the outstanding (i) Mortgage Loans in the
Trust Fund at a price equal to the sum of the outstanding Principal Balance of
the Mortgage Loans and except to the extent previously advanced by the Master
Servicer, accrued and unpaid interest thereon at the weighted average of the
Mortgage Interest Rates through the end of the Collection Period preceding the
final Distribution Date plus unreimbursed Servicing Advances, Advances and any
unpaid Servicing Fees allocable to such Mortgage Loans and (ii) REO Properties
in the Trust Fund at a price equal to their fair market value as determined in
good faith by the Master Servicer (the "Termination Price"). If 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 Master
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 Master Servicer shall deliver to the Trustee for deposit in the
Distribution Account all amounts then on deposit in the Collection Account (less
amounts permitted to be withdrawn by the Master Servicer pursuant to Section
3.07), which deposit shall be deemed to have occurred immediately following such
purchase.
Any such purchase shall be accomplished by delivery on the
Determination Date before such Distribution Date of the Termination Price to the
Trustee for deposit into the Distribution Account as part of Available Funds.
(b) Notice of any termination, specifying the Distribution Date
(which shall be a date that would otherwise be a Distribution Date) upon which
the Certificateholders may surrender their Certificates to the Trustee for
payment of the final distribution and cancellation, shall be given promptly by
the Trustee upon the Trustee receiving notice of such date from the NIMS
Insurer, the Majority Class CE Certificateholders or the Master Servicer, as
applicable, by letter to the Certificateholders mailed not earlier than the 15th
day of the month preceding the month of such final distribution and not later
than the 15th day of the month of such final distribution specifying (1) the
Distribution Date upon which final distribution of the Certificates will be made
upon presentation and surrender of such Certificates at the office or agency of
the Trustee therein designated, (2) the amount of any such final distribution
and (3) that the Record Date otherwise applicable to such Distribution Date is
not applicable, distributions being made only upon presentation and surrender of
the Certificates at the office or agency of the Trustee therein specified. Not
less than five (5) Business Days prior to such Determination Date relating to
such Distribution Date, the Trustee shall notify the Originator 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 Master 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, the Class R 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 the Class R
Certificateholder for payment.
Section 10.02 Additional Termination Requirements.
(a) In the event that the NIMS Insurer, the Majority Class CE
Certificateholders or the Master 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 and REMIC 2 and shall specify such date in
the final federal income tax return of each REMIC;
(ii) After the date of adoption of such plans of complete
liquidation and at or prior to the final Distribution Date, the Trustee
shall sell all of the assets of the Trust to the Majority Class CE
Certificateholders or the Master Servicer, as applicable, for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited in the order of priority set forth in Section 4.02
and then to the Class R Certificateholder, all cash on hand in respect of
the REMICs after such payment (other than cash retained to meet claims)
and the Trust shall terminate at such time.
(b) By their acceptance of Certificates, the Holders thereof hereby
agree to appoint the Trustee as their attorney in fact to: (i) designate such
date of adoption of plans of complete liquidation and (ii) to take such other
action in connection therewith as may be reasonably required to carry out such
plans of complete liquidation all in accordance with the terms hereof.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment.
This Agreement may be amended from time to time by the Depositor,
the Master Servicer and the Trustee; 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 or (v) 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 Master Servicer and the Trustee from the Rating Agencies that
such action will not result in the reduction or withdrawal of the rating of any
outstanding Class of Certificates with respect to which it is a Rating Agency,
or (ii) an Opinion of Counsel delivered to the Master Servicer and the Trustee.
In addition, this Agreement may be amended from time to time by the
Depositor, the Master Servicer and the Trustee, with the consent of the 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 Holders of
Certificates; provided, however, that no such amendment or waiver shall (x)
reduce in any manner the amount of, or delay the timing of, payments on the
Certificates which are required to be made on any Certificate without the
consent of the Holder of such Certificate, (y) adversely affect in any material
respect the interests of the Holders of any Class of Certificates in a manner
other than as described in clause (x) above, without the consent of the Holders
of Certificates of such Class evidencing at least 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.
Promptly after the execution of any such amendment the Trustee shall
furnish, at the expense of the Person that requested the amendment if such
Person is the Master Servicer (but in no event at the expense of the Trustee),
otherwise at the expense of the Trust, a copy of such amendment and the Opinion
of Counsel referred to in the immediately preceding paragraph to the Master
Servicer and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 11.01 to approve the particular form of any proposed
amendment; instead it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Section 11.02 Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is subject
to recordation in all appropriate public offices for real property records in
all the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer at the expense of the Trust, but only upon direction of
Certificateholders, accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall together constitute but
one and the same instrument.
Section 11.03 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not (i)
operate to terminate this Agreement or the Trust, (ii) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust, or (iii) otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
Except as expressly provided for herein, no Certificateholder shall
have any right to vote or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any provision
of this Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to this Agreement, unless such Holder
previously shall have given to the Trustee a written notice of default and of
the continuance thereof, as herein provided, and unless also the Holders of
Certificates entitled to at least 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 60 days after
its receipt of such notice, request and offer of indemnity, shall have neglected
or refused to institute any such action, suit or proceeding. It is understood
and intended, and expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 11.03 each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 11.04 Governing Law; Jurisdiction.
This Agreement shall be construed in accordance with the laws of the
State of New York, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws. With respect to any
claim arising out of this Agreement, each party irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in The City of New
York, and each party irrevocably waives any objection which it may have at any
time to the laying of venue of any suit, action or proceeding arising out of or
relating hereto brought in any such courts, irrevocably waives any claim that
any such suit, action or proceeding brought in any such court has been brought
in any inconvenient forum and further irrevocably waives the right to object,
with respect to such claim, suit, action or proceeding brought in any such
court, that such court does not have jurisdiction over such party, provided that
service of process has been made by any lawful means.
Section 11.05 Notices.
All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered at or mailed
by first class mail, postage prepaid, or by express delivery service, to (a) in
the case of the Trustee, ▇▇▇▇▇ Fargo Bank, N.A., ▇.▇. ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Corporate Trust Services - ABFC 2004-OPT5 with a copy to: (i)
▇▇▇▇▇ Fargo Bank, N.A., ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Services - ABFC 2004-OPT5 and (ii) ▇▇▇▇▇ Fargo Bank,
N.A., ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Services - ABFC 2004-OPT5, or such other address as
may hereafter be furnished to the Depositor, the NIMS Insurer and the Master
Servicer in writing by the Trustee, (b) in the case of the Depositor, Asset
Backed Funding Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ABFC Asset-Backed Certificates, Series 2004-OPT5, or
such other address as may be furnished to the Master Servicer, the NIMS Insurer
and the Trustee in writing by the Depositor, (c) in the case of the Master
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
Master Servicer in writing and (d) in the case of the NIMS Insurer, such address
furnished to the Depositor, the Master 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 Master 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 Master Servicer, as the case may be,
has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Servicer Event of Termination that has
not been cured or waived;
(iii) the resignation or termination of the Master Servicer or the
Trustee;
(iv) the final payment to Holders of the Certificates of any Class;
(v) any change in the location of any Account; and
(vi) if the Trustee is acting as successor servicer pursuant to
Section 7.02 hereof, any event that would result in the inability of the
Trustee to make Advances.
(vii) In addition, the Master Servicer shall promptly furnish to
each Rating Agency copies of the following:
(A) each annual statement as to compliance described in
Section 3.19 hereof;
(B) each annual independent public accountants' servicing
report described in Section 3.20 hereof; and
(C) each notice delivered pursuant to Section 7.01(a) hereof
which relates to the fact that the Master Servicer has not made an
Advance.
Any such notice pursuant to this Section 11.08 shall be in
writing and shall be deemed to have been duly given if personally delivered
or mailed by first class mail, postage prepaid, or by express delivery
service to: Dominion Bond Rating Service, Inc. ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; Fitch Ratings, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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.
Section 11.11 Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by the
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
agent duly appointed in writing; and such action shall become effective when
such instrument or instruments are delivered to the Trustee and the Master
Servicer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "act" of the
Certificateholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Agreement and conclusive in favor of the
Trustee and the Trust, if made in the manner provided in this Section 11.11.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other action by any Certificateholder shall bind every future Holder
of such Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the Trustee or the
Trust in reliance thereon, whether or not notation of such action is made upon
such Certificate.
IN WITNESS WHEREOF, the Depositor, the Master Servicer and the
Trustee have caused their names to be signed hereto by their respective officers
thereunto duly authorized, all as of the day and year first above written.
ASSET BACKED FUNDING CORPORATION, as
Depositor
By:____________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
OPTION ONE MORTGAGE CORPORATION, as
Master Servicer
By:____________________________________
Name:
Title:
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By:____________________________________
Name: ▇▇▇ ▇▇▇▇▇
Title: Vice President
STATE OF NORTH CAROLINA )
) ss.:
COUNTY OF MECKLENBURG )
On the 14th day of October, 2004 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 14th day of October, 2004 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 14th day of October, 2004 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 2004-OPT5, 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 2004-OPT5, Class A-1 Original Class Certificate Principal
Balance of the Class A-1 Certificates
as of the Closing Date: $931,393,000.00
Certificate Interest Rate: Floating
Initial Certificate Principal Balance:
Date of Pooling and Servicing Agreement $[__]
and Cut-off Date: October 1, 2004
Master Servicer: Option One Mortgage
First Distribution Date: November 26, Corporation
2004
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
No.
Closing Date: October 14, 2004
CUSIP: 04542B JY 9
ISIN: US04542BJY92
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class A-1 Certificates) in that certain beneficial ownership interest
evidenced by all the Class A-1 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
A-1 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class A-1 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class A-1
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
The Certificate Interest Rate for the Class A-1 Certificates for
each Distribution Date will be the lesser of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class A-1 Certificate Margin and (ii)
the Group 1 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 Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
▇▇▇▇▇ 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
JT TEN - as joint tenants with right Act
of survivorship and not as
tenants in common -----------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT A-2
[FORM OF THE CLASS 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 2004-OPT5, 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 2004-OPT5, Class A-2 Original Class Certificate Principal
Balance of the Class A-2 Certificates
as of the Closing Date: $145,382,000.00
Certificate Interest Rate: Floating
Initial Certificate Principal Balance:
Date of Pooling and Servicing Agreement $[__]
and Cut-off Date: October 1, 2004
Master Servicer: Option One Mortgage
First Distribution Date: November 26, Corporation
2004
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
No.
Closing Date: October 14, 2004
CUSIP: 04542B JZ 6
ISIN: US04542BJZ67
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class A-2 Certificates) in that certain beneficial ownership interest
evidenced by all the Class A-2 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
A-2 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class A-2 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class A-2
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
The Certificate Interest Rate for the Class A-2 Certificates for
each Distribution Date will be the lesser of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class A-2 Certificate Margin and (ii)
the Group 2 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 Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
▇▇▇▇▇ 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
JT TEN - as joint tenants with right Act
of survivorship and not as
tenants in common -----------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT A-3
[FORM OF THE CLASS A-3 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE,
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2004-OPT5, CLASS A-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 2004-OPT5, Class A-3 Original Class Certificate Principal
Balance of the Class A-3 Certificates
as of the Closing Date: $69,307,000.00
Certificate Interest Rate: Floating
Initial Certificate Principal Balance:
Date of Pooling and Servicing Agreement $[__]
and Cut-off Date: October 1, 2004
Master Servicer: Option One Mortgage
First Distribution Date: November 26, Corporation
2004
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
No.
Closing Date: October 14, 2004
CUSIP: 04542B KA 9
ISIN: US04542BKA97
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class A-3 Certificates) in that certain beneficial ownership interest
evidenced by all the Class A-3 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
A-3 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class A-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 A-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 A-3 Certificates for
each Distribution Date will be the lesser of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class A-3 Certificate Margin and (ii)
the Group 2 Cap. Interest will accrue on the Class A-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 A-3 Certificates.
The Class A-3 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
▇▇▇▇▇ 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
JT TEN - as joint tenants with right Act
of survivorship and not as
tenants in common -----------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT A-4
[FORM OF THE CLASS A-4 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE,
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2004-OPT5, CLASS A-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 2004-OPT5, Class A-4 Original Class Certificate Principal
Balance of the Class A-4 Certificates
as of the Closing Date: $66,024,000.00
Certificate Interest Rate: Floating
Initial Certificate Principal Balance:
Date of Pooling and Servicing Agreement $[__]
and Cut-off Date: October 1, 2004
Master Servicer: Option One Mortgage
First Distribution Date: November 26, Corporation
2004
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
No.
Closing Date: October 14, 2004
CUSIP: 04542B KB 7
ISIN: US04542BKB70
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class A-4 Certificates) in that certain beneficial ownership interest
evidenced by all the Class A-4 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
A-4 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class A-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 A-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 A-4 Certificates for
each Distribution Date will be the lesser of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class A-4 Certificate Margin and (ii)
the Group 2 Cap. Interest will accrue on the Class A-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 A-4 Certificates.
The Class A-4 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
▇▇▇▇▇ 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
JT TEN - as joint tenants with right Act
of survivorship and not as
tenants in common -----------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-1
[FORM OF CLASS 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 2004-OPT5, 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 2004-OPT5, Class M-1 Original Class Certificate Principal
Balance of the Class M-1 Certificates
as of the Closing Date: $53,871,000.00
Certificate Interest Rate: Floating
Initial Certificate Principal Balance:
Date of Pooling and Servicing Agreement $[__]
and Cut-off Date: October 1, 2004
Master Servicer: Option One Mortgage
First Distribution Date: November 26, Corporation
2004
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
No.
Closing Date: October 14, 2004
CUSIP: 04542B KC 5
ISIN: US04542BKC53
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-1 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-1 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-1 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-1 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class M-1
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
The Certificate Interest Rate for the Class M-1 Certificates for
each Distribution Date will be the lesser of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-1 Certificate Margin and (ii)
the Pool 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 Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
▇▇▇▇▇ 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
JT TEN - as joint tenants with right Act
of survivorship and not as
tenants in common -----------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-2
[FORM OF CLASS 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 2004-OPT5, 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 2004-OPT5, Class M-2 Original Class Certificate Principal
Balance of the Class M-2 Certificates
as of the Closing Date: $37,036,000.00
Certificate Interest Rate: Floating
Initial Certificate Principal Balance:
Date of Pooling and Servicing Agreement $[__]
and Cut-off Date: October 1, 2004
Master Servicer: Option One Mortgage
First Distribution Date: November 26, Corporation
2004
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
No.
Closing Date: October 14, 2004
CUSIP: 04542B KD 3
ISIN: US04542BKD37
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-2 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-2 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-2 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-2 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class M-2
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
The Certificate Interest Rate for the Class M-2 Certificates for
each Distribution Date will be the lesser of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-2 Certificate Margin and (ii)
the Pool 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 Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
▇▇▇▇▇ 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
JT TEN - as joint tenants with right Act
of survivorship and not as
tenants in common -----------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-3
[FORM OF CLASS 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 2004-OPT5, 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 2004-OPT5, Class M-3 Original Class Certificate Principal
Balance of the Class M-3 Certificates
as of the Closing Date: $10,101,000.00
Certificate Interest Rate: Floating
Initial Certificate Principal Balance:
Date of Pooling and Servicing Agreement $[__]
and Cut-off Date: October 1, 2004
Master Servicer: Option One Mortgage
First Distribution Date: November 26, Corporation
2004
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
No.
Closing Date: October 14, 2004
CUSIP: 04542B KE 1
ISIN: US04542BKE10
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-3 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-3 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-3 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-3 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class M-3
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
The Certificate Interest Rate for the Class M-3 Certificates for
each Distribution Date will be the lesser of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-3 Certificate Margin and (ii)
the Pool 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 Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
▇▇▇▇▇ 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
JT TEN - as joint tenants with right Act
of survivorship and not as
tenants in common -----------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-4
[FORM OF CLASS 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 2004-OPT5, 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 2004-OPT5, Class M-4 Original Class Certificate Principal
Balance of the Class M-4 Certificates
as of the Closing Date: $10,100,000.00
Certificate Interest Rate: Floating
Initial Certificate Principal Balance:
Date of Pooling and Servicing Agreement $[__]
and Cut-off Date: October 1, 2004
Master Servicer: Option One Mortgage
First Distribution Date: November 26, Corporation
2004
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
No.
Closing Date: October 14, 2004
CUSIP: 04542B KF 8
ISIN: US04542BKF84
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-4 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-4 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-4 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-4 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class M-4
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
The Certificate Interest Rate for the Class M-4 Certificates for
each Distribution Date will be the lesser of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-4 Certificate Margin and (ii)
the Pool 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 Certificate, Class M-2 Certificates and Class M-3
Certificates as described in the Pooling and Servicing Agreement referred to
herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
▇▇▇▇▇ 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
JT TEN - as joint tenants with right Act
of survivorship and not as
tenants in common -----------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-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 2004-OPT5, 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 2004-OPT5, Class M-5 Original Class Certificate Principal
Balance of the Class M-5 Certificates
as of the Closing Date: $8,081,000.00
Certificate Interest Rate: Floating
Initial Certificate Principal Balance:
Date of Pooling and Servicing Agreement $[__]
and Cut-off Date: October 1, 2004
Master Servicer: Option One Mortgage
First Distribution Date: November 26, Corporation
2004
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
No.
Closing Date: October 14, 2004
CUSIP: 04542B KG 6
ISIN: US04542BKG67
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-5 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-5 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-5 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-5 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class M-5
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
The Certificate Interest Rate for the Class M-5 Certificates for
each Distribution Date will be the lesser of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-5 Certificate Margin and (ii)
the Pool 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 Certificate, Class M-2 Certificates, Class M-3
Certificates and Class M-4 Certificates as described in the Pooling and
Servicing Agreement referred to herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
▇▇▇▇▇ 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
JT TEN - as joint tenants with right Act
of survivorship and not as
tenants in common -----------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-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 2004-OPT5, 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 2004-OPT5, Class M-6 Original Class Certificate Principal
Balance of the Class M-6 Certificates
as of the Closing Date: $4,714,000.00
Certificate Interest Rate: Floating
Initial Certificate Principal Balance:
Date of Pooling and Servicing Agreement $[__]
and Cut-off Date: October 1, 2004
Master Servicer: Option One Mortgage
First Distribution Date: November 26, Corporation
2004
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
No.
Closing Date: October 14, 2004
CUSIP: 04542B KH 4
ISIN: US04542BKH41
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-6 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-6 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-6 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-6 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class M-6
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
The Certificate Interest Rate for the Class M-6 Certificates for
each Distribution Date will be the lesser of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-6 Certificate Margin and (ii)
the Pool 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 Certificate, Class M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates and Class M-5 Certificates as described in
the Pooling and Servicing Agreement referred to herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
▇▇▇▇▇ 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
JT TEN - as joint tenants with right Act
of survivorship and not as
tenants in common -----------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-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.
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.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2004-OPT5, 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 2004-OPT5, Class M-7 Original Class Certificate Principal
Balance of the Class M-7 Certificates
as of the Closing Date: $4,040,000.00
Certificate Interest Rate: Floating
Initial Certificate Principal Balance:
Date of Pooling and Servicing Agreement $[__]
and Cut-off Date: October 1, 2004
Master Servicer: Option One Mortgage
First Distribution Date: November 26, Corporation
2004
Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
No.
