EXHIBIT 4
================================================================================
ASSET BACKED FUNDING CORPORATION,
Depositor
CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC,
Seller
LITTON LOAN SERVICING LP,
Servicer
and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2005
2005-CB2 Trust
C-BASS Mortgage Loan Asset-Backed Certificates, Series 2005-CB2
================================================================================
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Defined
Terms..................................................
Section 1.02
Accounting.....................................................
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of
Mortgage Loans...................................
Section 2.02 Acceptance by
Trustee..........................................
Section 2.03 Repurchase or
Substitution of Mortgage Loans by the Seller.....
Section 2.04 Representations
and Warranties of the Seller with Respect to
the Mortgage Loans.............................................
Section 2.05 Representations,
Warranties and Covenants of the Servicer......
Section 2.06 Representations
and Warranties of the Depositor................
Section 2.07 Issuance of
Certificates and the Uncertificated Regular
Interests......................................................
Section 2.08 Representations
and Warranties of the Seller...................
Section 2.09 Covenants of the
Seller........................................
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01 Servicer to Act
as Servicer....................................
Section 3.02 Collection of
Mortgage Loan Payments...........................
Section 3.03 Realization Upon
Defaulted Mortgage Loans......................
Section 3.04 Collection
Account, Distribution Account and Reserve Accounts..
Section 3.05 Permitted
Withdrawals From the Collection Account..............
Section 3.06 Establishment of
Escrow Account; Deposits in Escrow Account....
Section 3.07 Permitted
Withdrawals From Escrow Account......................
Section 3.08 Payment of
Taxes, Insurance and Other Charges; Collections
Thereunder.....................................................
Section 3.09 Transfer of
Accounts...........................................
Section 3.10 Maintenance of
Hazard Insurance................................
Section 3.11 Maintenance of
Mortgage Impairment Insurance Policy............
Section 3.12 Fidelity Bond,
Errors and Omissions Insurance..................
Section 3.13 Title,
Management and Disposition of REO Property and Certain
Delinquent Mortgage Loans......................................
Section 3.14 Due-on-Sale
Clauses; Assumption and Substitution Agreements....
Section 3.15 Notification of
Adjustments....................................
Section 3.16 Optional
Purchases and Sales of Mortgage Loans by Servicer.....
Section 3.17 Trustee to
Cooperate; Release of Files.........................
Section 3.18 Servicing
Compensation.........................................
Section 3.19 Annual Statement as to
Compliance..............................
Section 3.20 Annual
Independent Certified Public Accountants' Reports.......
Section 3.21 Access to
Certain Documentation and Information Regarding the
Mortgage Loans.................................................
Section 3.22
Reserved.......................................................
Section 3.23 Obligations of
the Servicer in Respect of Compensating Interest
Section 3.24 Obligations of
the Servicer in Respect of Mortgage Interest
Rates and Monthly Payments.....................................
Section 3.25 Investment of
Funds in the Collection Account and the
Distribution Account...........................................
Section 3.26 Liability of
Servicer; Indemnification.........................
Section 3.27 Reports of
Foreclosure and Abandonment of Mortgaged Properties.
Section 3.28 Protection of
Assets...........................................
Section 3.29 Periodic
Filings...............................................
ARTICLE IV
FLOW OF FUNDS
Section 4.01 Interest
Distributions.........................................
Section 4.02 Distributions of
Principal and Monthly Excess Cashflow Amounts.
Section 4.03 Allocation of
Losses...........................................
Section 4.04 Method of
Distribution.........................................
Section 4.05 Distributions on
Book-Entry Certificates.......................
Section 4.06
Statements.....................................................
Section 4.07 Remittance
Reports; Advances...................................
Section 4.08 REMIC 1
Distributions..........................................
ARTICLE V
THE CERTIFICATES
Section 5.01 The
Certificates...............................................
Section 5.02 Registration of
Transfer and Exchange of Certificates..........
Section 5.03 Mutilated,
Destroyed, Lost or Stolen Certificates..............
Section 5.04 Persons Deemed
Owners..........................................
Section 5.05 Appointment of
Paying Agent....................................
ARTICLE VI
THE SELLER, THE SERVICER AND THE DEPOSITOR
Section 6.01 Liability of the
Seller, the Servicer and the Depositor........
Section 6.02 Merger or Consolidation of, or
Assumption of the Obligations
of, the Seller, the Servicer or the Depositor..................
Section 6.03 Limitation on
Liability of the Servicer and Others.............
Section 6.04 Servicer Not to
Resign.........................................
Section 6.05 Delegation of
Duties...........................................
ARTICLE VII
DEFAULT
Section 7.01 Servicer Events
of Termination.................................
Section 7.02 Trustee to Act;
Appointment of Successor.......................
Section 7.03 Waiver of
Defaults.............................................
Section 7.04 Notification to
Certificateholders.............................
Section 7.05 Survivability of
Servicer Liabilities..........................
ARTICLE VIII
THE TRUSTEE
Section 8.01 Duties of
Trustee..............................................
Section 8.02 Certain Matters
Affecting the Trustee..........................
Section 8.03 Trustee Not
Liable for Certificates or Mortgage Loans..........
Section 8.04 Trustee May Own
Certificates...................................
Section 8.05 Seller to Pay
Trustee Fees and Expenses........................
Section 8.06 Eligibility
Requirements for Trustee...........................
Section 8.07 Resignation or
Removal of Trustee..............................
Section 8.08 Successor
Trustee..............................................
Section 8.09 Merger or
Consolidation of Trustee.............................
Section 8.10 Appointment of
Co-Trustee or Separate Trustee..................
Section 8.11 Limitation of
Liability........................................
Section 8.12 Trustee May
Enforce Claims Without Possession of Certificates..
Section 8.13 Suits for
Enforcement..........................................
Section 8.14 Waiver of Bond
Requirement.....................................
Section 8.15 Waiver of
Inventory, Accounting and Appraisal Requirement......
Section 8.16 Compliance with
National Housing Act of 1934...................
ARTICLE IX
REMIC AND GRANTOR TRUST ADMINISTRATION
Section 9.01 REMIC
Administration...........................................
Section 9.02 Prohibited
Transactions and Activities.........................
Section 9.03 Indemnification
with Respect to Certain Taxes and Loss of REMIC
Status.........................................................
Section 9.04 REO
Property...................................................
Section 9.05 Grantor Trust
Administration...................................
ARTICLE X
TERMINATION
Section 10.01
Termination....................................................
Section 10.02 Additional Termination
Requirements............................
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01
Amendment......................................................
Section 11.02 Recordation of
Agreement; Counterparts.........................
Section 11.03 Limitation on Rights
of Certificateholders.....................
Section 11.04 Governing Law;
Jurisdiction....................................
Section 11.05
Notices........................................................
Section 11.06 Severability of
Provisions.....................................
Section 11.07 Article and Section
References.................................
Section 11.08 Notice to the Rating
Agencies..................................
Section 11.09 Further
Assurances.............................................
Section 11.10 Benefits of
Agreement..........................................
Section 11.11 Acts of
Certificateholders.....................................
<PAGE>
EXHIBITS:
Exhibit A-1 Form of Class AV-1
Certificates
Exhibit A-2 Form of Class AV-2
Certificates
Exhibit A-3 Form of Class AF-1
Certificates
Exhibit A-4 Form of Class AF-2
Certificates
Exhibit A-5 Form of Class AF-3
Certificates
Exhibit A-6 Form of Class AF-4
Certificates
Exhibit B-1 Form of Class B-1
Certificates
Exhibit B-2 Form of Class B-2
Certificates
Exhibit B-3 Form of Class B-3
Certificates
Exhibit B-4 Form of Class B-4
Certificates
Exhibit B-5 Form of Class B-5
Certificates
Exhibit C-1A Form of Class R
Certificate
Exhibit C-1B Form of Class R-X
Certificate
Exhibit C-2 Form of Class M-1
Certificates
Exhibit C-3 Form of Class M-2
Certificates
Exhibit C-4 Form of Class M-3
Certificates
Exhibit C-5 Form of Class X
Certificates
Exhibit C-6 Form of Class N
Certificates
Exhibit D-1 Group I Mortgage Loan
Schedule
Exhibit D-2 Group II Mortgage Loan
Schedule
Exhibit E Form of Request for Release
of Documents
Exhibit F-1 Form of Trustee's
Initial Certification
Exhibit F-2 Form of Trustee's
Final Certification
Exhibit F-3 Form of Receipt of
Mortgage Note
Exhibit G Mortgage
Loan Purchase Agreement
Exhibit H Form of
Lost Note Affidavit
Exhibit I Form of
ERISA Representation
Exhibit J-1 Form of Investment
Letter [Non-Rule 144A]
Exhibit J-2 Form of Rule 144A
Investment Letter
Exhibit K Form of
Residual Certificate Transfer Affidavit
Exhibit L Form of
Transferor Certificate
Exhibit M
[Reserved]
Exhibit N DTC Letter
of Representations
Exhibit O
[Reserved]
Exhibit P Monthly
Information Provided by Servicer
Exhibit Q Form of
Officer's Certificate with Respect to Prepayments
Exhibit R Form of
Notice of Prepayment Penalty Inconsistency
Exhibit S-1 Form of Group I Yield
Maintenance Agreement
Exhibit S-2 Form of Class M Yield
Maintenance Agreement
Exhibit T Form of
Certification
Exhibit U Form of
Certification to be Provided by Trustee
Exhibit V Schedule
of Mortgage Loans without Title Policies
Exhibit W Form of
Power of Attorney
<PAGE>
This Pooling and Servicing Agreement is dated as of March 1,
2005
(the "Agreement"), among ASSET BACKED
FUNDING CORPORATION, as depositor (the
"Depositor"), CREDIT-BASED ASSET SERVICING
AND SECURITIZATION LLC, as seller
(the "Seller"), LITTON LOAN SERVICING LP,
as servicer (the "Servicer"), and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
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 eighteen
Classes of Certificates, designated as (i)
the Class AV-1, Class AV-2, Class
AF-1, Class AF-2, Class AF-3 and Class AF-4
Certificates, (ii) the Class M-1,
Class M-2 and Class M-3 Certificates, (iii)
the Class B-1, Class B-2, Class B-3,
Class B-4 and Class B-5 Certificates, (iv)
the Class N Certificates, (v) the
Class X Certificates and (vi) the Class R
and Class R-X Certificates.
REMIC 1
As provided herein, the Trustee will make an election to treat
the
segregated pool of assets consisting of the
Mortgage Loans and certain other
related assets subject to this Agreement
(but exclusive of the Yield Maintenance
Agreements, the Reserve Fund, any Cap
Carryover Amount and the prepayment
charges) as a real estate investment
conduit (a "REMIC") for federal income tax
purposes, and such segregated pool of
assets will be designated as "REMIC 1."
The Class R-1 Interest will represent the
sole class of "residual interests" in
REMIC 1 for purposes of the REMIC
Provisions under federal income tax law. The
following table irrevocably sets forth the
designation, the Uncertificated REMIC
1 Pass-Through Rate, the initial
Uncertificated Principal Balance, and solely
for purposes of satisfying Treasury
Regulations Section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" for each of
the REMIC 1 Regular Interests. None
of the REMIC 1 Regular Interests will be
certificated.
<TABLE>
<CAPTION>
===============================================================================================================
Initial
Uncertificated
REMIC
Uncertificated Principal
Latest Possible
Designation
Pass-Through Rate(1)
Balance
Maturity Date(1)
---------------------------------------------------------------------------------------------------------------
<S>
<C>
<C>
<C>
LT1AA
Variable(2)
$ 197,232,882.55 February
25, 2035
---------------------------------------------------------------------------------------------------------------
LT1AV1
Variable(2)
$ 955,800.00 February
25, 2035
---------------------------------------------------------------------------------------------------------------
LT1AV2
Variable(2)
$ 266,250.00 February
25, 2035
---------------------------------------------------------------------------------------------------------------
LT1AF1
Variable(2)
$ 166,190.00 February
25, 2035
---------------------------------------------------------------------------------------------------------------
LT1AF2
Variable(2)
$ 47,260.00 February
25, 2035
---------------------------------------------------------------------------------------------------------------
LT1AF3
Variable(2)
$ 36,140.00 February
25, 2035
---------------------------------------------------------------------------------------------------------------
LT1AF4
Variable(2)
$ 27,730.00
February
25, 2035
---------------------------------------------------------------------------------------------------------------
LT1M1
Variable(2)
$ 226,415.00 February
25, 2035
---------------------------------------------------------------------------------------------------------------
LT1M2
Variable(2)
$ 95,600.00 February
25, 2035
---------------------------------------------------------------------------------------------------------------
LT1M3
Variable(2)
$ 30,185.00 February
25, 2035
---------------------------------------------------------------------------------------------------------------
LT1B1
Variable(2)
$ 28,180.00 February
25, 2035
---------------------------------------------------------------------------------------------------------------
LT1B2
Variable(2)
$ 17,105.00 February
25, 2035
---------------------------------------------------------------------------------------------------------------
LT1B3
Variable(2)
$ 24,155.00 February
25, 2035
---------------------------------------------------------------------------------------------------------------
LT1B4
Variable(2)
$ 24,155.00 February
25, 2035
---------------------------------------------------------------------------------------------------------------
LT1B5
Variable(2)
$ 22,140.00 February
25, 2035
---------------------------------------------------------------------------------------------------------------
LT1ZZ
Variable(2)
$ 2,057,855.87 February
25, 2035
---------------------------------------------------------------------------------------------------------------
LT1SUB
Variable(2)
$ 8,365.80 February
25, 2035
---------------------------------------------------------------------------------------------------------------
LT1GRP
Variable(2)
$ 32,806.80 February
25, 2035
---------------------------------------------------------------------------------------------------------------
LT2SUB
Variable(2)
$ 1,898.41 February
25, 2035
---------------------------------------------------------------------------------------------------------------
LT2GRP
Variable(2)
$ 7,444.81 February
25, 2035
---------------------------------------------------------------------------------------------------------------
LT1XX
Variable(2)
$ 201,207,527.60 February
25, 2035
===============================================================================================================
</TABLE>
(1) Solely for purposes of
Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the
Distribution Date immediately following the maturity date
for the
Mortgage Loan with the latest maturity date has been designated
as
the
"latest possible maturity date" for each REMIC 1 Regular
Interest.
(2) Calculated in accordance
with the definition of "Uncertificated REMIC 1
Pass-Through Rate" herein.
REMIC 2
As provided herein, the Trustee shall make an election to treat
the
segregated pool of assets consisting of the
REMIC 1 Regular Interests as a REMIC
for federal income tax purposes, and such
segregated pool of assets will be
designated as "REMIC 2." REMIC 2 will issue
as regular interests (i) the Classes
of Certificates (exclusive of the rights of
such Classes of Certificates to
receive Cap Carryover Amounts) indicated as
issued by REMIC 2 in the table at
the end of the Preliminary Statement and
(ii) the REMIC 2 Class B-1 Interest,
the REMIC 2 Class B-2 Interest, the REMIC 2
Class B-3 Interest, the REMIC 2
Class B-4 Interest, the REMIC 2 Class B-5
Interest and the REMIC 2 Class X/N
Interest (as described in footnotes 15
through 20 to the table at the end of
this Preliminary Statement).
REMIC A
As provided herein, the Trustee shall make an election to treat
the
segregated pool of assets consisting of the
REMIC 2 Class X/N Interest as a
REMIC for federal income tax purposes, and
such segregated pool of assets will
be designated as "REMIC A." The REMIC A
Class X/N Interest represents the sole
class of regular interests and the Class
R-A Interest represents the sole class
of "residual interests" in REMIC A for
purposes of the REMIC Provisions. The
REMIC A Class X/N Interest shall have a
principal balance equal to the REMIC 2
Class X/N Interest and shall bear interest
at the same rate as the REMIC 2 Class
X/N Interest.
REMIC B
As provided herein, the Trustee shall make an election to treat
the
segregated pool of assets consisting of the
REMIC 2 Class B-1 Interest as a
REMIC for federal income tax purposes, and
such segregated pool of assets will
be designated as "REMIC B." The Class B-1
Certificates (exclusive of the right
to Cap Carryover Amounts) represent the
sole class of "regular interests" and
the Class R-B Interest represents the sole
class of "residual interests" in
REMIC B for purposes of the REMIC
Provisions. The Class B-1 Certificates shall
have a principal balance equal to the REMIC
2 Class B-1 Interest and shall bear
interest at the same rate as the REMIC 2
Class B-1 Interest.
REMIC C
As provided herein, the Trustee shall make an election to treat
the
segregated pool of assets consisting of the
REMIC 2 Class B-2 Interest as a
REMIC for federal income tax purposes, and
such segregated pool of assets will
be designated as "REMIC C." The Class B-2
Certificates (exclusive of the right
to Cap Carryover Amounts) represent the
sole class of "regular interests" and
the Class R-C Interest represents the sole
class of "residual interests" in
REMIC C for purposes of the REMIC
Provisions. The Class B-2 Certificates shall
have a principal balance equal to the REMIC
2 Class B-2 Interest and shall bear
interest at the same rate as the REMIC 2
Class B-2 Interest.
