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EXECUTION COPY
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.,
Depositor
DLJ MORTGAGE CAPITAL, INC.,
Seller
WILSHIRE CREDIT CORPORATION,
Servicer
and
JPMORGAN CHASE BANK, N.A.,
Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of February 1, 2005
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HOME EQUITY MORTGAGE TRUST SERIES 2005-1
HOME EQUITY MORTGAGE PASS-THROUGH CERTIFICATES, SERIES
2005-1
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS.............................................................................................1
SECTION 1.01
Definitions..............................................................................1
SECTION 1.02 Interest
Calculations...................................................................47
SECTION 1.03 Allocation of Certain Interest
Shortfalls...............................................47
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES..........................................48
SECTION 2.01 Conveyance of Mortgage
Loans............................................................48
SECTION 2.02 Representations and Warranties of the Seller and
Servicer...............................58
SECTION 2.03 Representations and Warranties of the Depositor as
to the Mortgage Loans................60
SECTION 2.04 Delivery of Opinion of Counsel in Connection with
Substitutions.........................60
SECTION 2.05 Execution and Delivery of
Certificates..................................................61
SECTION 2.06 REMIC
Matters...........................................................................61
SECTION 2.07 Covenants of the
Servicer...............................................................61
SECTION 2.08 Conveyance of REMIC Regular Interests and
Acceptance ofREMIC 1, REMIC 2
and REMIC 3 by the Trustee; Issuance of
Certificates....................................62
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS.......................................................63
SECTION 3.01 Servicer to Service Mortgage
Loans......................................................63
SECTION 3.02 Subservicing; Enforcement of the Obligations of
Subservicers............................65
SECTION 3.03
[Reserved]..............................................................................67
SECTION 3.04 Trustee to Act as
Servicer..............................................................67
SECTION 3.05 Collection of Mortgage Loans; Collection
Accounts;
Certificate Account; Pre-Funding Account; Capitalized Interest
Account..................67
SECTION 3.06 Establishment of and Deposits to Escrow
Accounts;
Permitted Withdrawals from Escrow Accounts; Payments of
Taxes, Insurance and Other
Charges......................................................71
SECTION 3.07 Access to Certain Documentation and Information
Regarding the Mortgage Loans;
Inspections...............................................73
SECTION 3.08 Permitted Withdrawals from the Collection Accounts
and
Certificate
Account.....................................................................73
SECTION 3.09 Maintenance of Hazard Insurance and Mortgage
Impairment
Insurance; Claims; Restoration of Mortgaged
Property....................................75
SECTION 3.10 Enforcement of Due-on-Sale Clauses; Assumption
Agreements...............................77
SECTION 3.11 Realization Upon Defaulted Mortgage Loans;
Repurchase
of Certain Mortgage
Loans...............................................................78
SECTION 3.12 Trustee to Cooperate; Release of Mortgage
Files.........................................84
SECTION 3.13 Documents, Records and Funds in Possession of
the
Servicer to be Held for the
Trustee.....................................................85
SECTION 3.14 Servicing
Fee...........................................................................86
SECTION 3.15 Access to Certain
Documentation.........................................................86
SECTION 3.16 Annual Statement as to
Compliance.......................................................86
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SECTION 3.17 Annual Independent Public Accountants' Servicing
Statement; Financial Statements..... ..87
SECTION 3.18 Maintenance of Fidelity Bond and Errors and
Omissions Insurance.........................88
SECTION 3.19 Duties of the Credit Risk
Manager.......................................................88
SECTION 3.20 Limitation Upon Liability of the Credit Risk
Manager....................................88
SECTION 3.21 Advance
Facility........................................................................89
ARTICLE IV DISTRIBUTIONS AND ADVANCES BY THE
SERVICER............................................................92
SECTION 4.01 Advances by the
Servicer................................................................92
SECTION 4.02 Priorities of
Distribution..............................................................93
SECTION 4.03
[Reserved]..............................................................................99
SECTION 4.04
[Reserved]..............................................................................99
SECTION 4.05 Allocation of Realized
Losses...........................................................99
SECTION 4.06 Monthly Statements to
Certificateholders...............................................100
SECTION 4.07 Distributions on the REMIC 1 Regular Interests and
REMIC 2 Regular Interests...........101
SECTION 4.08
[Reserved].............................................................................103
SECTION 4.09 Prepayment
Charges.....................................................................103
SECTION 4.10 Servicer to
Cooperate..................................................................104
ARTICLE V THE
CERTIFICATES......................................................................................105
SECTION 5.01 The
Certificates.......................................................................105
SECTION 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates............106
SECTION 5.03 Mutilated, Destroyed, Lost or Stolen
Certificates......................................111
SECTION 5.04 Persons Deemed
Owners..................................................................112
SECTION 5.05 Access to List of Certificateholders' Names and
Addresses..............................112
SECTION 5.06 Maintenance of Office or
Agency........................................................112
ARTICLE VI THE DEPOSITOR, THE SELLER AND THE
SERVICER...........................................................113
SECTION 6.01 Respective Liabilities of the Depositor, the
Sellers and the Servicer..................113
SECTION 6.02 Merger or Consolidation of the Depositor, the
Seller or the Servicer...................113
SECTION 6.03 Limitation on Liability of the Depositor, the
Seller, the Servicer and Others..........113
SECTION 6.04 Limitation on Resignation of the
Servicer..............................................114
ARTICLE VII
DEFAULT.............................................................................................115
SECTION 7.01 Events of
Default......................................................................115
SECTION 7.02 Trustee to Act; Appointment of
Successor...............................................117
SECTION 7.03 Notification to
Certificateholders.....................................................119
ARTICLE VIII CONCERNING THE
TRUSTEE.............................................................................120
SECTION 8.01 Duties of the
Trustee..................................................................120
SECTION 8.02 Certain Matters Affecting the
Trustee..................................................121
SECTION 8.03 Trustee Not Liable for Certificates or Mortgage
Loans..................................122
SECTION 8.04 Trustee May Own
Certificates...........................................................122
SECTION 8.05 Trustee's Fees and
Expenses............................................................122
SECTION 8.06 Eligibility Requirements for the Trustee and
Custodian.................................123
SECTION 8.07 Resignation and Removal of the
Trustee.................................................123
SECTION 8.08 Successor
Trustee......................................................................124
SECTION 8.09 Merger or Consolidation of the
Trustee.................................................125
SECTION 8.10 Appointment of Co-Trustee or Separate
Trustee..........................................125
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SECTION 8.11 Tax
Matters............................................................................126
SECTION 8.12 Commission
Reporting...................................................................128
ARTICLE IX
TERMINATION..........................................................................................131
SECTION 9.01 Termination upon Liquidation or Purchase of the
Mortgage Loans.........................131
SECTION 9.02 Final Distribution on the
Certificates.................................................132
SECTION 9.03 Additional Termination
Requirements....................................................133
ARTICLE X MISCELLANEOUS
PROVISIONS..............................................................................135
SECTION 10.01
Amendment..............................................................................135
SECTION 10.02 Recordation of Agreement;
Counterparts.................................................136
SECTION 10.03 Governing
Law..........................................................................137
SECTION 10.04
[Reserved].............................................................................137
SECTION 10.05
Notices................................................................................137
SECTION 10.06 Severability of
Provisions.............................................................138
SECTION 10.07
Assignment.............................................................................138
SECTION 10.08 Limitation on Rights of
Certificateholders.............................................138
SECTION 10.09 Certificates Nonassessable and Fully
Paid..............................................139
SECTION 10.10
Non-Solicitation.......................................................................139
EXHIBITS
EXHIBIT A. Form of Class A
Certificates..............................................................A-1
EXHIBIT B. Form of Subordinate
Certificate...........................................................B-1
EXHIBIT C. Form of Residual
Certificate..............................................................C-1
EXHIBIT D. Form of Notional Amount
Certificate.......................................................D-1
EXHIBIT E. Form of Class P
Certificate...............................................................E-1
EXHIBIT F. Form of Reverse
Certificates..............................................................F-1
EXHIBIT G. Form of Initial Certification of
Custodian................................................G-1
EXHIBIT H. Form of Final Certification of
Custodian..................................................H-1
EXHIBIT I. Transfer
Affidavit........................................................................I-1
EXHIBIT J. Form of Transferor
Certificate............................................................J-1
EXHIBIT K. Form of Investment Letter (Non-Rule
144A).................................................K-1
EXHIBIT L. Form of Rule 144A
Letter..................................................................L-1
EXHIBIT M. Request for
Release.......................................................................M-1
EXHIBIT N. Form of Subsequent Transfer
Agreement.....................................................N-1
EXHIBIT O-1. Form of Collection Account
Certification................................................O-1-1
EXHIBIT O-2. Form of Collection Account Letter
Agreement.............................................O-2-1
EXHIBIT P-1. Form of Escrow Account Certification
...................................................P-1-1
EXHIBIT P-2. Form of Escrow Account Letter
Agreement.................................................P-2-1
EXHIBIT Q. [Reserved]
...............................................................................Q-1
EXHIBIT R. Form of Custodial
Agreement...............................................................R-1
EXHIBIT S.
[Reserved]................................................................................S-1
EXHIBIT T.
[Reserved]................................................................................T-1
EXHIBIT U. Charged Off Loan Data
Report..............................................................U-1
EXHIBIT V. Form of Monthly Statement to
Certificateholders...........................................V-1
EXHIBIT W. Form of Depositor
Certification...........................................................W-1
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EXHIBIT X. Form of Trustee
Certification.............................................................X-1
EXHIBIT Y. Form of Servicer
Certification............................................................Y-1
EXHIBIT Z. Information to be Provided by Servicer to
Trustee.........................................Z-1
EXHIBIT AA Form of Limited Power of
Attorney........................................................AA-1
SCHEDULE I Mortgage Loan
Schedule....................................................................I-1
SCHEDULE II Seller's Representations and
Warranties..................................................II-1
SCHEDULE III Wilshire Representations and
Warranties.................................................III-1
SCHEDULE IV Representations and Warranties for the Mortgage
Loans....................................IV-1
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THIS POOLING AND SERVICING AGREEMENT, dated as of February
1,
2005, among CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES
CORP., a Delaware
corporation, as depositor (the "Depositor"), DLJ MORTGAGE
CAPITAL, INC., a
Delaware corporation, as Seller (the "Seller"), WILSHIRE CREDIT
CORPORATION, a
Nevada corporation, as servicer (the "Servicer" or "Wilshire")
and JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION, a national banking association
organized under
the laws of the United States, as trustee (the "Trustee").
WITNESSETH THAT
In consideration of the mutual agreements herein contained,
the parties hereto agree as follows:
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 A-1
Certificates, (ii) the
Class M-1 Certificates, (iii) the Class M-2 Certificates, (iv)
the Class M-3
Certificates, (v) the Class M-4 Certificates, (vi) the Class M-5
Certificates,
(vii) the Class M-6 Certificates, (viii) the Class M-7
Certificates, (ix) the
Class M-8 Certificates, (x) the Class M-9 Certificates, (xi) the
Class B-1
Certificates, (xii) the Class B-2 Certificates, (xiii) the Class
P Certificates,
(xiv) the Class X-1 Certificates, (xv) the Class X-2
Certificates, (xvi) the
Class X-S Certificates, (xvii) the Class A-R Certificates and
(xviii) the Class
A-RL 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 (exclusive of the Pre-Funding Account,
the Capitalized
Interest Account and the Subsequent Mortgage Loan Interest) as a
real estate
mortgage investment conduit (a "REMIC") for federal income tax
purposes, and
such segregated pool of assets will be designated as "REMIC 1."
The Class A-RL
Certificates will represent the sole class of "residual
interests" in REMIC 1
for purposes of the REMIC Provisions (as defined herein) under
federal income
tax law. The following table irrevocably sets forth the
designation, the
Uncertificated REMIC 1 Pass-Through Rate and the initial
Uncertificated
Principal Balance for each of the "regular interests" in REMIC 1
(the "REMIC 1
Regular Interests"). None of the REMIC 1 Regular Interests will
be certificated.
The latest possible maturity date (determined for purposes of
satisfying
Treasury regulation Section 1.860G-1(a)(4)(iii)) of each of the
REMIC 1 Regular
Interests will be the Latest Possible Maturity Date as defined
herein.
UNCERTIFICATED REMIC 1 INITIAL UNCERTIFICATED
DESIGNATION PASS-THROUGH RATE BALANCE
------------------- --------------------------
---------------------------
LTI-1 Variable(1) $ 531,330,610.76
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LTI-PF Variable(1) $ 78,669,389.24
LTI-S Variable(1) (2)
LTI-P Variable(1) $ 100.00
LTI-R Variable(1) $ 100.00
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(1) Calculated as provided in the definition of Uncertificated
REMIC 1
Pass-Through Rate.
(2) REMIC 1 Regular Interest LTI-S will not have an
Uncertificated
Principal Balance but will accrue interest on its
uncertificated
notional amount calculated in accordance with the definition
of
"Uncertificated Notional Amount" herein.
REMIC 2
-------
As provided herein, an election will be made to treat the
segregated pool of assets consisting of the REMIC 1 Regular
Interests as a REMIC
for federal income tax purposes, and such segregated pool of
assets will be
designated as REMIC 2. The Class R-2 Interest will represent the
sole class of
"residual interests" in REMIC 2 for purposes of the REMIC
Provisions under
federal income tax law (the "Class R-2 Interest"). The following
table
irrevocably sets forth the designation, Uncertificated REMIC 2
Pass-Through Rate
and initial Principal Balance for each of the "regular
interests" in REMIC 2
(the "REMIC 2 Regular Interests"). None of the REMIC 2 Regular
Interests will be
certificated. The latest possible maturity date (determined for
purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii)) of
each of the REMIC
2 Regular Interests will be the Latest Possible Maturity Date as
defined herein.
