Exhibit 4.1
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ASSET BACKED FUNDING CORPORATION,
Depositor
▇▇▇▇▇ FARGO HOME MORTGAGE, INC.,
Servicer
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
Securities Administrator
and
BANK ONE, N.A.,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2003
ABFC 2003-WF1 Trust
ABFC Mortgage Loan Asset-Backed Certificates, Series 2003-WF1
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms...................................................................................3
Section 1.02 Accounting.....................................................................................31
Section 1.03 Rights of the NIMS Insurer.....................................................................31
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans...................................................................31
Section 2.02 Acceptance by Trustee..........................................................................33
Section 2.03 Repurchase or Substitution of Mortgage Loans...................................................34
Section 2.04 Representations, Warranties and Covenants of the Securities Administrator......................37
Section 2.05 Representations, Warranties and Covenants of the Servicer......................................38
Section 2.06 Representations and Warranties of the Depositor................................................39
Section 2.07 Issuance of Certificates and the Uncertificated Regular Interests..............................41
ARTICLE III
ADMINISTRATION AND SERVICING OF THE TRUST FUND
Section 3.01 Servicer to Act as Servicer....................................................................41
Section 3.02 Collection of Mortgage Loan Payments...........................................................42
Section 3.03 Realization Upon Defaulted Mortgage Loans......................................................42
Section 3.04 Collection Account and Distribution Account....................................................43
Section 3.05 Permitted Withdrawals From the Collection Account..............................................45
Section 3.06 Establishment of Escrow Accounts; Deposits in Escrow Accounts..................................46
Section 3.07 Permitted Withdrawals From Escrow Account......................................................46
Section 3.08 Payment of Taxes, Insurance and Other Charges; Collections Thereunder; Primary Mortgage
Insurance.....................................................................................46
Section 3.09 Transfer of Accounts...........................................................................47
Section 3.10 Maintenance of Hazard Insurance................................................................47
Section 3.11 Maintenance of Mortgage Impairment Insurance Policy............................................47
Section 3.12 Fidelity Bond, Errors and Omissions Insurance..................................................48
Section 3.13 Title, Management and Disposition of REO Property..............................................48
Section 3.14 Due-on-Sale Clauses; Assumption and Substitution Agreements....................................49
Section 3.15 Duties of the Credit Risk Manager..............................................................50
Section 3.16 Optional Purchases of 60+ Day Delinquent Loans by Servicer.....................................50
Section 3.17 Trustee to Cooperate; Release of Files.........................................................51
Section 3.18 Servicing Compensation.........................................................................52
Section 3.19 Annual Statement as to Compliance..............................................................52
Section 3.20 Annual Independent Certified Public Accountants' Reports.......................................52
Section 3.21 Access to Certain Documentation and Information Regarding the Mortgage Loans...................53
Section 3.22 Reports Filed with Securities and Exchange Commission; Annual Certification of Securities and
Exchange Commission Filing....................................................................53
Section 3.23 Obligations of the Servicer in Respect of Compensating Interest................................55
Section 3.24 Prepayment Charges.............................................................................55
Section 3.25 Investment of Funds in the Collection Account and the Distribution Account.....................55
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Section 3.26 Liability of Servicer; Indemnification.........................................................56
Section 3.27 Reports of Foreclosure and Abandonment of Mortgaged Properties.................................57
Section 3.28 No Personal Solicitation.......................................................................57
Section 3.29 Limitation of Liability of the Credit Risk Manager.............................................57
Section 3.30 Auction Administration Agreement; Auction Swap Agreement.......................................57
ARTICLE IV
FLOW OF FUNDS
Section 4.01 Interest Distributions and Credit Risk Manager Fee.............................................58
Section 4.02 Distributions of Principal and Monthly Excess Cashflow Amounts.................................59
Section 4.03 Allocation of Losses...........................................................................62
Section 4.04 Method of Distribution.........................................................................62
Section 4.05 Distributions on Book-Entry Certificates.......................................................62
Section 4.06 Statements.....................................................................................62
Section 4.07 Remittance Reports; Advances...................................................................65
Section 4.08 [Reserved].....................................................................................66
Section 4.09 REMIC Distributions............................................................................66
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates...............................................................................67
Section 5.02 Registration of Transfer and Exchange of Certificates..........................................68
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates..............................................72
Section 5.04 Persons Deemed Owners..........................................................................72
Section 5.05 Appointment of Paying Agent....................................................................73
ARTICLE VI
THE SERVICER AND THE DEPOSITOR
Section 6.01 Liability of the Servicer and the Depositor....................................................73
Section 6.02 Merger or Consolidation of, or Assumption of the Obligations of, the Servicer or the Depositor.73
Section 6.03 Limitation on Liability of the Servicer and Others.............................................73
Section 6.04 Servicer Not to Resign.........................................................................74
Section 6.05 Delegation of Duties...........................................................................74
ARTICLE VII
DEFAULT
Section 7.01 Servicer Events of Termination.................................................................74
Section 7.02 Securities Administrator to Act; Appointment of Successor......................................76
Section 7.03 Waiver of Defaults.............................................................................76
Section 7.04 Notification to Certificateholders.............................................................77
Section 7.05 Survival of Servicer Liabilities...............................................................77
ARTICLE VIII
THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 8.01 Duties of Trustee and Securities Administrator.................................................77
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Section 8.02 Certain Matters Affecting the Trustee and the Securities Administrator.........................78
Section 8.03 Trustee and Securities Administrator Not Liable for Certificates or Mortgage Loans.............79
Section 8.04 Trustee and Securities Administrator May Own Certificates......................................80
Section 8.05 Trustee, Securities Administrator and Custodian Fees and Expenses..............................80
Section 8.06 Eligibility Requirements for Trustee and Securities Administrator..............................81
Section 8.07 Resignation or Removal of Trustee and Securities Administrator.................................81
Section 8.08 Successor Trustee and Successor Securities Administrator.......................................82
Section 8.09 Merger or Consolidation of Trustee or Securities Administrator.................................82
Section 8.10 Appointment of Co-Trustee or Separate Trustee..................................................83
Section 8.11 Limitation of Liability........................................................................84
Section 8.12 Trustee May Enforce Claims Without Possession of Certificates..................................84
Section 8.13 Suits for Enforcement..........................................................................84
Section 8.14 Waiver of Bond Requirement.....................................................................84
Section 8.15 Waiver of Inventory, Accounting and Appraisal Requirement......................................84
Section 8.16 Appointment of Custodian.......................................................................85
ARTICLE IX
REMIC AND GRANTOR TRUST ADMINISTRATION
Section 9.01 REMIC Administration...........................................................................85
Section 9.02 Prohibited Transactions and Activities.........................................................87
Section 9.03 Indemnification with Respect to Certain Taxes and Loss of REMIC Status.........................87
Section 9.04 REO Property...................................................................................87
Section 9.05 Grantor Trust Administration...................................................................88
ARTICLE X
TERMINATION
Section 10.01 Termination....................................................................................88
Section 10.02 Additional Termination Requirements............................................................90
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment......................................................................................90
Section 11.02 Recordation of Agreement; Counterparts.........................................................91
Section 11.03 Limitation on Rights of Certificateholders.....................................................91
Section 11.04 Governing Law; Jurisdiction....................................................................92
Section 11.05 Notices........................................................................................92
Section 11.06 Severability of Provisions.....................................................................93
Section 11.07 Article and Section References.................................................................93
Section 11.08 Notice to the Rating Agencies and the NIMS Insurer.............................................93
Section 11.09 Further Assurances.............................................................................94
Section 11.10 Benefits of Agreement..........................................................................94
Section 11.11 Acts of Certificateholders.....................................................................94
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EXHIBITS:
Exhibit A-1 Form of Class A-1 Certificates
Exhibit A-2 Form of Class A-2 Certificates
Exhibit C-1 Form of Class R Certificates
Exhibit C-2 Form of Class M-1 Certificates
Exhibit C-3 Form of Class M-2 Certificates
Exhibit C-4 Form of Class M-3 Certificates
Exhibit C-5 Form of Class M-4 Certificates
Exhibit C-6 Form of Class CE Certificates
Exhibit C-7 Form of Class P Certificates
Exhibit D Mortgage Loan Schedule
Exhibit E Form of Request for Release
Exhibit F-1 Form of Custodian's Initial Certification
Exhibit F-2 Form of Custodian's Interim Certification
Exhibit F-3 Form of Custodian's Final Certification
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 Investment Letter (Rule 144A)
Exhibit K Form of Residual Certificate Transfer Affidavit
Exhibit L Form of Transferor Certificate
Exhibit M Depository Agreement
Exhibit N Monthly Information Provided by Servicer
Exhibit O Auction Administration Agreement
Exhibit P-1 Form of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification
Exhibit P-2 Form of Securities Administrator's Certification to Depositor
Exhibit P-3 Form of Servicer's Certification to Depositor
Exhibit Q Form of Auction Swap Agreement
Schedule I ▇▇▇▇▇ Fargo Prepayment Charge Matrix
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This Pooling and Servicing Agreement is dated as of March 1, 2003 (the
"Agreement"), among ASSET BACKED FUNDING CORPORATION, as depositor (the
"Depositor"), ▇▇▇▇▇ FARGO HOME MORTGAGE, INC., as servicer (the "Servicer"),
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as securities administrator
(the "Securities Administrator") and BANK ONE, N.A., as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor intends to sell pass-through certificates (collectively,
the "Certificates"), to be issued hereunder in multiple Classes, which in the
aggregate will evidence the entire beneficial ownership interest in the Trust
Fund created hereunder. The Certificates will consist of nine Classes of
Certificates, designated as (i) the Class A-1 and Class A-2 Certificates, (ii)
the Class M-1, Class M-2, Class M-3 and Class M-4 Certificates, (iii) the Class
CE Certificates, (iv) the Class P Certificates and (v) the Class R Certificates.
As provided herein, the Trustee shall elect that the Trust Fund,
exclusive of the rights of the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-1, Class M-2, Class
M-3 and Class M-4 Certificates to receive payments in respect of the Net WAC
Rate Carryover Amount (the "Basis Risk Rights") and the rights and obligations
of the Class A-2 Certificates under the Auction Swap Agreement (the "Auction
Swap Rights"), be treated for federal income tax purposes as four separate real
estate mortgage investment conduits (each a "REMIC" or, in the alternative,
"REMIC 1," "REMIC 2," "REMIC 3" and "REMIC 4," respectively). The Class T4-A1IO,
Class T4-A2IO, Class T4-M1IO, Class T4-M2IO, Class T4-M3IO, Class T4-M4I0, Class
T4-4, Class T4-11, Class T4-12 and Class T4-13 Interests (such interests, the
"REMIC 4 Components") and the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-1, Class M-2, Class
M-3 and Class M-4 Certificates represent all of the "regular interests" in REMIC
4. The Class CE Certificates represent the REMIC 4 Components collectively. Each
of the Class R-1, Class R-2, Class R-3 and Class R-4 Interests represents the
sole Class of "residual interest" in REMIC 1, REMIC 2, REMIC 3 and REMIC 4,
respectively, for purposes of the REMIC Provisions. There are four classes of
uncertificated REMIC 1 Regular Interests (the Class T1-1, Class T1-2, Class T1-3
and Class T1-4 Interests), seven Classes of uncertificated REMIC 2 Regular
Interests (the Class T2-1, Class T2-2, Class T2-3, Class T2-4, Class T2-11,
Class T2-12 and Class T2-13 Interests), and eight Classes of uncertificated
REMIC 3 Regular Interests (the Class T3-A1, Class T3-A2, Class T3-M1, Class
T3-M2, Class T3-M3, Class T3-M4, Class T3-4, Class T3-11, Class T3-12 and Class
T3-13 Interests). Each Class of REMIC 1 Regular Interests, REMIC 2 Regular
Interests, REMIC 3 Regular Interests and REMIC 4 Regular Interests is a "REMIC
Regular Interest." The REMIC 1 Regular Interests will be held as assets of REMIC
2, the REMIC 2 Regular Interests will be held as assets of REMIC 3 and the REMIC
3 Regular Interests will be held as assets of REMIC 4. The Class P Certificates
represent an interest in a grantor trust created hereunder and are entitled to
receive any Prepayment Premiums with respect to the Mortgage Loans. In addition,
any Net WAC Rate Carryover Amounts that are paid with respect to the Class A-1,
Class A-2 or Class M Certificates will be treated as first having been
distributed with respect to the Class CE Certificates and then having been paid
outside of the REMICs to the Class A-1, Class A-2 or Class M Certificateholders.
Each of the Class A-1, Class A-2 and Class M Certificates represents an interest
in a grantor trust created hereunder that holds the related regular interest in
REMIC 4, the Basis Risk Rights, and, in the case of the Class A-2 Certificates,
the Auction Swap Rights. The "latest possible maturity date" for federal income
tax purposes of all interests created hereby will be the Distribution Date
occurring in April, 2033.
The following table sets forth (or describes) the Class
designation, Pass-Through Rate and approximate Original Class Certificate
Principal Balance for each Class of Certificates comprising the interests in the
Trust Fund created hereunder:
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Original Class
Certificate Principal or
Notional Pass-Through Assumed Final
Class Amount Rate Maturity Dates
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A-1 $34,433,000 1.902%(1) December 27, 2032
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A-2 $216,850,000 (2) December 27, 2032(3)
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M-1 $14,609,000 LIBOR + %(4) December 27, 2032
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M-2 $11,688,000 LIBOR + %(5) December 27, 2032
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M-3 $10,226,000 LIBOR + %(6) December 27, 2032
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M-4 $2,922,000 LIBOR + %(7) December 27, 2032
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P N/A N/A N/A
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CE (8) N/A
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R N/A N/A N/A
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Total $290,728,000
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(1) Subject to a cap on any Distribution Date equal to the Net WAC Rate for
that Distribution Date.
(2) For each Distribution Date through the Distribution Date in March 2005,
a fixed rate of 1.982% per annum, subject to a cap equal to the Net WAC
Rate for that Distribution Date. For each Distribution Date occurring
after March 2005, the lesser of (i) the lesser of (a) LIBOR plus 0.75%
per annum (or LIBOR plus 1.125% per annum, after the Optional
Termination Date) and (b) the Maximum Cap Rate for the related
Distribution Date, and (ii) the Net WAC Rate for the related
Distribution Date.
(3) The Class A-2 Certificates are subject to the Mandatory Auction Call in
March 2005.
(4) For the first Interest Accrual Period, 2.028750% per annum. For any
subsequent Interest Accrual Period, a per annum rate equal to the
lesser of: (i) the lesser of (a) LIBOR plus 0.72% per annum (or LIBOR
plus 1.080% per annum, after the Optional Termination Date) and (b) the
Maximum Cap Rate for the related Distribution Date, and (ii) the Net
WAC Rate for the related Distribution Date.
(5) For the first Interest Accrual Period, 3.058750% per annum. For any
subsequent Interest Accrual Period, a per annum rate equal to the
lesser of: (i) the lesser of (a) LIBOR plus 1.75% per annum (or LIBOR
plus 2.625% per annum, after the Optional Termination Date) and (b) the
Maximum Cap Rate for the related Distribution Date, and (ii) the Net
WAC Rate for the related Distribution Date.
(6) For the first Interest Accrual Period, 4.358750% per annum. For any
subsequent Interest Accrual Period, a per annum rate equal to the
lesser of: (i) the lesser of (a) LIBOR plus 3.05% per annum (or LIBOR
plus 4.575% per annum, after the Optional Termination Date) and (b) the
Maximum Cap Rate for the related Distribution Date, and (ii) the Net
WAC Rate for the related Distribution Date.
(7) For the first Interest Accrual Period, 4.558750% per annum. For any
subsequent Interest Accrual Period, a per annum rate equal to the
lesser of: (i) the lesser of (a) LIBOR plus 3.25% per annum and (b) the
Maximum Cap Rate for the related Distribution Date, and (ii) the Net
WAC Rate for the related Distribution Date.
(8) The Class CE Certificates, collectively, represent the beneficial
ownership of the Class CE Interest, which represents the Class T4-A1IO,
Class T4-A2IO, Class T4-M1IO, Class T4-M2IO, Class T4-M3IO, Class
T4-M4IO, Class T4-4, Class T4-11, Class T4-12, and Class T4-I3
Interests.
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ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement or in the Preliminary Statement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. Unless otherwise specified, interest on
the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3 and Class M-4 Certificates and on the REMIC
4 Components for any Distribution Date will be calculated on the basis of the
actual number of days in the related Interest Accrual Period over a 360-day
year, and interest on the Class A-1 Certificates and the Class A-2 Certificates
will be calculated on the basis of a 360-day year consisting of twelve 30-day
months.
"1933 Act": The Securities Act of 1933, as amended.
"60+ Day Delinquent Loan": Each Mortgage Loan with respect to which any
portion of a Monthly Payment is, as of the last day of the prior Due Period, two
months or more past due (without giving effect to any grace period), and all REO
Property.
"Account": Either of the Collection Account or the Distribution
Account.
"Accrued Certificate Interest": With respect to each Distribution Date
and Class of Certificates (other than the Class P, Class CE and Class R
Certificates), an amount equal to the interest accrued at the applicable rate
set forth or described opposite such Class in the table in the Preliminary
Statement during the related Interest Accrual Period on the Certificate
Principal Balance of such Class of Certificates, reduced by such Class's
Interest Percentage of Relief Act Interest Shortfalls for such Distribution
Date. The Class P, Class CE and Class R Certificates will not be entitled to
distributions in respect of interest.
"Adjustable Rate Mortgage Loan": A Mortgage Loan the documents for
which provide for the adjustment of the Mortgage Interest Rate payable in
respect thereof at any period during the life of such loan.
"Adjusted Net Maximum Mortgage Rate": With respect to any Mortgage Loan
for any Distribution Date, a per annum rate equal to the applicable Maximum
Mortgage Interest Rate for such Mortgage Loan (if it is an Adjustable Rate
Mortgage Loan) or the fixed Mortgage Interest Rate for such Mortgage Loan, if it
is a fixed-rate Mortgage Loan, as of the beginning of the related Due Period,
less the Expense Fee Rate.
"Adjusted Net Mortgage Rate": With respect to any Mortgage Loan for any
Distribution Date, a per annum rate equal to the related Mortgage Interest Rate,
as of the beginning of the related Due Period, less the Expense Fee Rate.
"Adjustment Date": With respect to each Adjustable Rate Mortgage Loan,
each adjustment date on which the Mortgage Interest Rate of such Adjustable Rate
Mortgage Loan changes pursuant to the related Mortgage Note. The first
Adjustment Date following the Cut-off Date as to each Adjustable Rate Mortgage
Loan is set forth in the Mortgage Loan Schedule.
"Advance": As to any Mortgage Loan, any advance made by the Servicer in
respect of any Distribution Date pursuant to Section 4.07.
"Adverse REMIC Event": As defined in Section 9.01(f) hereof.
"Affiliate": With respect to any Person, any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" means the power to direct the management and policies of a
Person, directly or indirectly, whether through ownership of voting securities,
by contract or otherwise and "controlling" and "controlled" shall have meanings
correlative to the foregoing.
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"Agreement": This Pooling and Servicing Agreement and all amendments
and supplements hereto.
"Applicable Regulations": As to any Mortgage Loan, all federal, state
and local laws, statutes, rules and regulations applicable thereto.
"Applied Realized Loss Amount": With respect to each Distribution Date,
the excess, if any, of (a) the aggregate of the Certificate Principal Balances
of the Certificates (after giving effect to all distributions on such
Distribution Date) over (b) the Pool Balance as of the end of the related Due
Period.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form (excepting therefrom the name of the
assignee and mortgage recordation information which has not yet been returned by
the applicable recorder's office), reflecting the sale of the Mortgage.
"Assumed Final Maturity Date": As to each Class of Certificates, the
date set forth as such in the Preliminary Statement.
"Auction Administration Agreement:" The Auction Administration
Agreement, in the form of Exhibit O attached hereto, dated as of the Closing
Date, among Bank of America, N.A., the Auction Administrator and the Trustee.
"Auction Administrator": The Securities Administrator, in its capacity
as auction administrator under this Agreement and the Auction Administration
Agreement.
"Auction Swap Agreement": The transactions evidenced by the ISDA Master
Agreement, together with the Schedule and Confirmation and any related documents
thereto dated as of March 27, 2002, between Bank of America, N.A. and the
Auction Administrator.
"Auction Swap Rights": As defined in the Preliminary Statement.
"Available Funds": As to any Distribution Date, an amount equal to the
sum of the following amounts with respect to the Mortgage Loans, net of amounts
reimbursable or payable therefrom to the Servicer, the Trustee and the
Securities Administrator and net of any Stayed Funds and any amounts deposited
in the Collection Account or the Distribution Account, as the case may be, in
error: (a) the aggregate of the Monthly Payments due during the related Due
Period and remitted by the Servicer to the Trustee one Business Day prior to the
related Distribution Date, after deduction of (i) the Securities Administration
Fee for such Distribution Date, (ii) the Servicing Fee for such Distribution
Date, (iii) the Credit Risk Manager Fees for such Distribution Date, and (iv)
any accrued and unpaid Servicing Fees, Securities Administration Fees and Credit
Risk Manager Fees in respect of any prior Distribution Dates, (b) Net
Liquidation Proceeds, Insurance Proceeds, Principal Prepayments, Substitution
Adjustment Amounts, the Purchase Price for any repurchased Mortgage Loan, the
Termination Price with respect to the termination of the Trust pursuant to
Section 10.01 hereof and other unscheduled recoveries of principal and interest
(excluding Prepayment Charges and Servicer Prepayment Charge Payment Amounts) in
respect of the Mortgage Loans collected during the related Prepayment Period,
(c) the aggregate of any amounts received in respect of an REO Property
deposited in the Collection Account for such Distribution Date, (d) any
Compensating Interest for such Distribution Date, and (e) the aggregate of any
Advances made by the Servicer for such Distribution Date.
"Balloon Mortgage Loan": A Mortgage Loan that provides for the payment
of the unamortized principal balance of such Mortgage Loan in a single payment
at the maturity of such Mortgage Loan that is substantially greater than the
preceding monthly payment.
"Balloon Payment": A payment of the unamortized principal balance of a
Mortgage Loan in a single payment at the maturity of such Mortgage Loan that is
substantially greater than the preceding Monthly Payment.
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"Bankruptcy Code": Title 11 of the United States Code, as amended.
"Basic Principal Distribution Amount" means as of any Distribution
Date, the excess of (i) the Principal Remittance Amount for such Distribution
Date over (ii) the Overcollateralization Release Amount, if any, for such
Distribution Date.
"Basis Risk Rights": As defined in the Preliminary Statement.
"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 ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-1, Class M-2, Class M-3 and Class M-4
and 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 city in which the Corporate Trust Office of
the Trustee is located or in the jurisdiction in which the Securities
Administrator is located (initially the State of Maryland and the State of
Minnesota) are authorized or obligated by law or executive order to be closed.
"Certificate": Any Regular Certificate or Class R Certificate.
"Certificate Custodian": Initially, Bank One, N.A.; thereafter any
other Certificate Custodian acceptable to the Depository and selected by the
Trustee.
"Certificate Owner": With respect to each Book-Entry Certificate, any
beneficial owner thereof.
"Certificate Principal Balance": With respect to any Class of
Certificates (other than the Class P, Class CE and Class R Certificates) and any
Distribution Date, will be equal to the Original Class Certificate Principal
Balance reduced by the sum of (i) all amounts actually distributed in respect of
principal of such Class on all prior Distribution Dates and (ii) Applied
Realized Loss Amounts allocated thereto. The Class P, Class CE and Class R
Certificates do not have a Certificate Principal Balance.
"Certificate Register" and "Certificate Registrar": The register
maintained and registrar appointed pursuant to Section 5.02 hereof.
"Certificateholder" or "Holder": The Person in whose name a Certificate
is registered in the Certificate Register, except that a Disqualified
Organization or non-U.S. Person shall not be a Holder of a Class R Certificate
for any purpose hereof.
"Class": Collectively, Certificates or REMIC Regular Interests which
have the same priority of payment and bear the same Class designation and the
form of which is identical except for variation in the Percentage Interest
evidenced thereby.
"Class A 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 combined Certificate Principal Balance of the Class A-1
Certificates and the Class A-2 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 72.00% and (ii)
the Pool Balance as of the last day of the related Due Period and (B) the Pool
Balance as of the last day of the related Due Period, minus the product of (i)
0.50% and (ii) the Pool Balance on the Cut-off Date.
"Class A-1 Certificate": Any one of the Certificates substantially in
the form annexed hereto as Exhibit A-1, executed by the Trustee on behalf of the
Trust and authenticated and delivered by the Trustee, representing the right to
distributions as set forth herein and therein.
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"Class A-1 Certificateholders": Collectively, the Holders of the Class
A-1 Certificates.
"Class A-1 Pass-Through Rate": For any Interest Accrual Period, the
lesser of (i) the related Fixed Rate and (ii) the Net WAC Rate for the related
Distribution Date.
"Class A-2 Certificates": Any one of the Certificates substantially in
the form annexed hereto as Exhibit A-2, executed by the Trustee on behalf of the
Trust and authenticated and delivered by the Trustee, representing the right to
distributions as set forth herein and therein.
"Class A-2 Certificateholders": collectively, the Holders of the Class
A-2 Certificates.
"Class A-2 Pass-Through Rate": For each Interest Accrual Period,
through and including the Interest Accrual Period ending in March 2005, the
lesser of (i) the related Fixed Rate and (ii) the Net WAC Rate for the related
Distribution Date. For any subsequent Interest Accrual Period, the lesser of (i)
(a) on or prior to the Optional Termination Date, the lesser of (1) LIBOR plus
0.75% per annum and (2) the Maximum Cap Rate, and (b) following the Optional
Termination Date, the lesser of (1) LIBOR plus 1.125% per annum and (2) the
Maximum Cap Rate, and (ii) the Net WAC Rate for the related Distribution Date.
"Class CE Certificates": Any one of the Class CE Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-6, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Trustee, representing the right to distributions as set
forth herein and therein, representing the REMIC 4 Components in the aggregate,
and which is entitled to all distributions in respect of the REMIC 4 Components.
"Class CE Distributable Amount": With respect to any Distribution Date,
the aggregate cumulative amount distributable with respect to the REMIC 4
Components less the sum of (i) amounts previously distributed pursuant to
Section 4.02(b)(xv) and (ii) Net WAC Rate Carryforward Amounts distributed on
the current or prior Distribution Dates to other classes of Certificates.
"Class M Certificate": Any one of the Certificates with an "M"
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-2, C-3, C-4 or C-5 executed by the Trustee on behalf of the Trust and
authenticated and delivered by the Trustee, representing the right to
distributions as set forth herein and therein.
"Class M Certificateholder": Any Holder of a Class M-1, Class M-2,
Class M-3 or Class M-4 Certificate.
"Class M-1 Pass-Through Rate": For the first Interest Accrual Period,
2.028750% per annum. For any subsequent Interest Accrual Period, the lesser of
(i) (a) on or prior to the Optional Termination Date, the lesser of (1) LIBOR
plus 0.72% per annum and (2) the Maximum Cap Rate, and (b) following the
Optional Termination Date, the lesser of (1) LIBOR plus 1.080% per annum and (2)
the Maximum Cap Rate, and (ii) the Net WAC Rate for the related Distribution
Date.
"Class M-1 Principal Distribution Amount": As of any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is not in effect,
the excess of (x) the sum of (i) the combined Certificate Principal Balance of
the Class A-1 and Class A-2 Certificates (after taking into account the payment
of the Class A Principal Distribution Amount on such Distribution Date) and (ii)
the Certificate Principal Balance of the Class M-1 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
82.00% and (ii) the Pool Balance as of the last day of the related Due Period
and (B) the Pool Balance as of the last day of the related Due Period, minus the
product of (i) 0.50% and (ii) the Pool Balance on the Cut-off Date.
"Class M-2 Pass-Through Rate": For the first Interest Accrual Period,
3.058750% per annum. For any subsequent Interest Accrual Period, the lesser of
(i) (a) on or prior to the Optional Termination
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Date, the lesser of (1) LIBOR plus 1.75% per annum and (2) the Maximum Cap Rate,
and (b) following the Optional Termination Date, the lesser of (1) LIBOR plus
2.625% per annum and (2) the Maximum Cap Rate, and (ii) the Net WAC Rate for the
related Distribution Date.
"Class M-2 Principal Distribution Amount": As of any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is not in effect,
the excess of (x) the sum of (i) the combined Certificate Principal Balance of
the Class A-1 and Class A-2 Certificates (after taking into account the payment
of the Class A Principal Distribution Amount on such Distribution Date), (ii)
the Certificate Principal Balance of the Class M-1 Certificates (after taking
into account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date) and (iii) the Certificate Principal Balance of the Class M-2
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 90.00% and (ii) the Pool Balance as of the last day of
the related Due Period, and (B) the Pool Balance as of the last day of the
related Due Period, minus the product of (i) 0.50% and (ii) the Pool Balance on
the Cut-off Date.
"Class M-3 Pass-Through Rate": For the first Interest Accrual Period,
4.358750% per annum. For any subsequent Interest Accrual Period, the lesser of
(i) (a) on or prior to the Optional Termination Date, the lesser of (1) LIBOR
plus 3.05% per annum and (2) the Maximum Cap Rate, and (b) following the
Optional Termination Date, the lesser of (1) LIBOR plus 4.575% per annum and (2)
the Maximum Cap Rate, and (ii) the Net WAC Rate for the related Distribution
Date.
"Class M-3 Principal Distribution Amount": As of any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is not in effect,
the excess of (x) the sum of (i) the combined Certificate Principal Balance of
the Class A-1 and Class A-2 Certificates (after taking into account the payment
of the Class A Principal Distribution Amount on such Distribution Date), (ii)
the Certificate Principal Balance of the Class M-1 Certificates (after taking
into account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date), 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) 97.00% and (ii)
the Pool Balance as of the last day of the related Due Period, and (B) the Pool
Balance as of the last day of the related Due Period minus the product of (i)
0.50% and (ii) the Pool Balance on the Cut-off Date.
"Class M-4 Pass-Through Rate": For the first Interest Accrual Period,
4.558750% per annum. For any subsequent Interest Accrual Period, the lesser of
(i) the lesser of (1) LIBOR plus 3.25% per annum and (2) the Maximum Cap Rate,
and (ii) the Net WAC Rate for the related Distribution Date.
"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 combined Certificate Principal Balance of
the Class A-1 and Class A-2 Certificates (after taking into account the payment
of the Class A Principal Distribution Amount on such Distribution Date), (ii)
the Certificate Principal Balance of the Class M-1 Certificates (after taking
into account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the payment of
the Class M-3 Principal Distribution Amount on such Distribution Date), and (v)
the Certificate Principal Balance of the Class M-4 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
99.00% and (ii) the Pool Balance as of the last day of the related Due Period,
and (B) the Pool Balance as of the last day of the related Due Period, minus the
product of (i) 0.50% and (ii) the Pool Balance on the Cut-off 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-7, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Trustee, 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 Trustee,
substantially in the form annexed hereto as Exhibit C-1 and evidencing the
ownership of the Residual Interest. The Class R Certificate represents the
ownership of the Class R-1 Interest, Class R-2 Interest, Class R-3 Interest and
the Class R-4 Interest.
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"Class R-1 Interest": The uncertificated residual interest in REMIC 1.
"Class R-2 Interest": The uncertificated residual interest in REMIC 2.
"Class R-3 Interest": The uncertificated residual interest in REMIC 3.
"Class R-4 Interest": The uncertificated residual interest in REMIC 4.
"Class T1-1 Interest": A regular interest in REMIC 1 that is held as an
asset of REMIC 2 and has a principal balance equal to the Class T1-1 Principal
Amount and bears interest at the Net WAC Rate.
"Class T1-1 Principal Amount": As of any Distribution Date, after the
application of principal payments and Applied Realized Loss Amounts, an amount
equal to 98% of the excess of (a) the Pool Balance over (b) the Remaining
Initial Overcollateralization Amount.
"Class T1-2 Interest": A regular interest in REMIC 1 that is held as an
asset of REMIC 2 and has a principal balance equal to the Class T1-2 Principal
Amount and bears interest at the Net WAC Rate.
"Class T1-2 Principal Amount": As of any Distribution Date, after the
application of principal payments and Applied Realized Loss Amounts, an amount
equal to 1% of the excess of (a) the excess of (i) the Pool Balance over (ii)
the Remaining Initial Overcollateralization Amount over (b) the Subsequent
Overcollateralization Amount.
"Class T1-3 Interest": A regular interest in REMIC 1 that is held as an
asset of REMIC 2 and has a principal balance equal to the Class T1-3 Principal
Amount and bears interest at the Net WAC Rate.
"Class T1-3 Principal Amount": As of any Distribution Date, after the
application of principal payments and Applied Realized Loss Amounts, an amount
equal to 1% of the sum of (a) the excess of (i) the Pool Balance over (ii) the
Remaining Initial Overcollateralization Amount and (b) the Subsequent
Overcollateralization Amount.
"Class T1-4 Interest": A regular interest in REMIC 1 that is held as an
asset of REMIC 2 and has a principal balance equal to the Class T1-4 Principal
Amount and bears interest at the Net WAC Rate.
"Class T1-4 Principal Amount": As of any Distribution Date, an amount
equal to (a) the Initial Overcollateralization Amount minus (b) any principal
payments and Realized Losses and accreted interest allocated to the Class T1-4
Interest as set forth in Section 4.09(d).
"Class T2-1 Interest": A regular interest in REMIC 2 that is held as an
asset of REMIC 3 and has a principal balance equal to the Class T1-1 Principal
Amount and bears interest at the REMIC 2 Pass-Through Rate.
"Class T2-2 Interest": A regular interest in REMIC 2 that is held as an
asset of REMIC 3 and has a principal balance equal to the Class T1-2 Principal
Amount and bears interest at the REMIC 2 Pass-Through Rate.
"Class T2-3 Interest": A regular interest in REMIC 2 that is held as an
asset of REMIC 3 and has a principal balance equal to the Class T1-3 Principal
Amount and bears interest at the REMIC 2 Pass-Through Rate.
"Class T2-4 Interest": A regular interest in REMIC 2 that is held as an
asset of REMIC 3 and has a principal balance equal to the Class T1-4 Principal
Amount and bears interest at the Net WAC Rate.
"Class T2-11 Interest": A regular interest in REMIC 2 that is held as
an asset of REMIC 3 and has a notional balance equal to the Class T1-1 Principal
Amount and bears interest at (a) the Net WAC Rate minus (b) the REMIC 2
Pass-Through Rate.
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"Class T2-12 Interest": A regular interest in REMIC 2 that is held as
an asset of REMIC 3 and has a notional balance equal to the Class T1-2 Principal
Amount and bears interest at (a) the Net WAC Rate minus (b) the REMIC 2
Pass-Through Rate.
"Class T2-13 Interest": A regular interest in REMIC 2 that is held as
an asset of REMIC 3 and has a notional balance equal to the Class T1-3 Principal
Amount and bears interest at (a) the Net WAC Rate minus (b) the REMIC 2
Pass-Through Rate.
"Class T3-A1 Interest": A regular interest in REMIC 3 that is held as
an asset of REMIC 4 and has a principal balance equal to the Certificate
Principal Balance of the Class A-1 Certificates and bears interest at the Net
WAC Rate.
"Class T3-A2 Interest": A regular interest in REMIC 3 that is held as
an asset of REMIC 4 and has a principal balance equal to the Certificate
Principal Balance of the Class A-2 Certificates and bears interest at the Net
WAC Rate.
"Class T3-M1 Interest": A regular interest in REMIC 3 that is held as
an asset of REMIC 4 and has a principal balance equal to the Certificate
Principal Balance of the Class M-1 Certificates and bears interest at the Net
WAC Rate.
"Class T3-M2 Interest": A regular interest in REMIC 3 that is held as
an asset of REMIC 4 and has a principal balance equal to the Certificate
Principal Balance of the Class M-2 Certificates and bears interest at the Net
WAC Rate.
"Class T3-M3 Interest": A regular interest in REMIC 3 that is held as
an asset of REMIC 4 and has a principal balance equal to the Certificate
Principal Balance of the Class M-3 Certificates and bears interest at the Net
WAC Rate.
"Class T3-M4 Interest": A regular interest in REMIC 3 that is held as
an asset of REMIC 4 and has a principal balance equal to the Certificate
Principal Balance of the Class M-4 Certificates and bears interest at the Net
WAC Rate.
"Class T3-4 Interest": A regular interest in REMIC 3 that is held as an
asset of REMIC 4 and has a principal balance equal to the Class T1-4 Principal
Amount and bears interest at the Net WAC Rate.
"Class T3-11 Interest": A regular interest in REMIC 3 that is held as
an asset of REMIC 4 and has a notional balance equal to the Class T1-1 Principal
Amount and is entitled to all interest distributions on the Class T2-11
Interest.
"Class T3-12 Interest": A regular interest in REMIC 3 that is held as
an asset of REMIC 4 and has a notional balance equal to the Class T1-2 Principal
Amount and is entitled to all interest distributions on the Class T2-12
Interest.
"Class T3-13 Interest": A regular interest in REMIC 3 that is held as
an asset of REMIC 4 and has a notional balance equal to the Class T1-3 Principal
Amount and is entitled to all interest distributions on the Class T2-13
Interest.
"Class T4-A1IO Interest": A regular interest in REMIC 4, beneficial
ownership of which is represented by the Class CE Certificates, that has a
notional balance equal to the Certificate Principal Balance of the Class A-1
Certificates and bears interest at a rate equal to the excess, if any, of (i)
the Net WAC Rate over (ii) the Class A-1 Pass-Through Rate.
"Class T4-A2IO Interest": A regular interest in REMIC 4, beneficial
ownership of which is represented by the Class CE Certificiates, that has a
notional balance equal to the Certificate Principal Balance of the
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Class A-2 Certificates and bears interest at a rate equal to the excess, if any,
of (i) the Net WAC Rate over (ii) the Class A-2 Pass-Through Rate.
"Class T4-M1IO Interest": A regular interest in REMIC 4, beneficial
ownership of which is represented by the Class CE Certificates, that has a
notional balance equal to the Certificate Principal Balance of the Class M-1
Certificates and bears interest at a rate equal to the excess, if any, of (i)
the Net WAC Rate over (ii) the Class M-1 Pass-Through Rate.
"Class T4-M2IO Interest": A regular interest in REMIC 4, beneficial
ownership of which is represented by the Class CE Certificates, that has a
notional balance equal to the Certificate Principal Balance of the Class M-2
Certificates and bears interest at a rate equal to the excess, if any, of (i)
the Net WAC Rate over (ii) the Class M-2 Pass-Through Rate.
"Class T4-M3IO Interest": A regular interest in REMIC 4, beneficial
ownership of which is represented by the Class CE Certificates, that has a
notional balance equal to the Certificate Principal Balance of the Class M-3
Certificates and bears interest at a rate equal to the excess, if any, of (i)
the Net WAC Rate over (ii) the Class M-3 Pass-Through Rate.
"Class T4-M4IO Interest": A regular interest in REMIC 4, beneficial
ownership of which is represented by the Class CE Certificates, that has a
notional balance equal to the Certificate Principal Balance of the Class M-4
Certificates and bears interest at a rate equal to the excess, if any, of (i)
the Net WAC Rate over (ii) the Class M-4 Pass-Through Rate.
"Class T4-4 Interest": A regular interest in REMIC 4, beneficial
ownership of which is represented by the Class CE Certificates, that has a
principal balance equal to the Class T1-4 Principal Amount and bears interest at
the Net WAC Rate.
"Class T4-11 Interest": A regular interest in REMIC 4, beneficial
ownership of which is represented by the Class CE Certificates, that has a
notional balance equal to the Class T1-1 Principal Amount and is entitled to all
interest distributions on the Class T3-11 Interest.
"Class T4-12 Interest": A regular interest in REMIC 4, beneficial
ownership of which is represented by the Class CE Certificates, that has a
notional balance equal to the Class T1-2 Principal Amount and is entitled to all
interest distributions on the Class T3-12 Interest.
"Class T4-13 Interest": A regular interest in REMIC 4, which is
represented by the Class CE Certificates, that has a notional balance equal to
the Class T1-3 Principal Amount and is entitled to all interest distributions on
the Class T3-13 Interest.
"Class T4 P&I Certificate": Any of the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-1,
Class M-2, Class M-3 and Class M-4 Certificates.
"Closing Date": March 27, 2003.
"Code": The Internal Revenue Code of 1986, as it may be amended from
time to time.
"Collection Account": The account or accounts created and maintained by
the Servicer pursuant to Section 3.04, which shall be entitled "▇▇▇▇▇ Fargo Home
Mortgage, Inc., as Servicer for Bank One, N.A., as Trustee, in trust for
registered Holders of 2003-WF1 Trust, ABFC Mortgage Loan Asset-Backed
Certificates, Series 2003-WF1", and which must be an Eligible Account.
"Collection Period": With respect to any Distribution Date, the period
from the first day of the calendar month preceding the month in which such
Distribution Date occurs through the last day of the calendar month preceding
the month in which such Distribution Date occurs.
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"Commission": The 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.
"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 Global Corporate Trust
Services, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇-▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ABFC 2003-WF1, or at such other address as the Trustee may designate
from time to time by notice to the Certificateholders, the Depositor, the
Securities Administrator and the Servicer.
"Corresponding Classes": With respect to REMIC 3 and REMIC 4, the
following Classes shall be Corresponding Classes:
--------------------------------------------------------------------------------
CORRESPONDING
REMIC 3 CLASS CORRESPONDING REMIC 4 CLASSES
--------------------------------------------------------------------------------
T3-A-1 Class A-1 Certificates
--------------------------------------------------------------------------------
T4-A2 Class A-2 Certificates
--------------------------------------------------------------------------------
T3-M1 Class M-1 Certificates
--------------------------------------------------------------------------------
T3-M2 Class M-2 Certificates
--------------------------------------------------------------------------------
T3-M3 Class M-3 Certificates
--------------------------------------------------------------------------------
T3-M-4 Class M-4 Certificates
--------------------------------------------------------------------------------
"Credit Enhancement Percentage": For any Distribution Date, the
percentage obtained by dividing (x) the Pool Balance as of the first day of the
related Due Period minus the aggregate Certificate Principal Balance of the
Class A-1 and Class A-2 Certificates (prior to any principal distributions on
such Distribution Date) by (y) the Pool Balance as of the last day of the
related Due Period.
"Credit Risk Manager": The Murrayhill Company, a Colorado corporation,
and any successor.
"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 Due Period.
"Credit Risk Manager Fee Rate": 0.0175% per annum.
"Credit Risk Management Agreement": The Credit Risk Management
Agreement between the Servicer and the Credit Risk Manager dated as of March 1,
2003.
"Cumulative Realized Loss Percentage": As of any Distribution Date, the
quotient, expressed as a percentage, which is obtained by dividing (a) the total
amount of Realized Losses incurred on the Mortgage Loans from and after the
Cut-off Date by (b) the Cut-off Date Aggregate Principal Balance.
"Custodian": ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as
custodian pursuant to the Custody Agreement, and any successor custodian, if
any, hereafter appointed by the Trustee pursuant to Section 8.16. The Custodian
may (but need not) be the Trustee or any Person directly or indirectly
controlling or controlled by or under common control of either of them. Neither
the Servicer nor the Depositor, nor any Person directly or indirectly
controlling or controlled by or under common control with any such Person may be
appointed Custodian.
-11-
"Custody Agreement": That certain Custody Agreement, dated as of March
1, 2003, among the Custodian, the Depositor, the Servicer, the Securities
Administrator and the Trustee.
"Cut-off Date": March 1, 2003.
"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).
"Data File": The electronic data file prepared by ▇▇▇▇▇ Fargo Home
Mortgage, Inc., and delivered to the Seller, pursuant to the Seller's Warranties
and Servicing Agreement, dated as of December 1, 2002, between ▇▇▇▇▇ Fargo Home
Mortgage, Inc., as sellers, and the Seller, as purchaser, pursuant to which the
Seller acquired the Mortgage Loans from ▇▇▇▇▇ Fargo Home Mortgage, Inc.
"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": A Monthly Payment due on a Due Date on a Mortgage Loan is
"Delinquent" if it is not paid by the close of business on the next scheduled
Due Date for such Mortgage Loan. The Monthly Payment will be 60 days
"Delinquent" if it is not paid by the close of business on the second Due Date
following the Due Date on which such Monthly Payment was due, but shall not
include any Mortgage Loan in foreclosure or subject to a bankruptcy or similar
proceeding if the payments thereon are current.