Closing Date: October 14, 2004
CUSIP: 04542B KJ 0
ISIN: US04542BKJ07
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-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
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-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 lesser of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-7 Certificate Margin and (ii)
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 Certificate, Class M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates, Class M-5 Certificates and Class M-6
Certificates as described in the Pooling and Servicing Agreement referred to
herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that transfer
is made pursuant to an effective registration statement under the 1933 Act and
effective registration or qualification under applicable state securities laws,
or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification, the Certificate Registrar shall require, in order to assure
compliance with such laws, 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. None of the Depositor,
the Certificate Registrar or the Trustee is obligated to register or qualify the
Class of Certificates specified on the face hereof under the 1933 Act or any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration or
qualification. Any such Certificateholder desiring to effect such transfer
shall, and does hereby agree to, indemnify the Trustee, the Depositor, the
Certificate Registrar and any Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
▇▇▇▇▇ 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
JT TEN - as joint tenants with right Act
of survivorship and not as
tenants in common -----------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT C-1
[FORM OF CLASS CE CERTIFICATES]
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A DIRECT
OR INDIRECT BENEFICIAL INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE
MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE") AND CERTAIN OTHER PROPERTY.
THIS CLASS CE CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES OF
THIS SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS CE CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH TIME
AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS CE CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN
A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND
IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, SECTION 4975 OF THE CODE OR ANY
MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW
WILL BE REGISTERED.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2004-OPT5, 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 2004-OPT5, Class CE Master Servicer: Option One Mortgage
Corporation
Date of Pooling and Servicing Agreement
and Cut-off Date: October 1, 2004 Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
First Distribution Date: November 26, Closing Date: October 14, 2004
2004
No.
Percentage Interest: 100%
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that __________________________________ is the
registered owner of a Percentage Interest set forth above in that certain
beneficial ownership interest evidenced by all the Class CE Certificates in the
Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among Asset Backed Funding Corporation
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement), the Master Servicer and the Trustee, a summary of certain
of the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date"), from funds in the Distribution Account in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class CE Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class CE
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
the Percentage Interest specified on the face hereof.
The Class CE Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that transfer
is made pursuant to an effective registration statement under the 1933 Act and
effective registration or qualification under applicable state securities laws,
or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification, the Certificate Registrar shall require, in order to assure
compliance with such laws, either (i) that the Certificateholder desiring to
effect the transfer and such Certificateholder's prospective transferee each
execute a representation letter in the form described by the Agreement
certifying to the Certificate Registrar the facts surrounding the transfer, or
(ii) unless such transfer is made in reliance upon Rule 144A under the 1933 Act,
that the Depositor and the Certificate Registrar receive an Opinion of Counsel
satisfactory to them that such transfer may be made without such registration or
qualification, which Opinion of Counsel shall not be an expense of the
Depositor, the Trustee or the Certificate Registrar, in their respective
capacities as such. None of the Depositor, the Certificate Registrar or the
Trustee is obligated to register or qualify the Class of Certificates specified
on the face hereof under the 1933 Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any such Certificateholder
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee, the Depositor, the Certificate Registrar and any Master Servicer
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
No transfer of a Certificate or any interest therein may be made to
employee benefit plans and certain other retirement plans and arrangements,
including individual retirement accounts and annuities, ▇▇▇▇▇ plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested that are subject to the fiduciary responsibility
provisions of ERISA, Section 4975 of the Code or any materially similar
provisions of applicable federal, state or local law (collectively, "Plans") or
any person who is directly or indirectly purchasing the Certificate or interest
therein on behalf of, as named fiduciary of, as trustee of, or with assets of a
Plan.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
▇▇▇▇▇ 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
JT TEN - as joint tenants with right Act
of survivorship and not as
tenants in common -----------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT C-2
[FORM OF CLASS 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 2004-OPT5, 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 2004-OPT5, Class P Master Servicer: Option One Mortgage
Corporation
Date of Pooling and Servicing Agreement
and Cut-off Date: October 1, 2004 Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
First Distribution Date: November 26, Closing Date: October 14, 2004
2004
No.
Percentage Interest: 100%
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that __________________________________ is the
registered owner of a Percentage Interest set forth above in that certain
beneficial ownership interest evidenced by all the Class P Certificates in the
Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among Asset Backed Funding Corporation
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement), the Master Servicer and the Trustee, a summary of certain
of the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date"), from Prepayment Charges, 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 Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that transfer
is made pursuant to an effective registration statement under the 1933 Act and
effective registration or qualification under applicable state securities laws,
or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification, the Certificate Registrar shall require, in order to assure
compliance with such laws, either (i) that the Certificateholder desiring to
effect the transfer and such Certificateholder's prospective transferee each
execute a representation letter in the form described by the Agreement
certifying to the Certificate Registrar the facts surrounding the transfer, or
(ii) unless such transfer is made in reliance upon Rule 144A under the 1933 Act,
that the Depositor and the Certificate Registrar receive an Opinion of Counsel
satisfactory to them that such transfer may be made without such registration or
qualification, which Opinion of Counsel shall not be an expense of the
Depositor, the Trustee or the Certificate Registrar, in their respective
capacities as such. None of the Depositor, the Certificate Registrar or the
Trustee is obligated to register or qualify the Class of Certificates specified
on the face hereof under the 1933 Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any such Certificateholder
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee, the Depositor, the Certificate Registrar and any Master Servicer
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
No transfer of a Certificate or any interest therein may be made to
employee benefit plans and certain other retirement plans and arrangements,
including individual retirement accounts and annuities, ▇▇▇▇▇ plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested that are subject to the fiduciary responsibility
provisions of ERISA, Section 4975 of the Code or any materially similar
provisions of applicable federal, state or local law (collectively, "Plans") or
any person who is directly or indirectly purchasing the Certificate or interest
therein on behalf of, as named fiduciary of, as trustee of, or with assets of a
Plan.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar or any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
▇▇▇▇▇ 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
JT TEN - as joint tenants with right Act
of survivorship and not as
tenants in common -----------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT C-3
[FORM OF CLASS R CERTIFICATE]
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE
"RESIDUAL INTEREST" IN TWO SEPARATE "REAL ESTATE MORTGAGE INVESTMENT
CONDUITS," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CLASS R CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES 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 2004-OPT5, 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 2004-OPT5, Class R Master Servicer: Option One Mortgage
Corporation
Date of Pooling and Servicing Agreement
and Cut-off Date: October 1, 2004 Trustee: ▇▇▇▇▇ Fargo Bank, N.A.
First Distribution Date: November 26, Closing Date: October 14, 2004
2004
No.
Percentage Interest: 100%
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________________ is the registered owner
of 100% Percentage Interest in that certain beneficial ownership interest
evidenced by the Class R Certificate in the Trust Fund created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Asset Backed Funding Corporation (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date"), from funds in the Distribution Account in the amount required to be
distributed to the Holder of Class R Certificate on such Distribution Date
pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class R
Certificate, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing the Percentage
Interest specified on the face hereof.
The Class R Certificate is limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that transfer
is made pursuant to an effective registration statement under the 1933 Act and
effective registration or qualification under applicable state securities laws,
or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification, the Certificate Registrar shall require, in order to assure
compliance with such laws, either (i) that the Certificateholder desiring to
effect the transfer and such Certificateholder's prospective transferee each
execute a representation letter in the form described by the Agreement
certifying to the Certificate Registrar the facts surrounding the transfer, or
(ii) unless such transfer is made in reliance upon Rule 144A under the 1933 Act,
that the Depositor and the Certificate Registrar receive an Opinion of Counsel
satisfactory to them that such transfer may be made without such registration or
qualification, which Opinion of Counsel shall not be an expense of the
Depositor, the Trustee or the Certificate Registrar, in their respective
capacities as such. None of the Depositor, the Certificate Registrar or the
Trustee is obligated to register or qualify the Class of Certificates specified
on the face hereof under the 1933 Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any such Certificateholder
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee, the Depositor, the Certificate Registrar and any Master Servicer
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
No transfer of this Certificate or any interest therein may be made
to employee benefit plans and certain other retirement plans and arrangements,
including individual retirement accounts and annuities, ▇▇▇▇▇ 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 two separate REMICs or cause the imposition of a tax upon
the Trust.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
▇▇▇▇▇ 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
JT TEN - as joint tenants with right Act
of survivorship and not as
tenants in common -----------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT D-1
GROUP 1 MORTGAGE LOAN SCHEDULE
[Intentionally Omitted]
EXHIBIT D-2
GROUP 2 MORTGAGE LOAN SCHEDULE
[Intentionally Omitted]
EXHIBIT E
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: ▇▇▇▇▇ Fargo Bank, N.A.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Client Manager - ABFC, Series 2004-OPT5
Re: Pooling and Servicing Agreement dated as of October 1, 2004 among
Asset Backed Funding Corporation, as depositor, Option One Mortgage
Corporation, as master 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
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Option One Mortgage Corporation
3 Ada
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of October 1, 2004 among Asset Backed Funding
Corporation, as depositor, Option One Mortgage Corporation, as
master servicer, and ▇▇▇▇▇ Fargo Bank, N.A., as trustee, with
respect to ABFC Asset-Backed Certificates, Series 2004-OPT5
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement, the undersigned, as Trustee, hereby certifies that it has received
the documents listed in Section 2.01 of the Pooling and Servicing Agreement for
each Mortgage File pertaining to each Mortgage Loan listed on Exhibits D-1 and
D-2 to the Pooling and Servicing Agreement, subject to any exceptions noted on
Schedule I hereto and, based on an examination of such documents, the
information set forth in the Mortgage Loan Schedules that corresponds to items
(1), (2), (3), (6), (7), (8), (10) and (22) of the Mortgage Loan Schedules
accurately reflects the information in the Mortgage File.
Capitalized words and phrases used herein and not otherwise defined
herein shall have the respective meanings assigned to them in the Pooling and
Servicing Agreement. This Certificate is subject in all respects to the terms of
Section 2.02 of the Pooling and Servicing Agreement and the Pooling and
Servicing Agreement sections cross-referenced therein.
▇▇▇▇▇ FARGO BANK, N.A.
as Trustee
By:______________________________________
Name:
Title:
EXHIBIT F-2
FORM OF TRUSTEE'S FINAL CERTIFICATION
[Date]
Asset Backed Funding Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Option One Mortgage Corporation
3 Ada
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of October 1, 2004, among Asset Backed Funding
Corporation, as depositor, Option One Mortgage Corporation, as
master servicer, and ▇▇▇▇▇ Fargo Bank, N.A., as trustee, with
respect to ABFC Asset-Backed Certificates, Series 2004-OPT5
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement, the undersigned, as Trustee, hereby certifies that as to each
Mortgage Loan listed in the Mortgage Loan Schedules attached as Exhibits D-1 and
D-2 to the Pooling and Servicing Agreement (other than any Mortgage Loan paid in
full or listed on Schedule I hereto), it has received the applicable documents
listed in Section 2.01 of the Pooling and Servicing Agreement.
The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedules, other than any Mortgage Loan listed
on Schedule I hereto, it has reviewed the applicable documents listed in Section
2.01 of the Pooling and Servicing Agreement and has determined that each such
document appears to be complete and, based on an examination of such documents,
the information set forth in the Mortgage Loan Schedules is correct.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement. This
Certificate is qualified in all respects by the terms of said Pooling and
Servicing Agreement.
▇▇▇▇▇ FARGO BANK, N.A.,
as Trustee
By:______________________________________
Name:
Title:
EXHIBIT F-3
FORM OF RECEIPT OF MORTGAGE NOTE
Asset Backed Funding Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: ABFC Asset-Backed Certificates, Series 2004-OPT5
Ladies and Gentlemen:
Pursuant to Section 2.01 of the Pooling and Servicing Agreement,
dated as of October 1, 2004, among Asset Backed Funding Corporation, as
depositor, Option One Mortgage Corporation, as master servicer, and ▇▇▇▇▇ Fargo
Bank, N.A., as trustee, we hereby acknowledge the receipt of the original
Mortgage Note, or, with respect to any lost Mortgage Note, an original Lost Note
Affidavit, together with a copy of the related Mortgage Note (a copy of which is
attached hereto as Exhibit 1) with any exceptions thereto listed on Exhibit 2.
▇▇▇▇▇ FARGO BANK, N.A.,
as Trustee
By:______________________________________
Name:
Title:
EXHIBIT G
MORTGAGE LOAN PURCHASE AGREEMENT
================================================================================
ASSET BACKED FUNDING CORPORATION
as Purchaser
and
BANK OF AMERICA, N.A.
as Seller
MORTGAGE LOAN PURCHASE AGREEMENT
Fixed Rate and Adjustable Rate Mortgage Loans
ABFC Asset-Backed Certificates, Series 2004-OPT5
Dated as of October 1, 2004
================================================================================
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 Definitions....................................................2
ARTICLE II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 Sale of Mortgage Loans.........................................2
Section 2.02 Obligations of Seller Upon Sale................................2
Section 2.03 Payment of Purchase Price for the Mortgage Loans...............4
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 Seller Representations and Warranties Relating to the
Mortgage Loans.................................................4
Section 3.02 Seller Representations and Warranties..........................9
ARTICLE IV
SELLER'S COVENANTS
Section 4.01 Covenants of the Seller.......................................11
ARTICLE V
TERMINATION
Section 5.01 Termination...................................................11
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01 Amendment.....................................................11
Section 6.02 Governing Law.................................................11
Section 6.03 Notices.......................................................12
Section 6.04 Severability of Provisions....................................12
Section 6.05 Counterparts..................................................12
Section 6.06 Further Agreements............................................12
Section 6.07 Intention of the Parties......................................13
Section 6.08 Successors and Assigns; Assignment of this Agreement..........13
Section 6.09 Survival......................................................13
Schedule I - Mortgage Loan Schedule for August Mortgage Loans
Schedule II - Mortgage Loan Schedule for September Mortgage Loans
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of October 1, 2004 (the
"Agreement"), between BANK OF AMERICA, N.A. ("Bank of America" or the "Seller")
and ASSET BACKED FUNDING CORPORATION (the "Purchaser").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Flow Sale and Servicing Agreement (the
"Underlying Sale Agreement"), dated as of April 29, 2004, by and among Bank of
America, N.A., as the purchaser (the "Underlying Purchaser"), Option One
Mortgage Corporation, as company and seller (the "Company"), Option One Owner
Trust 2001-1A, Option One Owner Trust 2001-1B, Option One Owner Trust 2001-2,
Option One Owner Trust 2002-3, Option One Owner Trust 2003-4 and Option One
Owner Trust 2003-5 as sellers, and the related Memorandum of Sale, dated as of
April 17, 2004, among the Underlying Purchaser, the Company and Option One Owner
Trust 2001-1B, Option One Owner Trust 2001-2, Option One Owner Trust 2002-3,
Option One Owner Trust 2003-4 and Option One Owner Trust 2003-5 (collectively,
the "Option One Owner Trusts"), the Seller is the owner of either the notes or
other evidence of indebtedness (the "August Mortgage Notes") or other evidence
of ownership so indicated on Schedule I hereto, and the other documents or
instruments constituting the Mortgage File (collectively the "August Mortgage
Loans") and pursuant to the related Memorandum of Sale, dated as of September 2,
2004, among the Underlying Purchaser, the Company and the Option One Owner
Trusts, the Seller is the owner of either the notes or other evidence of
indebtedness (the "September Mortgage Notes" and together with the August
Mortgage Notes, the "Mortgage Notes") or other evidence of ownership so
indicated on Schedule II hereto, and the other documents or instruments
constituting the Mortgage File (collectively, the September Mortgage Loans and
together with the August Mortgage Loans, the "Mortgage Loans");
WHEREAS, the Seller, as of the date hereof, owns the mortgages (the
"Mortgages") on the properties (the "Mortgaged Properties") securing such
Mortgage Loans, including rights (a) to any property acquired by foreclosure or
deed in lieu of foreclosure or otherwise, and (b) to the proceeds of any
insurance policies covering the Mortgage Loans or the Mortgaged Properties or
the obligors on the Mortgage Loans;
WHEREAS, the parties hereto desire that the Seller sell the Mortgage
Loans to the Purchaser and the Purchaser purchase the Mortgage Loans from the
Seller pursuant to the terms of this Agreement; and
WHEREAS, pursuant to the terms of a Pooling and Servicing Agreement,
dated as of October 1, 2004 (the "Pooling and Servicing Agreement"), among the
Purchaser, as depositor, the Company, as master servicer ("Option One" or the
"Master Servicer"), and ▇▇▇▇▇ Fargo Bank, N.A., as trustee (the "Trustee"), the
Purchaser will convey the Mortgage Loans to the Trustee, on behalf of the ABFC
2004-OPT5 Trust (the "Trust"), the trust created pursuant to the Pooling and
Servicing Agreement.
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 shall have the meanings assigned thereto in the Pooling and Servicing
Agreement.
ARTICLE II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 Sale of Mortgage Loans. The Seller does hereby agree to
and does hereby sell, assign, set over, and otherwise convey to the Purchaser,
without recourse, on the Closing Date (i) all of its right, title and interest
in and to each Mortgage Loan and the related Cut-off Date Principal Balance
thereof, including any Related Documents; (ii) all payments on or collections in
respect of the Mortgage Loans due after the Cut-off Date; (iii) property which
secured such Mortgage Loan and which has been acquired by foreclosure or deed in
lieu of foreclosure; (iv) its interest in any insurance policies in respect of
the Mortgage Loans; (v) the rights of the Seller under the Consulting Agreement,
(vi) the rights of the Seller in respect of the Mortgage Loans under Sections
3.03 and 4.22 of the Underlying Sale Agreement and the sixth paragraph of
Section 3.04 of the Underlying Sale Agreement, and (vii) all proceeds of any of
the foregoing.
Section 2.02 Obligations of Seller Upon Sale. (a) In connection with
any transfer pursuant to Section 2.01 hereof, the Seller further agrees, at its
own expense, on or prior to the Closing Date, (x) to indicate in its books and
records that the Mortgage Loans have been sold to the Purchaser pursuant to this
Agreement and (y) to deliver to the Purchaser and the Trustee a computer file
containing a true and complete list of all the Mortgage Loans, specifying, among
other things, for each Mortgage Loan, as of the Cut-off Date, its account number
and Cut-off Date Principal Balance. Such file (the "Mortgage Loan Schedule")
which is set forth as Exhibits D-1 and D-2 to the Pooling and Servicing
Agreement, is hereby incorporated into and made a part of this Agreement.
