_________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
September 15, 2000
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Prudential Securities Secured Financing Corporation
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(Exact Name of Registrant as Specified in its Charter)
Delaware 333-37256 13-3526694
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
One New York Plaza
New York, New York 10292
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(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code: (212) 778-1000
No Change
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(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events.
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On September 15, 2000, in connection with the offering of C-BASS
Mortgage Loan Asset-Backed Certificates, Series 2000-CB3, the 2000-CB3 Trust
issued the Class A-1F, Class A-2F, Class A-1A, Class M-1, Class M-2 and Class
B Certificates pursuant to a Prospectus dated August 10, 2000 and a Prospectus
Supplement dated September 13, 2000. The Trust was created pursuant to a
Pooling and Servicing Agreement, dated as of August 1, 2000, by and among
Prudential Securities Secured Financing 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, and
attached hereto as Exhibit 99.1.
Item 7. Financial Statements; Pro Forma Financial Information
and Exhibits.
-----------------------------------------------------------
(a) Not applicable.
(b) Not applicable.
(c) Exhibits:
99.1 Pooling and Servicing Agreement dated as of
August 1, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION
By: /s/ Peter Cerwin
----------------------
Name: Peter Cerwin
Title: Vice President
Dated: October 18, 2000
EXHIBIT INDEX
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Exhibit No. Description
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99.1 Pooling and Servicing Agreement.
<PAGE>
EXHIBIT 99.1
EXECUTION COPY
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PRUDENTIAL SECURITIES SECURED FINANCING 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 August 1, 2000
2000-CB3 Trust
C-BASS Mortgage Loan Asset-Backed Certificates, Series 2000-CB3
------------------------------
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
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Article I
DEFINITIONS
<S> <C> <C>
Section 1.01. Defined Terms...............................................................................4
Section 1.02. Accounting.................................................................................40
Article II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans...............................................................41
Section 2.02. Acceptance by Trustee......................................................................43
Section 2.03. Repurchase or Substitution of Mortgage Loans by the Seller.................................45
Section 2.04. Representations and Warranties of the Seller with Respect to the Mortgage Loans............47
Section 2.05. Representations, Warranties and Covenants of the Servicer..................................48
Section 2.06. Representations and Warranties of the Depositor............................................50
Section 2.07. Issuance of Certificates and the Uncertificated Regular Interests..........................52
Section 2.08. Representations and Warranties of the Seller...............................................52
Section 2.09. Covenants of the Seller....................................................................54
Article III
ADMINISTRATION AND SERVICING OF THE TRUST FUND
Section 3.01. Servicer to Act as Servicer................................................................54
Section 3.02. Collection of Mortgage Loan Payments.......................................................56
Section 3.03. Realization Upon Defaulted Mortgage Loans..................................................57
Section 3.04. Collection Account and Distribution Account................................................58
Section 3.05. Permitted Withdrawals From the Collection Account..........................................60
Section 3.06. Establishment of Escrow Accounts; Deposits in Escrow Accounts..............................61
Section 3.07. Permitted Withdrawals From Escrow Account..................................................61
Section 3.08. Payment of Taxes, Insurance and Other Charges; Collections Thereunder......................62
Section 3.09. Transfer of Accounts.......................................................................63
Section 3.10. Maintenance of Hazard Insurance............................................................63
Section 3.11. Maintenance of Mortgage Impairment Insurance Policy........................................64
Section 3.12. Fidelity Bond, Errors and Omissions Insurance..............................................64
Section 3.13. Title, Management and Disposition of REO Property..........................................65
Section 3.14. Due-on-Sale Clauses; Assumption and Substitution Agreements................................67
Section 3.15. Notification of Adjustments................................................................68
Section 3.16. Optional and Mandatory Purchases of Mortgage Loans by Seller...............................68
Section 3.17. Trustee to Cooperate; Release of Files.....................................................69
Section 3.18. Servicing Compensation.....................................................................70
Section 3.19. Annual Statement as to Compliance..........................................................70
Section 3.20. Annual Independent Certified Public Accountants' Reports...................................71
Section 3.21. Access to Certain Documentation and Information Regarding the Mortgage Loans...............71
Section 3.22. Reserved...................................................................................72
Section 3.23. Obligations of the Servicer in Respect of Compensating Interest............................72
Section 3.24. Obligations of the Servicer in Respect of Mortgage Interest Rates and Monthly
Payments...................................................................................72
Section 3.25. Investment of Funds in the Collection Account and the Distribution Account.................72
Section 3.26. Liability of Servicer; Indemnification.....................................................73
Section 3.27. Reports of Foreclosure and Abandonment of Mortgaged Properties.............................74
Section 3.28. Protection of Assets.......................................................................75
Article IV
FLOW OF FUNDS
Section 4.01. Interest Distributions.....................................................................75
Section 4.02. Distributions of Principal and Monthly Excess Cashflow Amounts.............................76
Section 4.03. Allocation of Losses.......................................................................79
Section 4.04. Method of Distribution.....................................................................80
Section 4.05. Distributions on Book-Entry Certificates...................................................80
Section 4.06. Statements.................................................................................80
Section 4.07. Remittance Reports; Advances...............................................................83
Section 4.08. Class N Reserve Fund.......................................................................85
Section 4.09. HLTV Reserve Account.......................................................................85
Section 4.10 Excess Reserve Fund Account................................................................86
Article V
THE CERTIFICATES
Section 5.01. The Certificates...........................................................................87
Section 5.02. Registration of Transfer and Exchange of Certificates......................................88
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates..........................................92
Section 5.04. Persons Deemed Owners......................................................................93
Section 5.05. Appointment of Paying Agent................................................................93
Article VI
THE SELLER, THE SERVICER AND THE DEPOSITOR
Section 6.01. Liability of the Seller, the Servicer and the Depositor....................................94
Section 6.02. Merger or Consolidation of, or Assumption of the Obligations of, the Seller, the
Servicer or the Depositor..................................................................94
Section 6.03. Limitation on Liability of the Servicer and Others.........................................94
Section 6.04. Servicer Not to Resign.....................................................................95
Section 6.05. Delegation of Duties.......................................................................95
Article VII
DEFAULT
Section 7.01. Servicer Events of Termination.............................................................96
Section 7.02. Trustee to Act; Appointment of Successor...................................................98
Section 7.03. Waiver of Defaults.........................................................................99
Section 7.04. Notification to Certificateholders.........................................................99
Section 7.05. Survivability of Servicer Liabilities......................................................99
Article VIII
THE TRUSTEE
Section 8.01. Duties of Trustee.........................................................................100
Section 8.02. Certain Matters Affecting the Trustee.....................................................101
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans.....................................102
Section 8.04. Trustee May Own Certificates..............................................................103
Section 8.05. Seller to Pay Trustee Fees and Expenses...................................................103
Section 8.06. Eligibility Requirements for Trustee......................................................104
Section 8.07. Resignation or Removal of Trustee.........................................................104
Section 8.08. Successor Trustee.........................................................................105
Section 8.09. Merger or Consolidation of Trustee........................................................106
Section 8.10. Appointment of Co-Trustee or Separate Trustee.............................................106
Section 8.11. Limitation of Liability...................................................................107
Section 8.12. Trustee May Enforce Claims Without Possession of Certificates.............................107
Section 8.13. Suits for Enforcement.....................................................................108
Section 8.14. Waiver of Bond Requirement................................................................108
Section 8.15. Waiver of Inventory, Accounting and Appraisal Requirement.................................108
Section 8.16. Compliance with National Housing Act of 1934..............................................108
Article IX
REMIC AND GRANTOR TRUST ADMINISTRATION
Section 9.01. REMIC Administration......................................................................108
Section 9.02. Prohibited Transactions and Activities....................................................112
Section 9.03. Indemnification with Respect to Certain Taxes and Loss of REMIC Status....................112
Section 9.04. REO Property..............................................................................113
Section 9.05. Grantor Trust Administration..............................................................113
Article X
TERMINATION
Section 10.01. Termination...............................................................................114
Section 10.02. Additional Termination Requirements.......................................................115
Article XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment.................................................................................116
Section 11.02. Recordation of Agreement; Counterparts....................................................117
Section 11.03. Limitation on Rights of Certificateholders................................................118
Section 11.04. Governing Law; Jurisdiction...............................................................119
Section 11.05. Notices...................................................................................119
Section 11.06. Severability of Provisions................................................................119
Section 11.07. Article and Section References............................................................120
Section 11.08. Notice to the Rating Agencies.............................................................120
Section 11.09. Further Assurances........................................................................121
Section 11.10. Benefits of Agreement.....................................................................121
Section 11.11. Acts of Certificateholders................................................................121
</TABLE>
EXHIBITS:
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.........Form of Class B 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
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
<PAGE>
This Pooling and Servicing Agreement is dated as of August 1, 2000
(the "Agreement"), among PRUDENTIAL SECURITIES SECURED FINANCING 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
nine 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
Certificates, (vii) the Class N Certificates, (viii) the Class X Certificates,
and (ix) 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 X/N Interest and the Excess Reserve Fund Account) will consist of two
REMICs, the REMIC1 and the REMIC 2. The REMIC 1 will consist of all of the
assets constituting the Trust Fund (exclusive of the Class N Certificate 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 the REMIC 1) and the R-1 Interest as the single "residual
interest" in the REMIC 1. The Trustee will hold the REMIC 1 regular interests.