REMIC D
As provided herein, the Trustee shall make an election to treat
the
segregated pool of assets consisting of the
REMIC 2 Class B-3 Interest as a
REMIC for federal income tax purposes, and
such segregated pool of assets will
be designated as "REMIC D." The Class B-3
Certificates (exclusive of the right
to Cap Carryover Amounts) represent the
sole class of "regular interests" and
the Class R-D Interest represents the sole
class of "residual interests" in
REMIC D for purposes of the REMIC
Provisions. The Class B-3 Certificates shall
have a principal balance equal to the REMIC
2 Class B-3 Interest and shall bear
interest at the same rate as the REMIC 2
Class B-3 Interest.
REMIC E
As provided herein, the Trustee shall make an election to treat
the
segregated pool of assets consisting of the
REMIC 2 Class B-4 Interest as a
REMIC for federal income tax purposes, and
such segregated pool of assets will
be designated as "REMIC E." The Class B-4
Certificates (exclusive of the right
to Cap Carryover Amounts) represent the
sole class of "regular interests" and
the Class R-E Interest represents the sole
class of "residual interests" in
REMIC E for purposes of the REMIC
Provisions. The Class B-4 Certificates shall
have a principal balance equal to the REMIC
2 Class B-4 Interest and shall bear
interest at the same rate as the REMIC 2
Class B-4 Interest.
REMIC F
As provided herein, the Trustee shall make an election to treat
the
segregated pool of assets consisting of the
REMIC 2 Class B-5 Interest as a
REMIC for federal income tax purposes, and
such segregated pool of assets will
be designated as "REMIC F." The Class B-5
Certificates (exclusive of the right
to Cap Carryover Amounts) represent the
sole class of "regular interests" and
the Class R-F Interest represents the sole
class of "residual interests" in
REMIC F for purposes of the REMIC
Provisions. The Class B-5 Certificates shall
have a principal balance equal to the REMIC
2 Class B-5 Interest and shall bear
interest at the same rate as the REMIC 2
Class B-5 Interest.
Solely for purposes of Treasury Regulations Section
1.860G-1(a)(4)(iii), the Distribution Date
following the maturity date for the
Mortgage Loan with the latest maturity date
has been designated as the "latest
possible maturity date" for each Class of
Certificates that represents one or
more of the "regular interests" in REMIC 2,
REMIC A, REMIC B, REMIC C, REMIC D,
REMIC E or REMIC F.
The following table sets forth (or describes) the Class
designation,
Pass-Through Rate and the Original Class
Certificate Principal Balance or the
Original Class N and Class X Notional
Amount, for each Class of Certificates
comprising the interests in the Trust Fund
created hereunder:
<PAGE>
<TABLE>
<CAPTION>
============================================================================================
Original Class
Certificate
Issuing
Principal Balance or Pass-Through
Assumed Final
Class
REMIC Notional
Amount
Rate
Maturity Dates
--------------------------------------------------------------------------------------------
<S>
<C>
<C>
<C>
<C>
AV-1
2
$191,160,000.00
(1)
October 25, 2030
--------------------------------------------------------------------------------------------
AV-2
2
$53,250,000.00
(2)
August 25, 2034
--------------------------------------------------------------------------------------------
AF-1
2
$33,238,000.00
(3)
June 25, 2023
--------------------------------------------------------------------------------------------
AF-2
2
$9,452,000.00
(4)
June 25, 2026
--------------------------------------------------------------------------------------------
AF-3
2
$7,228,000.00
(5)
September 25, 2029
--------------------------------------------------------------------------------------------
AF-4
2
$5,546,000.00
(6)
July 25, 2029
--------------------------------------------------------------------------------------------
M-1
2
$45,283,000.00
(7)
July 25, 2034
--------------------------------------------------------------------------------------------
M-2
2
$19,120,000.00
(8)
June 25, 2034
--------------------------------------------------------------------------------------------
M-3
2
$6,037,000.00
(9)
April 25, 2034
--------------------------------------------------------------------------------------------
B-1(15)
2
$5,636,000.00
(10)
March 25, 2034
--------------------------------------------------------------------------------------------
B-2(16)
2
$3,421,000.00
(11)
February 25, 2034
--------------------------------------------------------------------------------------------
B-3(17)
2
$4,831,000.00
(12)
January 25, 2034
--------------------------------------------------------------------------------------------
B-4(18)
2
$4,831,000.00
(13)
December 25, 2033
--------------------------------------------------------------------------------------------
B-5(19)
2
$4,428,000.00
(14)
August 25, 2033
--------------------------------------------------------------------------------------------
N(20)
(20)
$17,850,000.00 (20)(21) N/A
N/A
--------------------------------------------------------------------------------------------
X(20)
(20)
$1(20)(24)
N/A
N/A
--------------------------------------------------------------------------------------------
R
1, 2(22)
N/A
N/A
N/A
--------------------------------------------------------------------------------------------
A, B,
C,
R-X
D, E, F(23)
N/A
N/A/
N/A
--------------------------------------------------------------------------------------------
Total
$393,461,000.00(25)
============================================================================================
</TABLE>
(1) Interest will accrue on the
Class AV-1 Certificates at a rate equal to the
lesser of:
(i) the Class AV-1 Pass-Through Rate and (ii) the Group I Cap
for such
Distribution Date.
(2) Interest will accrue on the
Class AV-2 Certificates at a rate equal to the
lesser of:
(i) the Class AV-2 Pass-Through Rate and (ii) the Group I Cap
for such
Distribution Date.
(3) Interest will accrue on the
Class AF-1 Certificates at a rate equal to the
lesser of:
(i) the Class AF-1 Pass-Through Rate and (ii) the Group II Cap
for such
Distribution Date.
(4) Interest will accrue on the
Class AF-2 Certificates at a rate equal to the
lesser of:
(i) the Class AF-2 Pass-Through Rate and (ii) the Group II Cap
for such
Distribution Date.
(5) Interest will accrue on the
Class AF-3 Certificates at a rate equal to the
lesser of:
(i) the Class AF-3 Pass-Through Rate and (ii) the Group II Cap
for such
Distribution Date.
(6) Interest will accrue on the
Class AF-4 Certificates at a rate equal to the
lesser of:
(i) the Class AF-4 Pass-Through Rate and (ii) the Group II Cap
for such
Distribution Date.
(7) 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.
(8) 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.
(9) Interest will accrue on the
Class M-3 Certificates at a rate equal to the
lesser of:
(i) the Class M-3 Pass-Through Rate and (ii) the Pool Cap for
such
Distribution Date.
(10) Interest will accrue on the Class
B-1 Certificates at a rate equal to the
lesser of:
(i) the Class B-1 Pass-Through Rate and (ii) the Pool Cap for
such
Distribution Date.
(11) Interest will accrue on the Class
B-2 Certificates at a rate equal to the
lesser of:
(i) the Class B-2 Pass-Through Rate and (ii) the Pool Cap for
such
Distribution Date.
(12) Interest will accrue on the Class
B-3 Certificates at a rate equal to the
lesser of:
(i) the Class B-3 Pass-Through Rate and (ii) the Pool Cap for
such
Distribution Date.
(13) Interest will accrue on the Class
B-4 Certificates at a rate equal to the
lesser of:
(i) the Class B-4 Pass-Through Rate and (ii) the Pool Cap for
such
Distribution Date.
(14) Interest will accrue on the Class
B-5 Certificates at a rate equal to the
lesser of:
(i) the Class B-5 Pass-Through Rate and (ii) the Pool Cap for
such
Distribution Date.
(15) REMIC 2 will issue an
Uncertificated Regular Interest economically
equivalent
to the Class B-1 Certificates. That Regular Interest will be an
asset of
REMIC B which will issue the Class B-1 Certificates as
described
under
"REMIC B" in this Preliminary Statement.
(16) REMIC 2 will issue an
Uncertificated Regular Interest economically
equivalent
to the Class B-2 Certificates. That Regular Interest will be an
asset of
REMIC C which will issue the Class B-2 Certificates as
described
under
"REMIC C" in this Preliminary Statement.
(17) REMIC 2 will issue an
Uncertificated Regular Interest economically
equivalent
to the Class B-3 Certificates. That Regular Interest will be an
asset of
REMIC D which will issue the Class B-3 Certificates as
described
under
"REMIC D" in this Preliminary Statement.
(18) REMIC 2 will issue an
Uncertificated Regular Interest economically
equivalent to the Class B-4
Certificates. That Regular Interest will be an
asset of
REMIC E which will issue the Class B-4 Certificates as
described
under
"REMIC E" in this Preliminary Statement.
(19) REMIC 2 will issue an
Uncertificated Regular Interest economically
equivalent
to the Class B-5 Certificates. That Regular Interest will be an
asset of
REMIC F which will issue the Class B-5 Certificates as
described
under
"REMIC F" in this Preliminary Statement.
(20) The Class N and Class X
Certificates, collectively, represent the
beneficial
ownership of the Class X/N Interest. REMIC 2 will issue the
REMIC 2
Class X/N Interest, which will be an asset of REMIC A. REMIC A
will issue
the REMIC A Class X/N Interest. The REMIC 2 Class X/N Interest
and the
REMIC A Class X/N Interest will have a principal balance equal
to
the Class
X/N Uncertificated Principal Balance but will not bear interest
on that
balance. The REMIC 2 Class X/N Interest and the REMIC A Class
X/N
Interest
will bear interest on the Notional Amount therefor at the Pass
Through
Rate therefor. The X Certificates and Class N Certificates will
represent
the beneficial ownership of the REMIC A Class X/N Interest and
beneficial
rights with respect to the Yield Maintenance Agreements and the
Reserve
Accounts, subject to the obligation to pay Cap Carryover
Amounts.
(21) Initial Class N Notional
Amount.
(22) The Class R Certificate will
represent beneficial ownership of the Class
R-1
Interest and the Class R-2 Interest.
(23) The Class R-X Certificate will
represent beneficial ownership of the Class
R-A
Interest, the Class R-B Interest, the Class R-C Interest, the
Class
R-D
Interest, the Class R-E Interest and the Class R-F Interest.
(24) Initial Class X Notional
Amount.
(25) Exclusive of the Class N and Class
X Notional Amount.
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement or in the Preliminary Statement,
the
following words and phrases, unless the
context otherwise requires, shall have
the meanings specified in this Article.
Unless otherwise specified, interest on
the Floating Rate Certificates will be
calculated on the basis of the actual
number of days in the related Interest
Accrual Period and a 360-day year.
Interest on the Fixed-Rate Certificates and
the Class N and Class X Certificates
and the REMIC Regular Interests will be
calculated on the basis of a 360-day
year consisting of twelve 30-day
months.
"1933 Act": The Securities Act of 1933, as amended.
"60+ Day Delinquent Loan": Each Mortgage Loan with respect to
which
any portion of a Monthly Payment is, as of
the last day of the prior Collection
Period, two months or more past due, 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, the Distribution
Account,
the Escrow Account and the Reserve
Accounts.
"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 of such Class
of Certificates, reduced by such
Class's Interest Percentage of Relief Act
Interest Shortfalls for such
Distribution Date.
"Adjustable-Rate Mortgage Loan": A Mortgage Loan which has a rate
at
which interest accrues that adjusts based
on the Index plus a related Gross
Margin, as set forth and subject to the
limitations in the related Mortgage
Note.
"Adjustment Date": With respect to each Adjustable-Rate
Mortgage
Loan, each adjustment date, on which the
Mortgage Interest Rate of an
Adjustable-Rate Mortgage Loan changes
pursuant to the related Mortgage Note. The
first Adjustment Date following the Cut-off
Date as to each Adjustable-Rate
Mortgage Loan is set forth in the Group I
Mortgage Loan Schedule.
"Advance": As to any Mortgage Loan or REO Property, any advance
made
by the Servicer in respect of any
Distribution Date pursuant to Section 4.07.
"Advance Facility": As
defined in Section 6.05(b) hereof.
"Advance Facility Notice": As defined in Section 6.05(c)
hereof.
"Advance
Financing Person": As defined in Section 6.05(b) hereof.
"Advance Reimbursement Amounts": As defined in Section 6.05(c)
hereof.
"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": The FHA Insurance Contracts.
"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.
"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 and any increase of any
Certificate Principal Balance as a
result of Subsequent Recoveries) over (b)
the Pool Balance as of the end of the
related Collection Period.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form,
which is sufficient under the laws of
the jurisdiction wherein the related
Mortgaged Property is located to reflect or
record the sale of the Mortgage.
"Assumed
Final Maturity Date": As to each Class of Certificates, the
date set forth as such in the Preliminary
Statement.
"Available Funds": As to any Distribution Date, an amount equal
to
the excess of (i) the sum of (a) the
aggregate of the Monthly Payments due
during the related Collection Period and
received by the Servicer on or prior to
the related Determination Date, (b)
Liquidation Proceeds, Insurance Proceeds,
Condemnation Proceeds, Principal
Prepayments, Substitution Adjustment Amounts,
the Purchase Price for any repurchased
Mortgage Loan, the Termination Price with
respect to the termination of the Trust
pursuant to Section 10.01 hereof, any
Reimbursement Amount or Subsequent Recovery
deposited to the Collection Account
and other unscheduled recoveries of
principal and interest (excluding prepayment
penalties) 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 and (d)
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 Offered Certificates and the
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.
"Cap": Any of the Group I Cap, the Group II Cap or the Pool
Cap.
"Cap Carryover Amount": If on any Distribution Date, the
Accrued
Certificate Interest for (a) the Class AV-1
or Class AV-2 Certificates is based
upon the Group I Cap, (b) the Class AF-1,
Class AF-2, Class AF-3 or Class AF-4
Certificates is based upon the Group II Cap
or (c) the Class M-1, Class M-2,
Class M-3, Class B-1, Class B-2, Class B-3,
Class B-4 or Class B-5 Certificates
is based on the Pool Cap, the excess of (i)
the amount of interest such
Certificate would have been entitled to
receive on such Distribution Date based
on the related Pass-Through Rate, over (ii)
the amount of interest such
Certificate received on such Distribution
Date based on the applicable Cap,
together with the unpaid portion of any
such excess from prior Distribution
Dates (and interest accrued thereon at the
then applicable Pass-Through Rate on
such Certificate).
"Certificate": Any Regular Certificate or Residual Certificate.
"Certificate Custodian": Initially, JPMorgan Chase Bank,
National
Association; 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 Residual Certificates) and any
Distribution Date, the Original Class
Certificate Principal Balance (a) reduced
by the sum of (i) all amounts actually
distributed in respect of principal of
such Class on all prior Distribution Dates
and (ii) Applied Realized Loss
Amounts allocated thereto and (b) increased
by any Subsequent Recoveries
allocated to such Class for previous
Distribution Dates. The Class N, Class X
and Residual Certificates do not have a
Certificate Principal Balance. With
respect to any Certificate (other than a
Class N, Class X or a Residual
Certificate) of a Class and any
Distribution Date, the portion of the
Certificate Principal Balance of such Class
represented by such Certificate
equal to the product of the Percentage
Interest evidenced by such Certificate
and the Certificate Principal Balance of
such Class.
"Certificate Register" and "Certificate Registrar": The
register
maintained and registrar appointed pursuant
to Section 5.02 hereof.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the
Certificate Register, except that a
Disqualified Organization or Disqualified
Non-U.S. Person shall not be a Holder
of a Residual Certificate for any purpose
hereof.
"Class": Collectively, Certificates or REMIC Regular Interests
which
have the same priority of payment and bear
the same class designation and the
form of which is identical except for
variation in the Percentage Interest
evidenced thereby.
"Class AF-1 Pass-Through Rate": For each Distribution Date (i) on
or
prior to the Optional Termination Date,
4.303% per annum and (ii) following the
Optional Termination Date, 4.803% per
annum.
"Class AF-2 Pass-Through Rate": For each Distribution Date (i) on
or
prior to the Optional Termination Date,
4.782% per annum and (ii) following the
Optional Termination Date, 5.282% per
annum.
"Class AF-3 Pass-Through Rate": For each Distribution Date (i) on
or
prior to the Optional Termination Date,
5.561% per annum and (ii) following the
Optional Termination Date, 6.061% per
annum.
"Class AF-4 Lockout Distribution Amount": With respect to any
Distribution Date, the least of (x) the
Certificate Principal Balance of the
Class AF-4 Certificates immediately prior
to such Distribution Date, (y) the
product of (i) the Class AF-4 Lockout
Distribution Percentage for such
Distribution Date and (ii) the Class AF-4
Pro Rata Distribution Amount for such
Distribution Date and (z) the Group II
Principal Distribution Amount plus the
excess, if any, of (i) the Group I
Principal Distribution Amount as of such
Distribution Date over (ii) the sum of the
Class Certificate Balances of the
Class AV-1 and Class AV-2 Certificates
prior to such Distribution Date.
"Class AF-4 Lockout Distribution Percentage": For any
Distribution
Date, the percentage indicated below:
Distribution Date Occurring in Class AF-4 Lockout
Distribution
Percentage
April 2005
through March 2008
0%
April 2008
through March 2010
45%
April 2010
through March 2011
80%
April 2011
through March 2012
100%
April 2012 and
thereafter
300%
"Class AF-4 Pass-Through Rate": For each Distribution Date (i) on
or
prior to the Optional Termination Date,
5.263% per annum and (ii) following the
Optional Termination Date, 5.763% per
annum.