In connection with such transfer and assignment of the Mortgage
Loans, the Seller shall, on behalf of the Purchaser, deliver to and deposit with
the Trustee the following documents or instruments (with respect to each
Mortgage Loan, a "Mortgage File") with respect to each Mortgage Loan so
transferred and assigned:
(i) the original Mortgage Note, endorsed in blank or with respect to
any lost Mortgage Note, a Lost Note Affidavit, together with a copy of the
related mortgage note;
(ii) the original Mortgage with evidence of recording thereon, and
the original recorded power of attorney, if the Mortgage was executed pursuant
to a power of attorney, with evidence of recording thereon or, if such Mortgage
or power of attorney has been submitted for recording but has not been returned
from the applicable public recording office, has been lost or is not otherwise
available, a copy of such Mortgage or power of attorney, as the case may be,
certified to be a true and complete copy of the original submitted for
recording;
(iii) an original Assignment of Mortgage, in form and substance
acceptable for recording. The Mortgage shall be assigned in blank;
(iv) an original copy of any intervening assignment of Mortgage
showing a complete chain of assignments;
(v) the original or a certified copy of the lender's title insurance
policy; and
(vi) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any.
If any of the documents referred to in Section 2.02(ii), (iii) or
(iv) above has as of the Closing Date been submitted for recording but either
(x) has not been returned from the applicable public recording office or (y) has
been lost or such public recording office has retained the original of such
document, the obligations of the Seller to deliver such documents shall be
deemed to be satisfied upon (1) delivery to the Trustee no later than the
Closing Date, of a copy of each such document certified by the Seller or the
Company 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. If the original lender's title
insurance policy was not delivered pursuant to Section 2.02(v) above, the Seller
shall deliver or cause to be delivered to the Trustee, a written commitment or
interim binder or preliminary report of title issued by the title insurance or
escrow company, with the original to be delivered to the Trustee, promptly upon
receipt thereof. The Seller shall deliver or cause to be delivered to the
Trustee promptly upon receipt thereof any other original documents constituting
a part of a Mortgage File received with respect to any Mortgage Loan, including,
but not limited to, any original documents evidencing an assumption or
modification of any Mortgage Loan.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Seller
shall have 120 days to cure such defect or deliver such missing document to the
Trustee or 150 days following the Closing Date, in the case of missing Mortgages
or Assignments (or within 90 days of the earlier of Seller's discovery or
receipt of notification if such defect would cause the related Mortgage Loan not
to be a "qualified mortgage" for REMIC purposes or that the 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 Mortgage Loan in
accordance with Section 2.03 of the Pooling and Servicing Agreement.
It is understood and agreed that the obligations of the Seller set
forth in this Section 2.02 to cure, repurchase or substitute for a defective
Mortgage Loan constitute the sole remedies of the Purchaser respecting a missing
or defective document.
The Purchaser hereby acknowledges its acceptance of all right, title
and interest to the Mortgage Loans and other property, now existing and
hereafter created, conveyed to it pursuant to Section 2.01.
The parties hereto intend that the transaction set forth herein be a
sale by the Seller to the Purchaser of all the Seller's right, title and
interest in and to the Mortgage Loans and other property described above. In the
event the transaction set forth herein is deemed not to be a sale, the Seller
hereby grants to the Purchaser a security interest in all of the Seller's right,
title and interest in, to and under the Mortgage Loans and other property
described above, whether now existing or hereafter created, to secure all of the
Seller's obligations hereunder; and this Agreement shall constitute a security
agreement under applicable law. The Seller and the Purchaser shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
Mortgage Loans, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of the Pooling and Servicing Agreement.
Section 2.03 Payment of Purchase Price for the Mortgage Loans. In
consideration of the sale of the Mortgage Loans from the Seller to the Purchaser
on the Closing Date, the Purchaser agrees (i) to pay to the Seller on the
Closing Date by transfer of immediately available funds, as directed by the
Seller, an amount equal to $[__________] and (ii) deliver to or at the direction
of the Seller on the Closing Date, the Class CE, Class P and Class R
Certificates, in respect of the Mortgage Loans (collectively, the "Purchase
Price"). The Seller shall pay, and be billed directly for, all reasonable
expenses incurred by the Purchaser in connection with the issuance of the
Certificates, including, without limitation, printing fees incurred in
connection with the prospectus relating to the Certificates, blue sky
registration fees and expenses, fees and reasonable expenses of Purchaser's
counsel, fees of the rating agencies requested to rate the Certificates,
accountant's fees and expenses and the fees and expenses of the Trustee and
other out-of-pocket costs, if any.
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 Seller Representations and Warranties Relating to the
Mortgage Loans
The representations and warranties in the Underlying Sale Agreement
were made as of August 17, 2004 with respect to the August Mortgage Loans and as
of September 2, 2004 with respect to the September Mortgage Loans.
The Seller's right, title and interest in such representations and
warranties and the remedies in connection therewith have been assigned to the
Purchaser pursuant to Section 2.01 of this 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 Company under the Underlying Sale
Agreement and (ii) a representation or warranty of the Seller under this
Agreement (other than Section 3.01(k) and 3.01(t) below), the only right or
remedy of the Purchaser shall be the right to enforce the obligations of the
Company under any applicable representation or warranty made by it. The
Purchaser acknowledges and agrees that the representations and warranties of the
Seller in this Section 3.01 are applicable only to facts, conditions or events
that do not constitute a breach of any representation or warranty made by the
Company in the Underlying Sale Agreement. 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 (other than the representations made in
Section 3.01(k) below) if the fact, condition or event constituting such breach
also constitutes a breach of a representation or warranty made by the Company in
the Underlying Sale Agreement, without regard to whether the Company fulfills
its contractual obligations in respect of such representation or warranty. If,
however, the Originator fails to reimburse the Trustee for any costs or damages
incurred by the Trust in connection with a breach of the Originator's
representation set forth in Section 3.03(i) or 3.03(ddd) of the Underlying Sale
Agreement (such amount, the "Reimbursement Amount"), the Seller shall pay the
Reimbursement Amount to the Trust. The Reimbursement Amount shall be delivered
to the Master Servicer for deposit into the Collection Account within 10 days
from the date the Seller was notified by the Trustee of the amount of such costs
and damages. Subject to the foregoing, the Seller represents and warrants upon
delivery of the Mortgage Loans to the Purchaser hereunder, as to each, that:
(a) The information set forth with respect to the Mortgage Loans on
the Mortgage Loan Schedules attached hereto as Schedule I and Schedule II
provides an accurate listing of the Mortgage Loans, and the information with
respect to each Mortgage Loan on the Mortgage Loan Schedule is true and correct
in all material respects at the date or dates respecting which such information
is given;
(b) No Mortgage Loan was 30 days or more contractually delinquent as
of the Cut-off Date. The Seller has not waived any default, breach, violation or
event of acceleration, and the Seller has not taken any action to waive any
default, breach, violation or event of acceleration, with respect to any
Mortgage Loan;
(c) There are no delinquent taxes, assessments that could become a
lien prior to the related Mortgage or insurance premiums affecting the related
Mortgaged Property;
(d) Each Mortgage has not been satisfied, canceled, subordinated or
rescinded, in whole or in part, and the related Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part, nor has any
instrument been executed that would effect any such satisfaction, cancellation,
subordination, recission or release;
(e) Other than any Mortgage Loan that is less than 30 days
contractually delinquent as of the Cut-off Date, there is no material default,
breach, violation or event of acceleration existing under any Mortgage or the
related Mortgage Note and no event which, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute a
material default, breach, violation or event of acceleration, and neither the
Seller nor its predecessors have waived any material default, breach, violation
or event of acceleration;
(f) Each Mortgaged Property is free of material damage that would
affect adversely the value of the Mortgaged Property as security for the
Mortgage Loan or the use for which the premises were intended;
(g) To the best of the Seller's knowledge, there is no proceeding
pending for the total or partial condemnation of the Mortgaged Property;
(h) Each Mortgaged Property is lawfully occupied under applicable
law; all inspections, licenses and certificates required to be made or issued
with respect to all occupied portions of each Mortgaged Property and, with
respect to the use and occupancy of the same, including but not limited to
certificates of occupancy, have been made or obtained from the appropriate
authorities, except where the failure would not have a material adverse effect
upon the Mortgage Loan;
(i) No Mortgage Loan is in foreclosure;
(j) Each Mortgage Loan is a "qualified mortgage" within the meaning
of Section 860G of the Code and Treas. Reg ss. 1.860G-2;
(k) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth in lending, real estate settlement
procedures, consumer credit protections, all applicable predatory and abusive
lending laws, equal credit opportunity or disclosure laws applicable to the
origination of each Mortgage Loan have been complied with;
(l) No Mortgage Loan is a "high cost" loan as defined under any
federal, state or local law applicable to such Mortgage Loan at the time of its
origination;
(m) The Seller is the sole owner of record and holder of the
Mortgage Loan and the Mortgage Note and the Mortgage are not assigned or
pledged, and the Seller has good and marketable title thereto and has full right
and authority to transfer and sell the Mortgage Loan to the Purchaser. The
Seller is transferring the Mortgage Loan free and clear of any and all
encumbrances, liens, pledges, equities, participation interests, claims,
agreements with other parties to sell or otherwise transfer the Mortgage Loan,
mechanics' or similar liens or claims which have been filed for work, labor or
material (and no rights are outstanding that under the law could give rise to
such liens), charges or security interests of any nature encumbering such
Mortgage Loan;
(n) The terms of the Mortgage Note and Mortgage have not been
impaired, waived, altered or modified in any respect, except by a written
instrument which has been recorded, if necessary, to protect the interests of
the Purchaser and maintain the lien priority of the Mortgage and which has been
delivered to the Purchaser or its designee. The substance of any such waiver,
alteration or modification has been approved by the title insurer, to the extent
required by the policy, and its terms are reflected on the Mortgage Loan
Schedule. No instrument of waiver, alteration or modification has been executed,
and no Mortgagor has been released, in whole or in part, except in connection
with an assumption agreement approved by the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
File delivered to the Purchaser or its designee and the terms of which are
reflected on the related Mortgage Loan Schedule;
(o) The Seller has not dealt with any broker, investment banker,
agent or other Person (other than the Company and the Underwriters) who may be
entitled to any commission or compensation in connection with the sale of the
Mortgage Loans;
(p) The Mortgage is a valid, subsisting enforceable and perfected
first or second lien and first priority security interest on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(i) the lien of current real property taxes and assessments not yet
due and payable;
(ii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy delivered
to the originator of the Mortgage Loan and (i) referred to or to otherwise
considered in the appraisal made for the originator of the Mortgage Loan
or (ii) which do not adversely affect the appraised value of the Mortgaged
Property set forth in such appraisal;
(iii) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security
intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property; and
(iv) with respect to each second lien Mortgage a prior mortgage lien
on the Mortgaged Property;
(q) The Mortgage Loan is covered by (a) an attorney's opinion of
title and abstract of title the form and substance of which is acceptable to
▇▇▇▇▇▇ ▇▇▇, (b) an ALTA lender's title insurance policy or (c) a CLTA lender's
title insurance policy or (d) another generally acceptable form of policy of
insurance issued by a title insurer qualified to do business in the jurisdiction
where the Mortgaged Property is located insuring the Company, its successors and
assigns, as to the first or second priority lien of the Mortgage in the original
principal amount of the Mortgage Loan subject only to the exceptions contained
in clauses (i), (ii) and (iii), and with respect to each second lien Mortgage
Loan clause (iv), of paragraph (p) of this Section 3.01, and against any loss by
reason of the invalidity of unenforceability of the lien resulting from the
provisions of the Mortgage providing for adjustment in the Mortgage Interest
Rate and Monthly Payment. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. Where required by state law or
regulation, the Mortgagor has been given the opportunity to choose the carrier
of such lender's title insurance policy. The Company, its successors and
assigns, are the sole insureds of such lender's title insurance policy, and such
lender's title insurance policy is valid and remains in full force and effect
and will be in full force and effect upon the sale of the Mortgage Loan to the
Purchaser. No claims have been made under such lender's title insurance policy,
and no prior holder of the Mortgage, including the Company or the Seller, has
done anything which would impair the coverage of such lender's title insurance
policy. In connection with the issuance of such lender's title insurance policy,
no unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Company or the Seller;
(r) Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan establishes and
creates a valid, subsisting and enforceable (A) first lien and first priority
security interest with respect to each first lien Mortgage Loan, or (B) second
lien and second priority security interest with respect to each second lien
Mortgage Loan, in either case, on the property described therein and the Company
has full right to sell and assign the same to the Purchaser. The Mortgaged
Property was not, as of the date of origination of the Mortgage Loan, subject to
a mortgage, deed of trust, deed to secure debt or other security instrument
creating a lien subordinate to the lien of the Mortgage;
(s) With respect to the Mortgage Loans listed on Exhibit D-1 to the
Pooling and Servicing Agreement only, and except in the case of a Mortgage Loan
with a Principal Balance at origination of less than $60,000 which would have
resulted in an unprofitable origination, no Mortgagor was charged "points and
fees" (whether or not financed) in an amount greater than 5% of the principal
amount of such loan, such 5% limitation is calculated in accordance with ▇▇▇▇▇▇
Mae's anti-predatory lending requirements as set forth in the ▇▇▇▇▇▇ Mae Selling
Guide; and
(t) No Mortgage Loan (other than a Mortgage Loan that would be
subject to the provisions of the Oakland, California or Los Angeles, California
predatory and abusive lending laws or a Mortgage Loan that is a New Jersey
covered purchase loan) is a High Cost Loan or Covered Loan, as applicable (as
such terms are defined in the then current Standard & Poor's, a division of the
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.'s LEVELS (R) Glossary which is now Version 5.6
Revised, Appendix E) and no Mortgage Loan originated on or after October 1, 2002
through March 6, 2003 is governed by the Georgia Fair Lending Act.
With respect to the representations and warranties set forth in this
Section 3.01 that are made to the best of the Seller's knowledge or as to which
the Seller has no knowledge, if it is discovered by the Purchaser, the Master
Servicer or the Trustee that the substance of such representation and warranty
is inaccurate and such inaccuracy materially and adversely affects the value of
the related Mortgage Loan, Prepayment Charge or the interest therein of the
Purchaser or the Purchaser's assignee, transferee or designee then,
notwithstanding the Seller's lack of knowledge with respect to the substance of
such representation and warranty being inaccurate at the time the representation
or warranty was made, such inaccuracy shall be deemed a breach of the applicable
representation or warranty.
Upon discovery by the Seller, the Master Servicer, the Purchaser or
any assignee, transferee or designee of the Purchaser of a breach of any of the
representations and warranties contained in this Article III that materially and
adversely affects the value of any Mortgage Loan or the interest therein of the
Purchaser or the Purchaser's assignee, transferee or designee, the party
discovering the breach shall give prompt written notice to the others. Subject
to the first paragraph of this Section 3.01, within 90 days of the earlier of
its discovery or its receipt of notice of any such breach of a representation or
warranty, the Seller shall promptly cure such breach in all material respects,
or in the event such breach cannot be cured, the Seller shall repurchase the
affected Mortgage Loan or cause the removal of such Mortgage Loan from the Trust
Fund and substitute for it one or more Eligible Substitute Mortgage Loans, in
either case, in accordance with Section 2.03 of the Pooling and Servicing
Agreement.
It is understood and agreed that the representations and warranties
set forth in this Section 3.01 shall survive delivery of the respective Mortgage
Files to the Trustee on behalf of the Purchaser 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 Seller set
forth in this Section 3.01 to cure, repurchase or substitute for a Mortgage Loan
as a result of a breach of a representation or warranty, subject to the
limitation contained in the first paragraph of this Section 3.01, and to pay the
Reimbursement Amount constitute the sole remedies of the Purchaser respecting a
breach of the representations or warranties contained in this Section 3.01.
Section 3.02 Seller Representations and Warranties. The Seller
hereby represents and warrants to the Purchaser that as of the Closing Date or
as of such date specifically provided herein:
(a) The Seller is duly organized, validly existing and in good
standing as a national banking association and has the power and authority to
own its assets and to transact the business in which it is currently engaged.
The Seller is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in which the
failure to so qualify would have a material adverse effect on (i) its business,
properties, assets or condition (financial or other), (ii) the performance of
its obligations under this Agreement, (iii) the value or marketability of the
Mortgage Loans, or (iv) its ability to foreclose on the related Mortgaged
Properties.
(b) The Seller has the power and authority to make, execute, deliver
and perform this Agreement and to consummate all of the transactions
contemplated hereunder and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement. When executed and
delivered, this Agreement will constitute the Seller's legal, valid and binding
obligation enforceable in accordance with its terms, except as enforcement of
such terms may be limited by (i) bankruptcy, insolvency, reorganization,
receivership, moratorium or similar laws affecting the enforcement of creditors'
rights generally or creditors of national banks and by the availability of
equitable remedies, (ii) general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law) or (iii) public
policy considerations underlying the securities laws, to the extent that such
policy considerations limit the enforceability of the provisions of this
Agreement which purport to provide indemnification from securities laws
liabilities.
(c) The Seller holds all necessary licenses, certificates and
permits from all governmental authorities necessary for conducting its business
as it is presently conducted, except for such licenses, certificates and permits
the absence of which, individually or in the aggregate, would not have a
material adverse effect on the ability of the Seller to conduct its business as
it is presently conducted. It is not required to obtain the consent of any other
party or any consent, license, approval or authorization from, or registration
or declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement, except for such consents, licenses, approvals or authorizations, or
registrations or declarations as shall have been obtained or filed, as the case
may be, prior to the Closing Date.
(d) The execution and delivery of this Agreement and the
consummation of the transactions contemplated herein (i) will not conflict with
or constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Seller pursuant to any material contract, indenture, mortgage, loan agreement,
note, lease or other instrument, agreement or document to which the Seller is a
party or by which it may be bound or to which any of the property or assets of
the Seller is subject, (ii) will not result in any violation of the provisions
of the charter or by-laws of the Seller, or any law, administrative regulation
or administrative or court decree applicable to the Seller and (iii) will not
require any filing or registration with or notice to or consent, approval,
authorization or order of any court or governmental authority or agency.
(e) The transactions contemplated by this Agreement are in the
ordinary course of the Seller's business.
(f) The Seller is not insolvent, nor will the Seller be made
insolvent by the transfer of the Mortgage Loans, nor is the Seller aware of any
pending insolvency.
(g) The Seller is not in violation of, and the execution and
delivery of this Agreement by it and its performance and compliance with the
terms of this Agreement will not constitute a violation with respect to any
order or decree of any court, or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction, which violation would
materially and adversely affect the Seller's condition (financial or otherwise)
or operations or any of the Seller's properties, or materially and adversely
affect the performance of any of its duties hereunder.
(h) There are no actions or proceedings against, or investigations
of, the Seller pending or, to its knowledge, threatened, before any court,
administrative agency or other tribunal (i) that, if determined adversely, would
prohibit the Seller from entering into this Agreement, (ii) seeking to prevent
the consummation of any of the transactions contemplated by this Agreement or
(iii) that, if determined adversely, would prohibit or materially and adversely
affect the Seller's performance of any of its respective obligations under, or
the validity or enforceability of, this Agreement.
(i) The Seller is not transferring the Mortgage Loans to the
Purchaser hereunder with any intent to hinder, delay or defraud any of its
creditors.
(j) The Seller acquired title to the Mortgage Loans in good faith,
without notice of any adverse claims.
(k) The transfer, assignment and conveyance of the Mortgage Notes
and the Mortgages by the Seller pursuant to this Agreement are not subject to
the bulk transfer laws or any similar statutory provisions in effect in any
applicable jurisdiction.