The REMIC 2 will consist of the REMIC Regular Interests and will be
evidenced by the Regular Certificates (which will represent the "regular
interests" in the REMIC 2) and the R-2 Interest as the single "residual
interest" in the 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 Interests (the "Subsidiary
REMIC Accretion Directed Classes"), which will be uncertificated and
non-transferable and are hereby designated as the "regular interests" in the
Subsidiary REMIC. The REMIC 1 Interests will have the following designations,
initial principal balances, pass-through rates, and Corresponding Classes of
REMIC 2 Certificates ("Corresponding Classes"):
<TABLE>
<CAPTION>
Class Initial Uncertificated Principal Uncertificated Corresponding Latest Possible
Designation Balance REMIC 1 Class Maturity Date
Pass-Through Rate
----------- -------------------------------- ----------------- ------------ ---------------
<S> <C> <C> <C> <C>
T1-Accrual (1/2 Mortgage Loan balance plus1/2 (1) N/A September 18, 2030
Overcollateralization Amount)
T1-A-1F 1/2 Corresponding REMIC 2 Class (1) A-1F July 25, 2015
balance
T1-A-2F 1/2 Corresponding REMIC 2 Class (1) A-2F March 25, 2034
balance
T1-A-1A 1/2 Corresponding REMIC 2 Class (1) A-1A March 25, 2030
balance
T1-M-1 1/2 Corresponding REMIC 2 Class (1) M-1 March 25, 2034
balance
T1-M-2 1/2 Corresponding REMIC 2 Class (1) M-2 March 25, 2034
balance
T1-B 1/2 Corresponding REMIC 2 Class (1) B March 25, 2034
balance
(1) Calculated pursuant to the definition of Weighted Average Net Mortgage Rate.
</TABLE>
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
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 Certificates 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 50% of 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:
<TABLE>
<CAPTION>
Original Class
Certificate Principal or
Class Notional Pass-Through Assumed Final
Designation Amount Rate Maturity Dates
<S> <C> <C> <C>
A-1F $36,000,000 7.675(1) July 25, 2015
A-2F $16,101,000 7.855%(2) March 25, 2034
A-1A $87,157,000 (3) March 25, 2030
M-1 $10,135,000 8.215%(4) March 25, 2034
M-2 $8,813,000 8.500%(5) March 25, 2034
B $8,813,000 8.500%(6) March 25, 2034
X/N $176,277,505(7) (7) March 25, 2034
Total $167,019,000(8) N/A N/A
</TABLE>
(1) 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, (ii) the Sub-Group F 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 lesser of: (i) the Class A-2F Pass-Through Rate, (ii)
the Sub-Group F 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 lesser of: (i) the Class A-1A Pass-Through Rate, (ii)
the Sub-Group A 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.
(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 Certificates at a rate equal to
the lesser of: (i) the Class B Pass-Through Rate and (ii) the Pool
Cap for such Distribution Date.
(7) 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 Amount on the Closing
Date, distributed as Overcollateralization Release Amounts as part of
the distribution of Monthly Excess Cashflow Amounts in conformity
with Section 4.02(b).
(8) 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-2F, Class M-1, Class M-2, Class B and Class N Certificates and
on the REMIC Regular Interests (other than the Class T4-A1F and 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-1F and Class A-1A Certificates
and on the Class T4-A1F and 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.
"Account": Any of the Collection Account, Excess Reserve Fund
Account, HLTV Reserve 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 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, HLTV
Account Allocation, 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 and
Class B Certificates shall be Book-Entry Certificates.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking institutions in the State of Delaware, the State of New York,
the State of 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 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, 0.31% per annum, and (ii) following
the Optional Termination Date, 0.62% 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 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 7.675% 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, 7.855% per annum and (ii) following
the Optional Termination Date, 8.355% 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-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) 58.00% and (ii) the Pool Balance as of the last day
of the related Collection Period and (B) the Pool Balance as of the last day
of the related Collection Period minus the product of (i) 0.50% and (ii) the
Pool Balance on the Cut-Off Date.
"Class B Applied Realized Loss Amount": As to the Class B
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 Certificate": Any one of the Certificates with a "B"
designated on the face thereof substantially in the form annexed hereto as
Exhibit B, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Trustee, representing the right to distributions as set
forth herein and therein.
"Class B Certificateholder": Any Holder of a Class B Certificate.
"Class B Pass-Through Rate": For each Distribution Date, 8.500%, per
annum.
"Class B Principal Distribution Amount": As of any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is not in effect,
the excess of (x) the sum of (i) the sum of the Certificate Principal Balances
of the Class A-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 (iv) the Certificate Principal Balance of the Class B Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 89.50% 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 Realized Loss Amortization Amount": As to the Class B
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xi) hereof, in each
case for such Distribution Date.
"Class B REMIC Pass-Through Rate": The lesser of the Class B
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 and the Class B Applied Realized Loss Amount, in
each case as of such Distribution Date.
"Class M-1 Pass-Through Rate": For each Distribution Date, 8.215% 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) 69.50% 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 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 related Applied
Realized Loss Amount as of such Distribution Date over (ii) the Class B
Applied Realized Loss Amount as of such Distribution Date.
"Class M-2 Pass-Through Rate": For each Distribution Date, 8.500% 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) 79.50% 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 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)(xvi) and (xviii).
"Class N Pass-Through Rate": For each Distribution Date, 11.805% per
annum.
"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-CB3 Trust, C-BASS
Mortgage Loan Asset-Backed Certificates, Series 2000-CB3, 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 Certificate 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)(xiii) 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.
"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": September 15, 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-CB3 Trust, C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2000-CB3", 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: Capital Markets Fiduciary
Services, C-BASS Series 2000-CB3, 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 August 1,
2000, among the Trustee, the Servicer and the Custodian, as the same may be
amended or supplemented pursuant to the terms thereof.
"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": August 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": Prudential Securities Secured Financing Corporation, a
Delaware corporation, or any successor in interest.
"Depository": The initial depository shall be The Depository Trust
Company, whose nominee is Cede & Co., or any other organization registered as
a "clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of
the Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.
"Depository Agreement": With respect to any Book-Entry Certificates,
the agreement among the Depositor, the Trustee and the initial Depository, to
be dated on or about the Closing Date.
"Depository Participant": A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date": With respect to any Distribution Date, the 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 Holders of 2000-CB3 Trust, C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2000-CB3" 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 September 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 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 N, Class X and
Class R Certificates and, until the effective date of a final exemption
amending the Underwriter's Exemption to read substantially in the form in
which it was proposed in 65 Fed. Reg. 51454 (August 23, 2000) and a
determination by the Depositor, in consultation with counsel, that the
Underwriter's Exemption, as amended, provides an exemption for the Class M-1,
Class M-2 and Class B Certificates, the Class M-1, Class M-2 and Class B
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-CB3, Class A-1A."
"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.
"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 REMIC 2 Regular Interests, the Class N Reserve Fund,
the right of the Offered Certificates to receive Rate Payments, the right of
the Class A-1A Certificates to receive Class A-1A LIBOR Carryover Amounts and
the obligation of the Class X/N Interest to pay such Rate Payments and Class
A-1A LIBOR Carryover Amounts.
"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 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 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.
"HLTV Account Allocation": For any Distribution Date, with respect to
each HLTV Loan which was liquidated during the related Prepayment Period, the
lesser of (i) the HLTV Initial Allocation and (ii) the HLTV Liquidation
Allocation.
"HLTV Initial Allocation": For each HLTV Loan, the dollar amount by
which the Cut-Off Date Principal Balance of such HLTV Loan exceeded the Value
of the related Mortgaged Property, as of the Cut-Off Date, as specified on the
HLTV Loan Schedule or such amount computed in accordance with Section 4.09
hereof.
"HLTV Liquidation Allocation": For each liquidated HLTV Loan, the
excess, if any, of the related Principal Balance of such HLTV Loan as of the
date of liquidation over the related Net Liquidation Proceeds, as determined
by the Servicer and indicated on the Remittance Report.
"HLTV Loan": Any Conventional Mortgage Loan with a Combined
Loan-to-Value Ratio in excess of 100%, as of the Cut-Off Date and as indicated
on the HLTV Loan Schedule.
"HLTV Loan Schedule": At any date, the list of HLTV Loans included in
the Trust Fund on such date, identifying each HLTV Loan and the related HLTV
Initial Allocation.
"HLTV Reserve Account": As defined in Section 4.09 hereof.
"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 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": $9,258,505.
"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 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 September 24, 2000).
"Interest Carry Forward Amount": For any Class of Certificates (other
than the Class X 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, and Class B 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 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 September
2034.
"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 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.
"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 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 August 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;
(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;
(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.