"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 Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.
"Depository Agreement": With respect to any Book-Entry Certificates,
the agreement among the Depositor, the Trustee and the initial Depository, to be
dated on or about the Closing Date.
"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 18th
day of the calendar month in which such Distribution Date occurs or, if such
18th day is not a Business Day, the Business Day immediately preceding such 18th
day.
-12-
"Directly Operate": With respect to any REO Property, the furnishing or
rendering of services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for sale to
customers, the performance of any construction work thereon or any use of such
REO Property in a trade or business conducted by the Trust other than through an
Independent Contractor; provided, however, that the Trustee (or the Servicer on
behalf of the Trustee) shall not be considered to Directly Operate an REO
Property solely because the Trustee (or the Servicer on behalf of the Trustee)
establishes rental terms, chooses tenants, enters into or renews leases, deals
with taxes and insurance, or makes decisions as to repairs or capital
expenditures with respect to such REO Property.
"Disqualified Organization": A "disqualified organization" under
Section 860E of the Code, which as of the Closing Date is any of: (i) the United
States, any state or political subdivision thereof, any possession of the United
States, any foreign government, any international organization, or any agency or
instrumentality of any of the foregoing, (ii) any organization (other than a
cooperative described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code unless such organization is subject to the tax
imposed by Section 511 of the Code, (iii) any organization described in Section
1381(a)(2)(C) of the Code, or (iv) any other Person so designated by the Trustee
based upon an Opinion of Counsel provided by nationally recognized counsel to
the Trustee that the holding of an ownership interest in a 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, Bank One, N.A., as Trustee, in trust for the registered
Holders of 2002-WF2 Trust, ABFC Mortgage Loan Asset-Backed Certificates, Series
2003-WF1" 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 April 2003.
"Due Date": With respect to each Mortgage Loan and any Distribution
Date, the day of the calendar month in the related Due Period on which the
Monthly Payment for such Mortgage Loan was due, exclusive of any grace period.
"Due Period": With respect to each Distribution Date, the period
commencing on the second day of the month preceding the month of the
Distribution Date and ending on the first day of the month of the Distribution
Date.
"Eligible Account": Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the short-term unsecured debt obligations of such holding company) are
rated "A-1+" (or the equivalent) by each of the Rating Agencies at the time any
amounts are held on deposit therein, (ii) an account or accounts the deposits in
which are fully insured by the FDIC (to the limits established by such
corporation), the uninsured deposits in which account are otherwise secured such
that, as evidenced by an Opinion of Counsel acceptable to the Rating Agencies
and delivered to the Trustee, the NIMS Insurer and to each Rating Agency prior
to the establishment of such account, to the effect that the Certificateholders
will have a claim with respect to the funds in such account and a perfected
first priority security interest against such collateral (which shall be limited
to Permitted Investments) securing such funds that is superior to claims of any
other depositors or creditors of the depository institution with which such
account is maintained, (iii) a trust account or accounts maintained with the
trust department of a federal or state chartered depository institution,
national banking association or trust company (including the Trustee) acting in
its fiduciary capacity or (iv) an account otherwise acceptable to the NIMS
Insurer and 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.
-13-
"Eligible Substitute Mortgage Loan": A mortgage loan substituted for a
Defective Mortgage Loan pursuant to the terms of this Agreement which must, on
the date of such substitution, (i) have an outstanding principal balance, after
application of all scheduled payments of principal and interest due during or
prior to the month of substitution, not in excess of, and not more than 5% less
than, the outstanding principal balance of the Defective Mortgage Loan as of the
Due Date in the calendar month during which the substitution occurs, (ii) have a
Mortgage Interest Rate not less than the Mortgage Interest Rate of the Defective
Mortgage Loan and not more than 1% in excess of the Mortgage Interest Rate of
such Defective Mortgage Loan, (iii) if an Adjustable Rate Mortgage Loan, have a
Maximum Mortgage Interest Rate not less than the Maximum Mortgage Interest Rate
on the Deleted Mortgage Loan, (iv) if an Adjustable Rate Mortgage Loan, have a
Minimum Mortgage Interest Rate not less than the Minimum Mortgage Interest Rate
of the Deleted Mortgage Loan, (v) if an Adjustable Rate Mortgage Loan, have a
Gross Margin equal to or greater than the Gross Margin of the Deleted Mortgage
Loan, (vi) if an Adjustable Rate Mortgage Loan, have a next Adjustment Date not
more than two months later than the next Adjustment Date on the Deleted Mortgage
Loan, have the same Index as the Deleted Mortgage Loan and have the same
Adjustment Date frequency after the first Adjustment Date as the Deleted
Mortgage Loan, (vii) have the same monthly Due Date as that of the Defective
Mortgage Loan and have a remaining term to maturity not greater than (and not
more than one year less than) that of the Defective Mortgage Loan, (viii) be
current as of the date of substitution, (ix) have a Loan-to-Value Ratio as of
the date of substitution equal to or lower than the Loan-to-Value Ratio of the
Defective Mortgage Loan as of such date, (x) have a risk grading determined by
the Seller at least equal to the risk grading assigned on the Defective Mortgage
Loan, (xi) have been reunderwritten in accordance with the same underwriting
criteria and guidelines as the Defective Mortgage Loan and (xii) conform to each
representation and warranty set forth in Section 3.01 of the Mortgage Loan
Purchase Agreement applicable to the Defective Mortgage Loan. In the event that
one or more mortgage loans are substituted for one or more Defective Mortgage
Loans, the amounts described in clause (i) hereof shall be determined on the
basis of aggregate principal balances, the Mortgage Interest Rates and related
items described in clauses (ii), (iii), (iv) and (v) hereof shall be determined
on the basis of weighted average Mortgage Interest Rates and related items, the
risk gradings described in clause (x) hereof shall be satisfied as to each such
mortgage loan, the terms described in clause (xi) hereof shall be determined on
the basis of weighted average remaining term to maturity, the Loan-to-Value
Ratios described in clause (ix) 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 (xii) hereof must be
satisfied as to each Eligible Substitute Mortgage Loan or in the aggregate, as
the case may be.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"ERISA-Restricted Certificates": Any of the Class A-2 (prior to the
Distribution Date in March 2005), Class P, Class CE and Class R Certificates and
any Certificate that no longer satisfies the applicable ratings requirement
under the Underwriter's Exemption.
"ERISA Qualifying Underwriting": A best efforts or firm commitment
underwriting that meets the requirement of the Underwriter's Exemption.
"Escrow Account": The account or accounts created and maintained
pursuant to Section 3.06.
"Escrow Agreement": A voluntary agreement between a Mortgagor and the
Servicer relating to amounts constituting taxes and/or fire and hazard insurance
premiums required to be escrowed.
"Escrow Payments": The amounts constituting taxes and/or fire and
hazard insurance premiums required to be escrowed pursuant to a voluntary escrow
agreement between the Mortgagor and the Servicer.
"Estate in Real Property": A fee simple estate in a parcel of real
property.
"Expense Fee Rate": The sum of (i) the Securities Administration Fee
Rate, (ii) the Credit Risk Manager Fee Rate and (iii) the Servicing Fee Rate.
"Extended Period": As defined in Section 9.04(b).
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"Extra Principal Distribution Amount": As of any Distribution Date, the
lesser of (x) the Monthly Excess Cashflow Amount for such Distribution Date and
(y) the Overcollateralization Deficiency Amount for such Distribution Date.
"▇▇▇▇▇▇ ▇▇▇" or "FNMA": ▇▇▇▇▇▇ Mae, f/k/a Federal National Mortgage
Association, or any successor thereto.
"FDIC": Federal Deposit Insurance Corporation or any successor thereto.
"Fidelity Bond": Shall have the meaning assigned thereto in Section
3.12.
"Final Certification" means the certificate in the form of Exhibit F-3
attached hereto, delivered by the Trustee (or a Custodian on its behalf)
pursuant to Section 2.02.
"Final Recovery Determination": With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Seller pursuant to or as contemplated by Section 2.03 or the Class CE
Certificateholder or the Servicer pursuant to or as contemplated by Section
10.01), a determination made by the Servicer that all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which the Servicer, in its
reasonable good faith judgment, expects to be finally recoverable in respect
thereof have been so recovered. The Servicer shall maintain records, prepared by
a Servicing Officer, of each Final Recovery Determination made thereby.
"Fitch": Fitch Ratings and its successors, and if such company shall
for any reason no longer perform the functions of a securities rating agency,
"Fitch" shall be deemed to refer to any other "nationally recognized statistical
rating organization" as set forth on the most current list of such organizations
released by the Securities and Exchange Commission.
"Fixed Rate": For the Class A-1 Certificates, 1.902% per annum. For the
Class A-2 Certificates and each Distribution Date through and including the
Distribution Date occurring in March 2005, 1.982% per annum.
"▇▇▇▇▇▇▇ Mac" or "FHLMC": ▇▇▇▇▇▇▇ Mac, f/k/a Federal Home Loan Mortgage
Corporation, or any successor thereto.
"Grantor Trust": That portion of the Trust exclusive of REMIC 1, REMIC
2, REMIC 3 and REMIC 4 which holds (i) any Prepayment Charges received in
respect of the Mortgage Loans, (ii) any Servicer Prepayment Charge Payment
Amounts, (iii) the right of the Class P Certificateholders to receive such
Prepayment Charges and Servicer Prepayment Charge Payment Amounts, (iv) the
Basis Risk Rights, (v) the Auction Swap Rights, and (vi) the regular interest
components of the Offered Certificates.
"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
applicable 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.
"Indenture": An indenture relating to the issuance of notes secured by
the Class CE Certificates, the Class P Certificates and/or the Class R
Certificates (or any portion thereof) which may or may not be guaranteed by a
NIMS Insurer.
"Independent": When used with respect to any specified Person, any such
Person who (i) is in fact independent of the Depositor, the Securities
Administrator, the Servicer and their respective Affiliates, (ii) does not have
any direct financial interest in or any material indirect financial interest in
the Depositor, the Securities Administrator or the Servicer or any Affiliate
thereof, and (iii) is not connected with the Depositor, the Securities
Administrator or the Servicer or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar
functions; provided, however, that a Person shall not fail to be Independent of
the Depositor, the Securities Administrator or the Servicer or any Affiliate
thereof merely because
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such Person is the beneficial owner of 1% or less of any Class of securities
issued by the Depositor, the Securities Administrator or the Servicer or any
Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than the
Servicer or the Securities Administrator) that would be an "independent
contractor" with respect to the Trust Fund within the meaning of Section
856(d)(3) of the Code if the Trust Fund were a real estate investment trust
(except that the ownership tests set forth in that Section shall be considered
to be met by any Person that owns, directly or indirectly, 35 percent or more of
any Class of Certificates), so long as the Trust Fund does not receive or derive
any income from such Person and provided that the relationship between such
Person and the Trust Fund is at arm's length, all within the meaning of Treasury
Regulation Section 1.856-4(b)(5), or (ii) any other Person (including the
Servicer or the Securities Administrator) 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 such Adjustable Rate Mortgage Loan and 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 P, Class CE or Class R Certificate,
the amount designated "Initial Certificate Principal Balance" on the face
thereof.
"Initial Certification" means the certificate in the form of Exhibit
F-1 attached hereto, delivered by the Trustee (or a Custodian on its behalf)
pursuant to Section 2.02.
"Initial Overcollateralization Amount": $1,461,766.
"Insurance Proceeds": Proceeds of any title policy, hazard policy or
other insurance policy covering a Mortgage Loan, to the extent such proceeds are
not to be applied to the restoration of the related Mortgaged Property or
released to the Mortgagor in accordance with the procedures that the Servicer
would follow in servicing mortgage loans held for its own account, subject to
the terms and conditions of the related Mortgage Note and Mortgage.
"Interest Accrual Period": With respect to any Distribution Date and
any Class of Certificates and any Class of REMIC Regular Interests (other than
the Class A-1 Certificates and the T3-A1 and T4-A1IO Interests), the period from
and including the preceding Distribution Date (or the Closing Date in the case
of the initial Interest Accrual Period), to and including the day prior to the
current Distribution Date and, with respect to any Distribution Date and the
Class A-1 Certificates, and the Class T3-A1 and T4-A1IO Interests, the calendar
month immediately preceding the month in which such Distribution Date occurs.
Interest will accrue during any Interest Accrual Period on the Certificates and
each Class of REMIC Regular Interests (other than the Class A-1 Certificates,
the Class A-2 Certificates and the Class T3-A1, T3-A2, T4-A1IO and T4-A2IO
Interests) on the basis of the actual number of days in the Interest Accrual
Period over a 360-day year. Interest will accrue on the Class A-1 Certificates,
the Class A-2 Certificates and the Class T3-A1, T3-A2, T4-A1IO and T4A2IO
Interests on the basis of a 360-day year comprised of twelve 30-day months
during any Interest Accrual Period.
"Interest Determination Date": With respect to any Class of
Certificates and for each Interest Accrual Period after the first Interest
Accrual Period, the second LIBOR Business Day preceding the commencement of such
Interest Accrual Period.
"Interest Percentage": With respect to any Class of Certificates (other
than the Class P, Class CE and Class R Certificates) and any Distribution Date,
the ratio (expressed as a decimal carried to six places) of the
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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.
"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 Due Period on the Mortgage Loans (less the Servicing Fee,
the Securities Administration Fee, the Credit Risk Manager 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 Servicer on such Determination Date with
respect to the Mortgage Loans and (iii) the portion of any payment in connection
with any substitution, Purchase Price, Termination Price, Net Liquidation
Proceeds or Insurance Proceeds relating to interest with respect to the Mortgage
Loans received during the related Prepayment Period.
"Interim Certification" means the certificate in the form of Exhibit
F-2 attached hereto, delivered by the Trustee (or a Custodian on its behalf)
pursuant to Section 2.02.
"Late Collections": With respect to any Mortgage Loan, all amounts
received subsequent to the Determination Date immediately following any related
Due Period, whether as late payments of Monthly Payments or as Insurance
Proceeds, Liquidation Proceeds or otherwise, which represent late payments or
collections of principal and/or interest due (without regard to any acceleration
of payments under the related Mortgage and Mortgage Note) but delinquent on a
contractual basis for such Due Period and not previously recovered.
"LIBOR": With respect to the first Interest Accrual Period, 1.308750%
per annum. With respect to each Interest Accrual Period after the first Interest
Accrual Period, the rate determined by the Securities Administrator on the
related Interest Determination Date on the basis of the "Interest Settlement
Rate" for U.S. dollar deposits of one-month maturity set by the British Bankers'
Association (the "BBA") as such rate appears on Telerate Page 3750 as of 11:00
a.m. (London time) on such Interest Determination Date. With respect to any
Interest Determination Date, if the BBA's Interest Settlement Rate does not
appear on Telerate Page 3750 as of 11:00 a.m. (London time) on such date, or if
Telerate Page 3750 is not available on such date, the Securities Administrator
will request the principal London office of each of the Reference Banks to
provide a quotation of the rate at which it is offering deposits in United
States dollars at approximately 11:00 a.m. London Time on that day to prime
banks in the London interbank market for a period equal to the related Interest
Accrual Period commencing on the first day of the related Interest Accrual
Period. If at least two such quotations are provided, LIBOR will be the
arithmetic mean of the quotations. If fewer than two quotations are provided as
requested, LIBOR will be the arithmetic mean of the rates quoted at
approximately 11:00 AM New York City time on that day by major banks in New York
City, selected by the Securities Administrator, for loans in United States
dollars to leading European banks for a period equal to the related Interest
Accrual Period immediately commencing on the first day of such Interest Accrual
Period.
"LIBOR Business Day": Any Business Day on which banks in London,
England and The City of New York are open and conducting transactions in foreign
currency and exchange.
"Liquidated Mortgage Loan": As to any Distribution Date, any Mortgage
Loan in respect of which the Servicer has determined, in accordance with the
servicing procedures specified herein, as of the end of the related Prepayment
Period, that all Liquidation Proceeds and Insurance Proceeds which it expects to
recover with respect to the liquidation of the Mortgage Loan or disposition of
the related REO Property have been recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is
removed from the Trust Fund by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03 or Section 10.01. With respect to
any REO Property, either of the following events: (i) a Final Recovery
Determination is made as to such REO Property; or (ii) such REO Property is
removed from the Trust Fund by reason of its being sold or purchased pursuant to
Section 3.13 or Section 10.01.
"Liquidation Proceeds": The amount (other than amounts received in
respect of the rental of any REO Property prior to REO Disposition) received by
the Servicer, in connection with (i) the taking of all or a part of
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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 prepared by the Servicer with respect
to a Liquidated Mortgage Loan in such form and containing such information as is
agreed to by the Servicer, the Trustee and the Securities Administrator.
"Loan-to-Value Ratio": As of any date and Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the Principal Balance of
the Mortgage Loan, and the denominator of which is the Value of the related
Mortgaged Property.
"Losses": As defined in Section 9.03.
"Lost Note Affidavit": With respect to any Mortgage Loan as to which
the original Mortgage Note has been permanently lost or destroyed and has not
been replaced, an affidavit from the Seller certifying that the original
Mortgage Note has been lost, misplaced or destroyed (together with a copy of the
related Mortgage Note and indemnifying the Trust against any loss, cost or
liability resulting from the failure to deliver the original Mortgage Note) in
the form of Exhibit H hereto.
"Majority Certificateholders": The Holders of Certificates evidencing
at least 51% of the Voting Rights.
"Majority Class R Certificateholders": The Holders of Class R
Certificates evidencing at least a 51% Percentage Interest in the Class R
Certificates.
"Majority Class CE Certificateholders": The Holders of Class CE
Certificates evidencing at least a 51% Percentage Interest in the Class CE
Certificates.
"Mandatory Auction Call": The mandatory auction and sale of the Class
A-2 Certificates in March 2005, as described in and governed by, and subject to
the limitations set forth in, the Auction Administration Agreement.
"Maximum Cap Rate": With respect to any Distribution Date and the
related Interest Accrual Period, a per annum rate (not less than zero and
subject to adjustment based on the actual number of days elapsed in such
Interest Accrual Period) equal to the weighted average of the Adjusted Net
Maximum Mortgage Rates of the Mortgage Loans as of the beginning of the related
Due Period.
"Maximum Mortgage Interest Rate": With respect to each Adjustable Rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
maximum Mortgage Interest Rate thereunder.
"Minimum Mortgage Interest Rate": With respect to each Adjustable Rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
minimum Mortgage Interest Rate thereunder.
"Monthly Excess Cashflow Amount": The sum of (x) the
Overcollateralization Release Amount and (y) the excess of Available Funds over
the sum of (i) the interest paid on the Offered Certificates on that
Distribution Date and (ii) the Basic Principal Distribution Amount.
"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 and similar state laws; (b) without giving effect to any extension
granted or agreed to by the Servicer pursuant to Section 3.01; and (c) on the
assumption that all other amounts, if any, due under such Mortgage Loan are paid
when due.
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"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc. and its successors, and if
such company shall for any reason no longer perform the functions of a
securities rating agency, "Moody's" shall be deemed to refer to any other
"nationally recognized statistical rating organization" as set forth on the most
current list of such organizations released by the Securities and Exchange
Commission.
"Mortgage": The related mortgage, deed of trust or other instrument
identified on the Mortgage Loan Schedule as securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Interest Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, which rate (i) in
the case of each Fixed Rate Mortgage Loan shall remain constant at the rate set
forth in the Mortgage Loan Schedule as the Mortgage Interest Rate in effect
immediately following the Cut-off Date and (ii) in the case of each Adjustable
Rate Mortgage Loan (A) as of any date of determination until the first
Adjustment Date following the Cut-off Date shall be the rate set forth in the
Mortgage Loan Schedule as the Mortgage Interest Rate in effect immediately
following the Cut-off Date and (B) as of any date of determination thereafter
shall be the rate as adjusted on the most recent Adjustment Date, to equal the
sum of the applicable Index, determined as set forth in the related Mortgage
Note, plus the related Gross Margin, subject to the limitations set forth in the
related Mortgage Note. With respect to each Mortgage Loan that becomes an REO
Property, as of any date of determination, the annual rate determined in
accordance with the immediately preceding sentence as of the date such Mortgage
Loan became an REO Property.
"Mortgage Loan": Each mortgage loan transferred and assigned to the
Trustee pursuant to Section 2.01 or Section 2.03(d) as from time to time held as
a part of the Trust Fund, the Mortgage Loans so held being identified in the
Mortgage Loan Schedule.
"Mortgage Loan Purchase Agreement": The agreement between the Seller
and the Depositor, dated March 27, 2003, regarding the transfer of the Mortgage
Loans by the Seller to or at the direction of the Depositor.
"Mortgage Loan Schedule": As of any date with respect to the Mortgage
Loans, the list of such Mortgage Loans included in the Trust Fund on such date,
attached hereto as Exhibit D. The Mortgage Loan Schedule shall set forth the
following information with respect to each Mortgage Loan:
(1) the Mortgage Loan identifying number and the borrower's name;
(2) the city, state, and zip code of the Mortgaged Property;
(3) the type of Residential Dwelling constituting the Mortgaged Property or
a designation that the Mortgaged Property is a multi-family property;
(4) the occupancy status of the Mortgaged Property at origination;
(5) the original months to maturity;
(6) the date of origination;
(7) the first payment date;
(8) the stated maturity date;
(9) the stated remaining months to maturity;
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(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 date of
origination;
(13) the current principal and interest payment of the Mortgage Loan as of
the Cut-off Date;
(14) the next payment due date of the Mortgage Loan;
(15) the Loan-to-Value Ratio at origination;
(16) a code indicating the loan performance status of the Mortgage Loan as
of the Cut-off Date;
(17) a code indicating whether the Mortgage Loan has a Prepayment Charge;
(18) a code indicating the Index that is associated with such Mortgage Loan
(if such Mortgage Loan is an Adjustable Rate Mortgage Loan);
(19) the Gross Margin (if such Mortgage Loan is an Adjustable Rate Mortgage
Loan);
(20) the Periodic Rate Cap for the initial Adjustment Date (if such Mortgage
Loan is an Adjustable Rate Mortgage Loan);
(21) the Minimum Mortgage Interest Rate (if such Mortgage Loan is an
Adjustable Rate Mortgage Loan);
(22) the Maximum Mortgage Interest Rate (if such Mortgage Loan is an
Adjustable Rate Mortgage Loan);
(23) the Periodic Rate Cap for each Adjustment Date after the initial
Adjustment Date (if such Mortgage Loan is an Adjustable Rate Mortgage Loan);
(24) the first Adjustment Date immediately following the Cut-off Date (if
such Mortgage Loan is an Adjustable Rate Mortgage Loan);
(25) the rate adjustment frequency (if such Mortgage Loan is an Adjustable
Rate Mortgage Loan);
(26) the FICO score of the borrower; and
(27) whether the Mortgage Loan is covered by a primary mortgage insurance
policy.
The Mortgage Loan Schedule shall set forth the following information,
as of the Cut-off Date, with respect to the Mortgage Loans in the aggregate: (1)
the number of Mortgage Loans; (2) the current Principal Balance of the Mortgage
Loans; (3) the weighted average Mortgage Interest Rate of the Mortgage Loans;
and (4) the weighted average maturity of the Mortgage Loans. The Mortgage Loan
Schedule shall be amended from time to time in accordance with the provisions of
this Agreement. With respect to any Eligible Substitute Mortgage Loan, Cut-off
Date shall refer to the related Cut-off Date for such Mortgage Loan, determined
in accordance with the definition of Cut-off Date herein.
"Mortgage Note": The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on Exhibit D
from time to time, and any REO Properties acquired in respect thereof.
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"Mortgaged Property": The related real property identified on the
Mortgage Loan Schedule as securing the related Mortgage Loan.
"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, unpaid Servicing Fees, unpaid Securities
Administration Fees, unpaid Credit Risk Manager Fees and any other accrued and
unpaid servicing fees (including REO Disposition 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.
"Net WAC Rate": For any Distribution Date, a per annum rate (not less
than zero and subject to adjustment, in the case of applying such rate to the
Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3 and Class M-4 Certificates, based on the actual
number of days in the related Interest Accrual Period) equal to the weighted
average of the Adjusted Net Mortgage Rates of the Mortgage Loans as of the
beginning of the related Due Period.
"Net WAC Rate Carryover Amount": With respect to any Distribution Date,
for the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-1, Class M-2, Class M-3 and Class M-4
Certificates, the sum of (a) the amount, if any, by which (i) the amount of
Accrued Certificate Interest that would have been distributable on that Class
for that Distribution Date had its Pass-Through Rate been equal to the related
Fixed Rate or Formula Rate, as applicable, exceeds (ii) the actual amount of the
Accrued Certificate Interest for that Class and Distribution Date, because the
related Pass-Through Rate was limited to the Net WAC Rate, plus (b) any such
amount from a previous Distribution Date that remains unpaid, with interest
thereon at the applicable Fixed Rate or Formula Rate, as applicable, since that
Distribution Date, to the extent such interest remains unpaid.
"NIMS Insurer": An insurer, if any, that is guaranteeing certain
payments under notes secured by collateral which includes all or a portion of
the Class CE Certificates, the Class P Certificates and/or the Class R
Certificates.
"New Lease": Any lease of REO Property entered into on behalf of the
Trust, including any lease renewed or extended on behalf of the Trust if the
Trust has the right to renegotiate the terms of such lease.
"Nonrecoverable Advance": Any Advance or Servicing Advance previously
made or proposed to be made in respect of a Mortgage Loan that, in the good
faith business judgment of the Servicer, will not or, in the case of a proposed
Advance or Servicing Advance, would not be ultimately recoverable from Late
Collections on such Mortgage Loan as provided herein.
"Non-U.S. Person": Any Person other than a U.S. Person.
"Offered Certificates": The Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-1, Class M-2,
Class M-3 and Class M-4 Certificates.
"Officers' Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Servicer, the Securities
Administrator or the Depositor, as applicable.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be a salaried counsel for the Depositor, the Securities
Administrator, the Trustee or the Servicer except that any opinion of counsel
relating to (a) the qualification of any REMIC as a REMIC or (b) compliance with
the REMIC Provisions must be an opinion of Independent counsel.
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"Optional Termination Date": The first Distribution Date on which the
Majority Class CE Holders or the 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 the Class P, Class CE and Class R Certificates, which have an
Original Class Certificate Principal Balance of zero.
"Overcollateralization Amount": As of any Distribution Date, the
excess, if any, of (x) the Pool Balance as of the last day of the immediately
preceding Due Period over (y) the aggregate Certificate Principal Balances of
all Classes of Offered Certificates (after taking into account all distributions
of principal on such Distribution Date).
"Overcollateralization Deficiency Amount": As of any Distribution Date,
the excess, if any, of (x) the Overcollateralization Target 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 Certificates resulting from the distribution of the Basic Principal
Distribution Amount (but not the Extra Principal Distribution Amount) on such
Distribution Date, but prior to taking into account any Applied Realized Loss
Amounts on such Distribution Date.
"Overcollateralization Release Amount": With respect to any
Distribution Date on or after the Stepdown Date on which a Trigger Event is not
in effect, the lesser of (x) the Principal Remittance Amount for such
Distribution Date and (y) the excess, if any, of (i) the Overcollateralization
Amount for such Distribution Date, assuming that 100% of the Principal
Remittance Amount is applied as a principal payment on the Certificates on such
Distribution Date, over (ii) the Overcollateralization Target Amount for such
Distribution Date.
"Overcollateralization Target 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 Due Period and (B) 0.50% of the Cut-off Date Aggregate Principal Balance
and (ii) if a Trigger Event has occurred, the Overcollateralization Target
Amount for the immediately preceding Distribution Date.
"Ownership Interest": As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
"Pass-Through Rate": Any of the Class A-1 Pass-Through Rate, the Class
A-2 Pass-Through Rate, the Class M-1 Pass-Through Rate, the Class M-2
Pass-Through Rate, the Class M-3 Pass-Through Rate and the Class M-4
Pass-Through Rate.
"Paying Agent": Any paying agent appointed pursuant to Section 5.05.
"Percentage Interest": With respect to any Certificate (other than a
Class P, Class CE 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, Class P or Class R Certificate, the portion of the Class
evidenced thereby, expressed as a percentage, as stated on the face of such
Certificate; provided, however, that the sum of all such percentages for each
such Class totals 100%.
"Periodic Rate Cap": With respect to each Adjustable Rate Mortgage Loan
and any Adjustment Date therefor, the fixed percentage set forth in the related
Mortgage Note, which is the maximum amount by which the Mortgage Interest Rate
for such Mortgage Loan may increase or decrease on such Adjustment Date from the
Mortgage Interest Rate in effect immediately prior to such Adjustment Date.
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"Permitted Investments": Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued or managed by the Depositor, the Servicer, the Securities
Administrator, the NIMS Insurer, the Trustee or any of their respective
Affiliates or for which an Affiliate of the Trustee, the NIMS Insurer, or the
Securities Administrator 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. the Securities
Administrator or their respective agents acting in their respective
commercial banking 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 the highest applicable rating category
of each Rating Agency 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 with a depository institution
or trust company that has, or the ultimate parent company of which has, a
short-term unsecured debt rating in the highest applicable rating category
of each Rating Agency;
(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 in the
highest applicable rating category by ▇▇▇▇▇'▇ or in the highest applicable
rating category by each of S&P and Fitch, 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 (including the Trustee or the Securities Administrator
each acting in its commercial banking capacity) 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 the
Securities Administrator or an affiliate thereof, having the highest rating
category by the applicable 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 a permitted investment of funds backing
securities having ratings equivalent to its highest initial rating of the
Class A Certificates;
provided, that no instrument described hereunder shall evidence either the right
to receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provide a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations.
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"Permitted Transferee": Any transferee of a Residual Certificate other
than a Disqualified Organization, a Non-U.S. Person or a foreign permanent
establishment or fixed base (within the meaning of an applicable income tax
treaty) of a U.S. Person.
"Person": Any individual, corporation, partnership, joint venture,
association, joint stock company, trust, limited liability company,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pool Balance": As of any date of determination, the aggregate
Principal Balance of the Mortgage Loans.
"Prepayment Charge": With respect to any Prepayment Period, any
prepayment premium, penalty or charge collected by the Servicer from a Mortgagor
in connection with any voluntary Principal Prepayment in full pursuant to the
terms of the related Mortgage Note as from time to time held as a part of the
Trust Fund, the Prepayment Charges so held being determined in accordance with
the guidelines for Prepayment Charge provisions set forth in the ▇▇▇▇▇ Fargo
Prepayment Charge Matrix. The defined term "Prepayment Charge" shall not include
any Servicer Prepayment Charge Payment Amount.
"Prepayment Interest Shortfall": With respect to any Distribution Date,
for each Mortgage Loan that was during the related Prepayment Period the subject
of a Principal Prepayment in full or in part that was applied by the Servicer to
reduce the outstanding principal balance of such loan on a date preceding the
related Due Date, an amount equal to interest at the applicable Mortgage
Interest Rate (net of the Servicing Fee Rate) on the amount of such Principal
Prepayment for the number of days commencing on the date on which the prepayment
is applied and ending on the last day of the related Prepayment Period.
"Prepayment Period": With respect to any Distribution Date, the
calendar month preceding the month in which such Distribution Date occurs.
"Principal Balance": As to any Mortgage Loan and any day, other than a
Liquidated Mortgage Loan, the related Cut-off Date Principal Balance, minus all
collections credited against the principal balance of any such Mortgage Loan and
the principal portion of Advances made with respect to such Mortgage Loan. 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 Basic Principal Distribution Amount for such Distribution Date and
(ii) the Extra Principal Distribution Amount for such Distribution Date, 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 Available Funds attributable thereto, the sum of: (i) each
payment of principal on a Mortgage Loan due during the related Due Period and
received by the Servicer on or prior to the related Determination Date, and any
Advances with respect thereto, (ii) all full and partial Principal Prepayments
received by the Servicer during the related Prepayment Period, (iii) the Net
Liquidation Proceeds allocable to principal actually collected by the Servicer
during the related Prepayment Period, (iv) with respect to Defective Mortgage
Loans repurchased with respect to such Prepayment Period, the portion of the
Purchase Price allocable to principal, (v) any Substitution Adjustment Amounts
received on or prior to the previous Determination Date and not yet distributed
and (vi) on the Distribution Date on which the
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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 P, Class CE and Class R
Certificates.
"Property Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy covering a Mortgage Loan, to the extent such
proceeds are received by the Servicer and are not to be applied to the
restoration of the related Mortgaged Property or released to the Mortgagor in
accordance with the Servicer's servicing procedures, subject to the terms and
conditions of the related Mortgage Note and Mortgage.
"Prospectus Supplement": That certain Prospectus Supplement dated March
24, 2003 relating to the public offering of the Offered Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO Property to
be purchased pursuant to or as contemplated by Section 2.03 or 10.01, and as
confirmed by an Officers' Certificate from the Servicer to the Trustee, an
amount equal to the sum of (i) 100% of (x) in the case of a Mortgage Loan, the
Principal Balance thereof as of the date of purchase (or such other price as
provided in Section 10.01) or (y) in the case of an REO Property, its fair
market value, as determined in good faith by the Servicer, (ii) in the case of
(x) a Mortgage Loan, accrued interest on such Principal Balance at the
applicable Mortgage Interest Rate in effect from time to time from the Due Date
as to which interest was last covered by a payment by the Mortgagor or an
Advance by the Servicer, which payment or Advance had as of the date of purchase
been distributed pursuant to Section 4.01, through the end of the calendar month
in which the purchase is to be effected, and (y) an REO Property, accrued
interest at the applicable Mortgage Interest Rate on its fair market value,
determined in good faith by the Servicer, (iii) any unreimbursed Servicing
Advances and Advances and any unpaid Servicing Fees allocable to such Mortgage
Loan or REO Property, (iv) any amounts previously withdrawn from the Collection
Account in respect of such Mortgage Loan or REO Property pursuant to Section
3.13, and (v) in the case of a Mortgage Loan required to be purchased pursuant
to Section 2.03, expenses reasonably incurred or to be incurred by the Servicer,
the NIMS Insurer, the Securities Administrator or the Trustee in respect of the
breach or defect giving rise to the purchase obligation.
"Qualified REMIC Assets": Any "qualified mortgages" or "permitted
investments" within the meaning of Section 860G of the Code and any related
REMIC provisions.
"Rating Agency or Rating Agencies": Fitch, ▇▇▇▇▇'▇ and S & P, or their
respective successors. If such agencies or their successors are no longer in
existence, "Rating Agencies" shall be such nationally recognized statistical
rating organizations as set forth on the most current list of such organizations
released by the Securities and Exchange Commission and designated by the
Depositor, notice of which designation shall be given to the Trustee and the
Servicer.
"Realized Loss": (a) 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; (b) with respect to any Mortgage Loan, a Deficient
Valuation with respect thereto; and (c) with respect to any Mortgage Loan, a
reduction in the Principal Balance thereof resulting from a modification of such
Mortgage Loan by the Servicer permitted pursuant to this Agreement.
"Record Date": With respect to all of the Certificates (other than the
Class A-1 Certificates and 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 such Distribution Date occurs. With respect to the Class A-1
Certificates and the Private Certificates, the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
"Reference Banks": Bankers Trust Company, ▇▇▇▇▇▇▇'▇ Bank PLC, The Tokyo
Mitsubishi Bank and National Westminster Bank PLC and their successors in
interest; provided, however, that if any of the foregoing banks are not suitable
to serve as a Reference Bank, then any leading banks selected by the Securities
Administrator (after consultation with the NIMS Insurer) which are engaged in
transactions in Eurodollar deposits in the
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international Eurocurrency market (i) with an established place of business in
London, (ii) not controlling, under the control of, or under common control
with, the Depositor or any Affiliate thereof and (iii) which have been
designated as such by the Securities Administrator.
"Regular Certificate": Any of the Offered Certificates and the Class CE
Certificates.
"Related Documents": With respect to any Mortgage Loan, the related
Mortgage Notes and related Mortgages.
"Relief Act": The Soldiers' and Sailors Civil Relief Act of 1940, as
amended.
"Relief Act Interest Shortfall": With respect to any Distribution Date,
for any Mortgage Loan with respect to which there has been a reduction in the
amount of interest collectible thereon for the most recently ended Due Period as
a result of the application of the Relief Act and similar state laws, the amount
by which (i) interest collectible on such Mortgage Loan during such Due 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 and similar state laws.
"Remaining Initial Overcollateralization Amount": As of any
Distribution Date, an amount equal to (a) the Initial Overcollateralization
Amount minus (b) the sum of (i) any Overcollateralization Release Amounts
distributed and (ii) Realized Losses allocated to the Class T1-4 Interests.
"REMIC": A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
"REMIC 1 Regular Interests": The Class T1-1 Interest, Class T1-2
Interest, Class T1-3 Interest and Class T1-4 Interest.
"REMIC 2 Pass-Through Rate": With respect to any Distribution Date, a
rate obtained by dividing (A) the product of (i) 2 times (ii) the Net WAC Rate
times (iii) the Class T1-2 Principal Amount by (B) the sum of (x) the Class T1-2
Principal Amount and (y) the Class T1-3 Principal Amount, such principal
balances being determined before any reductions of principal balance or
allocation of Realized Losses made on such Distribution Date.
"REMIC 2 Regular Interests": The Class T2-1 Interest, Class T2-2
Interest, Class T2-3 Interest, Class T2-4 Interest, Class T2-11 Interest, Class
T2-12 Interest and Class T3-13 Interest.
"REMIC 3 Regular Interests": The Class T3-A1 Interest, Class T3-A2
Interest, Class T3-M1 Interest, Class T3-M2 Interest, Class T3-M3 Interest,
Class T3-M4 Interest, Class T3-4 Interest, Class T3-11 Interest, Class T3-12
Interest and Class T3-13 Interest.
"REMIC 4 Components": The Class T4-4, Class T4-11, Class T4-12, Class
T4-13, Class T4- A1IO, Class T4-A2IO, Class T4-M1IO, Class T4-M2IO, Class
T4-M3IO and Class T4-M4IO Interests. Each of the REMIC 4 Components represents a
regular interest in REMIC 4.
"REMIC 4 Regular Interests": The Class A-1 Certificates, Class A-2
Certificates, Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates, Class T4-4 Interest, Class T4-11 Interest,
Class T4-12 Interest, Class T4-13 Interest, Class T4-A1IO Interest, Class
T4-A2IO Interest, Class T4-M1IO Interest, Class T4-M2IO Interest, Class T4-M3IO
Interest and Class T4-M4IO Interest.
"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.
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"REMIC Regular Interest": As defined in the Preliminary Statement.
"Remittance Report": A report prepared by the Servicer and delivered to
the Securities Administrator and the NIMS Insurer pursuant to Section 4.07,
containing the information attached hereto as Exhibit N.
"Rents from Real Property": With respect to any REO Property, gross
income of the character described in Section 856(d) of the Code.
"REO Disposition": The sale or other disposition of an REO Property on
behalf of the Trust Fund.
"REO Disposition Fee": A fee payable to the Servicer as servicing
compensation in addition to the Servicing Fee upon the liquidation of any REO
Property, in an amount equal to the lesser of (a) the greater of (i) 1.00% of
the price for which the REO Property was sold and (ii) $1,500.00, and (b) the
Net Liquidation Proceeds of the REO Property (without reduction for the REO
Disposition Fee).
"REO Principal Amortization": With respect to any REO Property, for any
calendar month, the aggregate of all amounts received in respect of such REO
Property during such calendar month, whether in the form of rental income, sale
proceeds (including, without limitation, that portion of the Termination Price
paid in connection with a purchase of all of the Mortgage Loans and REO
Properties pursuant to Section 10.01 that is allocable to such REO Property) or
otherwise, net of any portion of such amounts (i) payable pursuant to Section
3.13 in respect of the proper operation, management and maintenance of such REO
Property or (ii) payable or reimbursable to the Servicer pursuant to Section
3.13 for unpaid Servicing Fees in respect of the related Mortgage Loan and
unreimbursed Servicing Advances and Advances in respect of such REO Property or
the related Mortgage Loan.
"REO Property": A Mortgaged Property acquired by the Servicer on behalf
of the Trust Fund through foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.13.
"Request for Release": A release signed by a Servicing Officer, in the
form of Exhibit E-1 attached hereto.
"Residential Dwelling": Any one of the following: (i) a detached
one-family dwelling, (ii) a two- to four-family dwelling, (iii) a one-family
dwelling unit in a FNMA eligible condominium project, (iv) a one-family dwelling
in a planned unit development, which is not a co-operative, or (v) a mobile or
manufactured home (as defined in section 603(6) of the National Manufactured
Housing Construction and Safety Standards Act of 1974).
"Residual Certificate": The Class R Certificates.
"Residual Interest": The sole Class of "residual interests" in each
REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee or the
Securities Administrator, any officer assigned to its corporate trust division
or the Securities Administration Office (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 or the
Securities Administrator customarily performing functions similar to those
performed by any of the above designated officers and in each case having direct
responsibility for the administration of this Agreement.
"S&P": Standard & Poor's Ratings Services, or any successor thereto,
and if such company shall for any reason no longer perform the functions of a
securities rating agency, "S&P" shall be deemed to refer to any other
"nationally recognized statistical rating organization" as set forth on the most
current list of such organizations released by the Securities and Exchange
Commission.
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"▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification": As defined in Section 3.22(b).
"Securities Act": The Securities Act of 1933, as amended.
"Securities Administration Fee": With respect to any Distribution Date,
the product of (x) one-twelfth of the Securities Administration Fee Rate and (y)
the Pool Balance as of the opening of business on the first day of the related
Due Period.
"Securities Administration Fee Rate": With respect to any Distribution
Date, 0.009% per annum.
"Securities Administration Office": The principal office of the
Securities Administration at which at any particular time its securities
administration business in connection with this Agreement shall be administered,
which office at the date of execution of this Agreement is located at ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Client Manager - ABFC
Series 2003-WF1, or at such other address as the Securities Administrator may
designate from time to time by notice to the Certificateholders, the Depositor,
the Trustee and the Servicer.
"Securities Administrator": ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, or its successor in interest, or any successor securities
administrator appointed as herein provided.
"Securities Administrator's Certification": As defined in Section
3.22(c).
"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 and Class A-2 Certificates.
"Servicer": ▇▇▇▇▇ Fargo Home Mortgage, Inc., a California corporation,
or any successor servicer appointed as herein provided, in its capacity as
Servicer hereunder.
"Servicer Affiliate": A Person (i) controlling, controlled by or under
common control with the Servicer or which is 50% or more owned by the Servicer
and (ii) which is qualified to service residential mortgage loans.
"Servicer Event of Termination": One or more of the events described in
Section 7.01.
"Servicer Prepayment Charge Payment Amount": The amount
payable by the Servicer in respect of any waived Prepayment Charges pursuant to
Section 3.24, 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 Purchase Price": As defined in Section 3.16.
"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 Servicer in the performance of its
servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of the Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of the REO Property and (iv) compliance with the
obligations under Section 3.08.
"Servicing Fee": With respect to each Mortgage Loan (including each REO
Property) and Distribution Date and for any calendar month, an amount equal to
the equivalent of 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
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such calendar month, interest for the number of days covered by such payment of
interest) at the Servicing Fee Rate on the same principal amount on which
interest on such Mortgage Loan accrues for such calendar month.
"Servicing Fee Rate": With respect to each Mortgage Loan, 0.50% per
annum.
"Servicing Officer": Any officer of the Servicer involved in, or
responsible for, the administration and servicing of Mortgage Loans, whose name
and specimen signature appear on a list of servicing officers furnished by the
Servicer to the Trustee and the Depositor on the Closing Date, as such list may
from time to time be amended.
"Servicing 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 Servicer
because the Servicer is the subject of a proceeding under the Bankruptcy Code
and the making of such remittance is prohibited by Section 362 of the Bankruptcy
Code.
"Stepdown Date": The earlier to occur of (x) the Distribution Date on
which the aggregate Certificate Principal Balance of the Class A Certificates is
reduced to zero, and (y) the later to occur of (A) the Distribution Date in
April 2006 and (B) the Distribution Date on which the Credit Enhancement
Percentage is greater than or equal to 28.00%.
"Subordinated Certificates": The Class M-1, Class M-2, Class M-3, Class
M-4, Class CE and Class R Certificates.
