Exhibit 4.1
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RESIDENTIAL ASSET FUNDING CORPORATION,
Depositor
CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC,
Seller
LITTON LOAN SERVICING LP,
Servicer
and
THE CHASE MANHATTAN BANK,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 2000
2000-CB4 Trust
C-BASS Mortgage Loan Asset-Backed Certificates, Series 2000-CB4
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
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Section 1.01. Defined Terms......................................................................4
Section 1.02. Accounting........................................................................44
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans......................................................44
Section 2.02. Acceptance by Trustee.............................................................47
Section 2.03. Repurchase or Substitution of Mortgage Loans by the Seller........................48
Section 2.04. Representations and Warranties of the Seller with Respect to the Mortgage Loans...51
Section 2.05. Representations, Warranties and Covenants of the Servicer.........................52
Section 2.06. Representations and Warranties of the Depositor...................................54
Section 2.07. Issuance of Certificates and the Uncertificated Regular Interests.................56
Section 2.08. Representations and Warranties of the Seller......................................56
Section 2.09. Covenants of the Seller...........................................................58
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01. Servicer to Act as Servicer.......................................................59
Section 3.02. Collection of Mortgage Loan Payments..............................................61
Section 3.03. Realization Upon Defaulted Mortgage Loans.........................................61
Section 3.04. Collection Account and Distribution Account.......................................63
Section 3.05. Permitted Withdrawals From the Collection Account.................................65
Section 3.06. Establishment of Escrow Accounts; Deposits in Escrow Accounts.....................66
Section 3.07. Permitted Withdrawals From Escrow Account.........................................66
Section 3.08. Payment of Taxes, Insurance and Other Charges; Collections Thereunder.............67
Section 3.09. Transfer of Accounts..............................................................68
Section 3.10. Maintenance of Hazard Insurance...................................................68
Section 3.11. Maintenance of Mortgage Impairment Insurance Policy...............................69
Section 3.12. Fidelity Bond, Errors and Omissions Insurance.....................................69
Section 3.13. Title, Management and Disposition of REO Property.................................70
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Section 3.14. Due-on-Sale Clauses; Assumption and Substitution Agreements.......................73
Section 3.15. Notification of Adjustments.......................................................73
Section 3.16. Optional and Mandatory Purchases of Mortgage Loans by Seller......................74
Section 3.17. Trustee to Cooperate; Release of Files............................................74
Section 3.18. Servicing Compensation............................................................76
Section 3.19. Annual Statement as to Compliance.................................................76
Section 3.20. Annual Independent Certified Public Accountants' Reports..........................76
Section 3.21. Access to Certain Documentation and Information Regarding the Mortgage Loans......77
Section 3.22. Reserved..........................................................................78
Section 3.23. Obligations of the Servicer in Respect of Compensating Interest...................78
Section 3.24. Obligations of the Servicer in Respect of Mortgage Interest Rates and Monthly
Payments.......................................................................78
Section 3.25. Investment of Funds in the Collection Account and the Distribution Account........78
Section 3.26. Liability of Servicer; Indemnification............................................80
Section 3.27. Reports of Foreclosure and Abandonment of Mortgaged Properties....................81
Section 3.28. Protection of Assets..............................................................81
ARTICLE IV
FLOW OF FUNDS
Section 4.01. Interest Distributions............................................................81
Section 4.02. Distributions of Principal and Monthly Excess Cashflow Amounts....................82
Section 4.03. Allocation of Losses..............................................................86
Section 4.04. Method of Distribution............................................................87
Section 4.05. Distributions on Book-Entry Certificates..........................................87
Section 4.06. Statements........................................................................87
Section 4.07. Remittance Reports; Advances......................................................91
Section 4.08. Class N Reserve Fund..............................................................92
Section 4.09. [Reserved]........................................................................93
Section 4.10. Excess Reserve Fund Account.......................................................93
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates..................................................................94
Section 5.02. Registration of Transfer and Exchange of Certificates.............................94
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.................................99
Section 5.04. Persons Deemed Owners............................................................100
Section 5.05. Appointment of Paying Agent......................................................100
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ARTICLE VI
THE SELLER, THE SERVICER AND THE DEPOSITOR
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Section 6.01. Liability of the Seller, the Servicer and the Depositor..........................101
Section 6.02. Merger or Consolidation of, or Assumption of the Obligations of, the Seller, the
Servicer or the Depositor.....................................................101
Section 6.03. Limitation on Liability of the Servicer and Others...............................101
Section 6.04. Servicer Not to Resign...........................................................102
Section 6.05. Delegation of Duties.............................................................102
ARTICLE VII
DEFAULT
Section 7.01. Servicer Events of Termination...................................................103
Section 7.02. Trustee to Act; Appointment of Successor.........................................105
Section 7.03. Waiver of Defaults...............................................................106
Section 7.04. Notification to Certificateholders...............................................107
Section 7.05. Survivability of Servicer Liabilities............................................107
ARTICLE VIII
THE TRUSTEE
Section 8.01. Duties of Trustee................................................................107
Section 8.02. Certain Matters Affecting the Trustee............................................109
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans............................110
Section 8.04. Trustee May Own Certificates.....................................................111
Section 8.05. Seller to Pay Trustee Fees and Expenses..........................................111
Section 8.06. Eligibility Requirements for Trustee.............................................112
Section 8.07. Resignation or Removal of Trustee................................................112
Section 8.08. Successor Trustee................................................................113
Section 8.09. Merger or Consolidation of Trustee...............................................114
Section 8.10. Appointment of Co-Trustee or Separate Trustee....................................114
Section 8.11. Limitation of Liability..........................................................115
Section 8.12. Trustee May Enforce Claims Without Possession of Certificates....................115
Section 8.13. Suits for Enforcement............................................................116
Section 8.14. Waiver of Bond Requirement.......................................................116
Section 8.15. Waiver of Inventory, Accounting and Appraisal Requirement........................116
Section 8.16. Compliance with National Housing Act of 1934.....................................116
ARTICLE IX
REMIC AND GRANTOR TRUST ADMINISTRATION
Section 9.01. REMIC Administration.............................................................117
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Section 9.02. Prohibited Transactions and Activities...........................................120
Section 9.03. Indemnification with Respect to Certain Taxes and Loss of REMIC Status...........121
Section 9.04. REO Property.....................................................................121
Section 9.05. Grantor Trust Administration.....................................................122
ARTICLE X
TERMINATION
Section 10.01. Termination......................................................................123
Section 10.02. Additional Termination Requirements..............................................124
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment........................................................................125
Section 11.02. Recordation of Agreement; Counterparts...........................................126
Section 11.03. Limitation on Rights of Certificateholders.......................................127
Section 11.04. Governing Law; Jurisdiction......................................................128
Section 11.05. Notices..........................................................................128
Section 11.06. Severability of Provisions.......................................................129
Section 11.07. Article and Section References...................................................129
Section 11.08. Notice to the Rating Agencies....................................................129
Section 11.09. Further Assurances...............................................................130
Section 11.10. Benefits of Agreement............................................................130
Section 11.11. Acts of Certificateholders.......................................................130
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EXHIBITS:
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Exhibit A-1 Form of Class A-1F Certificates
Exhibit A-2 Form of Class A-2F Certificates
Exhibit A-3 Form of Class A-1A Certificates
Exhibit B-1 Form of Class B-1 Certificates
Exhibit B-2 Form of Class B-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 X Certificates
Exhibit C-5 Form of Class N Certificates
Exhibit D Mortgage Loan Schedule
Exhibit E Form of Request for Release of Documents
Exhibit F-1 Form of Trustee's Initial Certification
Exhibit F-2 Form of Trustee's Final Certification
Exhibit F-3 Form of Receipt of Mortgage Note
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Exhibit G [Reserved]
Exhibit H Form of Lost Note Affidavit
Exhibit I Form of ERISA Representation
Exhibit J Form of Investment Letter
Exhibit K Form of Class R Certificate Transfer Affidavit
Exhibit L Form of Transferor Certificate
Exhibit M Form of Liquidation Report
Exhibit N [Reserved]
Exhibit O [Reserved]
Exhibit P [Reserved]
Exhibit Q Form of Officer's Certificate with Respect to Prepayments
Exhibit R [Reserved]
Exhibit S Ineligible Foreclosure Property Loan Schedule
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This Pooling and Servicing Agreement is dated as of November
1, 2000 (the "Agreement"), among RESIDENTIAL ASSET FUNDING CORPORATION, as
depositor (the "Depositor"), CREDIT-BASED ASSET SERVICING AND SECURITIZATION
LLC, as seller (the "Seller"), LITTON LOAN SERVICING LP, as servicer (the
"Servicer"), and THE CHASE MANHATTAN BANK, as trustee (the "Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest in
the Trust Fund created hereunder. The Certificates will consist of ten classes
of certificates, designated as (i) the Class A-1F Certificates, (ii) the Class
A-2F Certificates, (iii) the Class A-1A Certificates, (iv) the Class M-1
Certificates, (v) the Class M-2 Certificates, (vi) the Class B-1 Certificates,
(vii) the Class B-2 Certificates, (viii) the Class N Certificates, (ix) the
Class X Certificates, and (x) the Class R Certificates.
The Class A-1A Certificates represent (i) a Regular Interest
in REMIC 2 and (ii) the right to receive the Class A-1A LIBOR Carryover Amounts.
The Class N and Class X Certificates represent beneficial ownership of the Class
X/N Interest, subject to the obligation to pay Rate Payments and Class A-1A
LIBOR Carryover Amounts. If the Class N and Class X Certificates are
beneficially owned by different Persons, they will be treated as interests in a
partnership that holds the Class X/N Interest for federal income tax purposes as
described in Section 9.01(n).
For federal income tax purposes, the Trust Fund (exclusive of
the Class N Reserve Fund and the Excess Reserve Fund Account) will consist of
two REMICs, REMIC1 and REMIC 2. REMIC 1 will consist of all of the assets
constituting the Trust Fund (exclusive of the Class N Reserve Fund and the
Excess Reserve Fund Account) and will be evidenced by the REMIC 1 Regular
Interests (which will be uncertificated and will represent the "regular
interests" in REMIC 1) and the R-1 Interest as the single "residual interest" in
REMIC 1. The Trustee will hold the REMIC 1 regular interests.
REMIC 2 will consist of the REMIC 1 Regular Interests and will
be evidenced by the "regular interests" in REMIC 2 and the R-2 Interest as the
single "residual interest" in REMIC 2. The Class R Certificate will represent
beneficial ownership of the R-1 Interest and the R-2 Interest. All REMIC regular
and residual interests created hereby will be retired on or before the Latest
Possible Maturity Date.
The REMIC 1 will be evidenced by the T1-Accrual Interest (the
"Subsidiary REMIC Accrual Class"), the Class T1-A-1F, Class T1-A-2F, Class
T1-A-1A, Class T1-M-1, Class T1-M-2, Class T1-B-1 and Class T1-B-2 Interests
(the "Subsidiary REMIC Accretion Directed Classes"), which will be
uncertificated and non-transferable and are hereby designated as the "regular
interests" in REMIC 1. REMIC 1 Interests will have the following designations,
initial principal balances, pass-through rates, and Corresponding Classes of
REMIC 2 Certificates ("Corresponding Classes"):
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Initial Uncertificated Uncertificated REMIC Latest Possible
Class Designation Principal Balance 1 Pass-Through Rate Corresponding Class Maturity Date
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T1-Accrual (1/2 Mortgage Loan balance (1) N/A November 25, 2031
plus the
Overcollateralization
Amount)
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T1-A-1F 1/2 Corresponding REMIC 2 (1) A-1F April 25, 2013
Class balance
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T1-A-2F 1/2 Corresponding REMIC 2 (1) A-2F November 25, 2031
Class balance
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T1-A-1A 1/2 Corresponding REMIC 2 (1) A-1A February 25, 2030
Class balance
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T1-M-1 1/2 Corresponding REMIC 2 (1) M-1 November 25, 2031
Class balance
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T1-M-2 1/2 Corresponding REMIC 2 (1) M-2 November 25, 2031
Class balance
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T1-B-1 1/2 Corresponding REMIC 2 (1) B-1 November 25, 2031
Class balance
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T1-B-2 1/2 Corresponding REMIC 2 (1) B-2 November 25, 2031
Class balance
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(1) Calculated pursuant to the definition of Weighted Average Net Mortgage Rate.
On each Distribution Date, 50% of the increase in the
Overcollateralization Amount will be payable as a reduction of the principal
balances of the Subsidiary REMIC Accretion Directed Classes (each such Class
will be reduced by an amount equal to 50% of any increase in the
Overcollateralization Amount that is attributable to a reduction in the
principal balance of its Corresponding Class) and will be accrued and added to
the principal balance of the Subsidiary REMIC Accrual Class. All payments of
scheduled principal and prepayments of principal generated by the Mortgage
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Loans shall be allocated 50% to the Subsidiary REMIC Accrual Class, and 50% to
the Subsidiary REMIC Accretion Directed Classes (principal payments shall be
allocated among such Subsidiary REMIC Accretion Directed Classes in an amount
equal to 50% of the principal amounts allocated to their respective
Corresponding Classes), until paid in full. Notwithstanding the above, principal
payments allocated to the Class X/N Interest that result in a reduction in the
Overcollateralization Amount shall be allocated to the Subsidiary REMIC Accrual
Class (until paid in full). Realized Losses shall be applied so that after all
distributions have been made on each Distribution Date (i) the principal
balances of each of the Subsidiary REMIC Accretion Directed Classes is equal to
50% of the principal balance of their Corresponding Class, and (ii) the
Subsidiary REMIC Accrual Class is equal to 50% of the aggregate principal
balance of the Mortgage Loans plus the Overcollateralization Amount.
The following table sets forth (or describes) the REMIC 2
Class designation, Pass-Through Rate, Original Class Certificate Principal
Balance or Original Class X/N Notional Amount and Assumed Final Maturity Date
for each Class of Certificates comprising the interests in the REMIC 2 created
hereunder each of which, except the Class R-2 Interest, is hereby designated a
REMIC regular interest for federal income tax purposes:
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Original Class
Certificate Principal or Assumed Final Maturity
Class Designation Notional Amount Pass-Through Rate Dates
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A-1F $34,480,000 7.055%(1) April 25, 2013
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A-2F $18,820,000 7.170%(2) November 25, 2031
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A-1A $81,771,000 (3) February 25, 2030
-------------------------------------------------------------------------------------------------------------
M-1 $11,531,000 7.565%(4) November 25, 2031
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M-2 $7,825,000 7.915%(5) November 25, 2031
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B-1 $4,942,000 8.705%(6) November 25, 2031
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B-2 $2,471,000 8.900%(7) November 25, 2031
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X/N $ (8) (8) November 25, 2031
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Total $161,840,000(9) N/A N/A
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(1) Interest will accrue on the Class A-1F Certificates during each Interest
Accrual Period at a rate equal to the least of: (i) the Class A-1F
Pass-Through Rate, (ii) the Group 1 Net WAC and (iii) the Pool Cap for
each Distribution Date.
(2) Interest will accrue on the Class A-2F Certificates at a rate equal to
the least of: (i) the Class A-2F Pass-Through Rate, (ii) the Group 1 Net
WAC and (iii) the Pool Cap for such Distribution Date.
(3) Interest will accrue on the Class A-1A Certificates at a rate equal to
the least of: (i) the Class A-1A Pass-Through Rate, (ii) the Group 2 Net
WAC and (iii) the Pool Cap for such Distribution Date. The rates under
clause (i) and (ii) shall be multiplied by a fraction, the numerator of
which is the actual number of days in the Interest Accrual Period and the
denominator of which is 30 to convert such rates to the equivalent of one
based on twelve 30 day months.
(4) Interest will accrue on the Class M-1 Certificates at a rate equal to the
lesser of: (i) the Class M-1 Pass-Through Rate, and (ii) the Pool Cap for
such Distribution Date.
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(5) Interest will accrue on the Class M-2 Certificates at a rate equal to the
lesser of: (i) the Class M-2 Pass-Through Rate and (ii) the Pool Cap for
such Distribution Date.
(6) Interest will accrue on the Class B-1 Certificates at a rate equal to the
lesser of: (i) the Class B-1 Pass-Through Rate and (ii) the Pool Cap for
such Distribution Date.
(7) Interest will accrue on the Class B-2 Certificates at a rate equal to the
lesser of: (i) the Class B-2 Pass-Through Rate and (ii) the Pool Cap for
such Distribution Date.
(8) The Class X/N Interest will have no principal balance and will bear
interest at its respective Class X Pass-Through Rate on its Class X/N
Notional Amount. The Class X Certificates are hereby designated as REMIC
"regular interests" for federal income tax purposes. The Class X/N
Interest will also be entitled to principal in the amount of the
Overcollateralization Release Amount as part of the distribution of
Monthly Excess Cashflow Amounts in conformity with Section 4.02(b).
(9) Exclusive of the Class X/N Notional Amount.
The Class R-2 Interest is hereby designated as the sole class
of residual interest in the REMIC 2. The Class R Certificates will represent
beneficial ownership of both the Class R-1 Interest and the Class R-2 Interest.
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 A-1F, Class A-2F, Class M-1, Class M-2, Class
B-1, Class B-2 and Class N Certificates and on the REMIC Regular Interests
(other than the Class T4-A1A Interests) will be calculated on the basis of a
360-day year consisting of twelve 30-day months. Interest on the Class A-1A
Certificates and on the Class T4-A1A Interests will be calculated on the basis
of the actual number of days in the related Interest Accrual Period and a
360-day year.
Many of the defined terms listed below may apply to both Loan
Groups and are sometimes used in this Agreement to refer to a particular Loan
Group by the adjectival use of the words "Group 1" and "Group 2."
"1933 Act": The Securities Act of 1933, as amended.
"60+ Day Delinquent Loan": Each Mortgage Loan with respect to
which any portion of a Monthly Payment is, as of the last day of the prior
Collection Period, two months or more past due (other than a Reperforming 60+
Day Delinquent Loan), each Mortgage Loan in foreclosure, all REO Property and
each Mortgage Loan for which the Mortgagor has filed for bankruptcy after the
Closing Date.
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"Account": Any of the Collection Account, Excess Reserve Fund
Account, Class N Reserve Fund and Distribution Account.
"Accrued Certificate Interest": With respect to each
Distribution Date and Class of Certificates, an amount equal to the interest
accrued at the applicable rate set forth or described opposite such Class in the
table in the Preliminary Statement during the related Interest Accrual Period on
the Certificate Principal Balance (or Notional Amount) of such Class of
Certificates, reduced by such Class's Interest Percentage of Relief Act Interest
Shortfalls for such Distribution Date.
"Actuarial Mortgage Loan": Any Mortgage Loan other than a
Simple Interest Mortgage Loan.
"Adjustment Date": With respect to each Group 2 Mortgage Loan,
each adjustment date, on which the Mortgage Interest Rate of a Group 2 Mortgage
Loan changes pursuant to the related Mortgage Note. The first Adjustment Date
following the Cut-Off Date as to each Group 2 Mortgage Loan is set forth in the
Mortgage Loan Schedule.
"Advance": As to any Actuarial 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.
"Agency Insurance Agreements": Collectively, the FHA Insurance
Contracts and VA Guaranty Agreements.
"Agreement": This Pooling and Servicing Agreement and all
amendments and supplements hereto.
"Applicable Regulations": As to any Mortgage Loan, all
federal, state and local laws, statutes, rules and regulations applicable
thereto, including with respect to each FHA Loan the FHA Regulations and the
related FHA Insurance Contract and with respect to each VA Loan the VA
Regulations and the related VA Guaranty Agreement.
"Applied Realized Loss Amount": With respect to each
Distribution Date, the excess, if any, of (a) the aggregate of the Certificate
Principal Balances of the Certificates (after giving effect to all distributions
on such Distribution Date) over (b) the Pool Balance as of the end of the
related Collection Period.
"Arrearage": With respect to a Delinquent Mortgage Loan, the
total amount of scheduled monthly payments due thereon on or before the Cut-Off
Date that
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were not received prior to the Cut-Off Date but for which advances of principal
and interest were made, plus any unreimbursed Servicing Advances as of the
Cut-Off Date.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage.
"Assumed Final Maturity Date": As to each Class of
Certificates, the date set forth as such in the Preliminary Statement.
"Available Funds": As to any Distribution Date, an amount
equal to the excess of (i) the sum of (a) the aggregate of the Monthly Payments
due on the related Due Date and received by the Trustee one Business Day prior
to the related Distribution Date, (b) 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 penalties and amounts
received in respect of Arrearages) in respect of the Mortgage Loans during the
related Prepayment Period, (c) the aggregate of any amounts received in respect
of an REO Property withdrawn from any REO Account and deposited in the
Collection Account for such Distribution Date, (d) any Compensating Interest for
such Distribution Date, and (e) the aggregate of any Advances made by the
Servicer for such Distribution Date over (ii) the sum of (a) amounts
reimbursable or payable to the Servicer pursuant to Section 3.05, (b) Stayed
Funds, (c) the Servicing Fee, (d) the mortgage insurance premiums and (e)
amounts deposited in the Collection Account or the Distribution Account, as the
case may be, in error.
"Balloon Mortgage Loan": A Mortgage Loan that provides for the
payment of the unamortized principal balance of such Mortgage Loan in a single
payment at the maturity of such Mortgage Loan that is substantially greater than
the preceding monthly payment.
"Balloon Payment": A payment of the unamortized principal
balance of a Mortgage Loan in a single payment at the maturity of such Mortgage
Loan that is substantially greater than the preceding Monthly Payment.
"Bankruptcy Code": Title 11 of the United States Code, as
amended.
"Book-Entry Certificates": Any of the Certificates that shall
be registered in the name of the Depository or its nominee, the ownership of
which is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.02 hereof). On the Closing
Date, the Class A-1F, Class A-2F, Class A-1A, Class M-1, Class M-2, Class B-1
and Class B-2 Certificates shall be Book-Entry Certificates.
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"Business Day": Any day other than a Saturday, a Sunday or a
day on which banking institutions in the State of Delaware, the State of New
York, the State of Texas or in the city in which the Corporate Trust Office of
the Trustee is located are authorized or obligated by law or executive order to
be closed.
"Certificate": Any Regular Certificate or Class R Certificate.
"Certificate Custodian": Initially, The Chase Manhattan Bank;
thereafter any other Certificate Custodian acceptable to the Depository and
selected by the Trustee.
"Certificate Owner": With respect to each Book-Entry
Certificate, any beneficial owner thereof.
"Certificate Principal Balance": With respect to any Class of
Certificates (other than the Class N, Class X and 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 N, Class X 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 and that a Non-U.S. Person shall not be a
Holder of a Class N Certificate or a Class X 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-1A Certificate Margin": For each Distribution Date
(i) on or prior to the Optional Termination Date, 0.32% per annum, and (ii)
following the Optional Termination Date, 0.64% per annum.
"Class A-1A LIBOR Carryover Amount": If on any Distribution
Date, the Accrued Certificate Interest for the Class A-1A Certificates is based
upon the Class A-1A Net Funds Cap, the excess of (i) the amount of interest the
Class A-1A Certificates would have been entitled to receive on such Distribution
Date based on the Class A-1A Pass-Through Rate, over (ii) the amount of interest
the Class A-1A Certificates received on such Distribution Date based on such
Class A-1A Net Funds Cap, together with the unpaid portion of any such excess
from prior Distribution Dates (and interest accrued thereon at the then
applicable Class A-1A Pass-Through Rate).
"Class A-1A Net Funds Cap": With respect to any Distribution
Date, the product of (i) the average of the Net Mortgage Interest Rates of the
Group 2 Mortgage
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Loans, weighted on the basis of their Principal Balances as of the first day of
the related Collection Period (or, in the case of the first Distribution Date,
the Cut-Off Date), each expressed on the basis of an assumed 360-day year and
the actual number of days elapsed during the related Interest Accrual Period,
and (ii) the Pool Balance divided by the aggregate Certificate Principal Balance
of the Offered Certificates.
"Class A-1A Pass-Through Rate": For each Distribution Date,
LIBOR as of the related LIBOR Determination Date, plus the Class A-1A
Certificate Margin.
"Class A-1A REMIC Pass-Through Rate": The least of (a) the
Class A-1A Pass-Through Rate, (b) the Weighted Average Net Mortgage Rate and (c)
the Weighted Average Group 2 Net Mortgage Rate. The rate in clauses (a) and (c)
shall be multiplied by a fraction, the numerator of which is the actual number
of days in the Interest Accrual Period and the denominator of which is 30 to
convert such rates to the equivalent of one based on twelve 30-day months.
"Class A-1F Net Funds Cap": With respect to any Distribution
Date, the product of (i) the average of the Net Mortgage Interest Rates of the
Group 1 Mortgage Loans, weighted on the basis of their Principal Balances as of
the first day of the related Collection Period (or, in the case of the first
Distribution Date, the Cut-Off Date), and (ii) the Pool Balance divided by the
aggregate Certificate Principal Balance of the Offered Certificates.
"Class A-1F Pass-Through Rate": For each Distribution Date
7.055% per annum.
"Class A-1F REMIC Pass-Through Rate": The least of (a) the
Class A-1F Pass-Through Rate, (b) the Weighted Average Net Mortgage Rate and (c)
the Weighted Average Group 1 Net Mortgage Rate.
"Class A-2F Net Funds Cap": With respect to any Distribution
Date, the product of (i) the average of the Net Mortgage Interest Rates of the
Group 1 Mortgage Loans, weighted on the basis of their Principal Balances as of
the first day of the related Collection Period (or, in the case of the first
Distribution Date, the Cut-Off Date), and (ii) the Pool Balance divided by the
aggregate Certificate Principal Balance of the Offered Certificates.
"Class A-2F Pass-Through Rate": For each Distribution Date (i)
on or prior to the Optional Termination Date, 7.170% per annum and (ii)
following the Optional Termination Date, 7.670% per annum.
"Class A-2F REMIC Pass-Through Rate": The least of (a) the
Class A-2F Pass-Through Rate, (b) the Weighted Average Net Mortgage Rate and (c)
the Weighted Average Group 1 Net Mortgage Rate.
"Class A Certificate": Any one of the Certificates with an "A"
designated on the face thereof substantially in the form annexed hereto as
Exhibits A-1, A-2 and A-
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3, 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 Certificateholders": Collectively, the Holders of the
Class A Certificates.
"Class A Interest Carry Forward Amount": For any Distribution
Date, the sum of the Interest Carry Forward Amounts for the Class A-1F, Class
A-2F and Class A-1A Certificates for such Distribution Date.
"Class A Principal Distribution Amount": As of any
Distribution Date (a) prior to the Stepdown Date or with respect to which a
Trigger Event is in effect, the lesser of (i) 100% of the Principal Distribution
Amount and (ii) the sum of the Certificate Principal Balances of the Class A-1F,
Class A-2F and Class A-1A Certificates and (b) on or after the Stepdown Date and
as long as a Trigger Event is not in effect, the excess of (x) the sum of the
Certificate Principal Balances of the Class A-1F, Class A-2F and Class A-1A
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 64.0% and (ii) the Pool Balance as of the last day of the
related Collection Period and (B) the Pool Balance as of the last day of the
related Collection Period minus the product of (i) 0.50% and (ii) the Pool
Balance on the Cut-Off Date.
"Class B-1 Applied Realized Loss Amount": As to the Class B-1
Certificates and as of any Distribution Date, the lesser of (x) the Certificate
Principal Balance thereof (after taking into account the distribution of the
Principal Distribution Amount on such Distribution Date, but prior to the
application of the Applied Realized Loss Amount, if any, on such Distribution
Date) and (y) the excess of (i) the Applied Realized Loss Amount as of such
Distribution Date over (ii) the Class B-2 Applied Realized Loss Amount as of
such Distribution Date.
"Class B-1 Certificate": Any one of the Certificates with a
"B-1" designated on the face thereof substantially in the form annexed hereto as
Exhibit B-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.
"Class B-1 Certificateholder": Any Holder of a Class B-1
Certificate.
"Class B-1 Pass-Through Rate": For each Distribution Date,
8.705%, per annum.
"Class B-1 Principal Distribution Amount": As of any
Distribution Date on or after the Stepdown Date and as long as a Trigger Event
is not in effect, the excess of (x) the sum of (i) the sum of the Certificate
Principal Balances of the Class A-1A, Class A-1F and Class A-2F 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
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(iv) the Certificate Principal Balance of the Class B-1 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
93.50% and (ii) the Pool Balance as of the last day of the related Collection
Period and (B) the Pool Balance as of the last day of the related Collection
Period minus the product of 0.50% and the Pool Balance on the Cut-Off Date.
"Class B-1 Realized Loss Amortization Amount": As to the Class
B-1 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-1 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xi) hereof, in each case
for such Distribution Date.
"Class B-1 REMIC Pass-Through Rate": The lesser of the Class
B-1 Pass-Through Rate and the Weighted Average Net Mortgage Rate.
"Class B-2 Applied Realized Loss Amount": As to the Class B-2
Certificates and as of any Distribution Date, the lesser of (x) the Certificate
Principal Balance thereof (after taking into account the distribution of the
Principal Distribution Amount on such Distribution Date, but prior to the
application of the Applied Realized Loss Amount, if any, on such Distribution
Date) and (y) the Applied Realized Loss Amount as of such Distribution Date.
"Class B-2 Certificate": Any one of the Certificates with a
"B-2" designated on the face thereof substantially in the form annexed hereto as
Exhibit B-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 B-2 Certificateholder": Any Holder of a Class B-2
Certificate.
"Class B-2 Pass-Through Rate": For each Distribution Date,
8.900%, per annum.
"Class B-2 Principal Distribution Amount": As of any
Distribution Date on or after the Stepdown Date and as long as a Trigger Event
is not in effect, the excess of (x) the sum of (i) the sum of the Certificate
Principal Balances of the Class A-1A, Class A-1F and Class A-2F 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 B-1 Certificates
(after taking into account the payment of the Class B-1 Principal Distribution
Amount on such Distribution Date) and (v) the Certificate Principal Balance of
the Class B-2 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 96.50% and (ii) the Pool Balance as of the
last day of the related Collection Period and (B) the Pool Balance
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as of the last day of the related Collection Period minus the product of 0.50%
and the Pool Balance on the Cut-Off Date.
"Class B-2 Realized Loss Amortization Amount": As to the Class
B-2 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-2 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xiv) hereof, in each
case for such Distribution Date.
"Class B-2 REMIC Pass-Through Rate": The lesser of the Class
B-2 Pass-Through Rate and the Weighted Average Net Mortgage Rate.
"Class M-1 Applied Realized Loss Amount": As to the Class M-1
Certificates and as of any Distribution Date, the lesser of (x) the Certificate
Principal Balance thereof (after taking into account the distribution of the
Principal Distribution Amount on such Distribution Date, but prior to the
application of the Class M-1 Applied Realized Loss Amount, if any, on such
Distribution Date) and (y) the excess of (i) the Applied Realized Loss Amount as
of such Distribution Date over (ii) the sum of the Class M-2 Applied Realized
Loss Amount, the Class B-1 Applied Realized Loss Amount and the Class B-1
Applied Realized Loss Amount, in each case as of such Distribution Date.
"Class M-1 Pass-Through Rate": For each Distribution Date,
7.565% per annum.
"Class M-1 Principal Distribution Amount": As of any
Distribution Date on or after the Stepdown Date and as long as a Trigger Event
is not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balances of the Class A-1A, Class A-1F and Class A-2F 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) 78.0% and (ii) the Pool Balance as of the last day of the
related Collection Period and (B) the Pool Balance as of the last day of the
related Collection Period minus the product of 0.50% and the Pool Balance on the
Cut-Off Date.
"Class M-1 Realized Loss Amortization Amount": As to the Class
M-1 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-1 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (v) hereof, in each case
for such Distribution Date.
"Class M-1 REMIC Pass-Through Rate": The lesser of the Class
M-1 Pass-Through Rate and the Weighted Average Net Mortgage Rate.
"Class M-2 Applied Realized Loss Amount": As to the Class M-2
Certificates and as of any Distribution Date, the lesser of (x) the Certificate
Principal Balance thereof (after taking into account the distribution of the
Principal Distribution Amount on such Distribution Date, but prior to the
application of the Class M-2 Applied Realized Loss Amount, if any, on such
Distribution Date) and (y) the excess of (i) the
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related Applied Realized Loss Amount as of such Distribution Date over (ii) the
sum of the Class B-1 Applied Realized Loss Amount and the Class B-2 Applied
Realized Loss Amount, in each case, as of such Distribution Date.
"Class M-2 Pass-Through Rate": For each Distribution Date,
7.915% per annum.
"Class M-2 Principal Distribution Amount": As of any
Distribution Date on or after the Stepdown Date and as long as a Trigger Event
is not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balances of the Class A-1A, Class A-1F and Class A-2F 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) 87.5% and (ii)
the Pool Balance as of the last day of the related Collection Period and (B) the
Pool Balance as of the last day of the related Collection Period minus the
product of 0.50% and the Pool Balance on the Cut-Off Date.
"Class M-2 Realized Loss Amortization Amount": As to the Class
M-2 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-2 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (viii) hereof, in each
case for such Distribution Date.
"Class M-2 REMIC Pass-Through Rate": The lesser of the Class
M-2 Pass-Through Rate and the Weighted Average Net Mortgage Rate.
"Class N Certificate": Any one of the Certificates with a "N"
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-5, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Trustee, representing the right to distributions as set
forth herein and therein. The Class N Certificate shall not be designated as a
REMIC Regular Interest.
"Class N Excess Release Amount": For any Distribution Date,
the excess of (i) the Required Class N Reserve Fund Balance over (ii) the amount
on deposit in the Class N Reserve Fund.
"Class N Notional Amount": On any Distribution Date, with
respect to the Class N Certificates, an amount equal to the Original Class N
Notional Amount reduced by the aggregate distributions made to the Class N
Certificates pursuant to Sections 4.02(b)(xix) and (xxi).
"Class N Pass-Through Rate": For each Distribution Date, 9.00%
per annum.
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"Class N Reserve Fund": The separate account, held in trust,
created and maintained by the Trustee pursuant to Section 4.08(a) in the name of
the Trustee for the benefit of the Class N Certificateholders and designated
"The Chase Manhattan Bank in trust for registered Holders of 2000-CB4 Trust,
C-BASS Mortgage Loan Asset-Backed Certificates, Series 2000-CB4, Class N."
"Class R Certificate": The Class R Certificate executed by the
Trustee on behalf of the Trust, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit C-1
and evidencing the ownership of the Residual Interest. The Class R Certificate
represents the ownership of the Class R-1 Interest, and Class R-2 Interest.
"Class R-1 Interest": The uncertificated residual interest in
REMIC 1.
"Class R-2 Interest": The uncertificated residual interest in
REMIC 2.
"Class X Certificate": Any one of the Class X Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-3, 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. The Class X Certificate shall not be designated as a
REMIC Regular Interest.
"Class X/N Interest Pass-Through Rate": The Pass-Through Rate
in respect of the Class X/N Interest for any Distribution Date equal to the
excess of (i) the Weighted Average Net Mortgage Rate over (ii) the product of
(A) two and (B) the weighted average Pass-Through Rate of the Subsidiary REMIC
Regular Interests, where the Subsidiary REMIC Accrual Class is subject to a cap
of zero and each Subsidiary REMIC Accretion Directed Class is subject to a cap
equal to the REMIC Pass-Through Rate on its Corresponding Class. For purposes of
the foregoing calculation the Class A-1A REMIC Pass-Through Rate shall be
multiplied by a fraction, the numerator of which is the actual number of days in
the Interest Accrual Period and the denominator of which is 30 so as to adjust
it to a rate that consists of twelve 30 day accrual periods and a 360-day year.
The initial Weighted Average Net Mortgage Rate for this purposes shall be the
rate necessary to allow the Class X/N Interest to absorb the interest for the
first Interest Accrual Period in excess of the interest due on other REMIC 2
interests.
"Class X/N Interest": An uncertificated interest in the Trust
held by the Trustee on behalf of the holders of the Class X and Class N
Certificates, representing the REMIC 2 Components in the aggregate, and which is
entitled to all distributions in respect of the REMIC 2 Components and which
distributions shall first be used to pay the amount of any Class A-1A LIBOR
Carryover Amounts pursuant to Sections 4.02(b)(xvi) and 4.02(e) or Rate Payments
pursuant to Section 4.02(d).
"Class X/N Notional Amount": On any Distribution Date, with
respect to the Class X/N Interest, an amount equal to the Original Class X/N
Notional Amount reduced by the aggregate of distributions made on the Class X/N
Interest.
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"Class X Distributable Amount": With respect to any
Distribution Date, the excess of (i) the aggregate of amounts distributable on
the Class X/N Interest for such Distribution Date, over (ii) the aggregate of
amounts distributable to the Class N Certificates pursuant to Section 4.02(b).
"Closing Date": December 13, 2000.
"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
"Litton Loan Servicing LP, as Servicer for The Chase Manhattan Bank, as Trustee,
in trust for registered Holders of 2000-CB4 Trust, C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2000-CB4", and which must be an Eligible
Account.
"Collection Period": With respect to any Distribution Date,
the period from the second day of the calendar month preceding the month in
which such Distribution Date occurs through the first day of the month in which
such Distribution Date occurs.
"Combined Loan-to-Value Ratio": As of any date and Mortgage
Loan, the fraction, expressed as a percentage, the numerator of which is the
Principal Balance of the Mortgage Loan plus the principal balance of any related
senior mortgage loan, and the denominator of which is the Value of the related
Mortgaged Property.
"Compensating Interest": As defined in Section 3.23 hereof.
"Condemnation Proceeds": All awards or settlements in respect
of a taking of a Mortgaged Property by exercise of the power of eminent domain
or condemnation.
"Conventional Mortgage Loan": Any Mortgage Loan that is
neither an FHA Loan nor a VA Loan.
"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 450 West 33rd Street, 14th
Floor, New York, New York 10001, Attention: Structured Finance, C-BASS Series
2000-CB4, or at such other address as the Trustee may designate from time to
time by notice to the Certificateholders, the Depositor, the Servicer and the
Seller.
"Custodial Agreement": The Custodial Agreement, dated as of
November 1, 2000, among the Trustee, the Servicer and the Custodian, as the same
may be amended or supplemented pursuant to the terms thereof.
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"Custodian": Bank One Trust Company, N.A., a national banking
association, or any successor custodian appointed pursuant to the terms of the
Custodial Agreement.
"Cut-Off Date": November 1, 2000.
"Cut-Off Date Aggregate Principal Balance": The aggregate of
the Cut-Off Date Principal Balances of the Mortgage Loans.
"Cut-Off Date Principal Balance": With respect to any Mortgage
Loan, the unpaid principal balance thereof as of the Cut-Off Date after
application of funds received or advanced on or before such date (or as of the
applicable date of substitution with respect to an Eligible Substitute Mortgage
Loan).
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
"Defective Mortgage Loan": A Mortgage Loan replaced or to be
replaced by one or more Eligible Substitute Mortgage Loans.
"Deferred Interest": With respect to any Mortgage Loan
identified on the Mortgage Loan Schedule as having the possibility of negative
amortization, the current portion of interest not currently paid by the
Mortgagor that is added to the principal balance of such Mortgage Loan.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.
"Definitive Certificates": As defined in Section 5.02(c)
hereof.
"Delinquent": Any Mortgage Loan, the Monthly Payment due on a
Due Date with respect to which such monthly payment is not made by the close of
business on the next scheduled Due Date for such Mortgage Loan.
"Depositor": Residential Asset Funding Corporation, a North
Carolina 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.
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"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 10th day of the calendar month in which such Distribution Date occurs or, if
such 10th day is not a Business Day, the Business Day immediately preceding such
10th day.
"Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by the Trust other than
through an Independent Contractor; provided, however, that the Trustee (or the
Servicer 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, The Chase Manhattan Bank, as Trustee, in trust
for the registered
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Holders of 2000-CB4 Trust, C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2000-CB4" 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 December 2000.
"Due Date": With respect to each Mortgage Loan and any
Distribution Date, the day of the calendar month in which such Distribution Date
occurs on which the Monthly Payment for such Mortgage Loan was due, exclusive of
any grace period.
"Eligible Account": Any of (i) an account or accounts
maintained with a federal or state chartered depository institution or trust
company the short-term unsecured debt obligations of which (or, in the case of a
depository institution or trust company that is the principal subsidiary of a
holding company, the short-term unsecured debt obligations of such holding
company) are rated "A-1" (or the equivalent) by each of the Rating Agencies at
the time any amounts are held on deposit therein, (ii) an account or accounts
the deposits in which are fully insured by the FDIC (to the limits established
by such corporation), the uninsured deposits in which account are otherwise
secured such that, as evidenced by an Opinion of Counsel delivered to the
Trustee and to each Rating Agency, the Certificateholders will have a claim with
respect to the funds in such account or a perfected first priority security
interest against such collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution with which such account is
maintained, (iii) a trust account or accounts maintained with the trust
department of a federal or state chartered depository institution, national
banking association or trust company acting in its fiduciary capacity or (iv) an
account otherwise acceptable to each Rating Agency without reduction or
withdrawal of their then current ratings of the Certificates as evidenced by a
letter from each Rating Agency to the Trustee. Eligible Accounts may bear
interest.