"Class AF-4 Pro Rata Distribution Amount": As of any
Distribution
Date, the product of (x) a fraction, the
numerator of which is the Certificate
Principal Balance of the Class AF-4
Certificates immediately prior to such
Distribution Date and the denominator of
which is the sum of the Certificate
Principal Balances of the Class AF-1, Class
AF-2, Class AF-3 and Class AF-4
Certificates immediately prior to such
Distribution Date and (y) the Group II
Principal Distribution Amount for such
Distribution Date plus the excess, if
any, of (i) the Group I Principal
Distribution Amount as of such Distribution
Date over (ii) the sum of the Class
Certificate Balances of the Class AV-1 and
Class AV-2 Certificates prior to such
Distribution Date.
"Class AV-1 Certificate Margin": For each Distribution Date (i)
on
or prior to the Optional Termination Date,
0.100% per annum, and (ii) following
the Optional Termination Date, 0.200% per
annum.
"Class AV-1 Pass-Through Rate": For each Distribution Date, the
lesser of (i) LIBOR as of the related LIBOR
Determination Date plus the Class
AV-1 Certificate Margin and (ii) the Group
I Maximum Rate Cap.
"Class AV-2 Certificate Margin": For each Distribution Date (i)
on
or prior to the Optional Termination Date,
0.200% per annum, and (ii) following
the Optional Termination Date, 0.400% per
annum.
"Class AV-2 Pass-Through Rate": For each Distribution Date, the
lesser of (i) LIBOR as of the related LIBOR
Determination Date plus the Class
AV-2 Certificate Margin and (ii) the Group
I Maximum Rate Cap.
"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, A-3, A-4, A-5 and A-6,
executed by the Trustee on behalf of
the Trust and authenticated and delivered
by the Certificate Registrar,
representing the right to distributions as
set forth herein and therein.
"Class A Certificateholders": Collectively, the Holders of the
Class
A Certificates.
"Class A Interest Carry Forward Amount": For any Distribution
Date,
the sum of the Interest Carry Forward
Amounts for the Class A 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 Principal Distribution Amount
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 Certificates immediately prior
to such Distribution Date over (y) the
lesser of (A) the product of (i) 49.00%
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 Overcollateralization Floor.
"Class B Certificate": Any one of the Certificates with a "B"
designated on the face thereof
substantially in the form annexed hereto as
Exhibits B-1, B-2, B-3, B-4 and B-5,
executed by the Trustee on behalf of the
Trust and authenticated and delivered by
the Certificate Registrar, representing
the right to distributions as set forth
herein and therein.
"Class B Certificateholders": Collectively, the Holders of the
Class
B Certificates.
"Class B-1 Applied Realized Loss Amount": As to the Class B-1
Certificates and as of any Distribution
Date, the lesser of (x) the Certificate
Principal Balance thereof (after taking
into account the distribution of the
Principal Distribution Amount on such
Distribution Date and any increase in
Certificate Principal Balance as a result
of Subsequent Recoveries, but prior to
the application of the Class B-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 B-2 Applied Realized
Loss Amount, the Class B-3 Applied Realized
Loss Amount, the Class B-4 Applied
Realized Loss Amount and the Class B-5
Applied Realized Loss Amount as of such
Distribution Date.
"Class B-1 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date,
1.200% per annum, and (ii) following the
Optional Termination Date, 1.800% per
annum.
"Class B-1 Pass-Through Rate": For each Distribution Date, the
lesser of (i) LIBOR as of the related LIBOR
Determination Date plus the Class
B-1 Certificate Margin and (ii) the Pool
Maximum Rate Cap.
"Class B-1 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as
long as a Trigger Event is not in
effect, the excess of (x) the sum of (i)
the sum of the Certificate Principal
Balances of the Class A Certificates (after
taking into account the payment of
the Class A Principal Distribution Amount
on such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account the
payment of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the payment of
the Class M-3 Principal Distribution Amount
on such Distribution Date) and (v)
the Certificate Principal Balance of the
Class B-1 Certificates immediately
prior to such Distribution Date over (y)
the lesser of (A) the product of (i)
86.80% 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 Overcollateralization
Floor.
"Class B-1 Realized Loss Amortization Amount": As to the Class
B-1
Certificates and as of any Distribution
Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-1
Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum
of the amounts described in Section
4.02(b)(i) through (xiv) hereof, in each
case for such Distribution Date.
"Class B-2 Applied Realized Loss Amount": As to the Class B-2
Certificates and as of any Distribution
Date, the lesser of (x) the Certificate
Principal Balance thereof (after taking
into account the distribution of the
Principal Distribution Amount on such
Distribution Date and any increase in
Certificate Principal Balance as a result
of Subsequent Recoveries, but prior to
the application of the Class B-2 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 B-3 Applied Realized
Loss Amount, the Class B-4 Applied Realized
Loss Amount and the Class B-5
Applied Realized Loss Amount as of such
Distribution Date.
"Class B-2 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date,
1.300% per annum, and (ii) following the
Optional Termination Date, 1.950% per
annum.
"Class B-2 Pass-Through Rate": For each Distribution Date, the
lesser of (i) LIBOR as of the related LIBOR
Determination Date plus the Class
B-2 Certificate Margin and (ii) the Pool
Maximum Rate Cap.
"Class B-2 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as
long as a Trigger Event is not in
effect, the excess of (x) the sum of (i)
the sum of the Certificate Principal
Balances of the Class A Certificates (after
taking into account the payment of
the Class A Principal Distribution Amount
on such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account the
payment of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the payment of
the Class M-3 Principal Distribution Amount
on such Distribution Date), (v) the
Certificate Principal Balance of the Class
B-1 Certificates (after taking into
account the payment of the Class B-1
Principal Distribution Amount on such
Distribution Date) and (vi) the Certificate
Principal Balance of the Class B-2
Certificates immediately prior to such
Distribution Date over (y) the lesser of
(A) the product of (i) 88.50% 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
Overcollateralization Floor.
"Class B-2 Realized Loss Amortization Amount": As to the Class
B-2
Certificates and as of any Distribution
Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-2
Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum
of the amounts described in Section
4.02(b)(i) through (xvii) hereof, in each
case for such Distribution Date.
"Class B-3 Applied Realized Loss Amount": As to the Class B-3
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 and any increase in
Certificate Principal Balance as a result
of Subsequent Recoveries, but prior to
the application of the Class B-3 Applied
Realized Loss Amount, if any, on such
Distribution Date) and (y) the excess of
(i) the Applied Realized Loss Amount as
of such Distribution Date over (ii) the
Class B-4 Applied Realized Loss Amount
and the Class B-5 Applied Realized Loss
Amount as of such Distribution Date.
"Class B-3 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date,
1.800% per annum, and (ii) following the
Optional Termination Date, 2.700% per
annum.
"Class B-3 Pass-Through Rate": For each Distribution Date, the
lesser of (i) LIBOR as of the related LIBOR
Determination Date plus the Class
B-3 Certificate Margin and (ii) the Pool
Maximum Rate Cap.
"Class B-3 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as
long as a Trigger Event is not in
effect, the excess of (x) the sum of (i)
the sum of the Certificate Principal
Balances of the Class A Certificates (after
taking into account the payment of
the Class A Principal Distribution Amount
on such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account the
payment of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the payment of
the Class M-3 Principal Distribution Amount
on such Distribution Date), (v) the
Certificate Principal Balance of the Class
B-1 Certificates (after taking into
account the payment of the Class B-1
Principal Distribution Amount on such
Distribution Date), (vi) the Certificate
Principal Balance of the Class B-2
Certificates (after taking into account the
payment of the Class B-2 Principal
Distribution Amount on such Distribution
Date), and (vii) the Certificate
Principal Balance of the Class B-3
Certificates immediately prior to such
Distribution Date over (y) the lesser of
(A) the product of (i) 90.90% 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
Overcollateralization Floor.
"Class B-3 Realized Loss Amortization Amount": As to the Class
B-3
Certificates and as of any Distribution
Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-3
Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum
of the amounts described in Section
4.02(b)(i) through (xx) hereof, in each case
for such Distribution Date.
"Class B-4 Applied Realized Loss Amount": As to the Class B-4
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 and any increase in
Certificate Principal Balance as a result
of Subsequent Recoveries, but prior to
the application of the Class B-4 Applied
Realized Loss Amount, if any, on such
Distribution Date) and (y) the excess of
(i) the Applied Realized Loss Amount as
of such Distribution Date over (ii) the
Class B-5 Applied Realized Loss Amount
as of such Distribution Date.
"Class B-4 Pass-Through Rate": For each Distribution Date (i) on
or
prior to the Optional Termination Date,
6.000% per annum and (ii) following the
Optional Termination Date, 6.500% per
annum.
"Class B-4 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as
long as a Trigger Event is not in
effect, the excess of (x) the sum of (i)
the sum of the Certificate Principal
Balances of the Class A Certificates (after
taking into account the payment of
the Class A Principal Distribution Amount
on such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account the
payment of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the payment of
the Class M-3 Principal Distribution Amount
on such Distribution Date), (v) the
Certificate Principal Balance of the Class
B-1 Certificates (after taking into
account the payment of the Class B-1
Principal Distribution Amount on such
Distribution Date), (vi) the Certificate
Principal Balance of the Class B-2
Certificates (after taking into account the
payment of the Class B-2 Principal
Distribution Amount on such Distribution
Date), (vii) the Certificate Principal
Balance of the Class B-3 Certificates
(after taking into account the payment of
the Class B-3 Principal Distribution Amount
on such Distribution Date) and
(viii) the Certificate Principal Balance of
the Class B-4 Certificates
immediately prior to such Distribution Date
over (y) the lesser of (A) the
product of (i) 93.30% 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
Overcollateralization Floor.
"Class B-4 Realized Loss Amortization Amount": As to the Class
B-4
Certificates and as of any Distribution
Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-4
Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum
of the amounts described in Section
4.02(b)(i) through (xxiii) hereof, in each
case for such Distribution Date.
"Class B-5 Applied Realized Loss Amount": As to the Class B-5
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 and any increase in
Certificate Principal Balance as a result
of Subsequent Recoveries, but prior to
the application of the Class B-5 Applied
Realized Loss Amount, if any, on such
Distribution Date) and (y) the Applied
Realized Loss Amount as of such
Distribution Date.
"Class B-5 Pass-Through Rate": For each Distribution Date (i) on
or
prior to the Optional Termination Date,
6.000% per annum and (ii) following the
Optional Termination Date, 6.500% per
annum.
"Class B-5 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as
long as a Trigger Event is not in
effect, the excess of (x) the sum of (i)
the sum of the Certificate Principal
Balances of the Class A Certificates (after
taking into account the payment of
the Class A Principal Distribution Amount
on such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account the
payment of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the payment of
the Class M-3 Principal Distribution Amount
on such Distribution Date), (v) the
Certificate Principal Balance of the Class
B-1 Certificates (after taking into
account the payment of the Class B-1
Principal Distribution Amount on such
Distribution Date), (vi) the Certificate
Principal Balance of the Class B-2
Certificates (after taking into account the
payment of the Class B-2 Principal
Distribution Amount on such Distribution
Date), (vii) the Certificate Principal
Balance of the Class B-3 Certificates
(after taking into account the payment of
the Class B-3 Principal Distribution Amount
on such Distribution Date), (viii)
the Certificate Principal Balance of the
Class B-4 Certificates (after taking
into account the payment of the Class B-4
Principal Distribution Amount on such
Distribution Date) and (ix) the Certificate
Principal Balance of the Class B-5
Certificates immediately prior to such
Distribution Date over (y) the lesser of
(A) the product of (i) 95.50% 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
Overcollateralization Floor.
"Class B-5 Realized Loss Amortization Amount": As to the Class
B-5
Certificates and as of any Distribution
Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-5
Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum
of the amounts described in Section
4.02(b)(i) through (xxvi) hereof, in each
case for such Distribution Date.
"Class M Cap Amount": As to each class of the Class M
Certificates
and any Distribution Date, an amount equal
to (i) the Class M Yield Maintenance
Agreement Payment for such Distribution
Date multiplied by (ii) a fraction equal
to (a) the Certificate Principal Balance of
such class immediately prior to such
Distribution Date divided by (b) the
aggregate Certificate Principal Balance of
Class M Certificates immediately prior to
such Distribution Date.
"Class M Certificate": Any one of the Certificates with an "M"
designated on the face thereof
substantially in the form annexed hereto as
Exhibit C-2, Exhibit C-3 and Exhibit C-4,
executed by the Trustee on behalf of
the Trust and authenticated and delivered
by the Certificate Registrar,
representing the right to distributions as
set forth herein and therein.
"Class M
Certificateholders":
Collectively, the
Holders of the
Class M Certificates.
"Class M Reserve Account": The trust account created and
maintained
by the Trustee pursuant to Section 3.04(f)
which shall be entitled "Class M
Reserve Account, JPMorgan Chase Bank,
National Association, as Trustee, in trust
for registered Holders of C-BASS Mortgage
Loan Asset-Backed Certificates, Series
2005-CB2" and which must be an Eligible
Account. Amounts on deposit in the Class
M Reserve Account shall not be invested.
The Class M Reserve Account shall not
be an asset of any REMIC formed under this
Agreement.
"Class M Yield Maintenance Agreement": The interest rate cap
agreement between the Trustee, on behalf of
the Trust, and the Class M Yield
Maintenance Agreement Provider
substantially in the form attached hereto as
Exhibit S-2. The Class M Yield Maintenance
Agreement shall not be an asset of
any REMIC formed under this Agreement.
"Class M Yield Maintenance Agreement Payment": On each
Distribution
Date through the Distribution Date in
August 2007 (other than the initial
Distribution Date), an amount equal to the
product of (a) the excess of the
lesser of (i) one-month LIBOR and (ii) the
Cap Rate #1 over the Cap Rate #2 for
such Distribution Date, both as set forth
on the schedule attached to the
confirmation to the Class M Yield
Maintenance Agreement, (b) the product of the
cap notional amount and the scale factor,
both as set forth for that
Distribution Date on the schedule attached
to the confirmation to the Class M
Yield Maintenance Agreement and (c) a
fraction, the numerator of which is the
actual number of days elapsed since the
previous Distribution Date to but
excluding the current Distribution Date and
the denominator of which is 360.
"Class M Yield Maintenance Agreement Provider": The Bank of New
York, and any successor thereto.
"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 and any increase in
Certificate Principal Balance as a result
of Subsequent Recoveries, but prior to
the application of the Class M-1 Applied
Realized Loss Amount, if any, on such
Distribution Date) and (y) the excess of
(i) the Applied Realized Loss Amount as
of such Distribution Date over (ii) the sum
of the Class M-2 Applied Realized
Loss Amount, the Class M-3 Applied Realized
Loss Amount, the Class B-1 Applied
Realized Loss Amount, the Class B-2 Applied
Realized Loss Amount, the Class B-3
Applied Realized Loss Amount, the Class B-4
Applied Realized Loss Amount and the
Class B-5 Applied Realized Loss Amount, in
each case as of such Distribution
Date.
"Class M-1 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date,
0.440% per annum, and (ii) following the
Optional Termination Date, 0.660% per
annum.
"Class M-1 Pass-Through Rate": For each Distribution Date, the
lesser of (i) LIBOR as of the related LIBOR
Determination Date plus the Class
M-1 Certificate Margin and (ii) the Pool
Maximum Rate Cap.
"Class M-1 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as
long as a Trigger Event is not in
effect, the excess of (x) the sum of (i)
the Certificate Principal Balances of
the Class A 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) 71.50% 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 Overcollateralization Floor.
"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-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 and any increase in
Certificate Principal Balance as a result
of Subsequent Recoveries, 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 sum of the Class M-3 Applied
Realized Loss Amount, the Class B-1 Applied
Realized Loss Amount, the Class B-2
Applied Realized Loss Amount, the Class B-3
Applied Realized Loss Amount, the
Class B-4 Applied Realized Loss Amount and
the Class B-5 Applied Realized Loss
Amount, in each case as of such
Distribution Date.
"Class M-2 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date,
0.630% per annum, and (ii) following the
Optional Termination Date, 0.945% per
annum.
"Class M-2 Pass-Through Rate": For each Distribution Date, the
lesser of (i) LIBOR as of the related LIBOR
Determination Date plus the Class
M-2 Certificate Margin and (ii) the Pool
Maximum Rate Cap.
"Class M-2 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as
long as a Trigger Event is not in
effect, the excess of (x) the sum of (i)
the Certificate Principal Balances of
the Class A 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) 81.00% 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
Overcollateralization Floor.
"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-3 Applied Realized Loss Amount": As to the Class M-3
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 and any increase in
Certificate Principal Balance as a result
of Subsequent Recoveries, but prior to
the application of the Class M-3 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 sum of the Class B-1 Applied
Realized Loss Amount, the Class B-2 Applied
Realized Loss Amount, the Class B-3
Applied Realized Loss Amount, the Class B-4
Applied Realized Loss Amount and the
Class B-5 Applied Realized Loss Amount, in
each case as of such Distribution
Date.
"Class M-3 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date,
0.700% per annum, and (ii) following the
Optional Termination Date, 1.050% per
annum.
"Class M-3 Pass-Through Rate": For each Distribution Date, the
lesser of (i) LIBOR as of the related LIBOR
Determination Date plus the Class
M-3 Certificate Margin and (ii) the Pool
Maximum Rate Cap.
"Class M-3 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as
long as a Trigger Event is not in
effect, the excess of (x) the sum of (i)
the Certificate Principal Balances of
the Class A 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), (ii) the Certificate Principal
Balance of the Class M-2 Certificates
(after taking into account the payment of
the Class M-2 Principal Distribution
Amount on such Distribution Date) and (iv)
the Certificate Principal Balance of
the Class M-3 Certificates immediately
prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 84.00%
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 Overcollateralization Floor.