"Subsequent Overcollateralization Amount": As of any Distribution Date,
after the application of principal payments and Applied Realized Loss Amounts,
an amount equal to the excess, if any of (a) the Pool Balance over (b) the sum
of (i) the Certificate Principal Balance of each Class of Offered Certificates
and (ii) the Remaining Initial Overcollateralization Amount.
"Substitution Adjustment Amount": As defined in Section 2.03(d) hereof.
"Tax Administrator" and "Tax Matters Person": The Securities
Administrator or any successor thereto or assignee thereof shall serve as tax
administrator hereunder and as agent for the Tax Matters Person. The "Tax
Matters Person" shall be 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 in its capacity as a REMIC 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.
"Termination Price": As defined in Section 10.01(a) hereof.
"Transfer Agreement": The Seller's Warranties and Servicing Agreement,
dated as of December 1, 2002, between Bank of America, N.A., as purchaser, and
▇▇▇▇▇ Fargo Home Mortgage, Inc., as seller and servicer, relating to "Subprime
Mortgage Loans WFMR 2002-M19."
"Transferor": ▇▇▇▇▇ Fargo Home Mortgage, Inc.
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"Trigger Event": With respect to any Distribution Date on or after the
Stepdown Date, (i) if the three-month rolling average of 60+ Day Delinquent
Loans (expressed as a percentage of the Pool Balance) equals or exceeds 50% of
the Credit Enhancement Percentage for the Offered Certificates or (ii) if during
such period the Cumulative Realized Loss Percentage exceeds the values defined
below:
Cumulative Realized
Distribution Date Loss Percentage
April 2006 - March 2007 2.25%
April 2007 - March 2008 3.25%
April 2008 - March 2009 4.00%
April 2009 - March 2010 4.25%
April 2010 and after 4.50%
"Trust": ABFC 2003-WF1 Trust, the trust created hereunder.
"Trust Fund": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to a portion of which four REMIC elections are to be made, such
entire Trust Fund consisting of: (i) such Mortgage Loans as from time to time
are subject to this Agreement, together with the Mortgage Files relating
thereto, and together with all collections thereon and proceeds thereof, (ii)
any REO Property, together with all collections thereon and proceeds thereof,
(iii) the Trustee's rights with respect to the Mortgage Loans under all
insurance policies required to be maintained pursuant to this Agreement and any
proceeds thereof, (iv) the Depositor's rights under the Mortgage Loan Purchase
Agreement (including any security interest created thereby) and (v) the
Collection Account, the Distribution Account and such assets that are deposited
therein from time to time and any investments thereof, together with any and all
income, proceeds and payments with respect thereto.
"Trustee": Bank One, N.A., a national banking association, or any
successor Trustee appointed as herein provided.
"Underwriters": Banc of America Securities LLC, Greenwich Capital
Markets, Inc., and Wachovia Securities, Inc., as underwriters with respect to
the Offered Certificates.
"Underwriter's Exemption": Department of Labor Prohibited Transaction
Exemption 93-31, 90-59 or 96-22, each as most recently amended by Prohibited
Transaction 2002-41, 67 Fed. Reg. 54487 (August 22, 2002).
"United States Person" or "U.S. Person": (i) A citizen or resident of
the United States, (ii) a corporation or partnership (unless, in the case of a
partnership, Treasury regulations are adopted that provide otherwise) created or
organized in or under the laws of the United States, any state thereof or the
District of Columbia, including any entity treated as a corporation or
partnership, provided that, in the case of a partnership, none of the interests
in such partnership are held directly or indirectly through one or more
intermediate entities by a person that is not a U.S. Person for federal income
tax purposes, (iii) an estate that is subject to United States federal income
tax 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 such U.S. Persons have the authority to control all
substantial decisions of the trust, or, to the extent provided in applicable
Treasury regulations, some trusts in existence on August 20, 1996 which have a
valid election in place to be treated as U.S. Persons.
"Unpaid Interest Shortfall Amount": For any Class of Certificates
(other than the Class P, Class CE and Class R Certificates) and any Distribution
Date, the sum of (a) the excess, if any, of the Accrued Certificate Interest
plus any Unpaid Interest Shortfall Amount for the prior Distribution Date, over
the amount in respect of interest actually distributed on such Class on such
prior Distribution Date and (b) interest on such excess at the applicable
Pass-Through Rate for such Class for the related Interest Accrual Period
(computed without regard to any Net WAC Rate), on the basis of the actual number
of days in the related Interest Accrual Period over a 360-day year (or on the
basis of a 360-day year comprised of twelve 30-day months, in the case of the
Class A-1 Certificates and the Class A-2 Certificates).
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"Value": With respect to any Mortgaged Property, the value thereof as
determined by an independent appraisal made at the time of the origination of
the related Mortgage Loan or the sale price, if the appraisal is not available;
except that, with respect to any Mortgage Loan that is a purchase money mortgage
loan, the lesser of (i) the value thereof as determined by an independent
appraisal made at the time of the origination of such Mortgage Loan, if any, and
(ii) the sales price of the related Mortgaged Property.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. The Voting Rights allocated
among Holders of the Offered Certificates shall be 99% of the aggregate voting
rights of the Certificates, and shall be allocated among each such Class
according to the fraction, expressed as a percentage, the numerator of which is
the aggregate Certificate Principal Balance of all the Certificates of such
Class then outstanding and the denominator of which is the aggregate Certificate
Principal Balance of all the Offered Certificates then outstanding. The Voting
Rights allocated to each such Class of Certificates shall be allocated among all
holders of each such Class in proportion to the outstanding Certificate
Principal Balances of such Certificates; provided, however, that any Certificate
registered in the name of the Servicer, the Securities Administrator, the
Depositor or the Trustee or any of their respective affiliates shall not be
included in the calculation of Voting Rights. The percentage of all the Voting
Rights allocated among the Holders of the Class CE Certificate shall be 1%. The
Class P and Class R Certificates shall have no Voting Rights.
"▇▇▇▇▇ Fargo Prepayment Charge Matrix": The matrix, attached hereto as
Schedule I, setting forth the state-by-state guidelines for prepayment charge
provisions to be included in mortgage loan documents with respect to mortgage
loans originated and acquired by ▇▇▇▇▇ Fargo Home Mortgage, Inc.
"Written Order to Authenticate": A written order by which the Depositor
directs the Trustee to issue the Certificates.
Section 1.02 Accounting.
Unless otherwise specified herein, for the purpose of any definition or
calculation, whenever amounts are required to be netted, subtracted or added or
any distributions are taken into account such definition or calculation and any
related definitions or calculations shall be determined without duplication of
such functions.
Section 1.03 Rights of the NIMS Insurer.
Each of the rights of the NIMS Insurer set forth in this Agreement
shall exist so long as (i) the NIMS Insurer has undertaken to guarantee certain
payments of notes issued pursuant to the Indenture and (ii) the notes issued
pursuant to the Indenture remain 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 and any rights to indemnification hereunder in the case of clause (y)
below) so long as (x) the NIMS Insurer has not undertaken to guarantee any
payments in respect of notes issued pursuant to an Indenture or (y) any default
has occurred and is continuing under the insurance policy issued by the NIMS
Insurer with respect to such notes. The Depositor shall notify all other parties
to this Agreement, in writing, of the engagement of a NIMS Insurer, no later
than the date on which such NIMS Insurer is engaged to guarantee certain
payments as described above.
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
without recourse for the benefit of the Certificateholders all the right, title
and interest of the Depositor, including any security interest therein for the
benefit of the Depositor, in and to (i) each Mortgage Loan identified on the
Mortgage Loan Schedule, including the related Cut-off Date Principal
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Balance, all interest accruing thereon after the Cut-off Date and all
collections in respect of interest and principal due after the Cut-off Date;
(ii) property which secured each such Mortgage Loan and which has been acquired
by foreclosure or deed in lieu of foreclosure; (iii) its interest in any
insurance policies in respect of the Mortgage Loans; (iv) all proceeds of any of
the foregoing; (v) the rights of the Depositor under the Mortgage Loan Purchase
Agreement, including the rights of the Depositor as assignee of the Seller with
respect to the Seller's rights under the Transfer Agreement, and (vi) all other
assets included or to be included in the Trust Fund. Such assignment includes
all interest and principal due to the Depositor or the Servicer after the
Cut-off Date with respect to the Mortgage Loans.
In connection with such transfer and assignment, the Depositor does
hereby deliver (or cause to be delivered) to, and deposit (or cause to be
deposited) with the Trustee, or the Custodian on the Trustee's behalf, the
following documents or instruments with respect to each Mortgage Loan (a
"Mortgage File") so transferred and assigned:
(i) the original Mortgage Note, endorsed either (A) in blank or (B) in
the following form: "Pay to the order of Bank One, N.A., as Trustee
under the Pooling and Servicing Agreement, dated as of March 1,
2003, without recourse", or with respect to any lost Mortgage Note,
an original Lost Note Affidavit, together with a copy of the related
Mortgage Note;
(ii) the original Mortgage with evidence of recording thereon, and the
original recorded power of attorney, if the Mortgage was executed
pursuant to a power of attorney, with evidence of recording thereon
or, if such Mortgage or power of attorney has been submitted for
recording but has not been returned from the applicable public
recording office, has been lost or is not otherwise available, a
copy of such Mortgage or power of attorney, as the case may be,
certified to be a true and complete copy of the original submitted
for recording;
(iii) an original Assignment of Mortgage, in form and substance acceptable
for recording; assigned either (A) in blank or (B) to "Bank One,
N.A., as Trustee under the Pooling and Servicing Agreement, dated as
of March 1, 2003, without recourse";
(iv) originals of all intervening assignments of Mortgage (if any) with
evidence of recording thereon, or copies thereof certified by the
related recording office showing a complete chain of assignments
from the originator of such Mortgage Loan to ▇▇▇▇▇ Fargo Home
Mortgage, Inc.;
(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 Servicer shall promptly (and in no event later than thirty days
following the Closing Date) submit or cause to be submitted for recording, at
the Depositor's expense and at no expense to the Trust Fund or the Trustee, in
the appropriate public office for real property records, each Assignment
referred to in Section 2.01(iii) above required to be recorded as provided
below; provided, however, that such recording shall only be required in the
circumstances described in the second to the last paragraph of this Section
2.01. In the event that any such Assignment is lost or returned unrecorded
because of a defect therein, the Depositor shall cause the Seller or the
Servicer to promptly prepare or cause to be prepared a substitute Assignment or
cure or cause to be cured such defect, as the case may be, and thereafter cause
each such Assignment to be duly recorded.
If any of the documents referred to in Section 2.01(ii), (iii) or (iv)
above has as of the Closing Date been submitted for recording but either (x) has
not been returned from the applicable public recording office or (y) has been
lost or such public recording office has retained the original of such document,
the obligations of the Depositor to deliver such documents shall be deemed to be
satisfied upon (1) delivery to the Trustee or the Custodian no later than the
Closing Date, of a copy of each such document certified by the Seller or the
Servicer 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 or the
Servicer,
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delivery to the Trustee or the Custodian, promptly upon receipt thereof of
either the original or a copy of such document certified by the applicable
public recording office to be a true and complete copy of the original. If the
original lender's title insurance policy was not delivered pursuant to Section
2.01(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 Depositor shall deliver or cause to
be delivered to the Trustee or the Custodian promptly upon receipt thereof any
other documents constituting a part of a Mortgage File received with respect to
any Mortgage Loan, including, but not limited to, any original documents
evidencing an assumption or modification of any Mortgage Loan.
Upon discovery or receipt of notice that any document in a Mortgage
File is inconsistent with the information set forth on the related Mortgage Loan
Schedule or that a document is missing from, a Mortgage File, or is materially
mutilated, damaged or torn, the Seller shall have 120 days to cure such defect
(or 90 days after the earlier of the Depositor'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 365 days following the Closing Date,
in the case of missing Mortgages or Assignments, or to deliver such missing
document to the Trustee or the Custodian. If the Seller does not cure such
defect or deliver such missing document within such time period, the Seller
shall either repurchase or substitute for such Mortgage Loan in accordance with
Section 2.03.
No Assignments of Mortgage referred to in Section 2.01(iii) hereof
shall be recorded unless (x) subsequently required in connection with servicing
a Mortgage Loan pursuant to this Agreement or (y) the Depositor is informed by
the Rating Agencies that such failure to record would result in a withdrawal or
a downgrading by any Rating Agency of the rating on any Class of Certificates;
provided, however, each Assignment shall be submitted in the manner described
above, at no expense to the Trust Fund, the Custodian, the Securities
Administrator or the Trustee, upon the earliest to occur of: (i) reasonable
direction by the NIMS Insurer, (ii) the occurrence of a Servicer Event of
Termination, (iii) the occurrence of a servicing transfer as described in
Section 7.02 hereof, (iv) with respect to a particular Mortgage Loan, upon the
occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor
under the related Mortgage and upon the receipt of notice by the Servicer of
such situation, and (v) with respect to a particular Mortgage Loan, upon the
delinquency of such Mortgage Loan for 90 days or more upon receipt of notice by
the Servicer of such situation. Upon the occurrence of one of the events set
forth in the immediately preceding sentence, the Servicer, in its capacity as
originator, shall deliver such Assignments for recording as provided above,
promptly and in any event within 30 days following receipt of notice by the
Servicer.
The Depositor herewith delivers to the Trustee an executed copy of the
Mortgage Loan Purchase Agreement.
Section 2.02 Acceptance by Trustee.
The Trustee acknowledges the receipt of, subject to the provisions of
Section 2.01 and subject to the review described below and any exceptions noted
on the exception report described in the next paragraph below, the documents
referred to in Section 2.01 above and the assignment of 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" delivered to the Trustee in
trust for the exclusive use and benefit of all present and future
Certificateholders.
The Trustee shall execute and deliver (or cause the Custodian to
execute and deliver) to the Servicer, the Securities Administrator, the NIMS
Insurer and the Depositor on or prior to the Closing Date an Initial
Certification in the form attached hereto as Exhibit F-1 hereto, certifying that
it has received all documents required to be delivered to it pursuant to Section
2.01 of this Agreement, for each Mortgage Loan listed in the Mortgage Loan
Schedule (other than any Mortgage Loan that has been paid in full, liquidated or
otherwise released as of the date of such certification, and subject to any
exceptions specifically identified in the exception report annexed to such
certification).
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The Trustee, for the benefit of the Certificateholders and the NIMS
Insurer, shall review (or cause the Custodian to review) each Mortgage File
within 60 days after the Closing Date (or, with respect to any document
delivered after the Startup Day, within 60 days of receipt and with respect to
any Qualified Substitute Mortgage, within 60 days after the assignment thereof)
and shall deliver (or cause the Custodian to deliver) to the Servicer, the
Securities Administrator, the NIMS Insurer and the Depositor an Interim
Certification in the form attached hereto as Exhibit F-2 certifying that, as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan that has been paid in full, liquidated or otherwise released as of the date
of such certification, and subject to any exceptions specifically identified in
the exception report annexed to such certification), (i) all documents required
to be delivered to it pursuant Section 2.01 of this Agreement (other than any
document listed in Section 2.01(vi) not reflected on the Mortgage Loan Schedule)
are in its possession, (ii) such documents have been reviewed by it and have not
been mutilated, damaged or torn and relate to such Mortgage Loan and (iii) based
on its examination and only as to the foregoing, the information set forth in
the Mortgage Loan Schedule that corresponds to items (1), (2), (10), (12), (19),
(20) and (22) of the Mortgage Loan Schedule accurately reflects information set
forth in the Mortgage File. It is herein acknowledged that, in conducting such
review, the Trustee (or the Custodian, as applicable) is under no duty or
obligation to inspect, review or examine any such documents, instruments,
certificates or other papers to determine that they are genuine, enforceable, or
appropriate for the represented purpose or that they have actually been recorded
or that they are other than what they purport to be on their face.
Prior to the first anniversary date of this Agreement the Trustee shall
deliver (or cause the Custodian to deliver) to the Depositor, the NIMS Insurer,
the Securities Administrator and the Servicer a Final Certification in the form
attached hereto as Exhibit F-3 evidencing the completeness of the Mortgage
Files, with any applicable exceptions noted thereon.
If in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to above, the Trustee
(or the Custodian, as applicable) finds any document or documents constituting a
part of a Mortgage File to be missing, materially mutilated, damaged or torn or
containing information inconsistent with the information set forth in the
Mortgage Loan Schedule, at the conclusion of its review the Trustee shall so
notify the Seller, the Securities Administrator, the Depositor, the NIMS Insurer
and the Servicer. In addition, upon the discovery by the Depositor, the
Servicer, the Securities Administrator, the NIMS Insurer or the Trustee of a
breach of any of the representations and warranties made by the Seller in the
Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially adversely affects such Mortgage Loan or the interests of the related
Certificateholders in such Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties.
The Depositor and the Trustee intend that the assignment and transfer
herein contemplated constitute a sale of the Mortgage Loans and the Related
Documents, conveying good title thereto free and clear of any liens and
encumbrances, from the Depositor to the Trustee and that such property not be
part of the Depositor's estate or property of the Depositor in the event of any
insolvency by the Depositor. In the event that such conveyance is deemed to be,
or to be made as security for, a loan, the parties intend that the Depositor
shall be deemed to have granted and does hereby grant to the Trustee a first
priority perfected security interest in all of the Depositor's right, title and
interest in and to the Mortgage Loans and the Related Documents, and that this
Agreement shall constitute a security agreement under applicable law.
Section 2.03 Repurchase or Substitution of Mortgage Loans.
(a) Upon discovery or receipt of written notice that any document in a
Mortgage File is materially inconsistent with the related Mortgage Loan
Schedule, or that a document is missing from a Mortgage File or it is materially
mutilated, damaged or torn, or of the breach by the Transferor or the Seller of
any representation, warranty or covenant under the Transfer Agreement or the
Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially adversely affects the value of such Mortgage Loan, Prepayment Charge
or the interest therein of the Certificateholders, the Trustee (or the
Custodian, as applicable) shall promptly notify the Seller, the NIMS Insurer,
the Transferor and the Servicer of such defect, missing document or breach and
request that the Transferor or the Seller, as applicable, deliver such missing
document or cure such defect or breach within 120 days from the date the
Transferor or the Seller, as applicable, was notified of such missing document,
defect or breach, and if the Transferor or the Seller, as applicable, does not
deliver such missing document or cure such defect or breach in all material
respects during such period, the Trustee shall enforce the Transferor's or the
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Seller's obligation, as the case may be, under the Transfer Agreement or the
Mortgage Loan Purchase Agreement, as applicable, and cause the Transferor 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 120-day period (subject to Section 2.03(d)); provided that,
in connection with any such breach that could not reasonably have been cured
within such 120-day period, if the Transferor or the Seller, as applicable,
shall have commenced to cure such breach within such 120-day period, the
Transferor or the Seller, as applicable, shall be permitted to proceed
thereafter diligently and expeditiously to cure the same within the additional
period provided under the Transfer Agreement or the Mortgage Loan Purchase
Agreement. The Purchase Price for the repurchased Mortgage Loan shall be
deposited in the Collection Account, and the Trustee, upon receipt of written
certification from the Servicer of such deposit, shall release to the Transferor
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 Transferor or the Seller, as applicable, shall furnish to it
and as shall be necessary to vest in the Transferor or the Seller, as
applicable, 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 Transferor or the
Seller may cause such Mortgage Loan to be removed from the Trust Fund (in which
case it shall become a Defective Mortgage Loan) and substitute one or more
Eligible Substitute Mortgage Loans in the manner and subject to the limitations
set forth in Sections 2.03(c) and 2.03(d). In the event of discovery of a breach
of any representation and warranty of the Transferor or the Seller, the Trustee
shall enforce its rights under the Transfer Agreement and the Mortgage Loan
Purchase Agreement for the benefit of Certificateholders and the NIMS Insurer.
In the event of a breach of the representations and warranties with respect to
the Mortgage Loans set forth in the Transfer Agreement, the Trustee shall at the
request of the NIMS Insurer enforce the right of the Trust and the NIMS Insurer
to be indemnified for such breach of representation and warranty. It is
understood and agreed that, except for any indemnification provided for in the
Transfer Agreement, the obligation of the Transferor or the Seller to cure or to
repurchase (or to substitute for) any Mortgage Loan as to which a document is
missing, a material defect in a constituent document exists or as to which such
a breach has occurred and is continuing shall constitute the sole remedy against
the Transferor or the Seller respecting such omission, defect or breach
available to the Trustee on behalf of the Certificateholders.
With respect to the representations and warranties set forth in the
Mortgage Loan Purchase Agreement that are made to the best of the Seller's
knowledge or as to which the Seller has no knowledge, if it is discovered by the
Depositor, the Servicer or the Trustee that the substance of such representation
and warranty is inaccurate and such inaccuracy materially and adversely affects
the value of the related Mortgage Loan, Prepayment Charge or the interest
therein of the Certificateholders then, notwithstanding the Seller's lack of
knowledge with respect to the substance of such representation and warranty
being inaccurate at the time the representation or warranty was made, such
inaccuracy shall be deemed a breach of the applicable representation or
warranty.
It is understood and agreed that the representations and warranties set
forth in the Mortgage Loan Purchase Agreement shall survive delivery of the
Mortgage Files to the Trustee and shall inure to the benefit of the
Certificateholders notwithstanding any restrictive or qualified endorsement or
assignment. It is understood and agreed that the obligations of the Seller set
forth in this Section 2.03(a) to cure, substitute for or repurchase a Mortgage
Loan pursuant to the Mortgage Loan Purchase Agreement constitute the sole
remedies available to the Certificateholders and to the Trustee on their behalf
respecting a breach of the representations and warranties contained in the
Mortgage Loan Purchase Agreement.
The representations and warranties of the Transferor with respect to
the Mortgage Loans in the Transfer Agreement, which have been assigned to the
Trustee hereunder, were made as of the date specified in the Transfer 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 Transferor
under the Transfer Agreement and (ii) a representation or warranty of the Seller
and the Mortgage Loan Purchase Agreement, the only right or remedy of the
Trustee, the NIMS Insurer or of any Certificateholder shall be the Trustee's
right to enforce the obligations of the applicable Transferor 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 if
the fact, condition or event constituting such breach also constitutes a breach
of a representation or warranty made by the applicable Transferor in the
applicable Transfer Agreement, without regard to whether the Transferor fulfills
its contractual obligations in respect of such representation or warranty. The
Trustee further acknowledges that the Depositor shall have no obligation or
liability with respect to any breach
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of any representation or warranty with respect to the Mortgage Loans (except as
set forth in Section 2.06) under any circumstances. ▇▇▇▇▇ Fargo Home Mortgage,
Inc. hereby acknowledges that its representations and warranties under the
Transfer Agreement, and the Seller's rights and remedies under the Transfer
Agreement, have been assigned to the Trustee for the benefit of the
Certificateholders and the NIMS Insurer.
(b) Within 90 days of the earlier of discovery by the Servicer or
receipt of notice by the Servicer of the breach of any representation, warranty
or covenant of the Servicer set forth in Section 2.05 which materially and
adversely affects the value of any Mortgage Loan compared to what such value
would have been had the representation, warranty or covenant not been breached,
the Servicer shall cure such breach in all material respects.
(c) Any substitution of Eligible Substitute Mortgage Loans for
Defective Mortgage Loans made pursuant to Section 2.03(a) must be effected prior
to the last Business Day that is within two years after the Closing Date. As to
any Defective Mortgage Loan for which the Seller substitutes a Eligible
Substitute Mortgage Loan or Loans, such substitution shall be effected by the
Seller delivering to the Trustee, for such Eligible Substitute Mortgage Loan or
Loans, the Mortgage Note, the Mortgage, the Assignment to the Trustee, and such
other documents and agreements, with all necessary endorsements thereon, as are
required by Section 2.01, together with an Officers' Certificate providing that
each such Eligible Substitute Mortgage Loan satisfies the definition thereof and
specifying the Substitution Adjustment Amount (as described below), if any, in
connection with such substitution. The Trustee shall acknowledge receipt for
such Eligible Substitute Mortgage Loan or Loans and, within ten Business Days
thereafter, shall review such documents as specified in Section 2.02 and deliver
to the Servicer and the NIMS Insurer, with respect to such Eligible Substitute
Mortgage Loan or Loans, a certification, with any applicable exceptions noted
thereon. Within one year of the date of substitution, the Trustee shall deliver
to the Servicer and the NIMS Insurer a certification with respect to such
Eligible Substitute Mortgage Loan or Loans, with any applicable exceptions noted
thereon. Monthly Payments due with respect to Eligible Substitute Mortgage Loans
in the month of substitution are not part of the Trust Fund and will be retained
by the Seller. For the month of substitution, distributions to
Certificateholders will reflect the collections and recoveries in respect of
such Defective Mortgage Loan in the Due Period preceding the month of
substitution and the Depositor or the Seller, as the case may be, shall
thereafter be entitled to retain all amounts subsequently received in respect of
such Defective Mortgage Loan. The 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 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 Seller, the Mortgage Loan Purchase Agreement, including, in the
case of a substitution effected by the Seller, all applicable representations
and warranties made by the Seller in the Mortgage Loan Purchase Agreement, in
each case as of the date of substitution.
For any month in which the Seller substitutes one or more Eligible
Substitute Mortgage Loans for one or more Defective Mortgage Loans, the Servicer
will determine the amount (the "Substitution Adjustment Amount"), if any, by
which the aggregate Purchase Price of all such Defective Mortgage Loans exceeds
the aggregate, as to each such Eligible Substitute Mortgage Loan, of the
principal balance thereof as of the date of substitution, together with one
month's interest on such principal balance at the applicable Net Mortgage
Interest Rate. On the date of such substitution, the Seller will deliver or
cause to be delivered to the Servicer for deposit in the Collection Account an
amount equal to the Substitution Adjustment Amount, if any, and the Trustee,
upon receipt of the related Eligible Substitute Mortgage Loan or Loans and
certification by the Servicer of such deposit, shall release to the Seller the
related Mortgage File or Files and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as the Seller shall
deliver to it and as shall be necessary to vest therein any Defective Mortgage
Loan released pursuant hereto.
In addition, the Seller shall obtain at its own expense and deliver to
the Trustee and the NIMS Insurer an Opinion of Counsel, upon which the Trustee
may conclusively rely, 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
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Certificate is outstanding. If such Opinion of Counsel can not be delivered,
then such substitution may only be effected at such time as the required Opinion
of Counsel can be given.
(d) Upon discovery by the Seller, the 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 Seller shall repurchase or, subject to the
limitations set forth in Section 2.03(c), substitute one or more Eligible
Substitute Mortgage Loans for the affected Mortgage Loan within 90 days of the
earlier of discovery or receipt of such notice with respect to such affected
Mortgage Loan. In addition, upon discovery that a Mortgage Loan is defective in
a manner that would cause it to be a "defective obligation" within the meaning
of Treasury regulations relating to REMICs, the Seller shall cure the defect or
make the required purchase or substitution no later than 90 days after the
discovery of the defect. Any such repurchase or substitution shall be made in
the same manner as set forth in Section 2.03(a), if made by the Seller. The
Trustee shall reconvey to the Seller the Mortgage Loan to be released pursuant
hereto in the same manner, and on the same terms and conditions, as it would a
Mortgage Loan repurchased for breach of a representation or warranty.
Section 2.04 Representations, Warranties and Covenants of the
Securities Administrator.
The Securities Administrator 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 Servicer that as of the Closing
Date or as of such date specifically provided herein:
(i) The Securities Administrator is duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its formation and
has all licenses necessary to carry on its business as now being conducted,
except for such licenses, certificates and permits the absence of which,
individually or in the aggregate, would not have a material adverse effect
on the ability of the Securities Administrator to conduct its business as it
is presently conducted; the Securities Administrator 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 Securities Administrator and the consummation of the
transactions contemplated hereby have been duly and validly authorized; this
Agreement evidences the valid, binding and enforceable obligation of the
Securities Administrator, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights generally; and all requisite corporate action has been
taken by the Securities Administrator to make this Agreement valid and
binding upon the Securities Administrator in accordance with its terms;
(ii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Securities
Administrator and will not result in the breach of any term or provision of
the charter of the Securities Administrator 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 Securities
Administrator or its property is subject, or result in the violation of any
law, rule, regulation, order, judgment or decree to which the Securities
Administrator or its property is subject;
(iii) This Agreement, and all documents and instruments contemplated
hereby which are executed and delivered by the Securities Administrator,
constitute and will constitute valid, legal and binding obligations of the
Securities Administrator, enforceable in accordance with their respective
terms, except as the enforcement thereof may be limited by applicable
bankruptcy laws and general principles of equity;
(iv) The Securities Administrator does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every
covenant made by it in this Agreement;
(v) There is no action, suit, proceeding or investigation pending or,
to its knowledge, threatened against the Securities Administrator 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
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Securities Administrator, or in any material impairment of the right or
ability of the Securities Administrator to carry on its business
substantially as now conducted, or in any material liability on the part of
the Securities Administrator, 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 Securities Administrator contemplated
herein, or that would be likely to impair materially the ability of the
Securities Administrator to perform under the terms of this Agreement;
(vi) No consent, approval or order of any court or governmental agency
or body is required for the execution, delivery and performance by the
Securities Administrator of or compliance by the Securities Administrator
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
(vii) Neither the statements of the Securities Administrator in this
Agreement nor any information, certificate of an officer, statement
furnished in writing or report delivered to the Trustee by the Securities
Administrator in connection with the transactions contemplated hereby
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary in order to make the statements
contained therein, in light of the circumstances under which they were made,
not misleading.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.04 shall survive delivery of the Mortgage
Files to the Trustee and shall inure to the benefit of the Trustee, the
Depositor, the Servicer and the Certificateholders. Upon discovery by any of the
Depositor, the Servicer, the Securities Administrator, the NIMS Insurer or the
Trustee of a breach of any of the foregoing representations, warranties and
covenants, 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 2.05 Representations, Warranties and Covenants of the Servicer.
The Servicer hereby represents, warrants and covenants to the Trustee,
for the benefit of each of the Trustee and the Certificateholders and to the
Depositor, the NIMS Insurer and the Securities Administrator that as of the
Closing Date or as of such date specifically provided herein:
(i) The Servicer is duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its formation and has all
licenses necessary to carry on its business as now being conducted, except
for such licenses, certificates and permits the absence of which,
individually or in the aggregate, would not have a material adverse effect
on the ability of the Servicer to conduct its business as it is presently
conducted, and is licensed, qualified and in good standing in the states
where each Mortgaged Property is located if the laws of such state require
licensing or qualification in order to conduct business of the type
conducted by the Servicer or to ensure the enforceability or validity of
each Mortgage Loan; the Servicer has the power and authority to execute and
deliver this Agreement and to perform in accordance herewith; the execution,
delivery and performance of this Agreement (including all instruments of
transfer to be delivered pursuant to this Agreement) by the Servicer and the
consummation of the transactions contemplated hereby have been duly and
validly authorized; this Agreement evidences the valid, binding and
enforceable obligation of the Servicer, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally; and all requisite corporate
action has been taken by the Servicer to make this Agreement valid and
binding upon the Servicer in accordance with its terms;
(ii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Servicer and will
not result in the breach of any term or provision of the certificate or
articles of incorporation or the bylaws of the Servicer or result in the
breach of any term or provision of, or conflict with or constitute a default
under or result in the acceleration of any obligation under, any agreement,
indenture or loan or credit agreement or other instrument to which the
Servicer or its property is subject, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Servicer or its
property is subject;
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(iii) This Agreement, and all documents and instruments contemplated
hereby which are executed and delivered by the Servicer, constitute and will
constitute valid, legal and binding obligations of the Servicer, enforceable
in accordance with their respective terms, except as the enforcement thereof
may be limited by applicable bankruptcy laws and general principles of
equity;
(iv) The Servicer does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant contained
in this Agreement;
(v) There is no action, suit, proceeding or investigation pending or,
to its knowledge, threatened against the Servicer that, either individually
or in the aggregate, may result in any material adverse change in the
business, operations, financial condition, properties or assets of the
Servicer, or in any material impairment of the right or ability of the
Servicer to carry on its business substantially as now conducted, or in any
material liability on the part of the Servicer, or that would draw into
question the validity or enforceability of this Agreement or of any action
taken or to be taken in connection with the obligations of the Servicer
contemplated herein, or that would be likely to impair materially the
ability of the Servicer to perform under the terms of this Agreement;
(vi) No consent, approval or order of any court or governmental agency
or body is required for the execution, delivery and performance by the
Servicer of or compliance by the Servicer with this Agreement or the
consummation of the transactions contemplated by this Agreement, except for
such consents, approvals, authorizations and orders, if any, that have been
obtained;
(vii) Neither this Agreement nor any information, certificate of an
officer, statement furnished in writing or report delivered to the Trustee
by the Servicer in connection with the transactions contemplated hereby
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary in order to make the statements
contained therein, in light of the circumstances under which they were made,
not misleading; and
(viii) As of December 1, 2002, all information relating to Prepayment
Charges in the Data File and the ▇▇▇▇▇ Fargo Prepayment Charge Matrix
regarding the Prepayment Charges was complete and accurate in all material
respects, and except for balloon payment Mortgage Loans originated in
certain states specified in the ▇▇▇▇▇ Fargo Prepayment Charge Matrix with
restrictions on collection of Prepayment Charges, each Prepayment Charge is
permissible and enforceable in accordance with its terms under applicable
law. Prepayment Charges on the Mortgage Loans are applicable to prepayments
resulting from both refinancings and sales of the related Mortgaged
Properties and the terms of each such Prepayment Charge do not provide for a
waiver or release during the term of the Prepayment Charge. No Mortgage Loan
provides for the payment of a Prepayment Charge beyond the five-year term
following the origination of the Mortgage Loan.
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 Securities Administrator, the NIMS Insurer and the
Certificateholders. Upon discovery by any of the Depositor, the Servicer, the
Securities Administrator, 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 and the NIMS Insurer.
Section 2.06 Representations and Warranties of the Depositor.
The Depositor represents and warrants to the Trust, the Securities
Administrator, the Servicer and the Trustee on behalf of the Certificateholders
as follows:
(i) This agreement constitutes a legal, valid and binding obligation of
the Depositor, enforceable against the Depositor in accordance with its
terms, except as enforceability may be limited by
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applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general an 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; or (d)
which might materially and adversely affect the performance by the Depositor
of its obligations under, or the validity or enforceability of, this
Agreement.
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Section 2.07 Issuance of Certificates and the Uncertificated Regular
Interests.
The Trustee acknowledges the assignment to it of the Mortgage Loans and
the receipt by it (or the Custodian, as bailee and Custodian of the Trustee) of
the Mortgage Files, subject to the provisions of Sections 2.01 and 2.02,
together with the assignment to it of all other assets included in the Trust
Fund. 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, authenticated and delivered to or upon
the order of the Depositor, the Certificates (other than the Class P, Class CE
and Class R Certificates) in minimum dollar denominations or $25,000 and
integral dollar multiples of $1 in excess. The Class P, Class CE and Class R
Certificates are issuable only in minimum Percentage Interests of 25%. The
Trustee acknowledges the issuance of the uncertificated REMIC 1 Regular
Interests, the uncertificated REMIC 2 Regular Interests and the uncertificated
REMIC 3 Regular Interests, and declares that it hold such regular interests as
assets of REMIC 2, REMIC 3 and REMIC 4, respectively. The Trustee acknowledges
the issuance of the uncertificated REMIC 4 Components, and declares that it
holds the same on behalf of the Holders of the Class CE Certificates. The
interests evidenced by the Certificates constitute the entire beneficial
ownership interest in the Trust Fund.
ARTICLE III
ADMINISTRATION AND SERVICING OF THE TRUST FUND
Section 3.01 Servicer to Act as Servicer.
The Servicer, as independent contract servicer, shall service
and administer the Mortgage Loans in accordance with this Agreement and the
normal and usual standards of practice of sub-prime mortgage servicers servicing
similar mortgage loans in the same respective jurisdictions as the Mortgaged
Properties, and shall have full power and authority, acting alone, to do or
cause to be done any and all things in connection with such servicing and
administration which the Servicer may deem necessary or desirable and consistent
with the terms of this Agreement (the "Servicing Standards").
Consistent with the terms of this Agreement, the Servicer may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor if in the Servicer's reasonable determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Certificateholders; provided, however, that the Servicer shall not make future
advances and (unless the Mortgagor is in default with respect to the Mortgage
Loan or such default is, in the judgment of the Servicer, imminent) the Servicer
shall not permit any modification with respect to any Mortgage Loan that would
(i) change the Mortgage Interest Rate, defer or forgive the payment thereof of
any principal or interest payments, reduce the outstanding principal amount
(except for actual payments of principal) or extend the final maturity date with
respect to such Mortgage Loan, (ii) affect adversely the status of any REMIC as
a REMIC or (iii) cause any REMIC to be subject to a tax on "prohibited
transactions" or "contributions" pursuant to the REMIC Provisions.
Notwithstanding the foregoing, the Servicer shall not permit any modification
with respect to any Mortgage Loan that would both (x) effect an exchange or
reissuance of such Mortgage Loan under Section 1.860G-2(b) of the Treasury
Regulations and (y) cause any REMIC constituting part of the Trust Fund to fail
to qualify as a REMIC under the Code or the imposition of any tax on "prohibited
transactions" or "contributions" after the Startup Day under the REMIC
Provisions. Without limiting the generality of the foregoing, the Servicer shall
continue, and is hereby authorized and empowered to execute and deliver on
behalf of itself and the Trustee, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
Mortgaged Properties. The Servicer shall make all required Servicing Advances
and shall service and administer the Mortgage Loans in accordance with
Applicable Regulations, and shall provide to the Mortgagor any reports required
to be provided to them thereby. By the execution of this Agreement, the Trustee
hereby grants to the Servicer, a power of attorney to enable the Servicer to
carry out its servicing and administrative duties hereunder.
In servicing and administering the Mortgage Loans, the Servicer shall
employ procedures including collection procedures and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account giving due consideration to accepted mortgage
servicing practices of prudent lending institutions and the Certificateholders'
reliance on the Servicer.
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The Servicer shall give prompt notice to the Trustee and the NIMS
Insurer of any action, of which the Servicer has actual knowledge, to (i) assert
a claim against the Trust Fund or (ii) assert jurisdiction over the Trust Fund.
Section 3.02 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest on
all Mortgage Loans are paid in full, the Servicer will diligently collect all
payments due under each Mortgage Loan when the same shall become due and payable
and shall, to the extent such procedures shall be consistent with the Servicing
Standards set forth in 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, where applicable, the
Servicer will take special care in ascertaining and estimating annual Escrow
Payments that, as provided in the Escrow Agreement, will become due and payable
to that end that the installments payable by the Mortgagors will be sufficient
to pay such charges as and when they become due and payable.
Section 3.03 Realization Upon Defaulted Mortgage Loans.
In the event that any payment due under any Mortgage Loan is not paid
when the same becomes due and payable, or in the event the Mortgagor fails to
perform any other covenant or obligation under the Mortgage Loan and such
failure continues beyond any applicable grace period, the Servicer shall take
such action as it shall deem to be in the best interest of the
Certificateholders.
In connection with a foreclosure or other conversion, the Servicer
shall exercise such rights and powers vested in it hereunder and use the same
degree of care and skill in its exercise as it would exercise or use under the
circumstances in the conduct of its own affairs and consistent with Applicable
Regulations and the Servicing Standards, including, without limitation,
advancing funds for the payment of taxes and insurance premiums with respect to
first lien Mortgage Loans.
Notwithstanding the foregoing provisions of this Section 3.03, with
respect to any Mortgage Loan as to which the Servicer has received actual notice
of, or has actual knowledge of, the presence of any toxic or hazardous substance
on the related Mortgaged Property, the Servicer shall not either (i) obtain
title to such Mortgaged Property as a result of or in lieu of foreclosure or
otherwise, or (ii) otherwise acquire possession of, or take any other action
with respect to, such Mortgaged Property if, as a result of any such action, the
Trust would be considered to hold title to, to be a mortgagee-in-possession of,
or to be an owner or operator of such Mortgaged Property within the meaning of
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, or any comparable law, unless the Servicer
has also previously determined, based on its reasonable judgment and a report
prepared by a Person who regularly conducts environmental audits using customary
industry standards, stating 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.
Notwithstanding the foregoing, if such environmental audit reveals, or
if the Servicer has actual knowledge or notice, that such Mortgaged Property
contains such wastes or substances, the Servicer shall not foreclose or accept a
deed in lieu of foreclosure without the prior written consent of the NIMS
Insurer.
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The cost of the environmental audit report contemplated by this Section
3.03 shall be advanced by the Servicer, subject to the Servicer's right to be
reimbursed therefor from the Collection Account as provided in Section 3.05(ii).
If the Servicer determines, as described above, that it is in the best
economic interest of the Certificateholders to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes, or petroleum-based materials affecting any such Mortgaged Property, then
the Servicer shall take such action as it deems to be in the best economic
interest of the Certificateholders. The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Servicer, subject
to the Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.05(ii).
Section 3.04 Collection Account and Distribution Account.
(a) The Servicer shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan separate and apart from any of its own
funds and general assets and shall establish and maintain one or more Collection
Accounts. Each Collection Account shall be an Eligible Account.
The Servicer shall deposit in the Collection Account on a daily basis
within three Business Days of receipt, and retain therein, the following
payments and collections received or made by it after the Cut-off Date with
respect to the Mortgage Loans, without duplication:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans adjusted
to the Mortgage Interest Rate less the Servicing Fee Rate;
(iii) all Net Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be deposited
pursuant to Section 3.10, other than proceeds to be held in the Escrow
Account and applied to the restoration or repair of the Mortgaged Property
or released to the Mortgagor in accordance with the Servicer's normal
servicing procedures, the loan documents or applicable law;
(v) all Condemnation Proceeds affecting any Mortgaged Property which
are not released to the Mortgagor in accordance with the Servicer's normal
servicing procedures, the loan documents or applicable law;
(vi) any amounts required to be deposited by the Servicer in connection
with any REO Property pursuant to Section 3.13; and
(vii) all Prepayment Charges collected by the Servicer in connection
with the voluntary Principal Prepayment in full of any of the Mortgage
Loans.
Any interest paid on funds deposited in the Collection Account, subject
to Section 3.25, shall accrue to the benefit of the Servicer and the Servicer
shall be entitled to retain and withdraw such interest from the Collection
Account pursuant to Section 3.05(v). The foregoing requirements for deposit from
the Collection Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments in the nature of late
payment charges, prepayment penalties that are not Prepayment Charges, and
assumption fees need not be deposited by the Servicer in the Collection Account.
(b) On behalf of the Trust Fund, the Trustee shall establish and
maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the
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Certificateholders. On behalf of the Trust Fund, the Servicer shall deliver to
the Trustee in immediately available funds for deposit in the Distribution
Account by the close of business New York time on the Servicer Remittance Date,
(i) that portion of the Available Funds (calculated without regard to the
references in the definition thereof to amounts that may be deposited to the
Distribution Account from a different source as provided herein) then on deposit
in the Collection Account, (ii) the amount of all Prepayment Charges collected
by the Servicer in connection with the voluntary Principal Prepayment in full of
any of the Mortgage Loans then on deposit in the Collection Account (other than
any such Prepayment Charges received after the related Prepayment Period), (iii)
any Servicer Prepayment Charge Payment Amount that became due during the related
Prepayment Period and (iv) the Credit Risk Manager Fee payable on the upcoming
Distribution Date. These amounts may be sent via a single combined wire
transfer. Except as otherwise provided in Section 3.04(f), amounts in the
Distribution Account shall be deemed to be held on behalf of the related REMICs
in accordance with the REMIC distributions set forth in Section 4.09. The
Securities Administrator shall be entitled to cause the Trustee to withdraw from
the Distribution Account any amounts owing to it pursuant to Section 3.30(c) (in
its capacity as Auction Administrator), prior to the distribution of any amounts
on deposit therein to the Certificateholders; provided, however, in the case of
amounts owing to it other than the Securities Administration Fee, the Securities
Administrator shall provide the Depositor with a written account of such amounts
five Business Days prior to the withdrawal of such funds.
(c) Funds in the Collection Account and the Distribution Account may be
invested in Permitted Investments in accordance with the provisions set forth in
Section 3.25. The Servicer shall give notice to the Trustee, the NIMS Insurer
and the Securities Administrator of the location of the Collection Account
maintained by it when established and prior to any change thereof. The Trustee
shall give notice to the Servicer, the Securities Administrator, the NIMS
Insurer and the Depositor of the location of the Distribution Account when
established and prior to any change thereof.