UNCERTIFICATED REMIC 2 INITIAL UNCERTIFICATED
DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE
------------------- -----------------------
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MTI-AA Variable(1) $ 597,800,000.00
MTI-A-1 Variable(1) $ 4,331,000.00
MTI-M-1 Variable(1) $ 323,300.00
MTI-M-2 Variable(1) $ 299,000.00
MTI-M-3 Variable(1) $ 192,000.00
MTI-M-4 Variable(1) $ 201,300.00
MTI-M-5 Variable(1) $ 134,200.00
MTI-M-6 Variable(1) $ 125,100.00
MTI-M-7 Variable(1) $ 115,900.00
MTI-M-8 Variable(1) $ 109,800.00
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MTI-M-9 Variable(1) $ 94,500.00
MTI-B-1 Variable(1) $ 88,500.00
MTI-B-2 Variable(1) $ 85,400.00
MTI-ZZ Variable(1) $ 6,100,000.00
MTI-P Variable(1) $ 100.00
MTI-R Variable(1) $ 100.00
MTI-S (2) (3)
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(1) Calculated as provided in the definition of Uncertificated
REMIC 2
Pass-Through Rate.
(2) REMIC 2 Regular Interest MTI-S will not have an
Uncertificated REMIC 2
Pass-Through Rate, but will be entitled to 100% of the
amounts
distributed on REMIC 1 Regular Interest LTI-S.
(3) REMIC 2 Regular Interest MTI-S will not have an
Uncertificated
Principal Balance, but will have an Uncertificated Notional
Amount
equal to the Uncertificated Notional Amount of REMIC 1
Regular
Interest LTI-S.
REMIC 3
-------
As provided herein, an election will be made to treat the
segregated pool of assets consisting of the REMIC 2 Regular
Interests as a REMIC
for federal income tax purposes, and such segregated pool of
assets will be
designated as REMIC 3. The Class R-3 Interest will represent the
sole class of
"residual interests" in REMIC 3 for purposes of the REMIC
Provisions under
federal income tax law (the "Class R-3 Interest"). The following
table
irrevocably sets forth the designation, Pass-Through Rate,
aggregate Initial
Certificate Principal Balance and minimum denominations for each
Class of
Certificates comprising the interests representing "regular
interests" in REMIC
3, and the Class A-R Certificates, Class A-RL Certificates and
Class X-2
Certificates which are not "regular interests" in REMIC 3. The
latest possible
maturity date (determined solely for purposes of satisfying
Treasury regulation
Section 1.860G-1(a)(4)(iii)) of each of the Regular Certificates
will be the
Latest Possible Maturity Date as defined herein.
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` CLASS CERTIFICATE ` MINIMUM INTEGRAL MULTIPLES IN
` BALANCE PASS-THROUGH RATE DENOMINATION EXCESS OF MINIMUM
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Class A-1 $ 433,100,000 Adjustable(1) $ 25,000 $1
Class P $ 100 Variable(2) $ 100 N/A
Class A-R $ 100 Variable(2) $ 100 N/A
Class A-RL $ 100 Variable(2) $ 100 N/A
Class M-1 $ 32,330,000 Adjustable(1) $ 25,000 $1
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Class M-2 $ 29,900,000 Adjustable(1) $ 25,000 $1
Class M-3 $ 19,200,000 Adjustable(1) $ 25,000 $1
Class M-4 $ 20,130,000 5.265%(3) $ 25,000 $1
Class M-5 $ 13,420,000 5.281%(3) $ 25,000 $1
Class M-6 $ 12,510,000 5.363%(3) $ 25,000 $1
Class M-7 $ 11,590,000 5.700%(3) $ 25,000 $1
Class M-8 $ 10,980,000 5.791%(3) $ 25,000 $1
Class M-9 $ 9,450,000 6.281%(3) $ 25,000 $1
Class B-1 $ 8,850,000 7.000%(3) $ 25,000 $1
Class B-2 $ 8,540,000 7.000%(3) $ 25,000 $1
Class X-1 $ 610,000,000 Variable(4)(5) 100% $1
Class X-2 $ 0 0.00% N/A N/A
Class X-S $ 531,330,910.76(6) Variable(7) 100% $1
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(1) The Class A-1, Class M-1, Class M-2 and Class M-3
Certificates have an
adjustable rate and will receive interest pursuant to formulas
based on
LIBOR, subject to the Net Funds Cap.
(2) The initial pass-through rates on the Class P, Class A-R and
Class A-RL
Certificates will be approximately 9.72% per annum which is
equal to
the weighted average of the Net Mortgage Rates on the Initial
Mortgage
Loans and will vary after the first Distribution Date.
(3) The Class M-4, Class M-5, Class M-6, Class M-7, Class M-8,
Class M-9,
Class B-1 and Class B-2 Certificates have a fixed rate subject
to the
Net Funds Cap. The fixed rate will increase by 0.50% per annum
after
the Optional Termination Date.
(4) The Class X-1 Certificates will have an initial principal
balance of
$0.00 and will accrue interest on its notional amount. For
any
Distribution Date, the notional amount of the Class X-1
Certificates
will be equal to the Aggregate Collateral Balance minus the
aggregate
Class Certificate Balance of the Class A-R, Class A-RL and Class
P
Certificates immediately prior to such Distribution Date. The
initial
notional amount of the Class X-1 Certificates is
$610,000,000.
(5) The Class X-1 Certificates are variable rate and will accrue
interest
on a notional amount.
(6) For federal income tax purposes, the Class X-S Certificates
will not
have a Class Principal Balance, but will have a notional amount
equal
to the Uncertificated Notional Amount of REMIC 2 Regular
Interest
MTI-S.
(7) The Class X-S Certificates are an interest only Class and
for each
Distribution Date the Class X-S Certificates shall receive
the
aggregate Excess Servicing Fee. For federal
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income tax purposes, the Class X-S Certificates will not have
a
Pass-Through Rate, but will be entitled to 100% of the
amounts
distributed on REMIC 2 Regular Interest MTI-S.
Set forth below are designations of Classes of Certificates
to
the categories used herein:
Book-Entry Certificates........... All Classes of Certificates
other than the
Physical Certificates.
ERISA-Restricted Certificates..... Class A-R, Class A-RL, Class
P and Class X
Certificates.
LIBOR Certificates................ Class A-1, Class M-1, Class
M-2 and Class
M-3 Certificates.
Notional Amount Certificates...... Class X-1 Certificates and
Class X-S
Certificates.
Class A Certificates.............. Class A-1, Class A-R and
Class A-RL
Certificates.
Class B Certificates.............. Class B-1 Certificates and
Class B-2
Certificates
Class M Certificates.............. Class M-1, Class M-2, Class
M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8
and Class M-9 Certificates.
Offered Certificates.............. All Classes of Certificates
(other than the
Class B, Class P Certificates and Class X
Certificates).
Physical Certificates............. Class A-R, Class A-RL, Class
P, Class B and
Class X Certificates.
Private Certificates.............. Class B, Class P and Class X
Certificates.
Rating Agencies................... S&P and Moody's.
Regular Certificates.............. All Classes of Certificates
other than the
Class A-R, Class A-RL and Class X-2
Certificates.
Residual Certificates............. Class A-R Certificates and
Class A-RL
Certificates.
Senior Certificates............... Class A-1, Class P, Class A-R
and Class A-RL
Certificates.
Subordinate Certificates.......... Class M-1, Class M-2, Class
M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8,
Class M-9, Class B-1, Class B-2 and Class
X-1 Certificates.
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Minimum Denominations............. Class A-1, Class M-1, Class
M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7,
Class M-8, Class M-9, Class B-1 and Class
B-2 Certificates: $25,000 and multiples of
$1 in excess thereof.
Class A-R, Class A-RL and Class P
Certificates: $100. The Class X-1
Certificates will be issued as a single
Certificate with a Certificate Principal
Balance of $0.00. The Class X-2 Certificates
will be issued as a single Certificate and
will not have a principal balance. The Class
X-S Certificates will be issued as a single
Certificate with an initial Notional Amount
of $531,330,910.76.
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ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions.
Whenever used in this Agreement, the following words and
phrases,
unless the context otherwise requires, shall have the following
meanings:
Accepted Servicing Practices: With respect to any Mortgage
Loan, those mortgage servicing practices of prudent mortgage
lending
institutions which service mortgage loans of the same type as
such Mortgage Loan
in the jurisdiction where the related Mortgaged Property is
located.
Advance: The payment required to be made by the Servicer
with
respect to any Distribution Date pursuant to Section 4.01.
Aggregate Collateral Balance: As of any date of
determination
will be equal to the Aggregate Loan Balance plus the amount, if
any, then on
deposit in the Pre-Funding Account.
Aggregate Loan Balance: As of any Distribution Date will be
equal to the aggregate of the Stated Principal Balances of the
Mortgage Loans
determined as of the last day of the related Collection
Period.
Aggregate Subsequent Transfer Amount: With respect to any
Subsequent Transfer Date, the aggregate Stated Principal Balance
as of the
applicable Cut-off Date of the Subsequent Mortgage Loans
conveyed on such
Subsequent Transfer Date, as listed on the revised Mortgage Loan
Schedule
delivered pursuant to Section 2.01(b); provided, however, that
such amount shall
not exceed the amount on deposit in the Pre-Funding Account.
Agreement: This Pooling and Servicing Agreement and all
amendments or supplements hereto.
Ancillary Income: All income derived from the Mortgage
Loans,
other than Servicing Fees and Prepayment Charges, including but
not limited to,
late charges, fees received with respect to checks or bank
drafts returned by
the related bank for non-sufficient funds, assumption fees,
optional insurance
administrative fees and all other incidental fees and
charges.
Applied Loss Amount: As to any Distribution Date, an amount
equal to the excess, if any of (i) the aggregate Class Principal
Balance of the
Certificates after giving effect to all Realized Losses incurred
with respect to
the Mortgage Loans during the Due Period for such Distribution
Date and payments
of principal on such Distribution Date over (ii) the Aggregate
Collateral
Balance for such Distribution Date.
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Appraised Value: The amount set forth in an appraisal made
in
connection with the origination of the related Mortgage Loan as
the value of the
Mortgaged Property.
Assignment Agreement: An assignment agreement between DLJ
Mortgage Capital, Inc. as Seller and the Depositor, whereby the
Mortgage Loans
are transferred and limited representations and warranties
relating to the
Mortgage Loans are made.
Assignment of Mortgage: An assignment of the Mortgage,
notice
of transfer or equivalent instrument in recordable form (except
for the omission
of the name of the assignee if such Mortgage is endorsed in
blank), sufficient
under the laws of the jurisdiction wherein the related Mortgaged
Property is
located to reflect the transfer of the Mortgage to the Trustee
for the benefit
of the Certificateholders.
Auction Purchaser: As defined in Section 9.01.
Auction Date: As defined in Section 9.01.
Available Funds: With respect to any Distribution Date the
sum
of (i) all Scheduled Payments (net of the related Expense Fees
(other than the
Excess Servicing Fee)) due on the Due Date in the month in which
such
Distribution Date occurs and received prior to the related
Determination Date,
together with any Advances in respect thereof required pursuant
to Section 4.01;
(ii) all Insurance Proceeds, Liquidation Proceeds and Net
Recoveries received
during the month preceding the month of such Distribution Date;
(iii) all
Curtailments and Payoffs received during the Prepayment Period
applicable to
such Distribution Date (excluding Prepayment Charges); (iv)
amounts received
with respect to such Distribution Date as the Substitution
Adjustment Amount or
Repurchase Price; (v) Compensating Interest Payments for such
Distribution Date
and (vi) with respect to the Distribution Date in May 2005, the
amount remaining
in the Pre-Funding Account at the end of the Pre-Funding Period;
as to clauses
(i) through (iv) above, reduced by amounts in reimbursement for
Advances
previously made and other amounts as to which the Servicer is
entitled to be
reimbursed pursuant to Section 3.08.
Bankruptcy Code: The United States Bankruptcy Reform Act of
1978, as amended.
Book-Entry Certificates: As specified in the Preliminary
Statement.
Business Day: Any day other than (i) a Saturday or a Sunday,
or (ii) a day on which banking institutions in the City of New
York, New York,
or the city in which the Corporate Trust Office of the Trustee,
or the states in
which the Servicer's servicing operations are located, or
savings and loan
institutions in the States of Illinois, California, Texas,
Oregon, New Jersey or
Florida is located are authorized or obligated by law or
executive order to be
closed.
Capitalized Interest Account: The separate Eligible Account
designated as such and created and maintained by the Trustee
pursuant to Section
3.05(g) hereof. The Capitalized Interest Account shall be
treated as an "outside
reserve fund" under applicable Treasury
2
<PAGE>
regulations and shall not be part of any REMIC. Except as
provided in Section
3.05(g) hereof, any investment earnings on the Capitalized
Interest Account
shall be treated as owned by the Depositor and will be taxable
to the Depositor.
Capitalized Interest Deposit: $743,892.73.
Capitalized Interest Requirement: With respect to the March
2005 Distribution Date, an amount equal to interest accruing
during the related
Interest Accrual Period for the LIBOR Certificates at a per
annum rate equal to
(x) the weighted average Pass-Through Rate of the Offered
Certificates and the
Class B Certificates multiplied by (y) the Pre-Funded Amount
outstanding at the
end of the related Due Period. With respect to the April 2005
Distribution Date,
an amount equal to interest accruing during the related Interest
Accrual Period
for the LIBOR Certificates at a per annum rate equal to (x) the
weighted average
Pass-Through Rate of the Offered Certificates and the Class B
Certificates for
such Distribution Date multiplied by (y) the sum of (c) the
Pre-Funded Amount at
the end of the related Due Period and (d) the aggregate Stated
Principal Balance
of the Subsequent Mortgage Loans that do not have a first Due
Date prior to
April 1, 2005, transferred to the Trust during the related Due
Period. With
respect to the May 2005 Distribution Date, an amount equal to
interest accruing
during the related Interest Accrual Period for the LIBOR
Certificates at a per
annum rate equal to (x) the weighted average Pass-Through Rate
of the Offered
Certificates and the Class B Certificates for such Distribution
Date multiplied
by (y) the sum of (c) the Pre-Funded Amount at the end of the
related Due Period
and (d) the aggregate Stated Principal Balance of the related
Subsequent
Mortgage Loans that do not have a first Due Date prior to May 1,
2005,
transferred to the Trust during the related Due Period.
Carryforward Interest: For any Class of Certificates and any
Distribution Date, the sum of (1) the amount, if any, by which
(x) the sum of
(A) Current Interest for such Class for the immediately
preceding Distribution
Date and (B) any unpaid Carryforward Interest from previous
Distribution Dates
exceeds (y) the amount paid in respect of interest on such Class
on such
immediately preceding Distribution Date, and (2) interest on
such amount for the
related Interest Accrual Period at the applicable Pass-Through
Rate.