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, assume or suffer to
exist any lien on any Mortgage Loan, or any interest therein; the Seller will
notify the Trustee, as assignee of the Purchaser, of the existence of any lien
on any Mortgage Loan immediately upon discovery thereof, and the Seller will
defend the right, title and interest of the Trust, as assignee of the Purchaser,
in, to and under the Mortgage Loans, against all claims of third parties
claiming through or under the Seller; provided, however, that nothing in this
Section 4.01 shall prevent or be deemed to prohibit the Seller from suffering to
exist upon any of the Mortgage Loans any liens for municipal or other local
taxes and other governmental charges if such taxes or governmental charges shall
not at the time be due and payable or if the Seller shall currently be
contesting the validity thereof in good faith by appropriate proceedings and
shall have set aside on its books adequate reserves with respect thereto.
ARTICLE V
TERMINATION
Section 5.01 Termination. The respective obligations and
responsibilities of the Seller and the Purchaser created hereby shall terminate
upon the termination of the Trust as provided in Article X of the Pooling and
Servicing Agreement.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01 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 6.02 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 6.03 Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, postage prepaid, addressed
as follows:
if to the Seller:
Bank of America, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
or such other address as may hereafter be furnished to the Purchaser in
writing by the Seller.
if to the Purchaser:
Asset Backed Funding Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
or such other address as may hereafter be furnished to the Seller in writing
by the Purchaser.
Section 6.04 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
Section 6.05 Counterparts. This Agreement may be executed in one or
more counterparts by the different parties hereto on separate counterparts, each
of which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.
Section 6.06 Further Agreements. The Purchaser and the Seller each
agree to execute and deliver to the other such additional documents, instruments
or agreements as may be necessary or reasonable and appropriate to effectuate
the purposes of this Agreement or in connection with the issuance of any Series
of Certificates representing interests in the Mortgage Loans.
Without limiting the generality of the foregoing, as a further
inducement for the Purchaser to purchase the Mortgage Loans from the Seller, the
Seller will cooperate with the Purchaser in connection with the sale of any of
the securities representing interests in the Mortgage Loans. In that connection,
the Seller will provide to the Purchaser any and all information and appropriate
verification of information, whether through letters of its auditors and counsel
or otherwise, as the Purchaser shall reasonably request and will provide to the
Purchaser such additional representations and warranties, covenants, opinions of
counsel, letters from auditors, and certificates of public officials or officers
of the Seller as are reasonably required in connection with such transactions
and the offering of investment grade securities rated by the Rating Agencies.
Section 6.07 Intention of the Parties. It is the intention of the
parties that the Purchaser is purchasing, and the Seller is selling, the
Mortgage Loans rather than the pledging of the Mortgage Loans by the Seller to
secure a loan by the Purchaser to the Seller. Accordingly, the parties hereto
each intend to treat the transaction for Federal income tax purposes and all
other purposes as a sale by the Seller and a purchase by the Purchaser of the
Mortgage Loans. The Purchaser will have the right to review the Mortgage Loans
and the related Mortgage Files to determine the characteristics of the Mortgage
Loans which will affect the Federal income tax consequences of owning the
Mortgage Loans and the Seller will cooperate with all reasonable requests made
by the Purchaser in the course of such review.
Section 6.08 Successors and Assigns; Assignment of this Agreement.
This Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, the Purchaser and the Trustee. The obligations of the Seller under this
Agreement cannot be assigned or delegated to a third party without the consent
of the Purchaser and which consent shall be at the Purchaser's sole discretion,
except that the Purchaser acknowledges and agrees that the Seller may assign its
obligations hereunder to any Person into which the Seller is merged or any
corporation resulting from any merger, conversion or consolidation to which the
Seller is a party or any Person succeeding to the business of the Seller. The
parties hereto acknowledge that the Purchaser is acquiring the Mortgage Loans
for the purpose of contributing them to a trust that will issue a series of
certificates representing undivided interests in such Mortgage Loans. As an
inducement to the Purchaser to purchase the Mortgage Loans, the Seller
acknowledges and consents to the assignment by the Purchaser to the Trustee of
all of the Purchaser's rights against the Seller pursuant to this Agreement
insofar as such rights relate to Mortgage Loans transferred to the Trustee and
to the enforcement or exercise of any right or remedy against the Seller
pursuant to this Agreement by the Trustee. Such enforcement of a right or remedy
by the Trustee shall have the same force and effect as if the right or remedy
had been enforced or exercised by the Purchaser directly.
Section 6.09 Survival. The representations and warranties set forth
in Sections 3.01 and 3.02 hereof shall survive the purchase of the Mortgage
Loans hereunder.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed to this Mortgage Loan Purchase Agreement by their respective
officers thereunto duly authorized as of the day and year first above written.
ASSET BACKED FUNDING CORPORATION,
as Purchaser
By: ___________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
BANK OF AMERICA, N.A.
as Seller
By: ___________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
STATE OF NORTH CAROLINA )
) ss.:
COUNTY OF MECKLENBURG )
On the 14th day of October, 2004 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, the corporation that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
------------------------
Notary Public
STATE OF NORTH CAROLINA )
) ss.:
COUNTY OF MECKLENBURG )
On the 14th day of October, 2004 before me, a Notary Public in and
for said State, personally appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, known to me to be a
Managing Director of Bank of America, N.A., the company 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
SCHEDULE I
MORTGAGE LOAN SCHEDULE FOR AUGUST MORTGAGE LOANS
------------------------------------------------
[Intentionally Omitted]
SCHEDULE II
MORTGAGE LOAN SCHEDULE FOR SEPTEMBER MORTGAGE LOANS
---------------------------------------------------
[Intentionally Omitted]
EXHIBIT H
FORM OF LOST NOTE AFFIDAVIT
Personally appeared before me the undersigned authority to
administer oaths, ______________________ who first being duly sworn deposes and
says: Deponent is ______________________ of ______________________________,
successor by merger to _________________________________________ ("Seller") and
who has personal knowledge of the facts set out in this affidavit.
On ___________________, _________________________ did execute and
deliver a promissory note in the principal amount of $__________.
That said note has been misplaced or lost through causes unknown and
is presently lost and unavailable after diligent search has been made. Seller's
records show that an amount of principal and interest on said note is still
presently outstanding, due, and unpaid, and Seller is still owner and holder in
due course of said lost note.
Seller executes this Affidavit for the purpose of inducing ▇▇▇▇▇
Fargo Bank, N.A., as trustee on behalf of ABFC Asset-Backed Certificates, Series
2004-OPT5, 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
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇
Attn: Client Manager - ABFC, Series 2004-OPT5
Asset Backed Funding Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: ABFC Asset-Backed Certificates, Series 2004-OPT5
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
master 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 CE and Class
P Certificates) is an insurance company which is purchasing such Certificates
with funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60") and that the purchase and holding of such Certificates are covered under
Sections I and III of PTCE 95-60 or (y) (except in the case of the Class R
Certificate) shall deliver to the Certificate Registrar and the Depositor an
opinion of counsel (a "Benefit Plan Opinion") satisfactory to the Certificate
Registrar, and upon which the Certificate Registrar and the Depositor shall be
entitled to rely, to the effect that the purchase or holding of such Certificate
by the Transferee will not 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
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank, N.A.
Sixth and Marquette
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇
Attn: Client Manager - ABFC, Series 2004-OPT5
Ladies and Gentlemen:
In connection with our acquisition of the ABFC Asset-Backed
Certificates, Series 2004-OPT5 (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
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank, N.A.
Sixth and Marquette
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇
Attn: Client Manager - ABFC, Series 2004-OPT5
Re: ABFC Asset-Backed Certificates, Series 2004-OPT5
Ladies and Gentlemen:
In connection with our acquisition of the ABFC Asset-Backed
Certificates, Series 2004-OPT5 (the "Certificates"), we certify that (a) we
understand that the Certificates are not being registered under the Securities
Act of 1933, as amended (the "Act"), or any state securities laws and are being
transferred to us in a transaction that is exempt from the registration
requirements of the Act and any such laws, (b) we have had the opportunity to
ask questions of and receive answers from the Depositor concerning the purchase
of the Certificates and all matters relating thereto or any additional
information deemed necessary to our decision to purchase the Certificates, (c)
we have not, nor has anyone acting on our behalf offered, transferred, pledged,
sold or otherwise disposed of the Certificates, any interest in the Certificates
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Certificates, any interest in the
Certificates or any other similar security from, or otherwise approached or
negotiated with respect to the Certificates, any interest in the Certificates or
any other similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Certificates under
the Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, (d) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being
made in reliance on Rule 144A. We are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act.
Very truly yours,
[NAME OF TRANSFEREE]
By:______________________________________
Authorized Officer
ANNEX 1 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
i. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
ii. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $____________(1) in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts
or similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code of 1986,
as amended.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking
and is supervised by the State or territorial banking commission or
similar official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements, a copy of which is
attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised
and examined by a State or Federal authority having supervision over
any such institutions or is a foreign savings and loan association
or equivalent institution and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
___ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State, territory
or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of
1974.
___ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.
___ Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940.
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:____________________________________
--------
(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.
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 2004-OPT5
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is [an officer of] ____________________, the
proposed Transferee of an Ownership Interest in the Class R Certificates (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, (the
"Agreement"), relating to the above-referenced Certificates, among Asset Backed
Funding Corporation, as depositor, Option One Mortgage Corporation, as master
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
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of the Transferee
or any other person.
12. That, if the Transferee is purchasing the Class R Certificate in
a transfer intended to meet the safe harbor provisions of Treasury Regulations
Sections 1.860E-1(c), the Transferee has executed and attached Attachment A
hereto.
13. The Transferee is not an employee benefit plan that is subject
to ERISA or a plan that is subject to Section 4975 of the Code or a plan or
arrangement subject to any materially similar provisions of applicable federal,
state or local law, nor are we acting on behalf of such a plan.
IN WITNESS WHEREOF, the Transferee has caused this instrument to
be executed on its behalf, pursuant to authority of its Board of Directors,
by its duly authorized officer, 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 Certificate
equals or exceeds the excess of (a) the present value of the anticipated tax
liabilities over (b) the present value of the anticipated savings associated
with holding such Certificate, in each case calculated in accordance with U.S.
Treasury Regulations Sections 1.860E-1(c)(7) and (8), computing present values
using a discount rate equal to the short-term Federal rate prescribed by Section
1274(d) of the Code and the compounding period used by the Transferee.
OR
[ ] The transfer of the Class R Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly:
(i) the Transferee is an "eligible corporation," as defined in U.S.
Treasury Regulations Section 1.860E-1(c)(6)(i), as to which income from
Class R Certificate will only be taxed in the United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the transfer, the
Transferee had gross assets for financial reporting purposes (excluding
any obligation of a person related to the Transferee within the meaning of
U.S. Treasury Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100
million and net assets in excess of $10 million;
(iii) the Transferee will transfer the Class R Certificate only to
another "eligible corporation," as defined in U.S. Treasury Regulations
Section 1.860E-1(c)(6)(i), in a transaction that satisfies the
requirements of Sections 1.860E-1(c)(4)(i), (ii) and (iii) and Section
1.860E-1(c)(5) of the U.S. Treasury Regulations;
(iv) the Transferee has determined the consideration paid to it to
acquire the Class R Certificate based on reasonable market assumptions
(including, but not limited to, borrowing and investment rates, prepayment
and loss assumptions, expense and reinvestment assumptions, tax rates and
other factors specific to the Transferee) that it has determined in good
faith; and
(v) in the event of any transfer of the Class R Certificate by the
Transferee, the Transferee will require its transferee to complete a
representation in the form of this Attachment A as a condition of the
transferee's purchase of the Class R Certificate.
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE
[DATE]
▇▇▇▇▇ Fargo Bank, N.A.
Sixth and Marquette
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇
Attn: Client Manager - ABFC, Series 2004-OPT5
Asset Backed Funding Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: ABFC Asset-Backed Certificates, Series 2004-OPT5
Ladies and Gentlemen:
In connection with our disposition of the ABFC Asset-Backed
Certificates, Series 2004-OPT5 (the "Certificates"), we certify that (a) we
understand that the Certificates have not been registered under the Securities
Act of 1933, as amended (the "Act"), and are being disposed by us in a
transaction that is exempt from the registration requirements of the Act, (b) we
have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act, (c) to
the extent we are disposing of the Class R Certificate, we have no knowledge the
Transferee is not a Permitted Transferee and (d) no purpose of the proposed
disposition of the Class R Certificate is to impede the assessment or collection
of tax.
Very truly yours,
[_____________________]
By: ______________________________
EXHIBIT M
MONTHLY INFORMATION DELIVERED BY MASTER SERVICER
1. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the number and Principal Balances of all Mortgage
Loans which were the subject of Principal Prepayments during the related
Prepayment Period.
2. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the amount of all curtailments which were received
during the related Prepayment Period.
3. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the aggregate amount of the principal portion of
all Monthly Payments received during the related Collection Period.
4. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the amount of interest received on the Mortgage
Loans during the related Collection Period.
5. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the aggregate amount of the Advances made and
recovered with respect to such Distribution Date.
6. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the aggregate amount of the Servicing Advances
made and recovered with respect to such Distribution Date.
7. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the delinquency and foreclosure information and
the amount of Mortgage Loan Losses during the related Collection Period.
8. The information contained in the Liquidation Report for the related
Collection Period.
9. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the weighted average maturity, the weighted
average Mortgage Interest Rate and the weighted average Net Mortgage
Interest Rate as of the last day of the Collection Period preceding of the
related Interest Accrual Period.
10. The Servicing Fees paid and Servicing Fees accrued during the related
Collection Period.
11. The Trustee Fees paid and Trustee Fees accrued during the related
Collection Period.
12. The Credit Risk Manager Fees paid and Credit Risk Manager Fees accrued
during the related Collection Period.
13. The amount of all payments or reimbursements to the Master Servicer paid
or to be paid since the prior Distribution Date (or in the case of the
first Distribution Date, since the Closing Date).
14. The Pool Balance, the aggregate Principal Balance of the Group 1
Mortgage Loan and the aggregate Principal Balance of the Group 2
Mortgage Loans.
15. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the number of Mortgage Loans outstanding at the
beginning and at the end of the related Collection Period.
16. The aggregate interest accrued on the Mortgage Loans, the Group 1 Mortgage
Loans and the Group 2 Mortgage Loans, at their respective Mortgage
Interest Rates for the related Collection Period.
17. The amount deposited in the Collection Account which may not be withdrawn
therefrom pursuant to an Order of a United States Bankruptcy Court of
competent jurisdiction imposing a stay pursuant to Section 362 of U.S.
Bankruptcy Code.
18. The aggregate Realized Losses in the Mortgage Pool, in the Group 1
Mortgage Loans and in the Group 2 Mortgage Loans since the Cut-off Date as
of the end of the related Collection Period.
19. The amount of Prepayment Charges received, the amount of Originator
Prepayment Charge Payment Amounts paid, the amount of Servicer Prepayment
Charge Payment Amounts paid, and the reason for any Prepayment Charges
waived without a corresponding Servicer Prepayment Charge Payment Amount,
all for the related Collection Period.
20. The amount of Yield Maintenance Agreement Payments received with respect
to such Distribution Date.
21. The amount of any claims made, and any claims rejected, under the Mortgage
Insurance Policy during the related Collection Period.
EXHIBIT N
Form of Yield Maintenance Agreements
WestLB AG, New York
Global Financial Markets
TRANSACTION
To: ▇▇▇▇▇ Fargo Bank, N.A.,
not in its individual capacity but solely as trustee
for ABFC 2004-OPT5 Trust
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: ▇-▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇-▇▇▇-▇▇▇-▇▇▇▇
Our Reference: 381540N / Class M Certificates
The purpose of this letter agreement is to confirm the terms and conditions of
the Transaction entered into between ▇▇▇▇▇ Fargo Bank, N.A., not in its
individual capacity but solely as trustee for ABFC 2004-OPT5 Trust and WestLB
AG, New York Branch (each a "party" and, together, "the parties") on the Trade
Date specified below (the "Transaction"). This letter agreement constitutes a
"Confirmation" as referred to in the ISDA Form defined below.
The definitions and provisions contained in the 2000 ISDA Definitions (as
published by the International Swaps and Derivatives Association, Inc. ("ISDA"))
(the "Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between those definitions and provisions and this Confirmation,
this Confirmation will govern.
1. This Confirmation evidences a complete and binding agreement between you
and us as to the terms and conditions of the Transaction to which this
Confirmation relates and will constitute a Confirmation subject to the terms and
conditions of the 1992 Master Agreement (Multicurrency - Cross Border) in the
form published by ISDA, as if the parties had executed an agreement in such
form, except as expressly modified herein (the "ISDA Form") but without any
Schedule except for the election of (i) the laws of the State of New York
(without reference to choice of law doctrine) as the governing law (ii) USD as
the Termination Currency and (iii) the items specified in sections 3 through 21
below.
Each party will make each payment specified in this Confirmation as being
payable by it, not later than the due date for value on that date in the place
of the account specified below, in freely transferable funds and in the manner
customary for payments in the required currency. If on any date amounts would
otherwise be payable in the same currency by each party to the other, then, on
such date, each party's obligation to make payment of any such amount will be
automatically satisfied and discharged and, if the aggregate amount that would
otherwise have been payable by one party exceeds the aggregate amount that would
otherwise have been payable by the other party, replaced by an obligation upon
the party by whom the larger aggregate amount would have been payable to pay to
the other party the excess of the larger aggregate amount over the smaller
aggregate amount.
This Confirmation will be governed by and construed in accordance with the
laws of the State of New York without reference to choice of law doctrine. Each
party irrevocably agrees that the courts of the State of New York located in the
Borough of Manhattan and the United States District Court for the Southern
District of New York shall have jurisdiction to hear and determine any suit,
action or proceeding, and to settle any disputes, which may arise out of or in
connection with this Confirmation and for such purposes hereby irrevocably
submits to the jurisdiction of such courts. Each party waives any objection
which it may have now or in the future to the laying of venue of any suit,
action or proceeding in the above courts and agrees not to claim that either
court is an inconvenient forum. Additionally to the fullest extent permitted by
applicable law, each party waives its respective right to jury trial with
respect to any suit, action or proceeding arising under, or in connection with,
this Confirmation.
In this Confirmation "Party A" means WestLB AG, New York Branch and "Party B"
means ▇▇▇▇▇ Fargo Bank, N.A., not in its individual capacity but solely as
trustee for ABFC 2004-OPT5 Trust.
2. The particular Transaction to which this Confirmation relates is a Rate Cap,
the terms of which are as follows:
Notional Amount: As detailed in Schedule A attached
hereto for each Calculation Period.
Trade Date: October 12, 2004
Effective Date: October 14, 2004
Termination Date: January 25, 2012, subject to Adjustment
in accordance with the Following
Business Day Convention
Fixed Amounts:
Fixed Rate Payer : Party B
Fixed Amount : USD 313,000.00, paid by Party B to
(Premium) Party A on the Fixed Rate Payer
Payment Date, subject to Adjustment in
accordance with the Following Business
Day Convention.