(d) In the event the Servicer shall deliver to the Trustee for deposit
in the Distribution Account any amount not required to be deposited therein, it
may at any time request that the Trustee withdraw such amount from the
Distribution Account and remit to the Servicer any such amount, any provision
herein to the contrary notwithstanding. In addition, the Servicer shall deliver
to the Trustee from time to time for deposit, and the Trustee shall so deposit,
in the Distribution Account in respect of REMIC 1:
(i) any Advances, as required pursuant to Section 4.07;
(ii) any Stayed Funds, as soon as permitted by the federal bankruptcy
court having jurisdiction in such matters;
(iii) any Prepayment Charges or amounts in connection with the waiver
of such Prepayment Charges, in each case required to be deposited pursuant
to Section 3.24;
(iv) any amounts required to be deposited in the Distribution Account
pursuant to Sections 2.03, 3.04, 3.16, 3.23 or 4.07; and
(v) any amounts required to be deposited by the Servicer pursuant to
Section 3.11 in connection with the deductible clause in any blanket hazard
insurance policy, such deposit being made from the Servicer's own funds,
without reimbursement therefor.
(e) Promptly upon receipt of any Stayed Funds, whether from the
Servicer, a trustee in bankruptcy, or federal bankruptcy court or other source,
the Trustee shall, unless such funds have been received from the Servicer,
notify the Servicer of such receipt and deposit such funds in the Distribution
Account, subject to withdrawal thereof as permitted hereunder. In addition, the
Securities Administrator shall deposit in the Distribution Account any amounts
required to be deposited pursuant to Section 3.25(b) in connection with losses
realized on Permitted Investments with respect to funds held in the Distribution
Account.
(f) Any Prepayment Charges and Servicer Prepayment Charge Payment
Amounts deposited pursuant to Section 3.04(a)(vii) shall not be assets of any
REMIC created hereunder, but shall be considered assets of the Grantor Trust
held by the Trustee for the benefit of the Class P Certificateholders. In
addition, any Net WAC
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Rate Carryover Amounts that are paid with respect to the Class A or Class M
Certificates will be treated as first having been distributed with respect to
the Class CE Certificates and then having been paid outside of the REMICs to the
Class A or Class M Certificateholders.
(g) Not later than twenty (20) days after each Distribution Date, the
Servicer shall forward to the Trustee, the Securities Administrator, the NIMS
Insurer and the Depositor the most current available bank statement for the
Collection Account.
Section 3.05 Permitted Withdrawals From the Collection Account.
The Servicer may, from time to time, withdraw from the Collection
Account for the following purposes:
(i) to remit to the Trustee for deposit in the Distribution Account the
amounts required to be so remitted pursuant to Section 3.04(b) or permitted
to be so remitted pursuant to the first sentence of Section 3.04(d);
(ii) to reimburse itself for Advances and Servicing Advances; the
Servicer's right to reimburse itself pursuant to this subclause (ii) being
limited to amounts received on the related Mortgage Loan which represent
payments of (a) principal and/or interest respecting which any such Advance
was made or (b) Condemnation Proceeds, Insurance Proceeds or Liquidation
Proceeds respecting which any such Servicing Advance was made;
(iii) to reimburse itself for unreimbursed Servicing Advances, any
unpaid Servicing Fees and for unreimbursed Advances to the extent that such
amounts are deemed to be Nonrecoverable Advances, and to reimburse itself
for such amounts to the extent that such amounts are nonrecoverable from the
disposition of REO Property pursuant to Section 3.03 or Section 3.13 hereof;
(iv) to reimburse itself for any amounts paid pursuant to Section 3.03
(and not otherwise previously reimbursed);
(v) to pay to itself as servicing compensation (a) any interest earned
on funds in the Collection Account (all such interest to be withdrawn
monthly not later than each Servicer Remittance Date) and (b) the Servicing
Fee from that portion of any payment or recovery as to interest to a
particular Mortgage Loan to the extent not retained pursuant to Section
3.04(ii);
(vi) to reimburse itself for any amounts paid pursuant to Section 6.03
(and not otherwise previously reimbursed);
(vii) to reimburse the NIMS Insurer, the Servicer (if the Servicer is
not an Affiliate of the repurchasing party), the Securities Administrator or
the Trustee, as the case may be, for enforcement expenses reasonably
incurred in respect of the breach or defect giving rise to the purchase
obligation under Section 2.03 of this Agreement that were included in the
Purchase Price of the Mortgage Loan, including any expenses arising out of
the enforcement of the purchase obligation;
(viii) to reimburse the Depositor, the Servicer or the NIMS Insurer for
expenses and costs reimbursable to them pursuant to Section 3.26(b); and
(ix) to clear and terminate the Collection Account upon the termination
of this Agreement.
The foregoing requirements for withdrawal from the Collection Account
shall be exclusive. In the event the Servicer shall deposit in the Collection
Account any amount not required to be deposited therein, it may at any time
withdraw such amount from the Collection Account, any provision herein to the
contrary notwithstanding.
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Section 3.06 Establishment of Escrow Accounts; Deposits in Escrow
Accounts.
The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan which constitute Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts, in the form of time deposit or demand
accounts. A copy of such letter agreement shall be furnished to the Trustee upon
request. The Escrow Account shall be an Eligible Account.
The Servicer shall deposit in the Escrow Account or Accounts on a daily
basis within three Business Days of receipt, and retain therein, (i) all Escrow
Payments collected on account of the Mortgage Loans, for the purpose of
effecting timely payment of any such items as required under the terms of this
Agreement, and (ii) all Insurance Proceeds which are to be applied to the
restoration or repair of any Mortgaged Property. The Servicer shall make
withdrawals therefrom only to effect such payments as are required under this
Agreement, and for such other purposes as shall be set forth in, or in
accordance with, Section 3.07. The Servicer shall be entitled to retain any
interest paid on funds deposited in the Escrow Account by the depository
institution other than interest on escrowed funds required by law to be paid to
the Mortgagor and, to the extent required by the related Mortgage Loan or
Applicable Regulations, the Servicer shall pay interest on escrowed funds to the
Mortgagor notwithstanding that the Escrow Account is non-interest bearing or
that interest paid thereon is insufficient for such purposes.
Section 3.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by the Servicer (i) to
effect timely payments of Escrow Payments, (ii) to reimburse the Servicer for
any Servicing Advance made by the Servicer with respect to a related Mortgage
Loan but only from amounts received on the related Mortgage Loan which represent
late payments or Late Collections of Escrow Payments thereunder, (iii) to refund
to the Mortgagor any funds as may be determined to be overages, (iv) for
transfer to the Collection Account in accordance with the terms of this
Agreement, (v) for application to restoration or repair of the Mortgaged
Property, (vi) to pay to the Servicer, or to the Mortgagor to the extent
required by the related Mortgage Loan or Applicable Regulations, any interest
paid on the funds deposited in the Escrow Account, (vii) to clear and terminate
the Escrow Account on the termination of this Agreement, or (viii) to transfer
to the Collection Account any Insurance Proceeds. As part of its servicing
duties, the Servicer shall pay to the Mortgagor interest on funds in the Escrow
Account, to the extent required by the related Mortgage Loan or Applicable
Regulations, and to the extent that interest earned on funds in the Escrow
Account is insufficient, shall pay such interest from its own funds, without any
reimbursement therefor.
In the event the Servicer shall deposit in the Escrow Account any
amount not required to be deposited therein, it may at any time withdraw such
amount from the Escrow Account, any provision herein to the contrary
notwithstanding.
Section 3.08 Payment of Taxes, Insurance and Other Charges; Collections
Thereunder; Primary Mortgage Insurance.
(a) With respect to each Mortgage Loan subject to an Escrow Agreement,
the Servicer shall maintain accurate records reflecting the status of taxes,
which are or may become a lien upon the Mortgaged Property and the status of
fire, flood (if applicable) and hazard insurance coverage and shall obtain, from
time to time, all bills for the payment of such charges (including renewal
premiums) and shall effect payment thereof prior to the applicable penalty or
termination date and at a time appropriate for securing maximum discounts
allowable, employing for such purpose deposits of the Mortgagor in the Escrow
Account which shall have been estimated and accumulated by the Servicer in
amounts sufficient for such purposes, as allowed under the terms of the Escrow
Agreement or Applicable Regulations. To the extent that a Mortgage Loan is not
subject to an Escrow Agreement, the Servicer shall determine that any such
payments are made by the Mortgagor. The Servicer assumes full responsibility for
the payment of all such bills and shall effect payments of all such bills
irrespective of the Mortgagor's faithful performance in the payment of same or
the making of the Escrow Payments and shall make Servicing Advances from its own
funds to effect such payments.
(b) The Servicer shall maintain coverage under a primary mortgage
insurance policy for all Mortgage Loans with Loan-to-Value Ratios at origination
of 80% or greater, until the Loan-to-Value Ratio on any
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such Mortgage Loan is reduced to 78% or lower as a result of principal payments
on such Mortgage Loan or based upon an appraisal of the related Mortgaged
Property after the Closing Date. Notwithstanding anything to the contrary
herein, the Servicer shall be responsible for the payment of all primary
mortgage insurance premiums out of the Servicer's own funds, without any right
to reimbursement therefor.
Section 3.09 Transfer of Accounts.
The Servicer may transfer the Collection Account or the Escrow Account
to a different depository institution from time to time. Upon such transfer, the
Servicer shall deliver to the Trustee, the Securities Administrator and the
Depositor, a certification or letter agreement, as the case may be, as required
pursuant to Sections 3.04 and 3.06.
Section 3.10 Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each Mortgage Loan fire
and hazard insurance with extended coverage as is customary in the area where
the Mortgaged Property is located in an amount which is at least equal to the
lesser of (i) the amount necessary to fully compensate for any damage or loss to
the improvements which are a part of such property on a replacement cost basis
or (ii) the Principal Balance of the Mortgage Loan, in each case in an amount
not less than such amount as is necessary to prevent the Mortgagor and/or the
Mortgagee from becoming a co-insurer. If the Mortgaged Property is in an area
identified in the Federal Register by the Flood Emergency Management Agency as
having special flood hazards and flood insurance has been made available, the
Servicer will cause to be maintained a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
with a generally acceptable insurance carrier, in an amount representing
coverage not less than the least of (i) the Principal Balance of the Mortgage
Loan, (ii) the maximum insurable value of the improvements securing such
Mortgage Loan or (iii) the maximum amount of insurance which is available under
the Flood Disaster Protection Act of 1973, as amended. The Servicer shall also
maintain on the REO Property for the benefit of the Certificateholders, (x) fire
and hazard insurance with extended coverage in an amount which is at least equal
to the replacement cost of the improvements which are a part of such property,
(y) public liability insurance and, (z) to the extent required and available
under the Flood Disaster Protection Act of 1973, as amended, flood insurance in
an amount as provided above. Any amounts collected by the Servicer under any
such policies other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the Mortgaged Property or REO Property,
or released to the Mortgagor in accordance with the Servicer's normal servicing
procedures, shall be deposited in the Collection Account, subject to withdrawal
pursuant to Section 3.05. It is understood and agreed that no earthquake or
other additional insurance is required to be maintained by the Servicer or the
Mortgagor or maintained on property acquired in respect of the Mortgage Loan,
other than pursuant to such Applicable Regulations as shall at any time be in
force and as shall require such additional insurance. All such policies shall be
endorsed with standard mortgagee clauses with loss payable to the Servicer and
shall provide for at least thirty days prior written notice of any cancellation,
reduction in the amount of or material change in coverage to the Servicer. The
Servicer shall not interfere with the Mortgagor's freedom of choice in selecting
either his insurance carrier or agent, provided, however, that the Servicer
shall not accept any such insurance policies from insurance companies unless
such companies currently reflect a general policy rating of B:VI or better in
Best's Key Rating Guide and are licensed to do business in the state wherein the
property subject to the policy is located.
Section 3.11 Maintenance of Mortgage Impairment Insurance Policy.
In the event that the Servicer shall obtain and maintain a blanket
policy issued by an insurer that has a general policy rating of B:VI or better
in Best's Key Rating Guide insuring against hazard losses on all of the Mortgage
Loans, then, to the extent such policy provides coverage in an amount equal to
the amount required pursuant to Section 3.10 and otherwise complies with all
other requirements of Section 3.10, it shall conclusively be deemed to have
satisfied its obligations as set forth in Section 3.10, it being understood and
agreed that such policy may contain a deductible clause, in which case the
Servicer shall, in the event that there shall not have been maintained on the
related Mortgaged Property or REO Property a policy complying with Section 3.10,
and there shall have been a loss which would have been covered by such policy,
deliver to the Trustee for deposit in the Distribution Account the amount not
otherwise payable under the blanket policy because of such deductible clause,
which amount shall not be reimbursable to the Servicer from the Trust Fund. In
connection with its activities as servicer of the Mortgage Loans, the Servicer
agrees to prepare and present, on behalf of the Trustee, claims under
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any such blanket policy in a timely fashion in accordance with the terms of such
policy. Upon request of the Trustee, the Servicer shall cause to be delivered to
the Trustee a certified true copy of such policy and a statement from the
insurer thereunder that such policy shall in no event be terminated or
materially modified without thirty days prior written notice to the Trustee.
Section 3.12 Fidelity Bond, Errors and Omissions Insurance.
The Servicer shall maintain, at its own expense, a blanket fidelity
bond (the "Fidelity Bond") and an errors and omissions insurance policy, with
broad coverage with financially responsible companies on all officers, employees
or other persons acting in any capacity with regard to the Mortgage Loans to
handle funds, money, documents and papers relating to the Mortgage Loans. The
Fidelity Bond and errors and omissions insurance shall be in the form of the
Mortgage Banker's Blanket Bond and shall protect and insure the Servicer against
losses, including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such persons. Such Fidelity Bond shall also protect and insure
the Servicer against losses in connection with the failure to maintain any
insurance policies required pursuant to this Agreement and the release or
satisfaction of a Mortgage Loan without having obtained payment in full of the
indebtedness secured thereby. No provision of this Section 3.12 requiring the
Fidelity Bond and errors and omissions insurance shall diminish or relieve the
Servicer from its duties and obligations as set forth in this Agreement. The
minimum coverage under any such bond and insurance policy shall be at least
equal to the corresponding amounts required by FNMA in the FNMA Selling and
Servicing Guide or by FHLMC in the FHLMC Servicer's Guide. Upon request of the
Trustee or the NIMS Insurer, the Servicer shall cause to be delivered to the
Trustee or the NIMS Insurer 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 and the NIMS Insurer.
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 in the name of the Trustee, on behalf of the Certificateholders,
or in the event the Trustee is not authorized or permitted to hold title to real
property in the state where the REO Property is located, or would be adversely
affected under the "doing business" or tax laws of such state by so holding
title, the deed or certificate of sale shall be taken in the name of such Person
or Persons as shall be consistent with an Opinion of Counsel obtained by the
Servicer from an attorney duly licensed to practice law in the state where the
REO Property is located. Any Person or Persons holding such title other than the
Trustee shall acknowledge in writing that such title is being held as nominee
for the benefit of the Trustee. Pursuant to the power of attorney granted in
Section 3.01, the Servicer is hereby authorized to acquire, transfer and dispose
of any REO Property taken in the name of the Trustee pursuant to this Section
3.23 without further documentation of its authority as attorney in fact for the
Trustee on behalf of the Trust.
(b) In the event that the Trust Fund acquires any REO Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such REO Property before the end of
the third calendar year beginning after the year of its acquisition by the Trust
Fund for purposes of Section 860G(a)(8) of the Code or, at the expense of the
Trust Fund, request from the Internal Revenue Service, more than 60 days before
the day on which the above-mentioned grace period would otherwise expire, an
extension of the above-mentioned grace period, unless the Servicer obtains an
Opinion of Counsel acceptable to the NIMS Insurer, addressed and delivered to
the Servicer, the NIMS Insurer and the Trustee, to the effect that the holding
by the Trust Fund of such REO Property subsequent to such period will not: (i)
result in the imposition of any tax on "prohibited transactions" as defined in
Section 860F of the Code; or (ii) cause any REMIC constituting any part of the
Trust Fund to fail to qualify as a REMIC at any time that any
Certificates are outstanding, in which case the Trust Fund may continue
to hold such REO Property (subject to any conditions contained in such Opinion
of Counsel). The Servicer shall be entitled to be reimbursed from the Collection
Account for any costs incurred in obtaining such Opinion of Counsel, as provided
in Section 3.05.
Subject to compliance with applicable laws and regulations as shall at
any time be in force, and notwithstanding any other provisions of this
Agreement, no REO Property acquired by the Trust Fund shall be rented (or
allowed to continue to be rented) or otherwise used by or on behalf of the Trust
Fund in such a manner or
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pursuant to any terms that would: (i) cause such REO Property to fail to qualify
as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code;
or (ii) subject any REMIC constituting part of the Trust Fund to the imposition
of any federal income taxes on the income earned from such REO Property,
including any taxes imposed by reason of Sections 860F or 860G(c) of the Code,
unless the Servicer has agreed to indemnify and hold harmless the Trust Fund
with respect to the imposition of any such taxes.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Certificateholders and the Trust Fund solely for the purpose of
its prompt disposition and sale in a manner which does not cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or result in the receipt by the related REMIC of
any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code, or any "net income from foreclosure property" which
is subject to taxation under the REMIC Provisions. The Servicer shall cause each
REO Property to be inspected promptly upon the acquisition of title thereto and
possession thereof and shall cause each REO Property to be inspected at least
annually thereafter. The Servicer shall make or cause to be made a written
report of each such inspection. Such reports shall be retained in the Mortgage
File and copies thereof shall be forwarded by the Servicer to the Trustee upon
request. The Servicer shall attempt to sell the same (and may temporarily rent
the same) on such terms and conditions as the Servicer deems to be in the best
interest of the Certificateholders and the Trust Fund.
With respect to each REO Property, the Servicer shall segregate and
hold all funds collected and received in connection with the operation of the
REO Property separate and apart from its own funds or general assets and shall
deposit or cause to be deposited, on a daily basis, within three Business Days
of receipt, into the Collection Account, all revenues received with respect to
the related REO Property and shall withdraw therefrom funds necessary for the
proper operation, management and maintenance of the REO Property, including the
cost of maintaining any hazard insurance pursuant to Section 3.10 hereof and the
fees of any managing agent acting on behalf of the Servicer.
The Servicer shall furnish to the Securities Administrator and 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, if
applicable. Such operation statement shall be accompanied by such other
information as the Trustee shall reasonably request.
The Servicer shall use its best efforts to dispose of the REO Property
as promptly as is practically consistent with protecting the Certificateholders'
interests.
Each REO Disposition shall be carried out by the Servicer at such price
and upon such terms and conditions as the Servicer deems to be in the best
interest of the Certificateholders. If as of the date title to any REO Property
was acquired by the Servicer there were outstanding unreimbursed Servicing
Advances with respect to the REO Property, the Servicer, upon an REO Disposition
of such REO Property, shall be entitled to reimbursement for any related
unreimbursed Servicing Advances from proceeds received in connection with such
REO Disposition. The Servicer shall be entitled to an REO Disposition Fee upon
each REO Disposition, and may withhold and retain the REO Disposition Fee from
Liquidation Proceeds. The proceeds from the REO Disposition, net of any payments
to the Servicer as provided above, shall be deposited in the Collection Account
and shall be distributed to the Trust in the month following receipt thereof in
accordance with Section 4.01.
Any REO Disposition shall be for cash only (unless changes in the REMIC
Provisions made subsequent to the Startup Day allow a sale for other
consideration and an Opinion of Counsel is obtained by the Servicer to the
effect that such sale shall not cause any REMIC constituting part of the Trust
Fund to fail to qualify as a REMIC).
Section 3.14 Due-on-Sale Clauses; Assumption and Substitution
Agreements.
When a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Servicer shall, to the extent it has knowledge of such conveyance
or prospective conveyance, exercise its rights to accelerate the maturity of the
related Mortgage Loan under any "due-on-sale" clause contained in the related
Mortgage or Mortgage Note; provided, however, that the Servicer shall not
exercise any such right if the "due-on-sale" clause, in the reasonable belief of
the Servicer, is not enforceable under applicable law. An Opinion of Counsel at
the expense
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of the Servicer (which expense shall constitute a Servicing Advance) delivered
to the Trustee and the Depositor to the foregoing effect shall conclusively
establish the reasonableness of such belief. In such event, the Servicer shall
make reasonable efforts to enter into an assumption and modification agreement
with the Person to whom such property has been or is about to be conveyed,
pursuant to which such Person becomes liable under the Mortgage Note and, unless
prohibited by applicable law or the Mortgage, the Mortgagor remains liable
thereon. If the foregoing is not permitted under applicable law, the Servicer is
authorized to enter into a substitution of liability agreement with such Person,
pursuant to which the original Mortgagor is released from liability and such
Person is substituted as Mortgagor and becomes liable under the Note. The
Mortgage Loan, as assumed, shall conform in all respects to the requirements,
representations and warranties of this Agreement. The Servicer shall notify the
Trustee that any such assumption or substitution agreement has been completed by
forwarding to the Trustee (or the Custodian, as the case may be) the original
copy of such assumption or substitution agreement (indicating the Mortgage File
to which it relates) which copy shall be added by the Trustee (or the Custodian,
as the case may be) to the related Mortgage File and which shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. The Servicer shall
be responsible for recording any such assumption or substitution agreements.
Except as otherwise provided in Section 3.01, in connection with any such
assumption or substitution agreement, the Monthly Payment on the related
Mortgage Loan shall not be changed but shall remain as in effect immediately
prior to the assumption or substitution, the stated maturity or outstanding
principal amount of such Mortgage Loan shall not be changed nor shall any
required monthly payments of principal or interest be deferred or forgiven. Any
fee collected by the Servicer for consenting to any such conveyance or entering
into an assumption or substitution agreement shall be retained by or paid to the
Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or any assumption which the Servicer may be
restricted by law from preventing, for any reason whatsoever.
Section 3.15 Duties of the Credit Risk Manager.
For and on behalf of the Depositor, the Credit Risk Manager shall
provide reports and recommendations concerning certain delinquent and defaulted
Mortgage Loans and as to the collection of any Prepayment Charges with respect
to the Mortgage Loans. Such reports and recommendations will be based upon
information provided pursuant to the Credit Risk Management Agreement. The
Credit Risk Manager shall look solely to the Servicer for all information and
data (including loss and delinquency information and data) and loan level
information and data relating to the servicing of the Mortgage Loans.
The Credit Risk Manager may be removed at any time by a vote of
Certificateholders holding Certificates evidencing at least 66 2/3% of the
aggregate Voting Rights of the Certificates. After any such termination, the
Credit Risk Manager shall have no further obligations hereunder, and shall no
longer be entitled to the Credit Risk Manager Fee.
Section 3.16 Optional Purchases of 60+ Day Delinquent Loans by
Servicer.
(a) The NIMS Insurer may, at its option, purchase a Mortgage Loan which
has become 60 or more days delinquent or for which the Servicer has accepted a
deed in lieu of foreclosure. Prior to purchase pursuant to this Section 3.16(a),
the Servicer shall be required to continue to make Advances pursuant to Section
4.07. The NIMS Insurer shall not use any procedure in selecting Mortgage Loans
to be repurchased which is materially adverse to the interests of the
Certificateholders. The NIMS Insurer shall purchase such delinquent Mortgage
Loan at a price equal to the Purchase Price of such Mortgage Loan. Any such
purchase of a Mortgage Loan pursuant to this Section 3.16(a) shall be
accomplished by remittance to the Servicer for deposit in the Collection Account
of the amount of the Purchase Price. The Trustee shall immediately effectuate
the conveyance of such delinquent Mortgage Loan to the NIMS Insurer to the
extent necessary to vest in the NIMS Insurer title to such Mortgage Loan,
including the prompt delivery of all documentation to the NIMS Insurer.
(b) The Servicer may, at its option, with the consent of the Depositor
and the NIMS Insurer, repurchase any 60+ Day Delinquent Loan or any Mortgage
Loan or REO Property for which the Servicer has
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accepted a deed in lieu of foreclosure. Prior to repurchase pursuant to this
Section 3.16, the Servicer shall be required to continue to make monthly
Advances pursuant to Section 4.07. The Servicer shall not use any procedure in
selecting Mortgage Loans to be repurchased which is materially adverse to the
interests of the Certificateholders. The Servicer shall purchase any such 60+
Day Delinquent Loan or REO Property that it elects to repurchase at a price
equal to the Principal Balance of the Mortgage Loan (or of the related Mortgage
Loan, in the case of REO Property) plus accrued interest thereon at the related
Mortgage Interest Rate from the date to which interest has last been paid to the
Trust Fund to the last day of the month in which the date of purchase occurs,
plus any unreimbursed Servicing Advances and Advances (but only to the extent
made by a different entity as Servicer) (the "Servicer Purchase Price"). The
purchase price for the repurchased Mortgage Loan or REO Property shall be
deposited in the Collection Account, and the Trustee, upon receipt of written
certification from the Servicer of such deposit, shall release to, or at the
direction of, the Servicer, the related Mortgage File and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as the Servicer shall furnish to it and as shall be necessary to vest
in the Servicer any Mortgage Loan or REO Property released pursuant hereto and
the Trustee shall have no further responsibility with regard to such Mortgage
File.
Section 3.17 Trustee to Cooperate; Release of Files.
(a) Upon the payment in full of any Mortgage Loan (including any
liquidation of such Mortgage Loan through foreclosure or otherwise, or the
receipt by the Servicer of a notification that payment in full will be escrowed
in a manner customary for such purposes), the Servicer shall deliver to the
Trustee (or the Custodian as the case may be) an executed copy of a completed
"Request for Release" in the form of Exhibit E. Upon receipt of such Request for
Release of Documents, the Trustee (or the Custodian as the case may be) shall
promptly release the related Mortgage File, in trust to (i) the Servicer, or
(ii) such other party identified in the related Request for Release. No expense
incurred in connection with such instrument of satisfaction or assignment, as
the case may be, shall be chargeable to the Collection Account or the
Distribution Account, excepting therefrom recording fees that are not recovered
from the related Mortgagor.
(b) From time to time and as appropriate in the servicing of any
Mortgage Loan, including, without limitation, foreclosure or other comparable
conversion of a Mortgage Loan or collection under any insurance policy relating
to a Mortgage Loan, the Trustee shall (except in the case of the payment or
liquidation pursuant to which the related Mortgage File is released to an escrow
agent or an employee, agent or attorney of the Trustee), upon written request of
the Servicer and delivery to the Trustee (or the Custodian, as the case may be)
of an executed copy of a "Request for Release" in the form of Exhibit E signed
by a Servicing Officer, release the related Mortgage File to the Servicer and
shall execute such documents as shall be necessary to the prosecution of any
such proceedings, including, without limitation, an assignment without recourse
of the related Mortgage to the Servicer. Such receipt shall obligate the
Servicer to return the Mortgage File to the Trustee (or the Custodian, as the
case may be) when the need therefor by the Servicer no longer exists unless the
Mortgage Loan shall be liquidated, in which case, upon receipt of a Request for
Release evidencing such liquidation, the receipt shall be released by the
Trustee (or the Custodian, as the case may be) to the Servicer.
(c) Subject to Section 3.01, the Servicer shall have the right to
accept applications of Mortgagors for consent to (i) partial releases of
Mortgages, (ii) alterations, and (iii) removal, demolition or division of
properties subject to Mortgages. No application for approval shall be considered
by the Servicer unless: (w) either (A) 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 or (B) other evidence satisfactory to the
Servicer; (x) the provisions of the related Mortgage Note and Mortgage have been
complied with; (y) the Loan-to-Value Ratio and debt-to-income ratio after any
release does not exceed the maximum Loan-to-Value Ratio and debt-to-income ratio
established in accordance with the underwriting standards of the Mortgage Loans;
and (z) the lien priority of the related Mortgage is not affected. Upon receipt
by the Trustee of a Servicing Officer's certificate setting forth the action
proposed to be taken in respect of a particular Mortgage Loan and certifying
that the criteria set forth in the immediately preceding sentence have been
satisfied, the Trustee shall execute and deliver to the Servicer the consent or
partial release so requested by the Servicer. A proposed form of consent or
partial release, as the case may be, shall accompany any Servicing Officer's
certificate delivered by the Servicer pursuant to this paragraph.
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Section 3.18 Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain the amount of the Servicing Fee with respect to each Mortgage
Loan (including REO Properties). The Servicer shall be entitled to retain
additional servicing compensation in the form of release fees, bad check
charges, assumption fees, modification or extension fees, late payment charges,
or any other service-related fees, Insurance Proceeds and Liquidation Proceeds
not required to be deposited in the Collection Account and similar items, to the
extent collected from Mortgagors.
Section 3.19 Annual Statement as to Compliance.
(a) The Servicer, at its own expense, will deliver to the Securities
Administrator, not later than February 28 following the end of each calendar
year, commencing in February 2004, a Servicing Officer's certificate stating, as
to each signer thereof, that (i) a review of the activities of the Servicer
during such preceding fiscal year (or such shorter period in the case of the
first such report) and of performance under this Agreement or similar agreements
has been made under such officers' supervision, and (ii) to the best of such
officer's knowledge, based on such review, the Servicer has fulfilled all its
obligations under this Agreement for such year, or, if there has been a default
in the fulfillment of all such obligations, specifying each such default known
to such officers and the nature and status thereof including the steps being
taken by the Servicer to remedy such default. The Securities Administrator shall
forward such certificate to the Depositor, the Trustee and the NIMS Insurer
immediately upon receipt.
(b) Delivery of such reports, information and documents to the
Securities Administrator is for informational purposes only and the Trustee's,
Securities Administrator's and Depositor's receipt of such shall not constitute
constructive notice of any information contained therein or determinable, from
information contained therein, including the Servicer's compliance with any of
its covenants hereunder (as to which the Trustee, the Securities Administrator
and the Depositor are entitled to rely exclusively on Officers' Certificates).
Section 3.20 Annual Independent Certified Public Accountants' Reports.
(a) Not later than February 28 following the end of each calendar year
commencing with 2003, the Servicer, at its expense, shall cause a nationally
recognized firm of independent certified public accountants to furnish to the
Securities Administrator a report stating that (i) it has obtained a letter of
representation regarding certain matters from the management of the Servicer
which includes an assertion that the Servicer has complied with certain minimum
residential mortgage loan servicing standards, identified in either the Uniform
Single Attestation Program for Mortgage Bankers established by the Mortgage
Bankers Association of America or the Audit Program for Mortgages serviced by
FHLMC, with respect to the servicing of residential mortgage loans during the
most recently completed fiscal year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the American
Institute of Certified Public Accountants, such representation is fairly stated
in all material respects, subject to such exceptions and other qualifications
that may be appropriate. The Securities Administrator shall furnish a copy of
such report to the Trustee, the NIMS Insurer, the Depositor and each Rating
Agency immediately upon receipt. Copies of such statement shall be provided by
the Trustee to any Certificateholder upon request, provided that such statement
has been delivered by the Servicer to the Trustee.
(b) Delivery of such reports, information and documents to the Trustee
and the Securities Administrator is for informational purposes only and the
Trustee's and Securities Administrator's receipt of such shall not constitute
constructive notice of any information contained therein or determinable, from
information contained therein, including the Servicer's compliance with any of
its covenants hereunder (as to which the Trustee and the Securities
Administrator are entitled to rely exclusively on Officers' Certificates).
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Section 3.21 Access to Certain Documentation and Information Regarding
the Mortgage Loans.
The Servicer shall provide to the Trustee, the Securities
Administrator, the NIMS Insurer, Certificateholders that are federally insured
savings and loan associations, the Office of Thrift Supervision, the FDIC and
the supervisory agents and examiners of each of the foregoing (which, in the
case of supervisory agents and examiners, may be required by applicable state
and federal regulations) access to the documentation regarding the Mortgage
Loans, such access being afforded without charge but only upon reasonable
request and during normal business hours at the offices of the Servicer
designated by it.
Upon request, the Servicer shall furnish to the Securities Administrato
its most recent financial statements and such other information relating to the
Servicer's capacity to perform its obligations under this Agreement as it
possesses. The Securities Administrator shall deliver such financial statements
to the Depositor, the NIMS Insurer and the Trustee immediately upon receipt. To
the extent such information is not otherwise available to the public, the
Depositor, the Securities Administrator, the NIMS Insurer and the Trustee shall
not disseminate any information obtained pursuant to the preceding sentence
without the Servicer's written consent, except as required pursuant to this
Agreement or to the extent that it is appropriate to do so (i) in working with
legal counsel, auditors, taxing authorities or other governmental agencies or
(ii) pursuant to any law, rule, regulation, order, judgment, writ, injunction or
decree of any court or governmental authority having jurisdiction over the
Depositor and the Trustee or the Trust Fund, and in any case, each of the
Depositor, the NIMS Insurer, the Securities Administrator or the Trustee, as the
case may be, shall use its best efforts to assure the confidentiality of any
such disseminated non-public information.
Section 3.22 Reports Filed with Securities and Exchange Commission;
Annual Certification of Securities and Exchange Commission
Filing.
(a) The Securities Administrator and the Servicer shall reasonably
cooperate with the Depositor in connection with the Trust's satisfying the
reporting requirements under the Securities Exchange Act of 1934, as amended.
The Securities Administrator shall prepare on behalf of the Trust any Forms 8-K
and 10-K customary for similar securities as required by the Exchange Act and
the Rules and Regulations of the Securities and Exchange Commission thereunder,
and the Securities Adminstrator shall sign and file (via the Securities and
Exchange Commission's Electronic Data Gathering and Retrieval System) such Forms
on behalf of the Depositor. The Depositor hereby grants to the Securities
Administrator a limited power of attorney to execute and file each such document
on behalf of the Depositor. Such power of attorney shall continue until either
the earlier of (i) receipt by the Securities Administrator from the Depositor of
written termination of such power of attorney and (ii) the termination of the
Trust. Notwithstanding the foregoing, the Depositor shall sign any Form 10-K
with respect to which the Depositor signs a ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification.
(b) The Securities Administrator shall file a Form 8-K within 15 days
after each Distribution Date, including a Form 8-K with a copy of the statement
to the Certificateholders for such Distribution Date as an exhibit thereto.
Prior to March 15th of each year (or such earlier date as may be required by the
Exchange Act and the Rules and Regulations of the Commission), the Securities
Administrator shall file a Form 10-K, in substance as required by applicable law
or applicable Commission staff interpretations. Such Form 10-K shall include as
exhibits the Servicer's annual statement of compliance described under Section
3.19 and the accountant's report described under Section 3.20, in each case to
the extent they have been timely delivered to the Securities Administrator. If
they are not so timely delivered, the Securities Administrator shall file an
amended Form 10-K including such documents as exhibits reasonably promptly after
they are delivered to the Securities Administrator. The Securities Administrator
shall have no liability with respect to any failure to properly prepare or file
such periodic reports resulting from or relating to the Securities
Administrator's inability or failure to obtain any information not resulting
from its own negligence or willful misconduct. The Form 10-K and any amended
Form 10-K shall also include a certification of the Depositor in the form
attached hereto as Exhibit P-1 (the "Sarbanes Oxley Certification"), which shall
be signed by the senior officer of the Depositor in charge of its
securitizations, and which the Depositor shall deliver to the Securities
Administrator prior to March 15th of each year in which a Form 10-K is to be
filed with respect to the Trust. The Securities Administrator, the Depositor and
the Servicer shall cooperate reasonably to enable the Commission requirements
with respect to the Trust to be met in the event the Commission issues
additional interpretative guidance or promulgates rules or regulations, or in
the event of any other change of law,
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that would require the reporting arrangements, or the allocation of
responsibilities with respect thereto, described in this Section 3.22 to be
conducted in a different manner than as described herein.
(c) Not later than 15 calendar days before the date on which the
Depositor's annual report on Form 10-K is required to be filed in accordance
with the Exchange Act and the rules and regulations of the Commission (or, if
such day is not a Business Day, the immediately preceding Business Day), the
Securities Administrator shall sign and deliver to the Depositor (or to the
Servicer, if the Servicer is signing the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification) a
certification in the form attached hereto as Exhibit P-2 (the "Securities
Administrator's Certification") for the benefit of the Depositor (or the
Servicer) and its officers, directors and Affiliates as to items 1 through 3 of
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification; provided, however, that the Securities
Administrator shall not undertake an analysis of the accountant's report
attached as an exhibit to the Form 10-K. In addition, the Securities
Administrator shall indemnify and hold harmless the Depositor and each Person,
if any, who "controls" the Depositor within the meaning of the Securities Act
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 a
breach of the Securities Administrator's obligations under this Section 3.22(c)
or the Securities Administrator's negligence, bad faith or willful misconduct in
connection therewith or any inaccuracy in the Securities Administrator's
Certification. If the indemnification provided for in this Section 3.22(c) is
unavailable or insufficient to hold harmless such Persons, then the Securities
Administrator shall contribute to the amount paid or payable by such Persons as
a result of the losses, claims, damages or liabilities of such Persons in such
proportion as is appropriate to reflect the relative fault of the Depositor or
the Servicer on the one hand and the Securities Administrator on the other. The
Securities Administrator acknowledges that the Depositor is relying on the
Securities Administrator's performance of its obligations under this Section
3.22(c) in order to perform its obligations under Section 3.22(b) above.
(d) Not later than 15 calendar days before the date on which the
Depositor's annual report on Form 10-K is required to be filed in accordance
with the Exchange Act and the rules and regulations of the Commission (or, if
such day is not a Business Day, the immediately preceding Business Day), the
Servicer will deliver to the Depositor an Officer's Certificate for the prior
calendar year in substantially the form of Exhibit P-3 to this Agreement and
shall deliver to the Depositor a similar Officer's Certificate with respect to
any additional ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification that is required to be filed upon 30
days' written request. The Servicer agrees to indemnify and hold harmless each
of the Depositor and each Person, if any, who "controls" the Depositor within
the meaning of the Securities Act and their respective officers, directors and
Affiliates against any and all losses, penalties, fines, forfeitures, reasonable
legal fees and related costs, judgments and any other costs and expenses that
such Person may sustain arising out of or based on the failure of the Servicer
to deliver or cause to be delivered when required any Officer's Certificate
required pursuant to this Section 3.22(d), or any material misstatement or
omission contained in any Officer's Certificate provided pursuant to this
Section 3.22(d), or the Servicer's negligence, bad faith or willful misconduct
of the Servicer in connection therewith. If an event occurs that would otherwise
result in an indemnification obligation under this Section 3.22(d), but the
indemnification provided for in this Section 3.22(d) by the Servicer is
unavailable or insufficient to hold harmless such Persons, then the Servicer
shall contribute to the amount paid or payable by such Persons as a result of
the losses, claims, damages or liabilities of such Persons in such proportion as
is appropriate to reflect the relative fault of the Depositor or Securities
Administrator on the one hand and the Servicer on the other. The Servicer
acknowledges that the Depositor and the Securities Administrator are relying on
the Servicer's performance of its obligations under this Agreement in order to
perform their respective obligations under this Section 3.22.
(e) Upon any filing with the Commission, the Securities Administrator
shall promptly deliver to the Depositor a copy of any such executed report,
statement or information.
(f) If the Commission issues additional interpretative guidance or
promulgates additional rules or regulations, or if other changes in applicable
law occur, which would require the reporting arrangements, or the allocation of
responsibilities with respect thereto, described in this Section 3.22, to be
conducted differently than as described, the Depositor, the Servicer and the
Securities Administrator will reasonably cooperate to amend the provisions of
this Section 3.22 in order to comply with such amended reporting requirements
and such amendment of this Section 3.22. Any such amendment shall be made in
accordance with Section 11.01 without the consent of the Certificateholders, and
may result in a change in the reports filed by the Securities Administrator on
behalf of the Trust under the Exchange Act. Notwithstanding the foregoing, none
of the Depositor, the Servicer or the Securities
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Administrator shall be obligated to enter into any amendment pursuant to this
Section 3.22 that adversely affects its obligations and immunities under this
Agreement.
(g) Prior to January 30 of the first year in which the Securities
Administrator is able to do so under applicable law, the Securities
Administrator shall file a Form 15D Suspension Notification with respect to the
Trust.
Section 3.23 Obligations of the Servicer in Respect of Compensating
Interest.
Not later than the close of business on each Servicer Remittance Date,
the Servicer shall deliver to the Trustee for deposit in the Distribution
Account an amount ("Compensating Interest") equal to the lesser of (A) the
aggregate of the Prepayment Interest Shortfalls on the Mortgage Loans for the
related Distribution Date resulting from Principal Prepayments on the Mortgage
Loans during the related Prepayment Period and (B) its aggregate Servicing Fee
received in the related Due Period. The Servicer shall apply Compensating
Interest to offset any Prepayment Interest Shortfalls on the Mortgage Loans. The
Servicer shall not have the right to reimbursement for any amounts remitted to
the Trustee in respect of Compensating Interest. Such amounts so remitted shall
be included in the Available Funds and distributed therewith on the next
Distribution Date.
Section 3.24 Prepayment Charges.
(a) To the extent consistent with the terms of this Agreement, the
Servicer may waive (or permit a subservicer to waive) a Prepayment Charge only
under the following circumstances: (i) such waiver relates to a default or a
reasonably foreseeable default and would, in the reasonable judgment of the
Servicer, maximize recovery of total proceeds taking into account the value of
such Prepayment Charge and the related Mortgage Loan or (ii) such waiver is
required under state or federal law. The Servicer shall not waive any Prepayment
Charge unless it is waived in accordance with this Section 3.24(a).
(b) The Servicer shall pay the amount of any Prepayment Charge (to the
extent not collected and remitted to the Collection Account pursuant to Section
3.04(a)) to the Trustee, if (i) the representation in Section 2.05(viii) is
breached and such breach materially and adversely affects the value of such
Prepayment Charge or the interest therein of any Certificateholders or the
Trustee, or (ii) the Servicer or any subservicer waives any Prepayment Charge
other than as permitted under Section 3.24(a). The Servicer shall pay the amount
of such Prepayment Charge (or portion thereof not collected), determined in
accordance with the ▇▇▇▇▇ Fargo Prepayment Charge Matrix, by depositing such
amount into the Collection Account at the time that the amount prepaid on the
related Mortgage Loan is required to be deposited into the Collection Account.
Section 3.25 Investment of Funds in the Collection Account and the
Distribution Account.
(a) The Servicer may direct in writing any depository institution
maintaining the Collection Account and the Securities Administrator may direct
in writing any depository institution maintaining the Distribution Account (for
purposes of this Section 3.25, each an "Investment Account"), to invest the
funds in such Investment Account in one or more Permitted Investments bearing
interest or sold at a discount, and maturing, unless payable on demand, (i) no
later than the Business Day immediately preceding the date on which such funds
are required to be withdrawn from such account pursuant to this Agreement, if a
Person other than the Trustee is the obligor thereon, and (ii) no later than the
date on which such funds are required to be withdrawn from such account pursuant
to this Agreement, if the Trustee is the obligor thereon. All such Permitted
Investments shall be held to maturity, unless payable on demand. Any investment
of funds in an Investment Account shall be made in the name of the Securities
Administrator or the Servicer, as applicable (in its capacity as such) or in the
name of a nominee of the same. The Servicer or the Securities Administrator
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 Securities Administrator or its
agent, together with any document of transfer necessary to transfer title to
such investment to the Securities Administrator or its nominee. In the event
amounts on deposit in an Investment Account are at any time invested in a
Permitted Investment payable on demand, the Trustee shall at the direction of
the Servicer or the Securities Administrator:
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(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an
amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on
such date; and
(y) demand payment of all amounts due thereunder promptly upon
determination by a Responsible Officer of the Trustee that
such Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in the
Investment Account.
(b) All income and gain realized from the investment of funds in the
Collection Account shall be for the benefit of the Servicer. The Servicer shall
deposit in the Collection Account the amount of any loss incurred in respect of
any such Permitted Investment made with funds in such account immediately upon
realization of such loss. All income and gain realized from the investment of
funds in the Distribution Account shall be for the benefit of the Securities
Administrator. The Securities Administrator shall remit to the Trustee for
deposit in the Distribution Account the amount of any loss incurred on Permitted
Investments in the Distribution Account.
(c) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Trustee may and, subject to Section 8.01 and Section 8.02(a)(v),
upon the request of the NIMS Insurer or the Holders of Certificates representing
more than 50% of the Voting Rights allocated to any Class of Certificates, shall
take such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings.
Section 3.26 Liability of Servicer; Indemnification.