"Class M-3 Realized Loss Amortization Amount": As to the Class
M-3
Certificates and as of any Distribution
Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-3
Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum
of the amounts described in Section
4.02(b)(i) through (xi) hereof, in each case
for such Distribution Date.
"Class N Certificate": Any one of the Certificates with an "N"
designated on the face thereof
substantially in the form annexed hereto as
Exhibit C-6, executed by the Trustee on
behalf of the Trust and authenticated
and delivered by the Certificate Registrar,
representing the right to
distributions as set forth herein and
therein.
"Class N Notional Amount": As of any date, the Notional Amount
of
the Class N Certificates.
"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-1A
and evidencing the ownership of the
Residual Interest in each of REMIC 1 and
REMIC 2. The Class R Certificate represents
the ownership of the Class R-1
Interest and Class R-2 Interest.
"Class R-A Interest": The uncertificated residual interest in
REMIC
A.
"Class R-B Interest": The uncertificated residual interest in
REMIC
B.
"Class R-C Interest": The uncertificated residual interest in
REMIC
C.
"Class R-D Interest": The uncertificated residual interest in
REMIC
D.
"Class R-E Interest": The uncertificated residual interest in
REMIC
E.
"Class R-F Interest": The uncertificated residual interest in
REMIC
F.
"Class R-X Certificate": The Class R-X Certificate executed by
the
Trustee on behalf of the Trust, and
authenticated and delivered by the
Certificate Registrar, substantially in the
form annexed hereto as Exhibit C-1B
and evidencing the ownership of the
Residual Interest in each of REMIC A, REMIC
B, REMIC C, REMIC D, REMIC E and REMIC F.
The Class R-X Certificate represents
the ownership of the Class R-A Interest,
Class R-B Interest, Class R-C Interest,
Class R-D Interest, Class R-E Interest and
Class R-F 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": Any one of the Class X Certificates as 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
Certificate Registrar, representing the
right to distributions as set forth
herein and therein.
"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).
"Class X Notional Amount": As of any date, the Notional Amount
of
the Class X Certificates.
"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 ownership of the REMIC A Class
X/N Interest and beneficial rights
with respect to the Yield Maintenance
Agreements and the Reserve Accounts, less
the amount (without duplication) of any Cap
Carryover Amounts paid pursuant to
Section 4.02(b)(xxviii) and (xxix).
"Class X/N Uncertificated Principal Balance": The Initial
Overcollateralization Amount minus the sum
of (i) any Realized Losses allocated
thereto and (ii) any amounts distributed
(or deemed distributed) to the REMIC 2
Class X/N Interest or REMIC A Class X/N
Interest with respect thereto.
"Closing Date": April 7, 2005.
"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 "Collection
Account, Litton Loan Servicing LP, as
Servicer in trust for registered Holders
of 2005-CB2 Trust, C-BASS Mortgage Loan
Asset-Backed Certificates, Series
2005-CB2," 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 as of such
date of determination plus the principal
balance of any related senior mortgage
loan, if any, at origination of the
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 not an
FHA
Loan.
"Co-op Shares": Shares issued by private non-profit housing
corporations.
"Corporate Trust Office": With respect to the Trustee, the
principal
corporate trust office of the Trustee at
which at any particular time (a) 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 4 New York Plaza, 6th Floor, New
York, New York 10004-2477,
Attention: Institutional Trust
Services/Global Debt, C-BASS Series 2005-CB2, and
(b) Certificates may be presented for
transfer and exchanged and for purposes of
surrender for the final distributions
thereon is located at 2001 Bryon Street,
10th Floor, Dallas, Texas 75201, Attention:
Institutional Trust Services, C-BASS
2005-CB2 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.
"Corresponding Classes": With respect to REMIC 1 and REMIC 2,
the
following Classes shall be Corresponding
Classes:
--------------------------------------------------------------------------------
Corresponding REMIC 1 Classes
Corresponding REMIC 2 Classes
--------------------------------------------------------------------------------
LT1AV1
Class AV-1 Certificates
--------------------------------------------------------------------------------
LT1AV2
Class AV-2 Certificates
--------------------------------------------------------------------------------
LT1AF1
Class AF-1 Certificates
--------------------------------------------------------------------------------
LT1AF2
Class AF-2 Certificates
--------------------------------------------------------------------------------
LT1AF3
Class AF-3 Certificates
--------------------------------------------------------------------------------
LT1AF4
Class AF-4 Certificates
--------------------------------------------------------------------------------
LT1M1
Class M-1 Certificates
--------------------------------------------------------------------------------
LT1M2
Class M-2 Certificates
--------------------------------------------------------------------------------
LT1M3
Class M-3 Certificates
--------------------------------------------------------------------------------
LT1B1
REMIC 2 Class B-1 Interest
--------------------------------------------------------------------------------
LT1B2
REMIC 2 Class B-2 Interest
--------------------------------------------------------------------------------
LT1B3
REMIC 2 Class B-3 Interest
--------------------------------------------------------------------------------
LT1B4
REMIC 2 Class B-4 Interest
--------------------------------------------------------------------------------
LT1B5
REMIC 2 Class B-5 Interest
--------------------------------------------------------------------------------
"Custodial Agreement": The Custodial Agreement, dated as of March
1,
2005, among the Trustee, the Servicer and
the Custodian, as the same may be
amended or supplemented pursuant to the
terms thereof.
"Custodian": The Bank of New York, a New York banking
corporation,
or any successor custodian appointed
pursuant to the terms of the Custodial
Agreement.
"Cut-off Date": March 1, 2005.
"Cut-off Date Principal Balance": With respect to any Mortgage
Loan,
the unpaid principal balance thereof as of
the Cut-off Date after application of
funds received or advanced on or before
such date (or as of the applicable date
of substitution with respect to an Eligible
Substitute Mortgage Loan).
"DBRS": Dominion Bond Rating Service, Inc. and its successors,
and
if such company shall for any reason no
longer perform the functions of a
securities rating agency, "DBRS" shall be
deemed to refer to any other
"nationally recognized statistical rating
organization" as set forth on the most
current list of such organizations released
by the Securities and Exchange
Commission.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment
for such Mortgage Loan by a court of
competent jurisdiction in a proceeding
under the Bankruptcy Code, except such a
reduction resulting from a Deficient
Valuation.
"Defective Mortgage Loan": A Mortgage Loan replaced or to be
replaced by one or more Eligible Substitute
Mortgage Loans.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property
by a court of competent jurisdiction
in an amount less than the then outstanding
principal balance of the Mortgage
Loan, which valuation results from a
proceeding initiated under the Bankruptcy
Code.
"Definitive Certificates": As defined in Section 5.02(c)
hereof.
"Delinquent": Any Mortgage Loan with respect to which the
Monthly
Payment and/or any Escrow Payment due on a
Due Date is not made by the close of
business on the next scheduled Due Date for
such Mortgage Loan or any Mortgage
Loan with respect to which any Servicing
Advances made on or before the Cut-off
Date has not been reimbursed by the related
Mortgagor.
"Depositor": Asset Backed Funding Corporation, a Delaware
corporation, or any successor in
interest.
"Depository": The initial depository shall be The Depository
Trust
Company, whose nominee is Cede & Co.,
or any other organization registered as a
"clearing agency" pursuant to Section 17A
of the Exchange Act. The Depository
shall initially be the registered Holder of
the Book-Entry Certificates. The
Depository shall at all times be a
"clearing corporation" as defined in Section
8-102(3) of the Uniform Commercial Code of
the State of New York.
"Depository Participant": A broker, dealer, bank or other
financial
institution or other person for whom from
time to time a Depository effects
book-entry transfers and pledges of
securities deposited with the Depository.
"Determination Date": With respect to any Distribution Date,
the
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
under this Agreement) shall not be
considered to Directly Operate an REO
Property solely because the Trustee (or the
Servicer under this Agreement)
establishes rental terms, chooses tenants,
enters into or renews leases, deals
with taxes and insurance, or makes
decisions as to repairs or capital
expenditures with respect to such REO
Property.
"Disqualified Non-U.S. Person": With respect to a Residual
Certificate, any (A) non-U.S. Person or
agent thereof or (B) U.S. Person with
respect to whom income from a Residual
Certificate is attributable to a foreign
permanent establishment or fixed base,
within the meaning of an applicable
income tax treaty, of such Person or any
other U.S. Person.
"Disqualified Organization": A "disqualified organization"
under
Section 860E of the Code, which as of the
Closing Date is any of: (i) the United
States, any state or political subdivision
thereof, any possession of the United
States, any foreign government, any
international organization, or any agency or
instrumentality of any of the foregoing,
(ii) any organization (other than a
cooperative described in Section 521 of the
Code) which is exempt from the tax
imposed by Chapter 1 of the Code unless
such organization is subject to the tax
imposed by Section 511 of the Code, (iii)
any organization described in Section
1381(a)(2)(C) of the Code, or (iv) any
other Person so designated by the Trustee
based upon an Opinion of Counsel provided
by nationally recognized counsel to
the Trustee that the holding of an
ownership interest in a Residual Certificate
by such Person may cause the Trust Fund or
any Person having an ownership
interest in any Class of Certificates
(other than such Person) to incur
liability for any federal tax imposed under
the Code that would not otherwise be
imposed but for the transfer of an
ownership interest in a Residual Certificate
to such Person. A corporation will not be
treated as an instrumentality of the
United States or of any state or political
subdivision thereof if all of its
activities are subject to tax and a
majority of its board of directors is not
selected by a governmental unit. The term
"United States," "state" and
"international organization" shall have the
meanings set forth in Section 7701
of the Code.
"Distribution Account": The trust account or accounts created
and
maintained by the Trustee pursuant to
Section 3.04(b) which shall be entitled
"Distribution Account, JPMorgan Chase Bank,
National Association, as Trustee, in
trust for the registered Holders of
2005-CB2 Trust, C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2005-CB2"
and which must be an Eligible
Account.
"Distribution Date": The 25th day of any calendar month, or if
such
25th day is not a Business Day, the
Business Day immediately following such 25th
day, commencing in April 2005.
"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
Fixed-Rate 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 an Adjustable-Rate Mortgage Loan,
have a Maximum Loan Rate not less
than the Maximum Loan Rate for the
Defective Mortgage Loan, (iv) if an
Adjustable-Rate Mortgage Loan, have a
Minimum Loan Rate not less than the
Minimum Loan Rate of the Defective Mortgage
Loan, (v) if an Adjustable-Rate
Mortgage Loan, have the same Index as the
Defective Mortgage Loan, (vi) if an
Adjustable-Rate Mortgage Loan, have a Gross
Margin equal to or greater than the
Gross Margin of the Defective Mortgage
Loan, (vii) if an Adjustable-Rate
Mortgage Loan, have the same Index as the
Defective Mortgage Loan, (viii) if an
Adjustable-Rate Mortgage Loan, have a next
Adjustment Date not more than two
months later than the next Adjustment Date
on the Defective Mortgage Loan, (ix)
have a remaining term to maturity not
greater than (and not more than one year
less than) that of the Defective Mortgage
Loan, (x) be current as of the date of
substitution, (xi) 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,
(xii) have a risk grading determined by
the Seller at least equal to the risk
grading assigned on the Defective Mortgage
Loan, (xiii) have been reunderwritten by
the Seller in accordance with the same
underwriting criteria and guidelines as the
Defective Mortgage Loan, (xiv) have
the same Due Date as the Defective Mortgage
Loan and (xv) 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 (xii) hereof
shall be satisfied as to each such
mortgage loan, the terms described in
clause (ix) hereof shall be determined on
the basis of weighted average remaining
term to maturity, the Combined
Loan-to-Value Ratios described in clause
(xi) 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 (xv) hereof
must be satisfied as to each Eligible
Substitute Mortgage Loan or in the
aggregate, as the case may be.
"ERISA": The Employee Retirement Income Security Act of 1974,
as
amended.
"ERISA-Restricted Certificates": Any of the Class M-1, Class
M-2,
Class M-3, Class B-1, Class B-2, Class B-3,
Class B-4, Class B-5, Class N, Class
X, Class R and Class R-X Certificates.
"Escrow Account": The account or accounts created and
maintained
pursuant to Section 3.06.
"Escrow Payments": The amounts constituting ground rents,
taxes,
assessments, water rates, mortgage
insurance premiums, fire and hazard insurance
premiums and other payments required to be
escrowed by the Mortgagor with the
mortgagee pursuant to any Mortgage
Loan.
"Estate in Real Property": A fee simple estate in a parcel of
real
property.
"Exchange Act": The Securities Exchange Act of 1934, as
amended.
"Expense Fee Rate": The sum of (i) the Trustee Fee Rate 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.
"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.
"First Lien Mortgage Loan": Any of the Mortgage Loans which are
secured by a first mortgage lien that is
senior to a junior lien, if any, on the
related Mortgaged Property.
"Fitch": Fitch Ratings and its successors, and if such company
shall
for any reason no longer perform the
functions of a securities rating agency,
"Fitch" shall be deemed to refer to any
other "nationally recognized statistical
rating organization" as set forth on the
most current list of such organizations
released by the Securities and Exchange
Commission.
"Fixed-Rate Certificates": Any of the Class AF-1, Class AF-2,
Class
AF-3, Class AF-4, Class B-4 and Class B-5
Certificates.
"Fixed-Rate Mortgage Loan": A Mortgage Loan which has a
constant
annual rate at which interest accrues in
accordance with the provisions of the
related Mortgage Note.
"Floating Rate Certificates": Any of the Class AV-1, Class
AV-2,
Class M-1, Class M-2, Class M-3, Class B-1,
Class B-2 and Class B-3
Certificates.
"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,
REMIC 2, REMIC A, REMIC B, REMIC C, REMIC
D, REMIC E and REMIC F consisting of
(a) the right of the Fixed-Rate and
Floating Rate Certificates to receive Cap
Carryover Amounts, (b) the Yield
Maintenance Agreements, the Reserve Accounts
and the beneficial interest of the Class
X/N Interest with respect thereto and
(c) the obligation of the Class X/N
Interest to pay Cap Carryover Amounts.
"Gross Margin": With respect to each Adjustable-Rate Mortgage
Loan,
the fixed percentage, if any, 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 Subordinate Amount": With respect to any Distribution
Date
and (i) Loan Group I, the excess of the
aggregate Principal Balance of the Group
I Mortgage Loans as of the first day of the
related Collection Period over the
Certificate Principal Balance of the Class
AV-1 and Class AV-2 Certificates
immediately prior to such Distribution Date
and (ii) Loan Group II, the excess
of the aggregate Principal Balance of the
Group II Mortgage Loans as of the
first day of the related Collection Period
over the aggregate Certificate
Principal Balance of the Class AF-1, Class
AF-2, Class AF-3 and Class AF-4
Certificates immediately prior to such
Distribution Date.
"Group I Cap": With respect to any Distribution Date, a per
annum
rate (adjusted by multiplying such rate by
a fraction equal to 30 over the
actual number of days in the related
Interest Accrual Period) equal to the
Weighted Average Net Mortgage Rate for the
Group I Mortgage Loans for such
Distribution Date as of the first day of
the related Collection Period.
"Group I Interest Remittance Amount": As of any Distribution
Date,
the sum, without duplication, of (i) all
interest received by the Servicer on or
prior to the related Determination Date for
such Distribution Date or advanced
with respect to Monthly Payments due during
the related Collection Period on the
Group I Mortgage Loans (less the Servicing
Fee, amounts available for
reimbursement of Advances and Servicing
Advances pursuant to Section 3.05 and
expenses reimbursable pursuant to Section
6.03), (ii) the portion of any full or
partial Principal Prepayment related to
interest with respect to a Group I
Mortgage Loan received during the related
Prepayment Period, (iii) all
Compensating Interest paid by the Servicer
on the related Determination Date
with respect to the Group I Mortgage Loans,
(iv) the portion of any payment in
connection with any Purchase Price, Net
Liquidation Proceeds, Insurance Proceeds
or Condemnation Proceeds relating to
interest with respect to the Group I
Mortgage Loans received during the related
Prepayment Period, (v) the portion of
any Substitution Adjustment Amount relating
to interest with respect to the
Group I Mortgage Loans received during the
related Prepayment Period, (vi) with
respect to the related Distribution Date on
which the Trust is to be terminated
in accordance with the Section 10.01
hereof, that portion of the Termination
Price with respect to the Group I Mortgage
Loans in respect of interest and
(vii) the portion of any Reimbursement
Amount or Recovery related to the Group I
Mortgage Loans received during the related
Prepayment Period.
"Group I Maximum Rate Cap": With respect to any Distribution
Date
and the Class AV-1 and Class AV-2
Certificates, a per annum rate (adjusted by
multiplying such rate by a fraction equal
to 30 over the actual number of days
in the related Interest Accrual Period)
equal to the weighted average of the Net
Maximum Mortgage Interest Rates for the
Group I Mortgage Loans, weighted on the
basis of the Principal Balances of the
Group I Mortgage Loans as of the first
day of the related Collection Period.
"Group I Mortgage Loan": A Mortgage Loan in Loan Group I.
"Group I Mortgage Loan Schedule": The Mortgage Loan Schedule,
evidencing the Group I Mortgage Loans,
attached hereto as Exhibit D-1.