"Eligible Substitute Mortgage Loan": A mortgage loan
substituted for a Defective Mortgage Loan pursuant to the terms of this
Agreement which must, on the date of such substitution, (i) have an outstanding
principal balance, after application of all scheduled payments of principal and
interest due during or prior to the month of substitution, not in excess of, and
not more than 5% less than, the outstanding principal balance of the Defective
Mortgage Loan as of the Due Date in the calendar month during which the
substitution occurs, (ii) have a Mortgage Interest Rate, with respect to a Group
1 Mortgage Loan, not less than the Mortgage Interest Rate of the Defective
Mortgage Loan and not more than 1% in excess of the Mortgage Interest Rate of
such Defective Mortgage Loan, (iii) if a Group 2 Mortgage Loan, have a Maximum
Loan Rate not less than the Maximum Loan Rate for the Defective Mortgage Loan,
(iv) if a Group 2 Mortgage Loan, have a Minimum Loan Rate not less than the
Minimum Loan Rate of the Defective Mortgage Loan, (v) if a Group 2 Mortgage
Loan, have a Gross Margin equal to or greater than the Gross Margin of the
Defective Mortgage Loan, (vi) if a Group 2 Mortgage Loan, have a next Adjustment
Date not more than two months later than the next Adjustment Date on the
Defective Mortgage Loan, except in the case of any
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Mortgage Loan which has an Arrearage due to the application of any related
forbearance plan with respect to such Mortgage Loan, an Eligible Substitute
Mortgage Loan must have all Adjustment Dates occurring during the same Interest
Accrual Period during which Adjustment Dates occur with respect to the
substituted Mortgage Loan, (vii) 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 Combined
Loan-to-Value Ratio as of the date of substitution equal to or lower than the
Combined Loan-to-Value Ratio of the Defective Mortgage Loan as of such date, (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 by the
Seller 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 2.04 hereof applicable to the Defective Mortgage Loan. In
the event that one or more mortgage loans are substituted for one or more
Defective Mortgage Loans, the amounts described in clause (i) hereof shall be
determined on the basis of aggregate principal balances, the Mortgage Interest
Rates described in clause (ii) hereof shall be determined on the basis of
weighted average Mortgage Interest Rates, the risk gradings described in clause
(x) hereof shall be satisfied as to each such mortgage loan, the terms described
in clause (vii) hereof shall be determined on the basis of weighted average
remaining term to maturity, the Combined 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 M-1, Class
M-2, Class B-1, Class B-2, Class N, Class X and Class R Certificates.
"Escrow Account": The account or accounts created and
maintained pursuant to Section 3.06.
"Escrow Payments": The amounts constituting ground rents,
taxes, assessments, water rates, mortgage insurance premiums, fire and hazard
insurance premiums and other payments required to be escrowed by the Mortgagor
with the mortgagee pursuant to any Mortgage Loan.
"Estate in Real Property": A fee simple estate in a parcel of
real property.
"Excess Reserve Fund Account": The separate account, held in
trust, created and maintained by the Trustee pursuant to Section 4.10 in the
name of the Trustee for the benefit of the Class A-1A Certificateholders and
designated "The Chase Manhattan Bank in trust for registered Holders of C-BASS
Mortgage Loan Asset-Backed Certificates, Series 2000-CB4, Class A-1A." The
Excess Reserve Fund Account is not an asset of either REMIC 1 or REMIC 2.
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"Expense Fee Rate": The sum of (i) the Trustee Fee Rate and
(ii) the Servicing Fee Rate.
"Extended Period": As defined in Section 9.04(b).
"Extra Principal Distribution Amount": As of any Distribution
Date, the lesser of (x) the Monthly Excess Interest Amount for such Distribution
Date and (y) the Overcollateralization Deficiency for such Distribution Date.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"FHA": The Federal Housing Administration, an agency within
HUD.
"FHA Approved Mortgagee": Those institutions which are
approved by FHA to act as servicer and mortgagee of record pursuant to FHA
Regulations.
"FHA Insurance Contract" or "FHA Insurance": The contractual
obligation of FHA respecting the insurance of an FHA Loan pursuant to the
National Housing Act, as amended.
"FHA Loan": A Mortgage Loan which is the subject of an FHA
Insurance Contract as evidenced by a Mortgage Insurance Certificate.
"FHA Regulations": Regulations promulgated by HUD under the
National Housing Act, codified in 24 Code of Federal Regulations, and other HUD
issuances relating to FHA Loans, including the related handbooks, circulars,
notices and mortgagee letters.
"FHLMC": Federal Home Loan Mortgage Corporation or any
successor thereto.
"Fidelity Bond": Shall have the meaning assigned thereto in
Section 3.12.
"Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Seller or the Servicer pursuant to or as contemplated by
Section 2.03 or 10.01), a determination made by the Servicer that all Insurance
Proceeds, Liquidation Proceeds and other payments or recoveries which the
Servicer, in its reasonable good faith judgment, expects to be finally
recoverable in respect thereof have been so recovered. The Servicer shall
maintain records, prepared by a Servicing Officer, of each Final Recovery
Determination made thereby.
"Fitch": "Fitch, Inc. 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.
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"FNMA": Fannie Mae or any successor thereto.
"Foreclosure Price": The amount reasonably expected to be
received from the sale of the related Mortgaged Property net of any expenses
associated with foreclosure proceedings.
"Grantor Trust": That portion of the Trust exclusive of REMIC
1 and REMIC 2 which holds the Class N Reserve Fund and the Excess Reserve Fund
Account.
"Gross Margin": With respect to each Group 2 Mortgage Loan,
the fixed percentage set forth in the related Mortgage Note that is added to the
Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Interest Rate for such Mortgage
Loan.
"Group 1 Loan Balance": As of any date, the aggregate of the
Principal Balances of all Mortgage Loans in Loan Group 1 as of such date.
"Group 1 Mortgage Loan": A Mortgage Loan in Loan Group 1.
"Group 1 Net WAC": The average of the Net Mortgage Interest
Rates of the Group 2 Mortgage Loans, weighted on the basis of their Principal
Balances as of the first day of the related Collection Period (or, in the case
of the first Distribution Date, the Cut-off Date), each expressed on the basis
of an assumed 360-day year and the actual number of days elapsed during the
related Interest Accrual Period.
"Group 1 Principal Percentage": With respect to any
Distribution Date and the Class A-1F and Class A-2F Certificates, the percentage
equivalent of a fraction, the numerator of which is the amount of principal
collections (including any principal advanced by the Servicer) allocable to Loan
Group 1 for the related Collection Period or Prepayment Period, as applicable,
and the denominator of which is the amount of principal collections (including
any principal advanced by the Servicer) allocable to Loan Group 1 and Loan Group
2 for the related Collection Period or Prepayment Period, as applicable.
"Group 2 Loan Balance": As of any date, the aggregate of the
Principal Balances of all Mortgage Loans in Loan Group 2 as of such date.
"Group 2 Mortgage Loan": A Mortgage Loan in Loan Group 2.
"Group 2 Net WAC": The average of the Net Mortgage Interest
Rates of the Group 1 Mortgage Loans, weighted on the basis of their Principal
Balances as of the first day of the related Collection Period (or, in the case
of the first Distribution Date, the Cut-off Date).
"Group 2 Principal Percentage": With respect to any
Distribution Date and the Class A-1A Certificates, the percentage equivalent of
a fraction, the numerator of which is the amount of principal collections
(including any principal advanced by the Servicer) allocable to Loan Group 2 for
the related Collection Period or Prepayment Period, as applicable, and the
denominator of which is the amount of principal collections (including any
principal advanced by the Servicer) allocable to Loan Group 1 and Loan Group 2
for the related Collection Period or Prepayment Period, as applicable.
"HUD": The United States Department of Housing and Urban
Development, or any successor thereto and including the Federal Housing
Commissioner and the Secretary of Housing and Urban Development where
appropriate under the FHA Regulations.
"Independent": When used with respect to any specified Person,
any such Person who (i) is in fact independent of the Depositor, the Servicer
and their respective
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Affiliates, (ii) does not have any direct financial interest in or any material
indirect financial interest in the Depositor or the Servicer or any Affiliate
thereof, and (iii) is not connected with the Depositor or the Servicer or any
Affiliate thereof as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions; provided, however,
that a Person shall not fail to be Independent of the Depositor or the Servicer
or any Affiliate thereof merely because such Person is the beneficial owner of
1% or less of any Class of securities issued by the Depositor or the Servicer or
any Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than
the Servicer) that would be an "independent contractor" with respect to the
Trust Fund within the meaning of Section 856(d)(3) of the Code if the Trust Fund
were a real estate investment trust (except that the ownership tests set forth
in that Section shall be considered to be met by any Person that owns, directly
or indirectly, 35 percent or more of any Class of Certificates), so long as the
Trust Fund does not receive or derive any income from such Person and provided
that the relationship between such Person and the Trust Fund is at arm's length,
all within the meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any
other Person (including the Servicer) if the Trustee has received an Opinion of
Counsel, which Opinion of Counsel shall be an expense of the Trust Fund, to the
effect that the taking of any action in respect of any REO Property by such
Person, subject to any conditions therein specified, that is otherwise herein
contemplated to be taken by an Independent Contractor will not cause such REO
Property to cease to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code (determined without regard to the exception
applicable for purposes of Section 860D(a) of the Code), or cause any income
realized in respect of such REO Property to fail to qualify as Rents from Real
Property.
"Index": With respect to each Group 2 Mortgage Loan and with
respect to each related Adjustment Date, the index as specified in the related
Mortgage Note.
"Ineligible Foreclosure Property Loan": Any Mortgage Loan
listed on the Ineligible Foreclosure Property Loan Schedule as of the Closing
Date and for which there is no written agreement modifying such Mortgagor's
obligation to make payments under the Mortgage Loan.
"Ineligible Foreclosure Property Loan Schedule": The schedule,
attached hereto as Exhibit S, of Ineligible Foreclosure Property Loans to be
prepared by the Seller.
"Initial Certificate Principal Balance": With respect to any
Certificate of a Class other than a Class N, Class X or Class R Certificate, the
amount designated "Initial Certificate Principal Balance" on the face thereof.
"Initial Notional Amount": With respect to any Class N
Certificate, the amount designated "Initial Notional Amount" on the face
thereof.
"Initial Overcollateralization Amount": $2,882,627.22.
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"Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy covering a Mortgage Loan, to the extent such
proceeds are not to be applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the procedures that the
Servicer would follow in servicing mortgage loans held for its own account,
subject to the terms and conditions of the related Mortgage Note and Mortgage.
"Interest Accrual Period": With respect to any Distribution
Date and (i) with respect to the Class A-1F, A-2F, Class M-1, Class M-2, Class
B-1, Class B-2 and Class N Certificates and any Class of REMIC Regular
Interests, the calendar month immediately preceding the month in which such
Distribution Date occurs, and (ii) with respect to the Class A-1A Certificates,
the period from the preceding Distribution Date to the day prior to the current
Distribution Date (or, in the case of the first Distribution Date, the period
from the Closing Date through December 25, 2000).
"Interest Carry Forward Amount": For any Class of Certificates
(other than the Class X, Class N and Class R Certificates) and any Distribution
Date, the sum of (a) the excess, if any, of the Accrued Certificate Interest and
any Interest Carry Forward Amount for the prior Distribution Date, over the
amount in respect of interest actually distributed on such Class on such prior
Distribution Date and (b) interest on such excess at the applicable Pass-Through
Rate (x) with respect to the Class A-1F, Class A-2F, Class M-1, Class M-2, Class
B-1 and Class B-2 Certificates, on the basis of a 360-day year consisting of
twelve 30-day months, and (y) with respect to the Class A-1A Certificates, for
the actual number of days elapsed since the prior Distribution Date and a
360-day year.
"Interest Percentage": With respect to any Class of
Certificates and any Distribution Date, the ratio (expressed as a decimal
carried to six places) of the Accrued Certificate Interest for such Class to the
sum of the Accrued Certificate Interest for all Classes, in each case with
respect to such Distribution Date.
"Interest Remittance Amount": As of any Determination Date,
the sum, without duplication, of (i) all interest due and collected or advanced
with respect to the related Collection Period on the Mortgage Loans (less the
Servicing Fee, mortgage insurance premiums, 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 or Net Liquidation Proceeds relating to interest with
respect to the Mortgage Loans received during the related Prepayment Period.
"Late Collections": With respect to any Mortgage Loan, all
amounts received subsequent to the Determination Date immediately following any
related Collection Period, whether as late payments of Monthly Payments or as
Insurance Proceeds, Liquidation Proceeds or otherwise, which represent late
payments or collections of principal and/or interest due (without regard to any
acceleration of
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payments under the related Mortgage and Mortgage Note) but delinquent on a
contractual basis for such Collection Period and not previously recovered.
"Latest Possible Maturity Date": The Distribution Date in
November 25, 2031.
"LIBOR": With respect to each Interest Accrual Period, the
rate determined by the Trustee on the related LIBOR Determination Date on the
basis of the offered rate for one-month United States dollar deposits, as such
rate appears on the Telerate Page 3750, as of 11:00 a.m. (London time) on such
LIBOR Determination Date. If no such quotations are available on a LIBOR
Determination Date, LIBOR for the related Interest Accrual Period will be
established by the Trustee as follows:
(i) If on such LIBOR Determination Date two or more
Reference Banks provide such offered quotations, LIBOR for the related Interest
Accrual Period shall be the arithmetic mean of such offered quotations (rounded
upwards if necessary to the nearest whole multiple of 0.001%);
(ii) If on such LIBOR Determination Date fewer than two
Reference Banks provide such offered quotations, LIBOR for the related Interest
Accrual Period shall be the arithmetic mean of the rates quoted by one or more
major banks in New York City, selected by the Trustee after consultation with
the Servicer, as of 11:00 A.M., New York City time, on such date for loans in
U.S. Dollars to leading European banks for a period of one month in amounts
approximately equal to the aggregate Certificate Principal Balances of the Class
A-1F and Class A-1A Certificates; and
(iii) If no such quotations can be obtained, LIBOR for the
related Interest Accrual Period shall be LIBOR for the prior Distribution Date.
"LIBOR Business Day": Any day on which banks in London,
England and The City of New York are open and conducting transactions in foreign
currency and exchange.
"LIBOR Determination Date": With respect to the Class A-1A
Certificates, (i) for the first Distribution Date, the second LIBOR Business Day
preceding the Closing Date and (ii) for each subsequent Distribution Date, the
second LIBOR Business Day prior to the immediately preceding Distribution Date.
"Liquidated Mortgage Loan": As to any Distribution Date, any
Mortgage Loan in respect of which the Servicer has determined, in accordance
with the servicing procedures specified herein, as of the end of the related
Prepayment Period, that all Liquidation Proceeds and Insurance Proceeds which it
expects to recover with respect to the liquidation of the Mortgage Loan or
disposition of the related REO Property have been recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made as to such Mortgage Loan; or (iii) such Mortgage
Loan is
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removed from the Trust Fund by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03 or Section 10.01. With respect to
any REO Property, either of the following events: (i) a Final Recovery
Determination is made as to such REO Property; or (ii) such REO Property is
removed from the Trust Fund by reason of its being sold or purchased pursuant to
Section 3.13 or Section 10.01.
"Liquidation Proceeds": The amount (other than amounts
received in respect of the rental of any REO Property prior to REO Disposition)
received by the Servicer in connection with (i) the taking of all or a part of a
Mortgaged Property by exercise of the power of eminent domain or condemnation or
(ii) the liquidation of a defaulted Mortgage Loan by means of a trustee's sale,
foreclosure sale or otherwise.
"Liquidation Report": The report with respect to a Liquidated
Mortgage Loan in such form and containing such information as is agreed to by
the Servicer and the Trustee and substantially in the form of Exhibit M attached
hereto.
"Loan Group": Either Loan Group 1 or Loan Group 2, as the
context requires.
"Loan Group Balance": Either the Group 1 Loan Balance or the
Group 2 Loan Balance, as applicable.
"Loan Group 1": The pool of Mortgage Loans identified in the
Mortgage Loan Schedule as having been assigned to Sub-group 1A and Sub-group 1B.
"Loan Group 2": The pool of Mortgage Loans identified in the
Mortgage Loan Schedule as having been assigned to Loan Group 2.
"Loan Guaranty Certificate": The certificate evidencing a VA
Guaranty Agreement.
"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.
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"Maximum Loan Rate": With respect to each Group 2 Mortgage
Loan, the percentage set forth in the related Mortgage Note as the maximum
Mortgage Interest Rate thereunder.
"Minimum Loan Rate": With respect to each Group 2 Mortgage
Loan, the percentage set forth in the related Mortgage Note as the minimum
Mortgage Interest Rate thereunder.
"Monthly Excess Cashflow Amount": The sum of the Monthly
Excess Interest Amount, the Overcollateralization Release Amount and (without
duplication) any portion of the Principal Distribution Amount remaining after
principal distributions on the Offered Certificates.
"Monthly Excess Interest Amount": With respect to each
Distribution Date, the amount, if any, by which the Interest Remittance Amount
for such Distribution Date exceeds the aggregate amount distributed on such
Distribution Date pursuant to paragraphs (i) through (vi) under Section 4.01.
"Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction
in the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act; (b) without giving effect to any extension granted or agreed to by
the Servicer pursuant to Section 3.01; and (c) on the assumption that all other
amounts, if any, due under such Mortgage Loan are paid when due.
"Moody's": Moody's Investors Services, Inc. and its
successors, and if such company shall for any reason no longer perform the
functions of a securities rating agency, "Moody's" shall be deemed to refer to
any other "nationally recognized statistical rating organization" as set forth
on the most current list of such organizations released by the Securities and
Exchange Commission.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first or second lien on, or first or second priority security
interest in, a Mortgaged Property securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Insurance Certificate": The certificate evidencing
an FHA Insurance Contract.
"Mortgage Interest Rate": With respect to each Mortgage Loan,
the annual rate at which interest accrues on such Mortgage Loan from time to
time in accordance with the provisions of the related Mortgage Note, which rate
(i) in the case of
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each Group 1 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 Group 2 Mortgage Loan
(A) as of any date of determination until the first Adjustment Date following
the Cut-Off Date shall be the rate set forth in the Mortgage Loan Schedule as
the Mortgage Interest Rate in effect immediately following the Cut-Off Date and
(B) as of any date of determination thereafter shall be the rate as adjusted on
the most recent Adjustment Date, to equal the sum, rounded to the nearest 0.125%
as provided in the Mortgage Note, of the Index, determined as set forth in the
related Mortgage Note, plus the related Gross Margin subject to the limitations
set forth in the related Mortgage Note. With respect to each Mortgage Loan that
becomes an REO Property, as of any date of determination, the annual rate
determined in accordance with the immediately preceding sentence as of the date
such Mortgage Loan became an REO Property.
"Mortgage Loan": Each mortgage loan transferred and assigned
to the Trustee pursuant to Section 2.01 or Section 2.03(d) as from time to time
held as a part of the Trust Fund, the Mortgage Loans so held being identified in
the Mortgage Loan Schedule.
"Mortgage Loan Purchase Agreement": The agreement between the
Seller and the Depositor, dated as of November 1, 2000, 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 (i) with respect to
the Mortgage Loans, the list of such Mortgage Loans included in the Trust Fund
on such date, separately identifying the Group 1 Mortgage Loans and the Group 2
Mortgage Loans, attached hereto as Exhibit D. The Mortgage Loan Schedule shall
be prepared by the Seller and shall set forth the following information with
respect to each Mortgage Loan:
(1) the Seller's Mortgage Loan identifying number;
(2) the city, state, and zip code of the Mortgaged
Property;
(3) the type of Residential Dwelling constituting the
Mortgaged Property or a designation that the Mortgaged Property is a
multi-family property;
(4) the occupancy status of the Mortgaged Property at
origination;
(5) the original months to maturity;
(6) the date of origination;
(7) the first payment date;
(8) the stated maturity date;
(9) the stated remaining months to maturity;
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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 Arrearage of the Mortgage Loan as of the Cut-Off
Date;
(13) the Mortgage Interest Rate of the Mortgage Loan as of
the Cut-Off Date;
(14) the current principal and interest payment of the
Mortgage Loan as of the Cut-Off Date;
(15) the contractual interest paid to date of the Mortgage
Loan;
(16) if the Mortgage Loan is not owner-financed, the
Combined Loan-to-Value Ratio at origination;
(17) a code indicating the loan performance status of the
Mortgage Loan as of the Cut-Off Date;
(18) a code indicating whether the Mortgage Loan is a
Simple Interest Mortgage Loan or an Actuarial Mortgage Loan;
(19) a code indicating whether the Mortgaged Property is
in bankruptcy or in its forbearance period as of the Cut-Off Date;
(20) a code indicating whether the Mortgage Loan is
conventional, insured by the FHA or guaranteed by the VA;
(21) a code indicating the Index that is associated with
such Mortgage Loan;
(22) the Gross Margin;
(23) the Periodic Rate Cap;
(24) the Minimum Loan Rate;
(25) the Maximum Loan Rate;
(26) a code indicating whether the Mortgage Loan has a
prepayment penalty and the type of prepayment penalty;
(27) the first Adjustment Date immediately following the
Cut-Off Date;
(28) the rate adjustment frequency;
(29) the payment adjustment frequency;
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(30) a code indicating whether the Mortgage Loan is
owner-financed; and
(31) a code indicating whether the Mortgage Loan is a
second lien.
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 and for each Loan Group: (1) the number of Mortgage Loans; (2) the
current Principal Balance of the Mortgage Loans; (3) the weighted average
Mortgage Interest Rate of the Mortgage Loans; and (4) the weighted average
maturity of the Mortgage Loans. The Mortgage Loan Schedule shall be amended from
time to time by the Seller in accordance with the provisions of this Agreement.
With respect to any Eligible Substitute Mortgage Loan, Cut-Off Date shall refer
to the related Cut-Off Date for such Mortgage Loan, determined in accordance
with the definition of Cut-Off Date herein.
"Mortgage Note": The original executed note or other evidence
of indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage
Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on
Exhibit D from time to time, and any REO Properties acquired in respect thereof.
"Mortgaged Property": The underlying property securing a
Mortgage Loan, including any REO Property, consisting of an Estate in Real
Property improved by a Residential Dwelling or multi-family dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Excess Spread": With respect to any Distribution Date,
the fraction, expressed as a percentage, the numerator of which is equal to the
amount, if any, by which (a) the product of (i) the Pool Balance as of the end
of the related Collection Period and (ii) the weighted average of the Net
Mortgage Rates exceeds (b) the Interest Remittance Amount for such Distribution
Date, and the denominator of which is the product of (x) the Pool Balance and
(y) the actual number of days in the related Interest Accrual Period divided by
360.
"Net Liquidation Proceeds": With respect to any Liquidated
Mortgage Loan or any other disposition of related Mortgaged Property (including
REO Property) the related Liquidation Proceeds net of Advances, Servicing
Advances, Servicing Fees and any other accrued and unpaid servicing fees
received and retained in connection with the liquidation of such Mortgage Loan
or Mortgaged Property.
"Net Mortgage Interest Rate": With respect to any Mortgage
Loan, the Mortgage Interest Rate borne by such Mortgage Loan minus the sum of
the (i) Expense Fee Rate and (ii) the rate at which the mortgage insurance
premium, if any, is calculated.
"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.
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"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.
"Notional Amount": Either the Class N Notional Amount or the
Class X/N Notional Amount, as applicable.
"Offered Certificates": The Class A-1A, Class A-1F, Class
A-2F, Class M-1, Class M-2, Class B-1 and Class B-2 Certificates.
"Officers' Certificate": A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Servicer, the Seller or the
Depositor, as applicable.
"Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be a salaried counsel for the Depositor or the Servicer
except that any opinion of counsel relating to (a) the qualification of any
REMIC as a REMIC or (b) compliance with the REMIC Provisions must be an opinion
of Independent counsel.
"Optional Termination Date": The first Distribution Date on
which the Seller may opt to terminate the Mortgage Pool pursuant to Section
10.01.
"Original Class N Notional Amount": The Notional Amount of the
Class N Certificates on the Closing Date which shall be $7,290,000.00.
"Original Class X/N Notional Amount": The Notional Amount of
the Class X/N Interest on the Closing Date, as set forth opposite such Class in
the Preliminary Statement.
"Original Class Certificate Principal Balance": With respect
to each Class of Certificates, the Certificate Principal Balance thereof on the
Closing Date, as set forth opposite such Class in the Preliminary Statement,
except with respect to the Class N, Class X and 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 Collection Period over (y) the aggregate Certificate
Principal Balances of all Classes of Offered Certificates (after taking into
account all distributions of principal on such Distribution Date).
"Overcollateralization Deficiency": As of any Distribution
Date, the excess, if any, of (x) the Targeted Overcollateralization Amount for
such Distribution
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Date over (y) the Overcollateralization Amount for such Distribution Date,
calculated for this purpose after taking into account the reduction on such
Distribution Date of the Certificate Principal Balances of all Classes of
Offered Certificates resulting from the distribution of the Principal
Distribution Amount (but not the Extra Principal Distribution Amount) on such
Distribution Date, but prior to taking into account any Applied Realized Loss
Amounts on such Distribution Date.
"Overcollateralization Release Amount": With respect to any
Distribution Date after the Stepdown Date on which a Trigger Event is not in
effect, the lesser of (x) the Principal Remittance Amount for such Distribution
Date and (y) the excess, if any, of (i) the Overcollateralization Amount for
such Distribution Date, assuming that 100% of the Principal Remittance Amount is
applied as a principal payment on the Offered Certificates on such Distribution
Date, over (ii) the Targeted Overcollateralization Amount for such Distribution
Date.
"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-1A Pass-Through Rate,
the Class A-1F Pass-Through Rate, the Class A-2F Pass-Through Rate, the Class
M-1 Pass-Through Rate, the Class M-2 Pass-Through Rate, the Class B-1
Pass-Through Rate, the Class B-2 Pass-Through Rate, the Class X/N Interest
Pass-Through Rate and the Class N 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 N, Class X 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 N Certificate, the undivided percentage interest obtained by
dividing the Initial Notional Amount evidenced by such Certificate by the
Original Class N Notional Amount of such Class. With respect to a Class X 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 Group 2 Mortgage
Loan and any Adjustment Date therefor, the fixed percentage set forth in the
related Mortgage Note, which is the maximum amount by which the Mortgage
Interest Rate for such Mortgage Loan may increase or decrease (without regard to
the Maximum Loan Rate or the Minimum Loan Rate) on such Adjustment Date from the
Mortgage Interest Rate in effect immediately prior to such Adjustment Date.
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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
Trustee or any of their respective Affiliates or for which an Affiliate of the
Trustee serves as an advisor:
(i) direct obligations of, or obligations fully
guaranteed as to timely payment of principal and interest by, the United States
or any agency or instrumentality thereof, provided such obligations are backed
by the full faith and credit of the United States;
(ii) (A) demand and time deposits in, certificates of
deposit of, bankers' acceptances issued by or federal funds sold by any
depository institution or trust company (including the Trustee or its agent
acting in their respective commercial capacities) incorporated under the laws of
the United States of America or any state thereof and subject to supervision and
examination by federal and/or state authorities, so long as, at the time of such
investment or contractual commitment providing for such investment, such
depository institution or trust company or its ultimate parent has a short-term
uninsured debt rating in one of the two highest available rating categories of
S&P and Moody's and the highest available rating category of Fitch and provided
that each such investment has an original maturity of no more than 365 days and
(B) any other demand or time deposit or deposit which is fully insured by the
FDIC;
(iii) repurchase obligations with a term not to exceed 30
days with respect to any security described in clause (i) above and entered into
with a depository institution or trust company (acting as principal) rated A or
higher by S&P and Fitch and A1 or higher by Moody's; provided, however, that
collateral transferred pursuant to such repurchase obligation must be of the
type described in clause (i) above and must (A) be valued daily at current
market prices plus accrued interest or (B) pursuant to such valuation, be equal,
at all times, to 105% of the cash transferred by the Trustee in exchange for
such collateral and (C) be delivered to the Trustee or, if the Trustee is
supplying the collateral, an agent for the Trustee, in such a manner as to
accomplish perfection of a security interest in the collateral by possession of
certificated securities;
(iv) securities bearing interest or sold at a discount
that are issued by any corporation incorporated under the laws of the United
States of America or any State thereof and that are rated by each Rating Agency
in its highest long-term unsecured rating categories at the time of such
investment or contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand or on a
specified date not more than 30 days after the date of acquisition thereof) that
is rated by each Rating Agency in its highest short-term unsecured debt rating
available at the time of such investment;
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(vi) units of money market funds registered under the
Investment Company Act of 1940 including funds managed or advised by the Trustee
or an affiliate thereof having the highest rating category by the applicable
Rating Agency; and
(vii) if previously confirmed in writing to the Trustee,
any other demand, money market or time deposit, or any other obligation,
security or investment, as may be acceptable to the Rating Agencies in writing
as a permitted investment of funds backing securities having ratings equivalent
to its highest initial rating of the Class A Certificates;
provided, that no instrument described hereunder shall evidence either the right
to receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provide a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations.
"Permitted Transferee": Any transferee of a Residual
Certificate other than a Disqualified Organization or a Non-U.S. Person.
"Person": Any individual, corporation, partnership, joint
venture, association, joint stock company, trust, limited liability company,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pool Balance": As of any date of determination, the aggregate
Principal Balance of the Mortgage Loans.
"Pool Cap": With respect to any Distribution Date, the product
of (i) the average of the Net Mortgage Interest Rates of the Mortgage Loans,
weighted on the basis of their Principal Balances as of the first day of the
related Collection Period (or, in the case of the first Distribution Date, the
Cut-Off Date), and (ii) the Pool Balance divided by the aggregate Certificate
Principal Balance of the Offered Certificates.
"Prepayment Assumption": Prepayment Scenario IV as set forth
in the Prospectus Supplement.
"Prepayment Interest Shortfall": With respect to any
Distribution Date, for each Mortgage Loan that was during the related Prepayment
Period the subject of a Principal Prepayment in full that was applied by the
Servicer to reduce the outstanding principal balance of such loan on a date
preceding the related Due Date, an amount equal to interest at the applicable
Mortgage Interest Rate (net of the Servicing Fee Rate) on the amount of such
Principal Prepayment for the number of days commencing on the date on which the
prepayment is applied and ending on the last day of the related Prepayment
Period.
"Prepayment Period": With respect to any Distribution Date,
the calendar month preceding the month in which such Distribution Date occurs.
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"Primary Insurance Policy": Each policy of primary guaranty
mortgage insurance issued by a Qualified Insurer in effect with respect to any
Mortgage Loan, or any replacement policy therefor obtained by the Servicer
pursuant to Section 3.08.
"Principal Balance": As to any Mortgage Loan and any day,
other than a Liquidated Mortgage Loan, the related Cut-Off Date Principal
Balance, minus all collections credited against the principal balance of any
such Mortgage Loan and the principal portion of Advances plus, Deferred
Interest, if any. For purposes of this definition, a Liquidated Mortgage Loan
shall be deemed to have a Principal Balance equal to the Principal Balance of
the related Mortgage Loan as of the final recovery of related Liquidation
Proceeds and a Principal Balance of zero thereafter. As to any REO Property and
any day, the Principal Balance of the related Mortgage Loan immediately prior to
such Mortgage Loan becoming REO Property minus any REO Principal Amortization
received with respect thereto on or prior to such day.
"Principal Distribution Amount": As to any Distribution Date,
the sum of (i) the Principal Remittance Amount minus, for Distribution Dates
occurring on and after the Stepdown Date and for which a Trigger Event is not in
effect, the Overcollateralization Release Amount, if any, and (ii) the Extra
Principal Distribution Amount, if any.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the full
amount of scheduled interest due on any Due Date in any month or months
subsequent to the month of prepayment.
"Principal Remittance Amount": With respect to any
Distribution Date, to the extent of funds available therefor, the sum (less
amounts available for reimbursement of Advances and Servicing Advances pursuant
to Section 3.05 and expenses reimbursable pursuant to Section 6.03) of: (i) each
payment of principal on a Mortgage Loan due during the related Collection Period
and received by the Servicer on or prior to the related Determination Date, and
any Advances with respect thereto, (ii) 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 Trust is to be
terminated in accordance with Section 10.01 hereof, that portion of the
Termination Price in respect of principal.
"Private Certificates": Any of the Class N, Class X and 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
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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 December 7, 2000 relating to the public offering of the Offered
Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03 or
10.01, and as confirmed by an Officers' Certificate from the Servicer to the
Trustee, an amount equal to the sum of (i) 100% of the Principal Balance thereof
as of the date of purchase (or such other price as provided in Section 10.01),
(ii) in the case of (x) a Mortgage Loan, accrued interest on such Principal
Balance at the applicable Mortgage Interest Rate in effect from time to time
from the Due Date as to which interest was last covered by a payment by the
Mortgagor or an Advance by the Servicer, which payment or Advance had as of the
date of purchase been distributed pursuant to Section 4.01, through the end of
the calendar month in which the purchase is to be effected, and (y) an REO
Property, its fair market value, determined in good faith by the Servicer, (iii)
any unreimbursed Servicing Advances and Advances and any unpaid Servicing Fees
and Special Servicing Fees allocable to such Mortgage Loan or REO Property, (iv)
any amounts previously withdrawn from the Collection Account in respect of such
Mortgage Loan or REO Property pursuant to Section 3.13, and (v) in the case of a
Mortgage Loan required to be purchased pursuant to Section 2.03, expenses
reasonably incurred or to be incurred by the Servicer or the Trustee in respect
of the breach or defect giving rise to the purchase obligation.
"Qualified Insurer": Any insurance company acceptable to FNMA
or FHLMC.
"Rate Payment": With respect to any Distribution Date, the
excess, if any, of Accrued Certificate Interest on a Class of Offered
Certificates over the amount of interest accrued for the same period with
respect to the REMIC 2 Regular Interest with the same alphabetical or numeric
Class designation, together with the unpaid portion of any such excess from
prior Distribution Dates (and interest accrued thereon at the then applicable
Pass-Through Rate for such Class of Certificates).
"Rating Agency or Rating Agencies": Moody's, 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": With respect to a Liquidated Mortgage Loan,
the amount by which the remaining unpaid principal balance of the Mortgage Loan
exceeds
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the amount of Net Liquidation Proceeds applied to the principal balance of the
related Mortgage Loan.
"Realized Loss Amortization Amount": Any of the Class M-1
Realized Loss Amortization Amount, the Class M-2 Realized Loss Amortization
Amount, the Class B-1 Realized Loss Amortization Amount and the Class B-2
Realized Loss Amortization Amount.
"Record Date": With respect to all of the Certificates (except
for the Class A-1A Certificates), the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (or the
Closing Date, in the case of the first Distribution Date). With respect to the
Class A-1A Certificates, the Business Day immediately preceding such
Distribution Date; provided, however, that if any Class A-1A 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.
"Reference Banks": Those banks (i) with an established place
of business in London, England, (ii) not controlling, under the control of or
under common control with the Depositor or the Trustee, (iii) whose quotations
appear on the Telerate Page 3750 on the relevant LIBOR Determination Date and
(iv) which have been designated as such by the Trustee; provided, however, that
if fewer than two of such banks provide a LIBOR rate, then any leading banks
selected by the Trustee which are engaged in transactions in United States
dollar deposits in the international Eurocurrency market.
"Regular Certificate": Any of the Offered Certificates, the
Class N Certificates and the Class X Certificates.
"Related Documents": With respect to any Mortgage Loan, the
related Mortgage Notes, Mortgages and other related documents.
"Relief Act": The Soldiers' and Sailors Civil Relief Act of
1940, as amended.
"Relief Act Interest Shortfall": With respect to any
Distribution Date, for any Mortgage Loan with respect to which there has been a
reduction in the amount of interest collectible thereon for the most recently
ended Collection Period as a result of the application of the Relief Act, the
amount by which (i) interest collectible on such Mortgage Loan during such
Collection Period is less than (ii) one month's interest on the Principal
Balance of such Mortgage Loan at the Mortgage Interest Rate for such Mortgage
Loan before giving effect to the application of the Relief Act.
"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 REMIC 2 Regular Interests.
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"REMIC": A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
"REMIC 1 Regular Interests": The Class T1-Accrual Interest,
Class T1-A-1F Interest, Class T1-A-1A Interest, Class T1-A2F Interest, Class
T1-M-1 Interest, Class T1-M-2 Interest, Class T1-B-1 Interest and Class T1-B-2
Interest.
"REMIC 2 Regular Interests": The Class A-1F Certificates,
Class A-2F Certificates, Class A-1A Certificates, Class M-1 Certificates, Class
M-2 Certificates, Class B-1 Certificates, Class B-2 Certificates and Class X/N
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.
"REMIC Regular Interest": As defined in the Preliminary
Statement.
"Remittance Report": A report prepared by the Servicer and
delivered to the Trustee pursuant to Section 4.07.
"Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code.
"REO Account": The account or accounts maintained by the
Servicer in respect of an REO Property pursuant to Section 3.13.
"REO Disposition": The sale or other disposition of an REO
Property on behalf of the Trust Fund.
"REO Principal Amortization": With respect to any REO
Property, for any calendar month, the aggregate of all amounts received in
respect of such REO Property during such calendar month, whether in the form of
rental income, sale proceeds (including, without limitation, that portion of the
Termination Price paid in connection with a purchase of all of the Mortgage
Loans and REO Properties pursuant to Section 10.01 that is allocable to such REO
Property) or otherwise, net of any portion of such amounts (i) payable pursuant
to Section 3.13 in respect of the proper operation, management and maintenance
of such REO Property or (ii) payable or reimbursable to the Servicer pursuant to
Section 3.13 for unpaid Servicing Fees in respect of the related Mortgage Loan
and unreimbursed Servicing Advances and Advances in respect of such REO Property
or the related Mortgage Loan.
"REO Property": A Mortgaged Property acquired by the Servicer
on behalf of the Trust Fund through foreclosure or deed-in-lieu of foreclosure,
as described in Section 3.13.
"Re-Performing 60+ Day Delinquent Loan": Each Mortgage Loan
with respect to which, as of any date of determination, (x) any portion of a
Monthly Payment
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is, as of the last day of the prior Collection Period, two months or more past
due and (y) with respect to which the mortgagor has made three Monthly Payments
within the three calendar months preceding such date of determination. To the
extent that, as of any date of determination, more than 10% of the Mortgage
Loans (measured by scheduled principal balance) are Re-Performing 60+ Day
Delinquent Loans, the Re-Performing 60+ Day Delinquent Loans constituting such
excess shall be deemed to be 60+ Day Delinquent Loans.
"Re-performance Test": The following criteria one of which
must be met for a Mortgage Loan to qualify as a Re-performing Mortgage Loan: (1)
the Mortgagor has made at least three aggregate Monthly Payments in the three
calendar months preceding the Cut-Off Date (regardless of either the timing of
receipt of such payments or the payment history of such loans prior to August 1,
2000), or (2) the Mortgagor has made at least four aggregate Monthly Payments in
the four calendar months preceding the Cut-Off Date (regardless of either the
timing of receipt of such payments or the payment history of such loans prior to
July 1, 2000), or (3) the Mortgagor has made at least five aggregate Monthly
Payments in the five calendar months preceding the Cut-Off Date (regardless of
either the timing of receipt of such payments or the payment history of such
loans prior to June 1, 2000).
"Re-performing Mortgage Loan": A Mortgage Loan which has
defaulted in the past and which is at least 90 days Delinquent with respect to
certain Monthly Payments but which satisfies one of the Re-Performance Test
criteria.
"Request for Release": A release signed by a Servicing
Officer, substantially in the form of Exhibit E attached hereto.
"Required Class N Reserve Fund Balance": For the Distribution
Date occurring in December, 2000 an amount equal to the Accrued Certificate
Interest for the Class N Certificates for the related Interest Accrual Period.
For the Distribution Date occurring in January, 2001 an amount equal to two
times the Accrued Certificate Interest for the Class N Certificates for the
related Interest Accrual Period. For the Distribution Date occurring in
February, 2001 an amount equal to three times the Accrued Certificate Interest
for the Class N Certificates for the related Interest Accrual Period. For the
Distribution Date occurring in March, 2001 an amount equal to four times the
Accrued Certificate Interest for the Class N Certificates for the related
Interest Accrual Period. For the Distribution Date occurring in April, 2001 an
amount equal to five times the Accrued Certificate Interest for the Class N
Certificates for the related Interest Accrual Period. For the Distribution Date
occurring in May, 2001 and for each Distribution Date thereafter, an amount
equal to six times the Accrued Certificate Interest for the related Interest
Accrual Period.
"Required Class N Reserve Fund Deposit": With respect to any
Distribution Date, the amount, if any, by which (i) the Required Class N Reserve
Fund Balance for such Distribution Date exceeds (ii) the amount on deposit in
the Class N Reserve Fund immediately prior to such date.
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"Required Excess Reserve Fund Balance": An amount initially
equal to $5,000 and thereafter as calculated pursuant to Section 4.10.
"Required Excess Reserve Fund Deposit": With respect to any
Distribution Date occurring between the Closing Date and the Distribution Date
on which the amount on deposit in the Excess Reserve Fund first equals the
Required Excess Reserve Fund Balance, the amount, if any, by which (i) the
Required Excess Reserve Fund Balance exceeds (ii) the amount on deposit in the
Excess Reserve Fund immediately prior to such date.
"Residential Dwelling": Any one of the following: (i) a
one-family dwelling, (ii) a two- to four-family dwelling, (iii) a one-family
dwelling unit in a 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 42 United States Code, Section 5402(6)).
"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,
any officer assigned to the Corporate Trust Division (or any successor thereto),
including any Vice President, Assistant Vice President, Trust Officer, any
Assistant Secretary, any trust officer or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and in each case having direct responsibility for the
administration of this Agreement.