(a) Subject to clause (b) below and Section 6.03, the Servicer (except
the Securities Administrator if it is required to succeed the Servicer
hereunder) indemnifies and holds the Trustee, the Securities Administrator, the
NIMS Insurer and the Depositor (and their respective officers, directors and
Affiliates) and each Certificateholder harmless against any and all claims,
losses, penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and any other costs, fees and expenses that the Trustee, the
Securities Administrator, the Depositor, the NIMS Insurer and any
Certificateholder may sustain in any way related to the failure of the Servicer
to perform its duties and service the Mortgage Loans in compliance with the
Servicing Standards. The Servicer shall immediately notify the Trustee, the
Securities Administrator, the Depositor, the NIMS Insurer and each
Certificateholder if a claim is made that may result in such claims, losses,
penalties, fines, forfeitures, legal fees or related costs, judgments, or any
other costs, fees and expenses, and the Servicer shall assume (with the consent
of the Securities Administrator) the defense of any such claim and pay all
expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against the Servicer, the Trustee, the Securities Administrator, the Depositor,
the NIMS Insurer and/or Certificateholder in respect of such claim. The
provisions of this Section 3.26 shall survive the termination of this Agreement
and the payment of the outstanding Certificates.
(b) None of the Depositor, the NIMS Insurer, the Servicer, or any of
the directors, officers, employees or agents of the Depositor or the Servicer
shall be under any liability to the Trust Fund or the Certificateholders for any
action taken, or for refraining from the taking of any action, in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Depositor or the Servicer or any such
Person against any breach of warranties or representations made herein, or
against any specific liability imposed on the Servicer for a breach of the
Servicing Standard, or against any liability which would otherwise be imposed by
reason of its respective willful misfeasance, bad faith, fraud or negligence in
the performance of its duties or by reasons of negligent disregard of its
respective obligations or duties hereunder.
The Depositor, the NIMS Insurer, the Servicer and any director,
officer, employee or agent of the Depositor, the NIMS Insurer or the Servicer,
may rely in good faith on any document of any kind which, prima facie, is
properly executed and submitted by any appropriate Person with respect to any
matters arising hereunder. The Depositor, the NIMS Insurer, the Servicer and any
director, officer, employee or agent of the Depositor, the
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NIMS Insurer or the Servicer shall be indemnified and held harmless by the Trust
Fund against any loss, liability or expense incurred in connection with any
legal action relating to this Agreement or the Certificates, other than any
loss, liability or expense incurred in connection with any legal action incurred
by reason of its respective misfeasance, bad faith, fraud or negligence, a
breach of a representation or warranty hereunder or (in the case of the
Servicer) a breach of the Servicing Standard in the performance of its
respective duties or by reason of negligent disregard of its respective
obligations or duties hereunder. Neither the Depositor, the NIMS Insurer nor the
Servicer shall be under any obligation to appear in, prosecute or defend any
legal action unless such action is related to its respective duties under this
Agreement and in its opinion does not expose it to any expense or liability;
provided, however, that each of the Depositor, the NIMS Insurer and the Servicer
may in its discretion undertake any action related to its obligations hereunder
which it may deem necessary or desirable with respect to this Agreement and the
rights and duties of the parties hereto and the interests of the
Certificateholders hereunder. In such event, unless the Depositor or the
Servicer acts without the consent of Holders of Certificates entitled to at
least 51% of the Voting Rights, the legal expenses and costs of such action and
any liability resulting therefrom (except any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder) shall be expenses, costs and liabilities of
the Trust Fund, and the Depositor, the NIMS Insurer and the Servicer shall be
entitled to be reimbursed therefor from the Collection Account as and to the
extent provided in Section 3.05, any such right of reimbursement being prior to
the rights of the Certificateholders to receive any amount in the Collection
Account.
Section 3.27 Reports of Foreclosure and Abandonment of Mortgaged
Properties.
On or before April 30 of each year beginning in 2004, the Servicer
shall file the reports of foreclosure and abandonment of any Mortgaged Property
required by Section 6050J of the Code with the Internal Revenue Service and
provide an Officer's Certificate certifying its compliance with this Section
3.27 to the Trustee. The reports from the Servicer shall be in form and
substance sufficient to meet the reporting requirements imposed by such Section
6050J.
Section 3.28 No Personal Solicitation.
From and after the Closing Date, each of the Servicer and the
Securities Administrator hereby agrees that it will not directly solicit the
borrower or obligor under any Mortgage Loan to refinance such Mortgage Loan, in
whole or in part. Notwithstanding the foregoing, it is understood and agreed
that offers to refinance a Mortgage Loan made within 30 days following receipt
by the Servicer of a pay-off request or verification of mortgage and promotions
undertaken by the Servicer or an Affiliate of the Servicer which are directed to
the general public or segments thereof (including without limitation, bulk
mailings, newspaper, radio, internet and television advertisements) shall not
constitute solicitation under this Section 3.28.
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 Trustee, the Securities Administrator, the Certificateholders or the
Depositor for any action taken or for refraining from the taking of any action
in good faith pursuant to this Agreement, in reliance upon information provided
by the Servicer under the Credit Risk Management Agreement or for errors in
judgment; provided, however, that this provision shall not protect the Credit
Risk Manager or any such person against liability that would otherwise be
imposed by reason of willful malfeasance, bad faith or gross negligence in its
performance of its duties or by reason of reckless disregard for its obligations
and duties under this Agreement or the applicable Credit Risk Management
Agreement. The Credit Risk Manager and any director, officer, employee or agent
of the Credit Risk Manager may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder, and may rely in good faith upon the accuracy of information
furnished by the Servicer pursuant to the applicable Credit Risk Management
Agreement in the performance of its duties thereunder and hereunder.
Section 3.30 Auction Administration Agreement; Auction Swap Agreement.
(a) Concurrently with the execution and delivery hereof, the Depositor
hereby directs the Securities Administrator (in such capacity, the "Auction
Administrator") to execute and deliver the Auction
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Administration Agreement and the Auction Swap Agreement substantially in the
forms attached hereto as Exhibits O and P, respectively, and theDepositor hereby
directs the Trustee to execute the Auction Administration Agreement. Neither the
Securities Administrator nor the Trustee shall have any duty to determine the
adequacy of the Auction Administration Agreement or the Auction Swap Agreement.
(b) Each Holder of a Class A-2 Certificate is deemed, by acceptance of
such Certificate, (i) to authorize the Securities Administrator and the Trustee
to execute and deliver the Auction Administration Agreement and, in the case of
the Securities Administrator only, the Auction Swap Agreement, as their
intermediary agents and (ii) to acknowledge and accept and agree to be bound by
the provisions of the Auction Administration Agreement and, in the case of the
Securities Administrator only, the Auction Swap Agreement.
(c) The Auction Administrator, or any director, officer, employee or
agent of the Auction Administrator, shall be indemnified and held harmless by
the Trust against any loss, liability or expense (not including expenses and
disbursements incurred or made by the Auction Administrator, including the
compensation and the expenses and disbursements of its agents and counsel, in
the ordinary course of the Auction Administrator's performance in accordance
with the provisions of this Agreement and the Auction Administration Agreement)
incurred by the Auction Administrator arising out of or in connection with the
acceptance or administration of its obligations and duties under the Auction
Administration Agreement, other than any loss, liability or expense (i) that
constitutes a specific liability of the Auction Administrator under this
Agreement or the Auction Administration Agreement or (ii) any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence of
the Auction Administrator in the performance of its duties hereunder or under
the Auction Administration Agreement or by reason of the Auction Administrator's
reckless disregard of its obligations and duties hereunder or under the Auction
Administration Agreement. Any amounts payable to the Auction Administrator, or
any director, officer, employee or agent of the Auction Administrator, in
respect of the indemnification provided by this Section 3.30(c), or pursuant to
any other right of reimbursement from the Trust Fund that the Auction
Administrator, or any director, officer, employee or agent of the Auction
Administrator, may have hereunder in its capacity as such, may be withdrawn by
the Trustee for the benefit of the Auction Administrator from the Distribution
Account as set forth in Section 3.04(b).
(d) For federal tax return and information reporting, the rights of the
Holders of the Class A-2 Certificates (i) to receive payments under the Auction
Swap Agreement in respect of any swap proceeds and (ii) with respect to the
Basis Risk Rights, shall be assigned a value of zero.
ARTICLE IV
FLOW OF FUNDS
Section 4.01 Interest Distributions and Credit Risk Manager Fee.
No later than 11:00 AM Eastern Time on each Distribution Date, the
Securities Administrator shall furnish instructions to the Trustee reporting the
amount of the related Interest Remittance Amount and the amount of the related
Credit Risk Manager Fee, and instructing the Trustee as to how to apply such
Interest Remittance Amount in accordance with clauses (i) through (viii) below.
The Trustee shall remit the Credit Risk Manager Fee for such Distribution Date
to the Credit Risk Manager out of funds remitted by the Securities Administrator
to the Trustee therefor pursuant to Section 3.04(b)(iv). On each Distribution
Date, the Trustee shall withdraw from the Distribution Account the Interest
Remittance Amount, to the extent available in the Distribution Account, and
apply it in the following order of priority (based upon the information provided
to it by the Securities Administrator pursuant to the preceding sentence, 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 Class A-1 and Class A-2 Certificates, pro
rata, the applicable Accrued Certificate Interest for such Distribution
Date;
(ii) concurrently, to the Class A-1 and Class A-2 Certificates,
pro rata, the applicable Unpaid Interest Shortfall Amount for the Class A-1
and Class A-2 Certificates, respectively;
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(iii) to the Class M-1 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(iv) to the Class M-2 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(v) to the Class M-3 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(vi) to the Class M-4 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date; and
(vii) the amount, if any, of the Interest Remittance Amount
remaining after application with respect to the priorities set forth above
will be applied as described under Section 4.02(b) hereof and will be
included in the Monthly Excess Cashflow Amount.
Section 4.02 Distributions of Principal and Monthly Excess Cashflow
Amounts.
(a) No later than 11:00 AM Eastern Time on each Distribution Date, the
Securities Administrator shall furnish instructions to the Trustee reporting the
amount of the related Principal Distribution Amount, and instructing the Trustee
as to how to apply such Principal Distribution Amount in accordance with clause
(i) or (ii) below, as applicable. On each Distribution Date, the Trustee shall
make the following distributions in the following order of priority (based upon
the information provided to it by the Securities Administrator pursuant to the
preceding sentence, and the calculations required to be made by the Securities
Administrator), in reduction of the Certificate Principal Balances of the
Classes to which such amounts are paid, to the extent of the Principal
Distribution Amount:
(i) for any Distribution Date before the Stepdown Date or with respect
to which a Trigger Event is in effect:
(A) to the Holders of the Class A-1 Certificates, 100% of the
Principal Distribution Amount until the Certificate Principal Balance
of the Class A-1 Certificates has been reduced to zero;
(B) to the Holders of the Class A-2 Certificates, 100% of the
remaining Principal Distribution Amount until the Certificate Principal
Balance of the Class A-2 Certificates has been reduced to zero;
(C) to the Holders of the Class M-1 Certificates, 100% of the
remaining Principal Distribution Amount for such Distribution Date,
until the Certificate Principal Balance of the Class M-1 Certificates
has been reduced to zero;
(D) to the Holders of the Class M-2 Certificates, 100% of the
remaining Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-2 Certificates has been reduced to
zero;
(E) to the Holders of the Class M-3 Certificates, 100% of the
remaining Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-3 Certificates has been reduced to
zero;
(F) to the Holders of the Class M-4 Certificates, 100% of the
remaining Principal Distribution Amount until the Certificate Principal
Balance of the Class M-4 Certificates has been reduced to zero; and
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(G) any amount of the Principal Distribution Amount remaining
after making all of the distributions in clauses (A) (B), (C), (D), (E)
and (F) shall be applied as set forth in Section 4.02(b).
(ii) on or after the Stepdown Date and as long as a Trigger Event is
not in effect:
(A) to the Holders of the Class A-1 Certificates, the lesser of
(x) the Principal Distribution Amount and (y) the Class A Principal
Distribution Amount, until the Certificate Principal Balance of the
Class A-1 Certificates has been reduced to zero;
(B) to the Holders of he Class A-2 Certificates, the lesser of (x)
the excess of (i) the Principal Distribution Amount over (ii) the
amount distributed pursuant to clause (A) above and (y) the Class A
Principal Distribution Amount remaining after distributions pursuant to
clause (A) above, until the Certificate Principal Balance of the Class
A-2 Certificates has been reduced to zero.
(C) to the Holders of the Class M-1 Certificates, the lesser of
(x) the excess of (i) the Principal Distribution Amount over (ii) the
amounts distributed pursuant to clauses (A) and (B) above and (y) the
Class M-1 Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-1 Certificates has been reduced to
zero;
(D) to the Holders of the Class M-2 Certificates, the lesser of
(x) the excess of (i) the Principal Distribution Amount over (ii) the
amounts distributed pursuant to clauses (A), (B) and (C) above and (y)
the Class M-2 Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-2 Certificates has been reduced to
zero;
(E) to the Holders of the Class M-3 Certificates, the lesser of
(x) the excess of (i) the Principal Distribution Amount over (ii) the
amounts distributed pursuant to clauses (A), (B), (C) and (D) above and
(y) the Class M-3 Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-3 Certificates has been reduced to
zero;
(F) to the Holders of the Class M-4 Certificates, the lesser of
(x) the excess of (i) the Principal Distribution Amount over (ii) the
amounts distributed pursuant to clauses (A), (B), (C), (D) and (E)
above and (y) the Class M-4 Principal Distribution Amount, until the
Certificate Principal Balance of the Class M-4 Certificates has been
reduced to zero; and
(G) any amount of the Principal Distribution Amount remaining
after making all of the distributions in clauses (A), (B), (C), (D),
(E) and (F) above shall be applied as set forth in Section 4.02(b).
(b) On each Distribution Date, any Monthly Excess Cashflow Amount shall
be distributed, to the extent available, in the following order of priority on
such Distribution Date:
(i) to pay the Extra Principal Distribution Amount for such
Distribution Date in accordance with Section 4.02(a);
(ii) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-1 Certificates;
(iii) to pay the applicable Unpaid Interest Shortfall Amount on
the Class M-1 Certificates, if any;
(iv) to reimburse the Holders of the Class M-1 Certificates for
any Realized Losses that have been allocated to the Class M-1 Certificates
and not previously reimbursed;
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(v) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-2 Certificates;
(vi) to pay the applicable Unpaid Interest Shortfall Amount on the
Class M-2 Certificates, if any;
(vii) to reimburse the Holders of the Class M-2 Certificates for
any Realized Losses that have been allocated to the Class M-2 Certificates
and not previously reimbursed;
(viii) to pay any remaining unpaid Accrued Certificate Interest
for such Distribution Date for the Class M-3 Certificates;
(ix) to pay the applicable Unpaid Interest Shortfall Amount on the
Class M-3 Certificates, if any;
(x) to reimburse the Holders of the Class M-3 Certificates for
Realized Losses that have been allocated to the Class M-3 Certificates and
not previously reimbursed;
(xi) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-4 Certificates;
(xii) to pay the applicable Unpaid Interest Shortfall Amount on
the Class M-4 Certificates, if any;
(xiii) to reimburse the Holders of the Class M-4 Certificates for
Realized Losses that have been allocated to the Class M-4 Certificates and
not previously reimbursed;
(xiv) to pay the Net WAC Rate Carryover Amount, if any, for the
Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-1, Class M-2, Class M-3 and Class M-4
Certificates, in that order, in each case until such amount is paid in full
for such Class; and
(xv) to the Class CE Certificates, the Class CE Distributable
Amount for such Distribution Date.
On each Distribution Date, there shall be distributed to the Holders of
the Class R Certificates in respect of the Class R-1 Interest, any remaining
amount in the Distribution Account on such date after the application pursuant
to Sections 4.01, 4.02(a), 4.02(b)(i)-(xv) and 4.02(c). To the extent that any
amounts remain in a REMIC other than REMIC 1 after payment of all amounts due
under this Agreement, such amounts will be distributed to the related Residual
Interest.
Without limiting the provisions of Section 10.01, by acceptance of the
Residual Certificates the Holders of the Class R Certificates agree, and it is
the understanding of the parties hereto, that for so long as any of the notes
issued pursuant to the Indenture are outstanding or any amounts are reimbursable
or payable to the NIMS Insurer in accordance with the terms of the Indenture, to
pledge their rights to receive any amounts otherwise distributable to the
Holders of the Class R Certificates (and such rights are hereby assigned and
transferred) to the Holders of the Class CE Certificates as provided in Section
10.01(c) hereof.
(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 Servicer in connection with the Principal Prepayment in full of
any of the Mortgage Loans or any Servicer Prepayment Charge Payment Amount and
shall distribute such amounts to the Holders of the Class P Certificates.
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Section 4.03 Allocation of Losses.
Realized Losses shall be allocated first against the Remaining Initial
Overcollateralization Amount and second to the Subsequent Overcollateralization
Amount, until the Overcollateralization Amount has been reduced to zero. Any
Applied Realized Loss Amount will be allocated against the Class ▇-▇, ▇▇▇▇▇ ▇-▇,
Class M-2, and Class M-1 Certificates, in that order and until the respective
Certificate Principal Balances thereof are reduced to zero. No allocation of
Realized Losses shall be made to the Class P, Class A-1 or Class A-2
Certificates.
Section 4.04 Method of Distribution.
The Trustee shall make distributions in respect of a Distribution Date
to each Certificateholder of record on the related Record Date (other than as
provided in Section 10.01 respecting the final distribution), in the case of
Certificateholders of the Certificates, by wire transfer in immediately
available funds to the account of the Person entitled thereto if such Person
shall have so notified the Trustee in writing at least five Business Days prior
to the Record Date immediately prior to such Distribution Date and is the
registered owner of such Certificates the aggregate initial Certificate
Principal Balance of which is in excess of $5,000,000 (or, in the case of a
Class CE, Class P or Class R Certificate, the Percentage Interest evidenced by
which is greater than a 66% Percentage Interest of the Certificates of its
Class), or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Trustee may deduct a reasonable wire transfer fee
from any payment made by wire transfer. Distributions among Certificateholders
shall be made in proportion to the Percentage Interests evidenced by the
Certificates held by such Certificateholders.
Section 4.05 Distributions on Book-Entry Certificates.
Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, which shall credit the amount of such distribution to
the accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing such
distribution to the Certificate Owners that it represents and to each indirect
participating brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be responsible for
disbursing funds to the Certificate Owners that it represents. All such credits
and disbursements with respect to a Book-Entry Certificate are to be made by the
Depository and the Depository Participants in accordance with the provisions of
the Certificates. None of the Trustee, the Depositor or the Servicer shall have
any responsibility therefor except as otherwise provided by applicable law.
Section 4.06 Statements.
(a) On each Distribution Date, based, as applicable, on the Mortgage
Loan information contained in the Remittance Report, the Securities
Administrator shall make available to Holders of the Regular Certificates and
the NIMS Insurer on its internet website, initially located at
"▇▇▇.▇▇▇▇▇▇▇.▇▇▇," a statement (a "Distribution Date Statement") as to the
distributions to be made on such Distribution Date:
(i) the Principal Distribution Amount and 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 and Servicer Prepayment
Charge Payment Amounts;
(ii) the Interest Remittance Amount and 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 Amount and the
Overcollateralization Target Amount as of such Distribution Date and the
Monthly Excess Cashflow Amount for such Distribution Date;
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(iv) the aggregate amount of servicing compensation received by the
Servicer during the related Collection Period;
(v) the aggregate amount of Advances for the related Due Period;
(vi) the Pool Balance at the close of business at the end of the
related Due Period;
(vii) the number, weighted average remaining term to maturity and
weighted average Mortgage Interest Rate of the Mortgage Loans as of the
related Due Date;
(viii) the number and aggregate unpaid principal balance of Mortgage
Loans (a) 30 to 59 days past due on a contractual basis, (b) 60 to 89 days
past due on a contractual basis, (c) 90 or more days past due on a
contractual basis, (d) as to which foreclosure proceedings have been
commenced and (e) in bankruptcy as of the close of business on the last day
of the calendar month preceding such Distribution Date;
(ix) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number of such Mortgage Loan,
the unpaid principal balance and the Principal Balance of such Mortgage Loan
as of the date it became an REO Property;
(x) cumulatively, the total number and cumulative principal balance
of all REO Properties as of the close of business of the last day of the
preceding Collection Period;
(xi) the aggregate amount of Principal Prepayments made during the
related Prepayment Period;
(xii) the aggregate amount of Realized Losses incurred during the
related Collection Period, and the cumulative amount of Realized Losses and
the Cumulative Realized Loss Percentage;
(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
Offered Certificates for such Distribution Date, and the respective portions
thereof, if any, remaining unpaid following the distributions made in
respect of such Certificates on such Distribution Date;
(xv) the aggregate amount of any Prepayment Interest Shortfalls for
such Distribution Date, to the extent not covered by payments by the
Servicer pursuant to Section 3.23, and the amount of Relief Act Shortfalls
applied to reduce the Interest Remittance Amount for each Class for such
Distribution Date;
(xvi) the amount of the Securities Administration Fee paid;
(xvii) the aggregate amount of the Credit Risk Manager Fee paid;
(xviii) any Overcollateralization Deficiency Amount after giving effect
to the distributions of principal on such Distribution Date;
(xix) whether a Trigger Event has occurred and is continuing;
(xx) the Available Funds;
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(xxi) the Pass-Through Rate at which interest accrues for each Class
of Certificates for such Distribution Date and the Formula Rate at which
interest will accrue for such Class (other than the Class A-1 and, for the
first 24 Distribution Dates, the Class A-2 Certificates) for the next
Distribution Date, and the Pass-Through Rate for the Class A-1 and Class A-2
Certificates for the next Distribution Date;
(xxii) the Liquidation Report for such Distribution Date;
(xxiii) the aggregate Principal Balance of Mortgage Loans purchased by
the Seller during the related Collection Period and indicating the Section
of this Agreement requiring or allowing the purchase of each such Mortgage
Loan;
(xxiv) the aggregate Principal Balance of the Mortgage Loans
repurchased by the Depositor during the related Collection Period in
connection with Section 3.16;
(xxv) the amount of Unpaid Interest Shortfall Amount and Net WAC Rate
Carryover Amount payable on each Class for such Distribution Date,
separately identifying the portion of each that consists of interest accrued
on previous such amounts, the amounts paid on each Class on such
Distribution Date in respect of such items, and the amount of Unpaid
Interest Shortfall Amount and Net WAC Rate Carryover Amount that will be
payable on each Class on the next Distribution Date; and
(xxvi) the amount of all reimbursements of Realized Losses previously
allocated to reduce the Certificate Principal Balance of any Class of
Certificates that were reimbursed on such Distribution Date, and the
remaining amount of any Realized Losses that have been so allocated and not
yet reimbursed, for each Class.
Assistance in using the Securities Administrator's website can be
obtained by calling the Securities Administrator's customer service desk at
(▇▇▇) ▇▇▇-▇▇▇▇. Parties that are unable to use the above distribution option are
entitled to have a paper copy mailed to them via first class mail by calling the
customer service desk and indicating such. The Securities Administrator shall
have the right to change the way such reports are distributed in order to make
such distribution more convenient and/or more accessible to the parties, and the
Securities Administrator shall provide timely and adequate notification to all
parties regarding any such change.
The Securities Administrator's obligations pursuant to this Section
4.06 are limited to the extent of its receipt of all necessary information from
the Servicer. The Securities Administrator may fully rely upon and shall have no
liability with respect to information with respect to the Mortgage Loans
provided by the Servicer.
In the case of information furnished pursuant to subclauses (i) through
(iii) above, the amounts shall be expressed in a separate Section of the report
as a dollar amount for each Class for each $1,000 original dollar amount as of
the Cut-off Date.
(b) Within a reasonable period of time after the end of each calendar
year, the Trustee shall furnish to each Person who at any time during the
calendar year was a Certificateholder of a Regular Certificate, if requested in
writing by such Person, and to the NIMS Insurer, a statement containing the
information set forth in subclauses (i), (ii), (xi), (xii), (xxiii) and (xxiv)
above, aggregated for such calendar year or applicable portion thereof during
which such Person was a Certificateholder, plus other information as the
Securities Administrator may determine and advise the Trustee to be necessary
and/or to be required by the Internal Revenue Service or by federal or state
laws, rules or regulations to enable such Certificateholders to prepare their
tax returns for such calendar year. Such obligations of the Trustee and the
Securities Administrator shall be deemed to have been satisfied to the extent
that substantially comparable information shall be prepared and furnished by the
Trustee or the Securities Administrator to Certificateholders pursuant to any
requirements of the Code as are in force from time to time.
(c) On each Distribution Date, the Securities Administrator shall make
available on its website the same information to the Class R Certificateholders
and the NIMS Insurer as that provided to the Regular Certificateholders in
respect of such Distribution Date with such other information as the Securities
Administrator
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deems necessary or appropriate. Such obligation of the Securities Administrator
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be prepared and furnished to Class R
Certificateholders by the Securities Administrator pursuant to any requirements
of the Code as from time to time in force.
Within a reasonable period of time after the end of each calendar year,
the Trustee shall furnish to each Person who at any time during the calendar
year was a Holder of a Residual Certificate and the NIMS Insurer a statement
setting forth the amount, if any, actually distributed with respect to the
Residual Certificates, as appropriate, aggregated for such calendar year or
applicable portion thereof during which such Person was a Certificateholder.
(d) The Securities Administrator shall, upon request, furnish to each
Certificateholder and the NIMS Insurer, during the term of this Agreement, such
periodic, special, or other reports or information, whether or not provided for
herein, as shall be reasonable with respect to the Certificateholder or the NIMS
Insurer, as the case may be, or otherwise with respect to the purposes of this
Agreement, all such reports or information to be provided at the expense of the
Certificateholder or the NIMS Insurer, as the case may be, in accordance with
such reasonable and explicit instructions and directions as the
Certificateholder or the NIMS Insurer, as the case may be, may provide. For
purposes of this Section 4.06, the Securities Administrator's duties are
effective only to the extent that the Securities Administrator receives timely
reports as required from the Servicer.
Section 4.07 Remittance Reports; Advances.
(a) On the 15th calendar day of each month, or the preceding Business
Day if such 15th calendar day is not a Business Day, the Servicer shall deliver
to the Securities Administrator by telecopy (or by such other means as the
Servicer and the Securities Administrator may agree from time to time) a
Remittance Report with respect to the related Distribution Date. On the same
date as delivery of the Remittance Report, the Servicer shall deliver or cause
to be delivered to the Securities Administrator in addition to the information
provided on the Remittance Report, such other information reasonably available
to it with respect to the Mortgage Loans as the Securities Administrator may
reasonably request or order in order for the Securities Administrator to perform
the calculations necessary to make the distributions contemplated by Section
4.01, 4.02 and 4.03 and to prepare the statements to Certificateholders
contemplated by Section 4.06. The Securities Administrator shall not be
responsible to recompute, recalculate or verify any information provided to it
by the Servicer. The Securities Administrator shall deliver a copy of any such
report to the NIMS Insurer immediately upon receipt thereof by the Securities
Administrator, and shall request information from the Servicer as directed by
the NIMS Insurer.
(b) The amount of Advances to be made by the Servicer for any
Distribution Date shall equal, subject to Section 4.07(d), the aggregate amount
of Monthly Payments (net of the related Servicing Fee), due during the related
Due 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. For purposes of the preceding sentence, the Monthly Payment
on each Balloon Mortgage Loan with a delinquent Balloon Payment is equal to the
assumed monthly payment that would have been due on the related Due Date based
on the original principal amortization schedule for the such Balloon Mortgage
Loan.
On or before the close of business New York time on the Servicer
Remittance Date, the Servicer shall remit in immediately available funds to the
Trustee for deposit in the Distribution Account an amount equal to the aggregate
amount of Advances, if any, to be made in respect of the Mortgage Loans for the
related Distribution Date either (i) from its own funds or (ii) from the
Collection Account, to the extent of funds held therein for future distribution
(in which case it will cause to be made an appropriate entry in the records of
the Collection Account that amounts held for future distribution have been, as
permitted by this Section 4.07, used by the Servicer in discharge of any such
Advance) or (iii) in the form of any combination of (i) and (ii) aggregating the
total amount of Advances to be made by the Servicer with respect to the Mortgage
Loans. Any amounts held for future distribution and so used shall be
appropriately reflected in the Servicer's records and replaced by the Servicer
by deposit into 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
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Advances. The Trustee will provide notice to the Servicer, the NIMS Insurer and
the Securities Administrator by telecopy by the close of business on any
Servicer Remittance Date in the event that the amount remitted by the Servicer
to the Trustee on such date is less than the Advances required to be made by the
Servicer for the related Distribution Date, as set forth in the related
Remittance Report.
(c) The obligation of the Servicer to make such Advances is mandatory,
notwithstanding any other provision of this Agreement but subject to (d) below,
and, with respect to any Mortgage Loan, shall continue until the earlier of such
time as the Trust acquires title to the related Mortgaged Property or such
Mortgage Loan is paid in full by the Mortgagor or disposed of by the Trust, or
until the recovery of all Liquidation Proceeds thereon.
(d) Notwithstanding anything herein to the contrary, no Advance or
Servicing Advance shall be required to be made hereunder by the Servicer if such
Advance would, if made, constitute a Nonrecoverable Advance. The determination
by the Servicer that it has made a Nonrecoverable Advance or that any proposed
Advance, if made, would constitute a Nonrecoverable Advance, shall be evidenced
by an Officers' Certificate of the Servicer delivered to the Depositor, the NIMS
Insurer and the Trustee.
Section 4.08 [Reserved].
Section 4.09 REMIC Distributions.
(a) REMIC 4. Interest (and in the case of the Class T4-4 Interest,
principal) shall be deemed distributed to each Class of REMIC 4 Components as
follows: (i) the Class T4-4, Class T4-11, Class T4-12 and Class T4-13 Interests
shall be entitled to all distributions on the Class T3-4, Class T3-11, Class
T3-12 and Class T3-13 Interests, respectively; and (ii) the Class T4-A1IO, Class
T4-A2IO, Class T4-M1IO, Class T4-M2IO, Class T4-M3IO and Class T4-M4IO Interests
shall be entitled to a specified portion of interest payments consisting of the
excess of interest distributable on each of the Class T3-A1, Class T3-A2, Class
T3-M1, Class T3-M2, Class T3-M3 and Class T3-M4 Interests over interest
distributable on the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-1, Class M-2, Class M-3 and
Class M-4 Certificates, respectively. Any shortfalls of interest, including any
Realized Losses allocated to reduce the Subsequent Overcollateralization Amount,
shall be borne, first, by the REMIC 4 Components, pro rata based on interest
accrued, before being allocated to the Class T4 P&I Certificates (in reverse
order of seniority). Realized Losses allocated to the Class T4-4 Interest shall
equal Realized Losses allocated to the Class T3-4 Interest pursuant to Section
4.09(b). The Class CE Interest shall be deemed to receive the aggregate of the
amounts distributable in respect of the REMIC 4 Components. Any portion of the
Available Funds remaining in REMIC 4 on a Distribution Date shall be distributed
to the Class R Certificates in respect of the Class R-4 Interest.
(b) REMIC 3. On each Distribution Date, the timing and amounts of
principal and interest distributions and allocations of Applied Realized Loss
Amounts and Realized Loss Amortization Amounts on the Classes of REMIC 3 Regular
Interests identified as Corresponding Classes shall be identical to the timing,
amounts and allocations in respect of Corresponding Classes of REMIC 4 Regular
Interests pursuant to Section 4.09(a). The Class T3-4 Interest shall be entitled
to all distributions on the Class T2-4 Interest. Interest shortfalls will reduce
interest payable, first, on the Class T3-4 Interest, to the same extent that
interest shortfalls are allocable to the Class T2-4 Interest; second, on the
Class T3-11, Class T3-12 and Class T3-13 Interests, pro rata; third, on the
Class T3-M4, Class T3-M3, Class T3-M2 and Class T3-M1 Interests, in that order;
and fourth, on the Class T3-A1 and Class T3-A2 Interests, pro rata; provided,
that the portion of the interest payable on the Class T3-M4, Class T3-M3, Class
T3-M2, Class T3-M1, Class T3-A1, and Class T3-A2 Interests attributable to the
Class T4-M4IO, Class T4-M3IO, Class T4-M2IO, Class T4-M1IO, Class T4-A1IO, and
Class T4-A2IO Interests shall bear interest shortfalls pro rata and prior to the
allocation of any remaining shortfalls to such Interests. Amounts of principal
and interest distributed in respect of, and Realized Losses allocated to, the
Class T3-4 Interest shall equal the allocations made to the Class T3-4 Interest,
reduced by any allocation of interest shortfalls to the Class T3-4 Interest
pursuant to the preceding sentence. Amounts in the Distribution Account deemed
distributed in respect of the REMIC 3 Regular Interests shall be treated as held
by REMIC 4 for distribution in accordance with Sections 4.09(a). Any portion of
Available Funds remaining in REMIC 3 on a Distribution Date shall be distributed
to the Class R Certificates in respect of the Class R-3 Interest.
(c) REMIC 2. On each Distribution Date, the timing and amounts of
principal distributions and allocations of Realized Losses on each Class of
REMIC 2 Regular Interests shall be identical to the timing,
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amounts and allocations in respect of the corresponding Classes of REMIC 1
Regular Interests pursuant to Section 4.09(d). For these purposes, the Class
T2-1 and Class T2-11 Interests correspond to the Class T1-1 Interest, the Class
T2-2 and Class T2-12 Interests correspond to the Class T1-2 Interest, the Class
T2-3 and Class T2-13 Interests correspond to the Class T1-3 Interest, and the
Class T2-4 Interest corresponds to the Class T1-4 Interest. Interest will accrue
on each of the Class T2-1, Class T2-2 and Class T2-3 Interests at the REMIC 2
Pass-Through Rate. Interest will accrue on each of the Class T2-11, Class T2-12
and Class T2-13 Interests at the excess, if any, of the Net WAC Rate over the
REMIC 2 Pass-Through Rate. Interest will accrue on the Class T2-4 Interest at
the Net WAC Rate. Any shortfalls of interest will be allocated, first, to the
Class T2-4 Interest to the extent that interest shortfalls are allocated to the
Class T1-4 Interest; second, pro rata, to the Class T2-11, Class T2-12 and Class
T2-13 Interests; and third, pro rata, to the Class T2-1, Class T2-2 and Class
T2-3 Interests. Amounts in the Distribution Account deemed distributed in
respect of the REMIC 2 Regular Interests shall be treated as held by REMIC 3 for
distribution in accordance with Section 4.09(b). Any portion of Available Funds
remaining in REMIC 2 on a Distribution Date shall be distributed to the Class R
Certificates in respect of the Class R-2 Interest.
(d) REMIC 1. On each Distribution Date, the REMIC 1 Regular Interests
shall receive distributions of interest and principal equal in the aggregate to
amounts distributable pursuant to Sections 4.01 and 4.02 (other than to the
Class R Certificates with respect to the Class R-1 Interest). Amounts with
respect to interest shall accrue at the Net WAC Rate with respect to each of the
Class T1-1, Class T1-2, Class T1-3 and Class T1-4 Interest. Any shortfalls of
interest will be allocated, first, to the Class T1-4 Interest, and second, to
the Class T1-1, Class T1-2 and Class T1-3 Interests, pro rata based on interest
accrued. Amounts in reduction of principal balance of the REMIC 1 Regular
Interests shall be allocated to the Class T1-1, Class T1-2 and Class T1-3
Interests in the aggregate in an amount equal to the Principal Remittance Amount
less the lesser of Overcollateralization Release Amount and the Remaining
Initial Overcollateralization Amount. Such aggregate amount shall be allocated
so that the principal balance of the Class T1-1, Class T1-2 and Class T1-3
Interests equal the amounts specified in the definitions thereof in Article I.
The portion of the Principal Remittance Amount equal to the lesser of the
Overcollateralization Release Amount and the Remaining Initial
Overcollateralization Amount shall be allocated to reduce the principal balance
of the Class T1-4 Interest, until it is reduced to zero. Realized Losses shall
be allocated first to the Class T1-4 Interest, until such Class is reduced to
zero, and then pro rata to the Class T1-1, Class T1-2 and Class T1-3 Interests
so that their principal balances equal the amounts specified in the respective
definitions thereof in Article I. Such amounts with respect to principal and any
Realized Losses with respect to principal shall reduce the principal balances of
the REMIC 1 Regular Interests so that, in the aggregate, such balances
correspond to the Pool Balance of the Mortgage Loans as of the last day of the
related Due Period. Amounts in the Distribution Account deemed distributed in
respect of the REMIC 1 Regular Interests shall be treated as held by REMIC 2 for
distribution in accordance with Section 4.09(c). Any amounts remaining in REMIC
1 on a Distribution Date shall be distributed to the Class R Certificates in
respect of the Class R-1 Interest.
(e) Notwithstanding anything to the contrary contained herein, the
above distributions in this Section 4.09 (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 M-1, Class M-2, Class M-3,
Class M-4, Class P, Class CE, and Class R Certificates shall be substantially in
the forms annexed hereto as exhibits, and shall, on original issue, be executed,
authenticated and delivered by the Trustee to or upon the receipt of a Written
Order to Authenticate from the Depositor concurrently with the sale and
assignment to the Trustee of the Trust Fund. Each Class of the Offered
Certificates shall be initially evidenced by one or more Certificates
representing a Percentage Interest with a minimum dollar denomination of $25,000
and integral dollar multiples of $1 in excess thereof. The Class P, Class CE and
Class R Certificates are issuable only in minimum Percentage Interests of 25%.
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
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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 Trustee substantially in the form
provided for herein, and such authentication upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. Subject to Section 5.02(c), the Offered Certificates
shall be Book-Entry Certificates. The Class CE 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 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 and
shall maintain the Certificate Register at the offices of the Trustee designated
from time to time for such purposes. As of the Closing Date, the Trustee
designates the Corporate Trust Office for such purpose.
Upon surrender for registration of transfer of any Certificate at any
office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph and, in the case of a Class R Certificate,
upon satisfaction of the conditions set forth below, the Trustee on behalf of
the Trust shall execute, 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 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
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.
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Each Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners that it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures. The parties hereto
are hereby authorized to execute a Letter of Representations with the Depository
or take such other action as may be necessary or desirable to register a
Book-Entry Certificate to the Depository. In the event of any conflict between
the terms of any such Letter of Representation and this Agreement, the terms of
this Agreement shall control.
(c) If (i)(x) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to discharge properly
its responsibilities as Depository and (y) the Trustee or the Depositor is
unable to locate a qualified successor, (ii) the Depositor, at its sole option,
with the consent of the Trustee, elects to terminate the book-entry system
through the Depository or (iii) after the occurrence of a Servicer Event of
Termination, the Certificate Owners of each Class of Book-Entry Certificates
representing Percentage Interests of such Classes aggregating not less than 51%
advises the Trustee and Depository through the Financial Intermediaries and the
Depository Participants in writing that the continuation of a book-entry system
through the Depository to the exclusion of definitive, fully registered
certificates (the "Definitive Certificates") to Certificate Owners is no longer
in the best interests of the Certificate Owners. Upon surrender to the
Certificate Registrar of the Book-Entry Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall, at the Depositor's expense, in the case of (i) and (ii)
above, or the Servicer's expense, in the case of (iii) above, execute on behalf
of the Trust and authenticate the Definitive Certificates. Neither the Depositor
nor the Trustee shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates, the Trustee, the
Certificate Registrar, the Servicer, the Securities Administrator, any Paying
Agent and the Depositor shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder.
(d) Except with respect to the initial transfer of the Private
Certificates 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, either (i) in the case of a transfer
made in reliance upon Rule 144A under the 1933 Act, the proposed transferee
shall deliver to the Trustee a completed investment letter, in substantially the
form attached hereto as Exhibit J-2 or (ii) in the case of any other transfer,
either (A) the Trustee 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 Trustee 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 Trustee or the
Depositor, or (B) the Trustee 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) acceptable to and in form and substance
reasonably satisfactory to the Depositor and the Trustee certifying to the
Depositor and the Trustee the facts surrounding such transfer, which investment
letter shall not be an expense of the Trustee or the Depositor. The Holder of a
Private Certificate desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee 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. (e) No transfer of all of any portion of the
ERISA-Restricted Certificates may be made except as provided below.
(i) The Class A-2 Certificates. Until the Distribution Date in
March 2005, no transfer of a Class A-2 Certificate shall be made unless the
Trustee and the Securities Administrator shall have received either (x) a
representation from the transferee of such Certificate acceptable to and in
form and substance satisfactory to the Trustee and Securities Administrator
that such transferee is not an employee benefit plan or other retirement
arrangement, including individual retirement accounts and annuities, ▇▇▇▇▇
plans and collective investment funds and separate accounts in which such
plans, accounts or arrangements are invested, that is subject to section 406
of ERISA or section 4975 of the Code (collectively, an "ERISA Plan"), or any
person directly or indirectly purchasing such Certificate on behalf of, as
named fiduciary of, as trustee of, or with assets of an ERISA Plan (each,
together with an ERISA Plan, a " Benefit Plan Investor") or (y) a
representation that the acquisition or holding of the Class A-2
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Certificate by such Benefit Plan Investor is eligible for exemptive relief
under Department of Labor Prohibited Transaction Class Exemption ("PTCE")
84-14 (for transactions by independent "qualified professional asset
managers"), PTCE 91-38 (for transactions by bank collective investment
funds), ▇▇▇▇ ▇▇-▇ (for transactions by insurance company pooled separate
accounts), PTCE 95-60 (for transactions by insurance company general
accounts) or PTCE 96-23 (for transactions effected by "in-house asset
managers") (the "Investor Based Exemptions") and all the requirements of the
Investor Based Exemption on which it relies are met or (z) an Opinion of
Counsel satisfactory to the Trustee and the Securities Administrator, which
Opinion of Counsel shall not be an expense of either the Trustee, the Trust
Fund or the Securities Administrator to the effect that the purchase or
holding of such ERISA-Restricted Certificate will not result in prohibited
transactions under Title I of ERISA and/or Section 4975 of the Code and will
not subject the Depositor, the Underwriters, the Servicer, the Securities
Administrator, the Trustee or the Trust Fund to any obligation in addition
to those expressly undertaken in this Agreement. Any representations
required to be made under (x) or (y) above so long as the Class A-2
Certificates continue to be Book-Entry Certificates shall be deemed to have
been made by the acquisition or holding of such Certificate.
(ii) The Class M Certificates. No transfer of all or a portion of
any Class M Certificate that is not rated in one of the four highest generic
rating categories at the time of such transfer may occur unless the Trustee
and the Securities Administrator shall have received either (x) a
representation from the transferee of such Certificate acceptable to and in
form and substance satisfactory to the Trustee and Securities Administrator
that such transferee is not a Benefit Pan Investor, (y) if the purchaser is
an insurance company, a representation that (1) the purchaser is an
insurance company which is purchasing such Certificates pursuant to an
ERISA-Qualifying Underwriting with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of PTCE 95-60
("PTCE 95-60")) and (2) all of the requirements of PTCE 95-60 are met, or
(z) an Opinion of Counsel satisfactory to the Trustee and the Securities
Administrator, which Opinion of Counsel shall not be an expense of either
the Trustee, the Trust Fund or the Securities Administrator to the effect
that the purchase or holding of such Certificate will not result in
prohibited transactions under Title I of ERISA and/or Section 4975 of the
Code and will not subject the Depositor, the Underwriters, the Servicer, the
Securities Administrator, the Trustee or the Trust Fund to any obligation in
addition to those expressly undertaken in this Agreement. Any
representations required to be made under (x) or (y) above in the case that
the transferred Class M Certificate continues to be a Book-Entry Certificate
shall be deemed to have been made by the acquisition or holding of such
Certificate.
(iii) The Private Certificates. No transfer of all or any portion
of the Private Certificates shall occur unless the Trustee and the
Securities Administrator shall have received either (x) a representation
from the transferee of such Certificate acceptable to and in form and
substance satisfactory to the Trustee and the Securities Administrator
substantially in the form of Exhibit I that it is not a Benefit Plan
Investor or (y) an Opinion of Counsel satisfactory to the Trustee and the
Securities Administrator, which Opinion of Counsel shall not be an expense
of either the Trustee, the Trust Fund or the Securities Administrator to the
effect that the purchase or holding of such ERISA-Restricted Certificate
will not result in prohibited transactions under Title I of ERISA and/or
Section 4975 of the Code and will not subject the Depositor, the
Underwriters, the Servicer, the Securities Administrator, the Trustee or the
Trust Fund to any obligation in addition to those expressly undertaken in
this Agreement.