Certificate: Any one of the Certificates executed by the
Trustee in substantially the forms attached hereto as
exhibits.
Certificates: As specified in the Preliminary Statement.
Certificate Account: The separate Eligible Account created
and
maintained with the Trustee, or any other bank or trust company
acceptable to
the Rating Agencies which is incorporated under the laws of the
United States or
any state thereof pursuant to Section 3.05, which account shall
bear a
designation clearly indicating that the funds deposited therein
are held in
trust for the benefit of the Trustee on behalf of the
Certificateholders or any
other account serving a similar function acceptable to the
Rating Agencies.
Funds in the Certificate Account may (i) be held uninvested
without liability
for interest or compensation thereon or (ii) be invested at the
direction of the
Trustee in Eligible Investments and reinvestment earnings
thereon
3
<PAGE>
(net of investment losses) shall be paid to the Trustee. Funds
deposited in the
Certificate Account (exclusive of the Trustee Fee and other
amounts permitted to
be withdrawn pursuant to Section 3.08) shall be held in trust
for the
Certificateholders.
Certificate Balance: With respect to any Certificate at any
date, the maximum dollar amount of principal to which the Holder
thereof is then
entitled hereunder, such amount being equal to the Denomination
thereof minus
the sum of (i) all distributions of principal previously made
with respect
thereto and (ii) all Realized Losses allocated thereto and, in
the case of any
Subordinate Certificates, all other reductions in Certificate
Balance previously
allocated thereto pursuant to Section 4.05.
Certificate Margin: As to each Class of LIBOR Certificates,
the applicable amount set forth below:
CLASS CERTIFICATE MARGIN
--------------------------------------------------------------
(1) (2)
A-1 0.200% 0.400%
M-1 0.450% 0.675%
M-2 0.470% 0.705%
M-3 0.500% 0.750%
_________________
(1) On or prior to the Optional Termination Date.
(2) After the Optional Termination Date.
Certificate Owner: With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Book-Entry
Certificate.
Certificate Register: The register maintained pursuant to
Section 5.02.
Certificateholder or Holder: The person in whose name a
Certificate is registered in the Certificate Register, except
that, solely for
the purpose of giving any consent pursuant to this Agreement,
any Certificate
registered in the name of the Depositor or any affiliate of the
Depositor shall
be deemed not to be Outstanding and the Percentage Interest
evidenced thereby
shall not be taken into account in determining whether the
requisite amount of
Percentage Interests necessary to effect such consent has been
obtained;
provided, however, that if any such Person (including the
Depositor) owns 100%
of the Percentage Interests evidenced by a Class of
Certificates, such
Certificates shall be deemed to be Outstanding for purposes of
any provision
hereof that requires the consent of the Holders of Certificates
of a particular
Class as a condition to the taking of any action hereunder. The
Trustee is
entitled to rely conclusively on a certification of the
Depositor or any
affiliate of the Depositor in determining which Certificates are
registered in
the name of an affiliate of the Depositor.
4
<PAGE>
Charged Off Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan that has not yet been liquidated, giving
rise to a
Realized Loss, on the date on which the Servicer determines,
pursuant to the
procedures set forth in Section 3.11, that there will be (i) no
Significant Net
Recoveries with respect to such Mortgage Loan or (ii) the
potential Net
Recoveries are anticipated to be an amount, determined by the
Servicer in its
good faith judgment and in light of other mitigating
circumstances, that is
insufficient to warrant proceeding through foreclosure or other
liquidation of
the related Mortgaged Property.
Class: All Certificates bearing the same class designation
as
set forth in the Preliminary Statement.
Class A-R Certificates: The Class A-R Certificates
represents
beneficial ownership of the Class R-2 Interest and Class R-3
Interest.
Class A-RL Certificates: The sole class of residual
interests
in REMIC 1.
Class A-1 Pass-Through Rate: With respect to the initial
Interest Accrual Period, based on a LIBOR determination date of
February 22,
2005, 2.820% per annum. With respect to any Interest Accrual
Period thereafter,
will be a per annum rate equal to the lesser of (i) the sum of
LIBOR plus the
related Certificate Margin and (ii) the Net Funds Cap.
Class A-R Pass-Through Rate: With respect to the
Distribution
Date in March 2005, April 2005 or May 2005, a per annum rate
equal to the
Initial Mortgage Loan Net WAC Rate, and with respect to any
Distribution Date
thereafter, a per annum rate equal to the Net Funds Cap.
Class A-RL Pass-Through Rate: With respect to the
Distribution
Date in March 2005, April 2005 or May 2005, a per annum rate
equal to the
Initial Mortgage Loan Net WAC Rate, and with respect to any
Distribution Date
thereafter, a per annum rate equal to the Net Funds Cap.
Class B-1 Pass-Through Rate: With respect to the initial
Interest Accrual Period (a) on or prior to the Optional
Termination Date, the
lesser of (i) 7.000% per annum and (ii) the Net Funds Cap, and
(b) after the
Optional Termination Date, the lesser of (i) 7.500% per annum
and (ii) the Net
Funds Cap.
Class B-1 Principal Payment Amount: For any Distribution
Date
on or after the Stepdown Date and as long as a Trigger Event is
not in effect
with respect to such Distribution Date, will be the amount, if
any, by which (x)
the sum of (i) the aggregate Class Principal Balance of the
Class A-1, Class P,
Class A-R, Class A-RL, Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5,
Class M-6, Class M-7, Class M-8 and Class M-9 Certificates, in
each case, after
giving effect to payments on such Distribution Date and (ii) the
Class Principal
Balance of the Class B-1 Certificates immediately prior to such
Distribution
Date exceeds (y) the lesser of (A) the product of (i) 88.70% and
(ii) the
Aggregate Collateral Balance for
5
<PAGE>
such Distribution Date and (B) the amount, if any, by which (i)
the Aggregate
Collateral Balance for such Distribution Date exceeds (ii) 0.50%
of the
Aggregate Collateral Balance as of the Cut-off Date.
Class B-2 Pass-Through Rate: With respect to the initial
Interest Accrual Period (a) on or prior to the Optional
Termination Date, the
lesser of (i) 7.000% per annum and (ii) the Net Funds Cap, and
(b) after the
Optional Termination Date, the lesser of (i) 7.500% per annum
and (ii) the Net
Funds Cap.
Class B-2 Principal Payment Amount: For any Distribution
Date
on or after the Stepdown Date and as long as a Trigger Event is
not in effect
with respect to such Distribution Date, will be the amount, if
any, by which (x)
the sum of (i) the aggregate Class Principal Balance of the
Class A-1, Class P,
Class A-R, Class A-RL, Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5,
Class M-6, Class M-7, Class M-8, Class M-9 and Class B-1
Certificates, in each
case, after giving effect to payments on such Distribution Date
and (ii) the
Class Principal Balance of the Class B-2 Certificates
immediately prior to such
Distribution Date exceeds (y) the lesser of (A) the product of
(i) 91.50% and
(ii) the Aggregate Collateral Balance for such Distribution Date
and (B) the
amount, if any, by which (i) the Aggregate Collateral Balance
for such
Distribution Date exceeds (ii) 0.50% of the Aggregate Collateral
Balance as of
the Cut-off Date.
Class M-1 Pass-Through Rate: With respect to the initial
Interest Accrual Period, based on a LIBOR determination date of
February 22,
2005, 3.070% per annum. With respect to any Interest Accrual
Period thereafter,
will be a per annum rate equal to the lesser of (i) the sum of
LIBOR plus the
related Certificate Margin and (ii) the Net Funds Cap.
Class M-1 Principal Payment Amount: For any Distribution
Date
on or after the Stepdown Date and as long as a Trigger Event is
not in effect
with respect to such Distribution Date, will be the amount, if
any, by which (x)
the sum of (i) the aggregate Class Principal Balance of the
Class A-1, Class P,
Class A-R and Class A-RL Certificates after giving effect to
payments on such
Distribution Date and (ii) the Class Principal Balance of the
Class M-1
Certificates immediately prior to such Distribution Date exceeds
(y) the lesser
of (A) the product of (i) 44.10% and (ii) the Aggregate
Collateral Balance for
such Distribution Date and (B) the amount, if any, by which (i)
the Aggregate
Collateral Balance for such Distribution Date exceeds (ii) 0.50%
of the
Aggregate Collateral Balance as of the Cut-off Date.
Class M-2 Pass-Through Rate: With respect to the initial
Interest Accrual Period, based on a LIBOR determination date of
February 22,
2005, 3.090% per annum. With respect to any Interest Accrual
Period thereafter,
will be a per annum rate equal to the lesser of (i) the sum of
LIBOR plus the
related Certificate Margin and (ii) the Net Funds Cap.
Class M-2 Principal Payment Amount: For any Distribution
Date
on or after the Stepdown Date and as long as a Trigger Event has
not occurred
with respect to such Distribution Date, will be the amount, if
any, by which (x)
the sum of (i) the aggregate Class Principal Balance of the
Class A-1, Class P,
Class A-R, Class A-RL and Class M-1 Certificates, in each case,
after giving
effect to payments on such Distribution Date and (ii) the Class
Principal
6
<PAGE>
Balance of the Class M-2 Certificates immediately prior to such
Distribution
Date exceeds (y) the lesser of (A) the product of (i) 53.90% and
(ii) the
Aggregate Collateral Balance for such Distribution Date and (B)
the amount, if
any, by which (i) the Aggregate Collateral Balance for such
Distribution Date
exceeds (ii) 0.50% of the Aggregate Collateral Balance as of the
Cut-off Date.
Class M-3 Pass-Through Rate: With respect to the initial
Interest Accrual Period, based on a LIBOR determination date of
February 22,
2005, 3.120% per annum. With respect to any Interest Accrual
Period thereafter,
will be a per annum rate equal to the lesser of (i) the sum of
LIBOR plus the
related Certificate Margin and (ii) the Net Funds Cap.
Class M-3 Principal Payment Amount: For any Distribution
Date
on or after the Stepdown Date and as long as a Trigger Event has
not occurred
with respect to such Distribution Date, will be the amount, if
any, by which (x)
the sum of (i) the aggregate Class Principal Balance of the
Class A-1, Class P,
Class A-R, Class A-RL, Class M-1 and Class M-2 Certificates, in
each case, after
giving effect to payments on such Distribution Date and (ii) the
Class Principal
Balance of the Class M-3 Certificates immediately prior to such
Distribution
Date exceeds (y) the lesser of (A) the product of (i) 60.20% and
(ii) the
Aggregate Collateral Balance for such Distribution Date and (B)
the amount, if
any, by which (i) the Aggregate Collateral Balance for such
Distribution Date
exceeds (ii) 0.50% of the Aggregate Collateral Balance as of the
Cut-off Date.
Class M-4 Pass-Through Rate: With respect to the initial
Interest Accrual Period (a) on or prior to the Optional
Termination Date, the
lesser of (i) 5.265% per annum and (ii) the Net Funds Cap, and
(b) after the
Optional Termination Date, the lesser of (i) 5.765% per annum
and (ii) the Net
Funds Cap.
Class M-4 Principal Payment Amount: For any Distribution
Date
on or after the Stepdown Date and as long as a Trigger Event has
not occurred
with respect to such Distribution Date, will be the amount, if
any, by which (x)
the sum of (i) the aggregate Class Principal Balance of the
Class A-1, Class P,
Class A-R, Class A-RL, Class M-1, Class M-2 and Class M-3
Certificates, in each
case, after giving effect to payments on such Distribution Date
and (ii) the
Class Principal Balance of the Class M-4 Certificates
immediately prior to such
Distribution Date exceeds (y) the lesser of (A) the product of
(i) 66.80% and
(ii) the Aggregate Collateral Balance for such Distribution Date
and (B) the
amount, if any, by which (i) the Aggregate Collateral Balance
for such
Distribution Date exceeds (ii) 0.50% of the Aggregate Collateral
Balance as of
the Cut-off Date.
Class M-5 Pass-Through Rate: With respect to the initial
Interest Accrual Period (a) on or prior to the Optional
Termination Date, the
lesser of (i) 5.281% per annum and (ii) the Net Funds Cap, and
(b) after the
Optional Termination Date, the lesser of (i) 5.781% per annum
and (ii) the Net
Funds Cap.
Class M-5 Principal Payment Amount: For any Distribution
Date
on or after the Stepdown Date and as long as a Trigger Event has
not occurred
with respect to such Distribution
7
<PAGE>
Date, will be the amount, if any, by which (x) the sum of (i)
the aggregate
Class Principal Balance of the Class A-1, Class P, Class A-R,
Class A-RL, Class
M-1, Class M-2, Class M-3 and Class M-4 Certificates, in each
case, after giving
effect to payments on such Distribution Date and (ii) the Class
Principal
Balance of the Class M-5 Certificates immediately prior to such
Distribution
Date exceeds (y) the lesser of (A) the product of (i) 71.20% and
(ii) the
Aggregate Collateral Balance for such Distribution Date and (B)
the amount, if
any, by which (i) the Aggregate Collateral Balance for such
Distribution Date
exceeds (ii) 0.50% of the Aggregate Collateral Balance as of the
Cut-off Date.
Class M-6 Pass-Through Rate: With respect to the initial
Interest Accrual Period (a) on or prior to the Optional
Termination Date, the
lesser of (i) 5.363% per annum and (ii) the Net Funds Cap, and
(b) after the
Optional Termination Date, the lesser of (i) 5.863% per annum
and (ii) the Net
Funds Cap.
Class M-6 Principal Payment Amount: For any Distribution
Date
on or after the Stepdown Date and as long as a Trigger Event has
not occurred
with respect to such Distribution Date, will be the amount, if
any, by which (x)
the sum of (i) the aggregate Class Principal Balance of the
Class A-1, Class P,
Class A-R, Class A-RL, Class M-1, Class M-2, Class M-3, Class
M-4 and Class M-5
Certificates, in each case, after giving effect to payments on
such Distribution
Date and (ii) the Class Principal Balance of the Class M-6
Certificates
immediately prior to such Distribution Date exceeds (y) the
lesser of (A) the
product of (i) 75.30% and (ii) the Aggregate Collateral Balance
for such
Distribution Date and (B) the amount, if any, by which (i) the
Aggregate
Collateral Balance for such Distribution Date exceeds (ii) 0.50%
of the
Aggregate Collateral Balance as of the Cut-off Date.