"S&P": Standard & Poor's Ratings Services and its successors,
and if such company shall for any reason no longer perform the functions of a
securities rating agency, "S&P" shall be deemed to refer to any other
"nationally recognized statistical rating organization" as set forth on the most
current list of such organizations released by the Securities and Exchange
Commission.
"Seller": Credit-Based Asset Servicing and Securitization LLC,
or its successor in interest, in its capacity as seller under the Mortgage Loan
Purchase Agreement.
"Senior Certificates": The Class A-1F, Class A-2F and Class
A-1A Certificates.
"Senior Enhancement Percentage": For any Distribution Date,
the percentage obtained by dividing (x) the sum of (i) the aggregate Certificate
Principal Balances of the Subordinated Certificates and (ii) the
Overcollateralization Amount, in each case after taking into account the
distribution of the Principal Distribution Amount on such Distribution Date by
(y) the Pool Balance as of the last day of the related Collection Period.
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"Senior Specified Enhancement Percentage": On any date of
determination thereof, 36.00%.
"Servicer": Litton Loan Servicing LP, a Delaware limited
partnership, or any successor servicer appointed as herein provided, in its
capacity as Servicer hereunder.
"Servicer Affiliate": A Person (i) controlling, controlled by
or under common control with the Servicer or which is 50% or more owned by the
Servicer and (ii) which is qualified to service residential mortgage loans.
"Servicer Event of Termination": One or more of the events
described in Section 7.01.
"Servicer 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 for any calendar month, an amount equal to one month's
interest (or in the event of any payment of interest which accompanies a
Principal Prepayment in full made by the Mortgagor during such calendar month,
interest for the number of days covered by such payment of interest) at the
Servicing Fee Rate on the same principal amount on which interest on such
Mortgage Loan accrues for such calendar month.
"Servicing Fee Rate": With respect to each Mortgage Loan,
0.50% per annum.
"Servicing Officer": Any officer of the Servicer involved in,
or responsible for, the administration and servicing of Mortgage Loans, whose
name and specimen signature appear on a list of servicing officers furnished by
the Servicer to the Trustee and the Depositor on the Closing Date, as such list
may from time to time be amended.
"Servicing Rights Pledgee": One or more lenders, selected by
the Servicer, to which the Servicer will pledge and assign all of its right,
title and interest in, to and under this Agreement, including First Union
National Bank, as the representative of certain lenders.
"Servicing Standard": Shall mean the standards set forth in
Section 3.01.
"Simple Interest Method": The method of allocating a payment
to principal and interest, pursuant to which the portion of such payment that is
allocated to
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interest is equal to the product of the fixed rate of interest multiplied by the
unpaid principal balance multiplied by the period of time elapsed since the
preceding payment of interest was made and divided by either 360 or 365, as
specified in the related Mortgage Note, and the remainder of such payment is
allocated to principal.
"Simple Interest Mortgage Loan": Any Mortgage Loan under which
the portion of a payment allocable to interest and the portion of such payment
allocable to principal is determined in accordance with the Simple Interest
Method.
"Special Servicing Fee": With respect to each Mortgage Loan
(except a Re-performing Mortgage Loan) that is delinquent 90 or more days, $150
per month payable until the earlier of (i) 18 consecutive months and (ii) the
Delinquency status of such Mortgage Loan has been reduced to less than 90 days.
"Startup Day": As defined in Section 9.01(b) hereof.
"Stayed Funds": Any payment required to be made under the
terms of the Certificates and this Agreement but which is not remitted by the
Servicer because the Servicer is the subject of a proceeding under the
Bankruptcy Code and the making of such remittance is prohibited by Section 362
of the Bankruptcy Code.
"Stepdown Date": The later to occur of (x) the earlier to
occur of (A) the Distribution Date in December 2003 and (B) the Distribution
Date on which the aggregate Certificate Principal Balance of the Class A
Certificates is reduced to zero, and (y) the first Distribution Date on which
the Senior Enhancement Percentage (after taking into account distributions of
principal on such Distribution Date) is greater than or equal to the Senior
Specified Enhancement Percentage.
"Sub-group": Either Sub-group 1A or Sub-group 1B.
"Sub-group 1A": The pool of Mortgage Loans identified in the
Mortgage Loan Schedule as having been assigned to Sub-group 1A.
"Sub-group 1B": The pool of Mortgage Loans identified in the
Mortgage Loan Schedule as having been assigned to Sub-group 1B.
"Subordinated Certificates": The Class M-1, Class M-2, Class
B-1, Class B-2, Class N, Class X 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.
"Targeted Overcollateralization Amount": As of any
Distribution Date, (x) prior to the Stepdown Date, 1.75% of the initial Pool
Balance and (y) on and after the Stepdown Date, the lesser of (i) 1.75% of the
initial Pool Balance and (ii) the greater of (A) 3.50% of the Pool Balance as of
the last day of the related Collection Period and (B) 0.50% of the initial Pool
Balance.
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"Tax Matters Person": The tax matters person appointed
pursuant to Section 9.01(e) hereof.
"Tax Returns": The federal income tax returns on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of the REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed on behalf of the Trust 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 of the related
Group or filed with the Internal Revenue Service or any other governmental
taxing authority under any applicable provisions of federal, state or local tax
laws.
"Telerate Page 3750": The display page currently so designated
on the Bridge Telerate Service (or such other page as may replace the Telerate
Page 3750 page on that service for the purpose of displaying London interbank
offered rates of major banks).
"Termination Price": As defined in Section 10.01(a) hereof.
"Trigger Event": With respect to any Distribution Date, if (i)
the six-month rolling average of 60+ Day Delinquent Loans equals or exceeds 45%
of the Senior Enhancement Percentage; provided, that if the Certificate
Principal Balance of the Senior Certificates has been reduced to zero, a Trigger
Event will have occurred if the six-month rolling average of 60+ Day Delinquent
Loans equals or exceeds 20% or (ii) the aggregate amount of Realized Losses
incurred since the Cut-Off Date through the last day of the related Collection
Period divided by the initial Pool Balance exceeds the applicable percentages
set forth below with respect to such Distribution Date:
<TABLE>
<CAPTION>
DISTRIBUTION DATE OCCURRING IN PERCENTAGE
<S> <C>
December 2003 through November 2004 2.75%
December 2004 through November 2005 3.50%
December 2005 through November 2006 4.00%
December 2006 and thereafter 4.50%
</TABLE>
"Trust": 2000-CB4 Trust, the trust created hereunder.
"Trust Fund": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to a portion of which two REMIC elections are to be made, such
entire Trust Fund consisting of: (i) such Mortgage Loans as from time to time
are subject to this Agreement, together with the Mortgage Files relating
thereto, and together with all collections thereon and proceeds thereof, (ii)
any REO Property, together with all collections thereon and proceeds thereof,
(iii) the Trustee's rights with respect to the Mortgage Loans under all
insurance policies required to be maintained pursuant to this Agreement and any
proceeds thereof, (iv) the Depositor's rights under the Mortgage Loan Purchase
Agreement
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(including any security interest created thereby) and (v) the Collection
Account, the Distribution Account, the Excess Reserve Fund Account and any REO
Account and such assets that are deposited therein from time to time and any
investments thereof, together with any and all income, proceeds and payments
with respect thereto. Notwithstanding the foregoing, however, the Trust Fund
specifically excludes all payments and other collections of principal and
interest representing Arrearage.
"Trustee": The Chase Manhattan Bank, a New York banking
corporation, or any successor Trustee appointed as herein provided.
"Trustee Fee": With respect to any Distribution Date, the
product of (x) one-twelfth of the Trustee Fee Rate and (y) the aggregate of the
Principal Balances of all Mortgage Loans as of the opening of business on the
first day of the related Collection Period, subject to a minimum amount of
$7,500 per annum.
"Trustee Fee Rate": With respect to any Distribution Date,
0.0125% per annum.
"Underwriters": First Union Securities, Inc. and Bear, Stearns
& Co. Inc., as underwriters with respect to the Offered Certificates.
"United States Person" or "U.S. Person": (i) A citizen or
resident of the United States, (ii) a corporation, partnership or other entity
treated as a corporation or partnership for United States federal income tax
purposes organized in or under the laws of the United States or any state
thereof or the District of Columbia (unless, in the case of a partnership,
Treasury regulations provide otherwise) and in the case of a partnership to
which any REMIC residual interest is being transferred, all persons that own an
interest in such partnership either directly or through any entity that is not a
corporation for United States federal income tax purposes and required to be
United States Persons or (iii) an estate the income of which is includible in
gross income for United States tax purposes, regardless of its source, or (iv) a
trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have authority to control all substantial decisions of the trust.
Notwithstanding the preceding sentence, to the extent provided in Treasury
regulations, certain Trusts in existence on August 20, 1996, and treated as
United States persons prior to such date, that elect to continue to be treated
as United States persons will also be a U.S. Person.
"Unpaid Realized Loss Amount": For any Class B-1, Class B-2,
Class M-1 and Class M-2 Certificates and as to any Distribution Date, the excess
of (x) the aggregate Applied Realized Loss Amounts applied respect to such Class
for all prior Distribution Dates over (y) the aggregate Realized Loss
Amortization Amounts with respect to such Class for all prior Distribution
Dates.
"VA": The United States Department of Veterans Affairs.
"VA Approved Lender": Those institutions which are approved by
the VA to act as servicer and mortgagee of record pursuant to VA Regulations.
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"VA Guaranty Agreements": With respect to a VA Loan, the
agreements evidencing the guaranty of such Mortgage Loan by the VA.
"VA Loan": A Mortgage Loan guaranteed by the VA.
"VA Regulations": Any and all regulations promulgated by the
VA under the Servicemen's Readjustment Act of 1944, as amended.
"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 98%, and shall be
allocated among each such Class according to the fraction, expressed as a
percentage, the numerator of which is the aggregate Certificate Principal
Balance of all the Certificates of such Class then outstanding and the
denominator of which is the aggregate Certificate Principal Balance of all the
Offered Certificates then outstanding. The Voting Rights allocated to each such
Class of Certificates shall be allocated among all holders of each such Class in
proportion to the outstanding Certificate Principal Balance of such
Certificates; provided, however, that any Certificate registered in the name of
the Servicer, the Depositor or the Trustee or any of their respective affiliates
shall not be included in the calculation of Voting Rights. The percentage of all
the Voting Rights allocated among the Holders of the Class X Certificate shall
be 2%. The Class N and Class R Certificates shall have no Voting Rights.
"Weighted Average Group 1 Net Mortgage Rate": The weighted
average (based on Principal Balance as of the first day of the related
Collection Period or, in the case of the first Distribution Date, the Cut-Off
Date) of the Net Mortgage Interest Rates of the Group 1 Mortgage Loans,
expressed as an annual rate and calculated on the basis of twelve months
consisting of 30 days each and a 360-day year.
"Weighted Average Group 2 Net Mortgage Rate": The weighted
average (based on Principal Balance as of the first day of the related
Collection Period or, in the case of the first Distribution Date, the Cut-Off
Date) of the Net Mortgage Interest Rates of the Group 2 Mortgage Loans,
expressed as an annual rate and calculated on the basis of twelve months
consisting of 30 days each and a 360-day year.
"Weighted Average Net Mortgage Rate": The weighted average
(based on Principal Balance as of the first day of the related Collection Period
or, in the case of the first Distribution Date, the Cut-Off Date) of the Net
Mortgage Interest Rates of the Mortgage Loans, expressed as an annual rate and
calculated on the basis of twelve months consisting of 30 days each and a
360-day year.
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"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.
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 Balance, all interest accruing thereon after the Cut-Off Date and all
collections in respect of interest and principal due after the Cut-Off Date;
(ii) property which secured each such Mortgage Loan and which has been acquired
by foreclosure or deed in lieu of foreclosure; (iii) its interest in any
insurance policies in respect of the Mortgage Loans; (iv) all proceeds of any of
the foregoing; (v) the rights of the Depositor under the Mortgage Loan Purchase
Agreement, and (vi) all other assets included or to be included in the Trust
Fund; provided, however, so long as the Servicer is an FHA Approved Mortgagee,
the Commissioner of HUD shall have no obligation to recognize or deal with any
person other than the Servicer with respect to FHA Insurance. Such assignment
includes all interest and principal due to the Depositor or the Servicer after
the Cut-Off Date with respect to the Mortgage Loans.
In connection with such transfer and assignment, the Seller,
on behalf of the Depositor, does hereby deliver to, and deposit with the
Trustee, or its designated agent (the "Custodian"), the following documents or
instruments with respect to each Mortgage Loan (a "Mortgage File") so
transferred and assigned:
(i) the original Mortgage Note, endorsed either (A) in
blank or (B) in the following form: "Pay to the order
of The Chase Manhattan Bank, as Trustee under the
Pooling and Servicing Agreement, dated as of November
1, 2000, among Credit-Based Asset Servicing and
Securitization LLC, Residential Asset Funding
Corporation, Litton Loan Servicing LP and The Chase
Manhattan Bank, C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2000-CB4, without recourse", or
with respect to any lost Mortgage
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Note, an original Lost Note Affidavit, together with
a copy of the related Mortgage Note;
(ii) the original Mortgage with evidence of recording
thereon, and the original recorded power of attorney,
if the Mortgage was executed pursuant to a power of
attorney, with evidence of recording thereon or, if
such Mortgage or power of attorney has been submitted
for recording but has not been returned from the
applicable public recording office, has been lost or
is not otherwise available, a copy of such Mortgage
or power of attorney, as the case may be, certified
to be a true and complete copy of the original
submitted for recording;
(iii) an original Assignment of Mortgage, in form and
substance acceptable for recording. The Mortgage
shall be assigned either (A) in blank or (B) to "The
Chase Manhattan Bank, as Trustee under the Pooling
and Servicing Agreement, dated as of November 1,
2000, among Credit-Based Asset Servicing and
Securitization LLC, Residential Asset Funding
Corporation, Litton Loan Servicing LP and The Chase
Manhattan Bank, C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2000-CB4, without recourse";
(iv) an original copy of any intervening assignment of
Mortgage showing a complete chain of assignments;
(v) the original or a certified copy of lender's title
insurance policy;
(vi) the original or copies of each assumption,
modification, written assurance or substitution
agreement, if any;
(vii) for each FHA Loan, the original Mortgage Insurance
Certificate;
(viii) for each VA Loan, the original Loan Guaranty
Certificate;
(ix) [Reserved]; and
(x) the original, or a certified copy of the, Primary
Insurance Policy.
The Trustee agrees to execute and deliver (or cause the
Custodian to execute and deliver) to the Depositor on or prior to the Closing
Date an acknowledgment of receipt of the original Mortgage Note (with any
exceptions noted), substantially in the form attached as Exhibit F-3 hereto.
The Seller or Servicer shall within 90 days following the
Closing Date, with respect to each Mortgage Loan that is subject to the
provisions of the Homeownership and Equity Protection Act of 1994 place a legend
on the original Mortgage Note indicating the satisfaction of the provisions of
such Act and the
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regulations issued thereunder, to the effect that the Mortgage Loan is subject
to special truth in lending rules.
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 Servicer'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 Sections 2.01(iii) and (iv) above. In the event that any such
Assignment is lost or returned unrecorded because of a defect therein, the
Seller shall 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 Seller to deliver such documents shall be
deemed to be satisfied upon (1) delivery to the Trustee or the Custodian no
later than the Closing Date, of a copy of each such document certified by the
Seller in the case of (x) above or the applicable public recording office in the
case of (y) above to be a true and complete copy of the original that was
submitted for recording and (2) if such copy is certified by the Seller,
delivery to the Trustee or the Custodian, promptly upon receipt thereof of
either the original or a copy of such document certified by the applicable
public recording office to be a true and complete copy of the original. The
Seller shall deliver or cause to be delivered to the Trustee or the Custodian
promptly upon receipt thereof any other documents constituting a part of a
Mortgage File received with respect to any Mortgage Loan, including, but not
limited to, any original documents evidencing an assumption or modification of
any Mortgage Loan.
Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, a Mortgage File, the
Seller shall have 120 days to cure such defect or 150 days following the Closing
Date, in the case of missing Mortgages or Assignments or deliver such missing
document to the Trustee or the Custodian. If the Seller does not cure such
defect or deliver such missing document within such time period, the Seller
shall either repurchase or substitute for such Mortgage Loan in accordance with
Section 2.03.
The Seller shall cause the Assignments of Mortgage which were
delivered in blank to be completed and shall cause all Assignments referred to
in Section 2.01(iii) hereof and, to the extent necessary, in Section 2.01(iv)
hereof to be recorded; provided, however, the Seller need not cause to be
recorded any Assignment which relates to a Mortgage Loan in any jurisdiction
under the laws of which, as evidenced by an Opinion of Counsel delivered by the
Seller to the Trustee and the Rating Agencies, the recordation of such
assignment is not necessary to protect the Trustee's interest in the related
Mortgage Loan. The Seller shall be required to deliver such assignments for
recording within 30 days of the Closing Date. The Seller shall furnish the
Trustee, or its designated agent, with a copy of each assignment of Mortgage
submitted for recording. In the event that any such Assignment is lost or
returned unrecorded because of a defect therein, the
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Seller shall promptly have a substitute Assignment prepared or have such defect
cured, as the case may be, and thereafter cause each such Assignment to be duly
recorded. In the event that any Mortgage Note is endorsed in blank as of the
Closing Date, promptly following the Closing Date the Seller shall cause to be
completed such endorsements "Pay to the order of The Chase Manhattan Bank, as
Trustee under the Pooling and Servicing Agreement, dated as of November 1, 2000,
among Credit-Based Asset Servicing and Securitization LLC, Residential Asset
Funding Corporation, Litton Loan Servicing LP and The Chase Manhattan Bank,
C-BASS Mortgage Loan Asset-Backed Certificates, Series 2000-CB4, without
recourse."
The Depositor herewith delivers to the Trustee an executed
copy of the Mortgage Loan Purchase Agreement.
Section 2.02. Acceptance by Trustee.
The Trustee acknowledges the receipt of, subject to the
provisions of Section 2.01 and subject to the review described below and any
exceptions noted on the exception report described in the next paragraph below,
the documents referred to in Section 2.01 above and all other assets included in
the definition of "Trust Fund" and declares that it holds and will hold such
documents and the other documents delivered to it constituting a Mortgage File,
and that it holds or will hold all such assets and such other assets included in
the definition of "Trust Fund" in trust for the exclusive use and benefit of all
present and future Certificateholders.
The Trustee agrees, for the benefit of the Certificateholders,
to review (or cause the Custodian to review) each Mortgage File within 60 days
after the Closing Date (or, with respect to any document delivered after the
Startup Day, within 60 days of receipt and with respect to any Qualified
Substitute Mortgage, within 60 days after the assignment thereof) and to certify
in substantially the form attached hereto as Exhibit F-1 that, as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or any Mortgage Loan specifically identified in the exception
report annexed thereto as not being covered by such certification), (i) all
documents required to be delivered to it pursuant Section 2.01 of this Agreement
are in its possession, (ii) such documents have been reviewed by it and have not
been mutilated, damaged or torn and relate to such Mortgage Loan and (iii) based
on its examination and only as to the foregoing, the information set forth in
the Mortgage Loan Schedule that corresponds to items (1), (2), (3), (5), (13)
and (26) (in the case of (26), only as to whether there is a prepayment penalty)
of the Mortgage Loan Schedule accurately reflects information set forth in the
Mortgage File. It is herein acknowledged that, in conducting such review, the
Trustee (or the Custodian, as applicable) is under no duty or obligation to
inspect, review or examine any such documents, instruments, certificates or
other papers to determine that they are genuine, enforceable, or appropriate for
the represented purpose or that they have actually been recorded or that they
are other than what they purport to be on their face.
Prior to the first anniversary date of this Agreement the
Trustee shall deliver (or cause the Custodian to deliver) to the Depositor and
the Servicer a final
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certification in the form annexed hereto as Exhibit F-2 evidencing the
completeness of the Mortgage Files, with any applicable exceptions noted
thereon.
If in the process of reviewing the Mortgage Files and making
or preparing, as the case may be, the certifications referred to above, the
Trustee (or the Custodian, as applicable) finds any document or documents
constituting a part of a Mortgage File to be missing or defective in any
material respect, at the conclusion of its review the Trustee shall so notify
the Seller, the Depositor and the Servicer. In addition, upon the discovery by
the Seller, Depositor or the Servicer (or upon receipt by the Trustee of written
notification of such breach) of a breach of any of the representations and
warranties made by the Seller in the related Mortgage Loan Purchase Agreement in
respect of any Mortgage Loan which materially adversely affects such Mortgage
Loan or the interests of the related Certificateholders in such Mortgage Loan,
the party discovering such breach shall give prompt written notice to the other
parties.
The Depositor and the Trustee intend that the assignment and
transfer herein contemplated constitute a sale of the Mortgage Loans and the
Related Documents, conveying good title thereto free and clear of any liens and
encumbrances, from the Depositor to the Trustee and that such property not be
part of the Depositor's estate or property of the Depositor in the event of any
insolvency by the Depositor. In the event that such conveyance is deemed to be,
or to be made as security for, a loan, the parties intend that the Depositor
shall be deemed to have granted and does hereby grant to the Trustee a first
priority perfected security interest in all of the Depositor's right, title and
interest in and to the Mortgage Loans and the Related Documents, and that this
Agreement shall constitute a security agreement under applicable law.
Section 2.03. Repurchase or Substitution of Mortgage Loans by
the Seller.
(a) Upon discovery or receipt of written notice of any
materially defective document in, or that a document is missing from, a Mortgage
File or of the breach by the Seller of any representation, warranty or covenant
under the Mortgage Loan Purchase Agreement or in Section 2.04 in respect of any
Mortgage Loan which materially adversely affects the value of such Mortgage Loan
or the interest therein of the Certificateholders, the Trustee (or the
Custodian, as applicable) shall promptly notify the Seller and the Servicer of
such defect, missing document or breach and request that the Seller deliver such
missing document or cure such defect or breach within 120 days or 150 days
following the Closing Date, in the case of missing Mortgages or Assignments from
the date the Seller was notified of such missing document, defect or breach, and
if the Seller does not deliver such missing document or cure such defect or
breach in all material respects during such period, the Trustee shall enforce
the Seller's obligation under the Mortgage Loan Purchase Agreement and cause the
Seller to repurchase such Mortgage Loan from the Trust Fund at the Purchase
Price on or prior to the Determination Date following the expiration of such 120
day period (subject to Section 2.03(e)); provided that, in connection with any
such breach that could not reasonably have been cured within such 120 day or 150
day period, if the Seller shall have commenced to cure such breach within such
120 day or 150 day period, the Seller shall
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be permitted to proceed thereafter diligently and expeditiously to cure the same
within the additional period provided under the Mortgage Loan Purchase
Agreement. The Purchase Price for the repurchased Mortgage Loan shall be
deposited in the Collection Account, and the Trustee, upon receipt of written
certification from the Servicer of such deposit, shall release to the Seller the
related Mortgage File and shall execute and deliver such instruments of transfer
or assignment, in each case without recourse, as the Seller shall furnish to it
and as shall be necessary to vest in the Seller any Mortgage Loan released
pursuant hereto and the Trustee shall have no further responsibility with regard
to such Mortgage File. In lieu of repurchasing any such Mortgage Loan as
provided above, the Seller may cause such Mortgage Loan to be removed from the
Trust Fund (in which case it shall become a Defective Mortgage Loan) and
substitute one or more Eligible Substitute Mortgage Loans in the manner and
subject to the limitations set forth in Section 2.03(d). It is understood and
agreed that the obligation of the Seller to cure or to repurchase (or to
substitute for) any Mortgage Loan as to which a document is missing, a material
defect in a constituent document exists or as to which such a breach has
occurred and is continuing shall constitute the sole remedy against the Seller
respecting such omission, defect or breach available to the Trustee on behalf of
the Certificateholders.
(b) A Mortgage Loan that has an Arrearage cannot be
substituted for a Mortgage Loan that does not have an Arrearage.
(c) Within 90 days of the earlier of discovery by the Servicer
or receipt of notice by the Servicer of the breach of any representation,
warranty or covenant of the Servicer set forth in Section 2.05 which materially
and adversely affects the interests of the Certificateholders in any Mortgage
Loan, the Servicer shall cure such breach in all material respects.
(d) Any substitution of Eligible Substitute Mortgage Loans for
Defective Mortgage Loans made pursuant to Section 2.03(a) must be effected prior
to the last Business Day that is within two years after the Closing Date. As to
any Defective Mortgage Loan for which the Seller substitutes an 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, with respect to such Eligible Substitute Mortgage Loan or
Loans, a certification substantially in the form attached hereto as Exhibit F-1,
with any applicable exceptions noted thereon. Within one year of the date of
substitution, the Trustee shall deliver to the Servicer a certification
substantially in the form of Exhibit F-2 hereto with respect to such Eligible
Substitute Mortgage Loan or Loans, with any applicable exceptions noted thereon.
Monthly Payments due with respect to Eligible Substitute
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Mortgage Loans in the month of substitution are not part of the Trust Fund and
will be retained by the Seller. For the month of substitution, distributions to
Certificateholders will reflect the collections and recoveries in respect of
such Defective Mortgage Loan in the Collection Period preceding the month of
substitution and the Depositor or the Seller, as the case may be, shall
thereafter be entitled to retain all amounts subsequently received in respect of
such Defective Mortgage Loan. The Seller shall give or cause to be given written
notice to the Certificateholders that such substitution has taken place, shall
amend the Mortgage Loan Schedule to reflect the removal of such Defective
Mortgage Loan from the terms of this Agreement and the substitution of the
Eligible Substitute Mortgage Loan or Loans and shall deliver a copy of such
amended Mortgage Loan Schedule to the Trustee. Upon such substitution, such
Eligible Substitute Mortgage Loan or Loans shall constitute part of the Mortgage
Pool and shall be subject in all respects to the terms of this Agreement and, in
the case of a substitution effected by the Seller, the Mortgage Loan Purchase
Agreement, including, in the case of a substitution effected by the Seller all
applicable representations and warranties thereof included in the Mortgage Loan
Purchase Agreement and all applicable representations and warranties thereof set
forth in Section 2.04, in each case as of the date of substitution.
For any month in which the Seller substitutes one or more
Eligible Substitute Mortgage Loans for one or more Defective Mortgage Loans, the
Servicer will determine the amount (the "Substitution Adjustment Amount"), if
any, by which the aggregate Purchase Price of all such Defective Mortgage Loans
exceeds the aggregate, as to each such Eligible Substitute Mortgage Loan, of the
principal balance thereof as of the date of substitution, together with one
month's interest on such principal balance at the applicable Net Mortgage
Interest Rate. On the date of such substitution, the Seller will deliver or
cause to be delivered to the Servicer for deposit in the Collection Account an
amount equal to the Substitution Adjustment Amount, if any, and the Trustee,
upon receipt of the related Eligible Substitute Mortgage Loan or Loans and
certification by the Servicer of such deposit, shall release to the Seller the
related Mortgage File or Files and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as the Seller shall
deliver to it and as shall be necessary to vest therein any Defective Mortgage
Loan released pursuant hereto.
In addition, the Seller shall obtain at its own expense and
deliver to the Trustee an Opinion of Counsel to the effect that such
substitution will not cause (a) any federal tax to be imposed on the Trust Fund,
including, without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(l) of the Code or on "contributions after
the startup date" under Section 860G(d)(l) of the Code, or (b) any REMIC to fail
to qualify as a REMIC at any time that any Certificate is outstanding. If such
Opinion of Counsel can not be delivered, then such substitution may only be
effected at such time as the required Opinion of Counsel can be given.
(e) Upon discovery by the Seller, the Servicer or the Trustee
that any Mortgage Loan does not constitute a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code, the party discovering such fact shall
within two Business Days give written notice thereof to the other parties. In
connection therewith, the Seller shall repurchase or, subject to the limitations
set forth in Section 2.03(d), substitute one or
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more Eligible Substitute Mortgage Loans for the affected Mortgage Loan within 90
days of the earlier of discovery or receipt of such notice with respect to such
affected Mortgage Loan. In addition, upon discovery that a Mortgage Loan is
defective in a manner that would cause it to be a "defective obligation" within
the meaning of Treasury regulations relating to REMICs, the Seller shall cure
the defect or make the required purchase or substitution no later than 90 days
after the discovery of the defect. Any such repurchase or substitution shall be
made in the same manner as set forth in Section 2.03(a), if made by the Seller.
The Trustee shall reconvey to the Seller the Mortgage Loan to be released
pursuant hereto in the same manner, and on the same terms and conditions, as it
would a Mortgage Loan repurchased for breach of a representation or warranty.
Notwithstanding anything to the contrary contained herein, the
parties hereto acknowledge that the functions of the Trustee with respect to the
custody, acceptance, inspection and release of the Mortgage Files pursuant to
Sections 2.01, 2.02 and 2.03 and preparation and delivery of the certifications
in the form of Exhibit F-1, Exhibit F-2 and Exhibit F-3 shall be performed by
the Custodian pursuant to the terms and conditions of the Custodial Agreement.
The fees and expenses of the Custodian shall be paid by the Servicer.
Section 2.04. Representations and Warranties of the Seller
with Respect to the Mortgage Loans.
The Seller hereby represents and warrants to the Trustee for
the benefit of the Certificateholders that as of the Closing Date or as of such
other date specifically provided herein:
(a) The representations and warranties made by the Seller
pursuant to Section 3.01 of the Mortgage Loan Purchase Agreement are hereby
being made to the Trustee and are true and correct as of the Closing Date.
(b) Any written agreement between the Mortgagor in respect of
a Mortgage Loan and the Servicer modifying such Mortgagor's obligation to make
payments under the Mortgage Loan (such modified Mortgage Loan, a "Modified
Mortgage Loan") involved the application of the Seller's underwriting standards
or some assessment of the Mortgagor's ability to repay the Modified Mortgage
Loan.
With respect to the representations and warranties set forth
in this Section 2.04 that are made to the best of the Seller's knowledge or as
to which the Seller has no knowledge, if it is discovered by the Depositor, the
Seller, the Servicer or the Trustee that the substance of such representation
and warranty is inaccurate and such inaccuracy materially and adversely affects
the value of the related Mortgage Loan or the interest therein of the
Certificateholders then, notwithstanding the Seller's lack of knowledge with
respect to the substance of such representation and warranty being inaccurate at
the time the representation or warranty was made, such inaccuracy shall be
deemed a breach of the applicable representation or warranty.
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Upon discovery by the Depositor, the Seller, the Servicer or
the Trustee of a breach of any of the representations and warranties contained
in this Section that materially and adversely affects the value of any Mortgage
Loan or the interest therein of the Certificateholders, the party discovering
the breach shall give prompt written notice to the others and in no event later
than two Business Days from the date of such discovery. Within ninety days of
its discovery or its receipt of notice of any such missing or materially
defective documentation or any such breach of a representation or warranty, the
Seller shall promptly deliver such missing document or cure such defect or
breach in all material respects, or in the event such defect or breach cannot be
cured, the Seller shall repurchase the affected Mortgage Loan or cause the
removal of such Mortgage Loan from the Trust Fund and substitute for it one or
more Eligible Substitute Mortgage Loans, in either case, in accordance with
Section 2.03.
It is understood and agreed that the representations and
warranties set forth in this Section 2.04 shall survive delivery of the Mortgage
Files to the Trustee and shall inure to the benefit of the Certificateholders
notwithstanding any restrictive or qualified endorsement or assignment. It is
understood and agreed that the obligations of the Seller set forth in Section
2.03(a) to cure, substitute for or repurchase a Mortgage Loan pursuant to the
Mortgage Loan Purchase Agreement constitute the sole remedies available to the
Certificateholders or to the Trustee on their behalf respecting a breach of the
representations and warranties contained in this Section 2.04.
Section 2.05. Representations, Warranties and Covenants of the
Servicer.
The Servicer hereby represents, warrants and covenants to the
Trustee, for the benefit of each of the Trustee and the Certificateholders and
to the Depositor that as of the Closing Date or as of such date specifically
provided herein:
(i) The Servicer is duly organized, validly existing, and in
good standing under the laws of the jurisdiction of its formation and
has all licenses necessary to ensure the enforceability or validity of
each Mortgage Loan and 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; 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;
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(ii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Servicer and
will not result in the breach of any term or provision of the
certificate of formation or the partnership agreement of the Servicer
or result in the breach of any term or provision of, or conflict with
or constitute a default under or result in the acceleration of any
obligation under, any agreement, indenture or loan or credit agreement
or other instrument to which the Servicer or its property is subject,
or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Servicer or its property is subject;
(iii) The Servicer is an approved seller/servicer of
conventional mortgage loans for FNMA, and is an FHA Approved Mortgagee
in good standing to service mortgages, is a VA Approved Lender and has
not been suspended as a mortgagee or servicer by the FHA or VA and has
the facilities, procedures and experienced personnel necessary for the
sound servicing of mortgage loans of the same type as the Mortgage
Loans. The Servicer is, and shall remain for as long as it is servicing
the Mortgage Loans hereunder, in good standing as a FHA Approved
Mortgagee and a VA Approved Lender and to service mortgage loans for
HUD, FNMA or FHLMC, and no event has occurred, including but not
limited to a change in insurance coverage, which would make the
Servicer unable to comply with HUD, FNMA, FHLMC, FHA or VA eligibility
requirements or which would require notification to any of HUD, FNMA,
FHLMC, FHA or VA;
(iv) This Agreement, and all documents and instruments
contemplated hereby which are executed and delivered by the Servicer,
constitute and will constitute valid, legal and binding obligations of
the Servicer, enforceable in accordance with their respective terms,
except as the enforcement thereof may be limited by applicable
bankruptcy laws and general principles of equity;
(v) The Servicer does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant
contained in this Agreement;
(vi) There is no action, suit, proceeding or investigation
pending or, to its knowledge, threatened against the Servicer that,
either individually or in the aggregate, may result in any material
adverse change in the business, operations, financial condition,
properties or assets of the Servicer, or in any material impairment of
the right or ability of the Servicer to carry on its business
substantially as now conducted, or in any material liability on the
part of the Servicer, or that would draw into question the validity or
enforceability of this Agreement or of any action taken or to be taken
in connection with the obligations of the Servicer contemplated herein,
or that would be likely to impair materially the ability of the
Servicer to perform under the terms of this Agreement;
(vii) No consent, approval or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of or compliance by the Servicer with this
Agreement or the consummation of the
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transactions contemplated by this Agreement, except for such consents,
approvals, authorizations and orders, if any, that have been obtained;
and
(viii) Neither this Agreement nor any information, certificate
of an officer, statement furnished in writing or report delivered to
the Trustee by the Servicer in connection with the transactions
contemplated hereby contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary
in order to make the statements contained therein, in light of the
circumstances under which they were made, not misleading.
It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.05 shall survive delivery
of the Mortgage Files to the Trustee and shall inure to the benefit of the
Trustee, the Depositor and the Certificateholders. Upon discovery by any of the
Depositor, the Servicer, the Seller or the Trustee of a breach of any of the
foregoing representations, warranties and covenants which materially and
adversely affects the value of any Mortgage Loan or the interests therein of the
Certificateholders, the party discovering such breach shall give prompt written
notice (but in no event later than two Business Days following such discovery)
to the other parties hereto.
Section 2.06. Representations and Warranties of the Depositor.
The Depositor represents and warrants to the Trust and the
Trustee on behalf of the Certificateholders as follows:
(i) This agreement constitutes a legal, valid and binding
obligation of the Depositor, enforceable against the Depositor in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a
proceeding at law or in equity);
(ii) Immediately prior to the sale and assignment by the
Depositor to the Trustee on behalf of the Trust of each Mortgage Loan,
the Depositor had good and marketable title to each Mortgage Loan
(insofar as such title was conveyed to it by the Seller) subject to no
prior lien, claim, participation interest, mortgage, security interest,
pledge, charge or other encumbrance or other interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred
all right, title interest in the Mortgage Loans to the Trustee on
behalf of the Trust;
(iv) The Depositor has not transferred the Mortgage Loans to
the Trustee on behalf of the Trust with any intent to hinder, delay or
defraud any of its creditors;
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(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 articles 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 articles
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
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Agreement, as the case may be; (d) which might materially and adversely
affect the performance by the Depositor of its obligations under, or
the validity or enforceability of, this Agreement.
Section 2.07. Issuance of Certificates and the Uncertificated
Regular Interests.
The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to it (or the Custodian, as bailee and Custodian of the
Trustee) of the Mortgage Files, subject to the provisions of Sections 2.01 and
2.02, together with the assignment to it of all other assets included in the
Trust Fund, receipt of which is hereby acknowledged. Concurrently with such
assignment and delivery and in exchange therefor, the Trustee, pursuant to the
Written Order to Authenticate executed by an officer of the Depositor, has
executed, authenticated and delivered to or upon the order of the Depositor, the
Certificates (other than the Class X and Class R Certificates) in minimum dollar
denominations of $25,000 and integral dollar multiples of $1 in excess. The
Class N, Class X and Class R Certificates are issuable only in minimum
Percentage Interests of 10%. The Trustee acknowledges the issuance of the
uncertificated REMIC 1 Regular Interests and the uncertificated REMIC 2 Regular
Interests and declares that it holds such regular interests as assets of REMIC
2. The Trustee acknowledges the issuance of the uncertificated REMIC 2
Components and the Class X/N Interest, and declares that it holds the same as
assets of the Grantor Trust on behalf of the Holders of the Class N and Class X
Certificates. The interests evidenced by the Certificates constitute the entire
beneficial ownership interest in the Trust Fund.
Section 2.08. Representations and Warranties of the Seller.
The Seller hereby represents and warrants to the Trust and the
Trustee on behalf of the Certificateholders that as of the Closing Date or as of
such date specifically provided herein:
(i) The Seller is duly organized, validly existing and in good
standing as a limited liability company under the laws of the State of
Delaware and has the power and authority to own its assets and to
transact the business in which it is currently engaged. The Seller is
duly qualified to do business and is in good standing in each
jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in
which the failure to so qualify would have a material adverse effect on
(a) its business, properties, assets or condition (financial or other),
(b) the performance of its obligations under this Agreement, (c) the
value or marketability of the Mortgage Loans, or (d) its ability to
foreclose on the related Mortgaged Properties.
(ii) The Seller has the power and authority to make, execute,
deliver and perform this Agreement and to consummate all of the
transactions contemplated hereunder and has taken all necessary action
to authorize the execution, delivery and performance of this Agreement.
When executed and
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delivered, this Agreement will constitute the Seller's legal, valid and
binding obligations enforceable in accordance with its terms, except as
enforcement of such terms may be limited by (1) bankruptcy, insolvency,
reorganization, receivership, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by the availability of
equitable remedies, (2) general equity principles (regardless of
whether such enforcement is considered in a proceeding in equity or at
law) or (3) public policy considerations underlying the securities
laws, to the extent that such policy considerations limit the
enforceability of the provisions of this Agreement which purport to
provide indemnification from securities laws liabilities.
(iii) The Seller holds all necessary licenses, certificates
and permits from all governmental authorities necessary for conducting
its business as it is presently conducted, except for such licenses,
certificates and permits the absence of which, individually or in the
aggregate, would not have a material adverse effect on the ability of
the Seller to conduct its business as it is presently conducted. It is
not required to obtain the consent of any other party or any consent,
license, approval or authorization from, or registration or declaration
with, any governmental authority, bureau or agency in connection with
the execution, delivery, performance, validity or enforceability of
this Agreement, except for such consents, licenses, approvals or
authorizations, or registrations or declarations as shall have been
obtained or filed, as the case may be, prior to the Closing Date.
(iv) The execution, delivery and performance of this Agreement
by the Seller will not conflict with or result in a breach of, or
constitute a default under, any provision of any existing law or
regulation or any order or decree of any court applicable to the Seller
or any of its properties or any provision of its Limited Liability
Company Agreement, or constitute a material breach of, or result in the
creation or imposition of any lien, charge or encumbrance upon any of
its properties pursuant to any mortgage, indenture, contract or other
agreement to which it is a party or by which it may be bound.
(v) No certificate of an officer, written statement or report
delivered pursuant to the terms hereof by the Seller contains any
untrue statement of a material fact or omits to state any material fact
necessary to make the certificate, statement or report not misleading.
(vi) The transactions contemplated by this Agreement are in
the ordinary course of the Seller's business.
(vii) The Seller is not insolvent, nor will the Seller be made
insolvent by the transfer of the Mortgage Loans to the Depositor, nor
is the Seller aware of any pending insolvency.
(viii) The Seller is not in violation of, and the execution
and delivery of this Agreement by it and its performance and compliance
with the terms of this
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Agreement will not constitute a violation with respect to any order or
decree of any court, or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction, which violation
would materially and adversely affect the Seller's condition (financial
or otherwise) or operations or any of the Seller's properties, or
materially and adversely affect the performance of any of its duties
hereunder.
(ix) There are no actions or proceedings against, or
investigations of, the Seller pending or, to its knowledge, threatened,
before any court, administrative agency or other tribunal (i) that, if
determined adversely, would prohibit the Seller from entering into this
Agreement, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or (iii) that, if
determined adversely, would prohibit or materially and adversely affect
the Seller's performance of any of its respective obligations under, or
the validity or enforceability of, this Agreement.
(x) The Seller did not transfer the Mortgage Loans to the
Depositor with any intent to hinder, delay or defraud any of its
creditors.
(xi) The Seller acquired title to the Mortgage Loans in good
faith, without notice of any adverse claims.
(xii) The transfer, assignment and conveyance of the Mortgage
Notes and the Mortgages by the Seller to the Depositor are not subject
to the bulk transfer laws or any similar statutory provisions in effect
in any applicable jurisdiction.