(iv) To the extent permitted under applicable law (including, but
not limited to, ERISA), neither the Trustee nor the Securities Administrator
shall have any liability to any Person for any registration of transfer of
any ERISA-Restricted Certificate that is in fact not permitted by this
Section 5.02(d) or for making any payments due on such 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 transfer was registered by
the Trustee in accordance with the foregoing requirements.
(v) Notwithstanding anything to the contrary herein, any purported
transfer of an ERISA-Restricted Certificate under (i), (ii) or (iii) above
to a Benefit Plan Investor without the required representations specified
above or the delivery to the Trustee and Securities Administrator of an
Opinion of Counsel satisfactory to the Trustee or the Securities
Administrator shall be void and of no effect.
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(vi) Any transferee of the ERISA-Restricted Certificates, or
interest therein, in violation of the provisions of the preceding paragraphs
shall indemnify and hold harmless the Depositor, the Underwriters, the
Securities Administrator, the Servicer, the Trustee and the Trust Fund from
and against any and all liabilities, claims, costs or expenses incurred by
such parties as a result of the transferee's acquisition or holding of such
Certificate.
(f) Each Person who has or who acquires any Ownership Interest in a
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 a Class R Certificate are expressly subject to the
following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(ii) No Person shall acquire an Ownership Interest in a 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 a Class R Certificate, the Trustee 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 Certificates.
(iv) Any attempted or purported transfer of any Ownership Interest
in a 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 a Holder of a 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. Neither the Trustee, the NIMS Insurer nor the
Securities Administrator shall be under any liability to any Person for any
registration of transfer of a 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 Trustee
and the Securities Administrator received the documents specified in clause
(iii). The Trustee, the NIMS Insurer and the Securities Administrator shall
be entitled to recover from any Holder of a 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 Permitted Transferee acquires any
Ownership Interest in a Class R Certificate in violation of the restrictions
in this Section, then the Trustee and the Securities Administrator shall
have the right but not the obligation, without notice to the Holder of such
Class R Certificate or any other Person having an Ownership Interest
therein, to notify the Depositor to arrange for the sale of such Class R
Certificate. The proceeds of such sale, net of commissions (which may
include
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commissions payable to the Depositor or its affiliates in connection with
such sale), expenses and taxes due, if any, will be remitted by the Trustee
to the previous Holder of such Class R Certificate that is a Permitted
Transferee, except that in the event that the Trustee or the Securities
Administrator determines that the Holder of such 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 or the Securities Administrator and it shall not be liable to any
Person having an Ownership Interest in a 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 a Class R Certificate in violation of the restrictions
in this Section, then the Securities Administrator 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 Securities Administrator 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 Trustee and the Securities Administrator, in form and substance
satisfactory to the Trustee and the Securities Administrator, (i) written
notification from each Rating Agency that the removal of the restrictions on
Transfer set forth in this Section will not cause such Rating Agency to
downgrade its rating of the Certificates and (ii) an Opinion of Counsel to the
effect that such removal will not cause any REMIC hereunder to fail to qualify
as a REMIC.
(g) 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, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and Percentage Interest. Upon the issuance of any new
Certificate under this Section, the Trustee or the Certificate Registrar may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee and the Certificate Registrar) in
connection therewith. Any duplicate Certificate issued pursuant to this Section,
shall constitute complete and indefeasible evidence of ownership in the Trust,
as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners.
The Servicer, the Depositor, the NIMS Insurer, the Trustee, the
Securities Administrator, the Certificate Registrar, any Paying Agent and any
agent of the Servicer, the Depositor, the Securities Administrator, the
Certificate Registrar, any Paying Agent or the Trustee may treat the Person,
including a Depository, in whose name any Certificate is registered as the owner
of such Certificate for the purpose of receiving distributions pursuant to
Section 4.01 and 4.02 and for all other purposes whatsoever, and none of the
Servicer, the Trust, the NIMS Insurer, the Securities Administrator, the Trustee
nor any agent of any of them shall be affected by notice to the contrary.
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Section 5.05 Appointment of Paying Agent.
(a) The Paying Agent shall make distributions to Certificateholders
from the Distribution Account pursuant to Section 4.01 and 4.02 and shall report
the amounts of such distributions to the Trustee. The duties of the Paying Agent
may include the obligation to distribute statements and provide information to
Certificateholders as required hereunder. The Paying Agent hereunder shall at
all times be an entity duly incorporated and validly existing under the laws of
the United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers and subject to supervision or examination by
federal or state authorities. The Paying Agent shall initially be the Trustee.
The Trustee may appoint a successor to act as Paying Agent, which appointment
shall be reasonably satisfactory to the Depositor and the Rating Agencies.
(b) The Trustee shall cause the Paying Agent (if other than the
Trustee) to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee that such Paying Agent shall hold all
sums, if any, held by it for payment to the Certificateholders in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be paid
to such Certificateholders and shall agree that it shall comply with all
requirements of the Code regarding the withholding of payments in respect of
Federal income taxes due from Certificate Owners and otherwise comply with the
provisions of this Agreement applicable to it. Any Paying Agent shall be
afforded the same protection as given to the Trustee.
ARTICLE VI
THE SERVICER AND THE DEPOSITOR
Section 6.01 Liability of the Servicer and the Depositor.
The Servicer shall be liable in accordance herewith only to the extent
of the obligations specifically imposed upon and undertaken by the Servicer
herein. The Depositor shall be liable in accordance herewith only to the extent
of the obligations specifically imposed upon and undertaken by the Depositor.
Section 6.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer or the Depositor.
Any entity into which the Servicer or the Depositor may be merged or
consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Servicer or the Depositor shall be a party, or any
corporation succeeding to the business of the Servicer or the Depositor, shall
be the successor of the Servicer or the Depositor, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor Servicer shall satisfy
all the requirements of Section 7.02 with respect to the qualifications of a
successor Servicer.
Section 6.03 Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of the directors or officers or employees
or agents of the Servicer shall be under any liability to the Trust or the
Certificateholders for any action taken or for refraining from the taking of any
action by the Servicer in good faith pursuant to this Agreement, or for errors
in judgment; provided, however, that this provision shall not protect the
Servicer or any such Person against any liability which would otherwise be
imposed by reason of its willful misfeasance, bad faith or gross negligence in
the performance of duties of the Servicer or by reason of its reckless disregard
of its obligations and duties of the Servicer hereunder. The Servicer and any
director or officer or employee or agent of the Servicer may rely in good faith
on any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. The Servicer and any director
or officer or employee or agent of the Servicer shall be indemnified by the
Trust and held harmless against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense related to any specific Mortgage Loan
or Mortgage Loans (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement) and any loss, liability or
expense incurred by reason of its willful misfeasance, bad faith or negligence
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in the performance of duties hereunder or by reason of its reckless disregard of
obligations and duties hereunder. The Servicer may undertake any such action
which it may deem necessary or desirable in respect of this Agreement, and the
rights and duties of the parties hereto and the interests of the
Certificateholders hereunder. In such event, the reasonable legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Trust and the Servicer shall be entitled to be
reimbursed therefor only pursuant to Section 3.04. The Servicer's right to
indemnity or reimbursement pursuant to this Section shall survive any
resignation or termination of the Servicer pursuant to Section 6.04 or 7.01 with
respect to any losses, expenses, costs or liabilities arising prior to such
resignation or termination (or arising from events that occurred prior to such
resignation or termination). This paragraph shall apply to the Servicer solely
in its capacity as Servicer hereunder and in no other capacities.
Section 6.04 Servicer Not to Resign.
Subject to the provisions of Section 7.01 and Section 6.02, the
Servicer shall not resign from the obligations and duties hereby imposed on it
except (i) upon determination that the performance of its obligations or duties
hereunder are no longer permissible under applicable law or are in material
conflict by reason of applicable law with any other activities carried on by it
or its subsidiaries or Affiliates, the other activities of the Servicer so
causing such a conflict being of a type and nature carried on by the Servicer or
its subsidiaries or Affiliates at the date of this Agreement or (ii) upon
satisfaction of the following conditions: (a) the Servicer has proposed a
successor servicer to the Trustee, the NIMS Insurer and the Securities
Administrator in writing and such proposed successor servicer is reasonably
acceptable to the Trustee, the NIMS Insurer and the Securities Administrator;
and (b) each Rating Agency shall have delivered a letter to the Trustee prior to
the appointment of the successor servicer stating that the proposed appointment
of such successor servicer as Servicer hereunder will not result in the
reduction or withdrawal of the then current rating of the Regular Certificates
or the ratings that are in effect; provided, however, that no such resignation
by the Servicer shall become effective until such successor servicer or, in the
case of (i) above, the Securities Administrator shall have assumed the
Servicer's responsibilities and obligations hereunder or the Securities
Administrator shall have designated a successor servicer in accordance with
Section 7.02. Any such resignation shall not relieve the Servicer of
responsibility for any of the obligations specified in Sections 7.01 and 7.02 as
obligations that survive the resignation or termination of the Servicer. Any
such determination permitting the resignation of the Servicer shall be evidenced
by an Opinion of Counsel to such effect delivered to the Trustee and the
Securities Administrator.
Section 6.05 Delegation of Duties.
In the ordinary course of business, the Servicer at any time may
delegate any of its duties hereunder to any Person, including any of its
Affiliates, who agrees to conduct such duties in accordance with standards
comparable to those set forth in Section 3.01 and Section 3.24. Such delegation
shall not relieve the Servicer of its liabilities and responsibilities with
respect to such duties and shall not constitute a resignation within the meaning
of Section 6.04. Any delegation to a Person who is not an Affiliate of the
Servicer must be approved in writing by the NIMS Insurer.
ARTICLE VII
DEFAULT
Section 7.01 Servicer Events of Termination.
(a) Any one of the following events constitutes a Servicer Event of
Termination:
(i) (A) The failure by the Servicer to make any Advance, or (B)
any other failure by the Servicer to deposit in the Collection Account or
Distribution Account any deposit required to be made under the terms of this
Agreement; in each case, which continues unremedied for a period of one
Business Day after the date upon which written notice of such failure shall
have been given to the Servicer by the Trustee or to the Servicer, the
Securities Administrator and the Depositor by the NIMS Insurer or any Holder
of a Regular Certificate evidencing at least 25% of the Voting Rights; or
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(ii) The failure by the Servicer to make any required Servicing
Advance which failure continues unremedied for a period of 30 days, or the
failure by the Servicer duly to observe or perform, in any material respect,
any other covenants, obligations or agreements of the Servicer as set forth
in this Agreement, which failure continues unremedied for a period of 30
days, after the date (A) on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Servicer by the
Trustee or to the Servicer, the Securities Administrator and the Depositor
by the NIMS Insurer or any Holder of a Regular Certificate evidencing at
least 25% of the Voting Rights or (B) actual knowledge of such failure by a
Servicing Officer of the Servicer; or
(iii) The entry against the Servicer of a decree or order by a
court or agency or supervisory authority having jurisdiction in the premises
for the appointment of a trustee, conservator, receiver or liquidator in any
insolvency, conservatorship, receivership, readjustment of debt, marshalling
of assets and liabilities or similar proceedings, or for the winding up or
liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 days; or
(iv) The Servicer shall voluntarily go into liquidation, consent
to the appointment of a conservator or receiver or liquidator or similar
person in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to the Servicer or of or
relating to all or substantially all of its property; or a decree or order
of a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver, liquidator or
similar person in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged, unbonded or
unstayed for a period of 60 days; or the Servicer shall admit in writing its
inability to pay its debts generally as they become due, file a petition to
take advantage of any applicable insolvency or reorganization statute, make
an assignment for the benefit of its creditors or voluntarily suspend
payment of its obligations.
(b) Upon the occurrence of any Servicer Event of Termination, and in
each and every such case, so long as such 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 Distribution Date, the Trustee may (or shall, at the direction
of the NIMS Insurer) terminate all of the rights and obligations of the Servicer
under this Agreement and the Securities Administrator, or a successor servicer
appointed in accordance with Section 7.02, shall immediately make such Advance
and assume, pursuant to Section 7.02, the duties of a successor Servicer and (y)
in the case of (i)(B), (ii), (iii), (iv) and (v) above, the Trustee shall, at
the direction of the Holders of each Class of Regular Certificates evidencing
Percentage Interests aggregating not less than 51% or by the NIMS Insurer, by
notice then given in writing to the Servicer (and to the Trustee if given by
Holders of Certificates), terminate all of the rights and obligations of the
Servicer as servicer under this Agreement. Any such notice to the Servicer shall
also be given to the NIMS Insurer, each Rating Agency and the Depositor. On or
after the receipt by the Servicer (and by the Trustee if such notice is given by
the Holders) of such written notice, all authority and power of the Servicer
under this Agreement, whether with respect to the Certificates or the Mortgage
Loans or otherwise, shall pass to and be vested in the Securities Administrator
pursuant to and under this Section; and, without limitation, the Securities
Administrator is hereby authorized and empowered to execute and deliver, on
behalf of the Servicer, as attorney-in-fact or otherwise, any and all documents
and other instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement of each Mortgage Loan and
Related Documents or otherwise. The Servicer agrees to cooperate with the
Securities Administrator (or the applicable successor Servicer) in effecting the
termination of the responsibilities and rights of the Servicer hereunder,
including, without limitation, the delivery to the Securities Administrator of
all documents and records requested by it to enable it to assume the Servicer's
functions under this Agreement within ten Business Days subsequent to such
notice, the transfer within one Business Day subsequent to such notice to the
Securities Administrator (or the applicable successor Servicer) for the
administration by it of all cash amounts that shall at the time be held by the
Servicer and to be deposited by it in the Collection Account, the Distribution
Account or any Escrow Account or that have been deposited by the Servicer in
such accounts or thereafter received by the Servicer with respect to the
Mortgage Loans or any REO Property received by the Servicer (all unreimbursed
Advances and Servicing Advances previously made by the Servicer shall be
deducted from all such funds prior to remittance of the remaining funds to the
Trustee). All reasonable costs and expenses (including attorneys' fees) incurred
in connection with transferring the servicing to
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the successor Servicer and amending this Agreement to reflect such succession as
Servicer pursuant to this Section shall be paid by the predecessor Servicer upon
presentation of reasonable documentation of such costs and expenses.
In connection with any failure by the Servicer to make any remittance
required to be made by the Servicer to the Distribution Account on the day and
by the time such remittance is required to be made under the terms of this
Agreement (without giving effect to any grace or cure period), the Servicer
shall pay to the Securities Administrator for the account of the Securities
Administrator interest at the rate published in The Wall Street Journal as the
"Prime Rate" 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.
Section 7.02 Securities Administrator to Act; Appointment of Successor.
(a) Within 90 days of the time the Servicer (and the Trustee, if notice
is sent by the Holders or the NIMS Insurer) receives a notice of termination
pursuant to Section 7.01 or 6.04, the Securities Administrator (or such other
successor Servicer as is approved in accordance with this Agreement and is
acceptable to the NIMS Insurer) shall be the successor in all respects to the
Servicer in its capacity as servicer under this Agreement and the transactions
set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof arising on and after its succession. As
compensation therefor, immediately upon assuming the duties as a successor
Servicer, the Securities Administrator (or such other successor Servicer) shall
be entitled to such compensation as the Servicer would have been entitled to
hereunder if no such notice of termination had been given. Notwithstanding the
above, (i) if the Securities Administrator is unwilling to act as successor
Servicer or (ii) if the Securities Administrator is legally unable so to act,
the Securities Administrator shall appoint or petition a court of competent
jurisdiction to appoint, any established housing and home finance institution,
bank or other mortgage loan or home equity loan servicer having a net worth of
not less than $50,000,000 as the successor to the Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Servicer hereunder; provided, that the appointment of any such successor
Servicer will not result in the qualification, reduction or withdrawal of the
ratings assigned to the Certificates or the ratings that are in effect by the
Rating Agencies as evidenced by a letter to such effect from the Rating
Agencies, and that the successor Servicer must be acceptable to the NIMS
Insurer. Pending appointment of a successor to the Servicer hereunder, unless
the Securities Administrator is prohibited by law from so acting, the Securities
Administrator shall act in such capacity as hereinabove provided. In connection
with such appointment and assumption, the successor shall be entitled to receive
compensation out of payments on Mortgage Loans in an amount equal to the
compensation which the Servicer would otherwise have received pursuant to
Section 3.18 (or such other compensation as the Securities Administrator 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 the reasonable costs and expenses incurred by the Securities
Administrator associated with such transfer. The appointment of a successor
servicer shall not affect any liability of the predecessor Servicer which may
have arisen under this Agreement prior to its termination as Servicer to pay any
deductible under an insurance policy pursuant to Section 3.12 or to indemnify
the Trustee and the Securities Administrator pursuant to Section 3.26, 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 or for any
of obligations to repurchase Mortgage Loans. The Securities Administrator 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
Securities Administrator, to the Servicer as servicer shall during the term of
its service as servicer continue to service and administer the Mortgage Loans
for the benefit of Certificateholders, and maintain in force a policy or
policies of insurance covering errors and omissions in the performance of its
obligations as Servicer hereunder and a Fidelity Bond in respect of its
officers, employees and agents to the same extent as the Servicer is so required
pursuant to Section 3.12.
Section 7.03 Waiver of Defaults.
The Majority Certificateholders (with the consent of the NIMS Insurer)
may, on behalf of all Certificateholders, waive any events permitting removal of
the Servicer as servicer pursuant to this Article VII;
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provided, however, that the Majority Certificateholders may not waive a default
in making a required distribution on a Certificate without the consent of the
Holder of such Certificate and the consent of 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 Securities Administrator, the NIMS Insurer and the Rating Agencies.
Section 7.04 Notification to Certificateholders.
(a) Upon any termination or appointment of a successor the Servicer
pursuant to this Article VII or Section 6.04, the Trustee shall give prompt
written notice thereof to the Securities Administrator, the NIMS Insurer and the
Certificateholders at their respective addresses appearing in the Certificate
Register and each Rating Agency.
(b) No later than 60 days after the occurrence of any event which
constitutes or which, with notice or a lapse of time or both, would constitute a
Servicer Event of Termination for five Business Days after a Responsible Officer
of the Trustee becomes aware of the occurrence of such an event, the Trustee
shall transmit by mail to the Securities Administrator, 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 Survival of Servicer Liabilities.
Notwithstanding anything herein to the contrary, upon termination of
the Servicer hereunder, any liabilities of the Servicer which accrued prior to
such termination shall survive such termination.
ARTICLE VIII
THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 8.01 Duties of Trustee and Securities Administrator.
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,
and the Securities Administrator, each undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement as duties of
the Trustee and the Securities Administrator, respectively. If a Servicer Event
of Termination has occurred (which has not been cured or waived), 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.
Upon receipt of all resolutions, certificates, statements, opinions,
reports, documents, orders or other instruments furnished to the Trustee and the
Securities Administrator which are specifically required to be furnished
pursuant to any provision of this Agreement, the Trustee and the Securities
Administrator shall examine them to determine whether they conform on their face
to the requirements of this Agreement; provided, however, that neither the
Trustee nor the Securities Administrator shall be responsible for the accuracy
or content of any resolution, certificate, statement, opinion, report, document,
order or other instrument furnished by the Servicer, the Seller or the Depositor
hereunder. If any such instrument is found not to conform on their face in any
material respect to the requirements of this Agreement, the Trustee shall notify
the Certificateholders and the NIMS Insurer 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 or the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own misconduct; provided,
however, that:
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(i) prior to the occurrence of a Servicer Event of Termination,
and after the curing of all such Servicer Events of Termination which may
have occurred, the duties and obligations of the Trustee and the Securities
Administrator shall be determined solely by the express provisions of this
Agreement, neither the Trustee nor the Securities Administrator shall 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 or the
Securities Administrator and, in the absence of bad faith on the part of the
Trustee or the Securities Administrator, the Trustee or the Securities
Administrator, respectively, 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 or the Securities
Administrator and conforming to the requirements of this Agreement;
(ii) neither the Trustee nor the Securities Administrator shall be
personally liable for an error of judgment made in good faith by a
Responsible Officer of the Trustee or the Securities Administrator, unless
it shall be proved that the Trustee or the Securities Administrator,
respectively, was negligent in ascertaining or investigating the facts
related thereto;
(iii) neither the Trustee nor the Securities Administrator shall
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 the Securities Administrator, or exercising or omitting to exercise any
trust or power conferred upon the Trustee or the Securities Administrator,
under this Agreement; and
(iv) neither the Trustee nor the Securities Administrator shall be
charged with knowledge of any failure by the Servicer to comply with the
obligations of the Servicer referred to in clauses (i) and (ii) of Section
7.01 or any Servicer Event of Termination unless a Responsible Officer of
the Trustee nor the Securities Administrator, respectively, obtains actual
knowledge of such failure or the Trustee nor the Securities Administrator,
respectively, receives written notice of such failure from the Servicer or
the Majority Certificateholders.
Neither the Trustee nor the Securities Administrator shall 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 or the Securities Administrator to
perform, or be responsible for the manner of performance of, any of the
obligations of the Servicer under this Agreement, except during such time, if
any, as the Securities Administrator shall be the successor to, and be vested
with the rights, duties, powers and privileges of, the Servicer in accordance
with the terms of this Agreement.
Section 8.02 Certain Matters Affecting the Trustee and the Securities
Administrator.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee and the Securities Administrator 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, and the manner of obtaining consents and of
evidencing the authorization of the execution thereof by Certificateholders
shall be subject to the reasonable regulations as the Trustee may prescribe;
(ii) the Trustee and the Securities Administrator may consult with
counsel and any 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 Opinion of Counsel;
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(iii) neither the Trustee nor the Securities Administrator shall
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 or the Securities Administrator, as the case may be,
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; the right of the Trustee or the
Securities Administrator to perform any discretionary act enumerated in this
Agreement shall not be construed as a duty, and neither the Trustee nor the
Securities Administrator shall be answerable for other than its negligence
or willful misconduct in the performance of any such act;
(iv) neither the Trustee nor the Securities Administrator shall 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, neither the Trustee nor the Securities Administrator shall 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 or the Securities Administrator 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 or the Securities Administrator, not
reasonably assured to the Trustee or the Securities Administrator by the
security afforded to it by the terms of this Agreement, the Trustee or the
Securities Administrator may require reasonable indemnity against such cost,
expense or liability as a condition to such proceeding. The reasonable
expense of every such examination following the occurrence of a Servicer
Event of Termination shall be paid by the Servicer or, if paid by the
Trustee or the Securities Administrator, shall be reimbursed by the Servicer
upon demand. Nothing in this clause (v) shall derogate from the obligation
of the Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors;
(vi) neither the Trustee nor the Securities Administrator shall be
accountable, or shall have any liability, and neither of them makes any
representation as to any acts or omissions hereunder of the Servicer until,
in the case of the Securities Administrator, such time as the Securities
Administrator may be required to act as Servicer pursuant to Section 7.02
and thereupon only for the acts or omissions of the Securities Administrator
as successor Servicer;
(vii) each of the Trustee and the Securities Administrator 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 or Independent Contractor in connection with REO Property;
provided that neither the Trustee nor the Securities Administrator shall be
responsible for any misconduct or negligence on the part of any agent or
Independent Contractor or custodian appointed and supervised, or attorney
appointed with due care; and
(viii) the right of the Trustee or the Securities Administrator to
perform any discretionary act enumerated in this Agreement shall not be
construed as a duty, and neither the Trustee nor the Securities
Administrator shall be answerable for other than its negligence or willful
misconduct in the performance of such act.
Section 8.03 Trustee and Securities Administrator 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 neither the Trustee nor the Securities
Administrator assumes any responsibility for the correctness of the same.
Neither the Trustee nor the Securities Administrator makes any representations
as to the validity or sufficiency of this Agreement or of the Certificates
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(other than the signature and authentication of the Trustee on the Certificates,
in the case of the Trustee) or of any Mortgage Loan or Related Document. Neither
the Trustee nor the Securities Administrator shall be accountable for the use or
application by the Servicer, or for the use or application of any funds paid to
the Servicer in respect of the Mortgage Loans or deposited in or withdrawn from
the Collection Account by the Servicer. Neither the Trustee nor the Securities
Administrator shall 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 the Securities
Administrator's responsibility if the Securities Administrator shall assume the
duties of the Servicer pursuant to Section 7.02); the validity of the assignment
of any Mortgage Loan to the Trustee or of any intervening assignment; the
completeness of any Mortgage Loan; the performance or enforcement of any
Mortgage Loan (other than the Securities Administrator's responsibility if the
Securities Administrator shall assume the duties of the Servicer pursuant to
Section 7.02); the compliance by the Depositor or the Servicer with any warranty
or representation made under this Agreement or in any related document or the
accuracy of any such warranty or representation (except, in the case of the
Trustee, after receipt of notice of any non-compliance therewith or any breach
thereof); any investment of monies by or at the direction of the Servicer or any
loss resulting therefrom, it being understood that the Trustee shall remain
responsible for any Trust property that it may hold in its individual capacity;
the acts or omissions of any of the Servicer (other than the Securities
Administrator's responsibility if the Securities Administrator shall assume the
duties of the Servicer pursuant to Section 7.02), or any Mortgagor; any action
of the Servicer (other than the Securities Administrator's responsibility if the
Securities Administrator shall assume the duties of the Servicer pursuant to
Section 7.02), taken in the name of the Trust; the failure of the Servicer to
act or perform any duties required of it as agent of the Trust hereunder (other
than the Securities Administrator's responsibility if the Securities
Administrator shall assume the duties of the Servicer pursuant to Section 7.02);
or any action by the Trustee or the Securities Administrator taken at the
instruction of the Servicer (other than the Securities Administrator's
responsibility if the Securities Administrator shall assume the duties of the
Servicer pursuant to Section 7.02); provided, however, that the foregoing shall
not relieve the Trustee or the Securities Administrator of its obligation to
perform their respective duties under this Agreement, including, without
limitation, the Trustee's duty to review the Mortgage Files pursuant to Section
2.01. The Trustee shall have no 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 and Securities Administrator May Own Certificates.
Each of the Trustee and the Securities Administrator 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 or Securities Administrator
and may transact any banking and trust business with the Seller, the Servicer,
the Depositor or their Affiliates.
Section 8.05 Trustee, Securities Administrator and Custodian Fees and
Expenses.
The Securities Administrator shall be entitled to the Securities
Administration Fee plus investment income on funds on deposit in the
Distribution Account as set forth in Section 3.25. This shall constitute
compensation to the Securities Administrator for its activities hereunder and
for the performance of its duties as Auction Administrator pursuant to this
Agreement and the Auction Administration Agreement. The fees and expenses of the
Trustee shall be paid in accordance with a side letter agreement between the
Trustee and the Securities Administrator. The Trustee shall withdraw from the
Distribution Account on each Distribution Date and pay to the Securities
Administrator the Securities Administration Fee pursuant to Section 4.01(i). The
Trust shall reimburse the Trustee and the Securities Administrator for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
or the Securities Administrator 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),
pursuant to Section 4.01(ii), 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 or Securities Administrator hereunder. In
addition, the Trustee, the Securities Administrator and their respective
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
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Agreement or the Certificates, other than any loss, liability or expense (i)
that constitutes a specific liability of the Trustee or the Securities
Administrator under this Agreement or (ii) incurred by reason of willful
misfeasance, bad faith or negligence of the Trustee or Securities Administrator
in the performance of their respective duties hereunder or by reason of the
Trustee's or the Securities Administrator's, as the case may be, reckless
disregard of obligations and duties hereunder. The Custodian 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,
including reasonable attorneys' fees, that may be imposed on, incurred by or
asserted against it or them in any way related to or arising out of the Custody
Agreement, to the extent not provided for in the Custody Agreement, or any
action taken or not taken by it or them under the Custody Agreement, other than
any loss, liability or expense (i) that constitutes a specific liability of the
Custodian under the Custody Agreement or (ii) or incurred by reason of willful
misfeasance, bad faith or negligence of the Custodian in the performance of its
duties under the Custody Agreement or by reason of the Custodian's reckless
disregard of its obligations under the Custody Agreement. Subject to the
provisions of this Article VIII, the Trustee and its officers, directors,
employees and agents shall be indemnified by the Securities Administrator from,
and held harmless against, any and all losses, liabilities, damages, claims or
expenses incurred by the Trustee in connection with or arising out of the
willful misfeasance, bad faith or negligence of the Securities Administrator in
the performance of its duties under this Agreement or by reason of the
Securities Administrator's reckless disregard of its obligations and duties
under this Agreement. Subject to the provisions of this Article VIII, the
Securities Administrator and its officers, directors, employees and agents shall
be indemnified by the Trustee from, and held harmless against, any and all
losses, liabilities, damages, claims or expenses incurred by the Securities
Administrator in connection with or arising out of willful misfeasance, bad
faith or negligence of the Trustee in the performance of its duties under this
Agreement or by reason of the Trustee's reckless disregard of its obligations
and duties under this Agreement. This Section shall survive termination of this
Agreement or the resignation or removal of any Trustee or Securities
Administrator hereunder.
Section 8.06 Eligibility Requirements for Trustee and Securities
Administrator.
Each of the Trustee and the Securities Administrator shall at all times
be an entity duly organized and validly existing under the laws of the United
States of America or any state thereof, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000 and a minimum long-term debt rating of BBB by Fitch and S&P and Baa3
by ▇▇▇▇▇'▇ and a long term debt rating of at least A1 or better by ▇▇▇▇▇'▇, and
subject to supervision or examination by federal or state authority. If such
entity publishes reports of condition at least annually, pursuant to law or to
the requirements of the aforesaid supervising or examining authority, then for
the purposes of this Section 8.06, the combined capital and surplus of such
entity shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. The principal office of the
Trustee and the Securities Administrator (other than the initial Trustee or
Securities Administrator) shall be in a state with respect to which an Opinion
of Counsel has been delivered to such Trustee or Securities Administrator at the
time such Trustee or Securities Administrator is appointed Trustee or Securities
Administrator, at such entity's expense, 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 or Securities Administrator shall cease to be eligible in accordance
with the provisions of this Section 8.06, the Trustee or Securities
Administrator shall resign immediately in the manner and with the effect
specified in Section 8.07.
Section 8.07 Resignation or Removal of Trustee and Securities
Administrator.
The Trustee or the Securities Administrator may at any time resign and
be discharged from the trusts hereby created by giving written notice thereof to
the Depositor, the NIMS Insurer, the Servicer and each Rating Agency. Upon
receiving such notice of resignation, the Depositor shall promptly appoint a
successor Trustee or Securities Administrator acceptable to the NIMS Insurer by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee or Securities Administrator and one copy to
the successor Trustee or Securities Administrator. If no successor Trustee or
Securities Administrator shall have been so appointed and having accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee or Securities Administrator may petition any court of
competent jurisdiction for the appointment of a successor Trustee or Securities
Administrator.
If at any time the Trustee or the Securities Administrator 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
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NIMS Insurer, or if at any time the Trustee or the Securities Administrator
shall be legally unable to act, or shall be adjudged a bankrupt or insolvent, or
a receiver of the Trustee or the Securities Administrator or of its property
shall be appointed, or any public officer shall take charge or control of the
Trustee or the Securities Administrator or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Depositor or
the NIMS Insurer may remove the Trustee or the Securities Administrator, as the
case may be. If the Depositor, the NIMS Insurer or the Servicer removes the
Trustee or the Securities Administrator under the authority of the immediately
preceding sentence, the Depositor shall promptly appoint a successor Trustee or
Securities Administrator acceptable to the NIMS Insurer 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 or Securities Administrator.
The Majority Certificateholders (or the NIMS Insurer upon failure of
the Trustee to perform its obligations hereunder) may at any time remove the
Trustee or the Securities Administrator by written instrument or instruments
delivered to the Servicer, the Depositor, the Securities Administrator and the
Trustee; the Depositor shall thereupon use its best efforts to appoint a
successor Trustee or Securities Administrator acceptable to the NIMS Insurer in
accordance with this Section.
Any resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor Trustee or Securities Administrator
pursuant to any of the provisions of this Section 8.07 shall not become
effective until acceptance of appointment by the successor Trustee or Securities
Administrator as provided in Section 8.08.
Section 8.08 Successor Trustee and Successor Securities Administrator.
Any successor Trustee or Securities Administrator appointed as provided
in Section 8.07 shall execute, acknowledge and deliver to the Depositor, the
NIMS Insurer, the Rating Agencies, the Servicer and to its predecessor Trustee
or Securities Administrator an instrument accepting such appointment hereunder,
and thereupon the resignation or removal of the predecessor Trustee or
Securities Administrator shall become effective, and such successor Trustee or
Securities Administrator, 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 or
Securities Administrator. The Depositor, the Servicer and the predecessor
Trustee or Securities Administrator 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 or Securities Administrator all
such rights, powers, duties and obligations.
No successor Trustee or Securities Administrator shall accept
appointment as provided in this Section 8.08 unless at the time of such
acceptance such successor Trustee or Securities Administrator shall be eligible
under the provisions of Section 8.06 and the appointment of such successor
Trustee or Securities Administrator 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 or Securities
Administrator as provided in this Section 8.08, the successor Trustee or
Securities Administrator shall mail notice of the appointment of a successor
Trustee or Securities Administrator 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 or Securities
Administrator.
Any entity into which the Trustee or the Securities Administrator 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 or
the Securities Administrator shall be a party, or any entity succeeding to the
business of the Trustee or the Securities Administrator, shall be the successor
of the Trustee or the Securities Administrator 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.
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Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust or any Mortgaged Property may at the time be located, the
Depositor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee and the NIMS Insurer to act as co-trustee or co-trustees, jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust, or any part thereof,
and, subject to the other provisions of this Section 8.10, such powers, duties,
obligations, rights and trusts as the Servicer and the Trustee may consider
necessary or desirable. Any such co-trustee or separate trustee shall be subject
to the written approval of the Servicer and the NIMS Insurer. If the Servicer or
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. The
Servicer shall be responsible for the fees of any co-trustee or separate trustee
appointed hereunder.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not authorized
to act separately without the Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed, 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 Securities Administrator and the Trustee, acting
jointly, may at any time accept the resignation of or remove any separate
trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Depositor, the Rating Agencies, the NIMS Insurer, the Securities Administrator
and the Servicer.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor Trustee.
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Section 8.11 Limitation of Liability.
The Certificates are executed by the Trustee, not in its individual
capacity but solely as Trustee of the Trust, in the exercise of the powers and
authority conferred and vested in it by this Agreement. Each of the undertakings
and agreements made on the part of the Trustee in the Certificates is made and
intended not as a personal undertaking or agreement by the Trustee but is made
and intended for the purpose of binding only the Trust.
Section 8.12 Trustee May Enforce Claims Without Possession of
Certificates.
(a) All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee for the benefit of all
Holders of such Certificates, subject to the provisions of this Agreement. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursement and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Certificateholders in respect of
which such judgment has been recovered.
(b) The Trustee shall afford the Seller, the Depositor, the Servicer,
the Securities Administrator and each Certificateholder upon two Business Days
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. Upon request, the Trustee shall furnish
the Depositor, the Servicer, the Securities Administrator and any requesting
Certificateholder with its most recent financial statements. The Trustee shall
cooperate fully with the Seller, the Servicer, the Depositor, the Securities
Administrator and such Certificateholder and shall make available to the Seller,
the Servicer, the Depositor, the Securities Administrator and such
Certificateholder for review and copying at the expense of the party requesting
such copies, such books, documents or records as may be requested with respect
to the Trustee's duties hereunder. The Seller, the Depositor, the Servicer, the
Securities Administrator and the Certificateholders shall not have any
responsibility or liability for any action or failure to act by the Trustee and
are not obligated to supervise the performance of the Trustee under this
Agreement or otherwise.
Section 8.13 Suits for Enforcement.
In case a Servicer Event of Termination or other default by the
Servicer hereunder shall occur and be continuing, the Trustee may proceed to
protect and enforce its rights and the rights of the Certificateholders under
this Agreement by a suit, action or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement contained in
this Agreement or in aid of the execution of any power granted in this Agreement
or for the enforcement of any other legal, equitable or other remedy, as the
Trustee, being advised by counsel, and subject to the foregoing, shall deem most
effectual to protect and enforce any of the rights of the Trustee and the
Certificateholders.
Section 8.14 Waiver of Bond Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee post a bond or other surety with any
court, agency or body whatsoever.
Section 8.15 Waiver of Inventory, Accounting and Appraisal Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.
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Section 8.16 Appointment of Custodian.
▇▇▇▇▇ Fargo Bank Minnesota, National Association, has been appointed
Custodian by the Trustee pursuant to the Custody Agreement. If such entity
resigns or is terminated as Custodian pursuant to the Custody Agreement, the
Trustee shall serve as Custodian or the Trustee may, with the consent of the
Depositor and the Servicer, appoint one or more Custodians to hold all or a
portion of the Mortgage Files as agent for the Trustee, by entering into a
custodial agreement in the form of the Custody Agreement or otherwise in a form
acceptable to the Depositor and the Servicer. Subject to this Article VIII, the
Trustee agrees to comply with the terms of the Custody Agreement and any such
custodial agreement and to enforce the terms and provisions thereof against the
Custodian for the benefit of the Certificateholders. Each Custodian will be a
depositary institution subject to supervision by federal or state authority,
shall have a combined capital and surplus of at least $10,000,000 and shall be
qualified to do business in the jurisdiction in which it holds any Mortgage File
and afforded the same protections hereunder as the Trustee.
ARTICLE IX
REMIC AND GRANTOR TRUST ADMINISTRATION
Section 9.01 REMIC Administration.
(a) The Trustee shall make or cause to be made REMIC elections for each
of REMIC 1, REMIC 2, REMIC 3 and REMIC 4 as set forth in the Preliminary
Statement on Forms 1066 as prepared by the Securities Administrator or other
appropriate federal tax or information return for the taxable year ending on the
last day of the calendar year in which the Certificates are issued. The
Securities Administrator shall prepare such Forms 1066 and any other appropriate
federal tax or information return and deliver them to the Trustee on a timely
basis for the Trustee's execution. The Trustee shall execute and file such
forms. 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 Securities Administrator 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) that are attributable to
the negligence or willful misconduct of the Servicer in fulfilling its duties
hereunder. The Securities Administrator shall be entitled to reimbursement of
expenses to the extent provided in clause (i) above from the Trust Fund pursuant
to Sections 4.01(ii) and 8.05 and from the Servicer for expenses described in
clause (ii) above.
(d) The Securities Administrator 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 Securities
Administrator. The Securities Administrator will apply for an Employer
Identification Number from the Internal Revenue Service via a form SS-4 or any
other acceptable method for all REMICs and other tax entities and will also file
a Form 8811 with respect to all such REMICs with the Internal Revenue Service.
(e) The Holder of the Class R Certificates holding the largest
Percentage Interest shall be the "tax matters person" as defined in the REMIC
Provisions (the "Tax Matters Person") with respect to each REMIC, and the
Securities Administrator is irrevocably designated as and shall act as
attorney-in-fact and agent for such Tax Matters Person for each REMIC (the "Tax
Administrator"). The Securities Administrator, 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
Securities Administrator, as agent for the Tax Matters Person, shall
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provide (i) to the Treasury or other governmental authority such information as
is necessary for the application of any tax relating to the transfer of a
Residual Certificate to any disqualified person or organization and (ii) to the
Certificateholders such information or reports as are required by the Code or
REMIC Provisions.
(f) The Trustee, the Securities Administrator, the Servicer, and the
Holders of Residual Certificates shall take any action or cause any REMIC to
take any action necessary to create or maintain the status of such REMIC as a
REMIC under the REMIC Provisions and shall assist each other as necessary to
create or maintain such status. Neither the Trustee, the Securities
Administrator, the Servicer, nor the Holder of any Residual Certificate shall
take any action or cause any REMIC to take any action or fail to take (or fail
to cause to be taken) any action that, under the REMIC Provisions, if taken or
not taken, as the case may be, could (i) endanger the status of such REMIC as a
REMIC or (ii) result in the imposition of a tax upon such REMIC (including but
not limited to the tax on prohibited transactions as defined in Code Section
860F(a)(2) and the tax on prohibited contributions set forth on Section 860G(d)
of the Code) (either such event, an "Adverse REMIC Event") unless the Securities
Administrator, the Trustee, the NIMS Insurer and the Servicer have received an
Opinion of Counsel (at the expense of the party seeking to take such action),
upon which they may conclusively rely, to the effect that the contemplated
action will not endanger such status or result in the imposition of such a tax.
In addition, prior to taking any action with respect to any REMIC or the assets
therein, or causing such REMIC to take any action, which is not expressly
permitted under the terms of this Agreement, any Holder of a Residual
Certificate will consult with the Securities Administrator, the Trustee, the
NIMS Insurer and the Servicer, or their respective designees, in writing, with
respect to whether such action could cause an Adverse REMIC Event to occur with
respect to such REMIC, and no such Person shall take any such action or cause
such REMIC to take any such action as to which the Securities Administrator, the
Trustee, the NIMS Insurer or the Servicer has advised it in writing that an
Adverse REMIC Event could occur. The Trustee, the Securities Administrator, the
Servicer or the NIMS Insurer may consult with counsel to make such written
advice, and the cost of same shall be borne by the party seeking to take the
action not permitted by this Agreement, but in no event shall such cost be an
expense of the Trustee, the Securities Administrator, the Servicer or the NIMS
Insurer.
(g) In the event that any REMIC engages in any transactions that cause
it to be subject to the prohibited transactions tax as defined in Section
860F(a)(2) of the Code, the prohibited contributions tax as defined in Section
860G(d) of the Code, or the tax on net income from foreclosure property as
defined in Section 860G(c) of the Code, such tax will be borne (i) by the
Trustee or the Securities Administrator, if the Trustee or the Securities
Administrator, respectively, has breached its obligations with respect to REMIC
compliance under this Agreement, (ii) the Servicer, if the Servicer has breached
its obligations with respect to REMIC compliance under this Agreement, and (iii)
otherwise by the REMIC, with a resulting reduction in amounts otherwise
distributable to Holders of the Certificates. In the event that any other tax
not described in the preceding sentence is imposed on a REMIC by any taxing
authority, the Securities Administrator shall instruct the Trustee to pay, and
the Trustee shall pay, any remaining REMIC taxes out of current or future
amounts otherwise distributable to the Holder of the Residual Certificate in
each REMIC or, if no such amounts are available, out of other amounts held in
the Collection Account, and shall reduce amounts otherwise payable to Holders of
the other Certificates, as the case may be.
(h) The Securities Administrator, as agent for the Tax Matters Person,
shall, for federal income tax purposes, maintain or cause to be maintained books
and records with respect to each REMIC on a calendar year and on an accrual
basis.
(i) No additional contributions of assets shall be made to any REMIC,
except as expressly provided in this Agreement with respect to Eligible
Substitute Mortgage Loans.
(j) Neither the Trustee, the Securities Administrator, nor the Servicer
shall enter into any arrangement by which any REMIC will receive a fee or other
compensation for services.
(k) On or before April 15th of each calendar year, commencing April 15,
2004, the Securities Administrator shall deliver to each Rating Agency and the
NIMS Insurer an Officer's Certificate of the Securities Administrator stating
the Securities Administrator's compliance with this Article IX (without regard
to any action taken by any party other than the Securities Administrator).
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Section 9.02 Prohibited Transactions and Activities.
Neither the Seller, the Depositor, the Servicer nor the Trustee shall
sell, dispose of, or substitute for any of the Mortgage Loans, except in a
disposition pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the
bankruptcy of the Trust Fund, (iii) the termination of any REMIC pursuant to
Article X of this Agreement, (iv) a substitution pursuant to Article II of this
Agreement or (v) a repurchase of Mortgage Loans pursuant to Article II of this
Agreement, nor acquire any assets for any REMIC, nor sell or dispose of any
investments in the Distribution Account for gain, nor accept any contributions
to any REMIC after the Closing Date, unless it has received an Opinion of
Counsel, addressed to the Trustee and the NIMS Insurer (at the expense of the
party causing such sale, disposition, or substitution) that such disposition,
acquisition, substitution, or acceptance will not (a) affect adversely the
status of such REMIC as a REMIC or of the interests therein other than the
Residual Certificates as the regular interests therein, (b) affect the
distribution of interest or principal on the Certificates, (c) result in the
encumbrance of the assets transferred or assigned to the Trust Fund (except
pursuant to the provisions of this Agreement) or (d) cause such REMIC to be
subject to a tax on prohibited transactions or prohibited contributions pursuant
to the REMIC Provisions.