Class M-7 Pass-Through Rate: With respect to the initial
Interest Accrual Period (a) on or prior to the Optional
Termination Date, the
lesser of (i) 5.700% per annum and (ii) the Net Funds Cap, and
(b) after the
Optional Termination Date, the lesser of (i) 6.200% per annum
and (ii) the Net
Funds Cap.
Class M-7 Principal Payment Amount: For any Distribution
Date
on or after the Stepdown Date and as long as a Trigger Event has
not occurred
with respect to such Distribution Date, will be the amount, if
any, by which (x)
the sum of (i) the aggregate Class Principal Balance of the
Class A-1, Class P,
Class A-R, Class A-RL, Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5 and
Class M-6 Certificates, in each case, after giving effect to
payments on such
Distribution Date and (ii) the Class Principal Balance of the
Class M-7
Certificates immediately prior to such Distribution Date exceeds
(y) the lesser
of (A) the product of (i) 79.10% and (ii) the Aggregate
Collateral Balance for
such Distribution Date and (B) the amount, if any, by which (i)
the Aggregate
Collateral Balance for such Distribution Date exceeds (ii) 0.50%
of the
Aggregate Collateral Balance as of the Cut-off Date.
Class M-8 Pass-Through Rate: With respect to the initial
Interest Accrual Period (a) on or prior to the Optional
Termination Date, the
lesser of (i) 5.791% per annum and (ii) the Net Funds Cap, and
(b) after the
Optional Termination Date, the lesser of (i) 6.291% per annum
and (ii) the Net
Funds Cap.
8
<PAGE>
Class M-8 Principal Payment Amount: For any Distribution
Date
on or after the Stepdown Date and as long as a Trigger Event has
not occurred
with respect to such Distribution Date, will be the amount, if
any, by which (x)
the sum of (i) the aggregate Class Principal Balance of the
Class A-1, Class P,
Class A-R, Class A-RL, Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5,
Class M-6 and Class M-7 Certificates, in each case, after giving
effect to
payments on such Distribution Date and (ii) the Class Principal
Balance of the
Class M-8 Certificates immediately prior to such Distribution
Date exceeds (y)
the lesser of (A) the product of (i) 82.70% and (ii) the
Aggregate Collateral
Balance for such Distribution Date and (B) the amount, if any,
by which (i) the
Aggregate Collateral Balance for such Distribution Date exceeds
(ii) 0.50% of
the Aggregate Collateral Balance as of the Cut-off Date.
Class M-9 Pass-Through Rate: With respect to the initial
Interest Accrual Period (a) on or prior to the Optional
Termination Date, the
lesser of (i) 6.281% per annum and (ii) the Net Funds Cap, and
(b) after the
Optional Termination Date, the lesser of (i) 6.781% per annum
and (ii) the Net
Funds Cap.
Class M-9 Principal Payment Amount: For any Distribution
Date
on or after the Stepdown Date and as long as a Trigger Event has
not occurred
with respect to such Distribution Date, will be the amount, if
any, by which (x)
the sum of (i) the aggregate Class Principal Balance of the
Class A-1, Class P,
Class A-R, Class A-RL, Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5,
Class M-6, Class M-7 and Class M-8 Certificates, in each case,
after giving
effect to payments on such Distribution Date and (ii) the Class
Principal
Balance of the Class M-9 Certificates immediately prior to such
Distribution
Date exceeds (y) the lesser of (A) the product of (i) 85.80% and
(ii) the
Aggregate Collateral Balance for such Distribution Date and (B)
the amount, if
any, by which (i) the Aggregate Collateral Balance for such
Distribution Date
exceeds (ii) 0.50% of the Aggregate Collateral Balance as of the
Cut-off Date.
Class X-1 Distributable Amount: With respect to any
Distribution Date, the amount of interest accrued during the
related Interest
Accrual Period at the related Pass-Through Rate on the Class X-1
Notional Amount
for such Distribution Date.
Class X-1 Notional Amount: Immediately prior to any
Distribution Date, with respect to the Class X-1 Certificates,
an amount equal
to the aggregate of the Uncertificated Principal Balances of the
REMIC 2 Regular
Interests (other than REMIC 2 Regular Interests MTI-P and
MTI-R).
Class X-S Notional Amount: Immediately prior to any
Distribution Date, with respect to the Class X-S Certificates,
an amount equal
to the Stated Principal Balance of the Mortgage Loans as of the
Due Date in the
month of such Distribution Date (prior to giving effect to any
Scheduled
Payments due on such Mortgage Loans on such Due Date). For
federal income tax
purposes, however, the Class X-S Notional Amount will equal the
Uncertificated
Notional Amount of REMIC 2 Regular Interest MTI-S.
Class P Pass-Through Rate: With respect to the Class P
Certificates and the Distribution Dates, for March 2005, April
2005 and May 2005
a per annum rate equal to the
9
<PAGE>
Initial Mortgage Loan Net WAC Rate, and with respect to any
Distribution Date
thereafter, a per annum rate equal to the Net Funds Cap. For
federal income tax
purposes, however, with respect to any Distribution Date, the
Class P
Certificates will be entitled to 100% of the interest accrued on
REMIC 2 Regular
Interest MTI-P.
Class Principal Balance: With respect to any Class and as to
any date of determination, the aggregate of the Certificate
Balances of all
Certificates of such Class as of such date plus, in the case of
any Subordinate
Certificates, any increase in the Class Principal Balance of
such Class pursuant
to Section 4.02(vii) due to the receipt of Net Recoveries.
Class R-2 Interest: The sole class of residual interests in
REMIC 2.
Class R-3 Interest: The sole class of residual interests in
REMIC 3.
Closing Date: February 24, 2005.
Code: The Internal Revenue Code of 1986, as the same may be
amended from time to time (or any successor statute
thereto).
Collection Accounts: The accounts established and maintained
by the Servicer in accordance with Section 3.05.
Collection Period: With respect to any Distribution Date,
the
period from the second day of the month immediately preceding
such Distribution
Date to and including the first day of the month of such
Distribution Date.
Combined Loan-to-Value Ratio: With respect to any Mortgage
Loan and as of any date of determination, the fraction
(expressed as a
percentage) the numerator of which is the sum of (i) original
principal balance
of the related Mortgage Loan at such date of determination and
(ii) the unpaid
principal balance of the related First Mortgage Loan as of the
date of
origination of that Mortgage Loan and the denominator of which
is (a) with
respect to a refinanced Mortgage Loan, the Appraised Value of
the related
Mortgaged Property at origination and (b) with respect to all
other Mortgage
Loans, the lesser of (i) the Appraised Value of the related
Mortgage Property at
origination and (ii) the purchase price of the related Mortgaged
Property.
Compensating Interest Payment: For any Distribution Date, an
amount to be paid by the Servicer for such Distribution Date,
equal to the
lesser of (i) an amount equal to 0.25% per annum on the
aggregate Stated
Principal Balance of the Mortgage Loans otherwise payable to the
Servicer on
such Distribution Date (prior to giving effect to any Scheduled
Payments due on
the Mortgage Loans on such Due Date) and (ii) the aggregate
Prepayment Interest
Shortfall for the Mortgage Loans relating to Principal
Prepayments received
during the related Prepayment Period.
Corporate Trust Office: The designated office of the Trustee
in the State of New York at which at any particular time its
corporate trust
business with respect to this Agreement
10
<PAGE>
shall be administered, which office at the date of the execution
of this
Agreement is located at 4 New York Plaza, 6th Floor, New York,
New York
10004-2477, Attention: Institutional Trust Services/Global Debt:
Home Equity
Mortgage Trust-2005-1.
Corresponding Certificate: With respect to (i) REMIC 2
Regular
Interest MTI-P, (ii) REMIC 2 Regular Interest MTI-R, (iii) REMIC
2 Regular
Interest MTI-A-1, (iv) REMIC 2 Regular Interest MTI-M-1, (v)
REMIC 2 Regular
Interest MTI-M-2, (vi) REMIC 2 Regular Interest MTI-M-3, (vii)
REMIC 2 Regular
Interest MTI-M-4, (viii) REMIC 2 Regular Interest MTI-M-5, (ix)
REMIC 2 Regular
Interest MTI-M-6, (x) REMIC 2 Regular Interest MTI-M-7, (xi)
REMIC 2 Regular
Interest MTI-M-8, (xii) REMIC 2 Regular Interest MTI-M-9, (xiii)
REMIC 2 Regular
Interest MTI-B-1, (xiv) REMIC 2 Regular Interest MTI-B-2 and
(xv) REMIC 2
Regular Interest MTI-S, the (i) Class P Certificates, (ii) Class
A-R
Certificates, (iii) Class A-1 Certificates, (iv) Class M-1
Certificates, (v)
Class M-2 Certificates, (vi) Class M-3 Certificates, (vii) Class
M-4
Certificates, (viii) Class M-5 Certificates, (ix) Class M-6
Certificates, (x)
Class M-7 Certificates, (xi) Class M-8 Certificates, (xii) Class
M-9
Certificates, (xiii) Class B-1 Certificates, (xiv) Class B-2
Certificates and
(xv) Class X-S Certificates, respectively.
Corresponding Uncertificated Interest: With respect to (i)
REMIC 1 Regular Interest LTI-P and (ii) REMIC 1 Regular Interest
LTI-R, (i)
REMIC 2 Regular Interest MTI-P and (ii) REMIC 2 Regular Interest
MTI-R,
respectively.
Credit Risk Manager: The Murrayhill Company, a Colorado
corporation.
Credit Risk Management Agreement: The agreement between
Wilshire and the Credit Risk Manager dated as of February 24,
2005.
Credit Risk Manager Fee: As to each Mortgage Loan and any
Distribution Date, an amount equal to one month's interest at
the Credit Risk
Manager Fee Rate on the Stated Principal Balance of such
Mortgage Loan as of the
Due Date in the month of such Distribution Date (prior to giving
effect to any
Scheduled Payments due on such Mortgage Loan on such Due
Date).
Credit Risk Manager Fee Rate: 0.0175% per annum.
CSFB: Credit Suisse First Boston LLC, a Delaware limited
liability company, and its successors and assigns.
Cumulative Loss Event: For any Distribution Date, a
Cumulative
Loss Event is occurring if Cumulative Net Realized Losses on the
Mortgage Loans
equal or exceed the percentage of the Aggregate Collateral
Balance as of the
Cut-off Date for that Distribution Date as specified below:
<TABLE>
<CAPTION>
DISTRIBUTION DATE PERCENTAGE OF AGGREGATE COLLATERAL BALANCE
<S> <C>
March 2005 - February 2008............. N.A.
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
March 2008 - February 2009............. 5.75% for the first
month, plus an additional 1/12th of 3.00% for each
month thereafter
March 2009 - February 2010............. 8.75% for the first
month, plus an additional 1/12th of 0.75% for each
month thereafter
March 2010 - February 2011............. 9.50% for the first
month, plus an additional 1/12th of 0.50% for each
month thereafter
March 2011 - February 2012............. 10.00% for the first
month, plus an additional 1/12th of 0.50% for each
month thereafter
March 2012 and thereafter.............. 10.50%
</TABLE>
Cumulative Net Realized Losses: As to any date of
determination the aggregate amount of Realized Losses as reduced
by any Net
Recoveries received on Charged Off Loans.
Current Interest: For any Class of Certificates and
Distribution Date, the amount of interest accruing at the
applicable
Pass-Through Rate on the related Class Principal Balance, or
Notional Amount, as
applicable, of such Class during the related Interest Accrual
Period; provided,
that if and to the extent that on any Distribution Date the
Interest Remittance
Amount is less than the aggregate distributions required
pursuant to Section
4.02(b)(i)A-M without regard to this proviso, then the Current
Interest on each
such Class will be reduced, on a pro rata basis in proportion to
the amount of
Current Interest for each Class without regard to this proviso,
by the lesser of
(i) the amount of the deficiency described above in this proviso
and (ii) the
related Interest Shortfall for such Distribution Date.
Curtailment: Any payment of principal on a Mortgage Loan,
made
by or on behalf of the related Mortgagor, other than a Scheduled
Payment, a
prepaid Scheduled Payment or a Payoff, which is applied to
reduce the
outstanding Stated Principal Balance of the Mortgage Loan.
Custodial Agreement: The agreement, among the Trustee, the
Custodian and the Depositor providing for the safekeeping of any
documents or
instruments referred to in Section 2.01 on behalf of the
Certificateholders,
attached hereto as Exhibit R.
Custodian: LaSalle Bank National Association, a national
banking association, or any successor custodian appointed
pursuant to the terms
of the Custodial Agreement. Each Custodian so appointed shall
act as agent on
behalf of the Trustee, and shall be compensated by the
Depositor. The Trustee
shall remain at all times responsible under the terms of this
Agreement,
notwithstanding the fact that certain duties have been assigned
to a Custodian.
Cut-off Date: For any Mortgage Loan, other than a Subsequent
Mortgage Loan, February 1, 2005. For any Subsequent Mortgage
Loan, the
applicable Subsequent Transfer Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
Stated Principal Balance thereof as of the close of business on
the Cut-off
Date.
12
<PAGE>
Defective Mortgage Loan: Any Mortgage Loan which is required
to be repurchased pursuant to Section 2.02 or 2.03.
Deferred Amount: For any Class of Class M Certificates or
Class B Certificates and any Distribution Date, will equal the
amount by which
(x) the aggregate of the Applied Loss Amounts previously applied
in reduction of
the Class Principal Balance thereof exceeds (y) the sum of (i)
the aggregate of
amounts previously paid in reimbursement thereof and (ii) the
amount of the
increase in the related Class Principal Balance due to the
receipt of Net
Recoveries as provided in Section 4.02(vii).
Definitive Certificates: Any Certificate issued in lieu of a
Book-Entry Certificate pursuant to Section 5.02(e).
Deleted Mortgage Loan: As defined in Section 2.03.
Delinquency Rate: For any month, a fraction, expressed as a
percentage, the numerator of which is the aggregate outstanding
principal
balance of all Mortgage Loans 60 or more days delinquent
(including all
foreclosures and REO Properties) as of the close of business on
the last day of
such month, and the denominator of which is the Aggregate
Collateral Balance as
of the close of business on the last day of such month.