Section 2.09. Covenants of the Seller.
(a) The Seller hereby covenants that except for the transfer
hereunder, the Seller will not sell, pledge, assign or transfer to any other
Person, or grant, create, incur, assume or suffer to exist any lien on any
Mortgage Loan, or any interest therein; the Seller will notify the Trustee, as
assignee of the Depositor, of the existence of any lien on any Mortgage Loan
immediately upon discovery thereof, and the Seller will defend the right, title
and interest of the Trust, as assignee of the Depositor, in, to and under the
Mortgage Loans, against all claims of third parties claiming through or under
the Seller; provided, however, that nothing in this Section 2.09 shall prevent
or be deemed to prohibit the Seller from suffering to exist upon any of the
Mortgage Loans any liens for municipal or other local taxes and other
governmental charges if such taxes or governmental charges shall not at the time
be due and payable or if the Seller shall currently be contesting the validity
thereof in good faith by appropriate proceedings and shall have set aside on its
books adequate reserves with respect thereto.
(b) The Seller hereby covenants that neither it nor any
Affiliate of the Seller will directly solicit any Mortgagor hereunder to
refinance the related Mortgage Loan. For the purposes of the foregoing, neither
the Seller nor any Affiliate of the Seller shall be deemed to directly solicit
any Mortgagor if the Seller responds to a request from
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a Mortgagor regarding a refinancing or if the Mortgagor receives marketing
materials which are generally disseminated.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01. Servicer to Act as Servicer.
The Servicer, as independent contract servicer, shall service
and administer the Mortgage Loans in accordance with this Agreement and the
normal and usual standards of practice of prudent mortgage servicers, and shall
have full power and authority, acting alone, to do or cause to be done any and
all things in connection with such servicing and administration which the
Servicer may deem necessary or desirable and consistent with the terms of this
Agreement including, in the case of FHA Loans and VA Loans, taking all actions
that a mortgagee is permitted or required to take by the FHA or the VA, as the
case may be (the "Servicing Standards").
Consistent with the terms of this Agreement, the Servicer may
waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if in the Servicer's reasonable and prudent
determination such waiver, modification, postponement or indulgence is not
materially adverse to the Certificateholders; provided, however, that the
Servicer shall not make future advances and (unless the Mortgagor is in default
with respect to the Mortgage Loan or such default is, in the judgment of the
Servicer, 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) in the case of
FHA Loans and VA Loans, affect the FHA Insurance Contract or VA Guaranty
Agreement, as the case may be, with respect to such Mortgage Loan, (iii) affect
adversely the status of any REMIC as a REMIC or (iv) cause any REMIC to be
subject to a tax on "prohibited transactions" or "contributions" pursuant to the
REMIC Provisions. Notwithstanding the foregoing, the Servicer shall not permit
any modification with respect to any Mortgage Loan that would both (x) effect an
exchange or reissuance of such Mortgage Loan under Section 1.860G-2(b) of the
Treasury Regulations and (y) cause any REMIC constituting part of the Trust Fund
to fail to qualify as a REMIC under the Code or the imposition of any tax on
"prohibited transactions" or "contributions" after the Startup Day under the
REMIC Provisions. Without limiting the generality of the foregoing, the Servicer
shall continue, and is hereby authorized and empowered to execute and deliver on
behalf of itself, and the Trustee, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
Mortgaged Property. The Servicer shall make all required Servicing Advances and
shall service and administer the Mortgage Loans in accordance with Applicable
Regulations, and shall provide to the Mortgagor any reports required to be
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provided to them thereby. If reasonably required by the Servicer, the Trustee
shall furnish the Servicer with any powers of attorney and other documents
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties under this Agreement.
In servicing and administering FHA Loans and VA Loans, the
Servicer shall comply strictly with the National Housing Act, the FHA
Regulations, the Servicemen's Readjustment Act and the VA Regulations and
administrative guidelines issued thereunder or pursuant thereto (insofar as the
same apply to any Mortgage Loan) and, to the extent permitted hereunder,
promptly discharge all of the obligations of the mortgagee thereunder and under
each Mortgage including the timely giving of notices, the essence hereof being
that the full benefits of each FHA Insurance Contract and VA Guaranty Agreement
inure to the Trustee, on behalf of the Certificateholders.
In servicing and administering the Mortgage Loans, the
Servicer shall employ procedures including collection procedures and exercise
the same care that it customarily employs and exercises in servicing and
administering mortgage loans for its own account giving due consideration to
accepted mortgage servicing practices of prudent lending institutions, the FHA
Insurance Contracts and the VA Guaranty Agreements, where applicable, and the
Certificateholders' reliance on the Servicer.
The Servicer shall give prompt notice to the Trustee of any
action, of which the Servicer has actual knowledge, to (i) assert a claim
against the Trust Fund or (ii) assert jurisdiction over the Trust Fund.
Notwithstanding anything in this Agreement to the contrary, in
the event of a Principal Prepayment in full of a Mortgage Loan, the Servicer may
not waive any prepayment penalty or portion thereof required by the terms of the
related Mortgage Note unless (i) the Servicer determines that such waiver would
maximize recovery of Liquidation Proceeds for such Mortgage Loan, taking into
account the value of such prepayment penalty, or (ii) (A) the enforceability
thereof is limited (1) by bankruptcy, insolvency, moratorium, receivership, or
other similar law relating to creditors' rights generally or (2) due to
acceleration in connection with a foreclosure or other involuntary payment, or
(B) the enforceability is otherwise limited or prohibited by applicable law. In
the event of a Principal Prepayment in full with respect to any Mortgage Loan,
the Servicer shall deliver to the Trustee an Officer's Certificate substantially
in the form of Exhibit Q no later than the third Business Day following the
immediately succeeding Determination Date with a copy to the Class X
Certificateholder. If the Servicer has waived or does not collect all or a
portion of a prepayment penalty relating to a Principal Prepayment in full due
to any action or omission of the Servicer, other than as provided above, the
Servicer shall, within 90 days of the date on which the Principal Prepayment in
full is remitted to the Trustee, deliver to the Trustee the amount of such
prepayment penalty (or such portion thereof as had been waived for deposit) into
the Distribution Account for distribution in accordance with the terms of this
Agreement.
With respect to each Mortgage Loan which is the subject of a
Principal Prepayment in full, the Trustee shall verify whether such Mortgage
Loan was identified
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on the Mortgage Loan Schedule as being subject to a prepayment penalty and, if
such Mortgage Loan is so identified, whether the amount of the prepayment
penalty remitted by the Servicer (including any amounts to be remitted by the
Servicer pursuant to the last sentence of the preceding paragraph), if any, is
consistent with the amount of the prepayment penalty set forth in the Mortgage
Loan Schedule. In the event that the Trustee determines that a prepayment
penalty received with respect to a Principal Prepayment in full is inconsistent
with the prepayment penalty set forth in the Mortgage Loan Schedule for the
related Mortgage Loan and such inconsistency results in the receipt of a reduced
prepayment penalty, the Trustee shall provide notice to the Seller of such
inconsistency. Within 90 days of receipt of such notice, the Seller shall remit
to the Trustee for deposit in the Distribution Account an amount equal to the
difference between the amount of the prepayment penalties received by the
Trustee and the amount of the prepayment penalties determined in accordance with
the description thereof set forth in the Mortgage Loan Schedule for the related
Mortgage Loans.
The Trustee shall prepare and deliver to the Depositor and the
owner of the Class N and Class X Certificates, on a monthly basis, a statement
setting forth the amounts due and received with respect to prepayment penalties.
Section 3.02. Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and
interest on all Mortgage Loans are paid in full, the Servicer will diligently
collect all payments due under each Mortgage Loan when the same shall become due
and payable and shall, to the extent such procedures shall be consistent with
this Agreement and the terms and provisions of any related Primary Insurance
Policy and Applicable Regulations, follow such collection procedures as it
follows with respect to mortgage loans comparable to the Mortgage Loans and held
for its own account. Further, the Servicer will take special care in
ascertaining and estimating annual ground rents, taxes, assessments, water
rates, fire and hazard insurance premiums, mortgage insurance premiums, and all
other charges that, as provided in the Mortgage, will become due and payable to
that end that the installments payable by the Mortgagors will be sufficient to
pay such charges as and when they become due and payable.
Section 3.03. Realization Upon Defaulted Mortgage Loans.
In the event that any payment due under any Conventional
Mortgage Loan is not paid when the same becomes due and payable, or in the event
the Mortgagor fails to perform any other covenant or obligation under the
Mortgage Loan and such failure continues beyond any applicable grace period, the
Servicer shall take such action as it shall deem to be in the best interest of
the Certificateholders. In the event that any payment due under any FHA Loan
becomes delinquent, the Servicer shall take all such actions as are in the best
interests of the Certificateholders and permitted under any applicable FHA loss
mitigation proceedings, including, but not limited to, requesting the FHA to
accept an assignment of such FHA Loan, and, upon the Servicer's determination
that foreclosure is in the best interest of the Certificateholders, commencing
foreclosure proceedings. With respect to each VA Loan, the Servicer shall
diligently seek to mitigate
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losses by utilizing all remedies available in the VA Regulations. With respect
to any defaulted Mortgage Loan, the Servicer shall have the right to review the
status of the related forbearance plan and, subject to the second paragraph of
Section 3.01, may modify such forbearance plan.
In connection with a foreclosure or other conversion, the
Servicer shall exercise such rights and powers vested in it hereunder and use
the same degree of care and skill in its exercise as prudent mortgage servicers
would exercise or use under the circumstances in the conduct of their own
affairs and consistent with Applicable Regulations and the servicing standards
set forth in the FNMA Guide, including, without limitation, advancing funds for
the payment of taxes and insurance premiums with respect to first lien Mortgage
Loans.
Notwithstanding the foregoing provisions of this Section 3.03,
with respect to any Mortgage Loan as to which the Servicer has received actual
notice of, or has actual knowledge of, the presence of any toxic or hazardous
substance on the related Mortgaged Property, the Servicer shall not either (i)
obtain title to such Mortgaged Property as a result of or in lieu of foreclosure
or otherwise, or (ii) otherwise acquire possession of, or take any other action
with respect to, such Mortgaged Property if, as a result of any such action, the
Trust Fund would be considered to hold title to, to be a mortgagee-in-possession
of, or to be an owner or operator of such Mortgaged Property within the meaning
of the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, or any comparable law, unless the Servicer
has also previously determined, based on its reasonable judgment and a prudent
report prepared by a Person who regularly conducts environmental audits using
customary industry standards, that:
A. such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic interest of
the Certificateholders to take such actions as are necessary to bring the
Mortgaged Property into compliance therewith; and
B. there are no circumstances present at such Mortgaged
Property relating to the use, management or disposal of any hazardous
substances, hazardous materials, hazardous wastes, or petroleum-based materials
for which investigation, testing, monitoring, containment, clean-up or
remediation could be required under any federal, state or local law or
regulation, or that if any such materials are present for which such action
could be required, that it would be in the best economic interest of the
Certificateholders to take such actions with respect to the affected Mortgaged
Property.
The cost of the environmental audit report contemplated by
this Section 3.03 shall be advanced by the Servicer, subject to the Servicer's
right to be reimbursed therefor from the Collection Account as provided in
Section 3.05(b).
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
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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(b).
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 two Business Days of receipt, and retain therein, the
following payments and collections received or made by it after the Cut-Off Date
with respect to the Mortgage Loans:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Interest Rate less the Servicing Fee Rate and
the amount required to maintain the Primary Insurance Policy;
(iii) all proceeds from a cash liquidation;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Section 3.10, other than proceeds to be held in
the Escrow Account and applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance with the
Servicer's normal servicing procedures, the loan documents or
applicable law;
(v) all Condemnation Proceeds affecting any Mortgaged Property
which are not released to the Mortgagor in accordance with the
Servicer's normal servicing procedures, the loan documents or
applicable law; and
(vi) any amounts required to be deposited by the Servicer in
connection with any REO Property pursuant to Section 3.13.
Any interest paid on funds deposited in the Collection
Account, subject to Section 3.25, shall accrue to the benefit of the Servicer
and the Servicer shall be entitled to retain and withdraw such interest from the
Collection Account pursuant to Section 3.05(e). The foregoing requirements for
deposit from the Collection Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of late payment charges, prepayment charges that are
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not prepayment penalties, and assumption fees need not be deposited by the
Servicer in the Collection Account.
(b) On behalf of the Trust Fund, the Trustee shall establish
and maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Certificateholders. On behalf of
the Trust Fund, the Servicer shall deliver to the Trustee in immediately
available funds for deposit in the Distribution Account by the close of business
New York time on the Servicer Remittance Date, that portion of the Available
Funds (calculated without regard to the references in the definition thereof to
amounts that may be deposited to the Distribution Account from a different
source as provided herein) then on deposit in the Collection Account. Amounts in
the Distribution Account shall be deemed to be held on behalf of the related
REMICs and the Grantor Trust in accordance with the REMIC distributions set
forth in Section 4.10.
(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 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 and the Depositor of the location of the Distribution Account when
established and prior to any change thereof.
(d) In the event the Servicer shall deliver to the Trustee for
deposit in the Distribution Account any amount not required to be deposited
therein, it may at any time request that the Trustee withdraw such amount from
the Distribution Account and remit to the Servicer any such amount, any
provision herein to the contrary notwithstanding. In addition, the Servicer
shall deliver to the Trustee from time to time for deposit, and the Trustee
shall so deposit, in the Distribution Account in respect of REMIC 1:
(i) any Advances, as required pursuant to Section 4.07;
(ii) any Stayed Funds, as soon as permitted by the federal
bankruptcy court having jurisdiction in such matters;
(iii) any prepayment penalties and premiums or amounts in
connection with the waiver of such prepayment penalties or premiums, in
each case required to be deposited pursuant to Section 3.01;
(iv) any amounts required to be deposited in the Distribution
Account pursuant to Sections 2.03, 3.04, 3.15, 3.16, 3.23, 3.28 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
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shall notify the Servicer of such receipt and deposit such funds in the
Distribution Account, subject to withdrawal thereof as permitted hereunder. In
addition, the Trustee shall deposit in the Distribution Account any amounts
required to be deposited pursuant to Section 3.25 in connection with losses
realized on Permitted Investments with respect to funds held in the Distribution
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:
(a) 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);
(b) to reimburse itself for Advances and Servicing Advances;
provided that the Servicer's right to reimburse itself pursuant to this
subclause (b) is limited to amounts received on the related Mortgage Loan which
represent payments of (i) principal and/or interest respecting which any such
Advance was made or (ii) Condemnation Proceeds, Insurance Proceeds or
Liquidation Proceeds respecting which any such Servicing Advance was made;
(c) 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;
(d) to reimburse itself for any amounts paid pursuant to
Section 3.03 (and not otherwise previously reimbursed);
(e) 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(a)(ii);
(f) to reimburse itself for any amounts paid pursuant to
Section 6.03 (and not otherwise previously reimbursed); and
(g) 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 any letter agreement related to such accounts
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 two Business Days of receipt, and retain therein, (i)
all Escrow Payments collected on account of the Mortgage Loans, for the purpose
of effecting timely payment of any such items as required under the terms of
this Agreement, and (ii) all Insurance Proceeds which are to be applied to the
restoration or repair of any Mortgaged Property. The Servicer shall make
withdrawals therefrom only to effect such payments as are required under this
Agreement, and for such other purposes as shall be set forth in, or in
accordance with, Section 3.07. The Servicer shall be entitled to retain any
interest paid on funds deposited in the Escrow Account by the depository
institution other than interest on escrowed funds required by law to be paid to
the Mortgagor and, to the extent required by the related Mortgage Loan or
Applicable Regulations, the Servicer shall pay interest on escrowed funds to the
Mortgagor notwithstanding that the Escrow Account is non-interest bearing or
that interest paid thereon is insufficient for such purposes.
Section 3.07. Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by the
Servicer (i) to effect timely payments of ground rents, taxes, assessments,
water rates, fire, flood and hazard insurance premiums, Primary Insurance Policy
premiums, if applicable, and comparable items, (ii) to reimburse the Servicer
for any Servicing Advance made by the Servicer with respect to a related
Mortgage Loan but only from amounts received on the related Mortgage Loan which
represent late payments or Late Collections of Escrow Payments thereunder, (iii)
to refund to the Mortgagor any funds as may be determined to be overages, (iv)
for transfer to the Collection Account in accordance with the terms of this
Agreement, (v) for application to restoration or repair of the Mortgaged
Property, (vi) to pay to the Servicer, or to the Mortgagor to the extent
required by the related Mortgage Loan or Applicable Regulations, any interest
paid on the funds deposited in the Escrow Account, (vii) to clear and terminate
the Escrow Account on the termination of this Agreement, (viii) to transfer to
the Collection Account any insurance proceeds, or (ix) in the case of FHA Loans
and VA Loans, for transfer to the Collection Account, fire and hazard insurance
proceeds and Escrow Payments with respect to any Mortgage Loan where the FHA or
VA, as the case may be, has directed application of such funds as a credit
against the proceeds of the FHA Insurance Contract or the VA Guaranty Agreement.
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
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Escrow Account is insufficient, shall pay such interest from its own funds,
without any reimbursement therefor.
In the event the Servicer shall deposit in the Escrow Account
any amount not required to be deposited therein, it may at any time withdraw
such amount from the Escrow Account, any provision herein to the contrary
notwithstanding.
Section 3.08. Payment of Taxes, Insurance and Other Charges;
Collections Thereunder.
With respect to each first lien Mortgage Loan, the Servicer
shall maintain accurate records reflecting the status of ground rents, taxes,
assessments, water rates and other charges which are or may become a lien upon
the Mortgaged Property and the status of Primary Insurance Policy premiums and
fire, flood and hazard insurance coverage and shall obtain, from time to time,
all bills for the payment of such charges (including renewal premiums) and shall
effect payment thereof prior to the applicable penalty or termination date and
at a time appropriate for securing maximum discounts allowable, employing for
such purpose deposits of the Mortgagor in the Escrow Account which shall have
been estimated and accumulated by the Servicer in amounts sufficient for such
purposes, as allowed under the terms of the Mortgage or Applicable Regulations.
To the extent that the Mortgage does not provide for Escrow Payments, the
Servicer shall determine that any such payments are made by the Mortgagor at the
time they first become due. The Servicer assumes full responsibility for the
timely payment of all such bills and shall effect timely payments of all such
bills irrespective of the Mortgagor's faithful performance in the payment of
same or the making of the Escrow Payments and shall make Servicing Advances from
its own funds to effect such payments.
The Servicer, on behalf of the Trustee, as mortgagee, will
maintain in full force and effect (to the extent a Mortgage Loan has a Primary
Insurance Policy) a Primary Insurance Policy issued by a Qualified Insurer with
respect to each Mortgage Loan for which such coverage is required. Such coverage
will be maintained until the Combined Loan-to-Value Ratio of the related
Mortgage Loan is reduced to 80% or less. The Servicer will not cancel or refuse
to renew any Primary Insurance Policy in effect on the Closing Date that is
required to be kept in force under this Agreement unless a replacement Primary
Insurance Policy for such cancelled or non-renewed policy is obtained from and
maintained with a Qualified Insurer. The Servicer shall not take any action
which would result in non-coverage under any applicable Primary Insurance Policy
of any loss which, but for the actions of the Servicer, would have been covered
thereunder. In connection with any assumption or substitution agreement entered
into or to be entered into pursuant to Section 3.14, the Servicer shall promptly
notify the insurer under the related Primary Insurance Policy, if any, of such
assumption or substitution of liability in accordance with the terms of such
policy and shall take all actions which may be required by such insurer as a
condition to the continuation of coverage under the Primary Insurance Policy. If
such Primary Insurance Policy is terminated as a result of such assumption or
substitution of liability, the Servicer shall obtain a replacement Primary
Insurance Policy as provided above.
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In connection with its activities as servicer, the Servicer
agrees to prepare and present, on behalf of itself and the Trustee, claims to
the insurer under any Primary Insurance Policy in a timely fashion in accordance
with the terms of such policies and, in this regard, to take such action as
shall be necessary to permit recovery under any Primary Insurance Policy
respecting a defaulted Mortgage Loan. Pursuant to Section 3.04, any amounts
collected by the Servicer under any Primary Insurance Policy shall be deposited
in the Collection Account, subject to withdrawal pursuant to Section 3.05.
Section 3.09. Transfer of Accounts.
The Servicer may transfer the Collection Account or the Escrow
Account to a different depository institution from time to time. Upon such
transfer, the Servicer shall deliver to the Trustee and the Depositor, a
certification or letter agreement, as the case may be, as required pursuant to
Sections 3.04 and 3.06.
Section 3.10. Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each Mortgage
Loan fire and hazard insurance with extended coverage as is customary in the
area where the Mortgaged Property is located in an amount which is at least
equal to the lesser of (i) the amount necessary to fully compensate for any
damage or loss to the improvements which are a part of such property on a
replacement cost basis, (ii) the Principal Balance of the Mortgage Loan, in each
case in an amount not less than such amount as is necessary to prevent the
Mortgagor and/or the Mortgagee from becoming a co-insurer or (iii) the amount
required under applicable HUD/FHA regulations. If the Mortgaged Property is in
an area identified in the Federal Register by the Flood Emergency Management
Agency as having special flood hazards and flood insurance has been made
available, the Servicer will cause to be maintained a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration with a generally acceptable insurance carrier, in an amount
representing coverage not less than the least of (i) the Principal Balance of
the Mortgage Loan, (ii) the maximum insurable value of the improvements securing
such Mortgage Loan or (iii) the maximum amount of insurance which is available
under the Flood Disaster Protection Act of 1973, as amended. The Servicer shall
also maintain on the REO Property for the benefit of the Certificateholders, (x)
fire and hazard insurance with extended coverage in an amount which is at least
equal to the replacement cost of the improvements which are a part of such
property, (y) public liability insurance and, (z) to the extent required and
available under the Flood Disaster Protection Act of 1973, as amended, flood
insurance in an amount as provided above. Any amounts collected by the Servicer
under any such policies other than amounts to be deposited in the Escrow Account
and applied to the restoration or repair of the Mortgaged Property or REO
Property, or released to the Mortgagor in accordance with the Servicer's normal
servicing procedures, shall be deposited in the Collection Account, subject to
withdrawal pursuant to Section 3.05. It is understood and agreed that no
earthquake or other additional insurance is required to be maintained by the
Servicer or the Mortgagor or maintained on property acquired in respect of the
Mortgage Loan, other than pursuant to such Applicable Regulations as shall at
any time be in force and as shall require such additional insurance. All such
policies shall be endorsed with standard mortgagee
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clauses with loss payable to the Servicer and shall provide for at least thirty
days prior written notice of any cancellation, reduction in the amount of or
material change in coverage to the Servicer. The Servicer shall not interfere
with the Mortgagor's freedom of choice in selecting either his insurance carrier
or agent; provided, however, that the Servicer shall not accept any such
insurance policies from insurance companies unless such companies currently
reflect a general policy rating of B:VI or better in Best's Key Rating Guide and
are licensed to do business in the state wherein the property subject to the
policy is located.
Section 3.11. Maintenance of Mortgage Impairment Insurance
Policy.
In the event that the Servicer shall obtain and maintain a
blanket policy issued by an insurer that has a general policy rating of B:VI or
better in Best's Key Rating Guide insuring against hazard losses on all of the
Mortgage Loans, then, to the extent such policy provides coverage in an amount
equal to the amount required pursuant to Section 3.10 and otherwise complies
with all other requirements of Section 3.10, it shall conclusively be deemed to
have satisfied its obligations as set forth in Section 3.10, it being understood
and agreed that such policy may contain a deductible clause, in which case the
Servicer shall, in the event that there shall not have been maintained on the
related Mortgaged Property or REO Property a policy complying with Section 3.10,
and there shall have been a loss which would have been covered by such policy,
deliver to the Trustee for deposit in the Distribution Account the amount not
otherwise payable under the blanket policy because of such deductible clause,
which amount shall not be reimbursable to the Servicer from the Trust Fund. In
connection with its activities as servicer of the Mortgage Loans, the Servicer
agrees to prepare and present, on behalf of the Trustee, claims under any such
blanket policy in a timely fashion in accordance with the terms of such policy.
Upon request of the Trustee, the Servicer shall cause to be delivered to the
Trustee a certified true copy of such policy and a statement from the insurer
thereunder that such policy shall in no event be terminated or materially
modified without thirty days prior written notice to the Trustee.
Section 3.12. Fidelity Bond, Errors and Omissions Insurance.
The Servicer shall maintain, at its own expense, a blanket
fidelity bond (the "Fidelity Bond") and an errors and omissions insurance
policy, with broad coverage with financially responsible companies on all
officers, employees or other persons acting in any capacity with regard to the
Mortgage Loans to handle funds, money, documents and papers relating to the
Mortgage Loans. The Fidelity Bond and errors and omissions insurance shall be in
the form of the Mortgage Banker's Blanket Bond and shall protect and insure the
Servicer against losses, including forgery, theft, embezzlement, fraud, errors
and omissions and negligent acts of such persons. Such Fidelity Bond shall also
protect and insure the Servicer against losses in connection with the failure to
maintain any insurance policies required pursuant to this Agreement and the
release or satisfaction of a Mortgage Loan without having obtained payment in
full of the indebtedness secured thereby. No provision of this Section 3.12
requiring the Fidelity Bond and errors and omissions insurance shall diminish or
relieve the Servicer from its duties and obligations as set forth in this
Agreement. The minimum coverage under any such bond and
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insurance policy shall be at least equal to the corresponding amounts required
by FNMA in the FNMA MBS Selling and Servicing Guide or by FHLMC in the FHLMC
Servicer's Guide. Upon request of the Trustee, the Servicer shall cause to be
delivered to the Trustee a certified true copy of the Fidelity Bond and errors
and omissions insurance policy and a statement from the surety and the insurer
that such Fidelity Bond and errors and omissions insurance policy shall in no
event be terminated or materially modified without thirty days' prior written
notice to the Trustee.
Section 3.13. Title, Management and Disposition of REO
Property.
(a) In the event that title to a Mortgaged Property is
acquired in foreclosure or by deed in lieu of foreclosure, the deed or
certificate of sale shall be taken (pursuant to a limited power of attorney to
be provided by the Trustee to the Servicer) in the name of the Trustee, on
behalf of the Certificateholders, or in the event the Trustee is not authorized
or permitted to hold title to real property in the state where the REO Property
is located, or would be adversely affected under the "doing business" or tax
laws of such state by so holding title, the deed or certificate of sale shall be
taken in the name of such Person or Persons as shall be consistent with an
Opinion of Counsel obtained by the Servicer from an attorney duly licensed to
practice law in the state where the REO Property is located. Any Person or
Persons holding such title other than the Trustee shall acknowledge in writing
that such title is being held as nominee for the benefit of the Trustee.
(b) In the event that the Trust Fund acquires any REO Property
as aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such REO Property before the end of
the third calendar year beginning after the year of its acquisition by the Trust
Fund for purposes of Section 860G(a)(8) of the Code or, at the expense of the
Trust Fund, request from the Internal Revenue Service, more than 60 days before
the day on which the above-mentioned grace period would otherwise expire, an
extension of the above-mentioned grace period, unless the Servicer obtains an
Opinion of Counsel, addressed to the Servicer and the Trustee, to the effect
that the holding by the Trust Fund of such REO Property subsequent to such
period will not: (i) result in the imposition of any tax on "prohibited
transactions" as defined in Section 860F of the Code; or (ii) cause any REMIC
constituting 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 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
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on the income earned from such REO Property, including any taxes imposed by
reason of Sections 860F or 860G(c) of the Code, unless the Servicer has agreed
to indemnify and hold harmless the Trust Fund with respect to the imposition of
any such taxes.
The Servicer shall manage, conserve, protect and operate each
REO Property for the Certificateholders and the Trust Fund solely for the
purpose of its prompt disposition and sale in a manner which does not cause such
REO Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or result in the receipt by the related REMIC of
any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code, or any "net income from foreclosure property" which
is subject to taxation under the REMIC Provisions. The Servicer shall cause each
REO Property to be inspected promptly upon the acquisition of title thereto and
shall cause each REO Property to be inspected at least annually thereafter. The
Servicer shall make or cause to be made a written report of each such
inspection. Such reports shall be retained in the Mortgage Servicing File and
copies thereof shall be forwarded by the Servicer to the Trustee upon request.
The Servicer shall attempt to sell the same (and may temporarily rent the same)
on such terms and conditions as the Servicer deems to be in the best interest of
the Certificateholders and the Trust Fund.
With respect to each REO Property, the Servicer shall
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 establish and maintain with respect to all REO Property an REO
Account or Accounts in the form of a time deposit or demand account, unless an
Opinion of Counsel is obtained by the Servicer to the effect that the
classification as a REMIC for federal income tax purposes of the arrangement
under which the Mortgage Loans and the REO Property is held will not be
adversely affected by holding such funds in another manner. Such REO Account
shall be established with the Servicer or with a commercial bank, a mutual
savings bank or a savings and loan association. The creation of any REO Account
shall be evidenced by a letter agreement, in the case of an account held by a
depository. In either case, an original of such certification or letter
agreement shall be furnished to the Trustee upon request.
The Servicer shall deposit or cause to be deposited, on a
daily basis, within two Business Days of receipt, in each REO 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 have the right to earn interest, if
any, on funds deposited in such REO Account. On or before each Determination
Date, the Servicer shall withdraw from each REO Account and deposit into the
Collection Account the net receipts from the REO Property on deposit in the REO
Account and retain any interest.
The Servicer shall furnish to the Trustee, on each Servicer
Remittance Date, an operating statement for each REO Property covering the
operation of each REO
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Property for the previous month. Such operating statement shall be accompanied
by such other information as the Trustee shall reasonably request.
The Servicer shall use its best efforts to dispose of the REO
Property as promptly as is practically consistent with protecting the
Certificateholders' interests.
Each REO Disposition shall be carried out by the Servicer at
such price and upon such terms and conditions as the Servicer deems to be in the
best interest of the Certificateholders. If as of the date title to any REO
Property was acquired by the Servicer there were outstanding unreimbursed
Servicing Advances with respect to the REO Property, the Servicer, upon an REO
Disposition of such REO Property, shall be entitled to reimbursement for any
related unreimbursed Servicing Advances from proceeds received in connection
with such REO Disposition. The proceeds from the REO Disposition, net of any
payment to the Servicer as provided above, shall be deposited in the REO Account
and shall be transferred to the Collection Account on the Determination Date in
the month following receipt thereof for distribution on the succeeding Servicer
Remittance Date in accordance with Section 4.01.
Any REO Disposition shall be for cash only (unless changes in
the REMIC Provisions made subsequent to the Startup Day allow a sale for other
consideration and an Opinion of Counsel is obtained by the Servicer to the
effect that such sale shall not cause any REMIC constituting part of the Trust
Fund to fail to qualify as a REMIC).
The Servicer shall not complete, or allow to be completed, a
foreclosure or accept a deed in lieu of a foreclosure with respect to any
Ineligible Foreclosure Property Loan if it would cause the Trustee to hold REO
Property from Ineligible Foreclosure Property Loans with an aggregate value in
excess of 0.75% of the aggregate outstanding Principal Balance of the Mortgage
Loans as of the end of the prior Collection Period. If the Value of REO Property
from Ineligible Foreclosure Property Loans equals or exceeds 1% of the
outstanding Principal Balance of the Mortgage Loans as of the end of any
Collection Period, the Seller shall purchase at the Purchase Price on or prior
to the related Distribution Date sufficient REO Property from Ineligible
Foreclosure Property Loans to cause the Trustee to hold REO Property from
Ineligible Foreclosure Property Loans with a Value of less than 1% of the
outstanding Principal Balance of the Mortgage Loans and such proceeds shall be
treated as received during the related Prepayment Period. If the Seller shall
fail to purchase any REO Property as described in the preceding sentences, the
Servicer shall sell such REO Property as soon as reasonably practicable and in a
commercially reasonable manner. For purposes of this paragraph the "Value" of
REO Property from a Ineligible Foreclosure Property Loan shall be treated as
equal to the Principal Balance of the related Ineligible Foreclosure Property
Loan plus interest that had accrued on such Mortgage Loan as of the date of
acquisition of the REO Property by the Trustee. The Trustee shall reconvey a
Mortgage Loan so purchased in the same manner and under the same terms as
specified in Section 2.03.
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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 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. In connection with any such
assumption or substitution agreement, the Monthly Payment on the related
Mortgage Loan shall not be changed but shall remain as in effect immediately
prior to the assumption or substitution, the stated maturity or outstanding
principal amount of such Mortgage Loan shall not be changed nor shall any
required monthly payments of principal or interest be deferred or forgiven. Any
fee collected by the Servicer for consenting to any such conveyance or entering
into an assumption or substitution agreement shall be retained by or paid to the
Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or any assumption which the Servicer may be
restricted by law from preventing, for any reason whatsoever.
Section 3.15. Notification of Adjustments.
On each Adjustment Date, the Servicer shall make Mortgage
Interest Rate adjustments for each Group 2 Mortgage Rate Loan in compliance with
the requirements
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of the related Mortgage and Mortgage Note and Applicable Regulations. The
Servicer shall execute and deliver the notices required by each Mortgage and
Mortgage Note and Applicable Regulations regarding Mortgage Interest Rate
adjustments. The Servicer also shall provide timely notification to the Trustee
of all applicable data and information regarding such Mortgage Interest Rate
adjustments and the Servicer's methods of implementing such Mortgage Interest
Rate adjustments. Upon the discovery by the Servicer or the Trustee that the
Servicer has failed to adjust or has incorrectly adjusted a Mortgage Interest
Rate or a Monthly Payment pursuant to the terms of the related Mortgage Note and
Mortgage, the Servicer shall deliver to the Trustee for deposit in the
Distribution Account from its own funds the amount of any interest loss caused
thereby without reimbursement therefor; provided, however, the Servicer shall be
held harmless with respect to any Mortgage Interest Rate adjustments made by any
servicer prior to the Servicer.
Section 3.16. Optional and Mandatory Purchases of Mortgage
Loans by Seller.
The Seller may, at its option, repurchase a Mortgage Loan or
REO Property which becomes 60 or more days delinquent or for which the Servicer
has 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 Seller shall not use any procedure in
selecting Mortgage Loans to be repurchased which is materially adverse to the
interests of the Certificateholders. The Seller shall purchase such (i)
delinquent Mortgage Loan at a price equal to the Principal Balance of the
Mortgage Loan plus accrued interest thereon at the Mortgage Interest Rate from
the date to which interest has last been paid to the Trust Fund to the date of
purchase plus any unreimbursed Servicing Advances and Advances or (ii) REO
Property at its fair market value as determined in good faith by the Servicer.
Any such repurchase of a Mortgage Loan or REO Property pursuant to this Section
3.16 shall be accomplished by delivery to the Trustee for deposit in the
Distribution Account of the amount of the purchase price. The Trustee shall
immediately effectuate the conveyance of such delinquent Mortgage Loan or REO
Property to the Seller to the extent necessary, including the prompt delivery of
all documentation to the Seller.
Section 3.17. Trustee to Cooperate; Release of Files.
(a) Upon the payment in full of any Mortgage Loan (including
any liquidation of such Mortgage Loan through foreclosure or otherwise, or the
receipt by the Servicer of a notification that payment in full will be escrowed
in a manner customary for such purposes), the Servicer shall deliver to the
Trustee (or the Custodian as the case may be) two executed copies of a completed
"Request for Release" substantially in the form of Exhibit E. Upon receipt of
such Request for Release of Documents, the Trustee (or the Custodian as the case
may be) shall promptly release the related Mortgage File, in trust to (i) the
Servicer, or (ii) such other party identified in the related Request for
Release. Upon any such payment in full, or the receipt of such notification that
such funds have been placed in escrow, the Servicer shall direct the Trustee in
writing to execute an instrument of satisfaction (or assignment of Mortgage
without recourse) regarding the
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Mortgaged Property relating to such Mortgage, which instrument of satisfaction
or assignment, as the case may be, shall be delivered to the Person or Persons
entitled thereto against receipt therefor of payment in full, it being
understood and agreed that no expense incurred in connection with such
instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the Collection Account. In lieu of executing any such satisfaction
or assignment, as the case may be, the Servicer may prepare and submit to the
Trustee a satisfaction (or assignment without recourse, if requested by the
Person or Persons entitled thereto) in form for execution by the Trustee with
all requisite information completed by the Servicer; in such event, the Trustee
shall execute and acknowledge such satisfaction or assignment, as the case may
be, and deliver the same with the related Mortgage File, as aforesaid.
(b) From time to time and as appropriate in the servicing of
any Mortgage Loan, including, without limitation, foreclosure or other
comparable conversion of a Mortgage Loan or collection under any insurance
policy relating to a Mortgage Loan, the Trustee shall (except in the case of the
payment or liquidation pursuant to which the related Mortgage File is released
to an escrow agent or an employee, agent or attorney of the Trustee), upon
written request of the Servicer and delivery to the Trustee (or the Custodian,
as the case may be) of two executed copies of a "Request for Release"
substantially in the form of Exhibit E signed by a Servicing Officer, release
the related Mortgage File to the Servicer and shall execute such documents as
shall be necessary to the prosecution of any such proceedings, including,
without limitation, an assignment without recourse of the related Mortgage to
the Servicer. Such receipt shall obligate the Servicer to return the Mortgage
File to the Trustee (or the Custodian, as the case may be) when the need
therefor by the Servicer no longer exists unless the Mortgage Loan shall be
liquidated, in which case, upon receipt of a Request for Release evidencing such
liquidation, the receipt shall be released by the Trustee (or the Custodian, as
the case may be) to the Servicer.
(c) Subject to Section 3.01, the Servicer shall have the right
to accept applications of Mortgagors for consent to (i) partial releases of
Mortgages, (ii) alterations, (iii) removal, demolition or division of properties
subject to Mortgages and (iv) second mortgage subordination agreements. No
application for approval shall be considered by the Servicer unless: (w) it has
received an Opinion of Counsel, addressed to the Trustee (which opinion shall
not be an expense of the Trustee or the Trust Fund) that such sale, disposition,
substitution, acquisition or contribution will not affect adversely the status
of any REMIC constituting part of the Trust Fund as a REMIC or cause any REMIC
constituting part of the Trust Fund to be subject to a tax on "prohibited
transactions" or "contributions" pursuant to the REMIC Provisions; (x) the
provisions of the related Note and Mortgage have been complied with; (y) the
Combined Loan-to-Value Ratio and debt-to-income ratio after any release does not
exceed the maximum Combined Loan-to-Value Ratio and debt-to-income ratio
established in accordance with the underwriting standards of the Mortgage Loans;
and (z) the lien priority of the related Mortgage is not affected. Upon receipt
by the Trustee of a Servicing Officer's certificate setting forth the action
proposed to be taken in respect of a particular Mortgage Loan and certifying
that the criteria set forth in the immediately preceding sentence have been
satisfied, the Trustee shall execute and deliver to the Servicer the consent or
partial release so requested by the
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Servicer. A proposed form of consent or partial release, as the case may be,
shall accompany any Servicing Officer's certificate delivered by the Servicer
pursuant to this paragraph.
Section 3.18. Servicing Compensation.
As compensation for its activities hereunder, the Servicer
shall be entitled to retain the amount of the Servicing Fee with respect to each
Mortgage Loan (including REO Properties). The Servicer shall be entitled to
retain additional servicing compensation in the form of release fees, bad check
charges, assumption fees, modification or extension fees, late payment charges,
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. Additionally, the Servicer shall be entitled
to the Special Servicing Fee, payable in accordance with Section 4.02.
Section 3.19. Annual Statement as to Compliance.
(a) The Servicer, at its own expense, will deliver to the
Trustee and the Depositor, not later than 90 days following the end of the
fiscal year of the Servicer which as of the Startup Day ends on the last day of
December, commencing in 2000, a Servicing Officer's certificate stating, as to
each signer thereof, that (i) a review of the activities of the Servicer during
such preceding fiscal year (or such shorter period in the case of the first such
report) and of performance under this Agreement has been made under such
officers' supervision, and (ii) to the best of such officers' knowledge, based
on such review, the Servicer has fulfilled all its obligations under this
Agreement for such year, or, if there has been a default in the fulfillment of
all such obligations, specifying each such default known to such officers and
the nature and status thereof including the steps being taken by the Servicer to
remedy such default.
(b) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee'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 is
entitled to rely exclusively on Officers' Certificates).
Section 3.20. Annual Independent Certified Public Accountants'
Reports.
(a) Not later than 90 days following the end of each fiscal
year of the Servicer commencing in 2000, the Servicer, at its expense, shall
cause a nationally recognized firm of independent certified public accountants
to furnish to the Trustee and the Depositor a report stating that (i) it has
obtained a letter of representation regarding certain matters from the
management of the Servicer which includes an assertion that the Servicer has
complied with certain minimum residential mortgage loan servicing standards,
identified in either the Uniform Single Attestation Program for Mortgage Bankers
established by the Mortgage Bankers Association of America or the Audit
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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. Immediately upon
receipt of such report, the Servicer shall furnish a copy of such report to the
Trustee, the Depositor and each Rating Agency. Copies of such statement shall be
provided by the Trustee to any Certificateholder upon request at the Servicer's
expense, provided that such statement is delivered by the Servicer to the
Trustee.
(b) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee'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 is
entitled to rely exclusively on Officers' Certificates).