Section 9.03 Indemnification with Respect to Certain Taxes and Loss of
REMIC Status.
In the event that any REMIC formed hereunder fails to qualify as a
REMIC, loses its status as a REMIC, or incurs federal, state or local taxes as a
result of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Servicer, the Trustee, or the
Securities Administrator of its duties and obligations set forth herein, such
person shall indemnify the Holder of the related Residual Certificate and the
NIMS Insurer against any and all losses, claims, damages, liabilities or
expenses ("Losses") resulting from such negligence; provided, however, that no
such person shall be liable for any such Losses attributable to the action or
inaction of the Depositor or the Holder of such related Residual Certificate, as
applicable, nor for any such Losses resulting from misinformation provided by
the Holder of such related Residual Certificate on which such person has relied.
The foregoing shall not be deemed to limit or restrict the rights and remedies
of the Holder of such related Residual Certificate now or hereafter existing at
law or in equity. Notwithstanding the foregoing, however, in no event shall the
Servicer, the Trustee, or the Securities Administrator have any liability (1)
for any action or omission that is taken in accordance with and in compliance
with the express terms of, or which is expressly permitted by the terms of, this
Agreement, (2) for any Losses other than arising out of a negligent performance
by the Servicer, the Trustee, or the Securities Administrator 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). Any Losses not borne by the Servicer, the Trustee, or the
Securities Administrator shall be borne by the related REMIC, with a resulting
reduction in amounts otherwise distributable to Holders of the Offered
Certificates.
Section 9.04 REO Property.
(a) Subject to compliance with applicable laws and regulations as shall
at any time be in force, and notwithstanding any other provision of this
Agreement, the Servicer, acting on behalf of the Trust hereunder, shall not
rent, lease, or otherwise earn income on behalf of any REMIC with respect to any
REO Property which might cause such REO Property to fail to qualify as
"foreclosure" property within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by any REMIC of any "income from non-permitted assets"
within the meaning of Section 860F(a)(2) of the Code or any "net income from
foreclosure property" which is subject to tax under the REMIC Provisions unless
the Servicer has provided an Opinion of Counsel to the Trustee and the NIMS
Insurer to the effect that, under the REMIC Provisions, such action would not
adversely affect the status of any REMIC as a REMIC, any income generated for
such REMIC by the REO Property would not result in the imposition of a tax upon
such REMIC, and that such action will not cause such REO Property to fail to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code at any time that it is held by the REMIC, in which case the Servicer
may take such actions as are specified in such Opinion of Counsel.
(b) The Servicer shall make reasonable efforts to sell any REO Property
for its fair market value. In any event, however, the Servicer shall dispose of
any REO Property before the close of the third calendar year beginning after the
year of its acquisition by the Trust Fund unless the Servicer has received a
grant of extension from the Internal Revenue Service to the effect that, under
the REMIC Provisions and any relevant
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proposed legislation and under applicable state law, any REMIC may hold REO
Property for a longer period without adversely affecting its REMIC status or
causing the imposition of a Federal or state tax upon any REMIC. If the Servicer
has received such an extension, then the Servicer shall continue to attempt to
sell the REO Property for its fair market value as determined in good faith by
the Servicer for such longer period as such extension permits (the "Extended
Period"). If the Servicer has not received such an extension and the Servicer is
unable to sell the REO Property by September 30 of the third year after its
acquisition by the Trust Fund or if the Servicer has received such an extension,
and the Servicer is unable to sell the REO Property within the period ending
three months before the close of the Extended Period, the Servicer shall, before
the end of the applicable period, (i) purchase such REO Property at a price
equal to the REO Property's fair market value as determined in good faith by the
Servicer or (ii) auction the REO Property to the highest bidder (which may be
the Servicer) in an auction reasonably designed to produce a fair price prior to
the expiration of the applicable period.
Section 9.05 Grantor Trust Administration.
The parties intend that the portions of the Trust Fund consisting of
(i) the Prepayment Charges and Servicer Prepayment Charge Payment Amounts, (ii)
the right of the Class P Certificates to receive Prepayment Charges and Servicer
Prepayment Charge Payment Amounts, (iii) the Basis Risk Rights, (iv) the Auction
Swap Rights, and (v) the regular interest components of the Offered Certificates
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 Securities Administrator shall furnish or cause to be furnished
to the Holders of the Offered Certificates and the Class P 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 with respect to the property held by the Grantor Trust, at the time or
times and in the manner required by the Code.
ARTICLE X
TERMINATION
Section 10.01 Termination.
(a) The respective obligations and responsibilities of the Servicer,
the Depositor, the Securities Administrator and the Trustee created hereby
(other than the obligation of the Trustee to make certain payments to
Certificateholders after the final Distribution Date and the obligation of the
Servicer to send certain notices as hereinafter set forth and other than as set
forth in Section 7.05) shall terminate upon written notice to the Trustee upon
the earliest of (i) the Distribution Date on which the Certificate Principal
Balance of each Class of Certificates has been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust, and (iii)
the optional purchase by the Majority Class CE Certificateholders, the NIMS
Insurer or the Servicer of the Mortgage Loans as described below.
Notwithstanding the foregoing, in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the United
States to the Court of St. ▇▇▇▇▇, living on the date hereof.
The Majority Class CE Certificateholders may, at its option, or if such
option is not exercised by the Majority Class CE Certificateholders, the
Servicer (or, if the Servicer fails to exercise such right, the NIMS Insurer)
may, terminate the Trust Fund and retire the Offered Certificates on the next
succeeding Distribution Date upon which the aggregate current Pool Balance is
less than 10% of the aggregate Pool Balance of the Mortgage Loans as of the
Cut-off Date by purchasing all of the outstanding (i) Mortgage Loans in the
Trust Fund at a price equal to the sum of the outstanding Principal Balance of
the Mortgage Loans and except to the extent previously advanced by the Servicer,
accrued and unpaid interest thereon at the weighted average of the Mortgage
Interest Rates through the end of the Due Period preceding the final
Distribution Date plus unreimbursed Servicing Advances, Advances and any unpaid
Servicing Fees allocable to such Mortgage Loans and (ii) REO Properties in the
Trust Fund at a price equal to their fair market value as determined in good
faith by the Servicer (the "Termination Price");provided, however, that such
option may only be exercised if (i) the Termination Price is sufficient to pay
all interest accrued on, as well as amounts necessary to retire the principal
balance of, each class of notes issued pursuant to the Indenture and any
remaining amounts owed to the NIMS Insurer on the date such option is exercised
and (ii) the fair market value of the Mortgage Loans and REO Properties
described above is at least equal to the Principal Balance of the Mortgage Loans
(after giving effect to scheduled payments of principal due
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during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and the appraised value of the REO Properties. If such option is not
exercised by the Majority Class CE Certificateholders on the first applicable
Distribution Date, the Servicer (or, if the Servicer fails to exercise such
right, the NIMS Insurer) may exercise such option, but only upon providing at
least sixty days prior written notice to the Majority Class CE
Certificateholders and the Seller of the Servicer's (or the NIM Insurer's)
intention to terminate the Trust Fund and the applicable Distribution Date for
such termination. Upon receipt of such notice, the Majority Class CE
Certificateholders may exercise their option to terminate the Trust Fund on or
before the Distribution Date selected by the Servicer (or the NIMS Insurer) in
accordance with the procedures set forth in this Section 10.01.
In connection with any such purchase pursuant to the preceding
paragraph, the Servicer shall deliver to the Trustee for deposit in the
Distribution Account all amounts then on deposit in the Collection Account (less
amounts permitted to be withdrawn by the Servicer pursuant to Section 3.07),
which deposit shall be deemed to have occurred immediately following such
purchase.
Any such purchase shall be accomplished by delivery to the Trustee for
deposit into the Distribution Account as part of Available Funds on the
Determination Date before such Distribution Date of the Termination Price.
(b) Notice of any termination, specifying the Distribution Date (which
shall be a date that would otherwise be a Distribution Date) upon which the
Certificateholders may surrender their Certificates to the Trustee for payment
of the final distribution and cancellation, shall be given promptly to
Certificateholders and the NIMS Insurer by the Trustee upon the Trustee
receiving written notice of such date from the Servicer, by letter to the
Certificateholders and the Securities Administrator mailed not earlier than the
15th day of the month preceding the month of such final distribution and not
later than the 15th day of the month of such final distribution specifying (1)
the Distribution Date upon which final distribution of the Certificates will be
made upon presentation and surrender of such Certificates at the office or
agency of the Trustee therein designated, (2) the amount of any such final
distribution and (3) that the Record Date otherwise applicable to such
Distribution Date is not applicable, distributions being made only upon
presentation and surrender of the Certificates at the office or agency of the
Trustee therein specified.
(c) Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Holders of the Certificates on the
Distribution Date for such final distribution, in proportion to the Percentage
Interests of their respective Class and to the extent that funds are available
for such purpose, an amount equal to the amount required to be distributed to
such Holders in accordance with the provisions of Sections 4.01 and 4.02 for
such Distribution Date. By acceptance of the Residual Certificates, each Holder
of the Residual Certificates agrees for so long as any notes insured by the NIMS
Insurer and secured by all or a portion of the Class CE, Class P or Class R
Certificates are outstanding, in connection with any termination hereunder, to
assign and transfer any amounts in excess of par, and to the extent received in
respect of such termination, to pay any such amounts to the Holders of the Class
CE Certificates.
(d) In the event that all Certificateholders shall not surrender their
Certificates for final payment and cancellation on or before such final
Distribution Date, the Trustee shall promptly following such date cause all
funds in the Distribution Account not distributed in final distribution to
Certificateholders to be withdrawn therefrom and credited to the remaining
Certificateholders by depositing such funds in a separate escrow account for the
benefit of such Certificateholders, and the Servicer (if the Servicer has
exercised its right to purchase the Mortgage Loans) or the Trustee (in any other
case) shall give a second written notice to the remaining Certificateholders, to
surrender their Certificates for cancellation and receive the final distribution
with respect thereto. If within nine months after the second notice all the
Certificates shall not have been surrendered for cancellation, the Class R
Certificateholders shall be entitled to all unclaimed funds and other assets
which remain subject hereto, and the Trustee upon transfer of such funds shall
be discharged of any responsibility for such funds, and the Certificateholders
shall look to the Class R Certificateholders for payment.
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Section 10.02 Additional Termination Requirements.
(a) In the event that the Servicer exercises its purchase option as
provided in Section 10.01, the Trust shall be terminated in accordance with the
following additional requirements, unless the Trustee shall have been furnished
with an Opinion of Counsel to the effect that the failure of the Trust to comply
with the requirements of this Section will not (i) result in the imposition of
taxes on "prohibited transactions" of the Trust as defined in Section 860F of
the Code or (ii) cause any REMIC constituting part of the Trust Fund to fail to
qualify as a REMIC at any time that any Certificates are outstanding:
(i) The Trustee shall designate a date within 90 days prior to the
final Distribution Date as the date of adoption of plans of complete
liquidation of each of REMIC 1, REMIC 2, REMIC 3 and REMIC 4 and shall
specify such date in the final federal income tax return of each REMIC;
(ii) After the date of adoption of such plans of complete
liquidation and at or prior to the final Distribution Date, the Trustee
shall sell all of the assets of the Trust to the Servicer for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, all cash on hand (other than cash retained to meet
claims), in the order of priority provided by Sections 4.02 and 4.09 to the
Certificates and the uncertificated regular and residual interests, and the
Trust shall terminate at such time.
(b) By their acceptance of Certificates, the Holders thereof hereby
agree to appoint the Trustee as their attorney in fact to: (i) designate such
date of adoption of plans of complete liquidation and (ii) to take such other
action in connection therewith as may be reasonably required to carry out such
plans of complete liquidation all in accordance with the terms hereof.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment.
This Agreement may be amended from time to time by the Depositor, the
Servicer, the Securities Administrator and the Trustee, with the consent of the
NIMS Insurer, and without the consent of the Certificateholders, (i) to cure any
ambiguity, (ii) to correct or supplement any provisions herein which may be
defective or inconsistent with any other provisions herein or (iii) to make any
other provisions with respect to matters or questions arising under this
Agreement, which shall not be inconsistent with the provisions of this
Agreement; provided, however, that any such action listed in clause (i) through
(iii) above shall not adversely affect in any respect the interests of any
Certificateholder, as evidenced by (i) notice in writing to the Depositor, the
Servicer, the Securities Administrator and the Trustee from the Rating Agencies
that such action will not result in the reduction or withdrawal of the rating of
any outstanding Class of Certificates with respect to which it is a Rating
Agency, or (ii) an Opinion of Counsel delivered to the Servicer, the Trustee and
the NIMS Insurer.
In addition, this Agreement may be amended from time to time by the
Depositor, the Servicer, the Securities Administrator 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 (as evidenced by either (i) an
Opinion of Counsel delivered to the Trustee, the Securities Administrator and
the NIMS Insurer or (ii) confirmation from the Rating Agencies, delivered to the
Servicer, the Securities Administrator, the Trustee and the NIMS Insurer, that
such action will not result in the reduction or withdrawal of the rating of any
outstanding Class of Certificates), without the consent of the Holders of
Certificates of such Class evidencing at least a 66% Percentage Interest in such
Class, or (z) reduce the percentage
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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.
Notwithstanding any provision of this Agreement to the contrary, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel upon which it may conclusively rely,
delivered by (and at the expense of) the Person seeking such Amendment, to the
effect that such amendment will not result in the imposition of a tax on any
REMIC constituting part of the Trust Fund pursuant to the REMIC Provisions or
cause any REMIC constituting part of the Trust to fail to qualify as a REMIC at
any time that any Certificates are outstanding, that the execution of the
amendment is authorized or permitted by this Agreement and that all conditions
precedent to the execution of the amendment have been satisfied.
Promptly after the execution of any such amendment the Trustee shall
furnish, at the expense of the Person that requested the amendment if such
Person is the Servicer (but in no event at the expense of the Trustee),
otherwise at the expense of the Trust, a copy of such amendment and the Opinion
of Counsel referred to in the immediately preceding paragraph to the Servicer,
the NIMS Insurer 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.
Each of the Trustee and the Securities Administrator may, but shall not
be obligated to, enter into any amendment pursuant to this 11.01 Section that
affects its rights, duties and immunities under this Agreement or otherwise.
Section 11.02 Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the expense of the Trust, but only upon direction of
Certificateholders, accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall together constitute but
one and the same instrument.
Section 11.03 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not (i) operate
to terminate this Agreement or the Trust, (ii) entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust, or (iii)
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
Except as expressly provided for herein, no Certificateholder shall
have any right to vote or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
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No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee a written notice of default and of the
continuance thereof, as herein provided, and unless also the Holders of
Certificates entitled to at least 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 15 days after
its receipt of such notice, request and offer of indemnity, shall have neglected
or refused to institute any such action, suit or proceeding. It is understood
and intended, and expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 11.03 each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 11.04 Governing Law; Jurisdiction.
This Agreement shall be construed in accordance with the laws of the
State of New York, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws. With respect to any
claim arising out of this Agreement, each party irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in The City of New
York, and each party irrevocably waives any objection which it may have at any
time to the laying of venue of any suit, action or proceeding arising out of or
relating hereto brought in any such courts, irrevocably waives any claim that
any such suit, action or proceeding brought in any such court has been brought
in any inconvenient forum and further irrevocably waives the right to object,
with respect to such claim, suit, action or proceeding brought in any such
court, that such court does not have jurisdiction over such party, provided that
service of process has been made by any lawful means.
Section 11.05 Notices.
All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
first Class mail, postage prepaid, or by express delivery service, to (a) in the
case of the Trustee, Bank One, N.A., Global Corporate Trust Services, ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ - ▇▇▇-▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ABFC
2003-WF1, or such other address as may hereafter be furnished to the Depositor,
the Securities Administrator, the NIMS Insurer and the Servicer in writing by
the Trustee, (b) in the case of the Depositor, Asset Backed Funding Corporation,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ Attention: ABFC
Mortgage Loan Asset-Backed Certificates, Series 2003-WF1, or such other address
as may be furnished to the Servicer, the Securities Administrator, the NIMS
Insurer and the Trustee in writing by the Depositor, (c) in the case of the
Securities Administrator, ▇▇▇▇▇ Fargo Bank Minnesota, National Association, ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Client Manager-ABFC,
Series 2003-WF1, or to such other address as may hereafter be furnished to the
Depositor, the Servicer, the NIMS Insurer and the Trustee by the Securities
Administrator, and in the case of the Servicer, ▇▇▇▇▇ Fargo Home Mortgage, Inc.,
Legal Dept. - MACX 2401-06T, ▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention:
General Counsel and ▇▇▇▇▇ Fargo Home Mortgage, Inc. Investor Services MAC
#X2401-042, ▇▇▇▇ ▇. ▇▇▇▇▇, or such other address as may be furnished to the
Depositor, the Securities Administrator, the NIMS Insurer and the Trustee in
writing by the Servicer. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first Class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Notice of any
Servicer Event of Termination shall be given by telecopy and by certified mail.
Any notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have duly been given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder shall also be mailed to the appropriate party in the manner
set forth above.
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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 Securities Administrator 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 Securities Administrator, as the
case may be, has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Servicer Event of Termination that has
not been cured or waived;
(iii) the resignation or termination of the Servicer, the
Securities Administrator 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 Securities Administrator is acting as successor
Servicer pursuant to Section 7.02 hereof, any event that would result in the
inability of the Securities Administrator to make Advances.
(b) In addition, the Securities Administrator shall promptly furnish to
each Rating Agency and the NIMS Insurer copies of the following:
(A) each annual statement as to compliance of the Servicer
described in Section 3.19 hereof;
(B) each annual independent public accountants' servicing report
as to the Servicer described in Section 3.20 hereof; and
(C) each notice delivered pursuant to Section 7.01(a) hereof which
relates to the fact that the Servicer has not made an Advance.
Any such notice pursuant to this Section 11.08 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first Class mail, postage prepaid, or by express delivery service to Standard &
Poor's, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇
▇▇▇▇▇▇▇; ▇▇▇▇▇, Inc., ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇; and ▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgage Monitoring Group.
-93-
Section 11.09 Further Assurances.
Notwithstanding any other provision of this Agreement, neither the
Regular Certificateholders nor the Trustee shall have any obligation to consent
to any amendment or modification of this Agreement unless they have been
provided reasonable security or indemnity against their out-of-pocket expenses
(including reasonable attorneys' fees) to be incurred in connection therewith.
Section 11.10 Benefits of Agreement.
Nothing in this Agreement or in the Certificates, expressed or implied,
shall give to any Person, other than the Certificateholders and the parties
hereto and their successors hereunder, any benefit or any legal or equitable
right, remedy or claim under this Agreement, except that (i) the Custodian is an
express third-party beneficiary of this Agreement for purposes of Section 8.05
and (ii) any NIMS Insurer shall be deemed a third-party beneficiary of this
Agreement to the same extent as if it were a party hereto, and the NIMS Insurer
shall have the right to enforce the provisions of this Agreement.
Section 11.11 Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by the
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
agent duly appointed in writing; and such action shall become effective when
such instrument or instruments are delivered to the Trustee, the Securities
Administrator and the Servicer. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"act" of the Certificateholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Agreement and conclusive in favor of the
Trustee and the Trust, if made in the manner provided in this Section 11.11.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other action by any Certificateholder shall bind every future Holder
of such Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the Trustee or the
Trust in reliance thereon, whether or not notation of such action is made upon
such Certificate.
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IN WITNESS WHEREOF, the Depositor, the Servicer, the
Securities Administrator and the Trustee have caused their names to be signed
hereto by their respective officers thereunto duly authorized, all as of the day
and year first above written.
ASSET BACKED FUNDING CORPORATION, as
Depositor
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇ FARGO HOME MORTGAGE, INC., as Servicer
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
BANK ONE, N.A., solely as Trustee and not in its
individual capacity
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Officer
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Securities Administrator
By: /s/ ▇▇▇ ▇▇▇▇▇
---------------------------
Name: ▇▇▇ ▇▇▇▇▇
Title: Vice President
[SIGNATURE PAGE TO THE POOLING AND SERVICING AGREEMENT]
STATE OF NORTH CAROLINA )
) ss.:
COUNTY OF MECKLENBURG )
On the 27th day of March, 2003 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
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
My comm. expires: ▇-▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss.:
COUNTY OF NEW YORK )
On the 24th day of March, 2003 before me, a notary public in and for
said State, personally appeared ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, known to me to be an officer of
Bank One, 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 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
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
Notary Public State of New York
Reg. No. 01DA6004466
Qualified in New York County
My Commission Expires March 23, 2006
STATE OF )
) ss.:
COUNTY OF )
On the 27th day of March, 2003 before me, a notary public in and for
said State, personally appeared ▇▇▇▇▇▇ ▇▇▇▇, known to me to be a Vice President
of ▇▇▇▇▇ Fargo Home Mortgage, Inc., a California corporation, that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said limited partnership, and acknowledged to me that such limited
partnership executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
STATE OF MARYLAND )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the 27th day of March, 2003 before me, a notary public in
and for said State, personally appeared ▇▇▇ ▇▇▇▇▇, known to me to be a Vice
President of ▇▇▇▇▇ Fargo Bank Minnesota, National Association, a national
banking association that executed the within instrument, and also known to me to
be the person who executed it on behalf of said association, and acknowledged to
me that such 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
/s/ ▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇
Notary Public
▇▇▇▇▇▇ County
Maryland
My commission expires October 17, 2005
EXHIBIT A-1
FORM OF CLASS A-1 CERTIFICATES
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 MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2003-WF1, CLASS A-1
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2003-WF1, Class A-1 Initial Certificate Principal
Balance of this Certificate: $[ ]
Pass-Through Rate: 1.902% Servicer: ▇▇▇▇▇ Fargo Home
Mortgage, Inc.
Date of Pooling and Servicing Agreement
and Cut-off Date: March 1, 2003 Trustee: Bank One, N.A.
First Distribution Date: April 25,
2003 Securities Administrator: ▇▇▇▇▇ Fargo Bank Minnesota,
National Association
Final Scheduled Distribution Date:
December 27, 2032 CUSIP: 04542B CC 4
Closing Date: March 27, ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Original Class Certificate Principal Balance of the Class No. ___ A-1
Certificates: $34,433,000
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
A-1-1
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE SECURITIES ADMINISTRATOR, 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 Servicer, the Securities
Administrator, 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 A-1 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 A-1 Certificates the
aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
Interest will accrue on the Class A-1 Certificates during each Interest Accrual
Period at a rate equal to the lesser of (i) 1.902% and (ii) the Net WAC Rate for
the related Distribution Date.
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 a Percentage Interest
in the Class A-1 Certificates.
The Class A-1 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor, the
Servicer, the Securities Administrator, the Trustee and the rights of
A-1-2
the Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Securities Administrator and the Trustee with the consent of the
Holders of Certificates entitled to the Voting Rights identified in the
agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without coupons in
Classes and denominations representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Certificate Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Securities Administrator, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Servicer, the
Securities Administrator, the Trustee or the Certificate Registrar may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Servicer, the Securities Administrator,
the Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.
The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from the Trust Fund of all
Mortgage Loans and all property acquired in respect of such Mortgage Loans. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the Trust Fund all Mortgage Loans and all property acquired in
respect of any Mortgage Loan at a price determined as provided in the Agreement.
The exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Principal Balance of
the Mortgage Loans at the time of purchase being 10% or less of the Cut-off Date
Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the Depositor and
neither the Trustee nor the Securities Administrator assumes any 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.
A-1-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
Dated:
----------------------------
BANK ONE, N.A.,
as Trustee
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-1 Certificates referred to in the within-mentioned
Agreement.
BANK ONE, N.A.,
as Certificate Registrar
By:
--------------------------------
Authorized Signatory
Date of authentication:
-------------------
A-1-4
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the ABFC Mortgage Loan
Asset-Backed Certificates, Series 2003-WF1, Class A-1 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
A-1-5
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.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF CLASS A-2 CERTIFICATES
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.
PURSUANT TO THE AUCTION ADMINISTRATION AGREEMENT AND SWAP AGREEMENT (EACH AS
DEFINED IN THE AGREEMENT), THE HOLDER OF THIS CERTIFICATE WILL BE REQUIRED TO
SURRENDER THIS CERTIFICATE PRIOR TO THE DISTRIBUTION DATE IN MARCH 2005 TO THE
CERTIFICATE REGISTRAR FOR THE REGISTRATION OF TRANSFER TO A THIRD-PARTY
INVESTOR, AND IN EXCHANGE THEREFOR THE HOLDER OF THIS CERTIFICATE WILL RECEIVE,
TO THE EXTENT RECEIVED PURSUANT TO THE AUCTION ADMINISTRATION AGREEMENT AND THE
SWAP AGREEMENT, THE PAR PRICE (AS DEFINED IN THE AUCTION ADMINISTRATION
AGREEMENT) FOR THIS CERTIFICATE.
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.
PRIOR TO THE DISTRIBUTION DATE IN MARCH 2005, NO TRANSFER OF THIS CERTIFICATE
MAY BE MADE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT,
INCLUDING INDIVIDUAL RETIREMENT ACCOUNTS AND ANNUITIES, ▇▇▇▇▇ PLANS AND
COLLECTIVE INVESTMENT FUNDS AND SEPARATE ACCOUNTS IN WHICH SUCH PLANS, ACCOUNTS
OR ARRANGEMENTS ARE INVESTED, THAT IS SUBJECT TO THE FIDUCIARY RESPONSIBILITY
PROVISIONS 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") (EACH, A "PLAN") OR ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING
THE CLASS A-2 CERTIFICATE ON BEHALF OF, AS A NAMED FIDUCIARY OF, AS TRUSTEE OF,
OR WITH ASSETS OF A PLAN EXCEPT AS PROVIDED IN THE POOLING AND SERVICING
AGREEMENT.
A-2-1
ABFC MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2003-WF1, CLASS A-2
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2003-WF1, Class A-2 Initial Certificate Principal
Balance of this Certificate: $[ ]
Pass-Through Rate: Variable Servicer: ▇▇▇▇▇ Fargo Home
Mortgage, Inc.
Date of Pooling and Servicing
Agreement and Cut-off Date:
March 1, 2003 Trustee: Bank One, N.A.
First Distribution Date:
April 25, 2003 Securities Administrator: ▇▇▇▇▇
Fargo Bank Minnesota, National
Association
Final Scheduled Distribution Date:
December 27, 2032 CUSIP: 04542B CD 2
Closing Date: March 27, ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Original Class Certificate Principal Balance of the Class No. __
A-2 Certificates: $216,850,000
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE SECURITIES ADMINISTRATOR, 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 Servicer, the Securities
Administrator, 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 the related Distribution
Date (the "Record Date"); provided, however, that if any such
A-2-2
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, 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.
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 the
aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
The Class A-2 Certificates will accrue interest at a fixed rate of 1.982% for
the Interest Accrual Period relating to each Distribution Date through the
Distribution Date occurring in March 2005 and will accrue interest for the
Interest Accrual Periods relating to each Distribution Date occurring after the
Distribution Date in March 2005 at a rate equal to the lesser of [(i) the lesser
of (a) LIBOR plus 0.75% per annum (or LIBOR plus 1.125% per annum, after the
Optional Termination Date) and (b) the Maximum Cap Rate for the related
Distribution Date, and (ii) the Net WAC Rate for the related Distribution Date.]
Pursuant to the Auction Administration Agreement and the Swap Agreement (each as
defined in the Agreement), the Holder of this Certificate will be required to
surrender this Certificate prior to the Distribution Date in March 2005 to the
Certificate Registrar for registration of transfer to a third-party investor,
and in exchange therefor the holder of this Certificate will receive, to the
extent received pursuant to the Auction Administration Agreement and the Swap
Agreement, the Par Price (as defined in the Auction Administration Agreement)
for this Certificate.
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 a Percentage Interest
in the Class A-2 Certificates.
The Class A-2 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor, the
Servicer, the Securities Administrator, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Securities Administrator 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
A-2-3
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without coupons in
Classes and denominations representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Certificate Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Securities Administrator, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Servicer, the
Securities Administrator, the Trustee or the Certificate Registrar may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Servicer, the Securities Administrator,
the Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.
The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from the Trust Fund of all
Mortgage Loans and all property acquired in respect of such Mortgage Loans. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the Trust Fund all Mortgage Loans and all property acquired in
respect of any Mortgage Loan at a price determined as provided in the Agreement.
The exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Principal Balance of
the Mortgage Loans at the time of purchase being 10% or less of the Cut-off Date
Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the Depositor and
neither the Trustee nor the Securities Administrator assumes any 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.
A-2-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
Dated:
----------------------------
BANK ONE, N.A.,
as Trustee
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-2 Certificates referred to in the within-mentioned
Agreement.
BANK ONE, N.A.,
as Certificate Registrar
By:
---------------------------------
Authorized Signatory
Date of authentication:
-------------------
A-2-5
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the ABFC Mortgage Loan
Asset-Backed Certificates, Series 2003-WF1, Class A-2 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
A-2-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of _______________________________, account
number__________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.
A-2-7
EXHIBIT C-1
FORM OF CLASS R CERTIFICATES
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE "RESIDUAL
INTEREST" IN FOUR SEPARATE "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CLASS R CERTIFICATE IS SUBORDINATE TO THE 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 MAY BE MADE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT, INCLUDING INDIVIDUAL RETIREMENT ACCOUNTS AND ANNUITIES,
▇▇▇▇▇ PLANS AND COLLECTIVE INVESTMENT FUNDS AND SEPARATE ACCOUNTS IN WHICH SUCH
PLANS, ACCOUNTS OR ARRANGEMENTS ARE INVESTED, THAT IS SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS 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") (EACH, A "PLAN") OR ANY PERSON WHO IS DIRECTLY OR
INDIRECTLY PURCHASING THE CLASS R CERTIFICATE ON BEHALF OF, AS A NAMED FIDUCIARY
OF, AS TRUSTEE OF, OR WITH ASSETS OF A PLAN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A FORM OF ERISA REPRESENTATION AND
A RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT AND (1) SUCH TRANSFEREE IS NOT (A) THE
UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY
C-1-1
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"),
(D) AN AGENT OF A DISQUALIFIED ORGANIZATION OR (E) ANY OTHER ENTITY IDENTIFIED
AS A DISQUALIFIED ORGANIZATION UNDER THE CODE 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 OF ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CLASS R
CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED
ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF A CLASS R CERTIFICATE BY
ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE
PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS OF SECTION 5.02(d) OF THE
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.
C-1-2
ABFC MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2003-WF1, CLASS R
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2003-WF1, Class R Percentage Interest: 100%
Date of Pooling and Servicing Servicer: ▇▇▇▇▇ Fargo Home
Agreement and Cut-off Date: Mortgage, Inc.
March 1, 2003
First Distribution Date: Trustee: Bank One, N.A.
April 25, 2003
Maturity Date: N/A Securities Administrator: ▇▇▇▇▇
Fargo Bank Minnesota,
National Association
Closing Date: March 27, 2003 No. ___
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE SECURITIES ADMINISTRATOR, THE TRUSTEE OR
ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________________ is the registered owner of a
Percentage Interest set forth above in that certain beneficial ownership
interest evidenced by all the Class R Certificates in the Trust Fund created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Servicer, the Securities Administrator 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 R Certificates on such Distribution Date
pursuant to the Agreement.
All distributions to the Holder of this Certificate under the Agreement will be
made or caused to be made by or on behalf of the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Certificate Registrar in writing at least
five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class R Certificates the
aggregate Percentage Interest of which is in excess of a 66% Percentage Interest
of the Class R Certificates, or by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made
C-1-3
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 R Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from the
Collection Account and the Distribution Account may be made from time to time
for purposes other than distributions to Certificateholders, such purposes
including reimbursement of advances made, or certain expenses incurred, with
respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor, the
Servicer, the Securities Administrator, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Securities Administrator 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 Class R 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 Trustee shall require, in order to assure compliance with such laws, either
(i) in the case of a transfer made in reliance on Rule 144A under the 1933 Act,
that the proposed transferee delivers to the Trustee a completed investment
letter in substantially the form attached to the Agreement as Exhibit J-2, or
(ii) in the case of any other transfer, that the Certificateholder desiring to
effect the transfer and such Certificateholder's prospective transferee each
execute a representation letter in substantially the forms of Exhibit L and
Exhibit J-1 attached to the Agreement, respectively, certifying to the Depositor
and the Trustee the facts surrounding the transfer as described in Section 5.02
of the Agreement, or that the Depositor and the Trustee shall require an Opinion
of Counsel satisfactory to them that such transfer may be made without such
registration or qualification, which Opinion of Counsel shall not be an expense
of the Depositor, the Securities Administrator, the Trustee or the Certificate
Registrar, in their respective capacities as such. None of the Depositor, the
Securities Administrator, the Certificate Registrar nor 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 Securities Administrator, the Depositor, the Certificate Registrar,
the Servicer, and any Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
C-1-4
The Trustee shall, as a condition to registration of the transfer, require
delivery to it, in form and substance satisfactory to it, an affidavit in the
form of Exhibit K-1 attached to the Agreement executed by 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.
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 or Section 4975 of the Code 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 four separate REMICs or cause the imposition of a tax
upon the Trust.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Certificate Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Securities Administrator, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Servicer, the
Securities Administrator, the Trustee or the Certificate Registrar may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Servicer, the Securities Administrator,
the Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.
The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from the Trust Fund of all
Mortgage Loans and all property acquired in respect of such Mortgage Loans. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the Trust Fund all Mortgage Loans and all property acquired in
respect of any Mortgage Loan at a price determined as provided in the Agreement.
The exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Principal Balance of
the Mortgage Loans at the time of purchase being 10% or less of the Cut-off Date
Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the Depositor and
neither the Trustee nor the Securities Administrator assumes any 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.
C-1-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
Dated:
-------------------------
BANK One, N.A.,
as Trustee
By:
------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R Certificates referred to in the within-mentioned
Agreement.
Dated:
-------------------------
BANK ONE, N.A.,
as Certificate Registrar
By:
------------------------------
Authorized Signatory
C-1-6
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the ABFC Mortgage Loan
Asset-Backed Certificates, Series 2003-WF1, Class R 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
C-1-7
EXHIBIT C-2
FORM OF CLASS M-1 CERTIFICATES
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-1 AND CLASS
A-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.
THE CLASS M-1 CERTIFICATES ARE ONLY OFFERED FOR SALE, AND ARE ONLY TRANSFERABLE
TO PLAN INVESTORS IF AN EXEMPTION FROM THE PROHIBITED TRANSACTION RULES OF ERISA
AND THE CODE APPLIES. EACH PURCHASER OF A CLASS M-1 CERTIFICATE, OTHER THAN THE
INITIAL PURCHASER OF THE CLASS M-1 CERTIFICATE, BY VIRTUE OF ITS PURCHASE OF
SUCH CERTIFICATE, WILL BE DEEMED TO HAVE REPRESENTED EITHER THAT IT IS NOT A
PLAN INVESTOR OR THAT AN EXEMPTION FROM THE PROHIBITED TRANSACTION RULES OF
ERISA AND THE CODE APPLIES TO THE ACQUISITION, HOLDING, AND RESALE OF SUCH
CERTIFICATE AND TRANSACTIONS IN CONNECTION WITH THE SERVICING, MANAGEMENT AND
OPERATION OF THE TRUST.
C-2-1
ABFC MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2003-WF1, CLASS M-1
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2003-WF1, Class M-1 Initial Certificate Principal
Balance of this Certificate: $[ ]
Pass-Through Rate: Variable
Servicer: ▇▇▇▇▇ Fargo Home
Mortgage, Inc.
Date of Pooling and Servicing
Agreement and Cut-off Date:
March 1, 2003 Trustee: Bank One, N.A.
First Distribution Date: Securities Administrator: ▇▇▇▇▇
▇▇▇▇▇ 25, 2003 Fargo Bank Minnesota, National
Association
Final Scheduled Distribution Date:
December 27, 2032 CUSIP: 04542B CE 0
Closing Date: March 27, ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Original Class Certificate No. ___
Principal Balance of the Class M-1
Certificates as of the Closing
Date: $14,609,000
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE SECURITIES ADMINISTRATOR, THE TRUSTEE OR
ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a Percentage
Interest (obtained by dividing the Initial Certificate Principal Balance of this
Certificate by the Original Class Certificate Principal Balance of the Class M-1
Certificates) in that certain beneficial ownership interest evidenced by all the
Class M-1 Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Asset
Backed Funding Corporation (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Servicer, the Securities
Administrator 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.
C-2-2
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 the related Distribution
Date (the "Record 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, 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.
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 the
aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
The Class M-1 Pass-Through Rate for the first Interest Accrual Period will be
2.53063% per annum. For any subsequent Interest Accrual Period, a per annum rate
equal to the lesser of (i) the lesser of (a) LIBOR plus 0.72% per annum (or
LIBOR plus 1.080% per annum, after the Optional Termination Date) and (b) the
Maximum Cap Rate for the related Distribution Date, and (ii) the Net WAC Rate
for the related Distribution Date.
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 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-1 and Class
A-2 Certificates as described in the Pooling and Servicing Agreement referred to
herein.
The Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor, the
Servicer, the Securities Administrator, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Securities Administrator 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.
C-2-3
The Certificates are issuable in fully registered form only without coupons in
Classes and denominations representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Certificate Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Securities Administrator, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Servicer, the
Securities Administrator, the Trustee or the Certificate Registrar may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Servicer, the Securities Administrator,
the Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.
The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from the Trust Fund of all
Mortgage Loans and all property acquired in respect of such Mortgage Loans. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the Trust Fund all Mortgage Loans and all property acquired in
respect of any Mortgage Loan at a price determined as provided in the Agreement.
The exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Principal Balance of
the Mortgage Loans at the time of purchase being 10% or less of the Cut-off Date
Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the Depositor and
neither the Trustee nor the Securities Administrator assumes any 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.
C-2-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
Dated: _________________________
BANK ONE, N.A.,
as Trustee
By:
------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class M-1 Certificates referred to in the within-mentioned
Agreement.
BANK ONE, N.A.,
as Certificate Registrar
By:
-------------------------------
Authorized Signatory
Date of authentication:
-------------------
C-2-5
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the ABFC Mortgage Loan
Asset-Backed Certificates, Series 2003-WF1, Class A-1 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
C-2-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of _______________________________, account
number__________________________________, ______________________________________
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.
C-2-7
EXHIBIT C-3
FORM OF CLASS M-2 CERTIFICATES
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-1, CLASS A-2
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.
THE CLASS M-2 CERTIFICATES ARE ONLY OFFERED FOR SALE, AND ARE ONLY TRANSFERABLE
TO PLAN INVESTORS IF AN EXEMPTION FROM THE PROHIBITED TRANSACTION RULES OF ERISA
AND THE CODE APPLIES. EACH PURCHASER OF A CLASS M-2 CERTIFICATE, OTHER THAN THE
INITIAL PURCHASER OF THE CLASS M-2 CERTIFICATE, BY VIRTUE OF ITS PURCHASE OF
SUCH CERTIFICATE, WILL BE DEEMED TO HAVE REPRESENTED EITHER THAT IT IS NOT A
PLAN INVESTOR OR THAT AN EXEMPTION FROM THE PROHIBITED TRANSACTION RULES OF
ERISA AND THE CODE APPLIES TO THE ACQUISITION, HOLDING, AND RESALE OF SUCH
CERTIFICATE AND TRANSACTIONS IN CONNECTION WITH THE SERVICING, MANAGEMENT AND
OPERATION OF THE TRUST.
C-3-1
ABFC MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2003-WF1, CLASS M-2
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2003-WF1, Class M-2 Initial Certificate Principal
Balance of this Certificate: $[ ]
Pass-Through Rate: Variable Servicer: ▇▇▇▇▇ Fargo Home
Mortgage, Inc.
Date of Pooling and Servicing
Agreement and Cut-off Date:
March 1, 2003 Trustee: Bank One, N.A.
First Distribution Date: Securities Administrator: ▇▇▇▇▇
▇▇▇▇▇ 25, 2003 Fargo Bank Minnesota, National
Association
Final Scheduled Distribution Date:
December 27, 2032 CUSIP: 04542B CF 7
Closing Date: March 27, ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Original Class Certificate No. ___
Principal Balance of the Class M-2
Certificates as of the Closing
Date: $11,688,000
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE SECURITIES ADMINISTRATOR, 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 Servicer, the Securities
Administrator 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.
C-3-2
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 the related Distribution
Date (the "Record 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, 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.
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 the
aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
The Class M-2 Pass-Through Rate for the first Interest Accrual Period will be
3.21063% per annum. For any subsequent Interest Accrual Period, a per annum rate
equal to the lesser of: (i) the lesser of (a) LIBOR plus 1.40% per annum (or
LIBOR plus 2.10% per annum, after the Optional Termination Date) and (b) the
Maximum Cap Rate for the related Distribution Date, and (ii) the Net WAC Rate
for the related Distribution Date.
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 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-1, Class A-2
and Class M-1 Certificates as described in the Pooling and Servicing Agreement
referred to herein.
The Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor, the
Servicer, the Securities Administrator, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Securities Administrator 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.
C-3-3
The Certificates are issuable in fully registered form only without coupons in
Classes and denominations representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Certificate Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Securities Administrator, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Servicer, the
Securities Administrator, the Trustee or the Certificate Registrar may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Servicer, the Securities Administrator,
the Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.
The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from the Trust Fund of all
Mortgage Loans and all property acquired in respect of such Mortgage Loans. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the Trust Fund all Mortgage Loans and all property acquired in
respect of any Mortgage Loan at a price determined as provided in the Agreement.
The exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Principal Balance of
the Mortgage Loans at the time of purchase being 10% or less of the Cut-off Date
Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the Depositor and
neither the Trustee nor the Securities Administrator assumes any 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.
C-3-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
Dated:____________________________
BANK ONE, N.A.,
as Trustee
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class M-2 Certificates referred to in the within-mentioned
Agreement.
BANK ONE, N.A.,
as Certificate Registrar
By:
--------------------------------
Authorized Signatory
Date of authentication:
-------------------
C-3-5
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the ABFC Mortgage Loan
Asset-Backed Certificates, Series 2003-WF1, Class M-2 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
C-3-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of _______________________________, account
number__________________________________, ______________________________________
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.
C-3-7
EXHIBIT C-4
FORM OF CLASS M-3 CERTIFICATES
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 ▇-▇, ▇▇▇▇▇
▇-▇, 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.
THE CLASS M-3 CERTIFICATES ARE ONLY OFFERED FOR SALE, AND ARE ONLY TRANSFERABLE
TO PLAN INVESTORS IF AN EXEMPTION FROM THE PROHIBITED TRANSACTION RULES OF ERISA
AND THE CODE APPLIES. EACH PURCHASER OF A CLASS M-3 CERTIFICATE, OTHER THAN THE
INITIAL PURCHASER OF THE CLASS M-3 CERTIFICATE, BY VIRTUE OF ITS PURCHASE OF
SUCH CERTIFICATE, WILL BE DEEMED TO HAVE REPRESENTED EITHER THAT IT IS NOT A
PLAN INVESTOR OR THAT AN EXEMPTION FROM THE PROHIBITED TRANSACTION RULES OF
ERISA AND THE CODE APPLIES TO THE ACQUISITION, HOLDING, AND RESALE OF SUCH
CERTIFICATE AND TRANSACTIONS IN CONNECTION WITH THE SERVICING, MANAGEMENT AND
OPERATION OF THE TRUST.
C-4-1
ABFC MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2003-WF1, CLASS M-3
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2003-WF1, Class M-3 Initial Certificate Principal
Balance of this Certificate: $[ ]
Pass-Through Rate: Variable Servicer: ▇▇▇▇▇ Fargo Home
Mortgage, Inc.
Date of Pooling and Servicing
Agreement and Cut-off Date:
March 1, 2003 Trustee: Bank One, N.A.
First Distribution Date: Securities Administrator: ▇▇▇▇▇
▇▇▇▇▇ 25, 2003 Fargo Bank Minnesota, National
Association
Final Scheduled Distribution Date:
December 27, 2032 CUSIP: 04542B CG 5
Closing Date: March 27, ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Original Class Certificate No. ___
Principal Balance of the Class M-3
Certificates as of the Closing
Date: $10,226,000
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE SECURITIES ADMINISTRATOR, THE TRUSTEE OR
ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ___________ is the registered owner of a Percentage Interest
(obtained by dividing the Initial Certificate Principal Balance of this
Certificate by the Original Class Certificate Principal Balance of the Class M-3
Certificates) in that certain beneficial ownership interest evidenced by all the
Class M-3 Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Asset
Backed Funding Corporation (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Servicer, the Securities
Administrator 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
C-4-2
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding the related
Distribution Date (the "Record 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, 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.