Denomination: With respect to each Certificate, the amount
set
forth on the face thereof as the "Initial Certificate Balance of
this
Certificate" or the "Initial Notional Amount of this
Certificate" or, if neither
of the foregoing, the Percentage Interest appearing on the face
thereof.
Depositor: Credit Suisse First Boston Mortgage Securities
Corp., a Delaware corporation, or its successor in interest.
Depository: The initial Depository shall be The Depository
Trust Company, the nominee of which is CEDE & Co., as 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: As to any Distribution Date, the second
Business Day immediately following the 15th day of the month of
such
Distribution Date.
Distribution Date: The 25th day of each month or if such day
is not a Business Day, the first Business Day thereafter,
commencing in March
2005.
DLJMC: DLJ Mortgage Capital, Inc., a Delaware corporation,
and
its successors and assigns.
13
<PAGE>
Due Date: With respect to any Distribution Date and any
Mortgage Loan, the day during the related Due Period on which
the Scheduled
Payment is due.
Due Period: With respect to each Distribution Date, the
period
commencing on the second day of the month preceding the month of
the
Distribution Date and ending on the first day of the month of
the Distribution
Date.
Eligible Account: Either (i) an account or accounts
maintained
with a federal or state chartered depository institution or
trust company
acceptable to the Rating Agencies or (ii) an account or accounts
the deposits in
which are insured by the FDIC to the limits established by such
corporation,
provided that any such deposits not so insured shall be
maintained in an account
at a depository institution or trust company whose commercial
paper or other
short term debt obligations (or, in the case of a depository
institution or
trust company which is the principal subsidiary of a holding
company, the
commercial paper or other short term debt obligations of such
holding company)
have been rated by Moody's and Fitch in its highest short-term
rating category
and by S&P at least "A-1+", or (iii) a segregated trust
account or accounts
(which shall be a "special deposit account") maintained with the
Trustee or any
other federal or state chartered depository institution or trust
company, acting
in its fiduciary capacity, in a manner acceptable to the Trustee
and the Rating
Agencies. Eligible Accounts may bear interest.
Eligible Investments: Any one or more of the obligations and
securities listed below which investment provides for a date of
maturity not
later than the Determination Date in each month:
(i) direct obligations of, and obligations fully guaranteed
by, the United States of America, or any agency or
instrumentality of
the United States of America the obligations of which are backed
by the
full faith and credit of the United States of America; or
obligations
fully guaranteed by, the United States of America; Freddie Mac,
Fannie
Mae, the Federal Home Loan Banks or any agency or
instrumentality of
the United States of America rated AA or higher by the Rating
Agencies;
(ii) federal funds, demand and time deposits in,
certificates
of deposits of, or bankers' acceptances issued by, any
depository
institution or trust company incorporated or organized under the
laws
of the United States of America or any state thereof and subject
to
supervision and examination by federal and/or state banking
authorities, so long as at the time of such investment or
contractual
commitment providing for such investment the commercial paper or
other
short-term debt obligations of such depository institution or
trust
company (or, in the case of a depository institution or trust
company
which is the principal subsidiary of a holding company, the
commercial
paper or other short-term debt obligations of such holding
company) are
rated in one of two of the highest ratings by each of the
Rating
Agencies, and the long-term debt obligations of such
depository
institution or trust company (or, in the case of a
depository
institution or trust company which is the principal subsidiary
of a
holding company, the long-term debt obligations of such
holding
company) are rated in one of two of the highest ratings, by each
of the
Rating Agencies;
14
<PAGE>
(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
a
principal) rated "A" or higher by Moody's, "A-1" or higher by
S&P and
"F-1" or higher by Fitch; provided, however, that collateral
transferred pursuant to such repurchase obligation must be of
the type
described in clause (i) above and must (A) be valued daily at
current
market price plus accrued interest, (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
issued
by any corporation incorporated under the laws of the United
States of
America or any state thereof which has a long-term unsecured
debt
rating in the highest available rating category of each of the
Rating
Agencies at the time of such investment;
(v) commercial paper having an original maturity of less
than
365 days and issued by an institution having a short-term
unsecured
debt rating in the highest available rating category of Moody's
and
Fitch and rated "A-1+" by S&P at the time of such
investment;
(vi) a guaranteed investment contract approved by each of
the
Rating Agencies and issued by an insurance company or other
corporation
having a long-term unsecured debt rating in the highest
available
rating category of each of the Rating Agencies at the time of
such
investment;
(vii) which may be 12b-1 funds as contemplated under the
rules
promulgated by the Securities and Exchange Commission under
the
Investment Company Act of 1940) having ratings in the highest
available
rating category of Moody's and Fitch and or "AAAm" or "AAAm-G"
by S&P
at the time of such investment (any such money market funds
which
provide for demand withdrawals being conclusively deemed to
satisfy any
maturity requirements for Eligible Investments set forth
herein)
including money market funds of the Servicer or the Trustee and
any
such funds that are managed by the Servicer or the Trustee or
their
respective Affiliates or for the Servicer or the Trustee or
any
Affiliate of either acts as advisor, as long as such money
market funds
satisfy the criteria of this subparagraph (vii); and
(viii) such other investments the investment in which will
not, as evidenced by a letter from each of the Rating Agencies,
result
in the downgrading or withdrawal of the Ratings of the
Certificates.
provided, however, that no such instrument shall be an Eligible
Investment if
such instrument evidences either (i) a right to receive only
interest payments
with respect to the obligations underlying such instrument, or
(ii) both
principal and interest payments derived from obligations
underlying such
instrument and the principal and interest payments with respect
to such
15
<PAGE>
instrument provide a yield to maturity of greater than 120% of
the yield to
maturity at par of such underlying obligations.
ERISA: The Employee Retirement Income Security Act of 1974,
as
amended.
ERISA-Restricted Certificates: As specified in the
Preliminary
Statement.
Escrow Account: The separate account or accounts created and
maintained by the Servicer pursuant to Section 3.06.
Escrow Mortgage Loan: Any Mortgage Loan for which the
Servicer
has established an Escrow Account for items constituting Escrow
Payments.
Escrow Payments: With respect to any Mortgage Loan, the
amounts constituting ground rents, taxes, mortgage insurance
premiums, fire and
hazard insurance premiums, and any other payments required to be
escrowed by the
Mortgagor with the mortgagee pursuant to the Mortgage,
applicable law or any
other related document.
Event of Default: As defined in Section 7.01.
Excess Cashflow Loss Payment: As defined in Section
4.02(b)(iv)(A).
Excess Servicing Fee: As to any Distribution Date, an amount
equal to one month's interest at the Excess Servicing Fee Rate
on the Class X-S
Notional Amount for such Distribution Date.
Excess Servicing Fee Rate: The excess, if any, of 0.50% over
the "Wilshire Servicing Fee Rate" as defined in the Wilshire
Letter Agreement.
Expense Fees: As to each Mortgage Loan, the sum of the
Servicing Fee, the Excess Servicing Fee, the Credit Risk Manager
Fee and the
Trustee Fee.
Expense Fee Rate: As to each Mortgage Loan, the sum of the
Servicing Fee Rate, the Excess Servicing Fee Rate, the Credit
Risk Manager Fee
Rate and the Trustee Fee Rate.
Fair Market Value: The fair market value of all of the
property of the Trust, as agreed upon between the Optional
Termination Holder
and a majority of the Holders of the Class A-RL Certificates;
provided, however,
that if the Optional Termination Holder and a majority of the
Holders of the
Class A-RL Certificates do not agree upon the fair market value
of all the
property of the Trust, the Trustee shall solicit, or cause the
solicitation of,
good faith bids for all of the property of the Trust until it
has received three
bids from institutions that are regular purchasers and/or
sellers in the
secondary market of residential whole mortgage loans similar to
the Mortgage
Loans, and the Fair Market Value shall be equal to the highest
of such three
bids.
16
<PAGE>
Fannie Mae: Fannie Mae, a federally chartered and privately
owned corporation organized and existing under the Federal
National Mortgage
Association Charter Act, or any successor thereto.
Fannie Mae Guides: The Fannie Mae Sellers' Guide and the
Fannie Mae Servicers' Guide and all amendments or additions
thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
FIRREA: The Financial Institutions Reform, Recovery and
Enforcement Act of 1989.
First Mortgage Loan: A Mortgage Loan that is secured by a
first lien on the Mortgaged Property securing the related
Mortgage Note.
Fitch: Fitch, Inc., or any successor thereto.
Foreclosure Restricted Loan: Any Mortgage Loan that is 60 or
more days delinquent as of the Closing Date, unless such
Mortgage Loan has
become current for three consecutive Scheduled Payments after
the Closing Date.
Freddie Mac: Freddie Mac, a corporate instrumentality of the
United States created and existing under Title III of the
Emergency Home Finance
Act of 1970, as amended, or any successor thereto.
Highest Priority: As of any date of determination, the Class
of Subordinate Certificates then outstanding with a Class
Principal Balance
greater than zero, with the highest priority for payments
pursuant to Section
4.02, in the following order of decreasing priority: Class M-1,
Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8,
Class M-9, Class B-1
and Class B-2 Certificates.
Initial Mortgage Loan: A Mortgage Loan conveyed to the Trust
on the Closing Date pursuant to this Agreement as identified on
the Mortgage
Loan Schedule delivered to the Trustee on the Closing Date.
Initial Mortgage Loan Net WAC Rate: A per annum rate equal
to
the weighted average of the Net Mortgage Rates of the Initial
Mortgage Loans.
Indirect Participant: A broker, dealer, bank or other
financial institution or other Person that clears through or
maintains a
custodial relationship with a Depository Participant.
Insurance Proceeds: Proceeds paid under any Insurance Policy
covering a Mortgage Loan to the extent the proceeds are not (i)
applied to the
restoration of the related Mortgaged Property, (ii) applied to
the satisfaction
of any related First Mortgage Loan or (iii) released to the
Mortgagor in
accordance with the procedures that the Servicer would follow in
servicing
mortgage loans held for its own account.
17
<PAGE>
Interest Accrual Period: With respect to each Distribution
Date, (i) with respect to the Class M-4, Class M-5, Class M-6,
Class M-7, Class
M-8, Class M-9, Class B-1, Class B-2, Class A-R, Class A-RL,
Class P, Class X-1
and Class X-S Certificates, the calendar month prior to the
month of such
Distribution Date, (ii) with respect to the Class A-1, Class
M-1, Class M-2 and
Class M-3 Certificates, the one-month period commencing on the
immediately
preceding Distribution Date (or the Closing Date, in the case of
the first
Distribution Date) and ending on the day immediately preceding
the related
Distribution Date.
Interest Remittance Amount: For any Distribution Date, an
amount equal to the sum of (1) all interest collected (other
than Payaheads and
Simple Interest Excess, if applicable) or advanced in respect of
Scheduled
Payments on the Mortgage Loans during the related Due Period,
the interest
portion of Payaheads previously received and intended for
application in the
related Due Period and the interest portion of all Payoffs and
Curtailments
received on the Mortgage Loans during the related Prepayment
Period, less (x)
the Expense Fee (other than the Excess Servicing Fee) with
respect to such
Mortgage Loans and (y) unreimbursed Advances and other amounts
due to the
Servicer or the Trustee with respect to such Mortgage Loans, to
the extent
allocable to interest, (2) all Compensating Interest Payments
paid by the
Servicer with respect to such Distribution Date, (3) the portion
of any
Substitution Adjustment Amount or Repurchase Price paid with
respect to such
Mortgage Loans during the calendar month immediately preceding
the Distribution
Date allocable to interest, (4) all Liquidation Proceeds, Net
Recoveries and any
Insurance Proceeds and other recoveries (net of unreimbursed
Advances, Servicing
Advances and expenses, to the extent allocable to interest, and
unpaid Servicing
Fees) collected with respect to the Mortgage Loans during the
prior calendar
month, to the extent allocable to interest and (5) any amounts
withdrawn from
the Capitalized Interest Account and the Simple Interest Excess
Sub-Account to
pay interest on the Certificates with respect to such
Distribution Date. If on
any Determination Date the amount deposited into the Collection
Account with
respect to Compensating Interest is the amount calculated in
clause (ii) of the
definition of Compensating Interest Payment for such
Distribution Date, the
excess of (x) 0.25% per annum on the aggregate Stated Principal
Balance of the
Mortgage Loans over (y) the Compensating Interest Payment for
such Distribution
Date shall be available to cover any Net Simple Interest
Shortfalls on the
Mortgage Loans remaining on such Distribution Date, after giving
effect to the
withdrawal from the Simple Interest Excess Sub-Account pursuant
to Section
3.06(f) on such Distribution Date.
Interest Shortfall: For any Distribution Date, the aggregate
shortfall, if any, in collections of interest for the previous
month (adjusted
to the related Net Mortgage Rate) on Mortgage Loans resulting
from (a) Principal
Prepayments received during the related Prepayment Period to the
extent not
covered by Compensating Interest and (b) Relief Act
Reductions.
Last Scheduled Distribution Date: With respect to each Class
of Certificates, the Distribution Date in June 2035.
18
<PAGE>
Latest Possible Maturity Date: For purposes of satisfying
Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest
possible maturity
date" of all interests created in REMIC 1, REMIC 2 and REMIC 3
shall be June 25,
2035.
LIBOR: For any Interest Accrual Period other than the first
Interest Accrual Period, the rate for United States dollar
deposits for one
month which appears on the Dow Jones Telerate Screen Page 3750
as of 11:00 A.M.,
London, England time, on the second LIBOR Business Day prior to
the first day of
such Interest Accrual Period. With respect to the first Interest
Accrual Period,
the rate for United States dollar deposits for one month which
appears on the
Dow Jones Telerate Screen Page 3750 as of 11:00 A.M., London,
England time, two
LIBOR Business Days prior to the Closing Date. If such rate does
not appear on
such page (or such other page as may replace that page on that
service, or if
such service is no longer offered, such other service for
displaying LIBOR or
comparable rates as may be reasonably selected by the Trustee),
the rate will be
the Reference Bank Rate. If no such quotations can be obtained
and no Reference
Bank Rate is available, LIBOR will be the LIBOR applicable to
the Interest
Accrual Period preceding the next applicable Distribution
Date.