"Group I Principal Allocation Percentage": As of any
Distribution
Date, a fraction expressed as a percentage,
the numerator of which is the
Principal Remittance Amount allocable to
the Group I Mortgage Loans for such
Distribution Date and the denominator of
which is equal to the Principal
Remittance Amount for such Distribution
Date.
"Group I Principal Distribution Amount": As of any Distribution
Date, the product of the Group I Principal
Allocation Percentage and the Class A
Principal Distribution Amount.
"Group I Reserve Account": The trust account created and
maintained
by the Trustee pursuant to Section 3.04(f)
which shall be entitled "Group I
Reserve Account, JPMorgan Chase Bank,
National Association, as Trustee, in trust
for registered Holders of C-BASS Mortgage
Loan Asset-Backed Certificates, Series
2005-CB2" and which must be an Eligible
Account. Amounts on deposit in the Group
I Reserve Account shall not be invested.
The Group I Reserve Account shall not
be an asset of any REMIC formed under this
Agreement.
"Group I Yield Maintenance Agreement": The interest rate cap
agreement between the Trustee, on behalf of
the Trust, and the Group I Yield
Maintenance Agreement Provider
substantially in the form attached hereto as
Exhibit S-1. The Group I Yield Maintenance
Agreement shall not be an asset of
any REMIC formed under this Agreement.
"Group I Yield Maintenance Agreement Payment": On each
Distribution
Date through the Distribution Date in
September 2006 (other than the initial
Distribution Date), an amount equal to the
product of (a) the excess of the
lesser of (i) one-month LIBOR and (ii) the
Cap Rate #1 over the Cap Rate #2 for
such Distribution Date, both as set forth
on the schedule attached to the
confirmation to the Group I Yield
Maintenance Agreement, (b) the product of the
cap notional amount and the scale factor,
both as set forth for that
Distribution Date on the schedule attached
to the confirmation to the Group I
Yield Maintenance Agreement and (c) a
fraction, the numerator of which is the
actual number of days elapsed since the
previous Distribution Date to but
excluding the current Distribution Date and
the denominator of which is 360.
"Group I Yield Maintenance Agreement Provider": The Bank of New
York, and any successor thereto.
"Group II Cap": With respect to any Distribution Date, a per
annum
rate equal to the Weighted Average Net
Mortgage Rate for the Group II Mortgage
Loans for such Distribution Date as of the
first day of the related Collection
Period.
"Group II Interest Remittance Amount": As of any Distribution
Date,
the sum, without duplication, of (i) all
interest received by the Servicer on or
prior to the related Determination Date for
such Distribution Date or advanced
with respect to Monthly Payments due during
the related Collection Period on the
Group II Mortgage Loans (less the Servicing
Fee, amounts available for
reimbursement of Advances and Servicing
Advances pursuant to Section 3.05 and
expenses reimbursable pursuant to Section
6.03), (ii) the portion of any full or
partial Principal Prepayment related to
interest with respect to a Group II
Mortgage Loan received during the related
Prepayment Period, (iii) all
Compensating Interest paid by the Servicer
on the related Determination Date
with respect to the Group II Mortgage
Loans, (iv) the portion of any payment in
connection with any Purchase Price, Net
Liquidation Proceeds, Insurance Proceeds
or Condemnation Proceeds relating to
interest with respect to the Group II
Mortgage Loans received during the related
Prepayment Period, (v) the portion of
any Substitution Adjustment Amount relating
to interest with respect to the
Group II Mortgage Loans received during the
related Prepayment Period, (vi) with
respect to the related Distribution Date on
which the Trust is to be terminated
in accordance with the Section 10.01
hereof, that portion of the Termination
Price with respect to the Group II Mortgage
Loans in respect of interest and
(vii) the portion of any Reimbursement
Amount or Recovery related to the Group
II Mortgage Loans received during the
related Prepayment Period.
"Group II Mortgage Loan": A Mortgage Loan in Loan Group II.
"Group II Mortgage Loan Schedule": The Mortgage Loan Schedule,
evidencing the Group II Mortgage Loans,
attached hereto as Exhibit D-2.
"Group II Principal Allocation Percentage": As of any
Distribution
Date, a fraction expressed as a percentage,
the numerator of which is the
Principal Remittance Amount allocable to
the Group II Mortgage Loans for such
Distribution Date and the denominator of
which is equal to the Principal
Remittance Amount for such Distribution
Date.
"HUD": The United States Department of Housing and Urban
Development, or any successor thereto,
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
Regulations Section 1.856-4(b)(5), or (ii)
any other Person (including the Servicer)
if the Trustee has received an Opinion
of Counsel, which Opinion of Counsel shall
be an expense of the Trust Fund, to
the effect that the taking of any action in
respect of any REO Property by such
Person, subject to any conditions therein
specified, that is otherwise herein
contemplated to be taken by an Independent
Contractor will not cause such REO
Property to cease to qualify as
"foreclosure property" within the meaning of
Section 860G(a)(8) of the Code (determined
without regard to the exception
applicable for purposes of Section 860D(a)
of the Code), or cause any income
realized in respect of such REO Property to
fail to qualify as Rents from Real
Property.
"Index": With respect to each Adjustable-Rate Mortgage Loan and
with
respect to each related Adjustment Date,
the index as specified in the related
Mortgage Note.
"Initial Certificate Principal Balance": With respect to any
Certificate of a Class other than a Class
N, Class X or Residual Certificate,
the amount designated "Initial Certificate
Principal Balance" on the face
thereof.
"Initial Class N Notional Amount": With respect to a Class N
Certificate, the amount designated "Initial
Class N Notional Amount" on the face
thereof.
"Initial Class X Notional Amount": With respect to a Class X
Certificate, the amount designated "Initial
Class X Notional Amount" on the face
thereof.
"Initial Overcollateralization Amount": $9,055,086.84.
"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 Floating Rate
Certificates, the REMIC 2 Class B-1
Interest, the REMIC 2 Class B-2 Interest
and the REMIC 2 Class B-3 Interest, the
period from the preceding Distribution Date
through the day prior to the current
Distribution Date (or, in the case of the
first Distribution Date, the period
from the Closing Date through April 24,
2005), and (ii) with respect to (a) the
Fixed-Rate Certificates, the Class N and
Class X Certificates, the REMIC 2 Class
X/N Interest, the REMIC A Class X/N
Interest, the REMIC 2 Class B-4 Interest and
the REMIC 2 Class B-5 Interest and (b) the
REMIC 1 Regular Interests, the
calendar month immediately preceding the
month in which such Distribution Date
occurs.
"Interest Carry Forward Amount": For any Class of Certificates
(other than the Class X and Residual
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 each
Class 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
Floating Rate Certificates, on the
basis of the actual number of days elapsed
on the basis of a 360-day year since
the prior Distribution Date, and (y) with
respect to the Fixed-Rate Certificates
and the Class N Certificates, on the basis
of a 360-day year consisting of
twelve 30-day months.
"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 of
Certificates, in each case with respect
to such Distribution Date and without
regard to shortfalls caused by the Relief
Act or similar state laws.
"Interest Remittance Amount": As of any Determination Date, the
sum
of the Group I Interest Remittance Amount
and the Group II Interest Remittance
Amount.
"Late Collections": With respect to any Mortgage Loan, all
amounts
received subsequent to the Determination
Date immediately following any related
Collection Period, whether as late payments
of Monthly Payments or as Insurance
Proceeds, 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.
"Lender": As defined
in Section 6.05(b).
"LIBOR": With respect to each Interest Accrual Period, the rate
determined by the Trustee on the related
LIBOR Determination Date on the basis
of the offered rate for one-month United
States dollar deposits, as such rate
appears on the Telerate Page 3750, as of
11:00 a.m. (London time) on such LIBOR
Determination Date. If no such quotations
are available on an LIBOR
Determination Date, 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
quotations as to the rate at which deposits in U.S. Dollars are
offered as
of 11:00 a.m. (London time) to prime banks in the London
interbank
market for a period of one month in amounts approximately equal
to the
aggregate Certificate Principal Balance of the Floating Rate
Certificates, 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 Depositor, as of 11:00 a.m., New York City
time, on
such date
for loans in U.S. Dollars to leading European banks for a
period
of one
month in amounts approximately equal to the aggregate
Certificate
Principal
Balance of the Floating Rate 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 Floating Rate
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.
"Loan Group": Either of Loan Group I or Loan Group II, as the
context requires.
"Loan Group Balance": Either of the Group I Loan Balance or the
Group II Loan Balance, as applicable.
"Loan Group I": The pool of Mortgage Loans identified in Exhibit
D-1
as having been assigned to Loan Group
I.
"Loan Group II": The pool of Mortgage Loans identified in
Exhibit
D-2 as having been assigned to Loan Group
II.
"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.
"Marker Rate": With respect to the REMIC A Class X/N Interest
and
the REMIC 2 Class X/N Interest and any
Distribution Date, a per annum rate equal
to two (2) times the weighted average of
the Uncertificated REMIC Pass-Through
Rates for REMIC 1 Regular Interest LT1AF1,
REMIC 1 Regular Interest LT1AF2,
REMIC 1 Regular Interest LT1AF3, REMIC 1
Regular Interest LT1AF4, REMIC 1
Regular Interest LT1AV1, REMIC 1 Regular
Interest LT1AV2, REMIC 1 Regular
Interest LT1M1, REMIC 1 Regular Interest
LT1M2, REMIC 1 Regular Interest LT1M3,
REMIC 1 Regular Interest LT1B1, REMIC 1
Regular Interest LT1B2, REMIC 1 Regular
Interest LT1B3, REMIC 1 Regular Interest
LTB4, REMIC 1 Regular Interest LTB5 and
REMIC 1 Regular Interest LT1ZZ, (i) with
the rate on each such REMIC Regular
Interest (other than REMIC 1 Regular
Interest LT1ZZ) subject to a cap equal to
the Pass-Through Rate of its Corresponding
Class (taking into account in
determining any such Pass-Through Rate the
imposition of the Group I Cap, Group
II Cap or Pool Cap, as applicable, as
described in footnotes 1 through 14 to the
table at the end of the Preliminary
Statement) for the purposes of this
calculation and (ii) with the rate on REMIC
1 Regular Interest LT1ZZ subject to
a cap of zero for the purpose of this
calculation; provided, however, that for
this purpose, calculations of the
Uncertificated REMIC 1 Pass-Through Rate and
the Caps with respect to each such REMIC
Regular Interest (other than REMIC 1
Regular Interest LT1AF1, REMIC 1 Regular
Interest LT1AF2, REMIC 1 Regular
Interest LT1AF3, REMIC 1 Regular Interest
LT1AF4, REMIC 1 Regular Interest
LT1B4, REMIC 1 Regular Interest LT1B5 and
REMIC 1 Regular Interest LT1ZZ) shall
be multiplied by a fraction, the numerator
of which is the actual number of days
in the Interest Accrual Period and the
denominator of which is 30.
"Maximum Loan Rate": With respect to each Adjustable-Rate
Mortgage
Loan, the percentage set forth in the
related Mortgage Note as the maximum
Mortgage Interest Rate thereunder.
"Maximum LT1ZZ Uncertificated Accrued Interest Deferral
Amount":
With respect to any Distribution Date, the
excess of (a) accrued interest at the
Uncertificated REMIC 1 Pass-Through Rate
applicable to REMIC 1 Regular Interest
LT1ZZ for such Distribution Date on a
balance equal to the Uncertificated
Principal Balance of REMIC 1 Regular
Interest LT1ZZ minus the REMIC 1
Overcollateralized Amount, in each case for
such Distribution Date, over (b)
Uncertificated Accrued Interest on REMIC 1
Regular Interest LT1AF1, REMIC 1
Regular Interest LT1AF2, REMIC 1 Regular
Interest LT1AF3, REMIC 1 Regular
Interest LT1AF4, REMIC 1 Regular Interest
LT1AV1, REMIC 1 Regular Interest
LT1AV2, REMIC 1 Regular Interest LT1M1,
REMIC 1 Regular Interest LT1M2, REMIC 1
Regular Interest LT1M3, REMIC 1 Regular
Interest LT1B1, REMIC 1 Regular Interest
LT1B2, REMIC 1 Regular Interest LT1B3,
REMIC 1 Regular Interest LT1B4 and REMIC
1 Regular Interest LT1B5, each subject to a
cap equal to the Pass-Through Rate
of the related Corresponding Class (taking
into account in determining any such
Pass-Through Rate the imposition of the
Group I Cap, Group II Cap or Pool Cap,
as applicable, as described in footnotes 1
through 14 to the table at the end of
the Preliminary Statement) for the purpose
of this calculation; provided,
however, that for this purpose,
calculations of the Uncertificated REMIC 1
Pass-Through Rate and the related caps with
respect to Uncertificated Accrued
Interest on REMIC 1 Regular Interest
LT1AV1, REMIC 1 Regular Interest LT1AV2,
REMIC 1 Regular Interest LT1M1, REMIC 1
Regular Interest LT1M2, REMIC 1 Regular
Interest LT1M3, REMIC 1 Regular Interest
LT1B1, REMIC 1 Regular Interest LT1B2
and REMIC 1 Regular Interest LT1B3 shall be
multiplied by a fraction, the
numerator of which is the actual number of
days in the Interest Accrual Period
and the denominator of which is 30.
"Maximum Mortgage Interest Rate": With respect to each
Adjustable-Rate Mortgage Loan, the
percentage set forth in the related Mortgage
Note as the maximum Mortgage Interest Rate
thereunder.
"Minimum Loan Rate": With respect to each Adjustable-Rate
Mortgage
Loan, either the percentage set forth in
the related Mortgage Note as the
minimum Mortgage Interest Rate thereunder
or if no such percentage is set forth
in the related Mortgage Note, the Gross
Margin set forth in the related Mortgage
Note.
"Monthly Excess Cashflow Amount": The sum of the Monthly Excess
Interest Amount, the Overcollateralization
Release Amount and (without
duplication) any portion of the Principal
Distribution Amount remaining after
principal distributions on the Offered
Certificates and the Class B
Certificates.
"Monthly Excess Interest Amount": With respect to each
Distribution
Date, the amount, if any, by which the
Interest Remittance Amount for such
Distribution Date exceeds the aggregate
amount distributed on such Distribution
Date pursuant to paragraphs (i) through
(xii) under Section 4.01.
"Monthly Payment": With respect to any Mortgage Loan, the
scheduled
monthly payment of principal and interest
on such Mortgage Loan which is payable
by the related Mortgagor from time to time
under the related Mortgage Note,
determined: (a) after giving effect to (i)
any Deficient Valuation and/or Debt
Service Reduction with respect to such
Mortgage Loan and (ii) any reduction in
the amount of interest collectible from the
related Mortgagor pursuant to the
Relief Act or similar state laws; (b)
without giving effect to any extension
granted or agreed to by the Servicer
pursuant to Section 3.01; and (c) on the
assumption that all other amounts, if any,
due under such Mortgage Loan are paid
when due.
"Moody's": Moody's Investors Service, Inc. and its successors,
and
if such company shall for any reason no
longer perform the functions of a
securities rating agency, "Moody's" shall
be deemed to refer to any other
"nationally recognized statistical rating
organization" as set forth on the most
current list of such organizations released
by the Securities and Exchange
Commission.
"Mortgage": The mortgage, deed of trust or other instrument
creating
a first or second lien on, or first or
second priority security interest in, a
Mortgaged Property securing a Mortgage
Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan
and any additional documents required
to be added to the Mortgage File pursuant
to this Agreement.
"Mortgage 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 Fixed-Rate Mortgage Loan
shall remain constant at the rate set
forth in the Group II Mortgage Loan
Schedule as the Mortgage Interest Rate in
effect immediately following the Cut-off
Date and (ii) in the case of each
Adjustable-Rate Mortgage Loan (A) as of any
date of determination until the
first Adjustment Date following the Cut-off
Date shall be the rate set forth in
the Group I 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 Schedules and set forth in
Exhibits D-1 or D-2 attached hereto.
"Mortgage Loan Purchase Agreement": The agreement between the
Seller
and the Depositor, dated as of March 1,
2005, regarding the transfer of the
Mortgage Loans by the Seller to or at the
direction of the Depositor.
"Mortgage Loan Schedule": As of any date with respect to the
Mortgage Loans, the lists of such Mortgage
Loans included in the Trust Fund on
such date, separately identifying the Group
I Mortgage Loans and the Group II
Mortgage Loans, attached hereto as Exhibits
D-1 and D-2, respectively. Each
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
Mortgage Interest Rate of the Mortgage Loan as of the Cut-off
Date;
(13) the
current principal and interest payment of the Mortgage Loan as
of
the Cut-off Date;
(14) if
the Mortgage Loan is not owner-financed, the Combined
Loan-to-Value Ratio at origination;
(15) a
code indicating the loan performance status of the Mortgage Loan
as
of the Cut-off Date;
(16) a
code indicating whether the Mortgaged Property is in bankruptcy
or
in its forbearance period as of the Cut-off
Date;
(17) a
code indicating whether the Mortgage Loan is conventional or
insured by the FHA;
(18) a
code indicating the Index that is associated with such Mortgage
Loan;
(19) the
Gross Margin;
(20) the
Periodic Rate Cap;
(21) the
Minimum Loan Rate;
(22) the
Maximum Loan Rate;
(23) a
code indicating whether the Mortgage Loan has a prepayment
penalty
and the type of prepayment penalty;
(24) the
first Adjustment Date immediately following the Cut-off Date;
(25) the
rate adjustment frequency;
(26) the
payment adjustment frequency;
(27) a
code indicating whether the Mortgage Loan is owner-financed;
and
(28) a
code indicating whether the Mortgage Loan is a Second Lien
Mortgage
Loan.