"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 and Class B Certificates.
"Officers' Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the 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 $9,330,000.00.
"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 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 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.
"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;
(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.
"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 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
September 13, 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 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 and
the Class B 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.
"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 and Class T1-B 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 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 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
20% 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 May 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 April 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 March 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 September, 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 October, 2000 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
November, 2000 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 December, 2000 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 January, 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 February 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.
"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.
"Senior Specified Enhancement Percentage": On any date of
determination thereof, 42.00%.
"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 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 September 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 1A Mortgage Loan": A Mortgage Loan in 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.
"Sub-group 1B Mortgage Loan": A Mortgage Loan in Sub-group 1B.
"Sub-group A 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.
"Sub-group F 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).
"Subordinated Certificates": The Class M-1, Class M-2, Class B, 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, 5.25% of the initial Pool Balance and (y) on
and after the Stepdown Date, the lesser of (i) 5.25% of the initial Pool
Balance and (ii) the greater of (A) 10.50% of the Pool Balance as of the last
day of the related Collection Period and (B) 0.50% of the initial Pool
Balance.
"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:
Distribution Date Occurring In Percentage
September 2003 through August 2004 2.75%
September 2004 through August 2005 3.50%
September 2005 through August 2006 4.00%
September 2006 and thereafter 4.50%
"Trust": 2000-CB3 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 (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 and the
HLTV Reserve Account.
"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": Prudential Securities, Inc. and First Union
Securities, 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, 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.
"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.
"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 August 1, 2000, among
Credit-Based Asset Servicing and Securitization LLC,
Prudential Securities Secured Financing Corporation, Litton
Loan Servicing LP and The Chase Manhattan Bank, C-BASS
Mortgage Loan Asset-Backed Certificates, Series 2000-CB3,
without recourse", or with respect to any lost Mortgage
Note, an original Lost Note Affidavit, together with a copy
of the related Mortgage Note;
(ii) the original Mortgage with evidence of recording
thereon, and the original recorded power of attorney, if the
Mortgage was executed pursuant to a power of attorney, with
evidence of recording thereon or, if such Mortgage or power
of attorney has been submitted for recording but has not
been returned from the applicable public recording office,
has been lost or is not otherwise available, a copy of such
Mortgage or power of attorney, as the case may be, certified
to be a true and complete copy of the original submitted for
recording;
(iii) an original Assignment of Mortgage, in form and
substance acceptable for recording. The Mortgage shall be
assigned either (A) in blank or (B) to "The Chase Manhattan
Bank, as Trustee under the Pooling and Servicing Agreement,
dated as of August 1, 2000, among Credit-Based Asset
Servicing and Securitization LLC, Prudential Securities
Secured Financing Corporation, Litton Loan Servicing LP and
The Chase Manhattan Bank, C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2000-CB3, 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 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 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 August 1, 2000, among
Credit-Based Asset and Securitization LLC, Prudential Securities Secured
Financing Corporation, Litton Loan Servicing LP and The Chase Manhattan Bank,
C-BASS Mortgage Loan Asset-Backed Certificates, Series 2000-CB3, 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 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 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 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 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.
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;
(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 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;
(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 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 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 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 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 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 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 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 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;
(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 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 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.
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 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.
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 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
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 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 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.
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 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 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
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 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.
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 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).
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 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) 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;
(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 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date; and
(vii) the amount, if any, of the Interest Remittance Amount
remaining after application with respect to the priorities set forth
above will be applied as described under Section 4.02(b) hereof.
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;
(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 Certificates, 100% of the
remaining Principal Distribution Amount, until the Certificate
Principal Balance of the Class B Certificates has been reduced
to zero; and
(E) any amount of the Principal Distribution Amount
remaining after making all of the distributions in clauses (A),
(B), (C) and (D) 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;
(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
Principal Distribution Amount will be distributed to the Class B
Certificates, until the Certificate Principal Balance thereof
has been reduced to zero; and
(E) any amount of the Principal Distribution Amount
remaining after making all of the distributions in clauses (A),
(B), (C) and (D) 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;
(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 Certificates;
(xi) to pay the remaining Class B Interest Carry Forward Amount,
if any;
(xii) to pay the Class B Realized Loss Amortization Amount for
such Distribution Date;
(xiii) 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;
(xiv) to the Excess Reserve Fund Account, an amount equal to the
Required Excess Reserve Fund Deposit;
(xv) 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;
(xvi) 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;
(xvii) to the Class N Reserve Fund, the required Class N Reserve
Fund Deposit;
(xviii) 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
(xix) 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)-(xix) 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)(xviii)
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)-(vi) 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)(xiii) 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)(xvi) and (xviii), to the Class N Reserve Fund pursuant to
Section 4.02(b)(xvii) and to the Class X Certificates pursuant to Section
4.02(b)(xix) 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, Class M-2, Class M-1 and the Senior Certificates, in 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;
(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;
(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;
(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) the amount of any transfers from the HLTV Reserve
Account and the amount remaining on deposit in the HLTV Reserve
Account (with respect to each Loan Group) after giving effect to any
such transfers;
(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 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 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)(xvi)
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 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. HLTV Reserve Account.
(a) The Trustee, on behalf of the Certificateholders, shall establish
and maintain an "HLTV Reserve Account" held in trust by the Trustee in its
name. The HLTV Reserve 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. The HLTV Reserve Account will
not be an asset of the Trust Fund or any REMIC and shall be an "outside
reserve fund" within the meaning of the REMIC Provisions that is beneficially
owned by the Seller for federal income tax purposes. Holders of the
Certificates will be entitled to receive payments from the HLTV Reserve
Account to the extent of amounts on deposit therein in an amount equal to any
required HLTV Account Allocation.
(b) On the Closing Date, an amount equal to the aggregate of the HLTV
Initial Allocations for each HLTV Loan will be deposited to the HLTV Reserve
Account by the Seller. Thereafter, upon the liquidation of each HLTV Loan, an
amount equal to the related HLTV Account Allocation will be transferred on
each Distribution Date to the Distribution Account as a portion of Available
Funds for the related Loan Group.
(c) On each Distribution Date, (i) with respect to any HLTV Loan
which was liquidated during the related Prepayment Period, (A) the related
HLTV Account Allocation shall be transferred to the Distribution Account as a
portion of Available Funds for the related Loan Group and (B) the excess, if
any, of the related HLTV Initial Allocation over such HLTV Account Allocation
shall be released to the Seller, (ii) with respect to any HLTV Loan which was
paid in full by the related mortgagor during the related Prepayment Period,
any related HLTV Initial Allocation shall be released to the Seller, (iii)
with respect to any HLTV Loan for which the related Mortgaged Property was
re-appraised (by an independent appraiser) at a higher value than the Value as
of the Closing Date during the related Prepayment Period, (A) the HLTV Initial
Allocation shall be recomputed for such HLTV Loan, where the Value shall be
based on such new appraisal and the Principal Balance of such HLTV Loan shall
be as of the date of such re-appraisal and (B) the excess of the original HLTV
Initial Allocation over the recomputed HLTV Initial Allocation shall be
remitted to the Seller and (iv) with respect to any HLTV Loan which amortized
during the related Prepayment Period to have a Combined Loan-to-Value Ratio of
100% or less, any related HLTV Initial Allocation shall be released to the
Seller.
(d) Funds in the HLTV Reserve Account may be invested in Permitted
Investments by the Trustee at the direction of the Seller. On each
Distribution Date, any earnings on such amounts shall be distributed to the
Seller and any losses shall be reimbursed by the Seller. The Seller, which
shall be taxable thereon, 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 HLTV Reserve Account shall be invested by the
Trustee in The Chase Manhattan Bank Vista Money Market Fund. Upon termination
of the Trust Fund, any amounts remaining in the HLTV Reserve Account shall be
distributed to the Seller.
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)(xiv). 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 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, 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 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.
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 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 or (iii) (except in the case of a Class R, Class X or Class N
Certificate) in the case of any such ERISA-Restricted Certificate presented
for registration in the name of an employee benefit plan subject to ERISA or a
plan or arrangement subject to Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a trustee of any such plan or any
other person acting on behalf of any such plan or arrangement or using such
plan's or arrangement's assets, an Opinion of Counsel satisfactory to the
Trustee which Opinion of Counsel shall not be an expense of either the Trustee
or the Trust, addressed to the Trustee, to the effect that the purchase or
holding of such ERISA-Restricted Certificate will not result in the assets of
the Trust being deemed to be "plan assets" and subject to the prohibited
transaction provisions of ERISA and the Code and will not subject the Trustee
to any obligation in addition to those expressly undertaken in this Agreement
or to any liability. For purposes of clause (i) of the preceding sentence,
such representation shall be deemed to have been made to the 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 without the delivery to
the Trustee of an Opinion of Counsel satisfactory to the Trustee as described
above 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.
(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 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 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.
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 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 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
(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:
Distribution Date Occurring In Percentage
September 2000 through August 2004 2.75%
September 2004 through August 2005 3.50%
September 2005 through August 2006 4.00%
September 2006 and thereafter 4.50%
(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 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 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.