LIBOR Business Day: Any day other than (i) a Saturday or a
Sunday or (ii) a day on which banking institutions in the State
of New York or
in the city of London, England are required or authorized by law
to be closed.
Liquidated Mortgage Loan: With respect to any Distribution
Date, a defaulted Mortgage Loan (including any REO Property)
which was
liquidated or for which payments under the related private
mortgage insurance
policy, hazard insurance policy or any condemnation proceeds
were received, in
the calendar month preceding the month of such Distribution Date
and as to which
the Servicer has determined (in accordance with this Agreement)
that it has
received all amounts it expects to receive in connection with
the liquidation of
such Mortgage Loan, including the final disposition of the
related REO Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation
of defaulted
Mortgage Loans, whether through trustee's sale, foreclosure sale
or similar
disposition or amounts received in connection with any
condemnation or partial
release of a Mortgaged Property and any other proceeds received
in connection
with an REO Property, in each case, which, for the avoidance of
doubt, is
remaining after, or not otherwise required to be applied to, the
satisfaction of
any related First Mortgage Loan, less the sum of related
unreimbursed Expense
Fees, Servicing Advances, Advances and reasonable out-of-pocket
expenses.
Majority in Interest: As to any Class of Regular
Certificates
or the Class X-2 Certificates, the Holders of Certificates of
such Class
evidencing, in the aggregate, at least 51% of the Percentage
Interests evidenced
by all Certificates of such Class.
Marker Rate: With respect to the Class X-1 Certificates and
any Distribution Date, a per annum rate equal to two (2) times
the weighted
average of the Uncertificated REMIC 2 Pass-Through Rates for
REMIC 2 Regular
Interests MTI-A-1, MTI-M-1, MTI-M-2, MTI-M-3,
19
<PAGE>
MTI-M-4, MTI-M-5, MTI-M-6, MTI-M-7, MTI-M-8, MTI-M-9, MTI-B-1,
MTI-B-2 and
MTI-ZZ, with the rates on the REMIC 2 Regular Interests MTI-A-1,
MTI-M-1,
MTI-M-2 and MTI-M-3 subject to a cap, for the purpose of this
calculation, equal
to the lesser of (A) LIBOR plus the Certificate Margin for the
Corresponding
Certificate and (B) the REMIC 2 Net WAC Rate, with the rate on
the REMIC 2
Regular Interest MTI-M-4 subject to a cap, for purposes of this
calculation,
equal to the lesser of (A) 5.265% per annum on or prior to the
Optional
Termination Date and 5.765% per annum after the Optional
Termination Date and
(B) the REMIC 2 Net WAC Rate, with the rate on the REMIC 2
Regular Interest
MTI-M-5 subject to a cap, for purposes of this calculation,
equal to the lesser
of (A) 5.281% per annum on or prior to the Optional Termination
Date and 5.781%
per annum after the Optional Termination Date and (B) the REMIC
2 Net WAC Rate,
with the rate on the REMIC 2 Regular Interest MTI-M-6 subject to
a cap, for
purposes of this calculation, equal to the lesser of (A) 5.363%
per annum on or
prior to the Optional Termination Date and 5.863% per annum
after the Optional
Termination Date and (B) the REMIC 2 Net WAC Rate, with the rate
on the REMIC 2
Regular Interest MTI-M-7 subject to a cap, for purposes of this
calculation,
equal to the lesser of (A) 5.700% per annum on or prior to the
Optional
Termination Date and 6.200% per annum after the Optional
Termination Date and
(B) the REMIC 2 Net WAC Rate, with the rate on the REMIC 2
Regular Interest
MTI-M-8 subject to a cap, for purposes of this calculation,
equal to the lesser
of (A) 5.791% per annum on or prior to the Optional Termination
Date and 6.291%
per annum after the Optional Termination Date and (B) the REMIC
2 Net WAC Rate,
with the rate on the REMIC 2 Regular Interest MTI-M-9 subject to
a cap, for
purposes of this calculation, equal to the lesser of (A) 6.281%
per annum on or
prior to the Optional Termination Date and 6.781% per annum
after the Optional
Termination Date and (B) the REMIC 2 Net WAC Rate, with the rate
on the REMIC 2
Regular Interest MTI-B-1 subject to a cap, for purposes of this
calculation,
equal to the lesser of (A) 7.000% per annum on or prior to the
Optional
Termination Date and 7.500% per annum after the Optional
Termination Date and
(B) the REMIC 2 Net WAC Rate, with the rate on the REMIC 2
Regular Interest
MTI-B-2 subject to a cap, for purposes of this calculation,
equal to the lesser
of (A) 7.000% per annum on or prior to the Optional Termination
Date and 7.500%
per annum after the Optional Termination Date and (B) the REMIC
2 Net WAC Rate
and with the rate on the REMIC 2 Regular Interest MTI-ZZ subject
to a cap, for
the purpose of this calculation, equal to zero.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State
of Delaware, or
any successor thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS
on
the MERS System.
MERS(R) System: The system of recording transfers of
Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans
registered with MERS on the MERS(R) System.
20
<PAGE>
MOM Loan: With respect to any Mortgage Loan, MERS acting as
the mortgagee of such Mortgage Loan, solely as nominee for the
originator of
such Mortgage Loan and its successors and assigns, at the
origination thereof.
Monthly Excess Cashflow: For any Distribution Date, an
amount
equal to the sum of (1) the Monthly Excess Interest and (2)
the
Overcollateralization Release Amount, if any, for such date.
Monthly Excess Interest: As to any Distribution Date, the
sum
of (A) the Interest Remittance Amount remaining after the
application of
payments pursuant to clauses A. through N. of Section 4.02(b)(i)
plus (B) the
Principal Payment Amount remaining after the application of
payments pursuant to
clauses A. through M. of Section 4.02(b)(ii) or (iii).
Monthly Statement: The statement delivered to the
Certificateholders pursuant to Section 4.06.
Moody's: Moody's Investors Service, Inc., or any successor
thereto. For purposes of Section 10.05(b) the address for
notices to Moody's
shall be Moody's Investors Service, Inc., 99 Church Street, New
York, New York
10007, Attention: Residential Pass-Through Monitoring, or such
other address as
Moody's may hereafter furnish to the Depositor, the Servicer and
the Trustee.
Mortgage: The mortgage, deed of trust or other instrument
creating a first or second lien on an estate in fee simple or
leasehold interest
in real property securing a Mortgage Note.
Mortgage File: The Mortgage documents listed in Section
2.01(b) hereof pertaining to a particular Initial Mortgage Loan
or Subsequent
Mortgage Loan and any additional documents delivered to the
Trustee to be added
to the Mortgage File pursuant to this Agreement.
Mortgage Loans: Such of the mortgage loans transferred and
assigned to the Trustee pursuant to the provisions hereof as
from time to time
are held as a part of the Trust Fund (including any REO
Property), the mortgage
loans so held being identified in the Mortgage Loan Schedule,
notwithstanding
foreclosure or other acquisition of title of the related
Mortgaged Property.
Mortgage Loan Purchase Price: The price, calculated as set
forth in Section 9.01, to be paid in connection with the
purchase of the Trust
Collateral by the Auction Purchaser.
Mortgage Loan Schedule: The Mortgage Loan Schedule which
will
list the Mortgage Loans (as from time to time amended by the
Seller to reflect
the addition of Qualified Substitute Mortgage Loans and the
purchase of Mortgage
Loans pursuant to Section 2.01(f), 2.02 or 2.03) transferred to
the Trustee as
part of the Trust Fund and from time to time subject to this
Agreement, attached
hereto as Schedule I, setting forth the following information
with respect to
each Mortgage Loan:
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(i) the Mortgage Loan identifying number;
(ii) [reserved];
(iii) the zip code of the Mortgaged Property;
(iv) a code indicating the type of Mortgaged Property and
the occupancy status.
(v) the original months to maturity or the remaining months
to
maturity from the Cut-off Date, in any case based on the
original
amortization schedule and, if different, the maturity expressed
in the
same manner but based on the actual amortization schedule;
(vi) the Combined Loan-to-Value Ratio at origination;
(vii) the Mortgage Rate as of the Cut-off Date;
(viii) the stated maturity date;
(ix) the amount of the Scheduled Payment as of the Cut-off
Date;
(x) the original principal amount of the Mortgage Loan;
(xi) the principal balance of the Mortgage Loan as of the
close of business on the Cut-off Date, after deduction of
payments of
principal due on or before the Cut-off Date whether or not
collected;
(xii) a code indicating the purpose of the Mortgage Loan
(i.e., purchase, rate and term refinance, equity take-out
refinance);
(xiii) the Net Mortgage Rate as of the Cut-off Date;
(xiv) the Originator of the related Mortgage Loan;
(xv) the Servicing Fee Rate;
(xvi) the related sub-servicer;
(xvii) a code indicating whether a Mortgage Loan is subject
to a Prepayment Charge;
(xviii) the amount of the Prepayment Charge with respect to
each Mortgage Loan and a code identifying whether such
Prepayment
Charge is related to a Curtailment or Payoff;
(xix) whether such Mortgage Loan is a Balloon Loan;
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(xx) a code indicating whether the Mortgage Loan is a MERS
Mortgage Loan and, if so, its corresponding MIN; and
(xxi) whether such Mortgage Loan is a Simple Interest
Mortgage Loan.
With respect to the Mortgage Loans in the aggregate, each,
the
Mortgage Loan Schedule shall set forth the following
information, as of the
Cut-off Date:
(i) the number of Mortgage Loans; and
(ii) the current aggregate principal balance of the
Mortgage Loans as of the close of business on the Cut-off Date,
after
deduction of payments of principal due on or before the Cut-off
Date
whether or not collected.
Mortgage Note: The original executed note or other evidence
of
indebtedness evidencing the indebtedness of a Mortgagor under a
Mortgage Loan.
Mortgage Rate: The annual fixed rate of interest borne by a
Mortgage Note.
Mortgaged Property: The underlying real property securing a
Mortgage Loan.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Excess Spread: With respect to any Distribution Date and
Loan, a fraction, expressed as a percentage, the numerator of
which is equal to
the excess of (x) the aggregate Stated Principal Balance for
such Distribution
Date of the Mortgage Loans, multiplied by the weighted average
Net Mortgage Rate
of such Mortgage Loans over (y) the Interest Remittance Amount
for such
Distribution Date, and the denominator of which is an amount
equal to the
aggregate Stated Principal Balance for such Distribution Date of
the Mortgage
Loans, multiplied by the actual number of days elapsed in the
related Interest
Accrual Period divided by 360.
Net Funds Cap: As to any Distribution Date, will be a per
annum rate equal to (a) a fraction, expressed as a percentage,
(a) the numerator
of which is (1) the amount of interest accrued on the Mortgage
Loans for such
date, minus (2) the Expense Fee, and (b) the denominator of
which is the product
of (i) the Aggregate Collateral Balance immediately preceding
such Distribution
Date (or as of the Cut-off Date in the case of the first
Distribution Date),
multiplied by (ii)(x) in the case of the Class M-4, Class M-5,
Class M-6, Class
M-7, Class M-8, Class M-9, Class B-1, Class B-2, Class A-R,
Class A-RL and Class
P Certificates, 1/12 and (y) in the case of the Class A-1, Class
M-1, Class M-2
and Class M-3 Certificates, the actual number of days in the
related Interest
Accrual Period divided by 360. For federal income tax purposes,
however, as to
any Distribution Date will be the equivalent of the foregoing,
expressed as a
per annum rate equal to the weighted average of the
Uncertificated Pass-Through
Rates on the REMIC 2 Regular Interests (other than the REMIC 2
Regular Interest
MTI-P and the REMIC 2 Regular Interest MTI-R) multiplied by (in
the case of the
Class A-1, Class M-1, Class M-2 and Class M-3 Certificates) 30
divided by the
actual number of days in the related Interest Accrual
Period.
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Net Mortgage Rate: As to each Mortgage Loan, and at any
time,
the per annum rate equal to the Mortgage Rate less the related
Expense Fee Rate.
Net Prepayment Interest Shortfalls: As to any Distribution
Date, the amount, if any, by which the aggregate of Prepayment
Interest
Shortfalls during the Prepayment Period exceeds the Compensating
Interest
Payment for such Distribution Date.
Net Recovery: Any proceeds received by the Servicer on a
delinquent or Charged Off Loan (including any Liquidation
Proceeds received on a
Charged Off Loan), net of any Servicing Fee, Ancillary Income
and any other
related expenses.
Net Simple Interest Excess: As of any Distribution Date, an
amount equal to the excess, if any, of the aggregate amount of
Simple Interest
Excess with respect to the Mortgage Loans over the amount of
Simple Interest
Shortfall with respect to the Mortgage Loans.
Net Simple Interest Shortfall: As of any Distribution Date,
an
amount equal to the excess, if any, of the aggregate amount of
Simple Interest
Shortfall with respect to the Mortgage Loans over the amount of
Simple Interest
Excess with respect to the Mortgage Loans.
Nonrecoverable Advance: Any portion of an Advance or
Servicing
Advance previously made or proposed to be made by the Servicer
that, in the good
faith judgment of the Servicer, will not be ultimately
recoverable by the
Servicer from the related Mortgagor, related Liquidation
Proceeds or otherwise.
Notional Amount: The Class X-1 Notional Amount or the Class
X-S Notional Amount, as applicable.
Notional Amount Certificates: As specified in the
Preliminary
Statement.
Offered Certificates: As specified in the Preliminary
Statement.
Officer's Certificate: A certificate signed by the Chairman
of
the Board or the Vice Chairman of the Board or the President or
a Vice President
or an Assistant Vice President or the Treasurer or the Secretary
or one of the
Assistant Treasurers or Assistant Secretaries of the Servicer or
the Depositor,
and delivered to the Depositor or the Trustee, as the case may
be, as required
by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Depositor or the Servicer, including in-house
counsel,
reasonably acceptable to the Trustee; provided, however, that
with respect to
the interpretation or application of the REMIC Provisions, such
counsel must (i)
in fact be independent of the Depositor and the Servicer, (ii)
not have any
material direct financial interest in the Depositor or the
Servicer or in any
affiliate of either, and (iii) not be connected with the
Depositor or the
Servicer as an officer, employee, promoter, underwriter,
trustee, partner,
director or person performing similar functions.