Fixed Rate Payer Payment Date: October 14, 2004
Floating Amounts:
Floating Rate Payer: Party A
Cap Rate: As detailed in Schedule A attached
hereto for each Calculation Period.
Floating Rate Payer Period End The 25th day of each month of each year
Dates: commencing November 25, 2004, through
and including the Termination Date,
subject to adjustment in accordance
with the Following Business Day
Convention
Floating Rate Payer Payment Amount: To be determined in accordance with the
following formula:
Greater of (i) Scale Factor (as set
forth in Schedule A attached hereto)*
(Floating Rate Option - Cap Rate) *
Notional Amount * Floating Rate Day
Count Fraction, and (ii) zero
Floating Rate Payer Payment Dates: Two Business Days preceding each
Floating Rate Payer Period End Date
Floating Rate for initial 1.90379%
Calculation Period:
Floating Rate Option: USD-LIBOR-BBA, provided however, that
if the Floating Rate Option is greater
than the rate detailed in Schedule A
under the heading `Cap Ceiling' then
the Floating Rate Option shall be
deemed to be the rate detailed in
Schedule A under the heading `Cap
Ceiling' for such Calculation Period
Designated Maturity: 1 month, except for the first period
which shall be the linear
interpolation between 1 month and 2
month
Spread: None
Floating Rate Day Count Fraction: Act/360
Reset Dates: The first day of each Floating Rate
Payer Calculation Period.
Rate Cut-off Dates: Inapplicable
Method of Averaging: Inapplicable
Compounding: Inapplicable
Compounding Dates: Inapplicable
Business Days for Payment: New York
Calculation Agent: Party A
3. Credit Support Documents:
Party A Credit Support Documents: Inapplicable
Party B Credit Support Documents: Inapplicable
4. Account Details:
Payments to Party A: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank, NY
ABA#: ▇▇▇▇▇▇▇▇▇
Acct.#: ▇▇▇-▇-▇▇▇▇▇▇
Acct. Name: WestLB-NY Derivatives
Ref: 381540N
Swift Code: ▇▇▇▇▇▇▇▇▇▇▇
Payments to Party B: ▇▇▇▇▇ Fargo Bank, N.A.
ABA#: ▇▇▇-▇▇▇-▇▇▇
Acct. Number: ▇▇▇▇▇▇▇▇▇▇
Acct. Name: Corporate Trust Clearing
For Further Credit: 17119503, ABFC
2004-OPT5
Class M Reserve Account
5. Offices:
The Office of Party A for the Transaction is New York.
The Office of Party B for the Transaction is Columbia, Maryland.
6. Tax Representations:
Payer Representations. For the purpose of Section 3(e) of this Agreement,
Party A makes the following representations:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of the
ISDA Form) to be made by it to the other party under this Agreement. In
making this representation, it may rely on (i) the accuracy of any
representations made by the other party pursuant to Section 3(f) of the
ISDA Form, (ii) the satisfaction of the agreement contained in Section
4(a)(i) or 4(a)(iii) of the ISDA Form and the accuracy and effectiveness
of any document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of the ISDA Form and (iii) the satisfaction of the agreement of
the other party contained in Section 4(d) of the ISDA Form, provided that
it shall not be a breach of this representation where reliance is placed
on clause (ii) and the other party does not deliver a form or document
under Section 4(a)(iii) by reason of material prejudice of its legal or
commercial position.
Payee Representations. For the purpose of Section 3 (f) of this Agreement,
Party A and Party B make the following representations:
(a) Party A represents that it is a foreign corporation for U.S.
federal tax purposes. Each payment received or to be received by it in
connection with this Agreement will be effectively connected with its
conduct of a trade or business in the United States.
(b) Party B represents that it is the Trustee under the Pooling and
Servicing Agreement.
7. For the purpose of Sections 4(a)(i) and (ii) of the ISDA Form, each party
agrees to deliver the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:
(i) As soon as possible or upon demand, any document required or
reasonably requested to allow the other party to make payments under
this Transaction without any deduction or withholding for or on
account of any Tax, or with such deduction or withholding at a
reduced rate.
(b) Other documents to be delivered are:
(i) Upon execution and delivery of this Confirmation, copies of
specimen signatures of persons authorized to execute this
Confirmation. This document will be covered by the 3(d)
representation of the ISDA Form.
(ii) As soon as possible upon request, such other documents as the
other party may reasonably request in connection with the
Transaction to which this Confirmation relates. These documents will
be covered by the 3(d) representation of the ISDA Form.
(iii) With respect to Party A only, annual audited financial
statements prepared in accordance with generally accepted accounting
principles in Germany. These documents will be covered by the 3(d)
representation of the ISDA Form.
(iv) With respect to both parties, a legal opinion in a form
acceptable to the other party.
8. Addresses for Notices:
For the purpose of Section 12(a) of the ISDA Form:
Address for notices or communications to Party A:
WestLB AG, New York Branch
Woolgate Exchange
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Attn.: Documentation Unit
Tel: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
Fax: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
Address for notices or communications to Party B:
▇▇▇▇▇ Fargo Bank, N.A.
Corporate Trust Services
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
9. Additional Provisions: Notwithstanding the terms of Sections 5
and 6 of the ISDA Form, if Party B has
satisfied its payment obligations under
Section 2(a)(i) of the ISDA Form, then
unless Party A is required pursuant to
appropriate proceedings to return to
Party B or otherwise returns to Party B
upon demand of Party B any portion of
such payment, (a) the occurrence of an
event described in Section 5(a) of the
ISDA Form with respect to Party B shall
not constitute an Event of Default or
Potential Event of Default with respect
to Party B as the Defaulting Party and
(b) Party A shall be entitled to
designate an Early Termination Event
pursuant to Section 6 of the ISDA Form
only as a result of a Termination Event
set forth in either Section 5(b)(i) or
Section 5(b)(ii) of the ISDA Form with
respect to Party A as the Affected Party
or Section 5(b)(iii) of the ISDA Form
with respect to Party A as the Burdened
Party. For purposes of the Transaction
to which this Confirmation relates,
Party B's only obligation under Section
2(a)(i) of the ISDA Form is to pay the
Fixed Amount on the Fixed Rate Payer
Payment Date.
10. Transfer, Amendment and
Assignment: No transfer, amendment, waiver,
supplement, assignment or other
modification of this Transaction shall
be permitted by either party unless each
of Standard & Poors Ratings Group, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc ("S&P"), Fitch Ratings ("Fitch") and
Dominion Bond Rating Service, Inc. have
been provided notice of such transfer,
amendment or assignment and confirms in
writing (including by facsimile
transmission) within five Business Days
after such notice is given that it will
not downgrade, withdraw or modify its
then-current rating of the Class M-1
Certificates, the Class M-2
Certificates, the Class M-3, the Class
M-4, the Class M-5, the Class M-6
Certificates and the Class M-7
Certificates (the "Certificates") issued
by the Trust created pursuant to the
Pooling and Servicing Agreement, dated
October 1, 2004, among Asset Backed
Funding Corporation, as Depositor,
Option One Mortgage Corporation, as
Master Servicer, and ▇▇▇▇▇ Fargo Bank,
N.A., as Trustee (the "Pooling and
Servicing Agreement).
11. Proceedings: Party A shall not institute against or
cause any other person to institute
against, or join any other person in
instituting against Party B, any
bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings,
or other proceedings under any federal
or state bankruptcy, dissolution or
similar law, for a period of one year
and one day (or, if longer, the
applicable preference period) following
the later of indefeasible payment in
full of the Certificates.
12. Set-off: The provisions for Set-off set forth in
Section 6(e) of the ISDA Form shall not
apply for purposes of this Transaction.
Notwithstanding any provision of this
Confirmation, the ISDA Form or any other
existing or future agreement, each party
irrevocably waives any and all rights it
may have to set off, net, recoup or
otherwise withhold or suspend or
condition payment or performance of any
obligation between it and the other
party hereunder against any obligation
between it and the other party under any
other agreements.
13. Relationship Between
Parties:
Each party will be deemed to represent to the other party on the date on
which it enters into this Transaction or an amendment thereof that:
(i) In the case of Party A, it is acting for its own account, and in the
case of Party B, it is acting solely as Trustee. Each Party has made
its own independent decisions to enter into this Transaction and as
to whether this Transaction is appropriate or proper for it based
upon its own judgment and upon advice from such advisors as it has
deemed necessary. It is not relying on any communication (written or
oral) of the other party as investment advice or as a recommendation
to enter into this Transaction; it being understood that information
and explanations related to the terms and conditions of this
Transaction shall not be considered investment advice or a
recommendation to enter into this Transaction. It has not received
from the other party any assurance or guarantee as to the expected
results of this Transaction nor shall any communication (written or
oral) received from the other party be deemed to be an assurance or
guarantee as to the expected results of that Transaction.
(ii) It is capable of evaluating and understanding (on its own behalf or
through independent professional advice), and understands and
accepts, the terms, conditions and risks of this Transaction. It is
also capable of assuming, and assumes, the financial and other risks
of this Transaction.
(iii) The other party is not acting as a fiduciary or an advisor for it in
respect of this Transaction.
(iv) Trustee Capacity. It is expressly understood and agreed by the
parties hereto that insofar as this Confirmation is executed by the
Trustee (i) this Confirmation is executed and delivered by ▇▇▇▇▇
Fargo Bank, N.A., not in its individual capacity but solely as
Trustee under the Pooling and Servicing Agreement in the exercise of
the powers and authority conferred to and vested in it thereunder
and (ii) under no circumstances shall ▇▇▇▇▇ Fargo Bank, N.A. in its
individual capacity be personally liable for the payment of any
indebtedness or expenses or be personally liable for the breach or
failure of any obligation, representation, warranty or covenant made
or undertaken under this Confirmation. Party B is executing, and
acting under, the Confirmation as directed in the Pooling and
Servicing Agreement.
14. Sole Transaction
Notwithstanding anything else in this Agreement to the contrary, the Transaction
contemplated by this Confirmation between the parties hereto and dated as of the
date hereof is and will be the only Transaction governed by this Confirmation.
15. Additional Basic Representations
In Section 3(a) of this Agreement the following representations which shall be
construed as Section 3(a)(vi) and (vii) shall be added:
(vi) Organization. It is, in the case of Party A, a bank organized under
the laws of Germany, and in the case of Party B, a national banking
association organized under the laws of the United States.
(vii) Eligible Contract Participant. It is an "eligible contract
participant" as defined in Section 1a (12) of the Commodity Exchange
Act (7 U.S.C. 1a), as amended by the Commodity Futures Modernization
Act of 2000.
16. Automatic Early Termination
The Automatic Early Termination provisions of Section 6(a) of the ISDA Form will
not apply to Party A or Party B; provided, however, that for Party A (i) where
the Event of Default specified in Section 5(a)(vii)(1), (3), (4), (5), (6) or,
to the extent analogous thereto, (8) of the ISDA Form, is governed by a system
of law which does not permit termination to take place after the occurrence of
the relevant Event of Default, then the Automatic Early Termination provision of
Section 6(a) of the ISDA Form will apply to the Defaulting Party for purpose of
such Event of Default, and (ii) to the extent that Section 6(a) of the ISDA Form
is applicable, the second sentence of Section 6(a) of the ISDA Form shall only
apply with respect to an Event of Default specified in Section 5(a)(vii)(4) of
the ISDA Form or, to the extent analogous thereto, Section 5(a)(vii)(8) of the
ISDA Form, if the relevant petition is presented to a court or other authority
in the jurisdiction where the Defaulting Party is incorporated.
17. Indemnity
Party A agrees to indemnify, defend and hold harmless Asset Backed Funding
Corporation, Banc of America Securities LLC, ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated, Countrywide Securities Corporation and ▇▇▇▇▇ Fargo Bank,
N.A. (each an "Indemnified Party") against any and all Losses to which any may
become subject, under the United States Securities Act of 1933 or otherwise,
insofar as such Losses arise out of or result from any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus
Supplement dated October 12, 2004 (the "Prospectus Supplement") in respect of
the Certificates or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or omission was made in the text (except the first paragraph)
under the heading "The Counterparty" within the Section entitled "Description of
the Certificates" on pages S-83 and S-84.
Each of the Indemnified Parties are hereby recognized by the Parties as
third-party beneficiaries of this Confirmation with rights under this Section 17
as if such Indemnified Parties were parties to this Confirmation.
"Losses" means (a) any actual out-of-pocket loss incurred by any
Indemnified Party and (b) any actual out-of-pocket costs or expenses reasonably
incurred by any Indemnified Party, including reasonable fees or expenses of its
counsel and other expenses incurred in connection with investigating or
defending any claim, action or other proceeding which entitle such party to be
indemnified hereunder, plus (c) interest on the amount paid by any Indemnified
Party from the date of such payment to the date of payment by Party A, at the
statutory rate applicable to judgment for breach of contract.
18. Rating Agency Downgrade.
Notwithstanding anything else to the contrary herein, in the event that Party
A's short-term unsecured and unsubordinated debt rating is withdrawn or reduced
below "A-1" by S&P or its short-term unsecured and unsubordinated debt rating is
withdrawn or reduced below "F1" by Fitch (S&P and Fitch together the "Swap
Rating Agencies", and such rating thresholds, "Approved Rating Thresholds"),
within 30 Business Days after such rating withdrawal or downgrade (unless,
within 30 Business Days after such rating withdrawal or downgrade, each such
Swap Rating Agency has reconfirmed the rating of the Certificates which was in
effect immediately prior to such withdrawal or downgrade), Party A shall: (i)
seek another entity to replace Party A as party to this Agreement that meets or
exceeds the Approved Rating Thresholds on terms substantially similar to this
Agreement, (ii) obtain a guaranty of, or a contingent agreement of another
person with the Approved Rating Thresholds, to honor Party A's obligations under
this Agreement, (iii) post collateral in accordance with a 1994 ISDA Credit
Support Annex (Security Interest - New York law) and which will be sufficient to
restore the immediately prior ratings of the Certificates; or (iv) establish any
other arrangement satisfactory to the applicable Swap Rating Agency which will
be sufficient to restore the immediately prior ratings of the Certificates.
19. Additional Termination Events
Additional Termination Events will apply. If a Rating Agency Downgrade has
occurred and Party A has not, within 30 Business Days, complied with Section 18
above, then an Additional Termination Event shall have occurred with respect to
Party A and Party A shall be the sole Affected Party with respect to such an
Additional Termination Event. For the avoidance of doubt, this Additional
Termination Event will only occur upon the written notice of Party B. The second
method and market quotation shall apply.
20. Amendment to the ISDA Form
The "Failure to Pay or Deliver" provision in Section 5(a)(i) of the ISDA Form is
hereby amended by deleting the word "third" in the third line thereof and
inserting the word "first" in place thereof. The provisions in Sections
5(a)(ii), 5(a)(iii), 5(a)(iv), 5(a)(v), 5(a)(vi) and 5(b)(iv), and clause (2) in
the "Bankruptcy" provisions in Section 5(a)(vii) of the ISDA Form are hereby
deleted. The "Illegality" provision in Section 5(b)(i) of the ISDA Form is
hereby amended by adding the following words at the end of the fifth line: "or
regulatory requirements or filing burdens under the United States Securities Act
of 1933, as amended (the "Securities Act") or the United States Securities
Exchange Act of 1934, as amended (the "Exchange Act") are imposed on the party
(including without limitation any obligation imposed on Asset Backed Funding
Corporation to include information about Party A in any filing under the
Securities Act or the Exchange Act in respect of the Certificates, which
information Party A is unable or unwilling to timely supply) which such party
(which will be the Affected Party) otherwise than for the operation of this
Transaction would not be required to comply with".
21. Definitions
Capitalized terms not otherwise defined herein or in the Definitions shall have
the meanings set forth in the Pooling and Servicing Agreement. In the case of
any inconsistency between this Confirmation and such terms, this Confirmation
will prevail.
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Confirmation and returning it to us by facsimile
transmission at ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇. No hard copy of this Confirmation will follow.
If you require hard copies, please contact Documentation Unit, WestLB AG, New
York Branch, Woolgate Exchange, ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ tel: +44
▇▇ ▇▇▇▇ ▇▇▇▇. If you have any questions regarding payments or resets, please
contact our Business Area Control Group at (▇▇▇) ▇▇▇-▇▇▇▇.
We are happy to have completed this transaction with you.
Yours sincerely,
WESTLB AG, NEW YORK BRANCH
By: ____________________________ By:______________________________
Name: Name:
Title: Title:
Accepted and confirmed as of
The date first above written:
▇▇▇▇▇ Fargo Bank, N.A.,
not in its individual capacity but solely as trustee for
ABFC 2004-OPT5 Trust
By: ________________________
Name:
Title:
Schedule A
For use with Reference Number 381540N
(All dates subject to adjustment in accordance with the Following Business
Day Convention)
From and To but Notional Cap Cap Scale
Period Including Excluding Amount Rate Ceiling Factor
1 10/14/04 11/25/04 1,279,430.00 2.86% 8.54% 100.00
2 11/25/04 12/25/04 1,279,430.00 4.58% 8.54% 100.00
3 12/25/04 1/25/05 1,279,430.00 4.39% 8.54% 100.00
4 1/25/05 2/25/05 1,279,430.00 4.39% 8.54% 100.00
5 2/25/05 3/25/05 1,279,430.00 5.01% 8.54% 100.00
6 3/25/05 4/25/05 1,279,430.00 4.39% 8.54% 100.00
7 4/25/05 5/25/05 1,279,430.00 4.58% 8.54% 100.00
8 5/25/05 6/25/05 1,279,430.00 4.39% 8.54% 100.00
9 6/25/05 7/25/05 1,279,430.00 4.58% 8.54% 100.00
10 7/25/05 8/25/05 1,279,430.00 4.39% 8.54% 100.00
11 8/25/05 9/25/05 1,279,430.00 4.29% 8.54% 100.00
12 9/25/05 10/25/05 1,279,430.00 4.48% 8.54% 100.00
13 10/25/05 11/25/05 1,279,430.00 4.29% 8.54% 100.00
14 11/25/05 12/25/05 1,279,430.00 4.48% 8.54% 100.00
15 12/25/05 1/25/06 1,279,430.00 4.29% 8.54% 100.00
16 1/25/06 2/25/06 1,279,430.00 4.29% 8.54% 100.00
17 2/25/06 3/25/06 1,279,430.00 4.91% 8.54% 100.00
18 3/25/06 4/25/06 1,279,430.00 4.29% 8.54% 100.00
19 4/25/06 5/25/06 1,279,430.00 4.49% 8.54% 100.00
20 5/25/06 6/25/06 1,279,430.00 4.42% 8.54% 100.00
21 6/25/06 7/25/06 1,279,430.00 5.91% 8.54% 100.00
22 7/25/06 8/25/06 1,279,430.00 6.17% 8.54% 100.00
23 8/25/06 9/25/06 1,279,430.00 6.17% 8.54% 100.00
24 9/25/06 10/25/06 1,279,430.00 6.42% 8.54% 100.00
25 10/25/06 11/25/06 1,279,430.00 6.16% 8.54% 100.00
26 11/25/06 12/25/06 1,279,430.00 6.46% 8.54% 100.00
27 12/25/06 1/25/07 1,279,430.00 6.62% 8.54% 100.00
28 1/25/07 2/25/07 1,279,430.00 6.79% 8.54% 100.00
29 2/25/07 3/25/07 1,279,430.00 7.67% 8.54% 100.00
30 3/25/07 4/25/07 1,279,430.00 6.78% 8.54% 100.00
31 4/25/07 5/25/07 1,279,430.00 6.80% 8.54% 100.00
32 5/25/07 6/25/07 1,279,430.00 6.59% 8.54% 100.00
33 6/25/07 7/25/07 1,279,430.00 7.38% 8.54% 100.00
34 7/25/07 8/25/07 1,279,430.00 7.31% 8.54% 100.00
35 8/25/07 9/25/07 1,279,430.00 7.31% 8.54% 100.00
36 9/25/07 10/25/07 1,279,430.00 7.59% 8.54% 100.00
37 10/25/07 11/25/07 1,279,430.00 7.30% 8.54% 100.00
38 11/25/07 12/25/07 1,143,463.31 7.74% 8.65% 100.00
39 12/25/07 1/25/08 1,011,025.03 7.87% 8.63% 100.00
40 1/25/08 2/25/08 900,291.34 7.99% 8.58% 100.00
41 2/25/08 3/25/08 875,207.10 8.58% 8.58% 100.00
42 3/25/08 4/25/08 850,772.40 7.99% 8.59% 100.00
43 4/25/08 5/25/08 826,970.40 8.30% 8.59% 100.00
44 5/25/08 6/25/08 803,784.66 7.99% 8.60% 100.00
45 6/25/08 7/25/08 781,199.20 8.33% 8.60% 100.00
Schedule A (cont.)