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 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 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
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 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 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 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 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
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
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.
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.
(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.
(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 and Class B 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 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 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 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 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 REMIC 2 Regular Interests, the Class N Reserve Fund, the right of the
Offered Certificates to receive Rate Payments, the right of the Class A-1A
Certificates to receive Class A-1A LIBOR Carryover Amounts and the obligation
of the Class X/N Interest to pay such Rate Payments and Class A-1A LIBOR
Carryover Amounts shall be treated as a "grantor trust" under the Code, and
the provisions hereof shall be interpreted consistently with this intention.
In furtherance of such intention, the Trustee shall furnish or cause to be
furnished (i) to the Holders of the Offered Certificates and (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.
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 October 2033.
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 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;
(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 and Class B Certificates, the related Certificate Principal
Balance, as applicable, plus one month's interest thereon at the
applicable Pass-Through Rate, (B) to the Class 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 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, 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.
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-CB3, 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, Prudential Securities Secured
Financing Corporation, One New York Plaza, 14th Floor, New York, New York
10292, Attention: C-BASS Mortgage Loan Asset-Backed Certificates, Series
2000-CB3, 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.
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.
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., State Street Plaza, New York, New York 10004, Attention: Michael Nelson;
Standard & Poor's Ratings Services, 55 Water Street, New York, New York 10041,
Attention: Sharvin Setoodeh; 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 thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Trustee or
the Trust in reliance thereon, whether or not notation of such action is made
upon such Certificate.
IN WITNESS WHEREOF, the 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.
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION, as Depositor
By:_______________________________
Name: Peter Cerwin
Title: Vice President
CREDIT-BASED ASSET SERVICING AND
SECURITIZATION LLC, as Seller
By:_______________________________
Name:
Title:
LITTON LOAN SERVICING LP, as Servicer
By:_______________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as
Trustee
By:_______________________________
Name:
Title:
<PAGE>
STATE OF )
)ss.:
COUNTY OF )
On the 15th day of September, 2000 before me, a notary public in and
for said State, personally appeared Peter Cerwin known to me to be a Vice
President of Prudential Securities Secured Financing Corporation, a Delaware
corporation that executed the within instrument, and also known to me to be
the person who executed it on behalf of said corporation, and acknowledged to
me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
<PAGE>
STATE OF )
)ss.:
COUNTY OF )
On the 15th day of September, 2000 before me, a notary public in and
for said State, personally appeared ______________ known to me to be a
_______________________ 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
<PAGE>
STATE OF )
)ss.:
COUNTY OF )
On the 15th day of September, 2000 before me, a notary public in and
for said State, personally appeared _________________, known to me to be
______________________ 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
<PAGE>
STATE OF )
)ss.:
COUNTY OF )
On the 15th day of September, 2000 before me, a notary public in and
for said State, personally appeared _______________, known to me to be a
__________________________________________ of Litton Loan Servicing LP, a
_______________ 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
<PAGE>
EXHIBITS TO POOLING AND SERVICING AGREEMENT,
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2000-CB3
<PAGE>
EXHIBIT A-1
FORM OF CLASS A-1F CERTIFICATES
MORTGAGE LOAN ASSET BACKED CERTIFICATES
SERIES 2000-CB3, CLASS A-1F
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS 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 (THE "CODE").
<TABLE>
<CAPTION>
<S> <C>
Series 2000-CB3, Class A-1F Class Certificate Balance of the Class A-1F
Certificates as of the Issue Date:
Pass-Through Rate: 7.675% $ [___________]
Date of Pooling and Servicing Agreement Denomination: $ [__________]
and Cut-off Date:August 1, 2000
Servicer: Litton Loan Servicing LP
First Distribution Date: September 25, 2000
Trustee: The Chase Manhattan Bank
No. [__]
Issue Date: [_________, 20__]
CUSIP: [12489WCH5]
</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 BELOW.
MORTGAGE LOAN ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional one- to four-family first
mortgage loans formed and sold by
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION, THE SERVICER,
THE SELLER, THE TRUSTEE OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the Class Certificate 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"), by and among Prudential
Securities Secured Financing Corporation (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Servicer,
the Seller 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 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 Pass-Through Rate on the Class A-1F Certificates on each
Distribution Date after the first Distribution Date will be a rate per annum
equal to the lesser of (i) the Class A-1F Pass-Through Rate, (ii) the Class
A-1F Net Funds Cap and (iii) the Pool Cap for such Distribution Date.
This Certificate is one of a duly authorized issue of
Certificates designated as 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 Seller, the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Servicer, the Seller and the Trustee with the consent of the
Holders of Certificates entitled to the Voting Rights identified in the
agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the Holders of any of
the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for
registration of transfer at the offices or agencies appointed by the Trustee
as provided in the Agreement, duly endorsed by, or accompanied by an
assignment in the form below or other written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by,
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the
same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the 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 Seller, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Servicer, the
Seller, 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 Seller, the Trustee, the Certificate
Registrar nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party
designated in the Agreement at a price determined as provided in the Agreement
from the Trust Fund of all Mortgage Loans and all property acquired in respect
of such Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price
determined as provided in the Agreement. The exercise of such right will
effect early retirement of the Certificates; however, such right to purchase
is subject to the aggregate Principal Balance of the Mortgage Loans at the
time of purchase being 10% or less of the Cut-off Date Aggregate Principal
Balance.
The recitals contained herein shall be taken as statements
of the Depositor and the Trustee assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate
to be duly executed.
Dated: [_______________, 20__]
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: [______________, 20__]
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:
<TABLE>
<CAPTION>
<S> <C>
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 _________________
if survivorship and not as (State)
tenants in common
</TABLE>
Additional abbreviations may also be used though not in the
above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto ________________________________________
________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee)_____________________________
________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within Asset-Backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a
new Certificate of a like Percentage Interest and Class to the above named
assignee and deliver such Certificate to the following address:
________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise,
in immediately available funds to ______________________________________
________________________________________________________________________
for the account of __________________________, account number ______________,
or, if mailed by check, to __________________________________________________
________________________________________________________________________.
Applicable statements should be mailed to _______________________________
This information is provided by _________________________________________,
the assignee named above, or ________________________________________, as
its agent.
<PAGE>
EXHIBIT A-2
FORM OF CLASS A-2F CERTIFICATES
MORTGAGE LOAN ASSET BACKED CERTIFICATES
SERIES 2000-CB3, CLASS A-2F
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS 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 (THE "CODE").
<TABLE>
<CAPTION>
<S> <C>
Series 2000-CB3, Class A-2F Class Certificate Balance of the Class A-1F
Certificates as of the Issue Date:
Pass-Through Rate: 7.855% $[_______________]
Date of Pooling and Servicing Agreement and Cut-off Date: Denomination: $[_____________]
August 1, 2000
Servicer: Litton Loan Servicing LP
First Distribution Date: September 25, 2000
Trustee: The Chase Manhattan Bank
No. [__]
Issue Date: [___________, 20__]
CUSIP: [12489WCJ1]
</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 BELOW.
MORTGAGE LOAN ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional one- to four-family first
mortgage loans formed and sold by
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION, THE SERVICER,
THE SELLER, THE TRUSTEE OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the Class Certificate 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"), by and among Prudential
Securities Secured Financing Corporation (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Servicer,
the Seller 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-2F Certificates on such Distribution
Date pursuant to the Agreement provided, however, that if any Class A-2F
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-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, 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 Pass-Through Rate on the Class A-2F Certificates on each
Distribution Date after the first Distribution Date will be a rate per annum
equal to the lesser of (i) the Class A-2F Pass-Through Rate, (ii) the Class
A-2F Net Funds Cap and (iii) the Pool Cap for such Distribution Date.
This Certificate is one of a duly authorized issue of
Certificates designated as 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 Seller, the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Servicer, the Seller and the Trustee with the consent of the
Holders of Certificates entitled to the Voting Rights identified in the
agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the Holders of any of
the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for
registration of transfer at the offices or agencies appointed by the Trustee
as provided in the Agreement, duly endorsed by, or accompanied by an
assignment in the form below or other written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by,
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the
same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the 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 Seller, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Servicer, the
Seller, 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 Seller, the Trustee, the Certificate
Registrar nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party
designated in the Agreement at a price determined as provided in the Agreement
from the Trust Fund of all Mortgage Loans and all property acquired in respect
of such Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price
determined as provided in the Agreement. The exercise of such right will
effect early retirement of the Certificates; however, such right to purchase
is subject to the aggregate Principal Balance of the Mortgage Loans at the
time of purchase being 10% or less of the Cut-off Date Aggregate Principal
Balance.
The recitals contained herein shall be taken as statements
of the Depositor and the Trustee assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate
to be duly executed.
Dated: [____________, 20__]
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: [____________, 20__]
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:
<TABLE>
<CAPTION>
<S> <C>
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 _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the
above list.