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Optional Termination: The termination of the trust created
hereunder in connection with the purchase of the Mortgage Loans
pursuant to
Section 9.01.
Optional Termination Date: The first date on which the
Optional Termination may be exercised.
Optional Termination Holder: Wilshire, as Servicer, or any
successor servicer appointed by the Seller, so long as the
Seller is the owner
of the servicing rights.
OTS: The Office of Thrift Supervision.
Outsourcer: As defined in Section 3.02.
Outstanding: With respect to the Certificates as of any date
of determination, all Certificates theretofore executed and
authenticated under
this Agreement except: (i) Certificates theretofore canceled by
the Trustee or
delivered to the Trustee for cancellation; and (ii) Certificates
in exchange for
which or in lieu of which other Certificates have been executed
and delivered by
the Trustee pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage
Loan
with a Stated Principal Balance greater than zero which was not
the subject of a
Payoff prior to such Due Date and which did not become a
Liquidated Mortgage
Loan or Charged Off Loan prior to such Due Date.
Overcollateralization Amount: For any Distribution Date, an
amount equal to the amount, if any, by which (x) the Aggregate
Collateral
Balance for such Distribution Date exceeds (y) the aggregate
Class Principal
Balance of the Certificates after giving effect to payments on
such Distribution
Date.
Overcollateralization Release Amount: For any Distribution
Date, an amount equal to the lesser of (x) the Principal
Remittance Amount for
such Distribution Date and (y) the amount, if any, by which (1)
the
Overcollateralization Amount for such date, calculated for this
purpose on the
basis of the assumption that 100% of the aggregate of the
Principal Remittance
Amount and Excess Cashflow Loss Payment for such date is applied
on such date in
reduction of the aggregate of the Class Principal Balances of
the Certificates
(to an amount not less than zero), exceeds (2) the Targeted
Overcollateralization Amount for such date.
Overfunded Interest Amount: With respect to any Subsequent
Transfer Date and the Subsequent Mortgage Loans, the excess of
(A) the amount on
deposit in the Capitalized Interest Account on such date over
(B) the excess of
(i) the amount of interest accruing at (x) the assumed weighted
average
Pass-Through Rates of the Senior Certificates multiplied by (y)
the Pre-Funding
Amount outstanding at the end of the related Due Period for the
total number of
days remaining through the end of the Interest Accrual Periods
ending (a) March
25, 2005, (b) April 25, 2005 and (c) May 25, 2005 over (ii) one
month of
investment earnings on the amount on deposit in the Capitalized
Interest Account
on such date at an annual rate of 1.55%. The assumed weighted
average
Pass-Through Rate of the Senior Certificates will be
calculated
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assuming LIBOR is 2.62% for any Subsequent Transfer Date for the
Subsequent
Mortgage Loans prior to the March 2005 Distribution Date, 3.02%
for any
Subsequent Transfer Date for the Subsequent Mortgage Loans prior
to the April
2005 Distribution Date and 3.42% for any Subsequent Transfer
Date for the
Subsequent Mortgage Loans prior to the May 2005 Distribution
Date.
Ownership Interest: As to any Residual 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.
Par Value: As defined in Section 9.01 hereof; provided that
the "Par Value" for any Auction Date shall also include the
auction expenses of
the Trustee (which auction expenses shall not exceed
$25,000).
Pass-Through Rate: With respect to the Class A-1, Class A-R,
Class A-RL, Class P, Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5,
Class M-6, Class M-7, Class M-8, Class M-9, Class B-1 and Class
B-2
Certificates, the Class A-1 Pass-Through Rate, Class A-R
Pass-Through Rate,
Class A-RL Pass-Through Rate, Class P Pass-Through Rate, Class
M-1 Pass-Through
Rate, Class M-2 Pass-Through Rate, Class M-3 Pass-Through Rate,
Class M-4
Pass-Through Rate, Class M-5 Pass-Through Rate, Class M-6
Pass-Through Rate,
Class M-7 Pass-Through Rate, Class M-8 Pass-Through Rate, Class
M-9 Pass-Through
Rate, Class B-1 Pass-Through Rate and Class B-2 Pass-Through
Rate.
With respect to the Class X-1 Certificates and any Distribution
Date, a per
annum rate equal to the percentage equivalent of a fraction, the
numerator of
which is the sum of the amounts calculated pursuant to clauses
(A) through (N)
below, and the denominator of which is the aggregate of the
Uncertificated
Principal Balances of REMIC 2 Regular Interest MTI-AA, REMIC 2
Regular Interest
MTI-A-1, REMIC 2 Regular Interest MTI-M-1, REMIC 2 Regular
Interest MTI-M-2,
REMIC 2 Regular Interest MTI-M-3, REMIC 2 Regular Interest
MTI-M-4, REMIC 2
Regular Interest MTI-M-5, REMIC 2 Regular Interest MTI-M-6,
REMIC 2 Regular
Interest MTI-M-7, REMIC 2 Regular Interest MTI-M-8, REMIC 2
Regular Interest
MTI-M-9, REMIC 2 Regular Interest MTI-B-1, REMIC 2 Regular
Interest MTI-B-2 and
REMIC 2 Regular Interest MTI-ZZ. For purposes of calculating the
Pass-Through
Rate for the Class X-1 Certificates, the numerator is equal to
the sum of the
following components:
(A) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MTI-AA minus the Marker Rate, applied to an
amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-AA;
(B) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MTI-A-1 minus the Marker Rate, applied to an
amount equal to
the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-A-1;
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(C) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MTI-M-1 minus the Marker Rate, applied to an
amount equal to
the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-M-1;
(D) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MTI-M-2 minus the Marker Rate, applied to an
amount equal to
the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-M-2;
(E) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MTI-M-3 minus the Marker Rate, applied to an
amount equal to
the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-M-3;
(F) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MTI-M-4 minus the Marker Rate, applied to an
amount equal to
the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-M-4;
(G) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MTI-M-5 minus the Marker Rate, applied to an
amount equal to
the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-M-5;
(H) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MTI-M-6 minus the Marker Rate, applied to an
amount equal to
the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-M-6;
(I) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MTI-M-7 minus the Marker Rate, applied to an
amount equal to
the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-M-7;
(J) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MTI-M-8 minus the Marker Rate, applied to an
amount equal to
the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-M-8;
(K) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MTI-M-9 minus the Marker Rate, applied to an
amount equal to
the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-M-9;
(L) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MTI-B-1 minus the Marker Rate, applied to an
amount equal to
the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-B-1;
(M) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MTI-B-2 minus the Marker Rate, applied to an
amount equal to
the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-B-2; and
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<PAGE>
(N) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MTI-ZZ minus the Marker Rate, applied to an
amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-ZZ.
Payahead: Any Scheduled Payment intended by the related
Mortgagor to be applied in a Due Period subsequent to the Due
Period in which
such payment was received.
Payoff: Any payment of principal on a Mortgage Loan equal to
the entire outstanding Stated Principal Balance of such Mortgage
Loan, if
received in advance of the last scheduled Due Date for such
Mortgage Loan and
accompanied by an amount of interest equal to accrued unpaid
interest on the
Mortgage Loan to the date of such payment-in-full.
Percentage Interest: As to any Certificate, the percentage
interest evidenced thereby in distributions required to be made
on the related
Class, such percentage interest being set forth on the face
thereof or equal to
the percentage obtained by dividing the Denomination of such
Certificate by the
aggregate of the Denominations of all Certificates of the same
Class.
Permitted Transferee: Any person other than (i) the United
States, any State or political subdivision thereof, or any
agency or
instrumentality of any of the foregoing, (ii) a foreign
government,
International Organization or any agency or instrumentality of
either of the
foregoing, (iii) an organization (except certain farmers'
cooperatives described
in section 521 of the Code) which is exempt from tax imposed by
Chapter 1 of the
Code (including the tax imposed by section 511 of the Code on
unrelated business
taxable income) on any excess inclusions (as defined in section
860E(c)(1) of
the Code) with respect to any Residual Certificate, (iv) rural
electric and
telephone cooperatives described in section 1381(a)(2)(C) of the
Code, (v) a
Person that is not a United States Person, and (vi) a Person
designated as a
non-Permitted Transferee by the Depositor based upon an Opinion
of Counsel that
the Transfer of an Ownership Interest in a Residual Certificate
to such Person
may cause any REMIC created hereunder to fail to qualify as a
REMIC at any time
that the Certificates are outstanding. The terms "United
States," "State" and
"International Organization" shall have the meanings set forth
in section 7701
of the Code or successor provisions. A corporation will not be
treated as an
instrumentality of the United States or of any State or
political subdivision
thereof for these purposes if all of its activities are subject
to tax and, with
the exception of Freddie Mac, a majority of its board of
directors is not
selected by such government unit.
Person: Any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock
company, trust,
unincorporated organization or government, or any agency or
political
subdivision thereof.
Physical Certificates: As specified in the Preliminary
Statement.
Pre-Funding Account: The separate Eligible Account created
and
maintained by the Trustee with respect to the Mortgage Loans
pursuant to Section
3.05(f) in the name of the Trustee for the benefit of the
Certificateholders and
designated "JPMorgan Chase Bank, N.A., in trust for registered
holders of Home
Equity Mortgage Pass-Through Certificates, Series 2005-1."
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<PAGE>
Funds in the Pre-Funding Account shall be held in trust for
the
Certificateholders for the uses and purposes set forth in this
Agreement and
shall not be a part of any REMIC created hereunder; provided,
however, that any
investment income earned from Eligible Investments made with
funds in the
Pre-Funding Account shall be for the account of the
Depositor.
Pre-Funding Amount: The amount deposited in the Pre-Funding
Account on the Closing Date, which shall equal
$78,669,389.24.
Pre-Funding Period: the period from the Closing Date until
the
earliest of (i) the date on which the amount on deposit in the
Pre-Funding
Account is reduced to zero, (ii) the date on which an Event of
Default occurs or
(iii) May 24, 2005.
Prepayment Charge: With respect to any Mortgage Loan, any
charge required to be paid if the Mortgagor prepays such
Mortgage Loan as
provided in the related Mortgage Note or Mortgage.
Prepayment Interest Shortfall: As to any Mortgage Loan,
Distribution Date and Principal Prepayment, other than Principal
Prepayments in
full that occur during the portion of the Prepayment Period that
is in the same
calendar month as the Distribution Date, the difference between
(i) one full
month's interest at the applicable Mortgage Rate (giving effect
to any
applicable Relief Act Reduction), as reduced by the Expense Fee
Rate, on the
Stated Principal Balance of such Mortgage Loan immediately prior
to such
Principal Prepayment and (ii) the amount of interest actually
received that
accrued during the month immediately preceding such Distribution
Date or, with
respect to any Mortgage Loan with a Due Date other than the
first of the month,
the amount of interest actually received that accrued during the
one-month
period immediately preceding the Due Date following the
Principal Prepayment,
with respect to such Mortgage Loan in connection with such
Principal Prepayment.
Prepayment Period: With respect to each Distribution Date
(other than the March 2005 Distribution Date), each Mortgage
Loan and each
Payoff, the related "Prepayment Period" will be the 15th of the
month preceding
the month in which the related Distribution Date occurs through
the 14th of the
month in which the related Distribution Date occurs. With
respect to the March
2005 Distribution Date and each Payoff, the related "Prepayment
Period" will be
February 1, 2005 through March 14, 2005. With respect to each
Distribution Date,
each Mortgage Loan and each Curtailment, the related "Prepayment
Period" will be
the calendar month preceding the month in which the related
Distribution Date
occurs.
Principal Payment Amount: For any Distribution Date, an
amount
equal to the Principal Remittance Amount plus any Excess
Cashflow Loss Payment
for such date, minus the Overcollateralization Release Amount,
if any, for such
date.
Principal Remittance Amount: For any Distribution Date, an
amount equal to the sum of (1) all principal collected (other
than Payaheads) or
advanced in respect of Scheduled Payments on the Mortgage Loans
during the
related Due Period (less unreimbursed Advances, Servicing
Advances and other
amounts due to the Servicer and the Trustee with respect to
the
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<PAGE>
Mortgage Loans, to the extent allocable to principal) and the
principal portion
of Payaheads previously received and intended for application in
the related Due
Period, (2) all Principal Prepayments on the Mortgage Loans
received during the
related Prepayment Period, (3) the outstanding principal balance
of each
Mortgage Loan that was repurchased by the Seller, the Optional
Termination
Holder or the Majority in Interest Class X-2 Certificateholder
during the
calendar month immediately preceding such Distribution Date, (4)
the portion of
any Substitution Adjustment Amount paid with respect to any
Deleted Mortgage
Loans during the calendar month immediately preceding such
Distribution Date
allocable to principal, (5) all Liquidation Proceeds, and any
Insurance Proceeds
and other recoveries (net of unreimbursed Advances, Servicing
Advances and other
expenses, to the extent allocable to principal) and Net
Recoveries collected
with respect to the Mortgage Loans during the prior calendar
month, to the
extent allocable to principal and (6) with respect to the
Distribution Date in
May 2005, the amount remaining in the Pre-Funding Account at the
end of the
Pre-Funding Period.
Principal Prepayment: Any payment of principal on a Mortgage
Loan which constitutes a Payoff or Curtailment.
Prospectus Supplement: The Prospectus Supplement dated
February 23, 2005 relating to the Offered Certificates.
PUD: Planned Unit Development.
Qualified Insurer: A mortgage guaranty insurance company
duly
qualified as such under the laws of the state of its principal
place of business
and each state having jurisdiction over such insurer in
connection with the
insurance policy issued by such insurer, duly authorized and
licensed in such
states to transact a mortgage guaranty insurance business in
such states and to
write the insurance provided by the insurance policy issued by
it, approved as a
Fannie Mae- or Freddie Mac-approved mortgage insurer or having a
claims paying
ability rating of at least "AA" or equivalent rating by at least
two nationally
recognized statistical rating organizations. Any replacement
insurer with
respect to a Mortgage Loan must have at least as high a claims
paying ability
rating as the insurer it replaces had on the Closing Date.