(c) The Trustee shall, on behalf of the Trust Fund, prepare,
sign and file with the Securities and Exchange Commission any and all reports,
statements and information respecting the Trust which the Depositor determines
are required to be filed with the Securities and Exchange Commission pursuant to
Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, each
such report, statement and information to be filed on or prior to the required
filing date for such report, statement or information. Upon the request of the
Trustee, each of the Seller, the Servicer and the Depositor shall cooperate with
the Trustee in the preparation of any such report and shall provide to the
Trustee in a timely manner all such information or documentation as the Trustee
may reasonably request in connection with the performance of its duties and
obligations under this Section.
Section 3.21. Access to Certain Documentation and Information
Regarding the Mortgage Loans.
The Servicer shall provide to the Trustee, Certificateholders
that are federally insured savings and loan associations, the Office of Thrift
Supervision, the FDIC and the supervisory agents and examiners of each of the
foregoing (which, in the case of supervisory agents and examiners, may be
required by applicable state and federal regulations) access to the
documentation regarding the Mortgage Loans, such access being afforded without
charge but only upon reasonable request and during normal business hours at the
offices of the Servicer designated by it.
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Section 3.22. Reserved.
Section 3.23. Obligations of the Servicer in Respect of
Compensating Interest.
Not later than the close of business on each Servicer
Remittance Date, the Servicer shall deliver to the Trustee for deposit in the
Distribution Account an amount ("Compensating Interest") equal to the lesser of
(A) the aggregate of the Prepayment Interest Shortfalls on the Actuarial
Mortgage Loans for the related Distribution Date resulting from Principal
Prepayments on the Actuarial Mortgage Loans during the related Prepayment Period
and (B) 50% of its aggregate Servicing Fee received in the related Collection
Period. The Servicer shall apply Compensating Interest to offset any Prepayment
Interest Shortfalls on the Actuarial Mortgage Loans. The Servicer shall not have
the right to reimbursement for any amounts remitted to the Trustee in respect of
Compensating Interest. Such amounts so remitted shall be included in the
Available Funds and distributed therewith on the next Distribution Date. The
Servicer shall not be obligated to pay Compensating Interest with respect to
Prepayment Interest Shortfalls on Simple Interest Mortgage Loans or Relief Act
Interest Shortfalls.
Section 3.24. Obligations of the Servicer in Respect of
Mortgage Interest Rates and Monthly Payments.
In the event that a shortfall in any collection on or
liability with respect to any Mortgage Loan results from or is attributable to
adjustments to Mortgage Interest Rates, Monthly Payments or Principal Balances
that were made by the Servicer in a manner not consistent with the terms of the
related Mortgage Note and this Agreement, the Servicer, upon discovery or
receipt of notice thereof, immediately shall deliver to the Trustee for deposit
in the Distribution Account from its own funds the amount of any such shortfall
and shall indemnify and hold harmless the Trust Fund, the Trustee, the Depositor
and any successor servicer in respect of any such liability. Such indemnities
shall survive the termination or discharge of this Agreement.
Section 3.25. Investment of Funds in the Collection Account
and the Distribution Account.
(a) The Servicer may direct any depository institution
maintaining the Collection Account and the Trustee may direct any depository
institution maintaining the Distribution Account (for purposes of this Section
3.25, each an "Investment Account"), to invest the funds in such Investment
Account in one or more Permitted Investments bearing interest or sold at a
discount, and maturing, unless payable on demand, (i) no later than the Business
Day immediately preceding the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if a Person other than
the Trustee is the obligor thereon, and (ii) no later than the date on which
such funds are required to be withdrawn from such account pursuant to this
Agreement, if the Trustee is the obligor thereon. All such Permitted Investments
shall be held to maturity, unless payable on demand. Any investment of funds in
an Investment Account shall be made in the name of the Trustee or the Servicer,
as applicable (in its capacity as such) or
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in the name of a nominee of the Trustee. The Trustee shall be entitled to sole
possession (except with respect to investment direction of funds held in the
Collection Account) over each such investment and the income thereon, and any
certificate or other instrument evidencing any such investment shall be
delivered directly to the Trustee or its agent, together with any document of
transfer necessary to transfer title to such investment to the Trustee or its
nominee. In the event amounts on deposit in an Investment Account are at any
time invested in a Permitted Investment payable on demand, the Trustee shall at
the direction of the Servicer:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on the last
day such Permitted Investment may otherwise mature hereunder
in an amount equal to the lesser of (1) all amounts then
payable thereunder and (2) the amount required to be withdrawn
on such date; and
(y) demand payment of all amounts due thereunder
promptly upon determination by a Responsible Officer of the
Trustee that such Permitted Investment would not constitute a
Permitted Investment in respect of funds thereafter on deposit
in the Investment Account.
(b) All income and gain realized from the investment of funds
in the Collection Account shall be for the benefit of the 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
Trustee. The Trustee shall deposit in the Distribution Account the amount of any
loss incurred on Permitted Investments in the Distribution Account.
(c) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee may and, subject to Section 8.01 and Section
8.02(a)(v), upon the request of the Holders of Certificates representing more
than 50% of the Voting Rights allocated to any Class of Certificates, shall take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings.
The Trustee shall not in any way be held liable by reason of
any insufficiency in any Account held by the Trustee resulting from any
investment loss on any Permitted Investment included therein (except to the
extent that the Trustee is the obligor and has defaulted thereon).
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Section 3.26. Liability of Servicer; Indemnification.
(a) Subject to clause (b) below and Section 6.03, the Servicer
(except the Trustee if it is required to succeed the Servicer hereunder)
indemnifies and holds the Trustee, the Seller, the Depositor and each
Certificateholder harmless against any and all claims, losses, penalties, fines,
forfeitures, reasonable legal fees and related costs, judgments, and any other
costs, fees and expenses that the Trustee, the Depositor and any
Certificateholder may sustain in any way related to the failure of the Servicer
to perform its duties and service the Mortgage Loans in compliance with the
Servicing Standards. The Servicer shall immediately notify the Trustee, the
Depositor and each Certificateholder if a claim is made that may result in such
claims, losses, penalties, fines, forfeitures, legal fees or related costs,
judgments, or any other costs, fees and expenses, and the Servicer shall assume
(with the consent of the Trustee) the defense of any such claim and pay all
expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against the Servicer, the Trustee, the Depositor and/or Certificateholder in
respect of such claim. The provisions of this Section 3.26 shall survive the
termination of this Agreement and the payment of the outstanding Certificates.
(b) None of the Depositor, the Seller, the Servicer, or any of
the directors, officers, employees or agents of the Depositor, the Seller or the
Servicer shall be under any liability to the Trust Fund or the
Certificateholders for any action taken, or for refraining from the taking of
any action, in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the
Seller or the Servicer or any such Person against any breach of warranties or
representations made herein, or against any specific liability imposed on the
Servicer for a breach of the Servicing Standard, or against any liability which
would otherwise be imposed by reason of its respective willful misfeasance, bad
faith, fraud or negligence in the performance of its duties or by reasons of
negligent disregard of its respective obligations or duties hereunder.
The Depositor, the Servicer, the Seller and any director,
officer, employee or agent of the Depositor, the Seller or the Servicer, may
rely in good faith on any document of any kind which, prima facie, is properly
executed and submitted by any appropriate Person with respect to any matters
arising hereunder. The Depositor, the Servicer, the Seller, and any director,
officer, employee or agent of the Depositor, the Seller or the Servicer shall be
indemnified and held harmless by the Trust Fund against any loss, liability or
expense incurred in connection with any legal action relating to this Agreement
or the Certificates, other than any loss, liability or expense incurred in
connection with any legal action incurred by reason of its respective
misfeasance, bad faith, fraud or negligence, a breach of a representation or
warranty hereunder or (in the case of the Servicer) a breach of the Servicing
Standard in the performance of its respective duties or by reason of negligent
disregard of its respective obligations or duties hereunder. Neither the
Depositor, the Seller nor the Servicer shall be under any obligation to appear
in, prosecute or defend any legal action unless such action is related to its
respective duties under this Agreement and in its opinion does not expose it to
any expense or liability; provided, however, that the Depositor, the Seller or
the Servicer may
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in its discretion undertake any action related to its obligations hereunder
which it may deem necessary or desirable with respect to this Agreement and the
rights and duties of the parties hereto and the interests of the
Certificateholders hereunder.
Section 3.27. Reports of Foreclosure and Abandonment of
Mortgaged Properties.
On or before the last day of February of each year beginning
in 2001, the Servicer shall file the reports of foreclosure and abandonment of
any Mortgaged Property required by Section 6050J of the Code with the Internal
Revenue Service and provide an Officer's Certificate certifying its compliance
with this Section 3.27 to the Trustee. The reports from the Servicer shall be in
form and substance sufficient to meet the reporting requirements imposed by such
Section 6050J.
Section 3.28. Protection of Assets(a) . (a) Except for
transactions and activities entered into in connection with the securitization
that is the subject of this agreement, the trust created by this agreement is
not authorized and has no power to:
(1) borrow money or issue debt;
(2) merge with another entity, reorganize, liquidate or
sell assets;
(3) engage in any business or activities.
(b) Each party to this agreement agrees that it will not file
an involuntary bankruptcy petition against the Trustee or the Trust Fund or
initiate any other form of insolvency proceeding until after the Certificates
have been paid.
ARTICLE IV
FLOW OF FUNDS
Section 4.01. Interest Distributions.
On each Distribution Date, the Trustee shall withdraw from the
Distribution Account the Interest Remittance Amount and apply it in the
following order of priority (based upon the Mortgage Loan information provided
to it in the Remittance Report, upon which the Trustee may conclusively rely),
and the calculations required to be made by the Trustee, to the extent
available:
(i) to the Trustee, the Trustee Fee for such Distribution
Date;
(ii) concurrently, to the Class A-1F, Class A-2F and Class
A-1A Certificates, pro rata, the applicable Accrued Certificate
Interest for such Distribution Date;
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(iii) concurrently, to the Class A-1F, Class A-2F and Class
A-1A Certificates, pro rata, the applicable Interest Carry Forward
Amount for the Class A-1F, Class A-2F and Class A-1A Certificates,
respectively;
(iv) to the Class M-1 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(v) to the Class M-2 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(vi) to the Class B-1 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(vii) to the Class B-2 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date; and
(viii) the amount, if any, of the Interest Remittance Amount
remaining after application with respect to the priorities set forth
above will be applied as described under Section 4.02(b) hereof.
Section 4.02. Distributions of Principal and Monthly Excess
Cashflow Amounts.
(a) On each Distribution Date, the Trustee shall make the
following distributions in the following order of priority (based upon the
Mortgage Loan information provided to it in the Remittance Report), and the
calculations required to be made by the Trustee, to the extent of the Principal
Distribution Amount:
(i) before the Stepdown Date or with respect to which a
Trigger Event is in effect,
(A) concurrently, as follows:
(1) sequentially to the Holders of the Class
A-1F and Class A-2F Certificates, in that order, the
Group 1 Principal Percentage of the Principal
Distribution Amount for such Distribution Date, until
the Certificate Principal Balance of each such Class
has been reduced to zero and then to the Class A-1A
Certificates, until the Certificate Principal Balance
of such Class has been reduced to zero; and
(2) to the Holders of the Class A-1A
Certificates, the Group 2 Principal Percentage of the
Principal Distribution Amount for such Distribution
Date, until the Certificate Principal Balance of such
Class has been reduced to zero and then sequentially
to the Class A-1F and Class A-2F Certificates, in
that order, until the Certificate Principal Balance
of each such Class has been reduced to zero;
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(B) to the Holders of the Class M-1 Certificates,
100% of the remaining Principal Distribution Amount for such
Distribution Date, until the Certificate Principal Balance of
the Class M-1 Certificates has been reduced to zero;
(C) to the Holders of the Class M-2 Certificates,
100% of the remaining Principal Distribution Amount, until the
Certificate Principal Balance of the Class M-2 Certificates
has been reduced to zero;
(D) to the Holders of the Class B-1 Certificates,
100% of the remaining Principal Distribution Amount, until the
Certificate Principal Balance of the Class B-1 Certificates
has been reduced to zero;
(E) to the Holders of the Class B-2 Certificates,
100% of the remaining Principal Distribution Amount, until the
Certificate Principal Balance of the Class B-2 Certificates
has been reduced to zero; and
(F) any amount of the Principal Distribution Amount
remaining after making all of the distributions in clauses
(A), (B), (C), (D) and (E) 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) the lesser of (x) the Principal Distribution
Amount and (y) the Class A Principal Distribution Amount,
concurrently as follows:
(1) the Group 1 Principal Percentage of the
lesser of (x) the Principal Distribution Amount and
(y) Class A Principal Distribution Amount will be
distributed sequentially, to the Class A-1F and Class
A-2F Certificates, in that order, until the
Certificate Principal Balance of each such Class has
been reduced to zero and then to the Class A-1A
Certificates, until the Certificate Principal Balance
of such Class has been reduced to zero; and
(2) the Group 2 Principal Percentage of the
lesser of (x) the Principal Distribution Amount and
(y) Class A Principal Distribution Amount will be
distributed to the Class A-1A Certificates, until the
Certificate Principal Balance of such Class has been
reduced to zero and then sequentially to the Class
A-1F and Class A-2F Certificates, in that order,
until the Certificate Principal Balance of each such
Class has been reduced to zero;
(B) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed to the
Class A Certificates in clause (A) above and (y) the Class M-1
Principal Distribution Amount will be distributed to the Class
M-1 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero;
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(C) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amount
distributed to the Class A Certificates in clause (A) above
and the amount distributed to the Class M-1 Certificates in
clause (B) above and (y) the Class M-2 Principal Distribution
Amount will be distributed to the Class M-2 Certificates,
until the Certificate Principal Balance thereof has been
reduced to zero;
(D) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amount
distributed to the Class A Certificates pursuant to clause (A)
above, the amount distributed to the Class M-1 Certificates
pursuant to clause (B) above and the amount distributed to the
Class M-2 Certificates pursuant to clause (C) above and (y)
the Class B-1 Principal Distribution Amount will be
distributed to the Class B-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to
zero;
(E) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amount
distributed to the Class A Certificates pursuant to clause (A)
above, the amount distributed to the Class M-1 Certificates
pursuant to clause (B) above, the amount distributed to the
Class M-2 Certificates pursuant to clause (C) above and the
amount distributed to the Class B-1 Certificates pursuant to
clause (D) above and (y) the Class B-2 Principal Distribution
Amount will be distributed to the Class B-2 Certificates,
until the Certificate Principal Balance thereof has been
reduced to zero; and
(F) any amount of the Principal Distribution Amount
remaining after making all of the distributions in clauses
(A), (B), (C), (D) and (E) above shall be applied as set forth
in Section 4.02(b).
(b) On each Distribution Date, any Monthly Excess Cashflow
Amount shall be distributed, to the extent available, in the following order of
priority on such Distribution Date:
(i) to pay any remaining unpaid Accrued Certificate Interest
for such Distribution Date, pro rata, among the Class A-1F, Class A-2F
and Class A-1A Certificates;
(ii) to pay the remaining Interest Carry Forward Amounts for
the Classes of Class A Certificates, if any, pro rata, among the Class
A-1F, Class A-2F and the Class A-1A Certificates;
(iii) to pay the Extra Principal Distribution Amount for such
Distribution Date in accordance with Section 4.02(a);
(iv) to pay any remaining unpaid Accrued Certificate Interest
for such Distribution Date for the Class M-1 Certificates;
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(v) to pay the remaining Class M-1 Interest Carry Forward
Amount, if any;
(vi) to pay the Class M-1 Realized Loss Amortization Amount
for such Distribution Date;
(vii) to pay any remaining unpaid Accrued Certificate Interest
for such Distribution Date for the Class M-2 Certificates;
(viii) to pay the remaining Class M-2 Interest Carry Forward
Amount, if any;
(ix) to pay the Class M-2 Realized Loss Amortization Amount
for such Distribution Date;
(x) to pay any remaining unpaid Accrued Certificate Interest
for such Distribution Date for the Class B-1 Certificates;
(xi) to pay the remaining Class B-1 Interest Carry Forward
Amount, if any;
(xii) to pay the Class B-1 Realized Loss Amortization Amount
for such Distribution Date;
(xiii) to pay any remaining unpaid Accrued Certificate
Interest for such Distribution Date for the Class B-2 Certificates;
(xiv) to pay the remaining Class B-2 Interest Carry Forward
Amount, if any;
(xv) to pay the Class B-2 Realized Loss Amortization Amount
for such Distribution Date;
(xvi) to the Excess Reserve Fund Account, and then from the
Excess Reserve Fund Account to the Class A-1A Certificates, an amount
equal to the Class A-1A LIBOR Carryover Amount;
(xvii) to the Excess Reserve Fund Account, an amount equal to
the Required Excess Reserve Fund Deposit;
(xviii) to pay the Special Servicing Fees for such
Distribution Date and any accrued and unpaid Special Servicing Fees
which remain unpaid from any previous Distribution Date;
(xix) together with amounts from the Class N Reserve Fund, if
necessary, to pay the Class N Certificates, the Accrued Certificate
Interest for the Class N Certificates and any Interest Carry Forward
Amount thereon unpaid on prior Distribution Dates;
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(xx) to the Class N Reserve Fund, the Required Class N Reserve
Fund Deposit;
(xxi) any remaining Monthly Excess Cashflow Amount together
with the Class N Excess Release Amount to reduce the Class N Notional
Amount, until the Class N Notional Amount has been reduced to zero; and
(xxii) to the Class X Certificates, the Class X Distributable
Amount for such Distribution Date.
On each Distribution Date, there shall be distributed to the
Holders of the Class R Certificates in respect of the Class R-1 Interest, any
remaining amount in the Distribution Account on such date after the application
pursuant to Sections 4.01, 4.02(a), 4.02(b)(i)-(xxii) and 4.02(c).
(c) On each Distribution Date, all prepayment premiums and
penalties (including amounts deposited by the Seller in lieu thereof pursuant to
Section 3.01) shall be allocated to the Class N Certificates for so long as the
Class N Notional Amount is greater than zero pursuant to Section 4.02(b)(xxi)
above), and to the Class X Certificates after the Class N Notional Amount has
been reduced to zero.
(d) Any amounts distributed to the Offered Certificates in
respect of interest pursuant to Sections 4.01(ii)-(vii) which constitute Rate
Payments shall first be deemed distributed by REMIC 2 to the Class X/N Interest
as a distribution in respect of the REMIC 2 Components, and then distributed to
the Offered Certificates from the Grantor Trust as payments on notional
principal contracts in the nature of cap contracts.
(e) Any amounts distributed to the Class A-1A Certificates in
respect of Class A-1A LIBOR Carryover Amounts pursuant to Section 4.02(b)(xvi)
shall first be deemed distributed by REMIC 2 to the Class X/N Interest as a
distribution of Monthly Excess Cashflow Amount, and then distributed to the
Class A-1A Certificates from the Grantor Trust as payments on notional principal
contracts in the nature of cap contracts.
(f) Any amounts distributed to the Class N Certificates
pursuant to Section 4.02(b)(xix) and (xxi), to the Class N Reserve Fund pursuant
to Section 4.02(b)(xx) and to the Class X Certificates pursuant to Section
4.02(b)(xxii) shall be considered distributed to the Class X/N Interest in
respect of the REMIC 2 Components and then to the Class N and Class X
Certificates pursuant to Section 9.01(n).
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. If, after giving effect to the distribution of the Principal
Distribution Amount on any Distribution Date the aggregate Certificate Principal
Balance of the Offered Certificates exceeds the Pool Balance as of the end of
the related Collection Period, such excess will be allocated against the Class
B-2, Class B-1, Class M-2, Class M-1 and the Senior Certificates, in
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that order and until the respective Certificate Principal Balances thereof are
reduced to zero. Any allocation to the Senior Certificates shall be further
allocated among the Class A-1A, Class A-1F and Class A-2F Certificates, pro
rata, on the basis of their respective Certificate Principal Balances.
Section 4.04. Method of Distribution.
The Trustee shall make distributions in respect of a
Distribution Date to each Certificateholder of record on the related Record Date
(other than as provided in Section 10.01 respecting the final distribution), in
the case of Certificateholders of the Certificates, by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date and is
the registered owner of such Certificates the aggregate initial Certificate
Principal Balance of which is in excess of $5,000,000, or by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register, provided that the Trustee may
deduct a reasonable wire transfer fee from any payment made by wire transfer.
Distributions among Certificateholders shall be made in proportion to the
Percentage Interests evidenced by the Certificates held by such
Certificateholders.
Section 4.05. Distributions on Book-Entry Certificates.
Each distribution with respect to a Book-Entry Certificate
shall be paid to the Depository, which shall credit the amount of such
distribution to the accounts of its Depository Participants in accordance with
its normal procedures. Each Depository Participant shall be responsible for
disbursing such distribution to the Certificate Owners that it represents and to
each indirect participating brokerage firm (a "brokerage firm" or "indirect
participating firm") for which it acts as agent. Each brokerage firm shall be
responsible for disbursing funds to the Certificate Owners that it represents.
All such credits and disbursements with respect to a Book-Entry Certificate are
to be made by the Depository and the Depository Participants in accordance with
the provisions of the Certificates. None of the Trustee, the Depositor, the
Servicer or the Seller shall have any responsibility therefor except as
otherwise provided by applicable law.
Section 4.06. Statements.
(a) On each Distribution Date, based, as applicable, on the
Mortgage Loan information contained in the Remittance Report, the Trustee shall
prepare and post on its website at www.chase.com/sfa, a statement as to the
distributions made on such Distribution Date:
(i) the amount of the distribution made on such Distribution
Date to the Holders of each Class of Certificates allocable to
principal or reduction of the Class N Notional Amount, separately
identified;
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(ii) the amount of the distribution made on such Distribution
Date to the Holders of each Class of Certificates allocable to interest
or Class X Distributable Amount, separately identified;
(iii) the Overcollateralization Amount, the
Overcollateralization Release Amount, the Overcollateralization
Deficiency and the Overcollateralization Target Amount as of such
Distribution Date and the Monthly Excess Interest Amount and Monthly
Excess Cashflow Amount for such Distribution Date;
(iv) the aggregate amount of servicing compensation received
by the Servicer during the related Collection Period and accrued and
unpaid Special Servicing Fees;
(v) the aggregate amount of Advances for the related
Collection Period;
(vi) the Pool Balance and the Loan Group Balance for each Loan
Group at the close of business at the end of the related Collection
Period;
(vii) separately stated for each Loan Group and each
Sub-group, 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) separately stated for each Loan Group and each
Sub-group, 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) separately stated for each Loan Group and each Sub-group,
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) separately stated for each Loan Group and each Sub-group,
the book value of any REO Property as of the close of business on the
last Business Day of the calendar month preceding the Distribution
Date, and, cumulatively, the total number and cumulative principal
balance of all REO Properties as of the close of business of the last
day of the preceding Collection Period;
(xi) separately stated for each Loan Group and each Sub-group,
the aggregate amount of Principal Prepayments made during the related
Prepayment Period;
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(xii) the aggregate amount of prepayment penalties collected
or deposits by the Seller in lieu thereof pursuant to Section 3.01
during the related Collection Period and the amounts thereof allocable
to the Class N Certificates and the Class X Certificates;
(xiii) separately stated for each Loan Group and each
Sub-group, the aggregate amount of Realized Losses incurred during the
related Collection Period and the cumulative amount of Realized Losses;
(xiv) the Certificate Principal Balance, or Notional Amount,
as applicable, of each Class of Certificates, after giving effect to
the distributions, and allocations of Realized Losses or Applied
Realized Loss Amounts, as applicable, made on such Distribution Date,
separately identifying any reduction thereof due to allocations of
Realized Losses or Applied Realized Loss Amounts;
(xv) the beginning balance of amounts on deposit in the Excess
Reserve Fund as of the preceding Distribution Date, any withdrawals
from and deposits into the Excess Reserve Fund as of the Distribution
Date, and the ending balance of amounts on deposit in the Excess
Reserve Fund on such Distribution Date;
(xvi) the beginning balance of amounts on deposit in the Class
N Reserve Fund as of the preceding Distribution Date, any withdrawals
from and deposits into the Class N Reserve Fund as of the Distribution
Date, and the ending balance of amounts on deposit in the Class N
Reserve Fund on such Distribution Date;
(xvii) the Accrued Certificate Interest in respect of each
Class of Offered Certificates for such Distribution Date, separately
identifying the portions thereof attributable to Rate Payments, and the
respective portions thereof, if any, remaining unpaid following the
distributions made in respect of such Certificates on such Distribution
Date;
(xviii) 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;
(xix) [Reserved];
(xx) the Principal Balance of the Re-performing 60+ Day
Delinquent Loans;
(xxi) the amount of the Trustee Fee paid;
(xxii) Class A-1A LIBOR Carryover Amounts for the Class A-1A
Certificates distributed on such Distribution Date and the amounts
remaining after giving effect to distributions thereof on such
Distribution Date;
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(xxiii) any Overcollateralization Deficiency after giving
effect to the distribution of principal on such Distribution Date;
(xxiv) whether a Trigger Event has occurred and is continuing,
and the cumulative Realized Losses, as a percentage of the original
Pool Balance;
(xxv) the Available Funds;
(xxvi) the rate at which interest accrues for each Class of
Certificates for such Distribution Date;
(xxvii) the Liquidation Report for such Distribution Date;
(xxviii) [Reserved]
(xxix) the aggregate Principal Balance of Mortgage Loans
purchased by the Servicer or Seller during the related Collection
Period and indicating the Section of this Agreement requiring or
allowing the purchase of each such Mortgage Loan; and
(xxx) the aggregate Principal Balance of the Mortgage Loans
repurchased by the Seller during the related Collection Period in
connection with Section 3.16.
The Trustee may fully rely upon and shall have no liability
with respect to information with respect to the Mortgage Loans provided by the
Servicer.
In the case of information furnished pursuant to subclauses
(i) through (iii) above, the amounts shall be expressed in a separate Section of
the report as a dollar amount for each Class for each $1,000 original dollar
amount as of the Cut-Off Date.
(b) Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to each Person who at any time during
the calendar year was a Certificateholder of a Regular Certificate, if requested
in writing by such Person, such information as is reasonably necessary to
provide to such Person a statement containing the information set forth in
subclauses (i), (ii), (xv) and (xx) above, aggregated for such calendar year or
applicable portion thereof during which such Person was a Certificateholder.
Such obligation of the Trustee shall be deemed to have been satisfied to the
extent that substantially comparable information shall be prepared and furnished
by the Trustee to Certificateholders pursuant to any requirements of the Code as
are in force from time to time.
(c) On each Distribution Date, the Trustee shall provide to
the Class R Certificateholders a copy of the reports provided to the Regular
Certificateholders in respect of such Distribution Date with such other
information as the Trustee deems necessary or appropriate. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be prepared and
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furnished to Class R Certificateholders by the Trustee pursuant to any
requirements of the Code as from time to time in force.
Section 4.07. Remittance Reports; Advances.
(a) On the second Business Day following each Determination
Date but in no event less than four Business Days prior to the related
Distribution Date, the Servicer shall deliver to the Trustee by telecopy (or by
such other means as the Servicer and the Trustee may agree from time to time) a
Remittance Report with respect to the related Distribution Date. On the same
date, the Servicer shall forward to the Trustee by overnight mail a computer
readable magnetic tape or diskette or in such other medium as may be agreed
between the Servicer and the Trustee containing the information set forth in
such Remittance Report with respect to the related Distribution Date. Not later
than the close of business New York time on the Servicer Remittance Date, the
Servicer shall deliver or cause to be delivered to the Trustee in addition to
the information provided on the Remittance Report, such other information
reasonably available to it with respect to the Mortgage Loans as the Trustee may
reasonably request or order in order for the Trustee to perform the calculations
necessary to make the distributions contemplated by Section 4.01, 4.02 and 4.03
and to prepare the statements to Certificateholders contemplated by Section
4.06. The Trustee shall not be responsible to recompute, recalculate or verify
any information provided to it by the Servicer.
(b) The amount of Advances to be made by the Servicer for any
Distribution Date shall equal, subject to Section 4.07(d), the aggregate amount
of Monthly Payments (net of the related Servicing Fee), due during the related
Collection Period in respect of the Actuarial Mortgage Loans, which Monthly
Payments were delinquent on a contractual basis as of the close of business on
the related Determination Date. For purposes of the preceding sentence, the
Monthly Payment on each Balloon Mortgage Loan with a delinquent Balloon Payment
is equal to the assumed monthly payment that would have been due on the related
Due Date based on the original principal amortization schedule for the such
Balloon Mortgage Loan. The Servicer shall not be obligated to make any Advance
with respect to Simple Interest Mortgage Loans or REO Properties.
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 in the Collection Account on or before any future Servicer
Remittance Date to the extent
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that the Available Funds for the related Distribution Date (determined without
regard to Advances to be made on the Servicer Remittance Date) shall be less
than the total amount that would be distributed to the Classes of
Certificateholders pursuant to Section 4.01 and 4.02 on such Distribution Date
if such amounts held for future distributions had not been so used to make
Advances. The Trustee will provide notice to the Servicer by telecopy by the
close of business on any Servicer Remittance Date in the event that the amount
remitted by the Servicer to the Trustee on such date is less than the Advances
required to be made by the Servicer for the related Distribution Date, as set
forth in the related Remittance Report.
(c) The obligation of the Servicer to make such Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan, shall continue until the
earlier of such time as the Trust acquires title to the related Mortgaged
Property or such Mortgage Loan is paid in full by the Mortgagor or disposed of
by the Trust, or until the recovery of all Liquidation Proceeds thereon.
(d) Notwithstanding anything herein to the contrary, no
Advance or Servicing Advance shall be required to be made hereunder by the
Servicer if such Advance would, if made, constitute a Nonrecoverable Advance.
The determination by the Servicer that it has made a Nonrecoverable Advance or
that any proposed Advance, if made, would constitute a Nonrecoverable Advance,
shall be evidenced by an Officers' Certificate of the Servicer delivered to the
Depositor and the Trustee.
Section 4.08. Class N Reserve Fund.
(a) On the Closing Date, the Trustee shall establish and
maintain in its name, in trust for the benefit of the Holders of the Class N
Certificates, the Class N Reserve Fund. The Class N Reserve Fund will not be an
asset of the Trust Fund or any REMIC. The Class N Reserve Fund shall be an
Eligible Account, and funds on deposit therein shall be held separate and apart
from, and shall not be commingled with, any other moneys, including, without
limitation, other moneys of the Trustee held pursuant to this Agreement. Except
as provided in Section 4.08(b), the Trustee shall distribute the Class N Reserve
Fund only to the holders of the Class N Certificates and only on a Distribution
Date to the extent that there is insufficient cash in the Distribution Account
to make the distribution pursuant to Section 4.02(b)(xix) for such Distribution
Date.
(b) Funds in the Class N Reserve Fund may be invested in
Permitted Investments by the Trustee at the direction of the Holder of the Class
X Certificates with the greatest Percentage Interest. Any earnings on such
amounts shall be distributed to the Holders of the Class X Certificates and any
losses shall be chargeable first to amounts held in the Class N Reserve Fund and
second to Holders of the Class X Certificates. The Class N Reserve Fund is not
an asset of any of the REMICs, but rather is an "outside reserve fund" within
the meaning of the REMIC Provisions that is beneficially owned by the beneficial
owner of the Class X and Class N Certificates (when the Class X and Class N
Certificates are beneficially owned by one Person) or by the partnership
comprised of the Class X and Class N Certificates (when the Class X and Class N
Certificates are
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beneficially owned by two or more Persons). In the absence of written direction
from the Holders of the Class X Certificates, funds on deposit to the Class N
Reserve Fund shall be invested in the Chase Vista Money Market Fund. Upon the
earlier to occur of (i) termination of the Trust Fund or (ii) the reduction of
the Class N Notional Amount to zero, any amounts remaining in the Class N
Reserve Fund shall be distributed to the Holders of the Class X Certificates.
Section 4.09. [Reserved]
Section 4.10. Excess Reserve Fund Account.
(a) On the Closing Date, the Trustee shall establish and
maintain in its name, in trust for the benefit of the Holders of the Class A-1A
Certificates, the Excess Reserve Fund Account. The Excess Reserve Fund Account
shall be an Eligible Account, and funds on deposit therein shall be held
separate and apart from, and shall not be commingled with, any other moneys,
including, without limitation, other moneys of the Trustee held pursuant to this
Agreement.
(b) On the Closing Date, $5,000 will be deposited by the
Seller into the Excess Reserve Fund Account. Thereafter, on any Distribution
Date if the Class A-1A Net Funds Cap does not exceed the Class A-1A Pass-Through
Rate by at least 0.25%, the amount to be held in the Excess Reserve Fund Account
on any Distribution Date thereafter will equal the greater of (i) 0.50% of the
outstanding Certificate Principal Balance of the Class A-1A Certificates as of
such Distribution Date and (ii) $5,000 and will be funded from amounts
distributed pursuant to Section 4.02(b)(xvii). Thereafter, if the Class A-1A Net
Funds Cap for any Distribution Date exceeds the Class A-1A Pass-Through Rate for
the Class A-1A Certificates on such Distribution Date by 0.25% or more, the
Required Excess Reserve Fund Balance for such Distribution Date will be at least
$5,000. The amount required to be on deposit in the Excess Reserve Fund Account
at any time is referred to herein as the "Required Excess Reserve Fund Balance."
(c) On each Distribution Date on which there exists a Class
A-1A LIBOR Carryover Amount on the Class A-1A Certificates, the Trustee shall
withdraw from the Excess Reserve Fund Account amounts necessary to pay the Class
A-1A LIBOR Carryover Amount incurred by the Class A-1A Certificates, until such
amount is reduced to zero.
(d) Funds in the Excess Reserve Fund Account may be invested
in Permitted Investments by the Trustee at the direction of the Majority
Certificateholders of the Class X Certificates. On each Distribution Date, any
earnings on such amounts shall be distributed to the Holders of the Class X
Certificates and any losses shall be chargeable to amounts held in the Excess
Reserve Fund Account. The Majority Certificateholders of the Class X
Certificates shall evidence ownership of the Excess Reserve Fund Account for
federal income tax purposes and shall direct the Trustee, in writing, as to the
investment of amounts on deposit therein. In the absence of such written
direction, all funds in the Excess Reserve Fund Account shall be invested by the
Trustee in The Chase Manhattan Bank Vista Money Market Fund. Upon termination of
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the Trust Fund, any amounts remaining in the Excess Reserve Fund Account shall
be distributed to the Holders of the Class X Certificates. The Excess Reserve
Fund Account is not an asset of any of the REMICs, but rather is an "outside
reserve fund" within the meaning of the REMIC Provisions that is beneficially
owned by the beneficial owner of the Class X Certificates (when the Class X and
Class N Certificates are beneficially owned by one Person) or by the partnership
comprised of the Class X and Class N Certificates (when the Class X and Class N
Certificates are beneficially owned by two or more Persons).
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates.
Each of the Class A-1F, Class A-2F, Class A-1A, Class M-1,
Class M-2, Class B-1, Class B-2, Class N, Class X, 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 Certificates (other than the Class X and Class R 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 N, Class X and Class R
Certificates are issuable only in minimum Percentage Interests of 10%.
The Certificates shall be executed on behalf of the Trust by
manual or facsimile signature on behalf of the Trustee by a Responsible Officer.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures were affixed, authorized to sign on behalf of
the Trustee shall bind the Trust, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of such
Certificate. No Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose, unless such Certificate shall have been
manually authenticated by the 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 N, Class X and Class R Certificates
shall not be Book-Entry Certificates but shall be issued in fully registered
certificate form.
Section 5.02. Registration of Transfer and Exchange of
Certificates.
(a) The Certificate Registrar shall cause to be kept at the
Corporate Trust Office 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
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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.
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 Depository, the initial Depository, by, or on behalf of, the Depositor;
or to, and deposited with the Certificate Custodian, on behalf of the
Depository, if directed to do so pursuant to instructions from the Depository.
Except as provided in paragraph (c) below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of such Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Certificates; (iii) ownership and transfers of
registration of such Certificates on the books of the Depository shall be
governed by applicable rules established by the Depository; (iv) the Depository
may collect its usual and customary fees, charges and expenses from its
Depository Participants; (v) the Trustee shall for all purposes deal with the
Depository as representative of the Certificate Owners of the Certificates for
purposes of exercising the rights of Holders under this Agreement, and requests
and directions for and votes of such representative shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; (vi)
the Trustee may rely and shall be fully protected in relying upon information
furnished by the Depository with respect to its Depository Participants and
furnished by the Depository Participants with respect to indirect participating
firms and Persons shown on the books of such indirect participating firms as
direct or indirect Certificate Owners; and (vii) the direct participants of the
Depository shall have no rights under this Agreement under or with respect to
any of the Certificates held on their behalf by the Depository, and the
Depository may be treated by the Trustee and its agents, employees, officers and
directors as the absolute owner of the Certificates for all purposes whatsoever.
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All transfers by Certificate Owners of Book-Entry Certificates
shall be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owners. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners that it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures. The parties hereto
are hereby authorized to execute a Letter of Representations with the Depository
or take such other action as may be necessary or desirable to register a
Book-Entry Certificate to the Depository. In the event of any conflict between
the terms of any such Letter of Representation and this Agreement, the terms of
this Agreement shall control.
(c) If (i)(x) the Depository or the Depositor advises the
Trustee in writing that the Depository is no longer willing or able to discharge
properly its responsibilities as Depository and (y) the Trustee or the Depositor
is unable to locate a qualified successor, (ii) the Depositor, at its sole
option, with the consent of the Trustee, elects to terminate the book-entry
system through the Depository or (iii) after the occurrence of a Servicer Event
of Termination, the Certificate Owners of each Class of Book-Entry Certificates
representing Percentage Interests of such Classes aggregating not less than 51%
advises the Trustee and Depository through the Financial Intermediaries and the
Depository Participants in writing that the continuation of a book-entry system
through the Depository to the exclusion of definitive, fully registered
certificates (the "Definitive Certificates") to Certificate Owners is no longer
in the best interests of the Certificate Owners. Upon surrender to the
Certificate Registrar of the Book-Entry Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall, at the Depositor's expense, in the case of (ii) above, or the
Seller's expense, in the case of (i) and (iii) above, execute on behalf of the
Trust and authenticate the Definitive Certificates. Neither the Depositor nor
the Trustee shall be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates, the Trustee, the
Certificate Registrar, the Servicer, any Paying Agent and the Depositor shall
recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.
(d) Except with respect to the initial transfer of the Private
Certificates by the Depositor, no transfer, sale, pledge or other disposition of
any Private Certificate shall be made unless such disposition is exempt from the
registration requirements of the Securities Act of 1933, as amended (the "1933
Act"), and any applicable state securities laws or is made in accordance with
the 1933 Act and laws. In the event of any such transfer, (i) unless such
transfer is made in reliance upon Rule 144A (as evidenced by the investment
letter delivered to the Trustee, in substantially the form attached hereto as
Exhibit J) under the 1933 Act, 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 (ii) 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
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hereto as Exhibit J) 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 that is also a Class N Certificate desiring to effect a transfer of
a such Class N Certificate shall not make such transfer to a Non-U.S. Person.
The Holder of any Private Certificate desiring to effect a 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.
No transfer of an ERISA-Restricted Certificate shall be made
unless the Trustee shall have received either (i) a representation from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee and the Depositor, (such requirement is satisfied
only by the Trustee's receipt of a representation letter from the transferee
substantially in the form of Exhibit I hereto, as appropriate), to the effect
that such transferee is not an employee benefit plan or arrangement subject to
Section 406 of ERISA or a plan subject to Section 4975 of the Code, nor a person
acting on behalf of any such plan or arrangement nor using the assets of any
such plan or arrangement to effect such transfer or (ii) (except in the case of
a Class R, Class X or Class N Certificate) if the purchaser is an insurance
company, a representation that the purchaser is an insurance company which is
purchasing such Certificates with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60") and that the purchase and
holding of such Certificates are covered under Sections I and III of PTCE 95-60.
For purposes of clause (i) of the preceding sentence, such representation shall
be deemed to have been made to the Trustee by the acceptance by a Certificate
Owner of the beneficial interest in any such Class of ERISA-Restricted
Certificates, unless the Trustee shall have received from the transferee an
alternative representation acceptable in form and substance to the Depositor.
Notwithstanding anything else to the contrary herein, any purported transfer of
an ERISA-Restricted Certificate to or on behalf of an employee benefit plan
subject to ERISA or to the Code shall be void and of no effect.
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.
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(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.
The Trustee shall be under no 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 received the documents specified in clause (iii).
The Trustee 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 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 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
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that in the event that the Trustee 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 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 Trustee will provide to the
Internal Revenue Service, and to the persons specified in Sections
860E(e)(3) and (6) of the Code, information needed to compute the tax
imposed under Section 860E(e)(5) of the Code on transfers of residual
interests to disqualified organizations. The Trustee shall be entitled
to reasonable compensation for providing such information from the
person to whom it is provided.
The foregoing provisions of this Section shall cease to apply to transfers
occurring on or after the date on which there shall have been delivered to the
Trustee, in form and substance satisfactory to the Trustee, (i) written
notification from each Rating Agency that the removal of the restrictions on
Transfer set forth in this Section will not cause such Rating Agency to
downgrade its rating of the Certificates and (ii) an Opinion of Counsel to the
effect that such removal will not cause any REMIC hereunder to fail to qualify
as a REMIC.
(e) No service charge shall be made for any registration of
transfer or exchange of Certificates of any Class, but the Certificate Registrar
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of Certificates.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled by the Certificate Registrar and disposed of
pursuant to its standard procedures.
Section 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates.