</TABLE>
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto ______________________________________
_____________________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) _________________________
_____________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within Asset-Backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a
new Certificate of a like Percentage Interest and Class to the above named
assignee and deliver such Certificate to the following address:
_____________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise,
in immediately available funds to ___________________________________________
_____________________________________________________________________________
for the account of _____________________, account number ___________________,
or, if mailed by check, to _________________________________________________.
Applicable statements should be mailed to ___________________________________
This information is provided by ____________________________________________,
the assignee named above, or ________________________________________, as
its agent.
<PAGE>
EXHIBIT A-3
FORM OF CLASS A-1A CERTIFICATES
MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2000-CB3, CLASS A-1A
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS 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 (THE "CODE").
<TABLE>
<CAPTION>
<S> <C>
Series 2000-CB3, Class A-1A Class Certificate Balance of the Class A-1A
Certificates as of the Issue Date:
Pass-Through Rate: Variable [$____________]
Date of Pooling and Servicing Agreement and Cut-off Date: Denomination: [$_____________]
August 1, 2000
Servicer: Litton Loan Servicing LP
First Distribution Date: September 25, 2000
Trustee: The Chase Manhattan Bank
No. [__]
Issue Date: [___________, 20__]
CUSIP: [12489WCK8]
</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 BELOW.
MORTGAGE LOAN ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional one- to four-family first
mortgage loans formed and sold by
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION, THE SERVICER,
THE SELLER, THE TRUSTEE OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the Class Certificate 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"), by and among Prudential
Securities Secured Financing Corporation (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Servicer,
the Seller 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 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 Pass-Through Rate on the Class A-1A Certificates on each
Distribution Date after the first Distribution Date will be a rate per annum
equal to the lesser of (i) One-Month LIBOR plus the Class A-1A Certificate
Margin and (ii) the Class A-1A Net Funds Cap and (iii) the Pool Cap for such
Distribution Date.
This Certificate is one of a duly authorized issue of
Certificates designated as 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 Seller, the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Servicer, the Seller and the Trustee with the consent of the
Holders of Certificates entitled to the Voting Rights identified in the
agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the Holders of any of
the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for
registration of transfer at the offices or agencies appointed by the Trustee
as provided in the Agreement, duly endorsed by, or accompanied by an
assignment in the form below or other written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by,
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the
same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the 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 Seller, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Servicer, the
Seller, 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 Seller, the Trustee, the Certificate
Registrar nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party
designated in the Agreement at a price determined as provided in the Agreement
from the Trust Fund of all Mortgage Loans and all property acquired in respect
of such Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price
determined as provided in the Agreement. The exercise of such right will
effect early retirement of the Certificates; however, such right to purchase
is subject to the aggregate Principal Balance of the Mortgage Loans at the
time of purchase being 10% or less of the Cut-off Date Aggregate Principal
Balance.
The recitals contained herein shall be taken as statements
of the Depositor and the Trustee assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate
to be duly executed.
Dated: [___________, 20__]
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: [_____________, 20__]
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:
<TABLE>
<CAPTION>
<S> <C>
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 _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the
above list.
</TABLE>
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto __________________________________________
_________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) a Percentage Interest equal to
____% evidenced by the within Asset-Backed Certificate and hereby authorize(s)
the registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a
new Certificate of a like Percentage Interest and Class to the above named
assignee and deliver such Certificate to the following address:
____________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise,
in immediately available funds to ___________________________________________
for the account of _____________________, account number ___________________,
or, if mailed by check, to _________________________________________________.
Applicable statements should be mailed to ___________________________________
This information is provided by _____________________________________________
the assignee named above, or ________________________________________, as
its agent.
<PAGE>
EXHIBIT B
FORM OF CLASS B CERTIFICATES
MORTGAGE LOAN ASSET BACKED CERTIFICATES
SERIES 2000-CB3, CLASS B
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS 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 (THE "CODE").
<TABLE>
<CAPTION>
<S> <C>
Series 2000-CB3, Class B Class Certificate
Balance of the
Class B
Certificates as
of the Issue
Date:
Pass-Through Rate: 8.500% $[____________]
Date of Pooling and Servicing Agreement and Cut-off Date: Denomination: $[____________]
August 1, 2000
Servicer: Litton Loan Servicing LP
First Distribution Date: September 25, 2000
Trustee: The Chase Manhattan Bank
No. [__]
Issue Date: [____________, 20__]
CUSIP: [12489WCN2]
</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 BELOW.
MORTGAGE LOAN ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional one- to four-family first and
second mortgage loans formed and sold by
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION, THE SERVICER,
THE SELLER, THE TRUSTEE OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the Class Certificate Balance of the Class B Certificates) in that certain
beneficial ownership interest evidenced by all the Class B Certificates in the
Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), by and among Prudential Securities Secured
Financing Corporation (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Servicer, the Seller 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 lesser of (i) the Class B Pass-Through Rate and (ii)
the Pool Cap on such Distribution Date.
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 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 Pass-Through Rate on the Class B Certificates on each
Distribution Date after the first Distribution Date will be a rate per annum
equal to the lesser of (i) One-Month LIBOR plus the Class B Certificate margin
and (ii) the weighted average of the Loan Rates, less the Servicing Fee Rate
and the Trustee Fee Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as 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 Certificates.
The Class B Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution
Account may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
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 Seller, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified in the agreement. Any
such consent by the Holder of this Certificate shall be conclusive and binding
on such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the
same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the 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 Seller, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Servicer, the
Seller, 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 Seller, the Trustee, the Certificate
Registrar nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant
to the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price
determined as provided in the Agreement. The exercise of such right will
effect early retirement of the Certificates; however, such right to purchase
is subject to the aggregate Principal Balance of the Mortgage Loans at the
time of purchase being 10% or less of the Cut-off Date Aggregate Principal
Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: [___________, 20__]
THE CHASE MANHATTAN BANK, as Trustee
By:_________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class B Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK, as Certificate
Registrar
By:____________________________
Authorized Signatory
Date of authentication: [___________, 20__]
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:
<TABLE>
<CAPTION>
<S> <C>
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 _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the
above list.
</TABLE>
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee)________________________________
___________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within Asset-Backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a
new Certificate of a like Percentage Interest and Class to the above named
assignee and deliver such Certificate to the following address:
____________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
______________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ___________________________________________
__________________________________________________________________________
for the account of _____________________, account number _________________,
or, if mailed by check, to _______________________________________________.
Applicable statements should be mailed to _________________________________
This information is provided by ___________________________________________,
the assignee named above, or _________________________________, as its agent
<PAGE>
EXHIBIT C-1
FORM OF CLASS R CERTIFICATES
MORTGAGE LOAN ASSET BACKED CERTIFICATES
SERIES 2000-CB3, CLASS R
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986 (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
EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
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 ORGANIZATION, OR
ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY
ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF
THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE
CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY
SECTION 511 OF THE CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION
1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING
CLAUSES (A), (B) OR (C) BEING HEREINAFTER REFERRED TO AS A
"DISQUALIFIED ORGANIZATION"), OR (D) AN AGENT OF A DISQUALIFIED
ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE
ASSESSMENT OR COLLECTION OF TAX, AND (3) SUCH TRANSFEREE SATISFIES
CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF
THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE
CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF
THIS CLASS R CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT
OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO
BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT
BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER,
INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE. EACH HOLDER OF 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.
<TABLE>
<CAPTION>
<S> <C>
Series 2000-CB3, Class R Percentage Interest of the Class R
Certificates as of the Issue Date:
Date of Pooling and Servicing Agreement
and Cut-off Date: August 1, 2000
Servicer: Litton Loan Servicing LP
First Distribution Date: September 25, 2000
Trustee: The Chase Manhattan Bank
No. [__]
Issue Date: [____________, 20__]
Percentage Interest: 50%
</TABLE>
MORTGAGE LOAN ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional one- to four-family first and
second mortgage loans formed and sold by
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION, THE SERVICER,
THE SELLER, THE TRUSTEE OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Enhance Residuals, L.P. 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"), by and among Prudential Securities Secured
Financing Corporation (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Servicer, the Seller 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 of such distribution (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 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 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 Seller, the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Servicer, the Seller and the Trustee with the consent of the
Holders of Certificates entitled to the Voting Rights identified in the
agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the Holders of any of
the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for
registration of transfer at the offices or agencies appointed by the Trustee
as provided in the Agreement, duly endorsed by, or accompanied by an
assignment in the form below or other written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by,
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the
same.