For use with Reference Number 381540N
(All dates subject to adjustment in accordance with the Following Business
Day Convention)
From and To but Notional Cap Cap Scale
Period Including Excluding Amount Rate Ceiling Factor
46 7/25/08 8/25/08 759,201.10 8.04% 8.61% 100.00
47 8/25/08 9/25/08 737,773.88 8.04% 8.61% 100.00
48 9/25/08 10/25/08 716,901.23 8.35% 8.62% 100.00
49 10/25/08 11/25/08 696,568.77 8.03% 8.62% 100.00
50 11/25/08 12/25/08 676,762.50 8.36% 8.63% 100.00
51 12/25/08 1/25/09 657,468.77 8.07% 8.63% 100.00
52 1/25/09 2/25/09 638,676.22 8.09% 8.64% 100.00
53 2/25/09 3/25/09 620,370.95 8.64% 8.64% 100.00
54 3/25/09 4/25/09 602,539.24 8.09% 8.65% 100.00
55 4/25/09 5/25/09 585,168.83 8.41% 8.66% 100.00
56 5/25/09 6/25/09 568,246.77 8.09% 8.66% 100.00
57 6/25/09 7/25/09 551,747.13 8.40% 8.67% 100.00
58 7/25/09 8/25/09 535,673.15 8.09% 8.68% 100.00
59 8/25/09 9/25/09 520,014.97 8.09% 8.68% 100.00
60 9/25/09 10/25/09 504,762.07 8.41% 8.69% 100.00
61 10/25/09 11/25/09 489,903.95 8.10% 8.70% 100.00
62 11/25/09 12/25/09 475,430.39 8.40% 8.70% 100.00
63 12/25/09 1/25/10 461,331.42 8.09% 8.71% 100.00
64 1/25/10 2/25/10 447,597.34 8.10% 8.72% 100.00
65 2/25/10 3/25/10 434,218.70 8.72% 8.72% 100.00
66 3/25/10 4/25/10 421,186.28 8.10% 8.73% 100.00
67 4/25/10 5/25/10 408,491.14 8.41% 8.74% 100.00
68 5/25/10 6/25/10 396,124.52 8.10% 8.74% 100.00
69 6/25/10 7/25/10 384,077.93 8.41% 8.75% 100.00
70 7/25/10 8/25/10 372,343.08 8.10% 8.76% 100.00
71 8/25/10 9/25/10 360,911.90 8.11% 8.77% 100.00
72 9/25/10 10/25/10 349,776.53 8.42% 8.78% 100.00
73 10/25/10 11/25/10 338,929.31 8.12% 8.79% 100.00
74 11/25/10 12/25/10 328,362.78 8.43% 8.80% 100.00
75 12/25/10 1/25/11 318,069.68 8.12% 8.81% 100.00
76 1/25/11 2/25/11 308,042.93 8.12% 8.81% 100.00
77 2/25/11 3/25/11 298,275.65 8.82% 8.82% 100.00
78 3/25/11 4/25/11 288,761.11 8.12% 8.82% 100.00
79 4/25/11 5/25/11 279,492.78 8.43% 8.83% 100.00
80 5/25/11 6/25/11 270,464.28 8.12% 8.84% 100.00
81 6/25/11 7/25/11 261,669.42 8.43% 8.84% 100.00
82 7/25/11 8/25/11 253,102.15 8.12% 8.85% 100.00
83 8/25/11 9/25/11 244,756.58 8.13% 8.86% 100.00
84 9/25/11 10/25/11 236,626.98 8.43% 8.86% 100.00
85 10/25/11 11/25/11 228,707.77 8.12% 8.87% 100.00
86 11/25/11 12/25/11 220,993.49 8.44% 8.88% 100.00
87 12/25/11 1/25/12 213,478.87 8.13% 8.89% 100.00
WestLB AG, New York
Global Financial Markets
TRANSACTION
To: ▇▇▇▇▇ Fargo Bank, N.A.,
not in its individual capacity but solely as trustee
for ABFC 2004-OPT5 Trust
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: ▇-▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇-▇▇▇-▇▇▇-▇▇▇▇
Our Reference: 381538N / Class A1 Certificates
The purpose of this letter agreement is to confirm the terms and conditions of
the Transaction entered into between ▇▇▇▇▇ Fargo Bank, N.A., not in its
individual capacity but solely as trustee for ABFC 2004-OPT5 Trust and WestLB
AG, New York Branch (each a "party" and, together, "the parties") on the Trade
Date specified below (the "Transaction"). This letter agreement constitutes a
"Confirmation" as referred to in the ISDA Form defined below.
The definitions and provisions contained in the 2000 ISDA Definitions (as
published by the International Swaps and Derivatives Association, Inc. ("ISDA"))
(the "Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between those definitions and provisions and this Confirmation,
this Confirmation will govern.
1. This Confirmation evidences a complete and binding agreement between you
and us as to the terms and conditions of the Transaction to which this
Confirmation relates and will constitute a Confirmation subject to the terms and
conditions of the 1992 Master Agreement (Multicurrency - Cross Border) in the
form published by ISDA, as if the parties had executed an agreement in such
form, except as expressly modified herein (the "ISDA Form") but without any
Schedule except for the election of (i) the laws of the State of New York
(without reference to choice of law doctrine) as the governing law (ii) USD as
the Termination Currency and (iii) the items specified in sections 3 through 21
below.
Each party will make each payment specified in this Confirmation as being
payable by it, not later than the due date for value on that date in the place
of the account specified below, in freely transferable funds and in the manner
customary for payments in the required currency. If on any date amounts would
otherwise be payable in the same currency by each party to the other, then, on
such date, each party's obligation to make payment of any such amount will be
automatically satisfied and discharged and, if the aggregate amount that would
otherwise have been payable by one party exceeds the aggregate amount that would
otherwise have been payable by the other party, replaced by an obligation upon
the party by whom the larger aggregate amount would have been payable to pay to
the other party the excess of the larger aggregate amount over the smaller
aggregate amount.
This Confirmation will be governed by and construed in accordance with the
laws of the State of New York without reference to choice of law doctrine. Each
party irrevocably agrees that the courts of the State of New York located in the
Borough of Manhattan and the United States District Court for the Southern
District of New York shall have jurisdiction to hear and determine any suit,
action or proceeding, and to settle any disputes, which may arise out of or in
connection with this Confirmation and for such purposes hereby irrevocably
submits to the jurisdiction of such courts. Each party waives any objection
which it may have now or in the future to the laying of venue of any suit,
action or proceeding in the above courts and agrees not to claim that either
court is an inconvenient forum. Additionally to the fullest extent permitted by
applicable law, each party waives its respective right to jury trial with
respect to any suit, action or proceeding arising under, or in connection with,
this Confirmation.
In this Confirmation "Party A" means WestLB AG, New York Branch and "Party B"
means ▇▇▇▇▇ Fargo Bank, N.A., not in its individual capacity but solely as
trustee for ABFC 2004-OPT5 Trust.
2. The particular Transaction to which this Confirmation relates is a Rate Cap,
the terms of which are as follows:
Notional Amount: As detailed in Schedule A attached
hereto for each Calculation Period.
Trade Date: October 12, 2004
Effective Date: October 14, 2004
Termination Date: August 25, 2008, subject to Adjustment
in accordance with the Following
Business Day Convention
Fixed Amounts:
Fixed Rate Payer : Party B
Fixed Amount : USD 294,000.00, paid by Party B to
(Premium) Party A on the Fixed Rate Payer
Payment Date, subject to Adjustment in
accordance with the Following Business
Day Convention.
Fixed Rate Payer Payment Date: October 14, 2004
Floating Amounts:
Floating Rate Payer: Party A
Cap Rate: As detailed in Schedule A attached
hereto for each Calculation Period.
Floating Rate Payer Period End The 25th day of each month of each year
Dates: commencing November 25, 2004, through
and including the Termination Date,
subject to adjustment in accordance
with the Following Business Day
Convention
Floating Rate Payer Payment Amount: To be determined in accordance with the
following formula:
Greater of (i) Scale Factor (as set
forth in Schedule A attached hereto)*
(Floating Rate Option - Cap Rate) *
Notional Amount * Floating Rate Day
Count Fraction, and (ii) zero
Floating Rate Payer Payment Dates: Two Business Days preceding each
Floating Rate Payer Period End Date
Floating Rate for initial 1.90379%
Calculation Period:
Floating Rate Option: USD-LIBOR-BBA, provided however, that
if the Floating Rate Option is greater
than 9.65000% then the Floating Rate
Option shall be deemed to be 9.65000%
for such Calculation Period
Designated Maturity: 1 month, except for the first period
which shall be the linear
interpolation between 1 month and 2
month
Spread: None
Floating Rate Day Count Fraction: Act/360
Reset Dates: The first day of each Floating Rate
Payer Calculation Period.
Rate Cut-off Dates: Inapplicable
Method of Averaging: Inapplicable
Compounding: Inapplicable
Compounding Dates: Inapplicable
Business Days for Payment: New York
Calculation Agent: Party A
3. Credit Support Documents:
Party A Credit Support Documents: Inapplicable
Party B Credit Support Documents: Inapplicable
4. Account Details:
Payments to Party A: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank, NY
ABA#: ▇▇▇▇▇▇▇▇▇
Acct.#: ▇▇▇-▇-▇▇▇▇▇▇
Acct. Name: WestLB-NY Derivatives
Ref: 381538N
Swift Code: ▇▇▇▇▇▇▇▇▇▇▇
Payments to Party B: ▇▇▇▇▇ Fargo Bank, N.A.
ABA#: ▇▇▇-▇▇▇-▇▇▇
Acct. Number: ▇▇▇▇▇▇▇▇▇▇
Acct. Name: Corporate Trust Clearing
For Further Credit:17119501, ABFC
2004-OPT5 Class A1 Reserve Account
5. Offices:
The Office of Party A for the Transaction is New York.
The Office of Party B for the Transaction is Columbia, Maryland.
6. Tax Representations:
Payer Representations. For the purpose of Section 3(e) of this Agreement,
Party A makes the following representations:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of the
ISDA Form) to be made by it to the other party under this Agreement. In
making this representation, it may rely on (i) the accuracy of any
representations made by the other party pursuant to Section 3(f) of the
ISDA Form, (ii) the satisfaction of the agreement contained in Section
4(a)(i) or 4(a)(iii) of the ISDA Form and the accuracy and effectiveness
of any document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of the ISDA Form and (iii) the satisfaction of the agreement of
the other party contained in Section 4(d) of the ISDA Form, provided that
it shall not be a breach of this representation where reliance is placed
on clause (ii) and the other party does not deliver a form or document
under Section 4(a)(iii) by reason of material prejudice of its legal or
commercial position.
Payee Representations. For the purpose of Section 3 (f) of this Agreement,
Party A and Party B make the following representations:
(a) Party A represents that it is a foreign corporation for U.S.
federal tax purposes. Each payment received or to be received by it in
connection with this Agreement will be effectively connected with its
conduct of a trade or business in the United States.
(b) Party B represents that it is the Trustee under the Pooling and
Servicing Agreement.
7. For the purpose of Sections 4(a)(i) and (ii) of the ISDA Form, each party
agrees to deliver the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:
(i) As soon as possible or upon demand, any document required or
reasonably requested to allow the other party to make payments under
this Transaction without any deduction or withholding for or on
account of any Tax, or with such deduction or withholding at a
reduced rate.
(b) Other documents to be delivered are:
(i) Upon execution and delivery of this Confirmation, copies of
specimen signatures of persons authorized to execute this
Confirmation. This document will be covered by the 3(d)
representation of the ISDA Form.
(ii) As soon as possible upon request, such other documents as the
other party may reasonably request in connection with the
Transaction to which this Confirmation relates. These documents will
be covered by the 3(d) representation of the ISDA Form.
(iii) With respect to Party A only, annual audited financial
statements prepared in accordance with generally accepted accounting
principles in Germany. These documents will be covered by the 3(d)
representation of the ISDA Form.
(iv) With respect to both parties, a legal opinion in a form
acceptable to the other party.
8. Addresses for Notices:
For the purpose of Section 12(a) of the ISDA Form:
Address for notices or communications to Party A:
WestLB AG, New York Branch
Woolgate Exchange
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Attn.: Documentation Unit
Tel: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
Fax: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
Address for notices or communications to Party B:
▇▇▇▇▇ Fargo Bank, N.A.
Corporate Trust Services
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
9. Additional Provisions: Notwithstanding the terms of Sections 5
and 6 of the ISDA Form, if Party B has
satisfied its payment obligations under
Section 2(a)(i) of the ISDA Form, then
unless Party A is required pursuant to
appropriate proceedings to return to
Party B or otherwise returns to Party B
upon demand of Party B any portion of
such payment, (a) the occurrence of an
event described in Section 5(a) of the
ISDA Form with respect to Party B shall
not constitute an Event of Default or
Potential Event of Default with respect
to Party B as the Defaulting Party and
(b) Party A shall be entitled to
designate an Early Termination Event
pursuant to Section 6 of the ISDA Form
only as a result of a Termination Event
set forth in either Section 5(b)(i) or
Section 5(b)(ii) of the ISDA Form with
respect to Party A as the Affected Party
or Section 5(b)(iii) of the ISDA Form
with respect to Party A as the Burdened
Party. For purposes of the Transaction
to which this Confirmation relates,
Party B's only obligation under Section
2(a)(i) of the ISDA Form is to pay the
Fixed Amount on the Fixed Rate Payer
Payment Date.
10. Transfer, Amendment and
Assignment: No transfer, amendment, waiver,
supplement, assignment or other
modification of this Transaction shall
be permitted by either party unless each
of Standard & Poors Ratings Group, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc ("S&P"), Fitch Ratings ("Fitch") and
Dominion Bond Rating Service, Inc. have
been provided notice of such transfer,
amendment or assignment and confirms in
writing (including by facsimile
transmission) within five Business Days
after such notice is given that it will
not downgrade, withdraw or modify its
then-current rating of the Class A-1
Certificates (the "Certificates") issued
by the Trust created pursuant to the
Pooling and Servicing Agreement, dated
October 1, 2004, among Asset Backed
Funding Corporation, as Depositor,
Option One Mortgage Corporation, as
Master Servicer, and ▇▇▇▇▇ Fargo Bank,
N.A., as Trustee (the "Pooling and
Servicing Agreement).
11. Proceedings: Party A shall not institute against or
cause any other person to institute
against, or join any other person in
instituting against Party B, any
bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings,
or other proceedings under any federal
or state bankruptcy, dissolution or
similar law, for a period of one year
and one day (or, if longer, the
applicable preference period) following
the later of indefeasible payment in
full of the Certificates.
12. Set-off: The provisions for Set-off set forth in
Section 6(e) of the ISDA Form shall not
apply for purposes of this Transaction.
Notwithstanding any provision of this
Confirmation, the ISDA Form or any other
existing or future agreement, each party
irrevocably waives any and all rights it
may have to set off, net, recoup or
otherwise withhold or suspend or
condition payment or performance of any
obligation between it and the other
party hereunder against any obligation
between it and the other party under any
other agreements.
13. Relationship Between Parties:
Each party will be deemed to represent to the other party on the date on
which it enters into this Transaction or an amendment thereof that:
(i) In the case of Party A, it is acting for its own account, and in the
case of Party B, it is acting solely as Trustee. Each Party has made
its own independent decisions to enter into this Transaction and as
to whether this Transaction is appropriate or proper for it based
upon its own judgment and upon advice from such advisors as it has
deemed necessary. It is not relying on any communication (written or
oral) of the other party as investment advice or as a recommendation
to enter into this Transaction; it being understood that information
and explanations related to the terms and conditions of this
Transaction shall not be considered investment advice or a
recommendation to enter into this Transaction. It has not received
from the other party any assurance or guarantee as to the expected
results of this Transaction nor shall any communication (written or
oral) received from the other party be deemed to be an assurance or
guarantee as to the expected results of that Transaction.
(ii) It is capable of evaluating and understanding (on its own behalf or
through independent professional advice), and understands and
accepts, the terms, conditions and risks of this Transaction. It is
also capable of assuming, and assumes, the financial and other risks
of this Transaction.
(iii) The other party is not acting as a fiduciary or an advisor for it in
respect of this Transaction.
(iv) Trustee Capacity. It is expressly understood and agreed by the
parties hereto that insofar as this Confirmation is executed by the
Trustee (i) this Confirmation is executed and delivered by ▇▇▇▇▇
Fargo Bank, N.A., not in its individual capacity but solely as
Trustee under the Pooling and Servicing Agreement in the exercise of
the powers and authority conferred to and vested in it thereunder
and (ii) under no circumstances shall ▇▇▇▇▇ Fargo Bank, N.A. in its
individual capacity be personally liable for the payment of any
indebtedness or expenses or be personally liable for the breach or
failure of any obligation, representation, warranty or covenant made
or undertaken under this Confirmation. Party B is executing, and
acting under, the Confirmation as directed in the Pooling and
Servicing Agreement.
14. Sole Transaction
Notwithstanding anything else in this Agreement to the contrary, the Transaction
contemplated by this Confirmation between the parties hereto and dated as of the
date hereof is and will be the only Transaction governed by this Confirmation.
15. Additional Basic Representations
In Section 3(a) of this Agreement the following representations which shall be
construed as Section 3(a)(vi) and (vii) shall be added:
(vi) Organization. It is, in the case of Party A, a bank organized under
the laws of Germany, and in the case of Party B, a national banking
association organized under the laws of the United States.