Each Mortgage Loan Schedule shall set forth the following
information, as of the Cut-off Date, with
respect to the Mortgage Loans in the
aggregate, for the applicable 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. Each
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
Exhibits
D-1 and D-2 from time to time, and any REO
Properties acquired in respect
thereof.
"Mortgaged Property": The underlying property securing a
Mortgage
Loan (which may also include Co-op Shares),
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 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 Maximum Mortgage Interest Rate": With respect to any
Adjustable-Rate Mortgage Loan, the
applicable Maximum Mortgage Interest Rate
minus the Expense Fee Rate.
"Net Mortgage Interest Rate": With respect to any Mortgage Loan,
the
Mortgage Interest Rate borne by such
Mortgage Loan minus the Expense Fee Rate.
"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 or REO
Property 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 or REO Property as
provided herein.
"Notional Amount": 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 Section 4.02(b)(xxx).
With respect to the REMIC 2 Class X/N
Interest and the REMIC A Class X/N
Interest, an amount equal to the aggregate
principal balance of the REMIC 1
Regular Interests. With respect to the
Class X Certificates, $1.00.
"Offered Certificates": The Class AV-1, Class AV-2, Class AF-1,
Class AF-2, Class AF-3, Class AF-4, Class
M-1, Class M-2 and Class M-3
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 Servicer 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, 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
Residual Certificates, which have an
Original Class Certificate Principal
Balance of zero.
"Original Class X Notional Amount": The Notional Amount of the
Class
X Certificates on the Closing Date, as set
forth opposite such Class in the
Preliminary Statement.
"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 and the Class B Certificates
(after taking into account all
distributions of principal on such Distribution
Date and the increase of any Certificate
Principal Balance as a result of
Subsequent Recoveries).
"Overcollateralization Deficiency": As of any Distribution Date,
the
excess, if any, of (x) the Targeted
Overcollateralization Amount for such
Distribution Date over (y) the
Overcollateralization Amount for such
Distribution Date, calculated for this
purpose after taking into account the
reduction on such Distribution Date of the
Certificate Principal Balances of all
Classes of Offered Certificates and the
Class B Certificates resulting from the
distribution of the Principal Distribution
Amount (but not the Extra Principal
Distribution Amount) on such Distribution
Date, but prior to taking into account
any Applied Realized Loss Amounts on such
Distribution Date.
"Overcollateralization Floor": The product of 0.50% and the
Pool
Balance as of the Cut-off 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 and the Class B
Certificates on such Distribution Date,
over (ii) the Targeted
Overcollateralization Amount for such
Distribution Date. With respect to any
Distribution Date on which a Trigger Event
is in effect, the
Overcollateralization Release Amount will
be zero.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate,
including any interest in such
Certificate as the Holder thereof and any
other interest therein, whether direct
or indirect, legal or beneficial, as owner
or as pledgee.
"Pass-Through Rate": Any of the Class AF-1 Pass-Through Rate,
the
Class AF-2 Pass-Through Rate, the Class
AF-3 Pass-Through Rate, the Class AF-4
Pass-Through Rate, the Class AV-1
Pass-Through Rate, the Class AV-2 Pass-Through
Rate, the Class M-1 Pass-Through Rate, the
Class M-2 Pass-Through Rate, the
Class M-3 Pass-Through Rate, the Class B-1
Pass-Through Rate, the Class B-2
Pass-Through Rate, the Class B-3
Pass-Through Rate, the Class B-4 Pass-Through
Rate and the Class B-5 Pass-Through Rate.
With respect to the Class N
Certificates, the Pass-Through Rate is
12.00% per annum.
With respect to the REMIC 2 Class X/N Interest and the REMIC A
Class
X/N Interest and any Distribution Date, a
per annum rate equal to the percentage
equivalent of a fraction, the numerator of
which is the sum of the amounts
calculated pursuant to clauses (A) through
(P) below, and the denominator of
which is the aggregate of the
Uncertificated Principal Balances of REMIC 1
Regular Interest LT1AA, REMIC 1 Regular
Interest LT1AF1, REMIC 1 Regular
Interest LT1AF2, REMIC 1 Regular Interest
LT1AF3, REMIC 1 Regular Interest
LT1AF4, REMIC 1 Regular Interest LT1AV1,
REMIC 1 Regular Interest LT1AV2, REMIC
1 Regular Interest LT1M1, REMIC 1 Regular
Interest LT1M2, REMIC 1 Regular
Interest LT1M3, REMIC 1 Regular Interest
LT1B1, REMIC 1 Regular Interest LT1B2,
REMIC 1 Regular Interest LT1B3, REMIC 1
Regular Interest LT1B4, REMIC 1 Regular
Interest LT1B5 and REMIC 1 Regular Interest
LT1ZZ. For purposes of calculating
the Pass-Through Rate for the REMIC 2 Class
X/N Interest and the REMIC A Class
X/N Interest, the numerator is equal to the
sum of the following components:
(A) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1AA minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC 1
Regular
Interest LT1AA;
(B) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1AF1 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC 1
Regular
Interest LT1AF1;
(C) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1AF2 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC 1
Regular
Interest LT1AF2;
(D) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1AF3 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC 1
Regular
Interest LT1AF3;
(E) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1AF4 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC 1
Regular
Interest LT1AF4;
(F) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1AV1 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC 1
Regular
Interest LT1AV1;
(G) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1AV2 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC 1
Regular
Interest LT1AV2;
(H) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1M1 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC 1
Regular
Interest LT1M1;
(I) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1M2 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC 1
Regular
Interest LT1M2;
(J) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1M3 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC 1
Regular
Interest LT1M3;
(K) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1B1 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC 1
Regular
Interest LT1B1;
(L) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1B2 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC 1
Regular
Interest LT1B2;
(M) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1B3 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC 1
Regular
Interest LT1B3;
(N) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1B4 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC 1
Regular
Interest LT1B4;
(O) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest
LT1B5 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 1
Regular
Interest LT1B5; and
(P) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1ZZ minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC 1
Regular
Interest LT1ZZ.
"Paying Agent": Any paying agent appointed pursuant to Section
5.05.
"Percentage Interest": With respect to any Certificate (other than
a
Class N, Class X or Residual Certificate),
a fraction, expressed as a
percentage, the numerator of which is the
Initial Certificate Principal Balance
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 Class N Notional Amount by the
Original Class N Notional Amount of such
Class. With respect to a Class X
Certificate, the undivided percentage interest
obtained by dividing the Initial Class X
Notional Amount by the Original Class X
Notional Amount of such Class. With respect
to a Residual Certificate, the
portion of the Class evidenced thereby,
expressed as a percentage, as stated on
the face of such Certificate; provided,
however, that the sum of all such
percentages for each such Class totals
100%.
"Periodic Rate Cap": With respect to each Adjustable-Rate
Mortgage
Loan and any Adjustment Date therefor, the
fixed percentage set forth in the
related Mortgage Note, which is the maximum
amount by which the Mortgage
Interest Rate for such Mortgage Loan may
increase or decrease (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 agents
acting
in their
respective commercial capacities) incorporated under the laws
of
the United
States of America or any state thereof and subject to
supervision and examination by federal and/or state authorities, so
long
as, at the
time of such investment or contractual commitment providing for
such
investment, such depository institution or trust company or its
ultimate
parent has a short-term uninsured debt rating in one of the two
highest
available rating categories of S&P, Moody's and DBRS and
the
highest
available rating category of Fitch and provided that each such
investment
has an original maturity of no more than 365 days and (B) any
other
demand or time deposit or deposit which is fully insured by the
FDIC;
(iii) repurchase obligations with a term not to exceed 30 days
with
respect to
any security described in clause (i) above and entered into
with a
depository institution or trust company (acting as principal)
rated
A or
higher by S&P, Fitch and DBRS and rated A2 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
affiliates
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
Disqualified 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, a per annum
rate
(adjusted in the case of the Class M, Class
B-1, Class B-2 and Class B-3
Certificates by multiplying such rate by a
fraction equal to 30 over the actual
number of days in the related Interest
Accrual Period) equal to the weighted
average of the Group I Cap and the Group II
Cap, weighted on the basis of the
related Group Subordinate Amount. For
federal income tax purposes, the economic
equivalent of such rate shall be expressed
as the weighted average of the
Uncertificated REMIC 1 Pass-Through Rate on
(a) REMIC 1 Regular Interest LT1SUB,
subject to a cap and floor equal to the
Weighted Average Net Mortgage Interest
Rates of the Group I Mortgage Loans and (b)
REMIC 1 Regular Interest LT2SUB,
subject to a cap and floor equal to the
Weighted Average Net Mortgage Interest
Rates of the Group II Mortgage Loans,
weighted on the basis of the
Uncertificated Balances of such REMIC 1
Regular Interests.
"Pool Maximum Rate Cap": With respect to any Distribution Date
and
the Class M-1, Class M-2, Class M-3, Class
B-1, Class B-2 and Class B-3
Certificates, a per annum rate (adjusted by
multiplying such rate by a fraction
equal to 30 over the actual number of days
in the related Interest Accrual
Period) equal to the weighted average of
the Group I Maximum Rate Cap and the
Group II Cap, weighted on the basis of the
related Group Subordinate Amount.
"Prepayment Interest Shortfall": With respect to any
Distribution
Date, for each Mortgage Loan that was
during the related Prepayment Period the
subject of a Principal Prepayment in full
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
the sum of (i) all collections and other
amounts credited against the principal
balance of any such Mortgage Loan, (ii) the
principal portion of Advances, (iii)
any Deficient Valuation and (iv) any
principal reduction resulting from a
Servicer Modification. For purposes of this
definition, a Liquidated Mortgage
Loan shall be deemed to have a Principal
Balance equal to the Principal Balance
of the related Mortgage Loan as of the
final recovery of related Liquidation
Proceeds and a Principal Balance of zero
thereafter. As to any REO Property and
any day, the Principal Balance of the
related Mortgage Loan immediately prior to
such Mortgage Loan becoming REO Property
minus any REO Principal Amortization
received with respect thereto on or prior
to such day.
"Principal Distribution Amount": As to any Distribution Date,
the
sum of (i) the Principal Remittance Amount
minus, 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) the
portion of all full and partial
Principal Prepayments or Insurance Proceeds
and Subsequent Recoveries allocable
to principal 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 allocable to principal
received during the related Prepayment
Period and (vi) on the Distribution Date on
which the Trust is to be terminated
in accordance with Section 10.01 hereof,
that portion of the Termination Price
in respect of principal.
"Private Certificates": Any of the Class B-1, Class B-2, Class
B-3,
Class B-4, Class B-5, Class N, Class X and
Residual 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
April 5, 2005 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 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 Fannie
Mae
or Freddie Mac.
"Rating Agency or Rating Agencies": Fitch, Moody's, S&P and
DBRS, 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 plus
accrued and unpaid interest thereon at the
Mortgage Interest Rate through the
last day of the month of liquidation,
exceeds the amount of Net Liquidation
Proceeds applied to the principal balance
of the related Mortgage Loan. With
respect to any Mortgage Loan, a Deficient
Valuation or a reduction in the
Principal Balance thereof resulting from a
Servicer Modification.
"Realized Loss Amortization Amount": Any of the Class M-1
Realized
Loss Amortization Amount, the Class M-2
Realized Loss Amortization Amount, the
Class M-3 Realized Loss Amortization
Amount, the Class B-1 Realized Loss
Amortization Amount, the Class B-2 Realized
Loss Amortization Amount, the Class
B-3 Realized Loss Amortization Amount, the
Class B-4 Realized Loss Amortization
Amount and the Class B-5 Realized Loss
Amortization Amount.
"Record Date": With respect to the Floating Rate Certificates,
the
Business Day immediately preceding such
Distribution Date; provided, however,
that if any such Certificate becomes a
Definitive Certificate, the Record Date
for such Certificate shall be the last
Business Day of the month immediately
preceding the month in which the related
Distribution Date occurs. With respect
to the Fixed-Rate Certificates and the
Class N, Class X, Class R and Class R-X
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.
"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) that have been
designated as such by the Trustee, after
consultation with the Servicer and (iv)
that are engaged in transactions in the
London interbank market.
"Regular Certificate": Any of the Offered Certificates, the Class
B
Certificates, the Class N Certificates and
the Class X Certificates.
"Reimbursement Amount": As defined in Section 2.03.
"Related Documents": With respect to any Mortgage Loan, the
related
Mortgage Notes, Mortgages and other related
documents.
"Relief Act": The Servicemembers Civil Relief Act.
"Relief Act Interest Shortfall": With respect to any
Distribution
Date, for any Mortgage Loan with respect to
which there has been a reduction in
the amount of interest collectible thereon
for the most recently ended
Collection Period as a result of the
application of the Relief Act or similar
state laws, the amount by which (i)
interest collectible on such Mortgage Loan
during such Collection Period is less than
(ii) one month's interest on the
Principal Balance of such Mortgage Loan at
the Mortgage Interest Rate for such
Mortgage Loan before giving effect to the
application of the Relief Act or
similar state laws.
"REMIC": A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"REMIC 1 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a)
the product of (i) 50% of the sum of
the aggregate Principal Balance of the
Mortgage Loans and related REO Properties
then outstanding and (ii) the
Uncertificated REMIC 1 Pass-Through Rate for REMIC
1 Regular Interest LT1AA minus the Marker
Rate, divided by (b) 12.
"REMIC 1 Marker Allocation Percentage": 50% of any amount
payable
from or loss attributable to the Mortgage
Loans, which shall be allocated to
REMIC 1 Regular Interest LT1AA, REMIC 1
Regular Interest LT1AF1, REMIC 1 Regular
Interest LT1AF2, REMIC 1 Regular Interest
LT1AF3, REMIC 1 Regular Interest
LT1AF4, REMIC 1 Regular Interest LT1AV1,
REMIC 1 Regular Interest LT1AV2, REMIC
1 Regular Interest LT1M1, REMIC 1 Regular
Interest LT1M2, REMIC 1 Regular
Interest LT1M3, REMIC 1 Regular Interest
LT1B1, REMIC 1 Regular Interest LT1B2,
REMIC 1 Regular Interest LT1B3, REMIC 1
Regular Interest LT1B4, REMIC 1 Regular
Interest LT1B5 and REMIC 1 Regular Interest
LT1ZZ.
"REMIC 1 Overcollateralization Target Amount": 0.50% of the
Targeted
Overcollateralization Amount.
"REMIC 1 Overcollateralized Amount": With respect to any date
of
determination, (i) 0.50% of the aggregate
Uncertificated Principal Balances of
the REMIC 1 Regular Interests minus (ii)
the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular
Interest LT1AF1, REMIC 1 Regular Interest
LT1AF2, REMIC 1 Regular Interest LT1AF3,
REMIC 1 Regular Interest LT1AF4, REMIC
1 Regular Interest LT1AV1, REMIC 1 Regular
Interest LT1AV2, REMIC 1 Regular
Interest LT1M1, REMIC 1 Regular Interest
LT1M2, REMIC 1 Regular Interest LT1M3,
REMIC 1 Regular Interest LT1B1, REMIC 1
Regular Interest LT1B2, REMIC 1 Regular
Interest LT1B3, REMIC 1 Regular Interest
LT1B4 and REMIC 1 Regular Interest
LT1B5, in each case as of such date of
determination.
"REMIC 1 Principal Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a)
the product of (i) 50% of the
aggregate Principal Balance of the Mortgage
Loans and related REO Properties
then outstanding and (ii) 1 minus a
fraction, the numerator of which is two
times the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular
Interest LT1AF1, REMIC 1 Regular Interest
LT1AF2, REMIC 1 Regular Interest
LT1AF3, REMIC 1 Regular Interest LT1AF4,
REMIC 1 Regular Interest LT1AV1, REMIC
1 Regular Interest LT1AV2, REMIC 1 Regular
Interest LT1M1, REMIC 1 Regular
Interest LT1M2, REMIC 1 Regular Interest
LT1M3, REMIC 1 Regular Interest LT1B1,
REMIC 1 Regular Interest LT1B2, REMIC 1
Regular Interest LT1B3, REMIC 1 Regular
Interest LT1B4, and REMIC 1 Regular
Interest LT1B5 and the denominator of which
is the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular
Interest LT1AF1, REMIC 1 Regular Interest
LT1AF2, REMIC 1 Regular Interest
LT1AF3, REMIC 1 Regular Interest LT1AF4,
REMIC 1 Regular Interest LT1AV1, REMIC
1 Regular Interest LT1AV2, REMIC 1 Regular
Interest LT1M1, REMIC 1 Regular
Interest LT1M2, REMIC 1 Regular Interest
LT1M3, REMIC 1 Regular Interest LT1B1,
REMIC 1 Regular Interest LT1B2, REMIC 1
Regular Interest LT1B3, REMIC 1 Regular
Interest LT1B4, REMIC 1 Regular Interest
LT1B5 and REMIC 1 Regular Interest
LT1ZZ.