No transfer of this Certificate shall be made unless that
transfer is made pursuant to an effective registration statement under the
1933 Act and effective registration or qualification under applicable state
securities laws, or is made in a transaction that does not require such
registration or qualification. In the event that a transfer is to be made
without registration or qualification, the 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 and the Certificate Registrar
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, unless the prospective transferee provides the Trustee with
an opinion of counsel which establish to the satisfaction of the Trustee that
such transfer will not result in a violation of Section 406 of ERISA or
Section 4975 of the Code or cause the Servicer or Trustee to be deemed a
fiduciary of such Plan or result in the imposition of an excise tax under
Section 4975 of the Code. In the absence of its having received the opinion of
counsel contemplated by the preceding sentence, the Trustee shall (unless the
next succeeding paragraph applies) 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 REMIC Trust to cease to qualify as a REMIC or cause
the imposition of a tax upon the REMIC 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 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 Seller, the Trustee and the
Certificate Registrar and any agent of the Depositor, any Servicer, the
Seller, 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 Seller the Trustee, the Certificate
Registrar nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party
designated in the Agreement at a price determined as provided in the Agreement
from the Trust Fund of all Mortgage Loans and all property acquired in respect
of such Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price
determined as provided in the Agreement. The exercise of such right will
effect early retirement of the Certificates; however, such right to purchase
is subject to the aggregate Principal Balance of the Mortgage Loans at the
time of purchase being 10% or less of the Cut-off Date Aggregate Principal
Balance.
The recitals contained herein shall be taken as statements
of the Depositor and the Trustee assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate
to be duly executed.
Dated: [____________, 20__]
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.
Dated: [_____________, 20__]
THE CHASE MANHATTAN BANK, as
Certificate Registrar
By:________________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written
out in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
_______________
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the
above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee)___________________________________
______________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within Asset Backed
Floating Rate Certificate and hereby authorize(s) the registration of transfer
of such interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a
new Certificate of a like Percentage Interest and Class to the above named
assignee and deliver such Certificate to the following address:
______________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise,
in immediately available funds to ___________________________________________
_____________________________________________________________________________
for the account of ________________________, account number _________________
_______________________________ or, if mailed by check, to __________________
_____________________________________________________________________________.
Applicable statements should be mailed to ___________________________________
_____________________________________________________________________________
This information is provided by _____________________________________________
_____________________________________________________________________________
the assignee named above, or ________________________________________, as its
agent.
<PAGE>
EXHIBIT C-2
FORM OF CLASS M-1 CERTIFICATES
MORTGAGE LOAN ASSET BACKED CERTIFICATES
SERIES 2000-CB3, CLASS M-1
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS 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 (THE "CODE").
<TABLE>
<CAPTION>
<S> <C>
Series 2000-CB3, Class M-1 Class Certificate Balance of the
Class M-1 Certificates as
of the Issue Date:
Pass-Through Rate: 8.215% $[____________]
Date of Pooling and Servicing Agreement Denomination: $[____________]
and Cut-off Date: August 1, 2000
Servicer: Litton Loan Servicing LP
First Distribution Date: September 25, 2000
Trustee: The Chase Manhattan Bank
No. [__]
Issue Date: [____________, 20__]
CUSIP: [12489WCL6]
</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 BELOW.
MORTGAGE LOAN ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional one- to four-family first and
second mortgage loans formed and sold by
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION, THE SERVICER,
THE SELLER, THE TRUSTEE OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the Class Certificate 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"), by and among Prudential
Securities Secured Financing Corporation (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Servicer,
the Seller 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 of such distribution (the "Record Date"), from funds in
the Distribution Account in an amount equal to the lesser of (i) the Class M-1
Pass-Through Rate and (ii) the Pool Cap.
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 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 Pass-Through Rate on the Class M Certificates on each
Distribution Date after the first Distribution Date will be a rate specified
above.
This Certificate is one of a duly authorized issue of Certificates
designated as 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.
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 Seller, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified in the agreement. Any
such consent by the Holder of this Certificate shall be conclusive and binding
on such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the
same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the 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 Seller, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Servicer, the
Seller, 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 Seller, the Trustee, the Certificate
Registrar nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant
to the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price
determined as provided in the Agreement. The exercise of such right will
effect early retirement of the Certificates; however, such right to purchase
is subject to the aggregate Principal Balance of the Mortgage Loans at the
time of purchase being 10% or less of the Cut-off Date Aggregate Principal
Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: [__________, 20__]
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: [____________, 20__]
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:
<TABLE>
<CAPTION>
<S> <C>
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 _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the
above list.
</TABLE>
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ____________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee)__________________________________
_____________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within Asset-Backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a
new Certificate of a like Percentage Interest and Class to the above named
assignee and deliver such Certificate to the following address:
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________
_____________________________________________________________________________
for the account of ______________________, account number __________________,
or, if mailed by check, to _________________________________________________.
Applicable statements should be mailed to __________________________________
This information is provided by ____________________________________________,
the assignee named above, or _________________________________, as its agent.
<PAGE>
EXHIBIT C-3
FORM OF CLASS M-2 CERTIFICATES
MORTGAGE LOAN ASSET BACKED CERTIFICATES
SERIES 2000-CB3, CLASS M-2
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS 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 (THE "CODE").
<TABLE>
<CAPTION>
<S> <C>
Series 2000-CB3, Class M-2 Class Certificate Balance of the Class M-2
Certificates as of the Issue Date:
Pass-Through Rate: 8.500 % $[____________]
Date of Pooling and Servicing Agreement and Denomination: $[_____________]
Cut-off Date: August 1, 2000
Servicer: Litton Loan Servicing LP
First Distribution Date: September 25, 2000
Trustee: The Chase Manhattan Bank
No. [__]
Issue Date: [_____________, 20__]
CUSIP: [12489WCM4]
</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 BELOW.
MORTGAGE LOAN ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional one- to four-family first and
second mortgage loans formed and sold by
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION, THE SERVICER,
THE SELLER, THE TRUSTEE OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the Class Certificate 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"), by and among Prudential
Securities Secured Financing Corporation (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Servicer,
the Seller 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 of such distribution (the "Record Date"), from funds in
the Distribution Account in an amount equal to the product of the less of (i)
the Class M-2 Pass-Through Rate and (ii) the Pool Cap on such Distribution
Date.
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 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 Pass-Through Rate on the Class M Certificates on each
Distribution Date after the first Distribution Date will be a rate specified
above.
This Certificate is one of a duly authorized issue of Certificates
designated as 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.
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 Seller, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified in the agreement. Any
such consent by the Holder of this Certificate shall be conclusive and binding
on such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the
same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the 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 Seller, the Trustee and the
Certificate Registrar and any agent of the Depositor, any Servicer, the
Seller, 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 Seller, the Trustee, the Certificate
Registrar nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant
to the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price
determined as provided in the Agreement. The exercise of such right will
effect early retirement of the Certificates; however, such right to purchase
is subject to the aggregate Principal Balance of the Mortgage Loans at the
time of purchase being 10% or less of the Cut-off Date Aggregate Principal
Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: [_____________, 20__]
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: [_____________, 20__]
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:
<TABLE>
<CAPTION>
<S> <C>
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 _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the
above list.
</TABLE>
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ___________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) ________________________________
____________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within Asset-Backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a
new Certificate of a like Percentage Interest and Class to the above named
assignee and deliver such Certificate to the following address:
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________________________________________
for the account of ________________________, account number _________________,
or, if mailed by check, to __________________________________________________.
Applicable statements should be mailed to ____________________________________
This information is provided by _____________________________________________,
the assignee named above, or ________________________________________, as its
agent.
<PAGE>
EXHIBIT C-4
FORM OF CLASS X CERTIFICATES
MORTGAGE LOAN ASSET BACKED CERTIFICATES
SERIES 2000-CB3, CLASS X
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS 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 (THE "CODE").
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
EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS X 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 ORGANIZATION, OR
ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY
ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF
THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE
CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY
SECTION 511 OF THE CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION
1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING
CLAUSES (A), (B) OR (C) BEING HEREINAFTER REFERRED TO AS A
"DISQUALIFIED ORGANIZATION"), OR (D) AN AGENT OF A DISQUALIFIED
ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE
ASSESSMENT OR COLLECTION OF TAX, AND (3) SUCH TRANSFEREE SATISFIES
CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF
THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE
CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF
THIS CLASS X CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT
OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO
BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT
BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER,
INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE. EACH HOLDER OF A CLASS X CERTIFICATE BY ACCEPTANCE OF
THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS
OF THIS PARAGRAPH AND THE PROVISIONS OF SECTION 5.02(d) OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT
IS A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING
BENEFICIAL OWNERSHIP OF THIS CLASS X CERTIFICATE.
<TABLE>
<CAPTION>
<S> <C>
Series 2000-CB3, Class X Percentage Interest of the Class X Certificates
as of the Issue Date: 100%
Date of Pooling and Servicing Agreement and
Cut-off Date: August 1, 2000
Servicer: Litton Loan Servicing LP
First Distribution Date: September 25, 2000
Trustee: The Chase Manhattan Bank
No. [__]
Issue Date: [____________, 20__]
Percentage Interest: 100%
</TABLE>
MORTGAGE LOAN ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional one- to four-family first
mortgage loans formed and sold by
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION, THE SERVICER,
THE SELLER, THE TRUSTEE OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Credit-Based Asset Servicing and
Securitization LLC 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"), by and among Prudential
Securities Secured Financing Corporation (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Servicer,
the Seller 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 of such distribution (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 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 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 Seller, the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Servicer, the Seller and the Trustee with the consent of the
Holders of Certificates entitled to the Voting Rights identified in the
agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the Holders of any of
the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for
registration of transfer at the offices or agencies appointed by the Trustee
as provided in the Agreement, duly endorsed by, or accompanied by an
assignment in the form below or other written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by,
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the
same.