(vii) Eligible Contract Participant. It is an "eligible contract
participant" as defined in Section 1a (12) of the Commodity Exchange
Act (7 U.S.C. 1a), as amended by the Commodity Futures Modernization
Act of 2000.
16. Automatic Early Termination
The Automatic Early Termination provisions of Section 6(a) of the ISDA Form will
not apply to Party A or Party B; provided, however, that for Party A (i) where
the Event of Default specified in Section 5(a)(vii)(1), (3), (4), (5), (6) or,
to the extent analogous thereto, (8) of the ISDA Form, is governed by a system
of law which does not permit termination to take place after the occurrence of
the relevant Event of Default, then the Automatic Early Termination provision of
Section 6(a) of the ISDA Form will apply to the Defaulting Party for purpose of
such Event of Default, and (ii) to the extent that Section 6(a) of the ISDA Form
is applicable, the second sentence of Section 6(a) of the ISDA Form shall only
apply with respect to an Event of Default specified in Section 5(a)(vii)(4) of
the ISDA Form or, to the extent analogous thereto, Section 5(a)(vii)(8) of the
ISDA Form, if the relevant petition is presented to a court or other authority
in the jurisdiction where the Defaulting Party is incorporated.
17. Indemnity
Party A agrees to indemnify, defend and hold harmless Asset Backed Funding
Corporation, Banc of America Securities LLC, ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated, Countrywide Securities Corporation and ▇▇▇▇▇ Fargo Bank,
N.A. (each an "Indemnified Party") against any and all Losses to which any may
become subject, under the United States Securities Act of 1933 or otherwise,
insofar as such Losses arise out of or result from any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus
Supplement dated October 12, 2004 (the "Prospectus Supplement") in respect of
the Certificates or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or omission was made in the text (except the first paragraph)
under the heading "The Counterparty" within the Section entitled "Description of
the Certificates" on pages S-83 and S-84.
Each of the Indemnified Parties are hereby recognized by the Parties as
third-party beneficiaries of this Confirmation with rights under this Section 17
as if such Indemnified Parties were parties to this Confirmation.
"Losses" means (a) any actual out-of-pocket loss incurred by any
Indemnified Party and (b) any actual out-of-pocket costs or expenses reasonably
incurred by any Indemnified Party, including reasonable fees or expenses of its
counsel and other expenses incurred in connection with investigating or
defending any claim, action or other proceeding which entitle such party to be
indemnified hereunder, plus (c) interest on the amount paid by any Indemnified
Party from the date of such payment to the date of payment by Party A, at the
statutory rate applicable to judgment for breach of contract.
18. Rating Agency Downgrade.
Notwithstanding anything else to the contrary herein, in the event that Party
A's short-term unsecured and unsubordinated debt rating is withdrawn or reduced
below "A-1" by S&P or its short-term unsecured and unsubordinated debt rating is
withdrawn or reduced below "F1" by Fitch (S&P and Fitch together the "Swap
Rating Agencies", and such rating thresholds, "Approved Rating Thresholds"),
within 30 Business Days after such rating withdrawal or downgrade (unless,
within 30 Business Days after such rating withdrawal or downgrade, each such
Swap Rating Agency has reconfirmed the rating of the Certificates which was in
effect immediately prior to such withdrawal or downgrade), Party A shall: (i)
seek another entity to replace Party A as party to this Agreement that meets or
exceeds the Approved Rating Thresholds on terms substantially similar to this
Agreement, (ii) obtain a guaranty of, or a contingent agreement of another
person with the Approved Rating Thresholds, to honor Party A's obligations under
this Agreement, (iii) post collateral in accordance with a 1994 ISDA Credit
Support Annex (Security Interest - New York law) and which will be sufficient to
restore the immediately prior ratings of the Certificates; or (iv) establish any
other arrangement satisfactory to the applicable Swap Rating Agency which will
be sufficient to restore the immediately prior ratings of the Certificates.
19. Additional Termination Events
Additional Termination Events will apply. If a Rating Agency Downgrade has
occurred and Party A has not, within 30 Business Days, complied with Section 18
above, then an Additional Termination Event shall have occurred with respect to
Party A and Party A shall be the sole Affected Party with respect to such an
Additional Termination Event. For the avoidance of doubt, this Additional
Termination Event will only occur upon the written notice of Party B. The second
method and market quotation shall apply.
20. Amendment to the ISDA Form
The "Failure to Pay or Deliver" provision in Section 5(a)(i) of the ISDA Form is
hereby amended by deleting the word "third" in the third line thereof and
inserting the word "first" in place thereof. The provisions in Sections
5(a)(ii), 5(a)(iii), 5(a)(iv), 5(a)(v), 5(a)(vi) and 5(b)(iv), and clause (2) in
the "Bankruptcy" provisions in Section 5(a)(vii) of the ISDA Form are hereby
deleted. The "Illegality" provision in Section 5(b)(i) of the ISDA Form is
hereby amended by adding the following words at the end of the fifth line: "or
regulatory requirements or filing burdens under the United States Securities Act
of 1933, as amended (the "Securities Act") or the United States Securities
Exchange Act of 1934, as amended (the "Exchange Act") are imposed on the party
(including without limitation any obligation imposed on Asset Backed Funding
Corporation to include information about Party A in any filing under the
Securities Act or the Exchange Act in respect of the Certificates, which
information Party A is unable or unwilling to timely supply) which such party
(which will be the Affected Party) otherwise than for the operation of this
Transaction would not be required to comply with".
21. Definitions
Capitalized terms not otherwise defined herein or in the Definitions shall have
the meanings set forth in the Pooling and Servicing Agreement. In the case of
any inconsistency between this Confirmation and such terms, this Confirmation
will prevail.
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Confirmation and returning it to us by facsimile
transmission at ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇. No hard copy of this Confirmation will follow.
If you require hard copies, please contact Documentation Unit, WestLB AG, New
York Branch, Woolgate Exchange, ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ tel: +44
▇▇ ▇▇▇▇ ▇▇▇▇. If you have any questions regarding payments or resets, please
contact our Business Area Control Group at (▇▇▇) ▇▇▇-▇▇▇▇.
We are happy to have completed this transaction with you.
Yours sincerely,
WESTLB AG, NEW YORK BRANCH
By: ____________________________ By:______________________________
Name: Name:
Title: Title:
Accepted and confirmed as of
The date first above written:
▇▇▇▇▇ Fargo Bank, N.A.,
not in its individual capacity but solely as trustee for
ABFC 2004-OPT5 Trust
By: ________________________
Name:
Title:
Schedule A
For use with Reference Number 381538N
(All dates subject to adjustment in accordance with the Following Business
Day Convention)
From and To but Notional Cap Scale
Period Including Excluding Amount Rate Factor
1 10/14/04 11/25/04 9,313,930.00 3.97% 100.00
2 11/25/04 12/25/04 9,071,872.56 5.70% 100.00
3 12/25/04 01/25/05 8,830,456.46 5.50% 100.00
4 01/25/05 02/25/05 8,589,595.53 5.50% 100.00
5 02/25/05 03/25/05 8,349,222.94 6.13% 100.00
6 03/25/05 04/25/05 8,109,307.88 5.50% 100.00
7 04/25/05 05/25/05 7,869,919.19 5.70% 100.00
8 05/25/05 06/25/05 7,634,762.12 5.50% 100.00
9 06/25/05 07/25/05 7,405,748.16 5.70% 100.00
10 07/25/05 08/25/05 7,182,781.49 5.50% 100.00
11 08/25/05 09/25/05 6,965,702.47 5.41% 100.00
12 09/25/05 10/25/05 6,754,355.14 5.60% 100.00
13 10/25/05 11/25/05 6,548,587.94 5.41% 100.00
14 11/25/05 12/25/05 6,348,253.35 5.60% 100.00
15 12/25/05 01/25/06 6,153,207.75 5.41% 100.00
16 01/25/06 02/25/06 5,963,311.31 5.41% 100.00
17 02/25/06 03/25/06 5,778,428.13 6.02% 100.00
18 03/25/06 04/25/06 5,598,425.49 5.41% 100.00
19 04/25/06 05/25/06 5,423,174.40 5.60% 100.00
20 05/25/06 06/25/06 5,252,549.26 5.48% 100.00
21 06/25/06 07/25/06 5,086,427.83 7.03% 100.00
22 07/25/06 08/25/06 4,925,808.43 7.31% 100.00
23 08/25/06 09/25/06 4,769,818.62 7.30% 100.00
24 09/25/06 10/25/06 4,617,907.96 7.56% 100.00
25 10/25/06 11/25/06 4,469,969.60 7.30% 100.00
26 11/25/06 12/25/06 4,325,899.49 7.58% 100.00
27 12/25/06 01/25/07 4,185,596.32 7.76% 100.00
28 01/25/07 02/25/07 4,049,196.16 7.93% 100.00
29 02/25/07 03/25/07 3,916,443.04 8.81% 100.00
30 03/25/07 04/25/07 3,787,153.08 7.92% 100.00
31 04/25/07 05/25/07 3,661,235.78 7.95% 100.00
32 05/25/07 06/25/07 3,538,603.00 7.71% 100.00
33 06/25/07 07/25/07 3,419,168.93 8.53% 100.00
34 07/25/07 08/25/07 3,303,092.24 8.47% 100.00
35 08/25/07 09/25/07 3,190,139.25 8.47% 100.00
36 09/25/07 10/25/07 3,080,124.05 8.76% 100.00
37 10/25/07 11/25/07 2,972,970.08 8.46% 100.00
38 11/25/07 12/25/07 2,972,970.08 8.78% 100.00
39 12/25/07 1/25/08 2,972,970.08 8.94% 100.00
40 1/25/08 2/25/08 2,962,358.81 9.13% 100.00
41 2/25/08 3/25/08 2,885,361.85 9.65% 100.00
42 3/25/08 4/25/08 2,810,363.49 9.11% 100.00
43 4/25/08 5/25/08 2,737,311.76 9.42% 100.00
44 5/25/08 6/25/08 2,666,156.03 9.11% 100.00
45 6/25/08 7/25/08 2,596,847.00 9.45% 100.00
46 7/25/08 8/25/08 2,529,345.62 9.15% 100.00
WestLB AG, New York
Global Financial Markets
October 14, 2004
TRANSACTION
To: ▇▇▇▇▇ Fargo Bank, N.A.,
not in its individual capacity but solely as trustee
for ABFC 2004-OPT5 Trust
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: ▇-▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇-▇▇▇-▇▇▇-▇▇▇▇
Our Reference: 381539N / Group A2 Certificates
The purpose of this letter agreement is to confirm the terms and conditions of
the Transaction entered into between ▇▇▇▇▇ Fargo Bank, N.A., not in its
individual capacity but solely as trustee for ABFC 2004-OPT5 Trust and WestLB
AG, New York Branch (each a "party" and, together, "the parties") on the Trade
Date specified below (the "Transaction"). This letter agreement constitutes a
"Confirmation" as referred to in the ISDA Form defined below.
The definitions and provisions contained in the 2000 ISDA Definitions (as
published by the International Swaps and Derivatives Association, Inc. ("ISDA"))
(the "Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between those definitions and provisions and this Confirmation,
this Confirmation will govern.
1. This Confirmation evidences a complete and binding agreement between you
and us as to the terms and conditions of the Transaction to which this
Confirmation relates and will constitute a Confirmation subject to the terms and
conditions of the 1992 Master Agreement (Multicurrency - Cross Border) in the
form published by ISDA, as if the parties had executed an agreement in such
form, except as expressly modified herein (the "ISDA Form") but without any
Schedule except for the election of (i) the laws of the State of New York
(without reference to choice of law doctrine) as the governing law (ii) USD as
the Termination Currency and (iii) the items specified in sections 3 through 21
below.
Each party will make each payment specified in this Confirmation as being
payable by it, not later than the due date for value on that date in the place
of the account specified below, in freely transferable funds and in the manner
customary for payments in the required currency. If on any date amounts would
otherwise be payable in the same currency by each party to the other, then, on
such date, each party's obligation to make payment of any such amount will be
automatically satisfied and discharged and, if the aggregate amount that would
otherwise have been payable by one party exceeds the aggregate amount that would
otherwise have been payable by the other party, replaced by an obligation upon
the party by whom the larger aggregate amount would have been payable to pay to
the other party the excess of the larger aggregate amount over the smaller
aggregate amount.
This Confirmation will be governed by and construed in accordance with the
laws of the State of New York without reference to choice of law doctrine. Each
party irrevocably agrees that the courts of the State of New York located in the
Borough of Manhattan and the United States District Court for the Southern
District of New York shall have jurisdiction to hear and determine any suit,
action or proceeding, and to settle any disputes, which may arise out of or in
connection with this Confirmation and for such purposes hereby irrevocably
submits to the jurisdiction of such courts. Each party waives any objection
which it may have now or in the future to the laying of venue of any suit,
action or proceeding in the above courts and agrees not to claim that either
court is an inconvenient forum. Additionally to the fullest extent permitted by
applicable law, each party waives its respective right to jury trial with
respect to any suit, action or proceeding arising under, or in connection with,
this Confirmation.
In this Confirmation "Party A" means WestLB AG, New York Branch and "Party B"
means ▇▇▇▇▇ Fargo Bank, N.A., not in its individual capacity but solely as
trustee for ABFC 2004-OPT5 Trust.
2. The particular Transaction to which this Confirmation relates is a Rate Cap,
the terms of which are as follows:
Notional Amount: As detailed in Schedule A attached
hereto for each Calculation Period.
Trade Date: October 12, 2004
Effective Date: October 14, 2004
Termination Date: June 25, 2007, subject to Adjustment in
accordance with the Following Business
Day Convention
Fixed Amounts:
Fixed Rate Payer : Party B
Fixed Amount : USD 61,000.00, paid by Party B to
(Premium) Party A on the Fixed Rate Payer
Payment Date, subject to Adjustment in
accordance with the Following Business
Day Convention.
Fixed Rate Payer Payment Date: October 14, 2004
Floating Amounts:
Floating Rate Payer: Party A
Cap Rate: As detailed in Schedule A attached
hereto for each Calculation Period.
Floating Rate Payer Period End The 25th day of each month of each year
Dates: commencing November 25, 2004, through
and including the Termination Date,
subject to adjustment in accordance
with the Following Business Day
Convention
Floating Rate Payer Payment Amount: To be determined in accordance with the
following formula:
Greater of (I) Scale Factor (as set
forth in Schedule A attached hereto)*
(Floating Rate Option - Cap Rate) *
Notional Amount * Floating Rate Day
Count Fraction, and (ii) zero
Floating Rate Payer Payment Dates: Two Business Days preceding each
Floating Rate Payer Period End Date
Floating Rate for initial 1.90379%
Calculation Period:
Floating Rate Option: USD-LIBOR-BBA, provided however, that
if the Floating Rate Option is greater
than the rate detailed in Schedule A
under the heading `Cap Ceiling' then
the Floating Rate Option shall be
deemed to be the rate detailed in
Schedule A under the heading `Cap
Ceiling' for such Calculation Period
Designated Maturity: 1 month, except for the first period
which shall be the linear
interpolation between 1 month and 2
month
Spread: None
Floating Rate Day Count Fraction: Act/360
Reset Dates: The first day of each Floating Rate
Payer Calculation Period.
Rate Cut-off Dates: Inapplicable
Method of Averaging: Inapplicable
Compounding: Inapplicable
Compounding Dates: Inapplicable
Business Days for Payment: New York
Calculation Agent: Party A
3. Credit Support Documents:
Party A Credit Support Documents: Inapplicable
Party B Credit Support Documents: Inapplicable
4. Account Details:
Payments to Party A: ▇▇ ▇▇▇▇▇▇ Chase Bank, NY
ABA#: ▇▇▇▇▇▇▇▇▇
Acct.#: ▇▇▇-▇-▇▇▇▇▇▇
Acct. Name: WestLB-NY Derivatives
Ref: 381539N
Swift Code: ▇▇▇▇▇▇▇▇▇▇▇
Payments to Party B: ▇▇▇▇▇ Fargo Bank, N.A.
ABA#: ▇▇▇-▇▇▇-▇▇▇
Acct. Number: ▇▇▇▇▇▇▇▇▇▇
Acct. Name: Corporate Trust Clearing
For Further Credit: 17119502, ABFC
2004-OPT5
Group A2 Reserve Account
5. Offices:
The Office of Party A for the Transaction is New York.
The Office of Party B for the Transaction is Columbia, Maryland.
6. Tax Representations:
Payer Representations. For the purpose of Section 3(e) of this Agreement,
Party A makes the following representations:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of the
ISDA Form) to be made by it to the other party under this Agreement. In
making this representation, it may rely on (i) the accuracy of any
representations made by the other party pursuant to Section 3(f) of the
ISDA Form, (ii) the satisfaction of the agreement contained in Section
4(a)(i) or 4(a)(iii) of the ISDA Form and the accuracy and effectiveness
of any document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of the ISDA Form and (iii) the satisfaction of the agreement of
the other party contained in Section 4(d) of the ISDA Form, provided that
it shall not be a breach of this representation where reliance is placed
on clause (ii) and the other party does not deliver a form or document
under Section 4(a)(iii) by reason of material prejudice of its legal or
commercial position.
Payee Representations. For the purpose of Section 3 (f) of this Agreement,
Party A and Party B make the following representations:
(a) Party A represents that it is a foreign corporation for U.S.
federal tax purposes. Each payment received or to be received by it in
connection with this Agreement will be effectively connected with its
conduct of a trade or business in the United States.
(b) Party B represents that it is the Trustee under the Pooling and
Servicing Agreement.
7. For the purpose of Sections 4(a)(i) and (ii) of the ISDA Form, each party
agrees to deliver the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:
(i) As soon as possible or upon demand, any document required or
reasonably requested to allow the other party to make payments under
this Transaction without any deduction or withholding for or on
account of any Tax, or with such deduction or withholding at a
reduced rate.
(b) Other documents to be delivered are:
(i) Upon execution and delivery of this Confirmation, copies of
specimen signatures of persons authorized to execute this
Confirmation. This document will be covered by the 3(d)
representation of the ISDA Form.
(ii) As soon as possible upon request, such other documents as the
other party may reasonably request in connection with the
Transaction to which this Confirmation relates. These documents will
be covered by the 3(d) representation of the ISDA Form.
(iii) With respect to Party A only, annual audited financial
statements prepared in accordance with generally accepted accounting
principles in Germany. These documents will be covered by the 3(d)
representation of the ISDA Form.
(iv) With respect to both parties, a legal opinion in a form
acceptable to the other party.
8. Addresses for Notices:
For the purpose of Section 12(a) of the ISDA Form:
Address for notices or communications to Party A:
WestLB AG, New York Branch
Woolgate Exchange
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Attn.: Documentation Unit
Tel: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
Fax: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
Address for notices or communications to Party B:
▇▇▇▇▇ Fargo Bank, N.A.