"REMIC 1 Regular Interest LT1AA": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1AA
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1AF1": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1AF1
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1AF2": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1AF2
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1AF3": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1AF3
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1AF4": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1AF4
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1AV1": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1AV1
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1AV2": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1AV2
shall accrue interest at the related
Uncertificated REMIC 1 Pass- Through Rate
in effect from time to time, and shall be
entitled to distributions of
principal, subject to the terms and
conditions hereof, in an aggregate amount
equal to its initial Uncertificated
Principal Balance as set forth in the
Preliminary Statement hereto.
"REMIC 1 Regular Interest LT1M1": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1M1
shall accrue interest at the related
Uncertificated REMIC 1 Pass- Through Rate
in effect from time to time, and shall be
entitled to distributions of
principal, subject to the terms and
conditions hereof, in an aggregate amount
equal to its initial Uncertificated
Principal Balance as set forth in the
Preliminary Statement hereto.
"REMIC 1 Regular Interest LT1M2": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1M2
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M3": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1M3
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1B1": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1B1
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1B2": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1B2
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1B3": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1B3
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1B4": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1B4
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1B5": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1B5
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1SUB": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1SUB
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1GRP": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1GRP
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT2SUB": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT2SUB
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT2GRP": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT2GRP
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1XX": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1XX
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1ZZ": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1ZZ
shall accrue interest at the related
Uncertificated REMIC 1 Pass- Through Rate
in effect from time to time, and shall be
entitled to distributions of
principal, subject to the terms and
conditions hereof, in an aggregate amount
equal to its initial Uncertificated
Principal Balance as set forth in the
Preliminary Statement hereto.
"REMIC 1 Regular Interests": REMIC 1 Regular Interest LT1AA, REMIC
1
Regular Interest LT1AF1, REMIC 1 Regular
Interest LT1AF2, REMIC 1 Regular
Interest LT1AF3, REMIC 1 Regular Interest
LT1AF4, REMIC 1 Regular Interest
LT1AV1, REMIC 1 Regular Interest LT1AV2,
REMIC 1 Regular Interest LT1M1, REMIC 1
Regular Interest LT1M2, REMIC 1 Regular
Interest LT1M3, REMIC 1 Regular Interest
LT1B1, REMIC 1 Regular Interest LT1B2,
REMIC 1 Regular Interest LT1B3, REMIC 1
Regular Interest LT1B4, REMIC 1 Regular
Interest LT1B5, REMIC 1 Regular Interest
LT1SUB, REMIC 1 Regular Interest LT1GRP,
REMIC 1 Regular Interest LT2SUB, REMIC
1 Regular Interest LT2GRP, REMIC 1 Regular
Interest LT1XX and REMIC 1 Regular
Interest LT1ZZ.
"REMIC 1 Sub WAC Allocation Percentage": 50% of any amount
payable
or loss attributable from the Mortgage
Loans, which shall be allocated to REMIC
1 Regular Interest LT1SUB, REMIC 1 Regular
Interest LT1GRP, REMIC 1 Regular
Interest LT2SUB, REMIC 1 Regular Interest
LT2GRP and REMIC 1 Regular Interest
LT1XX.
"REMIC 1 Subordinated Balance Ratio": The ratio among the
Uncertificated Principal Balances of each
REMIC 1 Regular Interest ending with
the designation "SUB," equal to the ratio
among, with respect to each such REMIC
1 Regular Interest, the excess of (x) the
aggregate Principal Balance of the
Mortgage Loans in the related Loan Group
over (y) the current Certificate
Principal Amount of the Class A
Certificates in the related Loan Group.
"REMIC 2 Regular Interests": The Class AV-1, Class AV-2, Class
AF-1,
Class AF-2, Class AF-3, Class AF-4, Class
M-1, Class M-2 and Class M-3
Certificates (exclusive of the right of
such Certificates to Cap Carryover
Amounts) the REMIC 2 Class X/N Interest,
and the REMIC 2 Class B-1 Interest,
REMIC 2 Class B-2 Interest, REMIC 2 Class
B-3 Interest, REMIC 2 Class B-4
Interest and REMIC 2 Class B-5 Interest
(exclusive of any right to receive Cap
Carryover Amounts).
"REMIC 2 Class B-1 Interest": One of the separate
non-certificated
beneficial ownership interests in REMIC 2
issued hereunder and designated as a
Regular Interest in REMIC 2, and which is
held as an asset of REMIC B. The REMIC
2 Class B-1 Interest shall have a principal
balance and Pass-Through Rate equal
to the principal balance and Pass-Through
Rate of the Class B-1 Certificates.
"REMIC 2 Class B-2 Interest": One of the separate
non-certificated
beneficial ownership interests in REMIC 2
issued hereunder and designated as a
Regular Interest in REMIC 2, and which is
held as an asset of REMIC C. The REMIC
2 Class B-2 Interest shall have a principal
balance and Pass-Through Rate equal
to the principal balance and Pass-Through
Rate of the Class B-2 Certificates.
"REMIC 2 Class B-3 Interest": One of the separate
non-certificated
beneficial ownership interests in REMIC 2
issued hereunder and designated as a
Regular Interest in REMIC 2, and which is
held as an asset of REMIC D. The REMIC
2 Class B-3 Interest shall have a principal
balance and Pass-Through Rate equal
to the principal balance and Pass-Through
Rate of the Class B-3 Certificates.
"REMIC 2 Class B-4 Interest": One of the separate
non-certificated
beneficial ownership interests in REMIC 2
issued hereunder and designated as a
Regular Interest in REMIC 2, and which is
held as an asset of REMIC E. The REMIC
2 Class B-4 Interest shall have a principal
balance and Pass-Through Rate equal
to the principal balance and Pass-Through
Rate of the Class B-4 Certificates.
"REMIC 2 Class B-5 Interest": One of the separate
non-certificated
beneficial ownership interests in REMIC 2
issued hereunder and designated as a
Regular Interest in REMIC 2, and which is
held as an asset of REMIC F. The REMIC
2 Class B-5 Interest shall have a principal
balance and Pass-Through Rate equal
to the principal balance and Pass-Through
Rate of the Class B-5 Certificates.
"REMIC 2 Class X/N Interest": One of the separate
non-certificated
beneficial ownership interests in REMIC 2
issued hereunder and designated as a
Regular Interest in REMIC 2, and which is
held as an asset of REMIC A. The REMIC
2 Class X/N Interest shall accrue interest
at its Pass- Through Rate in effect
from time to time, and shall be entitled to
distributions of principal, subject
to the terms and conditions hereof, in an
aggregate amount equal to the Class
X/N Uncertificated Principal Balance, as
set forth in the Preliminary Statement
hereto.
"REMIC A Class X/N Interest": The separate non-certificated
beneficial ownership interests in REMIC A
issued hereunder and designated as a
Regular Interest in REMIC A, which is
represented by the Class X/N Interest in
the Grantor Trust and is beneficially owned
by the Class N and Class X
Certificates. The REMIC A Class X/N
Interest shall accrue interest at its
Pass-Through Rate in effect from time to
time, and shall be entitled to
distributions of principal, subject to the
terms and conditions hereof, in an
aggregate amount equal to the Class X/N
Uncertificated Principal Balance, as set
forth in the Preliminary Statement hereto
(in all cases, subject to the
obligation of the REMIC A Class X/N
Interest to pay Cap Carryover Amounts).
"REMIC Regular Interest": Any regular interest in REMIC 1, REMIC
2,
REMIC A, REMIC B, REMIC C, REMIC D, REMIC E
or REMIC F.
"Remittance Report": A report prepared by the Servicer and
delivered
to the Trustee pursuant to Section 4.07,
containing the information attached
hereto as Exhibit P.
"Rents from Real Property": With respect to any REO Property,
gross
income of the character described in
Section 856(d) of the Code.
"REO Disposition": The sale or other disposition of an REO
Property
on behalf of the Trust Fund.
"REO Principal Amortization": With respect to any REO Property,
for
any calendar month, the aggregate of all
amounts received in respect of such REO
Property during such calendar month,
whether in the form of rental income, sale
proceeds (including, without limitation,
that portion of the Termination Price
paid in connection with a purchase of all
of the Mortgage Loans and REO
Properties pursuant to Section 10.01 that
is allocable to such REO Property) or
otherwise, net of any portion of such
amounts (i) payable pursuant to Section
3.13 in respect of the proper operation,
management and maintenance of such REO
Property or (ii) payable or reimbursable to
the Servicer pursuant to Section
3.13 for unpaid Servicing Fees in respect
of the related Mortgage Loan and
unreimbursed Servicing Advances and
Advances in respect of such REO Property or
the related Mortgage Loan.
"REO Property": A Mortgaged Property acquired by the Servicer
on
behalf of the Trust Fund through
foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.13.
"Request for Release":
A release signed by a Servicing Officer, in
the form of Exhibit E attached hereto.
"Reserve Account": Either the Class M Reserve Account or the Group
I
Reserve Account.
"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 Fannie Mae 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 Certificates": The Class R and Class R-X
Certificates.
"Residual Interest": The sole Class of "residual interests" in
each
REMIC within the meaning of Section
860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee,
any
officer assigned to the Corporate Trust
Division (or any successor thereto),
including any Vice President, Assistant
Vice President, Trust Officer, any
Assistant Secretary, any trust officer or
any other officer of the Trustee
customarily performing functions similar to
those performed by any of the above
designated officers and in each case having
direct responsibility for the
administration of this Agreement.
"S&P": Standard & Poor's, a division of The McGraw-Hill
Companies,
Inc., and its successors, and if such
company shall for any reason no longer
perform the functions of a securities
rating agency, "S&P" shall be deemed to
refer to any other "nationally recognized
statistical rating organization" as
set forth on the most current list of such
organizations released by the
Securities and Exchange Commission.
"Second Lien Mortgage Loan": Any of the of the Mortgage Loans
which
are secured by a second mortgage lien that
is junior to a first lien on the
related Mortgaged Property.
"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 AV-1, Class AV-2, Class AF-1,
Class
AF-2, Class AF-3 and Class AF-4
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 Class M and Class
B Certificates and (ii) the
Overcollateralization Amount, in each case
before 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, 51.00%.
"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 Modification": A modification to the terms of a
Mortgage
Loan, in accordance with the terms of
Section 3.01, as to which the Mortgagor is
in default or as to which, in the judgment
of the Servicer, default is
reasonably foreseeable.
"Servicer Remittance Date": With respect to any Distribution
Date,
one Business Day prior to such Distribution
Date.
"Servicer's Assignee": As defined in Section 6.05(c) hereof.
"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
appears 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 Wachovia Bank, National
Association, as the representative of
certain lenders.
"Servicing Standard": Shall mean the standards set forth in
Section
3.01.
"Special Hazard Loss": Any Realized Losses that result from
direct
physical damage to Mortgaged Properties
caused by natural disasters and other
hazards (i) which are not covered by hazard
insurance policies (such as
earthquakes) and (ii) for which claims have
been submitted and rejected by the
related hazard insurer and any shortfall in
insurance proceeds for partial
damage due to the application of the
co-insurance clauses contained in hazard
insurance policies.
"SPV": As defined in Section 6.05(c).
"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 April 2008 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.
"Subordinated Certificates": The Class M-1, Class M-2, Class
M-3,
Class B-1, Class B-2, Class B-3, Class B-4,
Class B-5, Class N, Class X, Class R
and Class R-X Certificates.
"Subsequent Recovery": Any amount (net of reimbursable
expenses)
received on a Mortgage Loan subsequent to
such Mortgage Loan being determined to
be a Liquidated Mortgage Loan that resulted
in a Realized Loss in a prior month.
"Substitution Adjustment Amount": As defined in Section 2.03(d)
hereof.
"Targeted Overcollateralization Amount": As of any Distribution
Date, (x) prior to the Stepdown Date, 2.25%
of the Pool Balance on the Cut-off
Date and (y) on and after the Stepdown
Date, (i) if a Trigger Event has not
occurred, the lesser of (a) 2.25% of the
Pool Balance on the Cut-off Date and
(b) the greater of (A) 4.50% of the Pool
Balance as of the last day of the
related Collection Period and (B) 0.50% of
the Pool Balance on the Cut-off Date
and (ii) if a Trigger Event has occurred,
the Targeted Overcollateralization
Amount for the immediately preceding
Distribution Date.
"Tax Matters Person": The tax matters person appointed pursuant
to
Section 9.01(e) hereof.
"Tax Returns": The federal income tax returns on Internal
Revenue
Service Form 1066, U.S. Real Estate
Mortgage Investment Conduit Income Tax
Return, including Schedule Q thereto,
Quarterly Notice to Residual Interest
Holders of the REMIC Taxable Income or Net
Loss Allocation, or any successor
forms, to be filed on behalf of the Trust
for each of the eight REMICs created
pursuant to this Agreement under the REMIC
Provisions, together with any and all
other information reports or returns that
may be required to be furnished to the
Certificateholders or filed with the
Internal Revenue Service or any other
governmental taxing authority under any
applicable provisions of federal, state
or local tax laws.
"Telerate Page 3750": The display page currently so designated
on
the Moneyline Telerate Service (or such
other page as may replace the Telerate
Page 3750 page on that service for the
purpose of displaying London interbank
offered rates of major banks).
"Termination Price":
As defined in Section 10.01(a) hereof.
"Trigger Event": With respect to any Distribution Date, if (i)
the
six-month rolling average of 60+ Day
Delinquent Loans equals or exceeds 32% of
the Senior Enhancement Percentage or (ii)
the aggregate amount of Realized
Losses incurred since the Cut-off Date
through the last day of the related
Collection Period (reduced by the aggregate
amount of Subsequent Recoveries
received since the Cut-off Date through the
last day of the related Collection
Period) divided by the Pool Balance as of
the Cut-off Date exceeds the
applicable percentages set forth below with
respect to such Distribution Date:
Distribution Date Occurring In
Percentage
------------------------------
----------
April 2007 through March 2008
1.40%
April 2008 through March 2009
3.20%
April 2009 through March 2010
5.00%
April 2010 through March 2011
6.45%
April 2011 through March 2012
7.25%
April 2012 and thereafter
7.30%
"Trust": 2005-CB2 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 eight
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), (v) the Trustee's
rights under the Yield Maintenance
Agreements and (vi) the Collection Account,
the Distribution Account, the Reserve
Accounts 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.
"Trustee": JPMorgan Chase Bank, National Association, a
national
banking association organized under the
laws of the United States, or any
successor Trustee appointed as herein
provided.
"Trustee Fee": With respect to any Distribution Date, the product
of
(x) one-twelfth of the Trustee Fee Rate and
(y) the aggregate of the Principal
Balances of all Mortgage Loans as of the
opening of business on the first day of
the related Collection Period.
"Trustee Fee Rate": With respect to any Distribution Date, 0.01%
per
annum.
"Uncertificated Accrued Interest": With respect to each REMIC 1
Regular Interest on each Distribution Date,
an amount equal to one month's
interest at the related Uncertificated
REMIC 1 Pass-Through Rate on the
Uncertificated Principal Balance of such
REMIC Regular Interest. In each case,
Uncertificated Accrued Interest will be
reduced by any Prepayment Interest
Shortfalls and Relief Act Interest
Shortfalls (allocated to such REMIC Regular
Interests based on their respective
entitlements to interest irrespective of any
Prepayment Interest Shortfalls and Relief
Act Interest Shortfalls for such
Distribution Date).
"Uncertificated Principal Balance": The amount of any REMIC 1
Regular Interest outstanding as of any date
of determination. As of the Closing
Date, the Uncertificated Balance of each
REMIC 1 Regular Interest shall equal
the amount set forth in the Preliminary
Statement hereto as its initial
uncertificated balance. On each
Distribution Date, the Uncertificated Principal
Balance of each REMIC 1 Regular Interest
shall be reduced by all distributions
of principal made on such REMIC 1 Regular
Interest on such Distribution Date
pursuant to Section 4.08 and, if and to the
extent necessary and appropriate,
shall be further reduced on such
Distribution Date by Realized Losses as
provided in Section 4.08(b) and shall be
increased by all Subsequent Recoveries
allocated to such REMIC 1 Regular Interest
on such Distribution Date pursuant to
Section 4.08. The Uncertificated Balance of
REMIC 1 Regular Interest LT1ZZ shall
be increased by interest deferrals as
provided in Section 4.08(a)(i). The
Uncertificated Balance of each REMIC 1
Regular Interest shall never be less than
zero.
"Uncertificated REMIC 1 Pass-Through Rate": With respect to REMIC
1
Regular Interest LT1AA, REMIC 1 Regular
Interest LT1AF1, REMIC 1 Regular
Interest LT1AF2, REMIC 1 Regular Interest
LT1AF3, REMIC 1 Regular Interest
LT1AF4, REMIC 1 Regular Interest LT1AV1,
REMIC 1 Regular Interest LT1AV2, REMIC
1 Regular Interest LT1M1, REMIC 1 Regular
Interest LT1M2, REMIC 1 Regular
Interest LT1M3, REMIC 1 Regular Interest
LT1B1, REMIC 1 Regular Interest LT1B2,
REMIC 1 Regular Interest LT1B3, REMIC 1
Regular Interest LT1B4, REMIC 1 Regular
Interest LT1B5, REMIC 1 Regular Interest
LT1ZZ, REMIC 1 Regular Interest LT1SUB,
REMIC 1 Regular Interest LT2SUB and REMIC 1
Regular Interest LT1XX, the Weighted
Average Net Mortgage Rate of the Mortgage
Loans. With respect to REMIC 1 Regular
Interest LT1GRP, the Weighted Average Net
Mortgage Rate of the Group I Mortgage
Loans. With respect REMIC 1 Regular
Interest LT2GRP, the Weighted Average Net
Mortgage Interest Rate of the Group II
Mortgage Loans.