No transfer of this Certificate shall be made unless that
transfer is made pursuant to an effective registration statement under the
1933 Act and effective registration or qualification under applicable state
securities laws, or is made in a transaction that does not require such
registration or qualification. In the event that a transfer is to be made
without registration or qualification, the 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 and the Certificate Registrar
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, unless the prospective transferee provides the Trustee with
an opinion of counsel which establish to the satisfaction of the Trustee that
such transfer will not result in a violation of Section 406 of ERISA or
Section 4975 of the Code or cause the Servicer or Trustee to be deemed a
fiduciary of such Plan or result in the imposition of an excise tax under
Section 4975 of the Code. In the absence of its having received the opinion of
counsel contemplated by the preceding sentence, the Trustee shall (unless the
next succeeding paragraph applies) 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 REMIC Trust to cease to qualify as a REMIC or cause
the imposition of a tax upon the REMIC 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 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 Seller, the Trustee and the
Certificate Registrar and any agent of the Depositor, any Servicer, the
Seller, 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 Seller, the Trustee, the Certificate
Registrar nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party
designated in the Agreement at a price determined as provided in the Agreement
from the Trust Fund of all Mortgage Loans and all property acquired in respect
of such Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price
determined as provided in the Agreement. The exercise of such right will
effect early retirement of the Certificates; however, such right to purchase
is subject to the aggregate Principal Balance of the Mortgage Loans at the
time of purchase being 10% or less of the Cut-off Date Aggregate Principal
Balance.
The recitals contained herein shall be taken as statements
of the Depositor and the Trustee assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate
to be duly executed.
Dated: [___________, 20__]
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.
Dated: [__________, 20__]
THE CHASE MANHATTAN BANK, as
Certificate Registrar
By:__________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<CAPTION>
<S> <C>
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 _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the
above list.
</TABLE>
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto _____________________________________________
____________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) _________________________________
a Percentage Interest equal to ____% evidenced by the within Asset-Backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a
new Certificate of a like Percentage Interest and Class to the above named
assignee and deliver such Certificate to the following address:
___________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise,
in immediately available funds to ___________________________________________
_____________________________________________________________________________
for the account of _______________________, account number _________________,
or, if mailed by check, to __________________________________________________.
Applicable statements should be mailed to ___________________________________
This information is provided by _____________________________________________,
the assignee named above, or ________________________________________, as
its agent.
<PAGE>
EXHIBIT C-5
FORM OF CLASS N CERTIFICATES
C-BASS MORTGAGE LOAN ASSET BACKED CERTIFICATES
SERIES 2000-CB3, CLASS N
THIS CERTIFICATE REPRESENTS AN OBLIGATION OF THE CLASS X CERTIFICATE
AND DOES NOT REPRESENT AN INTEREST IN THE REMIC.
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
EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS N 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 ORGANIZATION, OR
ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY
ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF
THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE
CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY
SECTION 511 OF THE CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION
1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING
CLAUSES (A), (B) OR (C) BEING HEREINAFTER REFERRED TO AS A
"DISQUALIFIED ORGANIZATION"), OR (D) AN AGENT OF A DISQUALIFIED
ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE
ASSESSMENT OR COLLECTION OF TAX, AND (3) SUCH TRANSFEREE SATISFIES
CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF
THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE
CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF
THIS CLASS N 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 N 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 N CERTIFICATE.
<TABLE>
<CAPTION>
<S> <C>
Series 2000-CB3, Class N Notional Amount of the Class N Certificates:
$[_______________]
Pass-Through Rate: 11.805%
Servicer: Litton Loan Servicing LP
Date of Pooling and Servicing Agreement August 1, 2000
Trustee: The Chase Manhattan Bank
Cut-off Date: August 1, 2000
Issue Date: [_____________, 20__]
First Distribution Date: September 25, 2000
Certificate No. [__]
Percentage Interest: 100%
</TABLE>
C-BASS MORTGAGE LOAN ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional one- to four-family first
mortgage loans formed and sold by
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION, THE SERVICER,
THE SELLER, THE TRUSTEE OR ANY OF THEIR AFFILIATES.
This certifies that Prudential Bache International Limited
is the registered owner of a Percentage Interest set forth above 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 Prudential
Securities Secured Financing Corporation (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Seller, the
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will
be made on the 25th day of each month or, if such 25th day is not a Business
Day, the Business Day immediately following (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered on the last Business Day of the
month immediately preceding the month of such distribution (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 Notional Amount of which is in excess of $5,000,000, or by
check mailed by first class mail to the address of the Person entitled
thereto, as such name and address shall appear on the Certificate Register,
provided that the 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 Seller, the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Servicer, the Seller and the Trustee with the consent of the
Holders of Certificates entitled to at least 66% of the Voting Rights. Any
such consent by the Holder of this Certificate shall be conclusive and binding
on such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for
registration of transfer at the offices or agencies appointed by the Trustee
as provided in the Agreement, duly endorsed by, or accompanied by an
assignment in the form below or other written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by,
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the
same.
No transfer of this Certificate shall be made unless that
transfer is made pursuant to an effective registration statement under the
1933 Act and effective registration or qualification under applicable state
securities laws, or is made in a transaction that does not require such
registration or qualification. In the event that a transfer is to be made
without registration or qualification, the 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 and the Certificate Registrar
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, unless the prospective transferee provides the Trustee with
an opinion of counsel which establish to the satisfaction of the Trustee that
such transfer will not result in a violation of Section 406 of ERISA or
Section 4975 of the Code or cause the Servicer or Trustee to be deemed a
fiduciary of such Plan or result in the imposition of an excise tax under
Section 4975 of the Code. In the absence of its having received the opinion of
counsel contemplated by the preceding sentence, the Trustee shall (unless the
next succeeding paragraph applies) 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 in so far as they relate to the Class N
Certificates.
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 Seller, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Servicer, the
Seller, 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 Seller, 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 Balance.
The recitals contained herein shall be taken as statements
of the Depositor and the Trustee assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate
to be duly executed.
Dated: [____________, 20__]
THE CHASE MANHATTAN BANK,
not in its individual capacity,
but solely as Trustee
By:____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class N Certificates referred to in the
within-mentioned Agreement.
Dated: [____________, 20__]
THE CHASE MANHATTAN BANK,
as Trustee
By:_______________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<CAPTION>
<S> <C>
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 _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the
above list.
</TABLE>
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto ___________________________________________
__________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) ______________________________
a Percentage Interest equal to ____% evidenced by the within Mortgage Loan
Asset-Backed Certificate and hereby authorize(s) the registration of transfer
of such interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a
new Certificate of a like Percentage Interest and Class to the above named
assignee and deliver such Certificate to the following address:
_____________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise,
in immediately available funds to ___________________________________________
_____________________________________________________________________________
for the account of ________________________, account number _________________,
or, if mailed by check, to __________________________________________________.
Applicable statements should be mailed to ___________________________________
This information is provided by _____________________________________________,
the assignee named above, or ________________________________________, as
its agent.
<PAGE>
EXHIBIT D
MORTGAGE LOAN SCHEDULE
[Attached to Initial Certification of the Custodian]
<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
Attention: Capital Markets Fiduciary Services,
C-BASS Mortgage Loan Asset-Backed Certificates, Series 2000-CB3
Re: Pooling and Servicing Agreement dated as of August 1, 2000 by and
among Prudential Securities Secured Financing 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
In connection with the administration of the Mortgage Loans held by
you as Trustee pursuant to the above-captioned Agreement, we request the
release, and hereby acknowledge receipt, of the Trustee's Mortgage File for
the Mortgage Loan described below, for the reason indicated:
Mortgage Loan Number:
--------------------
Mortgagor Name, Address & Zip Code:
----------------------------------
Reason for Requesting Documents (check one):
-------------------------------
_____ 1. Mortgage Paid in Full
_____ 2. Foreclosure
_____ 3. Substitution
_____ 4. Other Liquidation (Repurchases, etc.)
_____ 5. Nonliquidation Reason: _________________
By:______________________
(authorized signer)
Issuer:____________________
Address:___________________
___________________
Date: ___________________
Custodian
---------
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
<PAGE>
EXHIBIT F-1
FORM OF TRUSTEE'S INITIAL CERTIFICATION
_______________
Date
Prudential Securities Secured Financing Corporation
One New York Plaza
14th Floor
New York, New York 10292
Attention: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2000-CB3
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of August 1, 2000, by and among Prudential
Securities Secured Financing 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,
with respect to C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2000-CB3.
---------------------------------------------------------------------
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 Exhibit D to the
Pooling and Servicing Agreement subject to any exceptions noted on or
specifically identified in the exception report annexed thereto.