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 the
aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
The Class M-3 Pass-Through Rate for the first Interest Accrual Period will be
3.66063% per annum. For any subsequent Interest Accrual Period, a per annum rate
equal to the lesser of: (i) the lesser of (a) LIBOR plus 1.850% per annum (or
LIBOR plus 2.775% per annum, after the Optional Termination Date) and (b) the
Maximum Cap Rate for the related Distribution Date, and (ii) the Net WAC Rate
for the related Distribution Date.
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 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 ▇-▇, ▇▇▇▇▇
▇-▇, Class M-1 and Class M-2 Certificates as described in the Pooling and
Servicing Agreement referred to herein.
The Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor, the
Servicer, the Securities Administrator, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Securities Administrator 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.
C-4-3
The Certificates are issuable in fully registered form only without coupons in
Classes and denominations representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Certificate Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Securities Administrator, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Servicer, the
Securities Administrator, the Trustee or the Certificate Registrar may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Servicer, the Securities Administrator,
the Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.
The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from the Trust Fund of all
Mortgage Loans and all property acquired in respect of such Mortgage Loans. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the Trust Fund all Mortgage Loans and all property acquired in
respect of any Mortgage Loan at a price determined as provided in the Agreement.
The exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Principal Balance of
the Mortgage Loans at the time of purchase being 10% or less of the Cut-off Date
Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the Depositor and
neither the Trustee nor the Securities Administrator assumes any 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.
C-4-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
Dated:
----------------------------
BANK ONE, N.A.,
as Trustee
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class M-3 Certificates referred to in the within-mentioned
Agreement.
BANK ONE, N.A.,
as Certificate Registrar
By:
--------------------------------
Authorized Signatory
Date of authentication:
-------------------
C-4-5
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the ABFC Mortgage Loan
Asset-Backed Certificates, Series 2003-WF1, Class M-3 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
C-4-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of _______________________________, account
number__________________________________, ______________________________________
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.
C-4-7
EXHIBIT C-5
FORM OF CLASS M-4 CERTIFICATES
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 ▇-▇, ▇▇▇▇▇
▇-▇, 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.
THE CLASS M-4 CERTIFICATES ARE ONLY OFFERED FOR SALE, AND ARE ONLY TRANSFERABLE
TO PLAN INVESTORS IF AN EXEMPTION FROM THE PROHIBITED TRANSACTION RULES OF ERISA
AND THE CODE APPLIES. EACH PURCHASER OF A CLASS M-4 CERTIFICATE, OTHER THAN THE
INITIAL PURCHASER OF THE CLASS M-4 CERTIFICATE, BY VIRTUE OF ITS PURCHASE OF
SUCH CERTIFICATE, WILL BE DEEMED TO HAVE REPRESENTED EITHER THAT IT IS NOT A
PLAN INVESTOR OR THAT AN EXEMPTION FROM THE PROHIBITED TRANSACTION RULES OF
ERISA AND THE CODE APPLIES TO THE ACQUISITION, HOLDING, AND RESALE OF SUCH
CERTIFICATE AND TRANSACTIONS IN CONNECTION WITH THE SERVICING, MANAGEMENT AND
OPERATION OF THE TRUST.
C-5-1
ABFC MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2003-WF1, CLASS M-4
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2003-WF1, Class M-4 Initial Certificate Principal
Balance of this Certificate: $[ ]
Pass-Through Rate: Variable Servicer: ▇▇▇▇▇ Fargo Home
Mortgage, Inc.
Date of Pooling and Servicing Trustee: Bank One, N.A.
Agreement and Cut-off Date:
March 1, 2003
First Distribution Date: Securities Administrator: ▇▇▇▇▇
▇▇▇▇▇ 25, 2003 Fargo Bank Minnesota, National
Association
Final Scheduled Distribution Date:
December 27, 2032 CUSIP: 04542B CH 3
Closing Date: March 27, ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Original Class Certificate No. ___
Principal Balance of the Class M-4
Certificates as of the Closing
Date: $2,922,000
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE SECURITIES ADMINISTRATOR, THE TRUSTEE OR
ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ___________ is the registered owner of a Percentage Interest
(obtained by dividing the Initial Certificate Principal Balance of this
Certificate by the Original Class Certificate Principal Balance of the Class M-4
Certificates) in that certain beneficial ownership interest evidenced by all the
Class M-4 Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Asset
Backed Funding Corporation (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Servicer, the Securities
Administrator 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
C-5-2
Day immediately preceding the related Distribution Date (the "Record 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, 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.
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 the
aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
The Class M-4 Pass-Through Rate for the first Interest Accrual Period will be
3.96063% per annum. For any subsequent Interest Accrual Period, a per annum rate
equal to the lesser of: (i) the lesser of (a) LIBOR plus 2.150% per annum (or
LIBOR plus 3.225% per annum, after the Optional Termination Date) and (b) the
Maximum Cap Rate for the related Distribution Date, and (ii) the Net WAC Rate
for the related Distribution Date.
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 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 ▇-▇, ▇▇▇▇▇
▇-▇, Class M-1, Class M-2 and Class M-3 Certificates as described in the Pooling
and Servicing Agreement referred to herein.
The Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor, the
Servicer, the Securities Administrator, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Securities Administrator 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
C-5-3
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Certificate Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Securities Administrator, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Servicer, the
Securities Administrator, the Trustee or the Certificate Registrar may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Servicer, the Securities Administrator,
the Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.
The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from the Trust Fund of all
Mortgage Loans and all property acquired in respect of such Mortgage Loans. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the Trust Fund all Mortgage Loans and all property acquired in
respect of any Mortgage Loan at a price determined as provided in the Agreement.
The exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Principal Balance of
the Mortgage Loans at the time of purchase being 10% or less of the Cut-off Date
Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the Depositor and
neither the Trustee nor the Securities Administrator assumes any 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.
C-5-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
Dated: ____________________________
BANK ONE, N.A.,
as Trustee
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class M-4 Certificates referred to in the within-mentioned
Agreement.
BANK ONE, N.A.,
as Certificate Registrar
By:
--------------------------------
Authorized Signatory
Date of authentication:
---------------------
C-5-5
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the ABFC Mortgage Loan
Asset-Backed Certificates, Series 2003-WF1, Class M-4 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
C-5-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of _______________________________, account
number__________________________________, ______________________________________
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.
C-5-7
EXHIBIT C-6
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 IN
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 MAY BE MADE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT, INCLUDING INDIVIDUAL RETIREMENT ACCOUNTS AND ANNUITIES,
▇▇▇▇▇ PLANS AND COLLECTIVE INVESTMENT FUNDS AND SEPARATE ACCOUNTS IN WHICH SUCH
PLANS, ACCOUNTS OR ARRANGEMENTS ARE INVESTED, THAT IS SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS 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") (EACH, A "PLAN") OR ANY PERSON WHO IS DIRECTLY OR
INDIRECTLY PURCHASING THE CLASS CE CERTIFICATE ON BEHALF OF, AS A NAMED
FIDUCIARY OF, AS TRUSTEE OF, OR WITH ASSETS OF A PLAN.
C-6-1
ABFC MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2003-WF1, CLASS CE
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2003-WF1, Class CE Percentage Interest: 100%
Date of Pooling and Servicing Servicer: ▇▇▇▇▇ Fargo Home
Agreement and Cut-off Date: Mortgage, Inc.
March 1, 2003
First Distribution Date: Trustee: Bank One, N.A.
April 25, 2003
Final Scheduled Distribution Date: Securities Administrator: ▇▇▇▇▇
May 25, 2032 Fargo Bank Minnesota, National
Association
Closing Date: March 27, 2003 No. ___
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE SECURITIES ADMINISTRATOR, 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
Servicer, the Securities Administrator 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 the
aggregate Percentage Interest of which is in excess of a 66% Percentage Interest
of the 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.
C-6-2
This Certificate is one of a duly authorized issue of Certificates designated as
ABFC Mortgage Loan Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing the Percentage
Interest specified on the face hereof.
The Class CE Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from the
Collection Account and the Distribution Account may be made from time to time
for purposes other than distributions to Certificateholders, such purposes
including reimbursement of advances made, or certain expenses incurred, with
respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor, the
Servicer, the Trustee and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Servicer, the Securities
Administrator 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 Class CE 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 Trustee shall require, in order to assure compliance with such laws, either
(i) in the case of a transfer made in reliance on Rule 144A under the 1933 Act,
that the proposed transferee delivers to the Trustee a completed investment
letter in substantially the form attached to the Agreement as Exhibit J-2, or
(ii) in the case of any other transfer, that the Certificateholder desiring to
effect the transfer and such Certificateholder's prospective transferee each
execute a representation letter in substantially the forms of Exhibit L and
Exhibit J-1 attached to the Agreement, respectively, certifying to the Depositor
and the Trustee the facts surrounding the transfer as described in Section 5.02
of the Agreement, or that the Depositor and the Trustee shall require an Opinion
of Counsel satisfactory to them that such transfer may be made without such
registration or qualification, which Opinion of Counsel shall not be an expense
of the Depositor, the Securities Administrator, the Trustee or the Certificate
Registrar, in their respective capacities as such. None of the Depositor, the
Securities Administrator, the Certificate Registrar nor 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 Securities Administrator, the Depositor, the Certificate Registrar,
Servicer and any Servicer against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
No transfer of a Certificate or any interest therein may be made to employee
benefit plans and certain other retirement plans and arrangements, including
individual retirement accounts and annuities, ▇▇▇▇▇ plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested that
C-6-3
are subject to the fiduciary responsibility provisions of ERISA and Section 4975
of the Code or any person who is directly or indirectly purchasing the
Certificate or interest therein on behalf of, as named fiduciary of, as trustee
of, or with assets of a Plan.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Securities Administrator, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Servicer, the
Securities Administrator, the Trustee or the Certificate Registrar may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Servicer, the Securities Administrator,
the Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.
The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from the Trust Fund of all
Mortgage Loans and all property acquired in respect of such Mortgage Loans. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the Trust Fund all Mortgage Loans and all property acquired in
respect of any Mortgage Loan at a price determined as provided in the Agreement.
The exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Principal Balance of
the Mortgage Loans at the time of purchase being 10% or less of the Cut-off Date
Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the Depositor and
neither the Trustee nor the Securities Administrator assumes any 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.
C-6-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
Dated:
----------------------------
BANK ONE, N.A.,
as Trustee
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class CE Certificates referred to in the within-mentioned
Agreement.
Dated: _____________________________
BANK ONE, N.A.,
as Certificate Registrar
By:
--------------------------------
Authorized Signatory
C-6-5
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the ABFC Mortgage Loan
Asset-Backed Certificates, Series 2003-WF1, Class CE 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
C-6-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of _______________________________, account
number__________________________________, ______________________________________
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.
C-6-7
EXHIBIT C-7
FORM OF CLASS P CERTIFICATES
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 MAY BE MADE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT, INCLUDING INDIVIDUAL RETIREMENT ACCOUNTS AND ANNUITIES,
▇▇▇▇▇ PLANS AND COLLECTIVE INVESTMENT FUNDS AND SEPARATE ACCOUNTS IN WHICH SUCH
PLANS, ACCOUNTS OR ARRANGEMENTS ARE INVESTED, THAT IS SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS 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") (EACH, A "PLAN") OR ANY PERSON WHO IS DIRECTLY OR
INDIRECTLY PURCHASING THE CLASS P CERTIFICATE ON BEHALF OF, AS A NAMED FIDUCIARY
OF, AS TRUSTEE OF, OR WITH ASSETS OF A PLAN.
ABFC MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2003-WF1, CLASS P
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate adjustable-rate one-
to four-family first lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2003-WF1, Class P Percentage Interest: 100%
Date of Pooling and Servicing Servicer: ▇▇▇▇▇ Fargo Home
Agreement and Cut-off Date: Mortgage, Inc.
March 1, 2003
First Distribution Date: Trustee: Bank One, N.A.
April 25, 2003
Final Scheduled Distribution Date: Securities Administrator: ▇▇▇▇▇
May 25, 2032 Fargo Bank Minnesota, National
Association
Closing Date: March 27, 2003 No. ___
C-7-1
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET BACKED
FUNDING CORPORATION, THE SERVICER, THE SECURITIES ADMINISTRATOR, 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
Servicer, the Securities Administrator and the Trustee, a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the 25th
day of each month or, if such 25th day is not a Business Day, the Business Day
immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the last Business Day of the month immediately preceding the
month in which the related Distribution Date occurs (the "Record Date"), from
Prepayment Charges and Servicer Prepayment Charge Payment Amounts in the
Distribution Account in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to the Holders of Class P Certificates on such Distribution Date pursuant to the
Agreement.
All distributions to the Holder of this Certificate under the Agreement will be
made or caused to be made by or on behalf of the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Certificate Registrar in writing at least
five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class P Certificates the
aggregate Percentage Interest of which is in excess of a 66% Percentage Interest
of the 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 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 P Certificates are limited in right of payment to Prepayment Charges
received on the Mortgage Loans and Servicer Prepayment Charge Payment Amounts,
all as more specifically set forth herein and in the Agreement. As provided in
the Agreement, withdrawals from the Collection Account and the Distribution
Account may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Depositor, the
Servicer, the Securities Administrator, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Securities Administrator 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
C-7-2
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 Class P 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 Trustee shall require, in order to assure compliance with such laws, either
(i) in the case of a transfer made in reliance on Rule 144A under the 1933 Act,
that the proposed transferee delivers to the Trustee a completed investment
letter in substantially the form attached to the Agreement as Exhibit J-2, or
(ii) in the case of any other transfer, that the Certificateholder desiring to
effect the transfer and such Certificateholder's prospective transferee each
execute a representation letter in substantially the forms of Exhibit L and
Exhibit J-1 attached to the Agreement, respectively, certifying to the Depositor
and the Trustee the facts surrounding the transfer as described in Section 5.02
of the Agreement, or that the Depositor and the Trustee shall require an Opinion
of Counsel satisfactory to them that such transfer may be made without such
registration or qualification, which Opinion of Counsel shall not be an expense
of the Depositor, the Securities Administrator, the Trustee or the Certificate
Registrar, in their respective capacities as such. None of the Depositor, the
Securities Administrator, the Certificate Registrar nor 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 Securities Administrator, the Depositor, the Certificate Registrar,
the Servicer and any Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of a Certificate or any interest therein may be made to employee
benefit plans and certain other retirement plans and arrangements, including
individual retirement accounts and annuities, ▇▇▇▇▇ plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested that are subject to the fiduciary responsibility
provisions of ERISA and Section 4975 of the Code or any person who is directly
or indirectly purchasing the Certificate or interest therein on behalf of, as
named fiduciary of, as trustee of, or with assets of a Plan.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Certificate Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Securities Administrator, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Servicer, the
Securities Administrator, the Trustee or the Certificate Registrar may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Servicer, the Securities Administrator,
the Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.
The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from the Trust Fund of all
Mortgage Loans and all property acquired in respect of such Mortgage Loans. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the Trust Fund all Mortgage Loans and all property acquired in
respect of any Mortgage Loan at a price determined as provided in the Agreement.
The exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Principal Balance of
the Mortgage Loans at the time of purchase being 10% or less of the Cut-off Date
Aggregate Principal Balance.
C-7-3
The recitals contained herein shall be taken as statements of the Depositor and
neither the Trustee nor the Securities Administrator assumes any 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.
C-7-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
Dated: ____________
BANK ONE, N.A.,
as Trustee
By:
-------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class P Certificates referred to in the within-mentioned
Agreement.
Dated:_____________
BANK ONE, N.A.,
as Certificate Registrar
By:
--------------------------------
Authorized Signatory
C-7-5
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
________________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the ABFC Mortgage Loan
Asset-Backed Certificates, Series 2003-WF1 Class P 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
C-7-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of _____________________, account number_______________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.
C-7-7
EXHIBIT D
MORTGAGE LOAN SCHEDULE
Copy On File With Securities Administrator
D-1
EXHIBIT E
FORM OF REQUEST FOR RELEASE
To: ▇▇▇▇▇ Fargo Bank Minnesota, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Re: Custody Agreement dated as of March 1, 2003 between Bank One,
N.A., as Trustee and ▇▇▇▇▇ Fargo Bank Minnesota, N.A., as
Custodian
In connection with the administration of the Mortgage Loans held by you as
Custodian for the Trustee pursuant to the above-captioned Custody Agreement, we
request the release, of the Custodian's Mortgage File for the Mortgage Loan
described below.
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 Minnesota, N.A., as Custodian
Please acknowledge the execution of the above request by your signature and date
below:
---------------------------------- ------------------------------------
Signature Date
Documents returned to Custodian:
---------------------------------- ------------------------------------
Custodian Date
E-1
EXHIBIT F-1
FORM OF CUSTODIAN'S INITIAL CERTIFICATION
March 27, 2003
Bank One, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Global Corporate Trust Services
Re: The Custody Agreement, dated as of March 1, 2003, among Bank One, N.A.,
the Trustee of the Mortgage Loans (the "Trustee"), ▇▇▇▇▇ Fargo Bank
Minnesota, N.A. (the "Custodian"), ▇▇▇▇▇ Fargo Home Mortgage, Inc. (the
"Servicer").
Ladies and Gentlemen:
In accordance with the provisions of Sections 3.2 and 3.3 of the above
referenced Custody Agreement, the undersigned, as the Custodian, hereby
certifies that it has received the related Mortgage Note with respect to each
Mortgage Loan identified on the Mortgage Loan Schedule, furthermore, the
Custodian certifies that as to each Mortgage Loan listed on the Mortgage Loan
Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan listed
on the attachment hereto) it has reviewed the related original Mortgage Note and
has determined that (subject to the exceptions set forth in the attached
Exceptions Report) (i) all Mortgage Notes required to be delivered to it
pursuant to the Custody Agreement are in its possession; (ii) such Mortgage
Notes have been reviewed by it and appear regular on their face, related to such
Mortgage Loan and in the form prescribed in the review procedures pursuant to
Sections 3.2 and 3.3 and Exhibit G-1 of the Custody Agreement; and (iii) each
Mortgage Note has been endorsed as provided in Section 3.1 of the Custody
Agreement, except as noted on the attached Exception Report.
▇▇▇▇▇ FARGO BANK MINNESOTA, N.A.,
as Custodian
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
F-1-1
EXHIBIT F-2
FORM OF CUSTODIAN'S INTERIM CERTIFICATION
[Date]
Bank One, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Global Corporate Trust Services
Re: The Custody Agreement, dated as of March 1, 2003, among Bank One, N.A.,
the Trustee of the Mortgage Loans (the "Trustee"), ▇▇▇▇▇ Fargo Bank
Minnesota, N.A. (the "Custodian"), ▇▇▇▇▇ Fargo Home Mortgage, Inc. (the
"Servicer").
Ladies and Gentlemen:
In accordance with the provisions of Sections 3.2 and 3.3 of the above
referenced Custody Agreement, the undersigned, as the Custodian, hereby
certifies that it has received a Mortgage File with respect to each Mortgage
Loan identified on the Mortgage Loan Schedule, furthermore, the Custodian
certifies that as to each Mortgage Loan listed on the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or any Mortgage Loan listed on the
attachment hereto) it has reviewed the Mortgage Files and has determined that
(subject to the exceptions set forth in the attached Exceptions Report) (i) all
documents required to be delivered to it pursuant to the Custody Agreement are
in its possession; (ii) such documents have been reviewed by it and appear
regular on their face, related to such Mortgage Loan and in the form prescribed
in the review procedures pursuant to Sections 3.2 and 3.3 and Exhibit G-2 of the
Custody Agreement; (iii) based on its examination and only as to the foregoing
documents, the Mortgage Loan number, the Mortgagor's name, the address of the
Mortgaged Property and the original amount of the Mortgage Note set forth in the
Mortgage Loan Schedule respecting such Mortgage Loan are correct; and (iv) each
Mortgage Note has been endorsed as provided in Section 3.1 of the Custody
Agreement, except as noted on the attached Exception Report.
▇▇▇▇▇ FARGO BANK MINNESOTA, N.A.,
as Custodian
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
F-2-1
EXHIBIT F-3
FORM OF CUSTODIAN'S FINAL CERTIFICATION
[Date]
Bank One, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Global Corporate Trust Services
Re: The Custody Agreement, dated as of March 1, 2003, among Bank One, N.A.,
the Trustee of the Mortgage Loans (the "Trustee"), ▇▇▇▇▇ Fargo Bank
Minnesota, N.A. (the "Custodian"), ▇▇▇▇▇ Fargo Home Mortgage, Inc. (the
"Servicer").
Ladies and Gentlemen:
In accordance with the provisions of Sections 3.2 and 3.3 of the above
referenced Custody Agreement, the undersigned, as the Custodian, hereby
certifies that it has received a Mortgage File with respect to each Mortgage
Loan identified on the Mortgage Loan Schedule, furthermore, the Custodian
certifies that as to each Mortgage Loan listed on the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or any Mortgage Loan listed on the
attachment hereto) it has reviewed the Mortgage Files and has determined that
(subject to the exceptions set forth in the attached Exceptions Report) (i) all
documents required to be delivered to it pursuant to the Custody Agreement are
in its possession; (ii) such documents have been reviewed by it and appear
regular on their face, related to such Mortgage Loan and in the form prescribed
in the review procedures pursuant to Sections 3.2 and 3.3 and Exhibit G-2 of the
Custody Agreement; (iii) based on its examination and only as to the foregoing
documents, the Mortgage Loan number, the Mortgagor's name, the address of the
Mortgaged Property and the original amount of the Mortgage Note set forth in the
Mortgage Loan Schedule respecting such Mortgage Loan are correct; and (iv) each
Mortgage Note has been endorsed as provided in Section 3.1 of the Custody
Agreement, except as noted on the attached Exception Report.
▇▇▇▇▇ FARGO BANK MINNESOTA, N.A.,
as Custodian
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
F-3-1
EXHIBIT G
MORTGAGE LOAN PURCHASE AGREEMENT
Copy On File With Securities Administrator
G-1
EXHIBIT H
AFFIDAVIT OF LOST NOTE
I, ________________ being duly sworn, do hereby state under oath that:
1. I as _______________ [title] of ▇▇▇▇▇ Fargo Home Mortgage, Inc.,
(the "Seller"), am authorized to make this Affidavit on behalf of the
seller.
2. The Seller is the current payee under the following described mortgage
note (the Note"):
Loan No: [LoanNumber]
Borrower(s): [BorrowersNames]
Original Amount: $[LoanAmt]
Rate of Interest: [InterestRate]%
Address of Mortgaged Property: [Address], [City], [State] [Zip]
3. The Note was not located after a thorough and diligent search.
4. Attached hereto is a true and correct copy of the Note, endorsed in
blank by Lender.
5. The Seller hereby agrees to indemnify and hold harmless, its
successors, and assigns, against any loss, from the unavailability of the
original Note, provided that in no event shall the Seller be liable for special
or consequential damages with respect to the foregoing, including but not
limited to, any claim for lost profits.
EXECUTED THIS ___ day of ______, on
behalf of the Seller by:
-------------------------------------
[Name]
On ____ day of _____________, before me appeared ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ to me
personally known, who being, duly sworn did say that she is the Vice President
of ▇▇▇▇▇ Fargo Home Mortgage Inc., and that said Affidavit of Lost Note was
signed and sealed on behalf of such corporation and said ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
acknowledged this instrument to be the free act of deed of said corporation.
--------------------------------------
Notary Public in and for the State of Maryland
My Commission expires: __________________
H-1
EXHIBIT I
FORM OF ERISA REPRESENTATION
Asset Backed Funding Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Bank One, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ - ▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Global Corporate Trust Services
Re: ABFC Mortgage Loan Asset-Backed Funding Certificates,
Series 2003-WF1
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") dated as of March 1, 2003, among Asset
Backed Funding Corporation, as depositor (the "Depositor"), ▇▇▇▇▇ Fargo Home
Mortgage, Inc., as servicer, ▇▇▇▇▇ Fargo Bank Minnesota, National Association,
as securities administrator (the "Securities Administrator"), and Bank One,
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"), 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 A-2 (prior to the Distribution Date in
March 2005), Class P, Class R, or Class CE Certificates) is an insurance company
which is purchasing such Certificates with funds contained in an "insurance
company general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60") and that the purchase and
holding of such Certificates are covered under Sections I and III of PTCE 95-60
or (y) (except in the case of a Class R Certificate) shall deliver to the
Certificate Registrar and the Depositor an opinion of counsel (a "Benefit Plan
Opinion") satisfactory to the Certificate Registrar, and upon which the
Certificate Registrar and the Depositor shall be entitled to rely, to the effect
that the purchase or holding of such Certificate by the Transferee will not
result in the assets of the Trust Fund being deemed to be plan assets, will not
be subject to the prohibited transaction provisions of ERISA or the Code, and
will not subject the Trustee, the Securities Administrator 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, the Securities Administrator or the Depositor.
Capitalized terms used but not defined herein shall have the meanings ascribed
to such terms in the Agreement.
I-1
IN WITNESS WHEREOF, the Transferee has executed this certificate.
---------------------------------
[Transferee]
By:
------------------------------
Name:
Title:
I-2
EXHIBIT J-1
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
Asset Backed Funding Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Bank One, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ - ▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Global Corporate Trust Services
Re: ABFC Mortgage Loan Asset-Backed Certificates, Series 2003-WF1
Ladies and Gentlemen:
In connection with our acquisition of the ABFC Mortgage Loan Asset-Backed
Certificates, Series 2003-WF1 (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
J-1-1
EXHIBIT J-2
FORM OF INVESTMENT LETTER (RULE 144A)
[DATE]
Asset Backed Funding Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Bank One, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ - ▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Global Corporate Trust Services
Re: ABFC Mortgage Loan Asset-Backed Certificates, Series 2003-WF1
Ladies and Gentlemen:
In connection with our acquisition of the ABFC Mortgage Loan Asset-Backed
Certificates, Series 2003-WF1 (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, and who executes a certification in the form of this letter and a
certification in the form of either Annex 1 or Annex 2 attached hereto, or (ii)
pursuant to another exemption from registration under the Securities Act.
Very truly yours,
[NAME OF TRANSFEREE]
By:
------------------------------
Authorized Officer
▇-▇-▇
▇▇▇▇▇ ▇ ▇▇ ▇▇▇▇▇▇▇ ▇-▇
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 ("Rule 144A") under
the Securities Act of 1933, as amended (the "1933 Act") 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
as defined in Section 3(a)(2) of the 1933 Act 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 as of a date not more than 16 months preceding the
date of this certification in the case of a U.S. bank, and not more
than 18 months preceding the date of this certification in the case of
a foreign bank or equivalent institution, a copy of which financial
statements are 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 referenced in Section
3(a)(5)(A) of the 1933 Act, which is supervised and examined by a
State or Federal authority having supervisory authority 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, as of a date not more than 16 months preceding the date
of this certification in the case of a U.S. bank, and not more than
18 months preceding the date of this certification in the case of a
foreign bank or equivalent institution, a copy of which financial
statements are attached hereto.
___ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934, as amended.
___ Insurance Company. The Buyer is an insurance company, as defined
in Section 2(13) of the 1933 Act, 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.
--------
(1) Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
J-2-2
___ 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.
___ Other. (Please supply a brief description of the entity and a
cross-reference to the paragraph and subparagraph under subsection
(a)(1) of Rule 144A pursuant to which it qualifies. Note that
registered investment companies should complete Annex 2 rather than
this Annex 1.)
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
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) 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. For purposes of
determining the aggregate amount of securities owned and/or invested on a
discretionary basis by the Buyer, the Buyer did not include any of the
securities referred to in this paragraph.
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. Will the Buyer be purchasing the Certificates ______ ______
only for the Buyer's own account? YES NO
If the answer to the foregoing question is "NO," the Buyer agrees that, in
connection with any purchase of securities sold to the Buyer for the account of
a third party (including any separate account) in reliance on Rule 144A, the
Buyer will only purchase for the account of a third party that at the time is a
"qualified institutional buyer" within the meaning of Rule 144A. In addition,
the Buyer agrees that the Buyer will not purchase securities for a third party
unless the Buyer has obtained a current representation letter from such third
party or taken other appropriate steps
J-2-3
contemplated by Rule 144A to conclude that such third party independently meets
the definition of "qualified institutional buyer" set forth in Rule 144A.
vii. 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.
[SIGNATURE ON FOLLOWING PAGE]
J-2-4
__________________________________
Print Name of Buyer
By:
-------------------------------
Name:
Title:
Date:
-----------------------------
▇-▇-▇
▇▇▇▇▇ ▇ ▇▇ ▇▇▇▇▇▇▇ ▇-▇
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 ("Rule 144A") under
the Securities Act of 1933, as amended (the "1933 Act") 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 (the "1940 Act") 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 in paragraph 4 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 in paragraph 4 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 in paragraph 4 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, except for a unit investment trust whose assets
consist solely of shares of one or more Registered Investment Companies
(provided that each series of a "series company," as defined in Rule 18f-2 under
the 1940 Act, shall be deemed to be a separate investment company) that have the
same investment adviser (or, in the case of unit investment trusts, the same
depositor) or investment advisers (or depositors) 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) bank deposit notes and certificates of deposit, (iii)
loan participations, (iv) repurchase agreements, (v) securities owned but
subject to a repurchase agreement and (vi) currency, interest rate and commodity
swaps. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, or owned by the Buyer's
Family of Investment Companies, the securities referred to in this paragraph
were excluded.
5. The Buyer is familiar with Rule 144A and understands that the
parties to which this certification is being made 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 I 44A.
____ ____ Will the Buyer be purchasing the Transferred Owner
Yes No Trust Certificates only for the Buyer's own account?
J-2-6
6. If the answer to the foregoing question is "NO," the Buyer agrees
that, in connection with any purchase of securities sold to the Buyer for the
account of a third party (including any separate account) in reliance on Rule
144A, the Buyer will only purchase for the account of a third party that at the
time is a "qualified institutional buyer" within the meaning of Rule 144A. In
addition, the Buyer agrees that the Buyer will not purchase securities for a
third party unless the buyer has obtained a current representation letter from
such third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The undersigned will notify the parties to which this certification
is made of any changes in the information and conclusions herein. Until such
notice, the Buyer's purchase of the Transferred Owner Trust Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
------------------------------------
Print Name of Buyer or Adviser
By:
---------------------------------
Name:
Title:
IF AN ADVISER:
------------------------------------
Print Name of Buyer
Date:
-------------------------------
J-2-7
EXHIBIT K
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT
ABFC MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2003-WF1
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is [an officer of] , the proposed Transferee of an
Ownership Interest in a Class R Certificates (the "Certificates") issued
pursuant to the Pooling and Servicing Agreement, (the "Agreement"), relating to
the above-referenced Certificates, among Asset Backed Funding Corporation, as
depositor, ▇▇▇▇▇ Fargo Home Mortgage, Inc., as servicer, ▇▇▇▇▇ Fargo Bank
Minnesota, National Association, as securities administrator, and Bank One,
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 Certificates to Persons that are not Permitted
Transferees; (ii) such tax will be imposed on the transferor, or, if such
Transfer is through an agent (which includes a broker, nominee or middleman) for
a Person that is not a Permitted Transferee, on the agent; and (iii) the Person
otherwise liable for the tax shall be relieved of liability for the tax if the
subsequent Transferee furnished to such Person an affidavit that such subsequent
Transferee is a Permitted Transferee and, at the time of Transfer, such Person
does not have actual knowledge that the affidavit is false.
4. The Transferee has been advised of, and understands that a tax will be
imposed on a "pass-through entity" holding the Certificates if at any time
during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
5. The Transferee has reviewed the provisions of Section 5.02(d) of the
Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificates including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(d) of the Agreement and the
restrictions noted on the face of the Certificates. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any Person to whom
the Transferee attempts to Transfer its Ownership Interest in the Certificates,
and in connection with any Transfer by a Person for whom the Transferee is
acting as nominee, trustee or agent, and the Transferee will not Transfer its
Ownership Interest or cause any Ownership Interest to be Transferred to any
Person that the Transferee knows is not a Permitted
K-1
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth in this Exhibit K to the Agreement (a "Transferor Certificate")
to the effect that such Transferee has no actual knowledge that the Person to
which the Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the assessment or
collection of any tax legally required to be paid with respect to the
Certificates.
8. The Transferee's taxpayer identification number is _______________________.
9. The Transferee is a U.S. Person as defined in the Pooling and Servicing
Agreement.
10. 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, nor are we acting on behalf of
such a plan.
11. The Transferee is aware that the Certificates may be a "noneconomic residual
interest" within the meaning of proposed Treasury regulations promulgated
pursuant to the Code and that the transferor of a noneconomic residual interest
will remain liable for any taxes due with respect to the income on such residual
interest, unless no significant purpose of the transfer was to impede the
assessment or collection of tax.
12. The Transferee has filed all required federal and state income tax returns
and has paid all federal and state income tax due and intends to file and pay
all such returns and taxes in the future.
13. The Transferee historically has paid its debts as they come due and fully
intends to be financially able to pay its debts, including any and all tax
liabilities, as they become due.
14. The Transferee understands that, as the holder of an Ownership Interest in a
Certificate, it may incur tax liabilities in excess of any cash flows generated
by such Ownership Interest and intends to pay all taxes associated with holding
such Ownership Interest as such taxes become due.
15. The Transferee agrees that it will not cause income from the 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 of another U.S.
taxpayer.
K-2
IN WITNESS WHEREOF, the Transferee has caused this instrument to be executed on
its behalf, pursuant to authority of its Board of Directors, by its duly
authorized officer and its corporate seal to be hereunto affixed, duly attested,
this day of , 20 .
[NAME OF TRANSFEREE]
By:
------------------------------
Name:
Title:
[Corporate Seal]
ATTEST:
[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 .
K-3
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Asset Backed Funding Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Bank One, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ - ▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Global Corporate Trust Services
Re: ABFC Mortgage Loan Asset-Backed Certificates, Series 2003-WF1
Ladies and Gentlemen:
In connection with our disposition of the ABFC Mortgage Loan Asset-Backed
Certificates, Series 2003-WF1 (the "Certificates"), we certify that (a) we
understand that the Certificates have not been registered under the Securities
Act of 1933, as amended (the "Act"), and are being disposed by us in a
transaction that is exempt from the registration requirements of the Act, (b) we
have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act, (c) to
the extent we are disposing of a Class R Certificate, we have no knowledge the
Transferee is not a Permitted Transferee and (d) no purpose of the proposed
disposition of a Class R Certificate is to impede the assessment or collection
of tax.
Very truly yours,
[________________]
By:
----------------------------------
L-1
EXHIBIT M
DEPOSITORY AGREEMENT
Copy On File With Securities Administrator
M-1
EXHIBIT N
MONTHLY INFORMATION PROVIDED BY SERVICER
1. With respect to the Mortgage Pool, the number and Principal Balances of
all Mortgage Loans which were the subject of Principal Prepayments
during the related Collection Period.
2. With respect to the Mortgage Pool, the amount of all curtailments which
were received during the related Collection Period.
3. With respect to the Mortgage Pool, the aggregate amount of principal
portion of all Monthly Payments received during the related Collection
Period.
4. With respect to the Mortgage Pool, the amount of interest received on
the Mortgage Loans during the related Collection Period.
5. With respect to the Mortgage Pool, the aggregate amount of the Advances
made and recovered with respect to such Distribution Date.
6. With respect to the Mortgage Pool, the delinquency and foreclosure
information and the amount of Mortgage Loan Losses during the related
Collection Period.
7. With respect to the Mortgage Pool, the weighted average maturity, the
weighted average Mortgage Interest Rate and the weighted average Net
Mortgage Interest Rate as of the last day of the Collection Period
preceding the related Accrual Period.
8. The Servicing Fees paid and Servicing Fees accrued during the related
Collection Period.
9. The amount of all payments or reimbursements to the Servicer paid or to
be paid since the prior Distribution Date (or in the case of the first
Distribution Date, since the Closing Date).
10. The Pool Balance as of the beginning and as of the end of the preceding
Collection Period.
11. With respect to the Mortgage Pool, the number of Mortgage Loans
outstanding at the beginning and at the end of the related Collection
Period.
12. The aggregate interest accrued on the Mortgage Loans at their
respective Mortgage Interest Rates for the related Collection Period.
13. The amount deposited in the Collection Account which may not be
withdrawn therefrom pursuant to an Order of a United States Bankruptcy
Court of competent jurisdiction imposing a stay pursuant to Section 362
of U.S. Bankruptcy Code.
14. The aggregate Realized Losses since the Cut-off Date as of the end of
the related Collection Period.
N-1
15. The Overcollateralization Amount, the Overcollateralization Targeted
Amount, any Overcollateralization Deficiency and any
Overcollateralization Release Amount, in each case after giving effect
to distributions on such Distribution Date.
N-2
EXHIBIT O
AUCTION ADMINISTRATION AGREEMENT
Copy On File With Securities Administrator
▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM ▇▇▇▇▇▇▇▇-▇▇▇▇▇ CERTIFICATION TO BE
PROVIDED WITH FORM 10-K
ABFC 2003-WF1 Trust
Mortgage Loan Asset-Backed Certificates
Series 2003-WF1
I, [identify the certifying individual], certify, in connection with that
certain Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"),
dated as of March 1, 2003, among Asset Backed Funding Corporation, as depositor
(the "Depositor"), ▇▇▇▇▇ Fargo Home Mortgage, Inc., as servicer (the
"Servicer"), ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as securities
administrator (the "Securities Administrator"), and Bank One, N.A., as trustee
(the "Trustee"), that I am the senior officer of the Depositor in charge of its
securitizations, and that:
1. I have reviewed this annual report on Form 10-K, and all reports on
Form 8-K containing distribution or servicing reports filed in respect of
periods included in the year covered by this annual report, of Asset Backed
Funding Corporation (the "Depositor") relating to the above-referenced 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 Securities Administrator by the Servicer under
the Pooling and Servicing Agreement referred to above is included in these
reports;
4. Based on my knowledge and upon the annual compliance statements
included in the report and required to be delivered to the Securities
Administrator in accordance with the terms of the Pooling and Servicing
Agreement, and except as disclosed in the report, the Servicer has fulfilled its
obligations under the Pooling and Servicing Agreement; and
5. The reports disclose all significant deficiencies relating to the
Servicer's compliance with the minimum servicing standards based upon the report
provided by an independent public accountant, after conducting a review in
compliance with the Uniform Single Attestation Program for Mortgage Bankers or
similar standard as set forth in the Pooling and Servicing Agreement, that is
included in these reports.
In giving the certifications above, I have reasonably relied on the
information provided to me by the following unaffiliated parties: ▇▇▇▇▇ Fargo
Home Mortgage, Inc., as Servicer, and ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, as Securities Administrator.
Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement.
P-1-1
Date: _________________________
-------------------------------
[Signature]
[Title]
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM CERTIFICATION TO BE
PROVIDED TO DEPOSITOR BY THE SECURITIES ADMINISTRATOR
ABFC 2003-WF1 Trust
Mortgage Loan Asset-Backed Certificates
Series 2003-WF1
▇▇▇▇▇ Fargo Bank Minnesota, National Association, as Securities Administrator of
the Trust (the "Securities Administrator"), hereby certifies to Asset Backed
Funding Corporation (the "Depositor") and each Person, if any, who "controls"
the Depositor within the meaning of the Securities Act of 1933, as amended, and
its officers, directors and affiliates, and with the knowledge and intent that
they will rely upon this certification, in connection with that certain Pooling
and Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of
March 1, 2003, among the Depositor, the Securities Administrator, ▇▇▇▇▇ Fargo
Home Mortgage, Inc., as servicer (the "Servicer"), and Bank One, N.A., as
trustee (the "Trustee"), that:
1. The Securities Administrator has reviewed the annual report on Form
10-K for the fiscal year [___], and all reports on Form 8-K containing
distribution reports filed in respect of periods included in the year covered by
that annual report, of the Depositor relating to the above-referenced Trust;
2. Based on the Securities Administrator's knowledge, and assuming the
accuracy and completeness of the information supplied to the Securities
Administrator by the Servicer, the distribution information in the distribution
reports contained in all reports on Form 8-K included in the year covered by the
annual report on Form 10-K for the fiscal year [_____], prepared by the
Securities Administrator, 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 the Securities Administrator's knowledge, the distribution
information required to be provided by the Securities Administrator under the
Pooling and Servicing Agreement is included in these reports.
Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed to them in the Pooling and Servicing Agreement.
Date:
----------------------------------
▇▇▇▇▇ Fargo Bank Minnesota, National Association, as
Securities Administrator
By:
------------------------------------
[Signature]
[Title]
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM CERTIFICATION TO BE
PROVIDED TO DEPOSITOR BY THE SERVICER
ABFC 2003-WF1 Trust
Mortgage Loan Asset-Backed Certificates
Series 2003-WF1
I, [identify the certifying individual], a [title] of ▇▇▇▇▇ Fargo Home Mortgage,
Inc., as Servicer for the Trust (the "Servicer"), hereby certify to Asset Backed
Funding Corporation (the "Depositor") and each Person, if any, who "controls"
the Depositor within the meaning of the Securities Act of 1933, as amended, and
their respective officers, directors and affiliates, and with the knowledge and
intent that they will rely upon this certification, pursuant to Section 3.22(d)
of that certain Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of March 1, 2003, among the Depositor, the Servicer, ▇▇▇▇▇
Fargo Bank Minnesota, National Association, as securities administrator (the
"Securities Administrator"), and Bank One, N.A., as trustee (the "Trustee"),
that:
1. Based on my knowledge, the information relating to the Mortgage
Loans and the servicing thereof submitted by the Servicer to the Securities
Administrator which is used in connection with preparation of the reports on
Form 8-K and the annual report on Form 10-K filed with the Commission with
respect to the Trust, 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 date of this certification;
2. The servicing information required to be provided to the Securities
Administrator by the Servicer under the Pooling and Servicing Agreement has been
provided to the Securities Administrator;
3. I am responsible for reviewing the activities performed by the
Servicer under the Pooling and Servicing Agreement and based upon the review
required by the Pooling and Servicing Agreement, and except as disclosed in the
Annual Statement of Compliance delivered to the Securities Administrator
pursuant to Section 3.19 of the Pooling and Servicing Agreement, the Annual
Independent Public Accountant's Servicing Report delivered to the Trustee, the
Securities Administrator and the Depositor pursuant to Section 3.20 of the
Pooling and Servicing Agreement, the Servicer has, as of the date of this
certification fulfilled its obligations under the Pooling and Servicing
Agreement; and
4. The Servicer has disclosed to the Servicer's certified public
accountants all significant deficiencies relating to the Servicer's compliance
with the minimum servicing standards in accordance with a review conducted in
compliance with the Uniform Single Attestation Program for Mortgage Bankers or
similar standard as set forth in the Pooling and Servicing Agreement.
5. The Servicer shall indemnify and hold harmless the Depositor and
each Person, if any, who "controls" the Depositor within the meaning of the
Securities Act of 1933, as amended, and their respective officers, directors,
agents and affiliates from and against any losses,
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damages, penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a breach by
the Servicer or any of its officers, directors, agents or affiliates of its
obligations under Section 3.22 of the Pooling and Servicing Agreement or any
material misstatement or omission contained in this certification, or the
negligence, bad faith or willful misconduct of the Servicer in connection with
the Pooling and Servicing Agreement or this certification. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless such Persons, then the Servicer agrees that it shall contribute to the
amount paid or payable by such Persons as a result of the losses, claims,
damages or liabilities of such Persons in such proportion as is appropriate to
reflect the relative fault of the Depositor, on the one hand, and the Servicer,
on the other, in connection with a breach of the Servicer's obligations under
Section 3.22 of the Pooling and Servicing Agreement or any material misstatement
or omission contained in this certification or the Servicer's negligence, bad
faith or willful misconduct in connection with the Pooling and Servicing
Agreement or this certification.
Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to them in the Pooling and Servicing Agreement.
Date:
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[Signature]
[Title]
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EXHIBIT Q
FORM OF AUCTION SWAP AGREEMENT
Copy On File With Securities Administrator
Q-1
SCHEDULE I
▇▇▇▇▇ FARGO PREPAYMENT CHARGE MATRIX
Copy On File With Securities Administrator
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