"Underwriters": Banc of America Securities LLC and Citigroup
Global
Markets Inc., as underwriters with respect
to the Offered Certificates.
"United States Person" or "U.S. Person": (i) A citizen or
resident
of the United States, (ii) a corporation,
partnership or other entity treated as
a corporation or partnership for United
States federal income tax purposes
organized in or under the laws of the
United States or any state thereof or the
District of Columbia (unless, in the case
of a partnership, Treasury regulations
provide otherwise) 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 ;
provided, that for purposes of the
definition of a "Permitted Transferee," a
U.S. Person shall not include any
person whose income is attributable to a
foreign permanent establishment or
fixed base, within the meaning of an
applicable income tax treaty, of such
Person or any other Person.
"Unpaid Realized Loss Amount": For any Class M-1, Class M-2,
Class
M-3, Class B-1, Class B-2, Class B-3, Class
B-4 and Class B-5 Certificates and
as to any Distribution Date, the excess of
(x) the cumulative amount of related
Applied Realized Loss Amounts with respect
to such Class for all prior
Distribution Dates over (y) the sum of (a)
the cumulative amount of any
Subsequent Recoveries allocated to such
Class and (b) the aggregate Realized
Loss Amortization Amounts with respect to
such Class for all prior Distribution
Dates.
"Value": With respect to any Mortgaged Property, the lower of
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 Certificates (other
than the Class N, Class X, Class R and
Class R-X 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
Certificates (other than the Class N,
Class X, Class R and Class R-X
Certificates) then outstanding. The Voting Rights
allocated to each such Class of
Certificates shall be allocated among all
holders of each such Class in proportion to
the outstanding Certificate
Principal Balance of such Certificates;
provided, however, that any Certificate
registered in the name of the Servicer, the
Depositor or the Trustee or any of
their respective affiliates shall not be
included in the calculation of Voting
Rights; provided that only such
Certificates as are known by a Responsible
Officer of the Trustee to be so registered
will be so excluded. On each
Distribution Date (a) prior to the date on
which the Notional Amount of the
Class N Certificates is reduced to zero,
the percentage of all the Voting Rights
allocated among the Holders of the Class N
and Class X Certificates shall be 2%
and (b) on and after the date on which the
Notional Amount of the Class N
Certificates is reduced to zero, the
percentage of all the Voting Rights
allocated among the Holders of the Class N
Certificates shall be 0% and the
percentage of all the Voting Rights
allocated among the Holder of the Class X
Certificates shall be 2%. The Residual
Certificates shall have no Voting Rights.
"Weighted Average Net Mortgage Rate": With respect to either of
Loan
Group I or Loan Group II, 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 of such Loan Group,
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 execute,
authenticate and deliver the
Certificates.
"Yield Maintenance Agreement": Either the Class M Yield
Maintenance
Agreement or the Group I Yield Maintenance
Agreement.
"Yield Maintenance Agreement Payment": Either a Group I Yield
Maintenance Agreement Payment or a Class M
Yield Maintenance Agreement Payment.
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, on
behalf of the Trust, without recourse for
the benefit of the Certificateholders
all the right, title and interest of the
Depositor, including any security
interest therein for the benefit of the
Depositor, in and to (i) each Mortgage
Loan identified on the Mortgage Loan
Schedules, including the related Cut-off
Date Principal Balance, all interest
accruing thereon after the Cut-off Date and
all collections in respect of interest and
principal due after the Cut-off Date;
(ii) property which secured each such
Mortgage Loan and which has been acquired
by foreclosure or deed in lieu of
foreclosure; (iii) its interest in any
insurance policies in respect of the
Mortgage Loans; (iv) all 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 Servicer shall remain mortgagee of
record with respect to any Mortgage Loan
that is an FHA Loan and 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.
It is agreed and understood by the parties hereto that it is
not
intended that any mortgage loan be included
in the Trust that is a "High-Cost
Home Loan" as defined in any of (i) the New
Jersey Home Ownership Act effective
November 27, 2003, (ii) the New Mexico Home
Loan Protection Act effective
January 1, 2004, (iii) the Massachusetts
Predatory Home Loan Practices Act
effective November 7, 2004, (iv) the
Indiana Home Loan Practices Act, effective
January 1, 2005 or (v) the Illinois High
Risk Home Loan Act, effective January
1, 2004.
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 JPMorgan Chase Bank,
National Association, as Trustee for the C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2005-CB2, 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 "JPMorgan Chase Bank, National
Association,
as Trustee for the C-BASS Mortgage Loan Asset-Backed
Certificates,
Series 2005-CB2, without recourse";
(iv)
an original or
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 except with respect to those Mortgage Loans identified
on
Exhibit V hereto;
(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;
and
(viii) for each Mortgage Loan secured by Co-op Shares, the
originals of
the following documents or instruments:
a. The stock certificate;
b. The stock power executed in blank;
c. The executed proprietary lease;
d. The executed recognition agreement;
e. The executed
assignment of recognition agreement, if any;
f. The executed UCC-1 financing statement with evidence of
recording thereon; and
g. Executed UCC-3 financing statements or other appropriate
UCC financing statements required by state law, evidencing a
complete and unbroken line from the mortgagee to the Trustee
with evidence of recording thereon (or in a form suitable for
recordation).
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.
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 Servicer 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 Servicer 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
Servicer to the Trustee and the Rating
Agencies, the recordation of such
assignment is not necessary to protect the
Trustee's interest, on behalf of the
Trust, in the related Mortgage Loan. The
Servicer shall be required to deliver
such assignments for recording within 30
days of the Closing Date. The Servicer
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
Servicer 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 Servicer shall cause
to be completed such endorsements "Pay to
the order of JPMorgan Chase Bank,
National Association, as Trustee for the
C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2005-CB2, without
recourse."
The Depositor herewith delivers to the Trustee executed copies
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
Schedules (other than any Mortgage
Loan paid in full or any Mortgage Loan
specifically identified in the exception
report annexed thereto as not being covered
by such certification), (i) all
documents required to be delivered to it
pursuant to Section 2.01 of this
Agreement are in its possession, (ii) such
documents have been reviewed by it
and have not been mutilated, damaged or
torn and relate to such Mortgage Loan
and (iii) based on its examination and only
as to the foregoing, the information
set forth in the Mortgage Loan Schedules
that corresponds to items (1), (2),
(3), (5), (13) and (25) (in the case of
(25), only as to whether there is a
prepayment penalty) of the Mortgage Loan
Schedules accurately reflects
information set forth in the Mortgage File.
It is herein acknowledged that, in
conducting such review, the Trustee (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, the Trustee or the Servicer (or
upon receipt by the Trustee of
written notification of such breach) of a
breach of any of the representations
and warranties made by the 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, on behalf
of the Trust, a first priority perfected
security interest in all of the
Depositor's right, title and interest in
and to the Mortgage Loans and the
Related Documents, and that this Agreement
shall constitute a security agreement
under applicable law.
The Trustee is hereby directed to execute, deliver and perform
its
obligations under each Yield Maintenance
Agreement on the Closing Date and
thereafter on behalf of the Holders of the
Class AV-1 and Class AV-2
Certificates, in the case of the Group I
Yield Maintenance Agreement, and the
Holders of the Class M Certificates, in the
case of the Class M Yield
Maintenance Agreement. The Seller, the
Servicer, the Depositor and the
Certificateholders by acceptance of their
Certificates acknowledge and agree
that the Trustee shall execute, deliver and
perform its obligations under each
Yield Maintenance Agreement and shall do so
solely in its capacity as Trustee of
the Trust Fund and not in its individual
capacity.
The Trustee is hereby directed to represent and warrant to the
Group
I Yield Maintenance Agreement Provider
under the Group I Yield Maintenance
Agreement and the Class M Yield Maintenance
Agreement Provider under the Class M
Yield Maintenance Agreement that the
beneficial owner for United States federal
income tax purposes of payments made under
the Yield Maintenance Agreements is
either:
(A) a "U.S. person" (as that term is used in section
1.1441-4(a)(3)(ii) of United States Treasury Regulations (the
"Regulations")) for United States federal income tax purposes,
or
(B) a "non-U.S. branch of a foreign person" as that term is
used
in section 1.1441-4(a)(3)(ii) of the Regulations for United
States federal income tax purposes, and a "foreign person" as
that term is used in section 1.6041-4(a)(4) of the Regulations
for United States federal income tax purposes.
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, the Servicer and the Trustee 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).
In addition to the foregoing, in the case
of a breach of the Seller's
representation set forth in Section 3.01(f)
or 3.01(zz) of the Mortgage Loan
Purchase Agreement, the Seller shall
reimburse the Trust for all costs or
damages incurred by the Trust as a result
of the violation of such law (such
amount, the "Reimbursement Amount"). The
Reimbursement Amount shall be delivered
to the Servicer for deposit into the
Collection Account within 10 days from the
date the Seller was notified by the Trustee
of the amount of such costs and
damages. It is understood and agreed that
the obligation of the Seller to pay
the Reimbursement Amount and to either cure
or repurchase (or 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 and the Trustee on behalf of
the Certificateholders.
(b) [Reserved].
(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 a Eligible
Substitute Mortgage Loan or Loans, such
substitution shall be effected by the
Seller delivering to the Trustee for such
Eligible Substitute Mortgage Loan or
Loans, the Mortgage Note, the Mortgage, the
Assignment to the Trustee, and such
other documents and agreements, with all
necessary endorsements thereon, as are
required by Section 2.01, together with an
Officers' Certificate providing that
each such Eligible Substitute Mortgage Loan
satisfies the definition thereof and
specifying the Substitution Adjustment
Amount (as described below), if any, in
connection with such substitution. The
Trustee shall acknowledge receipt for
such Eligible Substitute Mortgage Loan or
Loans and, within ten Business Days
thereafter, shall review such documents as
specified in Section 2.02 and deliver
(or cause the Custodian to 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
(or cause the Custodian to 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
applicable Mortgage Loan Schedule to
reflect the removal of such Defective
Mortgage Loan from the terms of this
Agreement and the substitution of the
Eligible Substitute Mortgage Loan or Loans
and shall deliver a copy of such
amended Mortgage Loan Schedule to the
Trustee. 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 formed under this Agreement 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 and Exhibit F-2
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 and to
reimburse the Trust the Reimbursement
Amount, 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 carry on its business as now being conducted,
except
for such
licenses, certificates and permits the absence of which,
individually or in the aggregate, would not have a material adverse
effect
on the
ability of the Servicer to conduct its business as it is
presently
conducted,
and is licensed, qualified and in good standing in the states
where the
Mortgaged Property is located if the laws of such state require
licensing
or qualification in order to conduct business of the type
conducted
by the Servicer or to ensure the enforceability or validity of
each
Mortgage Loan; the Servicer has the power and authority to
execute
and
deliver this Agreement and to perform in accordance herewith;
the
execution,
delivery and performance of this Agreement (including all
instruments of transfer to be delivered pursuant to this Agreement)
by the
Servicer
and the consummation of the transactions contemplated hereby
have
been duly
and validly authorized; 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 Fannie Mae and is an FHA Approved Mortgagee in good
standing
to service mortgages and has not been suspended as a mortgagee
or
servicer
by the FHA 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 servicer of mortgage loans for HUD, Fannie Mae or
Freddie
Mac, and no event has occurred, including but not limited to a
change in
insurance coverage, which would make the Servicer unable to
comply
with HUD, Fannie Mae or Freddie Mac or FHA eligibility
requirements
or which
would require notification to any of HUD, Fannie Mae, Freddie
Mac
or
FHA;
(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;
(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; and
(ix) The Servicer has fully furnished, and shall continue to
fully
furnish
for so long as it is servicing the Mortgage Loans hereunder, in
accordance
with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information on the Mortgagor
credit
files to
Equifax, Experian and Trans Union Credit Information Company on
a
monthly
basis.
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 certificate of
incorporation or by-laws or in default in the performance or
observance of
any
material obligation, agreement, covenant or condition contained in
any
contract,
indenture, mortgage, loan agreement, note, lease or other
instrument
to which the Depositor is a party or by which it or its
properties
may be bound, which default might result in any material
adverse
changes in the financial condition, earnings, affairs or
business
of the
Depositor or which might materially and adversely affect the
properties
or assets, taken as a whole, of the Depositor;
(vii) The execution, delivery and performance of this Agreement
by
the
Depositor, and the consummation of the transactions
contemplated
thereby,
do not and will not result in a material breach or violation of
any of the
terms or provisions of, or, to the knowledge of the Depositor,
constitute
a default under, any indenture, mortgage, deed of trust, loan
agreement
or other agreement or instrument to which the Depositor is a
party or
by which the Depositor is bound or to which any of the property
or assets
of the Depositor is subject, nor will such actions result in
any
violation
of the provisions of the certificate of incorporation or
by-laws
of the
Depositor or, to the best of the Depositor's knowledge without
independent investigation, any statute or any order, rule or
regulation of
any court
or governmental agency or body having jurisdiction over the
Depositor
or any of its properties or assets (except for such conflicts,
breaches,
violations and defaults as would not have a material adverse
effect on
the ability of the Depositor to perform its obligations under
this
Agreement);
(viii) To the best of the Depositor's knowledge without any
independent investigation, no consent, approval, authorization,
order,
registration or qualification of or with any court or governmental
agency
or body of
the United States or any other jurisdiction is required for the
issuance
of the Certificates, or the consummation by the Depositor of
the
other
transactions contemplated by this Agreement, except such
consents,
approvals,
authorizations, registrations or qualifications as (a) may be
required
under State securities or Blue Sky laws, (b) have been
previously
obtained
or (c) the failure of which to obtain would not have a material
adverse
effect on the performance by the Depositor of its obligations
under, or
the validity or enforceability of, this Agreement; and
(ix) There are no actions, proceedings or investigations
pending
before or,
to the Depositor's knowledge, threatened by any court,
administrative agency or other tribunal to which the Depositor is a
party
or of
which any of its properties is the subject: (a) which if
determined
adversely
to the Depositor would have a material adverse effect on the
business,
results of operations or financial condition of the Depositor;
(b)
asserting the invalidity of this Agreement or the Certificates;
(c)
seeking to
prevent the issuance of the Certificates or the consummation by
the
Depositor of any of the transactions contemplated by this
Agreement,
as the case may be; (d) which
might materially and adversely affect the
performance by the Depositor of its obligations under, or the
validity or
enforceability of, this Agreement.
Section 2.07 Issuance of Certificates and the Uncertificated
Regular
Interests.
The Trustee acknowledges the assignment to it of the Mortgage
Loans
and the delivery to it (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, and the Trustee acknowledges the
assignment to it of all other assets
included in the Trust Fund, receipt of
which is hereby acknowledged.
Concurrently with such assignment and
delivery and in exchange therefor, the
Trustee, pursuant to the Written Order to
Authenticate executed by an officer of
the Depositor, has executed, and the
Certificate Registrar has authenticated and
delivered to or upon the order of the
Depositor, the Certificates (other than
the Residual Certificates) in minimum
dollar denominations of $25,000 and
integral dollar multiples of $1 in excess.
The Class X Certificates are issuable
only in minimum denominations of $1
notional amount. The Class R and Class R-X
Certificates are issuable only in minimum
Percentage Interests of 10%. The
Trustee acknowledges the issuance of the
uncertificated REMIC 1 Regular
Interests and declares that it holds such
regular interests as assets of REMIC
2. The Trustee acknowledges the issuance of
the uncertificated REMIC 2 Class X/N
Interest and declares that it holds such
regular interest as the asset of REMIC
A. The Trustee acknowledges the issuance of
the uncertificated REMIC 2 Class B-1
Regular Interest and declares that it holds
such regular interest as the asset
of REMIC B. The Trustee acknowledges the
issuance of the uncertificated REMIC 2
Class B-2 Regular Interest and declares
that it holds such regular interest as
the asset of REMIC C. The Trustee
acknowledges the issuance of the
uncertificated REMIC 2 Class B-3 Regular
Interest and declares that it holds
such regular interest as the asset of REMIC
D. The Trustee acknowledges the
issuance of the uncertificated REMIC 2
Class B-4 Regular Interest and declares
that it holds such regular interest as the
asset of REMIC E. The Trustee
acknowledges the issuance of the
uncertificated REMIC 2 Class B-5 Regular
Interest and declares that it holds such
regular interest as the asset of REMIC
F. The Trustee acknowledges that it holds
the REMIC A Class X/N Interest as an
asset of the Grantor Trust, which Grantor
Trust will issue the Class X/N
Interest, subject to the obligation thereof
to pay Cap Carryover Amounts on
behalf of the Holders of the Fixed-Rate and
Floating Rate Certificates. In
addition to the assets described in the
preceding sentence, the assets of the
Grantor Trust shall also include the Yield
Maintenance Agreements, the Reserve
Accounts and the beneficial interest of the
Class X/N Interest with respect
thereto, subject to the obligation to pay
Cap Carryover Amounts. The interests
evidenced by the Certificates constitute
the entire beneficial ownership
interest in the Trust Fund.
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:
&