If (i) any mutilated Certificate is surrendered to the
Certificate Registrar or the Certificate Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate and (ii) there
is delivered to the Trustee, the Depositor and the Certificate Registrar such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Trustee or the Certificate Registrar that
such Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute on behalf of the Trust, 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
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other expenses (including the fees and expenses of the Trustee and the
Certificate Registrar) in connection therewith. Any duplicate Certificate issued
pursuant to this Section, shall constitute complete and indefeasible evidence of
ownership in the Trust, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
Section 5.04. Persons Deemed Owners.
The Servicer, the Depositor, the Trustee, the Certificate
Registrar, any Paying Agent and any agent of the Servicer, the Depositor, the
Certificate Registrar, any Paying Agent or the Trustee may treat the Person,
including a Depository, in whose name any Certificate is registered as the owner
of such Certificate for the purpose of receiving distributions pursuant to
Section 4.01 and 4.02 and for all other purposes whatsoever, and none of the
Servicer, the Trust, the Trustee nor any agent of any of them shall be affected
by notice to the contrary.
Section 5.05. Appointment of Paying Agent.
(a) The Paying Agent shall make distributions to
Certificateholders from the Distribution Account pursuant to Section 4.01 and
4.02 and shall report the amounts of such distributions to the Trustee. The
duties of the Paying Agent may include the obligation (i) to withdraw funds from
the Collection Account pursuant to Section 3.05 and for the purpose of making
the distributions referred to above and (ii) to distribute statements and
provide information to Certificateholders as required hereunder. The Paying
Agent hereunder shall at all times be an entity duly incorporated and validly
existing under the laws of the United States of America or any state thereof,
authorized under such laws to exercise corporate trust powers and subject to
supervision or examination by federal or state authorities. The Paying Agent
shall initially be the Trustee. The Trustee may appoint a successor to act as
Paying Agent, which appointment shall be reasonably satisfactory to the
Depositor and the Rating Agencies.
(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.
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ARTICLE VI
THE SELLER, THE SERVICER AND THE DEPOSITOR
Section 6.01. Liability of the Seller, the Servicer and the
Depositor.
The Seller and the Servicer shall be liable in accordance
herewith only to the extent of the obligations specifically imposed upon and
undertaken by the Seller or Servicer, as the case may be, herein. The Depositor
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by the Depositor.
Section 6.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Seller, the Servicer or the Depositor.
Any entity into which the Seller, the Servicer or the
Depositor may be merged or consolidated, or any entity resulting from any
merger, conversion or consolidation to which the Seller, the Servicer or the
Depositor shall be a party, or any corporation succeeding to the business of the
Seller, the Servicer or the Depositor, shall be the successor of the Seller, the
Servicer or the Depositor, as the case may be, hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; provided, however, that
the successor Servicer shall satisfy all the requirements of Section 7.02 with
respect to the qualifications of a successor Servicer.
Section 6.03. Limitation on Liability of the Servicer and
Others.
Neither the Servicer nor any of the directors or officers or
employees or agents of the Servicer shall be under any liability to the Trust or
the Certificateholders for any action taken or for refraining from the taking of
any action by the Servicer in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect the
Servicer or any such Person against any liability which would otherwise be
imposed by reason of its willful misfeasance, bad faith or gross negligence in
the performance of duties of the Servicer or by reason of its reckless disregard
of its obligations and duties of the Servicer hereunder; provided, further, that
this provision shall not be construed to entitle the Servicer to indemnity in
the event that amounts advanced by the Servicer to retire any senior lien exceed
Liquidation Proceeds (in excess of related liquidation expenses) realized with
respect to the related Mortgage Loan. The Servicer and any director or officer
or employee or agent of the Servicer may rely in good faith on any document of
any kind prima facie properly executed and submitted by any Person respecting
any matters arising hereunder. The Servicer and any director or officer or
employee or agent of the Servicer shall be indemnified by the Trust and held
harmless against any loss, liability or expense incurred in connection with any
legal action relating to this Agreement or the Certificates, other than any
loss, liability or expense 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
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negligence in the performance of duties hereunder or by reason of its reckless
disregard of obligations and duties hereunder. The Servicer may undertake any
such action which it may deem necessary or desirable in respect of this
Agreement, and the rights and duties of the parties hereto and the interests of
the Certificateholders hereunder. In such event, the reasonable legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust and the Servicer shall be entitled
to be reimbursed therefor only pursuant to Section 3.05. The Servicer's right to
indemnity or reimbursement pursuant to this Section shall survive any
resignation or termination of the Servicer pursuant to Section 6.04 or 7.01 with
respect to any losses, expenses, costs or liabilities arising prior to such
resignation or termination (or arising from events that occurred prior to such
resignation or termination). This paragraph shall apply to the Servicer solely
in its capacity as Servicer hereunder and in no other capacities.
Section 6.04. Servicer Not to Resign.
Subject to the provisions of Section 7.01 and Section 6.02,
the Servicer shall not resign from the obligations and duties hereby imposed on
it except (i) upon determination that the performance of its obligations or
duties hereunder are no longer permissible under applicable law or are in
material conflict by reason of applicable law with any other activities carried
on by it or its subsidiaries or Affiliates, the other activities of the Servicer
so causing such a conflict being of a type and nature carried on by the Servicer
or its subsidiaries or Affiliates at the date of this Agreement or (ii) upon
satisfaction of the following conditions: (a) the Servicer has proposed a
successor servicer to the Trustee in writing and such proposed successor
servicer is reasonably acceptable to the Trustee; and (b) each Rating Agency
shall have delivered a letter to the Trustee prior to the appointment of the
successor servicer stating that the proposed appointment of such successor
servicer as Servicer hereunder will not result in the reduction or withdrawal of
the then current rating of the Regular Certificates or the ratings that are in
effect; provided, however, that no such resignation by the Servicer shall become
effective until such successor servicer or, in the case of (i) above, the
Trustee shall have assumed the Servicer's responsibilities and obligations
hereunder or the Trustee shall have designated a successor servicer in
accordance with Section 7.02. Any such resignation shall not relieve the
Servicer of responsibility for any of the obligations specified in Sections 7.01
and 7.02 as obligations that survive the resignation or termination of the
Servicer. Any such determination permitting the resignation of the Servicer
pursuant to clause (i) above shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee.
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. Such delegation shall not relieve
the Servicer of its liabilities and responsibilities
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with respect to such duties and shall not constitute a resignation within the
meaning of Section 6.04. The Servicer shall provide the Trustee and the Rating
Agencies with 60 days prior written notice prior to the delegation of any of its
duties to any Person other than any of the Servicer's Affiliates or their
respective successors and assigns.
The Trustee and the Depositor hereby specifically (i) consent
to the pledge and assignment by the Servicer of all the Servicer's right, title
and interest in, to and under this Agreement to the Servicing Rights Pledgee,
for the benefit of certain lenders, and (ii) provided that no Servicer Event of
Termination exists, agree that upon delivery to the Trustee by the Servicing
Rights Pledgee of a letter signed by the Servicer whereunder the Servicer shall
resign as Servicer under this Agreement, the Trustee shall appoint the Servicing
Rights Pledgee or its designee as successor Servicer, provided that at the time
of such appointment, the Servicing Rights Pledgee or such designee meets the
requirements of a successor Servicer pursuant to Section 7.02(a) and agrees to
be subject to the terms of this Agreement. If, pursuant to any provision hereof,
the duties of the Servicer are transferred to a successor, the entire amount of
the Servicing Fee and other compensation payable to the Servicer pursuant hereto
shall thereafter be payable to such successor.
ARTICLE VII
DEFAULT
Section 7.01. Servicer Events of Termination.
(a) If any one of the following events ("Servicer Events of
Termination") shall occur and be continuing:
(i) (A) The failure by the Servicer to make any Advance; or
(B) any other failure by the Servicer to deposit in the Collection
Account or Distribution Account any deposit required to be made under
the terms of this Agreement which continues unremedied for a period of
one Business Day after the date upon which written notice of such
failure shall have been given to the Servicer by the Trustee or by any
Holder of a Regular Certificate evidencing at least 25% of the Voting
Rights; or
(ii) The failure by the Servicer to make any required
Servicing Advance which failure continues unremedied for a period of 30
days, or the failure by the Servicer duly to observe or perform, in any
material respect, any other covenants, obligations or agreements of the
Servicer as set forth in this Agreement, which failure continues
unremedied for a period of 30 days, after the date (A) on which written
notice of such failure, requiring the same to be remedied, shall have
been given to the Servicer by the Trustee or by any Holder of a Regular
Certificate evidencing at least 25% of the Voting Rights or (B) actual
knowledge of such failure by a Servicing Officer of the Servicer; or
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(iii) The entry against the Servicer of a decree or order by a
court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a trustee, conservator, receiver or
liquidator in any insolvency, conservatorship, receivership,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding up or liquidation of its affairs, and
the continuance of any such decree or order unstayed and in effect for
a period of 60 days; or
(iv) The Servicer shall voluntarily go into liquidation,
consent to the appointment of a conservator or receiver or liquidator
or similar person in any insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings of or relating to the
Servicer or of or relating to all or substantially all of its property;
or a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a
conservator, receiver, liquidator or similar person in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Servicer and such decree or order shall
have remained in force undischarged, unbonded or unstayed for a period
of 60 days; or the Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make
an assignment for the benefit of its creditors or voluntarily suspend
payment of its obligations; or
(v) The aggregate amount of cumulative Realized Losses
incurred since the Cut-Off Date through the last day of the related
Collection Period divided by the initial Pool Balance exceeds the
applicable percentages set forth below with respect to such
Distribution Date:
<TABLE>
<CAPTION>
Distribution Date Occurring In Percentage
--------------------------------------------- --------------
<S> <C>
December 2000 through November 2004 2.75%
December 2004 through November 2005 3.50%
December 2005 through November 2006 4.00%
December 2006 and thereafter 4.50%
</TABLE>
(b) Then, and in each and every such case, so long as a
Servicer Event of Termination shall not have been remedied within the applicable
grace period, (x) with respect solely to clause (i)(A) above, if such Advance is
not made by 2:00 P.M., New York time, on the Business Day immediately following
the Servicer Remittance Date, the Trustee may terminate all of the rights and
obligations of the Servicer under this Agreement and the Trustee, or a successor
servicer appointed in accordance with Section 7.02, shall immediately make such
Advance and assume, pursuant to Section 7.02, the duties of a successor Servicer
and (y) in the case of (i)(B), (ii), (iii), (iv) and (v) above, the Trustee
shall, at the direction of the Holders of each Class of Regular Certificates
evidencing Percentage Interests aggregating not less than 51%, by notice then
given in writing to the Servicer (and to the Trustee if given by Holders of
Certificates), terminate all of the rights and obligations of the Servicer as
servicer under this Agreement. Any such notice to the Servicer shall also be
given to each Rating Agency, the Depositor and
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the Seller. On or after the receipt by the Servicer (and by the Trustee if such
notice is given by the Holders) of such written notice, all authority and power
of the Servicer under this Agreement, whether with respect to the Certificates
or the Mortgage Loans or otherwise, shall pass to and be vested in the Trustee
pursuant to and under this Section; and, without limitation, the Trustee is
hereby authorized and empowered to execute and deliver, on behalf of the
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of each Mortgage Loan and Related
Documents or otherwise. The Servicer agrees to cooperate with the Trustee (or
the applicable successor Servicer) in effecting the termination of the
responsibilities and rights of the Servicer hereunder, including, without
limitation, the delivery to the Trustee of all documents and records requested
by it to enable it to assume the Servicer's functions under this Agreement
within ten Business Days subsequent to such notice, the transfer within one
Business Day subsequent to such notice to the Trustee (or the applicable
successor Servicer) for the administration by it of all cash amounts that shall
at the time be held by the Servicer and to be deposited by it in the Collection
Account, the Distribution Account, the Excess Reserve Fund Account, any REO
Account or any Escrow Account or that have been deposited by the Servicer in
such accounts or thereafter received by the Servicer with respect to the
Mortgage Loans or any REO Property received by the Servicer. All reasonable
costs and expenses (including attorneys' fees) incurred in connection with
transferring the servicing to the successor Servicer and amending this Agreement
to reflect such succession as Servicer pursuant to this Section shall be paid by
the predecessor Servicer (or if the predecessor Servicer is the Trustee, the
initial Servicer) upon presentation of reasonable documentation of such costs
and expenses.
Section 7.02. Trustee to Act; Appointment of Successor.
(a) Within 90 days of the time the Servicer (and the Trustee,
if notice is sent by the Holders) receives a notice of termination pursuant to
Section 7.01 or 6.04, the Trustee (or such other successor Servicer as is
approved in accordance with this Agreement) shall be the successor in all
respects to the Servicer in its capacity as servicer under this Agreement and
the transactions set forth or provided for herein and shall be subject to all
the responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions hereof arising on and after its succession.
As compensation therefor, the Trustee (or such other successor Servicer) shall
be entitled to such compensation as the Servicer would have been entitled to
hereunder if no such notice of termination had been given. Notwithstanding the
above, (i) if the Trustee is unwilling to act as successor Servicer or (ii) if
the Trustee is legally unable so to act, the Trustee shall appoint or petition a
court of competent jurisdiction to appoint, any established housing and home
finance institution, bank or other mortgage loan or home equity loan servicer
having a net worth of not less than $50,000,000 as the successor to the Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer hereunder; provided, that the appointment of any
such successor Servicer will not result in the qualification, reduction or
withdrawal of the ratings assigned to the Certificates or the ratings that are
in effect by the Rating Agencies as evidenced by a letter to such effect from
the Rating Agencies. Pending appointment of
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a successor to the Servicer hereunder, unless the Trustee is prohibited by law
from so acting, the Trustee shall act in such capacity as hereinabove provided.
In connection with such appointment and assumption, the successor shall be
entitled to receive compensation out of payments on Mortgage Loans in an amount
equal to the compensation which the Servicer would otherwise have received
pursuant to Section 3.18 (or such other compensation as the Trustee and such
successor shall agree, not to exceed the Servicing Fee). The successor servicer
shall be entitled to withdraw from the Collection Account all costs and expenses
associated with the transfer of the servicing to the successor servicer. The
appointment of a successor servicer shall not affect any liability of the
predecessor Servicer which may have arisen under this Agreement prior to its
termination as Servicer to pay any deductible under an insurance policy pursuant
to Section 3.12 or to indemnify the Trustee 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. The Trustee
and such successor shall take such action, consistent with this Agreement, as
shall be necessary to effectuate any such succession.
In the event of a Servicer Event of Termination,
notwithstanding anything to the contrary above, the Trustee and the Depositor
hereby agree that upon delivery to the Trustee by the Servicing Rights Pledgee
of a letter signed by the Servicer within ten Business Days of when notification
of such event shall have been provided to the Trustee, whereunder the Servicer
shall resign as Servicer under this Agreement, the Trustee shall appoint the
Servicing Rights Pledgee or its designee as successor Servicer (provided that at
the time of such appointment the Servicing Rights Pledgee or such designee meets
the requirements of a successor Servicer set forth above) and the Servicing
Rights Pledgee agrees to be subject to the terms of this Agreement.
(b) Any successor, including the Trustee, to the Servicer as
servicer shall during the term of its service as servicer continue to service
and administer the Mortgage Loans for the benefit of Certificateholders, and
maintain in force a policy or policies of insurance covering errors and
omissions in the performance of its obligations as Servicer hereunder and a
Fidelity Bond in respect of its officers, employees and agents to the same
extent as the Servicer is so required pursuant to Section 3.12.
Section 7.03. Waiver of Defaults.
The Majority Certificateholders may, on behalf of all
Certificateholders, waive any events permitting removal of the Servicer as
servicer pursuant to this Article VII; 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. Upon any
waiver of a past default, such default shall cease to exist and any Servicer
Event of Termination arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereto except to the extent
expressly so waived. Notice of any such waiver shall be given by the Trustee to
the Rating Agencies.
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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 Certificateholders at their respective
addresses appearing in the Certificate Register and each Rating Agency.
(b) No later than 60 days after the occurrence of any event
which constitutes or which, with notice or a lapse of time or both, would
constitute a Servicer Event of Termination for five Business Days after a
Responsible Officer of the Trustee becomes aware of the occurrence of such an
event, the Trustee shall transmit by mail to all Certificateholders notice of
such occurrence unless such default or Servicer Event of Termination shall have
been waived or cured. Such notice shall be given to the Rating Agencies promptly
after any such occurrence.
Section 7.05. Survivability of Servicer Liabilities.
Notwithstanding anything herein to the contrary, upon
termination of the Servicer hereunder, any liabilities of the Servicer which
accrued prior to such termination shall survive such termination.
ARTICLE VIII
THE TRUSTEE
Section 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of a Servicer Event of
Termination of which a Responsible Officer of the Trustee shall have actual
knowledge and after the curing of all Servicer Events of Termination which may
have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If a Servicer Event of Termination has
occurred (which has not been cured) of which a Responsible Officer has actual
knowledge, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise,
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement; provided, however, that that the
Trustee shall not be responsible for the accuracy or content of any resolution,
certificate, statement, opinion, report, document, order or other instrument
furnished by the Servicer, the Seller or the Depositor hereunder. If any such
instrument is found not to conform in any material respect to the requirements
of this Agreement, the Trustee shall notify the Certificateholders of such
instrument in
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the event that the Trustee, after so requesting, does not receive a
satisfactorily corrected instrument.
No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own misconduct; provided, however, that:
(i) prior to the occurrence of a Servicer Event of
Termination, and after the curing of all such Servicer Events of
Termination which may have occurred, the duties and obligations of the
Trustee shall be determined solely by the express provisions of this
Agreement, the Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this
Agreement against the Trustee and, in the absence of bad faith on the
part of the Trustee, the Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement;
(ii) the Trustee shall not be personally liable for an error
of judgment made in good faith by a Responsible Officer of the Trustee,
unless it shall be proved that the Trustee was negligent in
ascertaining or investigating the facts related thereto;
(iii) the Trustee shall not be personally liable with respect
to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of the Majority
Certificateholders relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising
or omitting to exercise any trust or power conferred upon the Trustee,
under this Agreement; and
(iv) the Trustee shall not be charged with knowledge of any
failure by the Servicer to comply with the obligations of the Servicer
referred to in clauses (i) and (ii) of Section 7.01 or any Servicer
Event of Termination unless a Responsible Officer of the Trustee at the
Corporate Trust Office obtains actual knowledge of such failure or the
Trustee receives written notice of such failure from the Servicer or
the Majority Certificateholders. In the absence of such receipt of such
notice, the Trustee may conclusively assume that there is no Servicer
Event of Termination.
The Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Servicer under this Agreement, except during such
time, if any, as the Trustee shall be the successor to, and be vested with the
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rights, duties, powers and privileges of, the Servicer in accordance with the
terms of this Agreement.
The Trustee shall have no duty (A) to see any recording,
filing, or depositing of this Agreement or any agreement referred to herein or
any financing statement or continuation statement evidencing a security
interest, or to see to the maintenance of any such recording or filing or
depositing or to any rerecording, refiling or redepositing of any thereof, (B)
to see to any insurance or (C) to see to the payment or discharge of any tax,
assessment, or other governmental charge or any lien or encumbrance of any kind
owing with respect to, assessed or levied against, any part of the Trust Fund
other than from funds available in the Distribution Account.
Section 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon, and shall be
protected in acting or refraining from acting upon, any resolution,
Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(ii) the Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such advice or Opinion
of Counsel;
(iii) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation hereunder or in relation
hereto, at the request, order or direction of the Certificateholders
pursuant to the provisions of this Agreement, unless such
Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
may be incurred therein or thereby; the right of the Trustee to perform
any discretionary act enumerated in this Agreement shall not be
construed as a duty, and the Trustee shall not be answerable for other
than its negligence or willful misconduct in the performance of any
such act;
(iv) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(v) prior to the occurrence of a Servicer Event of Termination
and after the curing of all Servicer Events of Termination which may
have occurred, the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or documents, unless
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requested in writing to do so by the Majority Certificateholder;
provided, however, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded
to it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such cost, expense or liability as a
condition to such proceeding. The reasonable expense of every such
examination shall be paid by the Servicer or, if paid by the Trustee,
shall be reimbursed by the Servicer upon demand. Nothing in this clause
(v) shall derogate from the obligation of the Servicer to observe any
applicable law prohibiting disclosure of information regarding the
Mortgagors;
(vi) the Trustee shall not be accountable, shall have no
liability and makes no representation as to any acts or omissions
hereunder of the Servicer until such time as the Trustee may be
required to act as Servicer pursuant to Section 7.02;
(vii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such
agent, attorney or custodian appointed by the Trustee with due care;
and
(viii) the right of the Trustee to perform any discretionary
act enumerated in this Agreement shall not be construed as a duty, and
the Trustee shall not be answerable for other than its negligence or
willful misconduct in the performance of such act.
Section 8.03. Trustee Not Liable for Certificates or Mortgage
Loans.
The recitals contained herein and in the Certificates (other
than the authentication of the Trustee on the Certificates) shall be taken as
the statements of the Seller, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the validity
or sufficiency of this Agreement or of the Certificates (other than the
signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or Related Document. The Trustee shall not be accountable for the
use or application by the Servicer, or for the use or application of any funds
paid to the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Servicer. The Trustee shall at no
time have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Mortgage or any Mortgage Loan, or the
perfection and priority of any Mortgage or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the Trust
or its ability to generate the payments to be distributed to Certificateholders
under this Agreement, including, without limitation: the existence, condition
and ownership of any Mortgaged Property; the existence and enforceability of any
hazard insurance thereon (other than if the Trustee shall assume the duties of
the Servicer pursuant to Section 7.02); the validity of the assignment of any
Mortgage Loan
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to the Trustee or of any intervening assignment; the completeness of any
Mortgage Loan; the performance or enforcement of any Mortgage Loan (other than
if the Trustee shall assume the duties of the Servicer pursuant to Section
7.02); the compliance by the Depositor, the Seller or the Servicer with any
warranty or representation made under this Agreement or in any related document
or the accuracy of any such warranty or representation prior to the Trustee's
receipt of notice or other discovery of any non-compliance therewith or any
breach thereof; any investment of monies by or at the direction of the Servicer
or any loss resulting therefrom, it being understood that the Trustee shall
remain responsible for any Trust property that it may hold in its individual
capacity; the acts or omissions of any of the Servicer (other than if the
Trustee shall assume the duties of the Servicer pursuant to Section 7.02), or
any Mortgagor; any action of the Servicer (other than if the Trustee shall
assume the duties of the Servicer pursuant to Section 7.02), taken in the name
of the Trustee; the failure of the Servicer to act or perform any duties
required of it as agent of the Trustee hereunder; or any action by the Trustee
taken at the instruction of the Servicer (other than if the Trustee shall assume
the duties of the Servicer pursuant to Section 7.02); provided, however, that
the foregoing shall not relieve the Trustee of its obligation to perform its
duties under this Agreement. The Trustee shall 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 May Own Certificates.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates with the same rights as it would have if it
were not Trustee and may transact any banking and trust business with the
Seller, the Servicer, the Depositor or their Affiliates.
Section 8.05. Seller to Pay Trustee Fees and Expenses.
Prior to disbursing the Available Funds, the Trustee shall
withdraw from the Distribution Account on each Distribution Date and pay to
itself the Trustee Fee and, to the extent funds therein are at any time
insufficient for such purpose, the Seller shall pay such fees as reasonable
compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) for all services rendered by
it in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Trustee, and the
Seller will pay or reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Agreement (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence or bad faith or which is the
responsibility of Certificateholders or the Trustee hereunder. Notwithstanding
any other provision of this Agreement, including Section 2.03(a) and Section
2.04, to the contrary, the Seller covenants and agrees to indemnify the Trustee
and its officers, directors, employees and agents from, and hold it harmless
against, any and all losses, liabilities, damages, claims or expenses incurred
in connection with any
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legal action relating to this Agreement, the Certificates or incurred in
connection with the administration of the Trust, other than any loss, liability
or expense incurred by reason of willful misfeasance, bad faith or negligence of
the Trustee in the performance of its duties hereunder or by reason of the
Trustee's reckless disregard of obligations and duties hereunder. Anything in
this Agreement to the contrary notwithstanding, in no event shall the Trustee be
liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Trustee has
been advised of the likelihood of such loss or damage and regardless of the form
of action. The Trustee and any director, officer, employee or agent of the
Trustee shall be indemnified, to the extent not paid by the Seller pursuant to
this Section, by the Trust Fund and held harmless against any loss, liability or
expense (not including expenses, disbursements and advances incurred or made by
the Trustee, in the ordinary course of the Trustee's performance in accordance
with the provisions of this Agreement) incurred by the Trustee or such party
arising out of or in connection with the acceptance or administration of its
duties under this Agreement, other than any loss, liability or expense incurred
by reason of willful misfeasance, bad faith or negligence in the performance by
the Trustee of its duties under this Agreement or by reason of the reckless
disregard of the Trustee's obligations and duties under this Agreement. This
Section shall survive termination of this Agreement or the resignation or
removal of any Trustee hereunder.
Section 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a Department of
Housing and Urban Development and Federal Housing Administration approved
mortgagee, an entity duly organized and validly existing under the laws of the
United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and a minimum long-term debt rating of BBB by Fitch and S&P
and Baa2 by Moody's, and subject to supervision or examination by federal or
state authority. If such entity publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section 8.06, the combined
capital and surplus of such entity shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published.
The principal office of the Trustee (other than the initial Trustee) shall be in
a state with respect to which an Opinion of Counsel has been delivered to such
Trustee at the time such Trustee is appointed Trustee to the effect that the
Trust will not be a taxable entity under the laws of such state. In case at any
time the Trustee shall cease to be eligible in accordance with the provisions of
this Section 8.06, the Trustee shall resign immediately in the manner and with
the effect specified in Section 8.07.
Section 8.07. Resignation or Removal of Trustee.
The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the Depositor, the
Servicer and each Rating Agency. Upon receiving such notice of resignation, the
Depositor shall promptly appoint a successor Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor
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Trustee. If no successor Trustee shall have been so appointed and having
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Depositor, or if at any time the Trustee shall
be legally unable to act, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor may remove the Trustee. If the Depositor or the Servicer removes the
Trustee under the authority of the immediately preceding sentence, the Depositor
shall promptly appoint a successor Trustee by written instrument, in duplicate,
one copy of which instrument shall be delivered to the Trustee so removed and
one copy to the successor Trustee.
The Majority Certificateholders may at any time remove the
Trustee by written instrument or instruments delivered to the Servicer, the
Depositor and the Trustee; the Depositor shall thereupon use its best efforts to
appoint a successor Trustee in accordance with this Section.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 8.07 shall
not become effective until acceptance of appointment by the successor Trustee as
provided in Section 8.08.
Section 8.08. Successor Trustee.
Any successor Trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Depositor, the Rating Agencies,
the Servicer and to its predecessor Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective, and such successor Trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as Trustee. The Depositor, the Servicer and the
predecessor Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor Trustee all such rights, powers, duties and
obligations.
No successor Trustee shall accept appointment as provided in
this Section 8.08 unless at the time of such acceptance such successor Trustee
shall be eligible under the provisions of Section 8.06 and the appointment of
such successor Trustee shall not result in a downgrading of the Regular
Certificates by either Rating Agency, as evidenced by a letter from each Rating
Agency.
Upon acceptance of appointment by a successor Trustee as
provided in this Section 8.08, the successor Trustee shall mail notice of the
appointment of a
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successor Trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register and to each Rating Agency.
Section 8.09. Merger or Consolidation of Trustee.
Any entity into which the Trustee may be merged or converted
or with which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any entity
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder, provided such entity shall be eligible under the provisions of
Section 8.06 and 8.08, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust or any Mortgaged Property may at the time be
located, the Depositor and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust, or any part thereof,
and, subject to the other provisions of this Section 8.10, such powers, duties,
obligations, rights and trusts as the Servicer and the Trustee may consider
necessary or desirable. Any such co-trustee or separate trustee shall be subject
to the written approval of the Servicer. If the Servicer shall not have joined
in such appointment within 15 days after the receipt by it of a request so to
do, or in the case a Servicer Event of Termination shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor Trustee under Section 8.06, and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08. The Servicer shall be responsible for the
fees of any co-trustee or separate trustee appointed hereunder.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any
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portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Servicer and the Trustee, acting jointly may at any
time accept the resignation of or remove any separate trustee or
co-trustee except that following the occurrence of a Servicer Event of
Termination, the Trustee acting alone may accept the resignation or
remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Depositor, the Rating Agencies and the Servicer.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
Section 8.11. Limitation of Liability.
The Certificates are executed by the Trustee, not in its
individual capacity but solely as Trustee of the Trust, in the exercise of the
powers and authority conferred and vested in it by this Agreement. Each of the
undertakings and agreements made on the part of the Trustee in the Certificates
is made and intended not as a personal undertaking or agreement by the Trustee
but is made and intended for the purpose of binding only the Trust.
Section 8.12. Trustee May Enforce Claims Without Possession of
Certificates.
(a) All rights of action and claims under this Agreement or
the Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee for the benefit of all
Holders of such Certificates, subject to the provisions of this
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Agreement. Any recovery of judgment shall, after provision for the payment of
the reasonable compensation, expenses, disbursement and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Certificateholders in
respect of which such judgment has been recovered.
(b) The Trustee shall afford the Seller, the Depositor, the
Servicer and each Certificateholder upon reasonable notice during normal
business hours, access to all records maintained by the Trustee in respect of
its duties hereunder and access to officers of the Trustee responsible for
performing such duties. The Trustee shall cooperate fully with the Seller, the
Servicer, the Depositor and such Certificateholder and shall make available to
the Seller, the Servicer, the Depositor and such Certificateholder for review
and copying at the expense of the party requesting such copies, such books,
documents or records as may be requested with respect to the Trustee's duties
hereunder. The Seller, the Depositor, the Servicer and the Certificateholders
shall not have any responsibility or liability for any action or failure to act
by the Trustee and are not obligated to supervise the performance of the Trustee
under this Agreement or otherwise.
Section 8.13. Suits for Enforcement.
In case a Servicer Event of Termination or other default by
the Servicer or the Seller hereunder shall occur and be continuing, the Trustee
may proceed to protect and enforce its rights and the rights of the
Certificateholders under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this Agreement or in aid of the execution of
any power granted in this Agreement or for the enforcement of any other legal,
equitable or other remedy, as the Trustee, being advised by counsel, and subject
to the foregoing, shall deem most effectual to protect and enforce any of the
rights of the Trustee and the Certificateholders.
Section 8.14. Waiver of Bond Requirement.
The Trustee shall be relieved of, and each Certificateholder
hereby waives, any requirement of any jurisdiction in which the Trust, or any
part thereof, may be located that the Trustee post a bond or other surety with
any court, agency or body whatsoever.
Section 8.15. Waiver of Inventory, Accounting and Appraisal
Requirement.
The Trustee shall be relieved of, and each Certificateholder
hereby waives, any requirement of any jurisdiction in which the Trust, or any
part thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.
Section 8.16. Compliance with National Housing Act of 1934.
In performing its duties hereunder with respect to FHA Loans,
the Trustee shall comply with all requirements of the National Housing Act of
1934, as amended.
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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 and REMIC 2 as set forth in the Preliminary Statement on
Forms 1066 or other appropriate federal tax or information return for the
taxable year ending on the last day of the calendar year in which the
Certificates are issued. The regular interests and residual interest in each
REMIC shall be as designated in the Preliminary Statement.
(b) The Closing Date is hereby designated as the "Startup Day"
of each REMIC within the meaning of Section 860G(a)(9) of the Code.
(c) The Servicer shall pay any and all tax related expenses
(not including taxes) of each REMIC, including, but not limited to, any
professional fees or expenses related to audits or any administrative or
judicial proceedings with respect to such REMIC that involve the Internal
Revenue Service or state tax authorities, but only to the extent that (i) such
expenses are ordinary or routine expenses, including expenses of a routine audit
but not expenses of litigation (except as described in (ii)); or (ii) such
expenses or liabilities (including taxes and penalties) are attributable to the
negligence or willful misconduct of the Servicer in fulfilling its duties
hereunder. The Servicer shall be entitled to reimbursement of expenses to the
extent provided in clause (i) above from the Collection Account.
(d) The Trustee shall prepare or cause to be prepared, sign
and file or cause to be filed, each REMIC's federal and state tax and
information returns as such REMIC's direct representative. The expenses of
preparing and filing such returns shall be borne by the Trustee.
(e) The Holder of the 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
Trustee is irrevocably designated as and shall act as attorney-in-fact and agent
for such Tax Matters Person for each REMIC. The Trustee, as agent for the Tax
Matters Person, shall perform, on behalf of each REMIC, all reporting and other
tax compliance duties that are the responsibility of such REMIC under the Code,
the REMIC Provisions, or other compliance guidance issued by the Internal
Revenue Service or any state or local taxing authority. Among its other duties,
if required by the Code, the REMIC Provisions, or other such guidance, the
Trustee, as agent for the Tax Matters Person, shall provide (i) to the Treasury
or other governmental authority such information as is necessary for the
application of any tax relating to the transfer of a Residual Certificate to any
disqualified person or organization and (ii) to the Certificateholders such
information or reports as are required by the Code or REMIC Provisions.
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(f) The Trustee, the Servicer, and the Holders of Certificates
shall take any action or cause any REMIC to take any action necessary to create
or maintain the status of such REMIC as a REMIC under the REMIC Provisions and
shall assist each other as necessary to create or maintain such status. Neither
the Trustee, the Servicer, nor the Holder of any Residual Certificate shall take
any action or cause any REMIC to take any action or fail to take (or fail to
cause to be taken) any action that, under the REMIC Provisions, if taken or not
taken, as the case may be, could (i) endanger the status of such REMIC as a
REMIC or (ii) result in the imposition of a tax upon such REMIC (including, but
not limited to, the tax on prohibited transactions as defined in Code Section
860F(a)(2) and the tax on prohibited contributions set forth on Section 860G(d)
of the Code) (either such event, an "Adverse REMIC Event") unless the Trustee
and the Servicer have received an Opinion of Counsel (at the expense of the
party seeking to take such action) to the effect that the contemplated action
will not endanger such status or result in the imposition of such a tax. In
addition, prior to taking any action with respect to any REMIC or the assets
therein, or causing such REMIC to take any action, which is not expressly
permitted under the terms of this Agreement, any Holder of a Residual
Certificate will consult with the Trustee and the Servicer, or their respective
designees, in writing, with respect to whether such action could cause an
Adverse REMIC Event to occur with respect to such REMIC, and no such Person
shall take any such action or cause such REMIC to take any such action as to
which the Trustee or the Servicer has advised it in writing that an Adverse
REMIC Event could occur.
(g) Each Holder of a Residual Certificate shall pay when due
its pro rata share of any and all taxes imposed on any REMIC by federal or state
governmental authorities. To the extent that such REMIC taxes are not paid by
Residual Certificateholders, the Trustee shall pay any remaining REMIC taxes out
of current or future amounts otherwise distributable to the Holder of the
Residual Certificate in 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 REMIC Regular Interests or the Certificates, as the
case may be.
(h) The Trustee, shall, for federal income tax purposes,
maintain or cause to be maintained books and records with respect to each REMIC
on a calendar year and on an accrual basis.
(i) No additional contributions of assets shall be made to any
REMIC, except as expressly provided in this Agreement with respect to Eligible
Substitute Mortgage Loans.
(j) Neither the Trustee nor the Servicer shall enter into any
arrangement by which any REMIC will receive a fee or other compensation for
services.
(k) On or before April 15 of each calendar year beginning in
2001, the Servicer shall deliver to the Trustee and each Rating Agency an
Officer's Certificate stating the Servicer's compliance with the provisions of
this Section 9.01.
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(l) The Trustee shall account for the rights of the Offered
Certificates to receive Rate Payments as a right in interest rate cap contracts
written by the Class X and Class N Certificateholders, as beneficial owners of
the Class X/N Interest, in favor of the Holders of the Offered Certificates, and
the Trustee shall account for such as property held separate and apart from the
regular interests it holds in REMIC 1 and REMIC 2. This provision is intended to
satisfy the requirements of Treasury Regulations Section 1.860G-2(i) for the
treatment of property rights coupled with regular interests to be separately
respected and shall be interpreted consistent with such regulation. On each
Distribution Date, to the extent the Offered Certificates receive interest
(excluding Class A-1A LIBOR Carryover Amounts) in excess of the Class A-1A REMIC
Pass-Through Rate, Class A-1F REMIC Pass-Through Rate, Class A-2F REMIC
Pass-Through Rate, Class M-1 REMIC Pass-Through Rate, Class M-2 REMIC
Pass-Through Rate, Class B-1 REMIC Pass-Through Rate, Class B-2 REMIC
Pass-Through Rate, as applicable, such interest will be treated as distributed
to the Class X/N Interest, pro rata, and then paid to the respective Class of
Offered Certificates pursuant to the related interest rate cap agreement.
(m) The Trustee shall treat the Excess Reserve Fund Account as
an outside reserve fund within the meaning of Treasury Regulation Section
1.860G-2(h) that is owned by the Class X and Class N Certificateholders and that
is not an asset of any REMIC. The Trustee shall treat the rights of the Class
A-1A Certificateholders to receive payments from the Excess Reserve Fund Account
in respect of Class A-1A LIBOR Carryover Amounts as a right in interest rate cap
contracts written by the Class X and Class N Certificateholders, as beneficial
owners of the Class X/N Interest, in favor of the Class A-1A Certificateholders,
and the Trustee shall account for such as property held separate and apart from
the regular interests it holds in REMIC 1 and REMIC 2. This provision is
intended to satisfy the requirements of Treasury Regulation Section 1.860G-2(i)
for the treatment of property rights coupled with regular interests to be
separately respected and shall be interpreted consistent with such regulation.
On each Distribution Date, to the extent the Class A-1A Certificates receive
interest in excess of the Class A-1A Net Funds Cap, such interest will be
treated as distributed to the Class X/N Interest, pro rata, and then paid to the
Excess Reserve Fund Account and then paid to the Class A-1A Certificates,
respectively, pursuant to the related interest rate cap agreement.
(n) In the event that the beneficial ownership of the Class N
Certificates and the Class X Certificates is held by a single Person for federal
income tax purposes, such Person shall be treated as the beneficial owner of the
Class X/N Interest represented thereby and the Class N Reserve Fund. In the
event that beneficial ownership of the Class N and the Class X Certificates is
held by two or more Persons for tax purposes, the Trustee shall treat the Class
N Certificateholders and the Class X Certificateholders as partners in a
partnership that owns the Class X/N Interest and the Class N Reserve Fund for
federal income tax purposes and shall not treat the Class N and Class X
Certificates as an interest in any REMIC created hereunder. By acquiring the
Class N Certificates and the Class X Certificates, the respective Holders will
agree to treat the Class N Certificates and the Class X Certificates in the
manner described in the preceding sentence for federal income tax purposes in
the event that the beneficial ownership of the Class N Certificates and the
Class X Certificates is separated. In such event, (i) a separate capital account
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shall be established and maintained for each Holder of a Class N or Class X
Certificate in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv),
which shall be credited with income or gain and debited by any expenses or
losses and distributions allocable to such Certificates, (ii) the Class N
Certificates shall be allocated income in an amount equal to interest at the
Pass-Through Rate thereon and any original issue discount that would be
reportable thereon if the Class N Certificate were a debt instrument issued on
the date ownership of the Class N and Class X Certificates is separated, with a
principal balance equal to its Notional Amount, (iii) the Class X and Class N
Certificates shall be allocated income with respect to all prepayment premiums
in accordance with the allocation of such amounts pursuant to Section 4.02(c),
to the extent not allocated pursuant to Section 9.01(m) above, (iv) the Class X
and Class N Certificates shall be allocated accruals (under any reasonable
method) of any "cap premiums" deemed received on the date ownership of the Class
X and Class N Certificates is separated in respect of the obligation of the
Class X/N Interest to pay Rate Payments and Class A-1A LIBOR Carryover Amounts,
and shall be allocated expense in respect of any actual payment of such Rate
Payments or Class A-1A LIBOR Carryover Amounts based on which one of such
Classes economically bears such expense, (v) the Class X Certificates shall be
allocated all remaining income and any expenses and Realized Losses with respect
to the Class X/N Interest and any income or loss with respect to the Class N
Reserve Fund, until the capital account of the Class X Certificates is reduced
to zero, and any remaining expenses or losses shall be allocated to the Class N
Certificates, (vi) neither the Class N Certificates nor the Class X Certificates
shall be responsible for restoring any deficit to its capital account, (vii)
upon termination of the Trust Fund pursuant to Article X, all amounts available
for distribution to Holders of the Class N and Class X Certificates shall be
distributed in accordance with their positive capital account balances, first to
the Class N Certificates until the Class N Notional Amount and any accrued but
unpaid interest thereon is reduced to zero, and then to the Class X
Certificates, (allocating any remaining Class N Reserve Fund to the Class X
Certificates) and (viii) the Trustee shall maintain books and records with
respect to the partnership on a calendar year basis (unless a different taxable
year shall be required by the Code) and shall prepare or cause to be prepared,
and cause the Holder of the largest Percentage Interest of the Class X
Certificates to sign and file or cause to be filed all federal and state tax and
information returns for the partnership, and shall furnish or cause to be
furnished Schedule K-1's to the Holders of the Class N and Class X Certificates
at the time required by the Code. Unless otherwise directed by a majority of the
Percentage Interests of the Class X and Class N Certificates, the Trustee shall
not make an election under Section 954 of the Code. The Holder of the largest
Percentage Interest of the Class X Certificates, by acceptance of its Class X
Certificate, agrees to act as "tax matters partner" (within the meaning of
Section 6231(a)(7) of the Code and to sign and timely file all federal and state
partnership tax and information returns prepared by the Trustee pursuant to this
Section 9.01(n).