Corporate Trust Services
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
9. Additional Provisions: Notwithstanding the terms of Sections 5
and 6 of the ISDA Form, if Party B has
satisfied its payment obligations under
Section 2(a)(i) of the ISDA Form, then
unless Party A is required pursuant to
appropriate proceedings to return to
Party B or otherwise returns to Party B
upon demand of Party B any portion of
such payment, (a) the occurrence of an
event described in Section 5(a) of the
ISDA Form with respect to Party B shall
not constitute an Event of Default or
Potential Event of Default with respect
to Party B as the Defaulting Party and
(b) Party A shall be entitled to
designate an Early Termination Event
pursuant to Section 6 of the ISDA Form
only as a result of a Termination Event
set forth in either Section 5(b)(i) or
Section 5(b)(ii) of the ISDA Form with
respect to Party A as the Affected Party
or Section 5(b)(iii) of the ISDA Form
with respect to Party A as the Burdened
Party. For purposes of the Transaction
to which this Confirmation relates,
Party B's only obligation under Section
2(a)(i) of the ISDA Form is to pay the
Fixed Amount on the Fixed Rate Payer
Payment Date.
10. Transfer, Amendment and
Assignment: No transfer, amendment, waiver,
supplement, assignment or other
modification of this Transaction shall
be permitted by either party unless each
of Standard & Poors Ratings Group, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc ("S&P"), Fitch Ratings ("Fitch") and
Dominion Bond Rating Service, Inc. have
been provided notice of such transfer,
amendment or assignment and confirms in
writing (including by facsimile
transmission) within five Business Days
after such notice is given that it will
not downgrade, withdraw or modify its
then-current rating of the Class A-2
Certificates, Class A-3 Certificates and
Class A-4 Certificates (the
"Certificates") issued by the Trust
created pursuant to the Pooling and
Servicing Agreement, dated October 1,
2004, among Asset Backed Funding
Corporation, as Depositor, Option One
Mortgage Corporation, as Master
Servicer, and ▇▇▇▇▇ Fargo Bank, N.A., as
Trustee (the "Pooling and Servicing
Agreement).
11. Proceedings: Party A shall not institute against or
cause any other person to institute
against, or join any other person in
instituting against Party B, any
bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings,
or other proceedings under any federal
or state bankruptcy, dissolution or
similar law, for a period of one year
and one day (or, if longer, the
applicable preference period) following
the later of indefeasible payment in
full of the Certificates.
12. Set-off: The provisions for Set-off set forth in
Section 6(e) of the ISDA Form shall not
apply for purposes of this Transaction.
Notwithstanding any provision of this
Confirmation, the ISDA Form or any other
existing or future agreement, each party
irrevocably waives any and all rights it
may have to set off, net, recoup or
otherwise withhold or suspend or
condition payment or performance of any
obligation between it and the other
party hereunder against any obligation
between it and the other party under any
other agreements.
13. Relationship Between Parties:
Each party will be deemed to represent to the other party on the date on
which it enters into this Transaction or an amendment thereof that:
(i) In the case of Party A, it is acting for its own account, and in the
case of Party B, it is acting solely as Trustee. Each Party has made
its own independent decisions to enter into this Transaction and as
to whether this Transaction is appropriate or proper for it based
upon its own judgment and upon advice from such advisors as it has
deemed necessary. It is not relying on any communication (written or
oral) of the other party as investment advice or as a recommendation
to enter into this Transaction; it being understood that information
and explanations related to the terms and conditions of this
Transaction shall not be considered investment advice or a
recommendation to enter into this Transaction. It has not received
from the other party any assurance or guarantee as to the expected
results of this Transaction nor shall any communication (written or
oral) received from the other party be deemed to be an assurance or
guarantee as to the expected results of that Transaction.
(ii) It is capable of evaluating and understanding (on its own behalf or
through independent professional advice), and understands and
accepts, the terms, conditions and risks of this Transaction. It is
also capable of assuming, and assumes, the financial and other risks
of this Transaction.
(iii) The other party is not acting as a fiduciary or an advisor for it in
respect of this Transaction.
(iv) Trustee Capacity. It is expressly understood and agreed by the
parties hereto that insofar as this Confirmation is executed by the
Trustee (i) this Confirmation is executed and delivered by ▇▇▇▇▇
Fargo Bank, N.A., not in its individual capacity but solely as
Trustee under the Pooling and Servicing Agreement in the exercise of
the powers and authority conferred to and vested in it thereunder
and (ii) under no circumstances shall ▇▇▇▇▇ Fargo Bank, N.A. in its
individual capacity be personally liable for the payment of any
indebtedness or expenses or be personally liable for the breach or
failure of any obligation, representation, warranty or covenant made
or undertaken under this Confirmation. Party B is executing, and
acting under, the Confirmation as directed in the Pooling and
Servicing Agreement.
14. Sole Transaction
Notwithstanding anything else in this Agreement to the contrary, the Transaction
contemplated by this Confirmation between the parties hereto and dated as of the
date hereof is and will be the only Transaction governed by this Confirmation.
15. Additional Basic Representations
In Section 3(a) of this Agreement the following representations which shall be
construed as Section 3(a)(vi) and (vii) shall be added:
(vi) Organization. It is, in the case of Party A, a bank organized under
the laws of Germany, and in the case of Party B, a national banking
association organized under the laws of the United States.
(vii) Eligible Contract Participant. It is an "eligible contract
participant" as defined in Section 1a (12) of the Commodity Exchange
Act (7 U.S.C. 1a), as amended by the Commodity Futures Modernization
Act of 2000.
16. Automatic Early Termination
The Automatic Early Termination provisions of Section 6(a) of the ISDA Form will
not apply to Party A or Party B; provided, however, that for Party A (i) where
the Event of Default specified in Section 5(a)(vii)(1), (3), (4), (5), (6) or,
to the extent analogous thereto, (8) of the ISDA Form, is governed by a system
of law which does not permit termination to take place after the occurrence of
the relevant Event of Default, then the Automatic Early Termination provision of
Section 6(a) of the ISDA Form will apply to the Defaulting Party for purpose of
such Event of Default, and (ii) to the extent that Section 6(a) of the ISDA Form
is applicable, the second sentence of Section 6(a) of the ISDA Form shall only
apply with respect to an Event of Default specified in Section 5(a)(vii)(4) of
the ISDA Form or, to the extent analogous thereto, Section 5(a)(vii)(8) of the
ISDA Form, if the relevant petition is presented to a court or other authority
in the jurisdiction where the Defaulting Party is incorporated.
17. Indemnity
Party A agrees to indemnify, defend and hold harmless Asset Backed
Funding Corporation, Banc of America Securities LLC, ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, Countrywide Securities Corporation and ▇▇▇▇▇ Fargo
Bank, N.A. (each an "Indemnified Party") against any and all Losses to which any
may become subject, under the United States Securities Act of 1933 or otherwise,
insofar as such Losses arise out of or result from any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus
Supplement dated October 12, 2004 (the "Prospectus Supplement") in respect of
the Certificates or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or omission was made in the text (except the first paragraph)
under the heading "The Counterparty" within the Section entitled "Description of
the Certificates" on pages S-83 and S-84.
Each of the Indemnified Parties are hereby recognized by the Parties as
third-party beneficiaries of this Confirmation with rights under this Section 17
as if such Indemnified Parties were parties to this Confirmation.
"Losses" means (a) any actual out-of-pocket loss incurred by any
Indemnified Party and (b) any actual out-of-pocket costs or expenses reasonably
incurred by any Indemnified Party, including reasonable fees or expenses of its
counsel and other expenses incurred in connection with investigating or
defending any claim, action or other proceeding which entitle such party to be
indemnified hereunder, plus (c) interest on the amount paid by any Indemnified
Party from the date of such payment to the date of payment by Party A, at the
statutory rate applicable to judgment for breach of contract.
18. Rating Agency Downgrade.
Notwithstanding anything else to the contrary herein, in the event that Party
A's short-term unsecured and unsubordinated debt rating is withdrawn or reduced
below "A-1" by S&P or its short-term unsecured and unsubordinated debt rating is
withdrawn or reduced below "F1" by Fitch (S&P and Fitch together the "Swap
Rating Agencies", and such rating thresholds, "Approved Rating Thresholds"),
within 30 Business Days after such rating withdrawal or downgrade (unless,
within 30 Business Days after such rating withdrawal or downgrade, each such
Swap Rating Agency has reconfirmed the rating of the Certificates which was in
effect immediately prior to such withdrawal or downgrade), Party A shall: (i)
seek another entity to replace Party A as party to this Agreement that meets or
exceeds the Approved Rating Thresholds on terms substantially similar to this
Agreement, (ii) obtain a guaranty of, or a contingent agreement of another
person with the Approved Rating Thresholds, to honor Party A's obligations under
this Agreement, (iii) post collateral in accordance with a 1994 ISDA Credit
Support Annex (Security Interest - New York law) and which will be sufficient to
restore the immediately prior ratings of the Certificates; or (iv) establish any
other arrangement satisfactory to the applicable Swap Rating Agency which will
be sufficient to restore the immediately prior ratings of the Certificates.
19. Additional Termination Events
Additional Termination Events will apply. If a Rating Agency Downgrade has
occurred and Party A has not, within 30 Business Days, complied with Section 18
above, then an Additional Termination Event shall have occurred with respect to
Party A and Party A shall be the sole Affected Party with respect to such an
Additional Termination Event. For the avoidance of doubt, this Additional
Termination Event will only occur upon the written notice of Party B. The second
method and market quotation shall apply.
20. Amendment to the ISDA Form
The "Failure to Pay or Deliver" provision in Section 5(a)(i) of the ISDA Form is
hereby amended by deleting the word "third" in the third line thereof and
inserting the word "first" in place thereof. The provisions in Sections
5(a)(ii), 5(a)(iii), 5(a)(iv), 5(a)(v), 5(a)(vi) and 5(b)(iv), and clause (2) in
the "Bankruptcy" provisions in Section 5(a)(vii) of the ISDA Form are hereby
deleted. The "Illegality" provision in Section 5(b)(i) of the ISDA Form is
hereby amended by adding the following words at the end of the fifth line: "or
regulatory requirements or filing burdens under the United States Securities Act
of 1933, as amended (the "Securities Act") or the United States Securities
Exchange Act of 1934, as amended (the "Exchange Act") are imposed on the party
(including without limitation any obligation imposed on Asset Backed Funding
Corporation to include information about Party A in any filing under the
Securities Act or the Exchange Act in respect of the Certificates, which
information Party A is unable or unwilling to timely supply) which such party
(which will be the Affected Party) otherwise than for the operation of this
Transaction would not be required to comply with".
21. Definitions
Capitalized terms not otherwise defined herein or in the Definitions shall have
the meanings set forth in the Pooling and Servicing Agreement. In the case of
any inconsistency between this Confirmation and such terms, this Confirmation
will prevail.
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Confirmation and returning it to us by facsimile
transmission at ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇. No hard copy of this Confirmation will follow.
If you require hard copies, please contact Documentation Unit, WestLB AG, New
York Branch, Woolgate Exchange, ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ tel: +44
▇▇ ▇▇▇▇ ▇▇▇▇. If you have any questions regarding payments or resets, please
contact our Business Area Control Group at (▇▇▇) ▇▇▇-▇▇▇▇.
We are happy to have completed this transaction with you.
Yours sincerely,
WESTLB AG, NEW YORK BRANCH
By: ____________________________ By:______________________________
Name: Name:
Title: Title:
Accepted and confirmed as of
The date first above written:
▇▇▇▇▇ Fargo Bank, N.A.,
not in its individual capacity but solely as trustee for
ABFC 2004-OPT5 Trust
By: ________________________
Name:
Title:
Schedule A
For use with Reference Number 381539N
(All dates subject to adjustment in accordance with the Following Business
Day Convention)
From and To but Notional Cap Cap Scale
Period Including Excluding Amount Rate Ceiling Factor
1 10/14/04 11/25/04 2,807,130.00 3.96% 8.16% 100.00
2 11/25/04 12/25/04 2,737,921.26 5.69% 8.16% 100.00
3 12/25/04 01/25/05 2,668,494.52 5.49% 8.16% 100.00
4 01/25/05 02/25/05 2,598,824.23 5.48% 8.15% 100.00
5 02/25/05 03/25/05 2,528,892.04 6.11% 8.15% 100.00
6 03/25/05 04/25/05 2,458,720.78 5.47% 8.14% 100.00
7 04/25/05 05/25/05 2,388,320.83 5.67% 8.14% 100.00
8 05/25/05 06/25/05 2,317,910.57 5.46% 8.13% 100.00
9 06/25/05 07/25/05 2,249,327.40 5.66% 8.13% 100.00
10 07/25/05 08/25/05 2,182,534.80 5.45% 8.12% 100.00
11 08/25/05 09/25/05 2,117,485.76 5.36% 8.12% 100.00
12 09/25/05 10/25/05 2,054,134.65 5.54% 8.11% 100.00
13 10/25/05 11/25/05 1,992,437.02 5.34% 8.10% 100.00
14 11/25/05 12/25/05 1,932,349.58 5.53% 8.10% 100.00
15 12/25/05 01/25/06 1,873,830.20 5.33% 8.09% 100.00
16 01/25/06 02/25/06 1,816,837.93 5.32% 8.08% 100.00
17 02/25/06 03/25/06 1,761,332.72 5.93% 8.08% 100.00
18 03/25/06 04/25/06 1,707,275.66 5.31% 8.07% 100.00
19 04/25/06 05/25/06 1,654,628.88 5.50% 8.06% 100.00
20 05/25/06 06/25/06 1,603,356.78 5.59% 8.05% 100.00
21 06/25/06 07/25/06 1,553,433.24 6.88% 8.04% 100.00
22 07/25/06 08/25/06 1,505,094.05 7.08% 8.04% 100.00
23 08/25/06 09/25/06 1,458,113.38 7.07% 8.03% 100.00
24 09/25/06 10/25/06 1,412,347.96 7.31% 8.02% 100.00
25 10/25/06 11/25/06 1,367,766.26 7.05% 8.01% 100.00
26 11/25/06 12/25/06 1,324,337.91 7.39% 8.00% 100.00
27 12/25/06 01/25/07 1,282,035.19 7.49% 8.00% 100.00
28 01/25/07 02/25/07 1,240,886.08 7.63% 7.99% 100.00
29 02/25/07 03/25/07 1,200,821.25 7.99% 7.99% 100.00
30 03/25/07 04/25/07 1,161,790.32 7.62% 7.99% 100.00
31 04/25/07 05/25/07 1,123,766.53 7.63% 7.98% 100.00
32 05/25/07 06/25/07 1,086,724.07 7.49% 7.98% 100.00
EXHIBIT O
Form of Certification
ABFC 2004-OPT5 TRUST,
ASSET-BACKED CERTIFICATES, SERIES 2004-OPT5
I, [identify the certifying individual] certify that:
1. I have reviewed the annual report on Form 10-K, and all Monthly Form 8-K's
containing Distribution Date Statements filed in respect of periods
included in the year covered by this annual report, of the ABFC 2004-OPT5
Trust;
2. Based on my knowledge, the information in these reports, taken as a whole,
does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of
the last day of the period covered by this annual report;
3. Based on my knowledge, the distribution or servicing information required
to be provided to the Trustee by the Master Servicer under the Pooling and
Servicing Agreement, dated as of October 1, 2004 (the "Agreement"), among
Asset Backed Funding Corporation, as depositor, Option One Mortgage
Corporation, as master servicer (the "Master Servicer"), and ▇▇▇▇▇ Fargo
Bank, N.A., as trustee (the "Trustee") for inclusion in these reports is
included in these reports;
4. Based on my knowledge and upon the annual compliance statement included in
the annual report on Form 10-K and required to be delivered to the Trustee
in accordance with the terms of the Agreement, and except as disclosed in
the reports, the Master Servicer has fulfilled its obligations under the
Agreement;
5. The reports disclose all significant deficiencies relating to the Master
Servicer's compliance with the minimum servicing standards based upon the
report provided by an independent public accountant, after conducting a
review in compliance with the Uniform Single Attestation Program for
Mortgage Bankers or similar procedure, as set forth in the Agreement, that
is included in these reports; and
6. In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties: 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 2004-OPT5 TRUST,
ASSET-BACKED CERTIFICATES, SERIES 2004-OPT5
I, [identify the certifying individual], certify to Asset Backed Funding
Corporation and its officers, directors and affiliates, and with the knowledge
and intent that they will rely upon this certification, that:
1. I have reviewed the annual report on Form 10-K for the calendar year [___]
and all Monthly Form 8-K's containing Distribution Date Statements filed
in respect of periods included in the year covered by that annual report,
of the ABFC 2004-OPT5 Trust;
2. Based on my knowledge, the distribution information in the Distribution
Date Statements contained in all Monthly Form 8-K's included in the
year covered by the annual report on Form 10-K for the calendar year
[___], taken as a whole, does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such
statements were made, not misleading as of the last day of the period
covered by that annual report; and
3. Based on my knowledge, the distribution or servicing information required
to be provided to the Trustee by the Master Servicer under the Pooling and
Servicing Agreement, dated as of October 1, 2004, among Asset Backed
Funding Corporation, as depositor, Option One Mortgage Corporation, as
master servicer (the "Master Servicer"), and ▇▇▇▇▇ Fargo Bank, N.A., as
trustee (the "Trustee"), for inclusion in these reports is included in
these reports.
▇▇▇▇▇ FARGO BANK, N.A., as Trustee
By:______________________________________
Name:
Title:
EXHIBIT P-2
Form of Certification to be Provided by the Master Servicer to the Depositor
ABFC 2004-OPT5 TRUST,
ASSET-BACKED CERTIFICATES, SERIES 2004-OPT5
I, [identify the certifying individual], certify to Asset Backed Funding
Corporation and its officers, directors and affiliates, and with the knowledge
and intent that they will rely upon this certification, that:
1. I have reviewed the annual report on Form 10-K for the calendar year
[___], and all Monthly Form 8-K's containing Distribution Date Statements
filed in respect of periods included in the year covered by that annual
report, of the ABFC 2004-OPT5 Trust;
2. Based on my knowledge, the servicing information in the Distribution
Date Statements contained in all Monthly Form 8-K's included in the
year covered by the annual report on Form 10-K for the calendar year
[___], taken as a whole, does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such
statements were made, not misleading as of the last day of the period
covered by that annual report;
3. Based on my knowledge, the servicing information required to be provided
to the Trustee by the Master Servicer under the Pooling and Servicing
Agreement, dated as of October 1, 2004 (the "Agreement"), among Asset
Backed Funding Corporation, as depositor, Option One Mortgage Corporation,
as master servicer (the "Master Servicer"), and ▇▇▇▇▇ Fargo Bank, N.A., as
trustee (the "Trustee"), for inclusion in these reports is included in
these reports;
4. I am responsible for reviewing the activities performed by the Master
Servicer under the Agreement and based upon my knowledge and the annual
compliance review required under the Agreement, and except as disclosed in
the reports, the Master Servicer has fulfilled its obligations under the
Agreement; and
5. The reports disclose all significant deficiencies relating to the Master
Servicer's compliance with the minimum servicing standards based upon the
report provided by an independent public accountant, after conducting a
review in compliance with the Uniform Single Attestation Program for
Mortgage Bankers or similar procedure, as set forth in the Agreement, that
is included in these reports.
OPTION ONE MORTGAGE CORPORATION
By:______________________________________
Name:
Title:
Schedule I