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:
<PAGE>
EXHIBIT F-2
FORM OF TRUSTEE'S FINAL CERTIFICATION
________________
[Date]
Prudential Securities Secured Financing Corporation
One New York Plaza
14th Floor
New York, New York 10292
Attention: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2000-CB3
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of August 1, 2000, by and among Prudential
Securities Secured Financing 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,
with respect to C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2000-CB3.
____________________________________________________________________
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 Exhibit D attached 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 Exhibit D attached 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:
<PAGE>
EXHIBIT F-3
FORM OF RECEIPT OF MORTGAGE NOTE
Prudential Securities Secured Financing Corporation
One New York Plaza
14th Floor
New York, New York 10292
Re: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2000-CB3
---------------------------------------------------------------
Ladies and Gentlemen:
Pursuant to Section 2.01 of the Pooling and Servicing Agreement,
dated as of August 1, 2000, by and among Prudential Securities Secured
Financing Corporation, as Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller (the "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 Notes, in a form
substantially similar to Exhibit 1 attached hereto, with any exceptions
thereto listed on Exhibit 2 which is also attached hereto.
THE CHASE MANHATTAN BANK,
as Trustee
By: ______________________
Name:
Title:
<PAGE>
EXHIBIT 1
FORM OF MORTGAGE NOTE
(Available Upon Request to Seller)
<PAGE>
EXHIBIT G
[Reserved]
<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 Credit-Based Asset Servicing and
Securitization LLC or its successor entity ("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-CB3, to accept the transfer of the above described
loan from Seller.
Seller agrees to indemnify The Chase Manhattan Bank, Prudential
Securities Secured Financing Corporation, Prudential Securities Incorporated,
and First Union Securities, Inc. harmless 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 _______________.
<PAGE>
EXHIBIT I
FORM OF ERISA REPRESENTATION LETTER
Prudential Securities Secured Financing Corporation
One New York Plaza
14th Floor
New York, New York 10292
Re: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2000-CB3
---------------------------------------------------------------
Ladies and Gentlemen:
1. The undersigned is the _____________________ of
(the "Transferee") a [corporationduly organized] and existing under the laws
of __________, on behalf of which he makes this affidavit.
2. _______ 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
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. The Transferee hereby acknowledges that under the
terms of the Pooling and Servicing Agreement (the "Agreement") by and among
Prudential Securities Secured Financing Corporation, as 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"), 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.
IN WITNESS WHEREOF, the Transferee has executed this
certificate.
_____________________________
[Transferee]
By:______________________________
Name:
Title:
<PAGE>
EXHIBIT J
FORM OF INVESTMENT LETTER [NON-RULE 144A]
____________, 20__
Prudential Securities Secured Financing Corporation
One New York Plaza
14th Floor
New York, New York 10292
The Chase Manhattan Bank
450 West 33rd Street
14th Floor
New York, New York 10001
Attention: Capital Markets Fiduciary Services
Re: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2000-CB3
---------------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above-captioned
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 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
<PAGE>
FORM OF RULE 144A INVESTMENT LETTER
____________, 20__
Prudential Securities Secured Financing Corporation
One New York Plaza
14th Floor
New York, New York 10292
The Chase Manhattan Bank
450 West 33rd Street
14th Floor
New York, New York 10001
Attention: Capital Markets Fiduciary Services
Re: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2000-CB3
---------------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above 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 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
<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 $100,000,000 in securities unless Buyer is a dealer, and, in
that case, Buyer must own and/or invest on a discretionary basis at
least $10,000,000 in securities.
<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.
v. The Buyer acknowledges that it is familiar with
Rule 144A and understands that the seller to it and other parties related to
the Certificates are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer may be in reliance on Rule 144A.
vi. Until the date of purchase of the Rule 144A
Securities, the Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification as of the date of such
purchase. In addition, if the Buyer is a bank or savings and loan is provided
above, the Buyer agrees that it will furnish to such parties updated annual
financial statements promptly after they become available.
_____________________
Print Name of Buyer
By:__________________
Name:
Title:
Date:_________________
<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.
___ The Buyer owned $ ______________ in
securities (other than the excluded securities referred to
below) as of the end of the Buyer's most recent fiscal year
(such amount being calculated in accordance with Rule 144A).
___ The Buyer is part of a Family of
Investment Companies which owned in the aggregate $
_________ in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with
Rule 144A).
3. The term "Family of Investment Companies" as used
herein means two or more registered investment companies (or series thereof)
that have the same investment adviser or investment advisers that are
affiliated (by virtue of being majority owned subsidiaries of the same parent
or because one investment adviser is a majority owned subsidiary of the
other).
4. The term "securities" as used herein does not
include (i) securities of issuers that are affiliated with the Buyer or are
part of the Buyer's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit
notes and certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and
understands that the parties listed in the Rule 144A Transferee Certificate to
which this certification relates are relying and will continue to rely on the
statements made herein because one or more sales to the Buyer will be in
reliance on Rule 144A. In addition, the Buyer will only purchase for the
Buyer's own account.
6. Until the date of purchase of the Certificates,
the undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
______________________________
Print Name of Buyer or Adviser
By:___________________________
Name:
Title:
IF AN ADVISER:
______________________________
Print Name of Buyer
Date:_________________________
<PAGE>
EXHIBIT K
AFFIDAVIT OF TRANSFER OF RESIDUAL CERTIFICATES
PURSUANT TO SECTION 5.02(d)
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2000-CB3
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, by and among
Prudential Securities Secured Financing Corporation, as Depositor,
Credit-Based Asset Servicing and Securitization LLC, as Seller (the "Seller"),
Litton Loan Servicing LP, as Servicer, and The Chase Manhattan Bank, as
Trustee (the "Trustee"). Capitalized terms used, but not defined herein or in
Exhibit 1 hereto, 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 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 (attached hereto as Exhibit 2 and incorporated herein
by reference) 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 as 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.
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__.
<PAGE>
EXHIBIT 1 to EXHIBIT K
Certain Definitions
-------------------
"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.
"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.
<PAGE>
EXHIBIT 2 to EXHIBIT K
Section 5.02(d) of the Agreement
--------------------------------
(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 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 or (iii) (except in the case of a Class R, Class X or Class N
Certificate) in the case of any such ERISA-Restricted Certificate presented
for registration in the name of an employee benefit plan subject to ERISA or a
plan or arrangement subject to Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a trustee of any such plan or any
other person acting on behalf of any such plan or arrangement or using such
plan's or arrangement's assets, an Opinion of Counsel satisfactory to the
Trustee which Opinion of Counsel shall not be an expense of either the Trustee
or the Trust, addressed to the Trustee, to the effect that the purchase or
holding of such ERISA-Restricted Certificate will not result in the assets of
the Trust being deemed to be "plan assets" and subject to the prohibited
transaction provisions of ERISA and the Code and will not subject the Trustee
to any obligation in addition to those expressly undertaken in this Agreement
or to any liability. For purposes of clause (i) of the preceding sentence,
such representation shall be deemed to have been made to the 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 without the delivery to
the Trustee of an Opinion of Counsel satisfactory to the Trustee as described
above 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:
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.
No Person shall acquire an Ownership Interest in a Class R
Certificate unless such Ownership Interest is a pro rata undivided interest.
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.
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.
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 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.
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.
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.
<PAGE>
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE
______________, 20__
Prudential Securities Secured Financing Corporation
One New York Plaza
14th Floor
New York, New York 10292
Re: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2000-CB3
---------------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above 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: ______________________________
<PAGE>
EXHIBIT M
FORM OF LIQUIDATION REPORT
Customer Name:
Account Number:
Original Principal Balance:
1. Type of Liquidation (REO disposition/charge-off/short pay-off)
Date last paid
Date of foreclosure
Date of REO
Date of REO Disposition
Property Sale Price/Estimated Market Value at disposition
2. Liquidation Proceeds
Principal Prepayment $____________
Property Sale Proceeds ____________
Insurance Proceeds ____________
Other (itemize) ____________
Total Proceeds $____________
3. Liquidation Expenses
Servicing Advances $____________
Delinquency Advances ____________
Monthly Advances ____________
Servicing Fees ____________
Other Servicing Compensation ____________
Total Advances $____________
4. Net Liquidation Proceeds $____________
(Item 2 minus Item 3)
5. Principal Balance of Mortgage Loan $____________
6. Loss, if any (Item 5 minus Item 4) $____________
<PAGE>
EXHIBIT N
[Reserved]
<PAGE>
EXHIBIT O
[Reserved]
<PAGE>
EXHIBIT P
[Reserved]
<PAGE>
EXHIBIT Q
FORM OF OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS
Officer's Certificate
C-BASS Mortgage Loan Asset-Backed Certificates, Series 2000-CB3
__________, 20__
Via Facsimile
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-CB3
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, as the term is defined in the
Pooling and Servicing Agreement, 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.
LITTON LOAN SERVICING LP
By:______________________
Name
Title:___________________
<PAGE>
EXHIBIT R
<PAGE>
[Reserved]
EXHIBIT S
INELIGIBLE FORECLOSURE PROPERTY LOAN SCHEDULE
[TO BE PROVIDED BY SELLER]