Section 9.02. Prohibited Transactions and Activities.
Neither the Seller, the Depositor, the Servicer nor the
Trustee shall sell, dispose of, or substitute for any of the Mortgage Loans,
except in a disposition pursuant to (i) the foreclosure of a Mortgage Loan, (ii)
the bankruptcy of the Trust Fund, (iii) the
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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 (at the expense of the party
causing such sale, disposition, or substitution) that such disposition,
acquisition, substitution, or acceptance will not (a) affect adversely the
status of such REMIC as a REMIC or of the interests therein other than the
Residual Certificates as the regular interests therein, (b) affect the
distribution of interest or principal on the Certificates, (c) result in the
encumbrance of the assets transferred or assigned to the Trust Fund (except
pursuant to the provisions of this Agreement) or (d) cause such REMIC to be
subject to a tax on prohibited transactions or prohibited contributions pursuant
to the REMIC Provisions.
Section 9.03. Indemnification with Respect to Certain Taxes
and Loss of REMIC Status.
In the event that any REMIC formed hereunder fails to qualify
as a REMIC, loses its status as a REMIC, or incurs federal, state or local taxes
as a result of a prohibited transaction or prohibited contribution under the
REMIC Provisions due to the negligent performance by the Servicer of its duties
and obligations set forth herein, the Servicer shall indemnify the Holder of the
related Residual Certificate against any and all losses, claims, damages,
liabilities or expenses ("Losses") resulting from such negligence; provided,
however, that the Servicer shall not be liable for any such Losses attributable
to the action or inaction of the Trustee, the Depositor or the Holder of such
Residual Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of such Residual Certificate on which the
Servicer has relied. The foregoing shall not be deemed to limit or restrict the
rights and remedies of the Holder of such Residual Certificate now or hereafter
existing at law or in equity. Notwithstanding the foregoing, however, in no
event shall the Servicer have any liability (1) for any action or omission that
is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of, this Agreement, (2) for any Losses
other than arising out of a negligent performance by the Servicer of its duties
and obligations set forth herein, and (3) for any special or consequential
damages to Certificateholders (in addition to payment of principal and interest
on the Certificates).
Section 9.04. REO Property.
(a) Subject to compliance with applicable laws and regulations
as shall at any time be in force, and notwithstanding any other provision of
this Agreement, the Servicer, acting on behalf of the Trustee 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
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Provisions unless the Servicer has advised, or has caused the applicable
Servicer to advise, the Trustee in writing to the effect that, under the REMIC
Provisions, such action would not adversely affect the status of any REMIC as a
REMIC and any income generated for such REMIC by the REO Property would not
result in the imposition of a tax upon such REMIC.
(b) The Servicer shall make reasonable efforts to sell any REO
Property for its fair market value. In any event, however, the Servicer shall
dispose of any REO Property before the close of the third calendar year
beginning after the year of its acquisition by the Trust Fund unless the
Servicer has received a grant of extension from the Internal Revenue Service to
the effect that, under the REMIC Provisions and any relevant proposed
legislation and under applicable state law, any REMIC may hold REO Property for
a longer period without adversely affecting its REMIC status or causing the
imposition of a Federal or state tax upon any REMIC. If the Servicer has
received such an extension, then the Servicer shall continue to attempt to sell
the REO Property for its fair market value as determined in good faith by the
Servicer for such longer period as such extension permits (the "Extended
Period"). If the Servicer has not received such an extension and the Servicer is
unable to sell the REO Property within 33 months after its acquisition by the
Trust Fund or if the Servicer has received such an extension, and the Servicer
is unable to sell the REO Property within the period ending three months before
the close of the Extended Period, the Servicer shall, before the end of the
applicable period, (i) purchase such REO Property at a price equal to the REO
Property's fair market value as determined in good faith by the Servicer or (ii)
auction the REO Property to the highest bidder (which may be the Servicer) in an
auction reasonably designed to produce a fair price prior to the expiration of
the applicable period.
Section 9.05. Grantor Trust Administration.
The parties intend that the portions of the Trust Fund
consisting of the Class N Reserve Fund and the Excess Reserve Fund Account be
treated as a "grantor trust" under the Code, and the provisions hereof shall be
interpreted consistently with this intention. In furtherance of such intention,
the Trustee shall furnish or cause to be furnished (i) to the Holders of the
Offered Certificates and (ii) to the Holder of the Class X and Class N
Certificates (if there is a single beneficial owner thereof) or to itself on
behalf of the partnership comprised of the Holders of the Class X and Class N
Certificates (if there are two or more beneficial owners thereof), and 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.
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ARTICLE X
TERMINATION
Section 10.01. Termination.
(a) The respective obligations and responsibilities of the
Seller, the Servicer, the Depositor 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) shall terminate upon notice to the
Trustee upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balance of each Class of Certificates has been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust,
and (iii) the optional purchase by the Seller of the Mortgage Loans in both Loan
Groups 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 Joseph P. Kennedy, the late
ambassador of the United States to the Court of St. James, living on the date
hereof and the Distribution Date in November 2031.
The Seller may, at its option, terminate the Mortgage Loans in
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 Collection Period preceding the final Distribution Date
plus unreimbursed Servicing Advances, Advances and any unpaid Servicing Fees and
Special 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").
In connection with any such purchase pursuant to the preceding
paragraph, the Servicer shall deliver to the Trustee for deposit in the
Distribution Account all amounts then on deposit in the Collection Account (less
amounts permitted to be withdrawn by the Servicer pursuant to Section 3.07),
which deposit shall be deemed to have occurred immediately following such
purchase.
Any such purchase shall be accomplished by delivery to the
Trustee for deposit into the Distribution Account as part of Available Funds on
the Determination Date before such Distribution Date of the Termination Price.
(b) Notice of any termination, specifying the Distribution
Date (which shall be a date that would otherwise be a Distribution Date) upon
which the Certificateholders may surrender their Certificates to the Trustee for
payment of the final distribution and cancellation, shall be given promptly by
the Trustee upon the Trustee receiving notice of such date from the Servicer, by
letter to the Certificateholders mailed
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not earlier than the 15th day of the month preceding the month of such final
distribution and not later than the 15th day of the month of such final
distribution specifying (1) the Distribution Date upon which final distribution
of the Certificates will be made upon presentation and surrender of such
Certificates at the office or agency of the Trustee therein designated, (2) the
amount of any such final distribution and (3) that the Record Date otherwise
applicable to such Distribution Date is not applicable, distributions being made
only upon presentation and surrender of the Certificates at the office or agency
of the Trustee therein specified.
(c) Upon presentation and surrender of the Certificates, the
Trustee shall cause to be distributed to the Holders of the Certificates on the
Distribution Date for such final distribution, in proportion to the Percentage
Interests of their respective Class and to the extent that funds are available
for such purpose, an amount equal to the amount required to be distributed to
such Holders in accordance with the provisions of Sections 4.01 and 4.02 for
such Distribution Date.
(d) In the event that all Certificateholders shall not
surrender their Certificates for final payment and cancellation on or before
such final Distribution Date, the Trustee shall promptly following such date
cause all funds in the Distribution Account not distributed in final
distribution to Certificateholders to be withdrawn therefrom and credited to the
remaining Certificateholders by depositing such funds in a separate escrow
account for the benefit of such Certificateholders, and the Seller (if the
Seller 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.
Section 10.02. Additional Termination Requirements.
(a) In the event that the Seller 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 and REMIC 2 and shall specify
such date in the final federal income tax return of each REMIC;
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(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 Seller for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited in the following order of priority (A) to the
Holders of each of the Class A-1F, Class A-2F, Class A-1A, Class M-1,
Class M-2, Class B-1 and Class B-2 Certificates, the related
Certificate Principal Balance, as applicable, plus one month's interest
thereon at the applicable Pass-Through Rate, (B) to the Class N and
Class X Certificates in respect of the Class X/N Interest, the amount
of any remaining Monthly Excess Cash Flow Amounts not previously
distributed thereon, (C) to the remaining REMIC Regular Interests the
amounts allocable thereto pursuant to Section 4.10 and (D) to the Class
R Certificateholders, all cash on hand after such payment (other than
cash retained to meet claims) and the Trust shall terminate at such
time.
(b) By their acceptance of Certificates, the Holders thereof
hereby agree to appoint the Trustee as their attorney in fact to: (i) designate
such date of adoption of plans of complete liquidation and (ii) to take such
other action in connection therewith as may be reasonably required to carry out
such plans of complete liquidation all in accordance with the terms hereof.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment.
This Agreement may be amended from time to time by Seller, the
Depositor, the Servicer and the Trustee; and without the consent of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct or supplement any
provisions herein which may be defective or inconsistent with any other
provisions herein or (iii) to make any other provisions with respect to matters
or questions arising under this Agreement, which shall not be inconsistent with
the provisions of this Agreement; provided, however, that any such action listed
in clause (i) through (iii) above shall not adversely affect in any respect the
interests of any Certificateholder, as evidenced by (i) notice in writing to the
Depositor, the Servicer and the Trustee from the Rating Agencies that such
action will not result in the reduction or withdrawal of the rating of any
outstanding Class of Certificates with respect to which it is a Rating Agency,
or (ii) an Opinion of Counsel delivered to the Servicer and the Trustee.
In addition, this Agreement may be amended from time to time
by Seller, the Depositor, the Servicer and the Trustee, with the consent of the
Majority Certificateholders for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Holders of Certificates; provided,
however, that no such amendment or
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waiver shall (x) reduce in any manner the amount of, or delay the timing of,
payments on the Certificates which are required to be made on any Certificate
without the consent of the Holder of such Certificate, (y) adversely affect in
any material respect the interests of the Holders of any Class of Certificates
in a manner other than as described in clause (x) above, without the consent of
the Holders of Certificates of such Class evidencing at least a 66% Percentage
Interest in such Class, or (z) reduce the percentage of Voting Rights required
by clause (y) above without the consent of the Holders of all Certificates of
such Class then outstanding. Upon approval of an amendment, a copy of such
amendment shall be sent to the Rating Agencies. Prior to the execution of any
amendment to this Agreement, the Trustee shall be entitled to receive and rely
upon an Opinion of Counsel (at the expense of the Person seeking such amendment)
stating that the execution of such amendment is authorized or permitted by this
Agreement. The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's own rights, duties or immunities under
this Agreement.
Notwithstanding any provision of this Agreement to the
contrary, the Trustee shall not consent to any amendment to this Agreement
unless it shall have first received an Opinion of Counsel, delivered by (and at
the expense of) the Person seeking such Amendment, to the effect that such
amendment will not result in the imposition of a tax on any REMIC constituting
part of the Trust Fund pursuant to the REMIC Provisions or cause any REMIC
constituting part of the Trust to fail to qualify as a REMIC at any time that
any Certificates are outstanding and that the amendment is being made in
accordance with the terms hereof.
Promptly after the execution of any such amendment the Trustee
shall furnish, at the expense of the Person that requested the amendment if such
Person is the Seller or the Servicer (but in no event at the expense of the
Trustee), otherwise at the expense of the Trust, a copy of such amendment and
the Opinion of Counsel referred to in the immediately preceding paragraph to the
Servicer and each Rating Agency.
It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular form of
any proposed amendment; instead it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable regulations as the Trustee may prescribe.
The Trustee 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,
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such recordation to be effected by the Servicer at the expense of the Trust, but
only upon direction of Certificateholders, accompanied by an Opinion of Counsel
to the effect that such recordation materially and beneficially affects the
interests of the Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
together constitute but one and the same instrument.
Section 11.03. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not (i)
operate to terminate this Agreement or the Trust, (ii) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust, or (iii) otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
Except as expressly provided for herein, no Certificateholder
shall have any right to vote or in any manner otherwise control the operation
and management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as herein provided, and unless also the Holders
of Certificates entitled to at least 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 15 days after
its receipt of such notice, request and offer of indemnity, shall have neglected
or refused to institute any such action, suit or proceeding. It is understood
and intended, and expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 11.03 each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
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Section 11.04. Governing Law; Jurisdiction.
This Agreement shall be construed in accordance with the laws
of the State of New York, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws. With respect
to any claim arising out of this Agreement, each party irrevocably submits to
the exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in The City of New
York, and each party irrevocably waives any objection which it may have at any
time to the laying of venue of any suit, action or proceeding arising out of or
relating hereto brought in any such courts, irrevocably waives any claim that
any such suit, action or proceeding brought in any such court has been brought
in any inconvenient forum and further irrevocably waives the right to object,
with respect to such claim, suit, action or proceeding brought in any such
court, that such court does not have jurisdiction over such party, provided that
service of process has been made by any lawful means.
Section 11.05. Notices.
All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, or by express delivery service,
to (a) in the case of the Seller, Credit-Based Asset Servicing and
Securitization LLC, 335 Madison Avenue, 19th Floor, New York, New York,
Attention: Director - Mortgage Finance (telecopy number (212) 850-7760), or such
other address or telecopy number as may hereafter be furnished to the Depositor
and the Trustee in writing by the Seller, (b) in the case of the Trustee, The
Chase Manhattan Bank, 450 West 33rd Street, 14th Floor, New York, New York
10001, Attention: Capital Markets Fiduciary Services, C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2000-CB4, or such other address as may
hereafter be furnished to the Depositor, the Seller and the Servicer in writing
by the Trustee, (c) in the case of the Depositor, Residential Asset Funding
Corporation, 301 South College Street, TW-09, Charlotte, North Carolina
28288-0610, Attention: C-BASS Mortgage Loan Asset-Backed Certificates, Series
2000-CB4, or such other address as may be furnished to the Seller, the Servicer
and the Trustee in writing by the Depositor, and (d) in the case of the
Servicer, Litton Loan Servicing LP, 5373 W. Alabama, Suite 600, Houston, Texas
77056, Attention: Janice McClure, or such other address as may be furnished to
the Seller, the Depositor and the Trustee in writing by the Servicer. Any notice
required or permitted to be mailed to a Certificateholder shall be given by
first class mail, postage prepaid, at the address of such Holder as shown in the
Certificate Register. Notice of any Servicer Event of Termination shall be given
by telecopy and by certified mail. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have duly been
given when mailed, whether or not the Certificateholder receives such notice. A
copy of any notice required to be telecopied hereunder shall also be mailed to
the appropriate party in the manner set forth above.
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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.
(a) Each of the Trustee and the Servicer shall be obligated to
use its best reasonable efforts promptly to provide notice to the Rating
Agencies with respect to each of the following of which a Responsible Officer of
the Trustee or Servicer, as the case may be, has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Servicer Event of Termination that
has not been cured or waived;
(iii) the resignation or termination of the Servicer or the
Trustee;
(iv) the final payment to Holders of the Certificates of any
Class;
(v) any change in the location of any Account; and
(vi) if the Trustee is acting as successor Servicer pursuant
to Section 7.02 hereof, any event that would result in the inability of
the Trustee to make Advances.
(vii) In addition, the Servicer shall promptly furnish to each
Rating Agency copies of the following:
(A) each annual statement as to compliance described
in Section 3.19 hereof;
(B) each annual independent public accountants'
servicing report described in Section 3.20 hereof; and
(C) each notice delivered pursuant to Section 7.01(a)
hereof which relates to the fact that the Servicer has not
made an Advance.
129
<PAGE>
Any such notice pursuant to this Section 11.08 shall be in
writing and shall be deemed to have been duly given if personally delivered or
mailed by first class mail, postage prepaid, or by express delivery service to
Fitch, Inc., One State Street Plaza, New York, New York 10004, Attention: Sonny
Weng; Standard & Poor's Ratings Services, 55 Water Street, New York, New York
10041, Attention: Scott Mason; and Moody's Investors Services, Inc., 99 Church
Street, New York, New York 10007, Attention: Nehal Farooqui.
Section 11.09. Further Assurances.
Notwithstanding any other provision of this Agreement, neither
the Regular Certificateholders nor the Trustee shall have any obligation to
consent to any amendment or modification of this Agreement unless they have been
provided reasonable security or indemnity against their out-of-pocket expenses
(including reasonable attorneys' fees) to be incurred in connection therewith.
Section 11.10. Benefits of Agreement.
Nothing in this Agreement or in the Certificates, expressed or
implied, shall give to any Person, other than the Certificateholders and the
parties hereto and their successors hereunder, any benefit or any legal or
equitable right, remedy or claim under this Agreement.
Section 11.11. Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by the Certificateholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Certificateholders in
person or by agent duly appointed in writing; and such action shall become
effective when such instrument or instruments are delivered to the Trustee,
Seller and the Servicer. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "act" of
the Certificateholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Agreement and conclusive in favor of the
Trustee and the Trust, if made in the manner provided in this Section 11.11.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.
(c) Any request, demand, authorization, direction, notice,
consent, waiver or other action by any Certificateholder shall bind every future
Holder of such Certificate and the Holder of every Certificate issued upon the
registration of transfer
130
<PAGE>
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.
131
<PAGE>
IN WITNESS WHEREOF, the Seller, the Depositor, the Servicer
and the Trustee have caused their names to be signed hereto by their respective
officers thereunto duly authorized, all as of the day and year first above
written.
RESIDENTIAL ASSET FUNDING
CORPORATION, as Depositor
By: /s/ Eric Kaplan
------------------------------
Name: Eric Kaplan
Title: Vice President
CREDIT-BASED ASSET SERVICING
AND SECURITIZATION LLC, as Seller
By: /s/ Ivan Halpern
------------------------------
Name: Ivan Halpern
Title: Vice President
LITTON LOAN SERVICING LP, as
Servicer
By: /s/ Janice McClure
------------------------------
Name: Janice McClure
Title: Sr. Vice President
THE CHASE MANHATTAN BANK, as
Trustee
By: /s/ Karen Schluter
------------------------------
Name: Karen Schluter
Title: Trust Officer
[Signature Page to Pooling and Servicing Agreement]
<PAGE>
STATE OF NC )
) ss.:
COUNTY OF MECKLENBURG )
On the 12th day of December, 2000 before me, a notary public
in and for said State, personally appeared Eric Kaplan known to me to be a Vice
President of Residential Asset Funding Corporation, a North Carolina 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
Margaret Gavin
Expires: 12-5-03
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the __ day of December, 2000 before me, a notary public in
and for said State, personally appeared Ivan Halpern known to me to be a Vice
President of Credit-Based Asset Servicing and Securitization LLC, a limited
liability company that executed the within instrument, and also known to me to
be the person who executed it on behalf of said limited liability company, and
acknowledged to me that such limited liability company executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
Marion D. Rodriguez
Expires 4-19-01
2
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF KINGS )
On the 11th day of December, 2000 before me, a notary public
in and for said State, personally appeared Karen Schluter, known to me to be
Trust Officer of The Chase Manhattan Bank, a New York banking corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said 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
Genevieve A. Forbes
Expires 1-23-01
3
<PAGE>
STATE OF TEXAS )
) ss.:
COUNTY OF HARRIS )
On the 8th day of December, 2000 before me, a notary public in
and for said State, personally appeared Janice McClure, known to me to be a of
Litton Loan Servicing LP, a Delaware limited partnership, that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said limited partnership, and acknowledged to me that such limited
partnership executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
Laurie Struecker
Expires 2-4-02
4
<PAGE>
EXHIBIT A-1
[FORM OF THE CLASS A-1A CERTIFICATE]
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2000-CB4, CLASS A-1A
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.
<TABLE>
<S> <C>
Series 2000-CB4, Class A-1A Original Class Certificate Principal Balance
of the Class A-1A Certificates as of the
Pass-Through Rate: Variable Closing Date: $81,771,000
Date of Pooling and Servicing Agreement: Denomination: $81,771,000
November 1, 2000
Cut-off Date: November 1, 2000
Servicer: Litton Loan Servicing LP
First Distribution Date: December 26,
2000 Trustee: The Chase Manhattan Bank
No.
Closing Date: December 13, 2000
</TABLE>
CUSIP: 12489WCR3
A-1-1
<PAGE>
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.
A-1-2
<PAGE>
ASSET- BACKED CERTIFICATE
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 and second lien mortgage loans formed and sold by
RESIDENTIAL ASSET FUNDING CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
RESIDENTIAL ASSET FUNDING CORPORATION, THE SERVICER, THE TRUSTEE,
CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC 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 denomination of this Certificate by the
Original Class Certificate Principal Balance of the Class A-1A Certificates) in
that certain beneficial ownership interest evidenced by all the Class A-1A
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Residential Asset
Funding Corporation (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), Credit-Based Asset Servicing and
Securitization LLC, the Servicer and the Trustee, a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Business Day immediately preceding such Distribution Date
(the "Record Date"), from funds in the Distribution Account in an amount equal
to the product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to the Holders of Class A-1A Certificates on
such Distribution Date pursuant to the Agreement, provided, however, that if any
Class A-1A Certificate becomes a Definitive Certificate: (as defined herein),
the Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by or on behalf of the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the 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
A-1-3
<PAGE>
Class A-1A 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 Trustee 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-1A Pass-Through Rate on each Distribution Date will be a rate
per annum equal to the sum of one month LIBOR plus the Class A-1A Certificate
Margin. Interest will accrue on the Class A-1A Certificates during each Interest
Accrual Period at a rate equal to the lesser of (i) the Class A-1A Pass-Through
Rate and (ii) the Class A-1A Net Funds Cap for such Distribution Date.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class A-1A Certificates.
The Class A-1A Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the
A-1-4
<PAGE>
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 Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate Registrar and
any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all proposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.
The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from the Trust Fund of all
Mortgage Loans and all property acquired in respect of such Mortgage Loans. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the Trust Fund all Mortgage Loans and all property acquired in
respect of any Mortgage Loan at a price determined as provided in the Agreement.
The exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Principal Balance of
the Mortgage Loans at the time of purchase being 10% or less of the Cut-off Date
Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the Depositor
and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-1-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: December 13, 2000
THE CHASE MANHATTAN BANK, as
Trustee
By:
----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class A-1A Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK, as
Certificate Registrar
By:
---------------------------------
Authorized Signatory
Date of authentication: December 13, 2000
A-1-6
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform
Gifts to Minors
Act
------------
(State)
JT TEN - as joint tenants with right
of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assigns) and transfers)
unto ___________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to _____ % evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:
--------------------------------------------------------------------------------
Dated:
------------------------------------------
Signature by or on behalf of assignor
------------------------------------------
Signature Guaranteed
A-1-7
<PAGE>
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-1-8
<PAGE>
EXHIBIT A-2
[FORM OF CLASS A-1F CERTIFICATE]
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES SERIES
2000-CB4, CLASS A-1F
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.
Series 2000-CB4, Class A-1F Original Class Certificate Principal
Balance of the Class A-1F Certificates
as of the Closing Date: $34,480,000
Pass-Through Rate: 7.055%
Date of Pooling and Servicing Agreement: Denomination: $34,480,000
November 1, 2000
Cut-off Date: November 1, 2000
Servicer: Litton Loan Servicing LP
First Distribution Date: December 26,
2000
Trustee: The Chase Manhattan Bank
No.
Closing Date: December 13, 2000
CUSIP: 12489WCP7
A-2-1
<PAGE>
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.
A-2-2
<PAGE>
ASSET- BACKED CERTIFICATE
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 and second lien mortgage loans formed and sold by
RESIDENTIAL ASSET FUNDING CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
RESIDENTIAL ASSET FUNDING CORPORATION, THE SERVICER, THE TRUSTEE, CREDIT-BASED
ASSET SERVICING AND SECURITIZATION LLC 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 denomination of this Certificate by the
Original Class Certificate Principal Balance of the Class A-1F Certificates) in
that certain beneficial ownership interest evidenced by all the Class A-1F
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Residential Asset
Funding Corporation (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Servicer, Credit-Based Asset
Servicing and Securitization LLC and the Trustee, a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Business Day immediately preceding such Distribution Date
(the "Record Date"), from funds in the Distribution Account in an amount equal
to the product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to the Holders of Class A-1F Certificates on
such Distribution Date pursuant to the Agreement; provided, however, that if any
Class A-1F Certificate becomes a Definitive Certificate (as defined herein), the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by or on behalf of the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the 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 Class A-1F Certificates, the
aggregate initial Certificate Principal Balance of which is in
A-2-3
<PAGE>
excess of $5,000,000, or by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register; provided that the Trustee may deduct a reasonable wire
transfer fee from any payment made by wire transfer. 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-1F Pass-Through Rate on each Distribution Date will be a rate
per annum equal to the sum of one month LIBOR plus the Class A-1F Certificate
Margin. Interest will accrue on the Class A-1F Certificates during each Interest
Accrual Period at a rate equal to the lesser of (i) the Class A-1F Pass-Through
Rate and (ii) the Class A-1F Net Funds Cap for such Distribution Date.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class A-1F Certificates.
The Class A-1F Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the
A-2-4
<PAGE>
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 Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate Registrar and
any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.
The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from the Trust Fund of all
Mortgage Loans and all property acquired in respect of such Mortgage Loans. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the Trust Fund all Mortgage Loans and all property acquired in
respect of any Mortgage Loan at a price determined as provided in the Agreement.
The exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Principal Balance of
the Mortgage Loans at the time of purchase being 10% or less of the Cut-off Date
Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the Depositor
and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-2-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: December 13, 2000
THE CHASE MANHATTAN BANK, as
Trustee
By:_______________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class A-1F Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK, as
Certificate Registrar
By:___________________________________
Authorized Signatory
Date of authentication: December 13, 2000
A-2-6
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust)(Minor)
under Uniform
Gifts to Minors
Act
---------
(State)
JT TEN - as joint tenants with right
of survivorship and not as
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
transfers) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _________________________________ a
Percentage Interest equal to _____ % evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:
--------------------------------------------------------------------------------
Dated:
------------------------------------------
Signature by or on behalf of assignor
------------------------------------------
Signature Guaranteed
A-2-7
<PAGE>
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-2-8
<PAGE>
EXHIBIT A-3
[FORM OF CLASS A-2F CERTIFICATE]
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2000-CB4, CLASS A-2F
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.
<TABLE>
<S> <C>
Series 2000-CB4, Class A-2F Original Class Certificate Principal
Balance of the Class
A-2F Certificates as of
the Closing Date: $18,820,000
Pass-Through Rate: 7.170%
Date of Pooling and Servicing Agreement: Denomination: $18,820,000
November 1, 2000
Cut-off Date: November 1, 2000
Servicer: Litton Loan Servicing LP
First Distribution Date: December 26,
2000
Trustee: The Chase Manhattan Bank
No.
Closing Date: December 13, 2000
</TABLE>
CUSIP: 12489WCQ5
A-3-1
<PAGE>
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.
A-3-2
<PAGE>
ASSET- BACKED CERTIFICATE
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 and second lien mortgage loans formed and sold by
RESIDENTIAL ASSET FUNDING CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
RESIDENTIAL ASSET FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY
OF THE UNITED STATES.
This certifies that ________________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the Original Class Certificate Principal Balance of the Class A-2F
Certificates) in that certain beneficial ownership interest evidenced by all the
Class A-2F Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Residential Asset Funding Corporation (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized teams used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the last Business Day of the month immediately preceding the
month in which the related Distribution Date occurs or the Closing Date, in the
case of the first Distribution Date (the "Record Date"), from funds in the
Distribution Account in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to the Holders of Class A-2F 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 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 Class A-2F 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;
A-3-3
<PAGE>
provided that the Trustee 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-2F Pass-Through Rate on each Distribution Date will be the per
annum rate specified above, plus on each Distribution Date following the
Optional Termination Date, 0.50% per annum. Interest will accrue on the Class
A-2F Certificates during each Interest Accrual Period at a rate equal to the
lesser of (i) the Class A-2F Pass-Through Rate and (ii) the applicable Class
A-2F Net Funds Cap for such Distribution Date.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class A-2F Certificates.
The Class A-2F Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
A-3-4
<PAGE>
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 Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate Registrar and
any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.
The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from the Trust Fund of all
Mortgage Loans and all property acquired in respect of such Mortgage Loans. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the Trust Fund all Mortgage Loans and all property acquired in
respect of any Mortgage Loan at a price determined as provided in the Agreement.
The exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Principal Balance of
the Mortgage Loans at the time of purchase being 10% or less of the Cut-off Date
Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the Depositor
and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-3-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: December 13, 2000
THE CHASE MANHATTAN BANK, as
Trustee
By:____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class A-2F Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK, as
Certificate Registrar
By:______________________________________
Authorized Signatory
Date of authentication: December 13, 2000
A-3-6
<PAGE>
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
transfers) unto ________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)_____________________________________________
a Percentage Interest equal to _____ % evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:
--------------------------------------------------------------------------------
Dated:
------------------------------------------
Signature by or on behalf of assignor
------------------------------------------
Signature Guaranteed
A-3-7
<PAGE>
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-3-8
<PAGE>
EXHIBIT B
[FORM OF CLASS B-1 CERTIFICATE]
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2000-CB4, CLASS B-1
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 INASTMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS M-1
AND CLASS M-2 CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT HAS
NOT DELIVERED A REPRESENTATION LETTER STATING EITHER (A) THAT THE TRANSFEREE IS
NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO TITLE I
OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 497 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL,
STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON
BEHALF OF OR INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO CERTAIN CONDITIONS
SET FORTH IN THE POOLING AND SERVICING AGREEMENT, THAT THE SOURCE OF FUNDS USED
TO PURCHASE THIS CERTIFICATE IS AN "INSURANCE COMPANY GENERAL ACCOUNT." EACH
PERSON WHO ACQUIRES THIS CERTIFICATE OR ANY INTEREST THEREIN SHALL BE DEEMED TO
HAVE MADE THE REPRESENTATIONS REQUIRED BY THE REPRESENTATION LETTER REFERRED TO
IN THE PRECEDING SENTENCE, UNLESS SUCH PERSON SHALL HAVE
B-1-1
<PAGE>
PROVIDED SUCH REPRESENTATION LETTER REFERRED TO IN THE PRECEDING SENTENCE TO THE
TRUSTEE. THE POOLING AND SERVICING AGREEMENT PROVIDES THAT ANY ATTEMPTED OR
PURPORTED TRANSFER IN VIOLATION OF THESE TRANSFER RESTRICTIONS WILL BE NULL AND
VOID AND WILL VEST NO RIGHTS IN ANY PURPORTED TRANSFEREE.
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.
<TABLE>
<S> <C>
Series 2000-CB4, Class B-1 Original Class Certificate Principal Balance
of the Class B-1 Certificates as of the
Closing Date: $4,942,000
Pass-Through Rate: 8.705%
Date of Pooling and Servicing Agreement: Denomination: $4,942,000
November 1, 2000
Cut-off Date: November 1, 2000 Servicer: Litton Loan Servicing LP
First Distribution Date: December 26,
2000 Trustee: The Chase Manhattan Bank
No.
Closing Date: December 13, 2000
CUSIP: 12489WCU6
</TABLE>
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.
B-1-2
<PAGE>
ASSET- BACKED CERTIFICATE
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 and second lien mortgage loans formed and sold by
RESIDENTIAL ASSET FUNDING CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
RESIDENTIAL ASSET FUNDING CORPORATION, THE SERVICER, THE TRUSTEE, CREDIT-BASED
ASSET SERVICING AND SECURITIZATION LLC 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 denomination of this Certificate by the
Original Class Certificate Principal Balance of the Class B-1 Certificates) in
that certain beneficial ownership interest evidenced by all the Class B-1
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Residential Asset
Funding Corporation (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Servicer, Credit-Based Asset
Servicing and Securitization LLC and the Trustee, a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the last Business Day of the month immediately preceding the
month in which the related Distribution Date occurs or the Closing Date, in the
case of the first Distribution Date (the "Record Date"), from funds in the
Distribution Account in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to the Holders of Class B-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 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 Class B-1 Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
B-1-3
<PAGE>
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. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee for that
purpose as provided in the Agreement.
The Class B-1 Pass-Through Rate on the Class B-1 Certificates on each
Distribution Date will be the per annum rate specified above. Interest will
accrue on the Class B-1 Certificates during each Interest Accrual Period at a
rate equal to the lesser of (i) the Class B-1 Pass-Through Rate and (ii) the
Pool Cap for such Distribution Date.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class B-1 Certificates.
The Class B-1 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This certificate is subordinated in right of payment to the Class A, Class
M-1 and Class M-2 Certificates as described in the Pooling and Servicing
Agreement referred to herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or
B-1-4
<PAGE>
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 Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate Registrar and
any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.
The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from the Trust Fund of all
Mortgage Loans and all property acquired in respect of such Mortgage Loans. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the Trust Fund all Mortgage Loans and all property acquired in
respect of any Mortgage Loan at a price determined as provided in the Agreement.
The exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Principal Balance of
the Mortgage Loans at the time of purchase being 10% or less of the Cut-off Date
Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the Depositor
and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
B-1-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: December 13, 2000
THE CHASE MANHATTAN BANK, as
Trustee
By:
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class B-1 Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK, as
Certificate Registrar
By:
----------------------------------
Authorized Signatory
Date of authentication: December 13, 2000
B-1-6
<PAGE>
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
transfers) unto ________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to _____ %
evidenced by the within asset-backed Certificate and hereby authorize(s) the
registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:
--------------------------------------------------------------------------------
Dated:
-------------------------------------------
Signature by or on behalf of assignor
-------------------------------------------
Signature Guaranteed
B-1-7
<PAGE>
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.
B-1-8
<PAGE>
[FORM OF CLASS B-2 CERTIFICATE]
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2000-CB4, CLASS B-2
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 INASTMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS M-1,
CLASS M-2 AND CLASS B-1 CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT HAS
NOT DELIVERED A REPRESENTATION LETTER STATING EITHER (A) THAT THE TRANSFEREE IS
NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO TITLE I
OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 497 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL,
STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON
BEHALF OF OR INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO CERTAIN CONDITIONS
SET FORTH IN THE POOLING AND SERVICING AGREEMENT, THAT THE SOURCE OF FUNDS USED
TO PURCHASE THIS CERTIFICATE IS AN "INSURANCE COMPANY GENERAL ACCOUNT." EACH
PERSON WHO ACQUIRES THIS CERTIFICATE OR ANY INTEREST THEREIN SHALL BE DEEMED TO
HAVE MADE THE REPRESENTATIONS REQUIRED BY THE REPRESENTATION LETTER REFERRED TO
IN THE PRECEDING SENTENCE, UNLESS SUCH PERSON SHALL HAVE PROVIDED SUCH
REPRESENTATION LETTER REFERRED TO IN THE PRECEDING SENTENCE TO THE TRUSTEE. THE
POOLING
B-2-1
<PAGE>
AND SERVICING AGREEMENT PROVIDES THAT ANY ATTEMPTED OR PURPORTED TRANSFER IN
VIOLATION OF THESE TRANSFER RESTRICTIONS WILL BE NULL AND VOID AND WILL VEST NO
RIGHTS IN ANY PURPORTED TRANSFEREE.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS BENEFICIAL
OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") AND CERTAIN OTHER
PROPERTY.
<TABLE>
<S> <C>
Series 2000-CB4, Class B-2 Original Class Certificate Principal Balance
of the Class B-2 Certificates as of the
Closing Date: $2,471,000
Pass-Through Rate: 8.900%
Date of Pooling and Servicing Agreement: Denomination: $2,471,000
November 1, 2000
Cut-off Date: November 1, 2000 Servicer: Litton Loan Servicing LP
First Distribution Date: December 26,
2000
Trustee: The Chase Manhattan Bank
No.
Closing Date: December 13, 2000
</TABLE>
CUSIP: 12489WCV4
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.
B-2-2
<PAGE>
ASSET- BACKED CERTIFICATE
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 and second lien mortgage loans formed and sold by
RESIDENTIAL ASSET FUNDING CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
RESIDENTIAL ASSET FUNDING CORPORATION, THE SERVICER, THE TRUSTEE, CREDIT-BASED
ASSET SERVICING AND SECURITIZATION LLC 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 denomination of this Certificate by the
Original Class Certificate Principal Balance of the Class B-2 Certificates) in
that certain beneficial ownership interest evidenced by all the Class B-2
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Residential Asset
Funding Corporation (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Servicer, Credit-Based Asset
Servicing and Securitization LLC and the Trustee, a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the last Business Day of the month immediately preceding the
month in which the related Distribution Date occurs or the Closing Date, in the
case of the first Distribution Date (the "Record Date"), from funds in the
Distribution Account in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to the Holders of Class B-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 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 Class B-2 Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
B-2-3
<PAGE>
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. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee for that
purpose as provided in the Agreement.
The Class B-2 Pass-Through Rate on the Class B-2 Certificates on each
Distribution Date will be the per annum rate specified above. Interest will
accrue on the Class B-2 Certificates during each Interest Accrual Period at a
rate equal to the lesser of (i) the Class B-2 Pass-Through Rate and (ii) the
Pool Cap for such Distribution Date.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class B-2 Certificates.
The Class B-2 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This certificate is subordinated in right of payment to the Class A, Class
M-1, Class M-2 and Class B-1 Certificates as described in the Pooling and
Servicing Agreement referred to herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or
B-2-4
<PAGE>
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 Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate Registrar and
any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.
The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from the Trust Fund of all
Mortgage Loans and all property acquired in respect of such Mortgage Loans. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the Trust Fund all Mortgage Loans and all property acquired in
respect of any Mortgage Loan at a price determined as provided in the Agreement.
The exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Principal Balance of
the Mortgage Loans at the time of purchase being 10% or less of the Cut-off Date
Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the Depositor
and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
B-2-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: December 13, 2000
THE CHASE MANHATTAN BANK, as
Trustee
By:
----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class B-2 Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK, as
Certificate Registrar
By:
----------------------------------
Authorized Signatory
Date of authentication: December 13, 2000
B-2-6
<PAGE>
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
transfers) unto ________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to _____ % evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:
--------------------------------------------------------------------------------
Dated:
------------------------------------------
Signature by or on behalf of assignor
------------------------------------------
Signature Guaranteed
B-2-7
<PAGE>
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.
B-2-8
<PAGE>
EXHIBIT C-1
[FORM OF CLASS R CERTIFICATE]
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2000-CB4, CLASS R
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 TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR THE CODE WILL BE REGISTERED.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (1) AN AFFIDAVIT TO THE
CERTIFICATE REGISTRAR AND THE TRUSTEE THAT SUCH TRANSFEREE IS NOT (A) THE UNITED
STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL
C-1-1
<PAGE>
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY
ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE)
WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE, (C) ANY
ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE (ANY SUCH PERSON
DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING HEREINAFTER REFERRED TO
AS A "DISQUALIFIED ORGANIZATION"), OR (D) AN AGENT OF A DISQUALIFIED
ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX, AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDI-TIONAL
CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE
NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OR ANY TRANSFER,
SALE OR OTHER DISPOSITION OF THIS CLASS R CERTIFICATE TO A DISQUALIFIED
ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL
BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT
BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF
A CLASS R CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE
CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS OF SECTION
5.02(D) OF THE 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.
Series 2000-CB4, Class R Servicer: Litton Loan Servicing LP
Date of Pooling and Servicing Agreement: Trustee: The Chase Manhattan Bank
November 1, 2000
Cut-off Date: November 1, 2000
First Distribution Date: December 26, Closing Date: December 13, 2000
2000
No.
Percentage Interest: 100%
C-1-2
<PAGE>
ASSET- BACKED CERTIFICATE
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 and second lien mortgage loans formed and sold by
RESIDENTIAL ASSET FUNDING CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
RESIDENTIAL ASSET FUNDING CORPORATION, THE SERVICER, THE TRUSTEE,
CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC 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 Residential Asset Funding Corporation (hereinafter called
the "Depositor," which term includes any successor entity under the Agreement),
the Servicer, Credit-Based Asset Servicing and Securitization LLC and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the last Business Day of the month immediately preceding the
month in which the related Distribution Date occurs or the Closing Date, in the
case of the first Distribution Date (the "Record Date"), from funds in the
Distribution Account in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to the Holders of Class R Certificates on such Distribution Date pursuant to the
Agreement.
All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by or on behalf of the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the 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 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
C-1-3
<PAGE>
Certificate Register; provided that the Trustee may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
the Percentage Interest specified on the face hereof.
The Class R Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without coupons
in Classes and denominations representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of the
same Class in authorized
C-1-4
<PAGE>
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 and the Certificate Registrar shall require, in order to assure
compliance with such laws, either (i) that the Certificateholder desiring to
effect the transfer and such Certificateholder's prospective transferee each
execute a representation letter in the form described by the Agreement
certifying to the Trustee and the Certificate Registrar the facts surrounding
the transfer, or (ii) that the Trustee and the Certificate Registrar 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 Trustee or the Certificate Registrar, in
their respective capacities as such. None of the Depositor, 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 Depositor, the
Certificate Registrar and any Servicer against any liability that may result if
the transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of a Certificate or any interest therein may be made to
employee benefit plans and certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Keogh 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 ("Plans") or any person who is
directly or indirectly purchasing the Certificate or interest therein on behalf
of, as named fiduciary of, as trustee of, or with assets of a Plan. The Trustee
shall require the prospective transferee of any Certificate to certify that it
is neither (i) a Plan nor (ii) a Person who is directly or indirectly purchasing
such Certificate on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan (including any insurance company using funds in its general or
separate accounts that may constitute "plan assets").
The Holder of this Certificate, by its acceptance hereof, shall be deemed
for all purposes to have consented to the provisions of Section 5.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause the Trust
to cease to qualify as two separate REMICs or cause the imposition of a tax upon
the Trust.
No service charge will be made for any such registration of transfer or
exchange of Certificates, but the Trustee may require payment of a sum
sufficient
C-1-5
<PAGE>
to cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate Registrar and
any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.
The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from the Trust Fund of all
Mortgage Loans and all property acquired in respect of such Mortgage Loans. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the Trust Fund all Mortgage Loans and all property acquired in
respect of any Mortgage Loan at a price determined as provided in the Agreement.
The exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Principal Balance of
the Mortgage Loans at the time of purchase being 10% or less of the Cut-off Date
Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the Depositor
and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
C-1-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: December 13, 2000
THE CHASE MANHATTAN BANK, as
Trustee
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class R Certificates referred to in the within-mentioned
Agreement.
THE CHASE MANHATTAN BANK, as
Certificate Registrar
By:
-----------------------------------
Authorized Signatory
Date of authentication: December 13, 2000
C-1-7
<PAGE>
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
transfers) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) ______________________________ a Percentage
Interest equal to _____ % evidenced by the within asset-backed Certificate and
hereby authorize(s) the registration of transfer of such interest to assignee on
the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:
--------------------------------------------------------------------------------
Dated:
------------------------------------------
Signature by or on behalf of assignor
------------------------------------------
Signature Guaranteed
C-1-8
<PAGE>
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-1-9
<PAGE>
EXHIBIT C-2
[FORM OF CLASS M-1 CERTIFICATE]
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2000-CB4, CLASS M-1
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A CERTIFICATES
AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT HAS
NOT DELIVERED A REPRESENTATION LETTER STATING EITHER (A) THAT THE TRANSFEREE IS
NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO TITLE I
OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 497 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL,
STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON
BEHALF OF OR INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO CERTAIN CONDITIONS
SET FORTH IN THE POOLING AND SERVICING AGREEMENT, THAT THE SOURCE OF FUNDS USED
TO PURCHASE THIS CERTIFICATE IS AN "INSURANCE COMPANY GENERAL ACCOUNT." EACH
PERSON WHO ACQUIRES THIS CERTIFICATE OR ANY INTEREST THEREIN SHALL BE DEEMED TO
HAVE MADE THE REPRESENTATIONS REQUIRED BY THE REPRESENTATION LETTER REFERRED TO
IN
C-2-1
<PAGE>
THE PRECEDING SENTENCE, UNLESS SUCH PERSON SHALL HAVE PROVIDED SUCH
REPRESENTATION LETTER REFERRED TO IN THE PRECEDING SENTENCE TO THE TRUSTEE. THE
POOLING AND SERVICING AGREEMENT PROVIDES THAT ANY ATTEMPTED OR PURPORTED
TRANSFER IN VIOLATION OF THESE TRANSFER RESTRICTIONS WILL BE NULL AND VOID AND
WILL VEST NO RIGHTS IN ANY PURPORTED TRANSFEREE.
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.
<TABLE>
<S> <C>
Series 2000-CB4, Class M-1 Original Class Certificate Principal Balance
of the Class M-1 Certificates as of the
Closing Date: $11,531,000
Pass-Through Rate: 7.565%
Date of Pooling and Servicing Agreement: Denomination: $11,531,000
November 1, 2000
Servicer: Litton Loan Servicing LP
First Distribution Date: December 26,
2000
Cut-off Date: November 1, 2000 Trustee: The Chase Manhattan Bank
No.
Closing Date: December 13, 2000
CUSIP: 12489WCS1
</TABLE>
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.
C-2-2
<PAGE>
ASSET- BACKED CERTIFICATE
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 and second lien mortgage loans formed and sold by
RESIDENTIAL ASSET FUNDING CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
RESIDENTIAL ASSET FUNDING CORPORATION, THE SERVICER, THE TRUSTEE, CREDIT-BASED
ASSET SERVICING AND SECURITIZATION LLC 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 denomination 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 Residential Asset
Funding Corporation (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Servicer, Credit-Based Asset
Servicing and Securitization LLC and the Trustee, a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the last Business Day of the month immediately preceding the
month in which the related Distribution Date occurs or the Closing Date, in the
case of the first Distribution Date (the "Record Date"), from funds in the
Distribution Account in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to the Holders of Class 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 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 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
C-2-3
<PAGE>
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. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee for that
purpose as provided in the Agreement.
The Class M-1 Pass-Through Rate on the Class M-1 Certificates on each
Distribution Date will be the per annum rate specified above. Interest will
accrue on the Class M-1 Certificates during each Interest Accrual Period at a
rate equal to the lesser of (i) the Class M- 1 Pass-Through Rate and (ii) the
Pool Cap for such Distribution Date.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class M-1 Certificates.
The Class M-1 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This certificate is subordinated in right of payment to the Class A
Certificates as described in the Pooling and Servicing Agreement referred to
herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the
C-2-4
<PAGE>
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 Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate Registrar and
any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all proposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such went 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 fight will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Principal Balance of
the Mortgage Loans at the time of purchase being 10% or less of the Cut-off Date
Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the Depositor
and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
C-2-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: December 13, 2000
THE CHASE MANHATTAN BANK, as
Trustee
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class M-1 Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK, as
Certificate Registrar
By:
--------------------------------------
Authorized Signatory
Date of authentication: December 13, 2000
C-2-6
<PAGE>
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), assigns) and transfers)
unto ___________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) a Percentage Interest equal to _____
% evidenced by the within asset-backed Certificate and hereby authorizes) 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-2-7
<PAGE>
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-2-8
<PAGE>
EXHIBIT C-3
[FORM OF CLASS M-2 CERTIFICATE]
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2000-CB4, CLASS M-2
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A AND CLASS
M-1 CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT HAS
NOT DELIVERED A REPRESENTATION LETTER STATING EITHER (A) THAT THE TRANSFEREE IS
NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO TITLE I
OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 497 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL,
STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON
BEHALF OF OR INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO CERTAIN CONDITIONS
SET FORTH IN THE POOLING AND SERVICING AGREEMENT, THAT THE SOURCE OF FUNDS USED
TO PURCHASE THIS CERTIFICATE IS AN "INSURANCE COMPANY GENERAL ACCOUNT." EACH
PERSON WHO ACQUIRES THIS CERTIFICATE OR ANY INTEREST THEREIN SHALL BE DEEMED TO
HAVE MADE THE REPRESENTATIONS REQUIRED BY THE REPRESENTATION LETTER REFERRED TO
IN THE PRECEDING SENTENCE, UNLESS SUCH PERSON SHALL HAVE
C-3-1
<PAGE>
PROVIDED SUCH REPRESENTATION LETTER REFERRED TO IN THE PRECEDING SENTENCE TO THE
TRUSTEE. THE POOLING AND SERVICING AGREEMENT PROVIDES THAT ANY ATTEMPTED OR
PURPORTED TRANSFER IN VIOLATION OF THESE TRANSFER RESTRICTIONS WILL BE NULL AND
VOID AND WILL VEST NO RIGHTS IN ANY PURPORTED TRANSFEREE.
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 8606 AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") AND CERTAIN OTHER
PROPERTY.
<TABLE>
<S> <C>
Series 2000-CB4, Class M-2 Original Class Certificate Principal Balance
of the Class M-2 Certificates as of the
Closing Date: $7,825,000
Pass-Through Rate: 7.915%
Date of Pooling and Servicing Agreement: Denomination: $7,825,000
November 1, 2000
Cut-off Date: November 1, 2000 Servicer: Litton Loan Servicing LP
First Distribution Date: December 26,
2000
Trustee: The Chase Manhattan Bank
No.
Closing Date: December 13, 2000
CUSIP: 12489WCT9
DISTRIBUTIONS 1N 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.
</TABLE>
C-3-2
<PAGE>
ASSET- BACKED CERTIFICATE
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 and second lien mortgage loans formed and sold by
RESIDENTIAL ASSET FUNDING CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
RESIDENTIAL ASSET FUNDING CORPORATION, THE SERVICER, THE TRUSTEE, CREDIT-BASED
ASSET SERVICING AND SECURITIZATION LLC 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 denomination 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 Residential Asset
Funding Corporation (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Servicer, Credit-Based Asset
Servicing and Securitization LLC and the Trustee, a summary of certain of the
pertinent provisions or' 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
2ith day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the last Business Day of the month immediately preceding the
month in which the related Distribution Date occurs or the Closing Date, in the
case of the first Distribution Date (the "Record Date"), from funds in the
Distribution Account in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to the Holders of Class 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 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 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
C-3-3
<PAGE>
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. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee for that
purpose as provided in the Agreement.
The Class M-2 Pass-Through Rate on the Class M-2 Certificates on each
Distribution Date will be the per annum rate specified above. Interest will
accrue on the Class M-2 Certificates during each Interest Accrual Period at a
rate equal to the lesser of (i) the Class M-2 Pass-Through Rate and (ii) the
Pool Cap for such Distribution Date.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class M-2 Certificates.
The Class M-2 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This certificate is subordinated in right of payment to the Class A and
Class M-1 Certificates as described in the Pooling and Servicing Agreement
referred to herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or
C-3-4
<PAGE>
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 Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate Registrar and
any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such anent shall be affected by
notice to the contrary.
The obligations created by the Agreement and the `trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the .Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the Depositor
and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
C-3-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: December 13, 2000
THE CHASE MANHATTAN BANK, as
Trustee
By:
-------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class M-2 Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK, as
Certificate Registrar
By:
------------------------------------
Authorized Signatory
Date of authentication: December 13, 2000
C-3-6
<PAGE>
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), assigns) and transfers)
unto ___________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) ____________________________________ a
Percentage Interest equal to _____ % evidenced by the within asset-backed
Certificate and hereby authorizes) 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-3-7
<PAGE>
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-3-8
<PAGE>
EXHIBIT C-4
[FORM OF CLASS X CERTIFICATES]
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2000-CB4, CLASS X
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A DIRECT OR
INDIRECT BENEFICIAL INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G
AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") AND IN
CERTAIN OTHER PROPERTY.
THIS CLASS X CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES OF THIS
SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
THIS CLASS X CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH TIME AS
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS X CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT
SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION THAT DOES
NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR THE CODE WILL BE REGISTERED.
C-4-1
<PAGE>
<TABLE>
<S> <C>
Series 2000-CB4, Class X Servicer: Litton Loan Servicing LP
Date of Pooling and Servicing Agreement: Trustee: The Chase Manhattan Bank
November 1, 2000
Cut-off Date: November 1, 2000 Closing Date: December 13, 2000
First Distribution Date: December 26,
2000
No.
Percentage Interest: ___%
</TABLE>
C-4-2
<PAGE>
ASSET- BACKED CERTIFICATE
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 and second lien mortgage loans formed and sold by
RESIDENTIAL ASSET FUNDING CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
RESIDENTIAL ASSET FUNDING CORPORATION, THE SERVICER, THE TRUSTEE, CREDIT-BASED
ASSET SERVICING AND SECURITIZATION LLC OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.
This certifies that ________________________________ is the registered
owner of a Percentage Interest set forth above in that certain beneficial
ownership interest evidenced by all the Class X Certificates in the Trust Fund
created pursuant to a Pooling and Servicing Agreement, dated as specified above
(the "Agreement"), among Residential Asset Funding Corporation (hereinafter
called the "Depositor," which term includes any successor entity under the
Agreement), the Servicer, Credit-Based Asset Sericing and Securitization LLC 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 a bound.
Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the last Business Day of the month immediately preceding the
month in which the related Distribution Date occurs or the Closing Date in the
case of the first Distribution Date (the "Record Date"), from funds in the
Distribution Account in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to the Holders of Class X Certificates on such Distribution Date pursuant to the
Agreement.
All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by or on behalf of the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the 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 Class X Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of a 66%
Percentage Interest of the Class X Certificates, or by check mailed by first
class mail to the address of the Person entitled thereto, as such name and
address
C-4-3
<PAGE>
shall appear on the Certificate Register, provided that the Trustee may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
the Percentage Interest specified on the face hereof.
The Class X Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will he 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
C-4-4
<PAGE>
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 and the Certificate Registrar shall require, in order to assure
compliance with such laws, either (i) that the Certificateholder desiring to
effect the transfer and such Certificateholder's prospective transferee each
execute a representation letter in the form described by the Agreement
certifying to the Trustee and the Certificate Registrar the facts surrounding
the transfer, or (ii) that the Trustee and the Certificate Registrar 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 Trustee or the Certificate Registrar, in
their respective capacities as such. None of the Depositor, 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 Depositor, the
Certificate Registrar and the Servicer against any liability that may result if
the transfer is not so exempt or is not made in accordance with such federal and
state laws.
Except as otherwise set forth in the next succeeding paragraph, 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, Keogh 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 ("Plans") or any person who is directly or indirectly
purchasing the Certificate or interest therein on behalf of, as named fiduciary
of, as trustee of, or with assets of a Plan. The Trustee shall require the
prospective transferee of any Certificate to certify that it is neither (i) a
Plan nor (ii) a Person who is directly or indirectly purchasing such Certificate
on behalf of, as named fiduciary of, as trustee of, or with assets of a Plan
(including any insurance company using funds in its general or separate accounts
that may constitute "plan assets").
No service charge will be made for any such registration of transfer or
exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate Registrar and
any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all
C-4-5
<PAGE>
purposes, and none of the Depositor, the Servicer, the Trustee, the Certificate
Registrar nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from the Trust Fund of all
Mortgage Loans and all property acquired in respect of such Mortgage Loans. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the Trust Fund all Mortgage Loans and all property acquired in
respect of any Mortgage Loan at a price determined as provided in the Agreement.
The exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Principal Balance of
the Mortgage Loans at the time of purchase being 10% or less of the Cut-off Date
Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the Depositor
and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
C-4-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: December 13, 2000
THE CHASE MANHATTAN BANK, as
Trustee
By:
---------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class X Certificates referred to in the within-mentioned
Agreement.
THE CHASE MANHATTAN BANK, as
Certificate Registrar
By:
---------------------------------------
Authorized Signatory
Date of authentication: December 13, 2000
C-4-7
<PAGE>
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), assigns) and
transfers) unto -----------------------------------------------------------
----------------------------------------------------------------------- (Please
print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)------------------------------------------- a
Percentage Interest equal to _____ % evidenced by the within asset-backed
Certificate and hereby authorizes) 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 alike 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-4-8
<PAGE>
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-4-9
<PAGE>
EXHIBIT C-5
[FORM OF CLASS N CERTIFICATE]
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2000-CB4, CLASS N
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A
DIRECT OR INDIRECT BENEFICIAL INTEREST IN A "REGULAR INTEREST" IN A
"REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE") AND IN CERTAIN OTHER PROPERTY.
THIS CLASS N CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES OF
THIS SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS N CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH
TIME AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
THIS CLASS N CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY
IN A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR
QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED.
Series 2000-CB4, Class N Original Class N Notional Amount as of
the Closing Date:
Date of Pooling and Servicing Agreement: Denomination: $_____________ (Notional
November 1, 2000 Amount)
Cut-off Date: November 1, 2000 Servicer: Litton Loan Servicing LP
First Distribution Date: December 26,
C-5-1
<PAGE>
2000 Trustee: The Chase Manhattan Bank
No.
Closing Date: December 13, 2000
C-5-2
<PAGE>
ASSET- BACKED CERTIFICATE
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 and second lien mortgage loans formed and sold by
RESIDENTIAL ASSET FUNDING CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
RESIDENTIAL ASSET FUNDING CORPORATION, THE SERVICER, THE TRUSTEE,
CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC 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 denomination
of this Certificate by the Original Class N Notional Amount) in that certain
beneficial ownership interest evidenced by all the Class N Certificates in the
Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among Residential Asset Funding Corporation
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement), the Servicer, Credit-Based Asset Servicing and
Securitization LLC and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs or the Closing
Date in the case of the first Distribution Date (the "Record Date"), from funds
in the Distribution Account in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to the Holders of Class N Certificates on such Distribution Date pursuant to the
Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the 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 Class N Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of a 66%
Percentage Interest of the Class N Certificates, or by check mailed by
C-5-3
<PAGE>
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.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as C-BASS Mortgage Loan Asset-Backed Certificates of the
Series specified on the face hereof (herein called the "Certificates") and
representing the Percentage Interest specified on the face hereof.
The Class N Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of an), 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
C-5-4
<PAGE>
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 and the Certificate Registrar
shall require, in order to assure compliance with such laws, either (i) that the
Certificateholder desiring to effect the transfer and such Certificateholder's
prospective transferee each execute a representation letter in the form
described by the Agreement certifying to the Trustee and the Certificate
Registrar the facts surrounding the transfer, or (ii) that the Trustee and the
Certificate Registrar 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 Trustee or the
Certificate Registrar, in their respective capacities as such. None of the
Depositor, 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
Depositor, the Certificate Registrar and the Servicer against any liability that
may result if the transfer is not so exempt or is not made in accordance with
such federal and state laws.
Except as otherwise set forth in the next succeeding
paragraph, 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, Keogh 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 497 of the Code ("Plans") or any person who is
directly or indirectly purchasing the Certificate or interest therein on behalf
of, as named fiduciary of, as trustee of, or with assets of a Plan. The Trustee
shall require the prospective transferee of any Certificate to certify that it
is neither (i) a Plan nor (ii) a Person who is directly or indirectly purchasing
such Certificate on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan (including any insurance company using funds in its general or
separate accounts that may constitute "plan assets").
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all
C-5-5
<PAGE>
purposes, and none of the Depositor, the Servicer, the Trustee, the Certificate
Registrar nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates: however, such right to purchase is subject to
the aggregate Principal Balance of the Mortgage Loans at the time of purchase
being 10% or less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
C-5-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: December 13, 2000
THE CHASE MANHATTAN BANK, as
Trustee
By:_________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class N Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK, as
Certificate Registrar
By:_________________________________
Authorized Signatory
Date of authentication: December 13, 2000
C-5-7
<PAGE>
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), assigns)
and transfers) unto --------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) ------------------------------------------ a
Percentage Interest equal to _____ % evidenced by the within asset-backed
Certificate and hereby authorizes) 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-5-8
<PAGE>
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-5-9
<PAGE>
EXHIBIT D
MORTGAGE LOAN SCHEDULE
[On File with Dewey Ballantine LLP]
D-1-1
<PAGE>
EXHIBIT E
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: The Chase Manhattan Bank
450 West 33rd Street
14th Floor
New York, New York 10001
Attn: Capital Markets Fiduciary Services,
C-BASS Mortgage Loan Asset-Backed Funding Certificates, Series 2000-CB4
Re: Pooling and Servicing Agreement dated as of November 1, 2000
among Residential Asset Funding Corporation, as depositor,
Credit-Based Asset Servicing and Securitization LLC, as
seller, Litton Loan Servicing LP, as servicer, and The Chase
Manhattan Bank, as trustee.
All capitalized terms used herein shall have the means ascribed to them in the
Pooling and Servicing Agreement (the "Agreement") referenced above.
In connection with the administration of the Mortgage Loans held by you as
Trustee pursuant to the Agreement, we request the release, and hereby
acknowledge receipt, of the Trustee's Mortgage File for the Mortgage Loan
described below, for the reason indicated.
Mortgage Loan Number:
--------------------
Mortgagor Name, Address & Zip Code:
----------------------------------
Reason for Requesting Documents (check one):
------------------------------------------
---------- 1. Mortgage Paid in Full
---------- 2. Foreclosure
---------- 3. Substitution
---------- 4. Other Liquidation (Repurchase, etc.)
E-2
<PAGE>
---------- 5. Nonliquidation Reason:
-----------------------------
By:
-----------------------------
(authorized signer)
Issuer:
-----------------------------
Address:
-----------------------------
-----------------------------
Date:
-----------------------------
Custodian
Bank One Trust Company, NA
Please acknowledge the execution of the above request by your signature and date
below:
----------------------------- -----------------------------
Signature Date
Documents returned to Custodian:
----------------------------- -----------------------------
Custodian Date
E-3
<PAGE>
F-1-1
EXHIBIT F-I
FORM OF TRUSTEE'S INITIAL CERTIFICATION
Date
Residential Asset Funding Corporation
One First Union Center, TW9
Charlotte, NC 28288-0610
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of November 1, 2000 among Residential
Asset Funding Corporation, as depositor, Credit-Based Asset
Servicing and Securitization LLC, as seller, Litton Loan
Servicing LP, as servicer, The Chase Manhattan Bank, as
trustee with respect to C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2000-CB4.
--------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing Agreement, the
undersigned, as Trustee, hereby certifies that it received confirmation from the
Custodian that the Custodian has received the documents listed in Section 2.01
of the Pooling and Servicing Agreement for each Mortgage File pertaining to each
Mortgage Loan listed on Schedule A to the Pooling and Servicing Agreement,
subject to any exceptions noted on Schedule I hereto.
Capitalized words and phrases used herein and not otherwise defined herein shall
have the respective meanings assigned to them in the Pooling and Servicing
Agreement. This Certificate is subject in all respects to the terms of Section
2.02 of the Pooling and Servicing Agreement and the Pooling and Servicing
Agreement sections cross-referenced therein.
THE CHASE MANHATTAN BANK
as Trustee
By:
-------------------------------------
Name:
Title:
F-1-1
<PAGE>
EXHIBIT F-2
FORM OF TRUSTEE'S FINAL CERTIFICATION
[Date]
Residential Asset Funding Corporation
One First Union Center, TW9
Charlotte, NC 28288-0610
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of November 1, 2000 among Residential
Asset Funding Corporation, as depositor, Credit-Based Asset
Servicing and Securitization LLC, as seller, Litton Loan
Servicing LP, as servicer, The Chase Manhattan Bank, as
trustee with respect to C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2000-CB4.
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing Agreement, the
undersigned, as Trustee, hereby certifies that as to each Mortgage Loan listed
in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or
listed on Schedule I hereto) it received confirmation from the Custodian that
the Custodian has received the applicable documents listed in Section 2.01 of
the Pooling and Servicing Agreement.
The undersigned hereby certifies that as to each Mortgage Loan identified on the
Mortgage Loan Schedule, other than any Mortgage Loan listed on Schedule I
hereto, it has reviewed the documents listed above and has determined that each
such document appears to be complete and, based on an examination of such
documents, the information set forth in the Mortgage Loan Schedule is correct.
Capitalized words and phrases used herein shall have the respective meanings
assigned to them in the Pooling and Servicing Agreement. This Certificate is
qualified in all respects by the terms of said Pooling and Servicing Agreement.
THE CHASE MANHATTAN BANK,
as Trustee
By:
-------------------------------------
Name:
Title:
F-2-1
<PAGE>
EXHIBIT F-3
FORM OF RECEIPT OF MORTGAGE NOTE
Residential Asset Funding Corporation
One First Union Center, TW9
Charlotte, NC 28288-0610
Re: C-BASS Mortgage Loan Asset-Backed Funding Certificates,
Series 2000-CB4
-----------------------------------------------------
Ladies and Gentlemen:
Pursuant to Section 2.01 of the Pooling and Servicing Agreement, dated as of
November 1, 2000, among Residential Asset Funding Corporation, as depositor,
Credit-Based Asset Servicing and Securitization LLC, as seller, Litton Loan
Servicing LP, as servicer, and The Chase Manhattan Bank, as trustee (the
"Trustee"), we hereby acknowledge the receipt of the original Mortgage Note (a
copy of which is attached hereto as Exhibit 1) with any exceptions thereto
listed on Exhibit 2.
THE CHASE MANHATTAN BANK,
as Trustee
By:
-------------------------------------
Name:
Title:
F-3-1
<PAGE>
EXHIBIT G
MORTGAGE LOAN PURCHASE AGREEMENT
[On File with Dewey Ballantine LLP]
G-1
<PAGE>
EXHIBIT H
FORM OF LOST NOTE AFFIDAVIT
Personally appeared before me the undersigned authority to administer oaths,
________________ who first being duly sworn deposes and says: Deponent is
___________________ of _____________________________, successor by merger to
___________________________________ ("Seller") and who has personal knowledge of
the facts set out in this affidavit.
On ________________________, ________________ did execute and deliver a
promissory note in the principal amount of $____________.
That said note has been misplaced or lost through causes unknown and is
presently lost and unavailable after diligent search has been made. Seller's
records show that an amount of principal and interest on said note is still
presently outstanding, due, and unpaid, and Seller is still owner and holder in
due course of said lost note.
Seller executes this Affidavit for the purpose of inducing The Chase Manhattan
Bank, as trustee on behalf of C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2000-CB4, to accept the transfer of the above described loan from Seller.
Seller agrees to indemnify and hold harmless The Chase Manhattan Bank,
Residential Asset Funding Corporation for any losses incurred by such parties
resulting from the above described promissory note has been lost or misplaced.
By:
----------------------------
------------------------------
STATE OF )
) SS:
COUNTY OF )
On this ______ day of 20____, before me, a Notary Public, in and for said County
and State, appeared ____________________, who acknowledged the extension of the
foregoing and who, having been duly sworn, states that any representations
therein contained are true.
Witness my hand and Notarial Seal this ___ day of _______ 20 __.
----------------------------------
----------------------------------
My commission expires ___________.
H-1
<PAGE>
EXHIBIT I
FORM OF ERISA REPRESENTATION
Residential Asset Funding Corporation
One First Union Center, TW9
Charlotte, NC 28288-0610
Re: C-BASS Mortgage Loan Asset-Backed Funding Certificates,
Series 2000-CB4
-------------------------------------------------------
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.
2. The Transferee hereby acknowledges that under the terms of the Pooling
and Servicing Agreement (the "Agreement") among Residential Asset Funding
Corporation, as depositor (the "Depositor"), Credit-Based Asset Servicing and
Securitization LLC, as seller, Litton Loan Servicing LP, as servicer and The
Chase Manhattan Bank, as trustee (the "Trustee"), no transfer of the
ERISA-Restricted Certificates shall be permitted to be made to any person unless
the Depositor and Trustee have received a certificate from such transferee in
the form hereof.
3. [With respect to the Class M-1, Class M-2 and Class B Certificates only]
The Transferee either (x) (1) 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 (2) if the
Transferee is an insurance company, such Transferee is purchasing such
Certificates with funds contained in an "Insurance Company General Account" (as
such term is defined in Section v(e) of the Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of such
Certificates are covered under PTCE 95-60; or (y) shall deliver to the Trustee
and the Depositor an opinion of counsel (a "Benefit Plan Opinion") satisfactory
to the Trustee and the Depositor, and upon which the Trustee and the Depositor
shall be entitled to rely, to the effect that the purchase or holding of such
Certificate by the Transferee will not result in the assets of the Trust Fund
being deemed to be plan assets and subject to the prohibited transaction
provisions of ERISA or the Code and will not subject the Trustee or the
Depositor to any obligation in addition to those undertaken by such entities in
the Pooling and Servicing Agreement, which opinion of counsel shall not be an
expense of the Trustee or the Depositor.
3. [With respect to the Class X and Class N Certificates only] The Transferee
either (x) 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
I-1
<PAGE>
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 (y) shall deliver to the Trustee and the Depositor an
opinion of counsel (a "Benefit Plan Opinion") satisfactory to the Trustee and
the Depositor, and upon which the Trustee and the Depositor shall be entitled to
rely, to the effect that the purchase or holding of such Certificate by the
Transferee will not result in the assets of the Trust Fund being deemed to be
plan assets and subject to the prohibited transaction provisions of ERISA or the
Code and will not subject the Trustee or the Depositor to any obligation in
addition to those undertaken by such entities in the Pooling and Servicing
Agreement, which opinion of counsel shall not be an expense of the Trustee or
the Depositor.
Capitalized terms used but not defined herein shall have the meanings ascribed
to such terms in the Agreement.
IN WITNESS WHEREOF, the Transferee has executed this certificate.
------------------------------
[Transferee]
By:
---------------------------
Name:
Title:
I-2
<PAGE>
EXHIBIT J
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
Residential Asset Funding Corporation
One First Union Center, TW9
Charlotte, NC 28288-0610
The Chase Manhattan Bank
450 West 33rd Street
14th Floor
New York, NY 10001
Re: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2000-CB4
---------------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2000-CB4 (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 not an employee benefit plan that is subject to the Employee Retirement
Income Security Act of 1974, as amended, or a plan that is subject to Section
4975 of the Internal Revenue Code of 1986, as amended, nor are we acting on
behalf of any such plan, (e) 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), (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, and (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
J-1
<PAGE>
or transferee has otherwise complied with any conditions for transfer set forth
in the Pooling and Servicing Agreement.
Very truly yours,
[NAME OF TRANSFEREE]
By:
-----------------------------
Authorized Officer
J-2
<PAGE>
FORM OF RULE 144A INVESTMENT LETTER
[DATE]
Residential Asset Funding Corporation
One First Union Center, TW9
Charlotte, NC 28288-0610
The Chase Manhattan Bank
450 West 33rd Street
14th Floor
New York, NY 10001
Re: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2000-CB4
---------------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2000-CB4 (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 are not an employee benefit plan that is subject to the Employee Retirement
Income Security Act of 1974, as amended, or a plan that is subject to Section
4975 of the Internal Revenue Code of 1986, as amended, nor are we acting on
behalf of any such plan, (d) 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, (e) 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
J-3
<PAGE>
institutional buyer to whom notice is given that the resale, pledge or transfer
is being made in reliance on Rule 144A, or (ii) pursuant to another exemption
from registration under the Securities Act.
Very truly yours,
[NAME OF TRANSFEREE]
By:
------------------------------
Authorized Officer
J-4
<PAGE>
ANNEX 1 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:
i. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.
ii. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $_______(1) in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A and (ii)
the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other than
a bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking
institution organized under the laws of any State, territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the
State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
_____ Broker-dealer. The Buyer is a dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934.
-----------------
(1) Buyer must own and/or invest on a discretionary basis at least $____ in
securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $_____ in securities.
J-5
<PAGE>
____ Insurance Company. The Buyer is an insurance company
whose primary and predominant business activity is the writing
of insurance or the reinsuring of risks underwritten by
insurance companies and which is subject to supervision by the
insurance commissioner or a similar official or agency of a
State, territory or the District of Columbia.
____ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974.
____ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
____ Small Business Investment Company. Buyer is a small
business investment company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
____ Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940.
iii. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer, (ii) securities that are part of an
unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) securities issued or guaranteed by the U.S. or any instrumentality
thereof, (iv) bank deposit notes and certificates of deposit, (v) loan
participations, (vi) repurchase agreements, (vii) securities owned but subject
to a repurchase agreement and (viii) currency, interest rate and commodity
swaps.
iv. For purposes of determining the aggregate amount of securities owned and/or
invested on a discretionary basis by the Buyer, the Buyer used the cost of such
securities to the Buyer and did not include any of the securities referred to in
the preceding paragraph, except (i) where the Buyer reports its securities
holdings in its financial statements on the basis of their market value, and
(ii) no current information with respect to the cost of those securities has
been published. If clause (ii) in the preceding sentence applies, the securities
may be valued at market. Further, in determining such aggregate amount, the
Buyer may have included securities owned by subsidiaries of the Buyer, but only
if such subsidiaries are consolidated with the Buyer in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Buyer's direction.
However, such securities were not included if the Buyer is a majority-owned,
consolidated subsidiary of another enterprise and the Buyer is not itself a
reporting company under the Securities Exchange Act of 1934, as amended.
J-6
<PAGE>
v. The Buyer acknowledges that it is familiar with Rule 144A and understands
that the seller to it and other parties related to the Certificates are relying
and will continue to rely on the statements made herein because one or more
sales to the Buyer may be in reliance on Rule 144A.
vi. Until the date of purchase of the Rule 144A Securities, the Buyer will
notify each of the patties to which this certification is made of any changes in
the information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
-------------------------------
Print Name of Buyer
By:
----------------------------
Name:
Title:
Date:
--------------------------
J-7
<PAGE>
ANNEX 2 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial Officer
or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
____ Buyer owned $_______ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies
which owned in the aggregate $______ in securities (other than
the excluded securities referred to below) as of the end of
the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or more
registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's Family of
Investment Companies,
J-8
<PAGE>
(ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the parties listed
in the Rule 144A Transferee Certificate to which this certification relates are
relying and will continue to rely on the statements made herein because one or
more sales to the Buyer will be in reliance on Rule 144A. In addition, the Buyer
will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned will notify
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
---------------------------------
Print Name of Buyer or Adviser
By:
------------------------------
Name:
Title:
IF AN ADVISER:
---------------------------------
Print Name of Buyer
Date:
----------------------------
J-9
<PAGE>
EXHIBIT K
FORM OF CLASS R CERTIFICATE TRANSFER AFFIDAVIT
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2000-CB4
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 Certificate (the "Certificate") issued pursuant
to the Pooling and Servicing Agreement, (the "Agreement"), relating to the
above-referenced Certificates, among Residential Asset Funding Corporation, as
depositor, Credit-Based Asset Servicing and Securitization LLC, as seller,
Litton Loan Servicing LP, as servicer, and The Chase Manhattan Bank, as trustee
(the "Trustee"). Capitalized terms used, but not defined herein shall have the
meanings ascribed to such terms in the Agreement. The Transferee has authorized
the undersigned to make this affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of the date of the
Transfer, a Permitted Transferee. The Transferee is acquiring its Ownership
Interest in the Certificate either (i) for its own account or (ii) as nominee,
trustee or agent for another Person and has attached hereto an affidavit from
such Person in substantially the same form as this affidavit. The Transferee has
no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a tax will be
imposed on Transfers of the Certificate to Persons that are not Permitted
Transferees; (ii) such tax will be imposed on the transferor, or, if such
Transfer is through an agent (which includes a broker, nominee or middleman) for
a Person that is not a Permitted Transferee, on the agent; and (iii) the Person
otherwise liable for the tax shall be relieved of liability for the tax if the
subsequent Transferee furnished to such Person an affidavit that such subsequent
Transferee is a Permitted Transferee and, at the time of Transfer, such Person
does not have actual knowledge that the affidavit is false.
4. The Transferee has been advised of, and understands that a tax will be
imposed on a "pass-through entity" holding the Certificate if at any time during
the taxable year of the pass-through entity a Person that is not a Permitted
Transferee is the record holder of an interest in such entity. The Transferee
understands that 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
K-1
<PAGE>
may be provided in Treasury Regulations, persons holding interests in
pass-through entities as a nominee for another Person.)
5. The Transferee has reviewed the provisions of Section 5.02(d) of the
Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(d) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any Person to whom
the Transferee attempts to Transfer its Ownership Interest in the Certificate,
and in connection with any Transfer by a Person for whom the Transferee is
acting as nominee, trustee or agent, and the Transferee will not Transfer its
Ownership Interest or cause any Ownership Interest to be Transferred to any
Person that the Transferee knows is not a Permitted Transferee. In connection
with any such Transfer by the Transferee, the Transferee agrees to deliver to
the Trustee a certificate substantially in the form set forth in this Exhibit K
to the Agreement (a "Transferor Certificate") to the effect that such Transferee
has no actual knowledge that the Person to which the Transfer is to be made is
not a Permitted Transferee.
7. The Transferee does not have the intention to impede the assessment or
collection of any tax legally required to be paid with respect to the
Certificate.
8. The Transferee's taxpayer identification number is ________.
9. The Transferee is a U.S. Person as defined in Code Section 7701(a)(30).
10. The Transferee is aware that the Certificate may be a "noneconomic residual
interest" within the meaning of 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.
11. 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.
K-2
<PAGE>
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
<PAGE>
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Residential Asset Funding Corporation
One First Union Center, TW9
Charlotte, NC 28288-0610
Re: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2000-CB4
---------------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2000-CB4 (the "Certificates"), we certify that (a) we
understand that the Certificates have not been registered under the Securities
Act of 1933, as amended (the "Act"), and are being disposed by us in a
transaction that is exempt from the registration requirements of the Act, (b) we
have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act, (c) to
the extent we are disposing of a Class [ ] Certificate, we have no knowledge the
Transferee is not a Permitted Transferee and (d) no purpose of the proposed
disposition of a Class [ ] Certificate is to impede the assessment or collection
of tax.
Very truly yours,
[ ]
----------------------------
By:
-----------------------------
L-1
<PAGE>
EXHIBIT M
[RESERVED]
M-1
<PAGE>
EXHIBIT N
DEPOSITORY AGREEMENT
[On File With Dewey Ballantine LLP]
N-1
<PAGE>
EXHIBIT O
FORM OF SERVICER REQUEST FOR REIMBURSEMENT
O-1
<PAGE>
EXHIBIT P
MONTHLY INFORMATION DELIVERED BY SERVICER
1. With respect to the Mortgage Pool and each Loan Group, the
number and Principal Balances of all Mortgage Loans which were the subject of
Principal Prepayments during the related Due Period.
2. With respect to the Mortgage Pool and each Loan Group, the
amount of all curtailments which were received during the related Due Period.
3. With respect to the Mortgage Pool and each Loan Group, the
aggregate amount of principal portion of all Monthly Payments received during
the related Due Period.
4. With respect to the Mortgage Pool and each Loan Group, the
amount of interest received on the Mortgage Loans during the related Due Period.
5. With respect to the Mortgage Pool and each Loan Group, the
aggregate amount of the Advances made and recovered with respect to such
Distribution Date.
6. With respect to the Mortgage Pool and each Loan Group, the
delinquency and foreclosure information and the amount of Mortgage Loan Losses
during the related Due Period.
7. With respect to the Mortgage Pool and each Loan Group, 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 Due Period
preceding of the related Accrual Period.
8. The Servicing Fees paid and Servicing Fees accrued during
the related Due Period.
9. The amount of all payments or reimbursements to the
Servicer paid or to be paid since the prior Distribution Date (or in the case of
the first Distribution Date, since the Closing Date).
10. The Pool Balance and aggregate Principal Balance for each
Loan Group.
11. The PMI Fees paid and PMI Fees accrued during the related
Due Period.
12. With respect to the Mortgage Pool and each Loan Group, the
number of Mortgage Loans outstanding at the beginning and at the end of the
related Due Period.
P-1
<PAGE>
13. The aggregate interest accrued on the Mortgage Loans at
their respective Mortgage Interest Rates for the
related Due Period.
14. 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.
15. The aggregate Realized Losses since the Cut-off Date as of
the end of the related Due Period.
16. The LIBOR Carryover Amount for the Class A-IA and Class
A-1F Certificates, if any, with respect to such Distribution Date.
17. The Overcollateralized Amount, the Targeted
Overcollateralization Amount and any Overcollateralization Deficiency, in each
case after giving effect to distributions on such Distribution Date.
P-2
<PAGE>
EXHIBIT Q
[RESERVED]
Q-1
<PAGE>
EXHIBIT R
FORM OF NOTICE OF PREPAYMENT PREMIUM INCONSISTENCY
________________, 20__
Credit-Based Asset Servicing and Securitization LLC
335 Madison Avenue, 19th Floor
New York, New York 10017
Re: Pooling and Servicing Agreement (the "Agreement") dated as of
November 1, 2000, among Residential Asset Funding Corporation,
Credit-Based Asset Servicing and Securitization LLC, Litton Loan
Servicing LP and The Chase Manhattan Bank-- C-BASS Mortgage Loan Asset
Backed Certificates, Series 2000-CB4
Ladies and Gentlemen:
Pursuant to Section 3.01 of the Agreement, we have determined the following
inconsistency between the amount of the Prepayment Premium remitted by the
Servicer and the amount of the Prepayment Premium set forth in the Mortgage Loan
Schedule with respect to Mortgage Loan No. _____________:
THE CHASE MANHATTAN BANK
as Trustee
By:
-------------------------
Name:
-----------------------
Title:
----------------------
R-1
<PAGE>
EXHIBIT S
OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS
Officer's Certificate
C-BASS Mortgage Loan Asset-Backed Certificates, Series 2000-CB4
Date
Via Facsimile
The Chase Manhattan Bank, Trustee
450 West 33rd Street
14th Floor
New York, NY 10001
Re: Pre-Payments
Dear Sir or Madam:
________________hereby certifies that he/she is an officer of the Servicer,
holding the office set forth beneath his/her name and hereby further certifies
as follows:
With respect to the Mortgage Loans set forth in the attached schedule:
1. A Principal Prepayment in full was received during the related Collection
Period;
2. Any prepayment penalty due under the terms of the Mortgage Note with
respect to such Principal Prepayment in full was received from the
mortgagor and deposited in the Collection Account; __________Yes ________
No
3. As to each Mortgage Loan so noted on the attached schedule, all or part of
the prepayment penalty required in connection with the Principal Prepayment
in full was waived based upon (Circle one): (i) the Servicer's
determination that such waiver would maximize recovery of Liquidation
Proceeds for such Mortgage Loan, taking into account the value of such
prepayment penalty, or (ii) (A) the enforceability thereof be limited (1)
by bankruptcy insolvency, moratorium, receivership, or other similar law
relating to creditors' rights generally or (2) due to acceleration in
connection with a foreclosure or other involuntary payment, or (B) the
enforceability is otherwise limited or prohibited by applicable law;
4. We certify that all amounts due in connection with the waiver of a
prepayment penalty inconsistent with number 3 above which are required to
be deposited by the Servicer pursuant to Section 3.01 of the Pooling and
Servicing Agreement, have been or will be so deposited.
Capitalized terms used herein shall have the meanings ascribed to such terms in
the Pooling and Servicing Agreement, dated November 1, 2000, among Residential
Asset
S-1
<PAGE>
Funding Corporation, as depositor, Credit-Based Asset Servicing, and
Securitization LLC, as seller, Litton Loan Servicing LP, as servicer, and The
Chase Manhattan Bank, as trustee.
By: LITTON LOAN SERVICING LP
-------------------------------
Name:
Title:
S-2