Qualified Substitute Mortgage Loan: A Mortgage Loan
substituted by the Seller for a Deleted Mortgage Loan which
must, on the date of
such substitution, as confirmed in a Request for Release,
substantially in the
form of Exhibit M (i) have a Stated Principal Balance, after
deduction of the
principal portion of the Scheduled Payment due in the month of
substitution (or,
in the case of a substitution of more than one mortgage loan for
a Deleted
Mortgage Loan, an aggregate principal balance), not in excess
of, and not more
than 10% less than the Stated Principal Balance of the Deleted
Mortgage Loan;
(ii) be accruing interest at a rate no lower than and not more
than 1% per annum
higher than, that of the Deleted Mortgage Loan; (iii) have a
Combined
Loan-to-Value Ratio no higher than that of the Deleted Mortgage
Loan; (iv) have
a remaining term to maturity no greater than (and not more than
one year less
than that of) the Deleted Mortgage Loan; and (v) comply with
each representation
and warranty set forth in Section 2.03(f).
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Rating Agency: S&P and Moody's. If either such organization
or
a successor is no longer in existence, "Rating Agency" shall be
such nationally
recognized statistical rating organization, or other comparable
Person, as is
designated by the Depositor, notice of which designation shall
be given to the
Trustee and the Servicer. References herein to a given rating or
rating category
of a Rating Agency shall mean such rating category without
giving effect to any
modifiers.
Ratings: As of any date of determination, the ratings, if
any,
of the Certificates as assigned by the Rating Agencies.
Realized Loss: With respect to each Liquidated Mortgage
Loan,
an amount (not less than zero or greater than the Stated
Principal Balance of
the Mortgage Loan) as of the date of such liquidation, equal to
(i) the Stated
Principal Balance of the Liquidated Mortgage Loan as of the date
of such
liquidation, plus (ii) interest at the Net Mortgage Rate from
the related Due
Date as to which interest was last paid or advanced (and not
reimbursed) to the
related Certificateholders up to the related Due Date in the
month in which
Liquidation Proceeds are required to be distributed on the
Stated Principal
Balance of such Liquidated Mortgage Loan from time to time,
minus (iii) the
Liquidation Proceeds, if any, received during the month in which
such
liquidation occurred, to the extent applied as recoveries of
interest at the Net
Mortgage Rate and to principal of the Liquidated Mortgage Loan.
Any Charged Off
Loan will give rise to a Realized Loss (calculated as if clause
(iii) of the
previous sentence is equal to zero) at the time it is charged
off, as described
in Section 3.11(a)(iii) hereof.
If the Servicer receives Net Recoveries with respect to any
Charged Off Loan, the amount of the Realized Loss with respect
to that Charged
Off Loan will be reduced to the extent such recoveries are
applied to principal
distributions on any Distribution Date.
Record Date: With respect to the Certificates (other than
the
Class A-1, Class M-1, Class M-2 and Class M-3 Certificates which
are Book-Entry
Certificates) and any Distribution Date, the close of business
on the last
Business Day of the month preceding the month in which such
applicable
Distribution Date occurs. With respect to the Class A-1, Class
M-1, Class M-2
and Class M-3 Certificates which are Book-Entry Certificates and
any
Distribution Date, the close of business on the Business Day
preceding such
Distribution Date.
Reference Bank Rate: With respect to any Interest Accrual
Period, as follows: the arithmetic mean (rounded upwards, if
necessary, to the
nearest one sixteenth of a percent) of the offered rates for
United States
dollar deposits for one month which are offered by the Reference
Banks as of
11:00 A.M., London, England time, on the second LIBOR Business
Day prior to the
first day of such Interest Accrual Period to prime banks in the
London interbank
market for a period of one month in amounts approximately equal
to the aggregate
Class Principal Balance of the LIBOR Certificates; provided that
at least two
such Reference Banks provide such rate. If fewer than two
offered rates appear,
the Reference Bank Rate will be the arithmetic mean of the rates
quoted by one
or more major banks in New York City, selected by the Trustee,
as of 11:00 a.m.,
New York 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 Class
Principal Balance of
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the LIBOR Certificates. If no such quotations can be obtained,
the Reference
Bank Rate shall be LIBOR applicable to the preceding
Distribution Date; provided
however, that if, under the priorities indicated above, LIBOR
for a Distribution
Date would be based on LIBOR for the previous Payment Date for
the third
consecutive Distribution Date, the Trustee shall select an
alternative
comparable index over which the Trustee has no control, used for
determining
one-month Eurodollar lending rates that is calculated and
published or otherwise
made available by an independent party.
Reference Banks: Barclays Bank PLC, National Westminster
Bank
and Abbey National PLC.
Regular Certificates: As specified in the Preliminary
Statement.
Released Loan: Any Charged Off Loan that is released by
Wilshire to the Class X-2 Certificateholders pursuant to Section
3.11(a),
generally on the date that is six months after the date on which
Wilshire begins
using Wilshire Special Servicing on such Charged Off Loans. Any
Released Loan
will no longer be an asset of any REMIC or the Trust Fund.
Relief Act: The Servicemembers Civil Relief Act or any
similar
state law or regulation.
Relief Act Reductions: With respect to any Distribution Date
and any Mortgage Loan as to which there has been a reduction in
the amount of
interest or principal collectible thereon (attributable to any
previous month)
as a result of the application of the Relief Act or similar
state law or
regulation, the amount, if any, by which (i) interest and/or
principal
collectible on such Mortgage Loan for the most recently ended
calendar month is
less than (ii) interest and/or principal accrued thereon for
such month pursuant
to the Mortgage Note.
REMIC: A "real estate mortgage investment conduit" within
the
meaning of section 860D of the Code.
REMIC 1: The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be
administered hereunder,
with respect to which a REMIC election is to be made consisting
of: (i) such
Mortgage Loans as from time to time are subject to this
Agreement (other than
any Prepayment Charges), 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, including any Primary Insurance Policy, required to be
maintained
pursuant to this Agreement and any proceeds thereof and (iv) the
Collection
Account and the Certificate Account (subject to the last
sentence of this
definition) and such assets that are deposited therein from time
to time and any
investments thereof. Notwithstanding the foregoing, however, a
REMIC election
will not be made with respect to the Pre-Funding Account or the
Capitalized
Interest Account.
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REMIC 1 Regular Interest LTI-1: 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 LTI-1
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 LTI-PF: 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 LTI-PF
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 LTI-P: 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 LTI-P
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 LTI-R: 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 LTI-R
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 LTI-S: 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 LTI-S
shall accrue interest at the related Uncertificated REMIC 1
Pass-Through Rate in
effect from time to time, and shall not be entitled to
distributions of
principal.
REMIC 1 Regular Interests: REMIC 1 Regular Interest LTI-1,
LTI-PF, LTI-P, LTI-S and LTI-R.
REMIC 2: The segregated pool of assets consisting of all of
the REMIC 1 Regular Interests conveyed in the trust to the
Trustee, for the
benefit of the Holders of the REMIC 2 Regular Interests and the
Class A-R
Certificates (in respect of the Class R-2 Interest), pursuant to
Article II
hereunder, and all amounts deposited therein, with respect to
which a separate
REMIC election is to be made.
REMIC 2 Interest Loss Allocation Amount: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the
aggregate
Stated Principal Balance of the
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<PAGE>
Mortgage Loans and related REO Properties then outstanding and
(ii) the
Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest MT-AA
minus the Marker Rate, divided by (b) 12.
REMIC 2 Net WAC Rate: With respect to any Distribution Date,
a
per annum rate equal to the weighted average of the
Uncertificated REMIC 1
Pass-Through Rates on the REMIC 1 Regular Interest LTI-1 and
REMIC 1 Regular
Interest LTI-1PF, weighted on the basis of such respective
Uncertificated
Principal Balances thereof immediately preceding such
Distribution Date.
REMIC 2 Overcollateralization Amount: With respect to any
date
of determination, (i) 1% of the aggregate Uncertificated
Principal Balances of
the REMIC 2 Regular Interests minus (ii) the aggregate
Uncertificated Principal
Balances of REMIC 2 Regular Interests MTI-A-1, MTI-M-1, MTI-M-2,
MTI-M-3,
MTI-M-4, MTI-M-5, MTI-M-6, MTI-M-7, MTI-M-8, MTI-M-9, MTI-B-1,
MTI-B-2, MTI-R
and MTI-P, in each case as of such date of determination.
REMIC 2 Principal Loss Allocation Amount: With respect to
any
Distribution Date, an amount equal to the product of (i) the
aggregate Stated
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 Uncertificated Principal Balance of REMIC 2 Regular
Interests MTI-A-1,
MTI-M-1, MTI-M-2, MTI-M-3, MTI-M-4, MTI-M-5, MTI-M-6, MTI-M-7,
MTI-M-8, MTI-M-9,
MTI-B-1 and MTI-B-2 and the denominator of which is the
aggregate Uncertificated
Principal Balance of REMIC 2 Regular Interests MTI-A-1, MTI-M-1,
MTI-M-2,
MTI-M-3, MTI-M-4, MTI-M-5, MTI-M-6, MTI-M-7, MTI-M-8, MTI-M-9,
MTI-B-1, MTI-B-2
and MTI-ZZ.
REMIC 2 Regular Interest MTI-AA: One of the separate
non-certificated beneficial ownership interests in REMIC 2
issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular
Interest MTI-AA
shall accrue interest at the related Uncertificated REMIC 2
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 2 Regular Interest MTI-A-1: One of the separate
non-certificated beneficial ownership interests in REMIC 2
issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular
Interest MTI-A-1
shall accrue interest at the related Uncertificated REMIC 2
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 2 Regular Interest MTI-M-1: One of the separate
non-certificated beneficial ownership interests in REMIC 2
issued hereunder and
designated as a Regular Interest
34
<PAGE>
in REMIC 2. REMIC 2 Regular Interest MTI-M-1 shall accrue
interest at the
related Uncertificated REMIC 2 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 2 Regular Interest MTI-M-2: One of the separate
non-certificated beneficial ownership interests in REMIC 2
issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular
Interest MTI-M-2
shall accrue interest at the related Uncertificated REMIC 2
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 2 Regular Interest MTI-M-3: One of the separate
non-certificated beneficial ownership interests in REMIC 2
issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular
Interest MTI-M-3
shall accrue interest at the related Uncertificated REMIC 2
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 2 Regular Interest MTI-M-4: One of the separate
non-certificated beneficial ownership interests in REMIC 2
issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular
Interest MTI-M-4
shall accrue interest at the related Uncertificated REMIC 2
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 2 Regular Interest MTI-M-5: One of the separate
non-certificated beneficial ownership interests in REMIC 2
issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular
Interest MTI-M-5
shall accrue interest at the related Uncertificated REMIC 2
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 2 Regular Interest MTI-M-6: One of the separate
non-certificated beneficial ownership interests in REMIC 2
issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular
Interest MTI-M-6
shall accrue interest at the related Uncertificated REMIC 2
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.
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<PAGE>
REMIC 2 Regular Interest MTI-M-7: One of the separate
non-certificated beneficial ownership interests in REMIC 2
issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular
Interest MTI-M-7
shall accrue interest at the related Uncertificated REMIC 2
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 2 Regular Interest MTI-M-8: One of the separate
non-certificated beneficial ownership interests in REMIC 2
issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular
Interest MTI-M-8
shall accrue interest at the related Uncertificated REMIC 2
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 2 Regular Interest MTI-M-9: One of the separate
non-certificated beneficial ownership interests in REMIC 2
issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular
Interest MTI-M-9
shall accrue interest at the related Uncertificated REMIC 2
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 2 Regular Interest MTI-B-1: One of the separate
non-certificated beneficial ownership interests in REMIC 2
issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular
Interest MTI-B-1
shall accrue interest at the related Uncertificated REMIC 2
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 2 Regular Interest MTI-B-2: One of the separate
non-certificated beneficial ownership interests in REMIC 2
issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular
Interest MTI-B-2
shall accrue interest at the related Uncertificated REMIC 2
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 2 Regular Interest MTI-P: One of the separate
non-certificated beneficial ownership interests in REMIC 2
issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular
Interest MTI-P
shall accrue interest at the related Uncertificated REMIC 2
Pass-Through Rate in
effect from time to time, and shall be entitled to distributions
of
36
<PAGE>
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 2 Regular Interest MTI-R: One of the separate
non-certificated beneficial ownership interests in REMIC 2
issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular
Interest MTI-R
shall accrue interest at the related Uncertificated REMIC 2
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 2 Regular Interest MTI-S: One of the separate
non-certificated beneficial ownership interests in REMIC 2
issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular
Interest MTI-S
shall accrue interest as set forth in the Preliminary Statement
hereto. REMIC 2
Regular Interest MTI-S shall not be entitled to distributions of
principal.
REMIC 2 Regular Interest MTI-ZZ: One of the separate
non-certificated beneficial ownership interests in REMIC 2
issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular
Interest MTI-ZZ
shall accrue interest at the related Uncertificated REMIC 2
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 2 Regular Interest MTI-ZZ Maximum Interest Deferral
Amount: With respect to any Distribution Date, the excess of (i)
REMIC 2
Uncertificated Accrued Interest calculated with the
Uncertificated Pass-Through
Rate for REMIC 2 Regular Interest MTI-ZZ and an Uncertificated
Principal Balance
equal to the excess of (x) the Uncertificated Principal Balance
of REMIC 2
Regular Interest MTI-ZZ over (y) the REMIC 2
Overcollateralization Amount, in
each case for such Distribution Date, over (ii) the sum of REMIC
2
Uncertificated Accrued Interest on REMIC 2 Regular Interests
MTI-A-1, MTI-M-1,
MTI-M-2, MTI-M-3, MTI-M-4, MTI-M-5, MTI-M-6, MTI-M-7, MTI-M-8,
MTI-M-9, MTI-B-1
and MTI-B-2, with the rates on the REMIC 2 Regular Interests
MTI-A-1, MTI-M-1,
MTI-M-2 and MTI-M-3 subject to a cap, for the purpose of this
calculation, equal
to the lesser of (A) LIBOR plus the Certificate Margin for the
Corresponding
Certificate and (B) the REMIC 2 Net WAC Rate, with the rate on
the REMIC 2
Regular Interest MTI-M-4 subject to a cap, for purposes of this
calculation,
equal to the lesser of (A) 5.265% per annum on or prior to the
Optional
Termination Date and 5.765% per annum after the Optional
Termination Date and
(B) the REMIC 2 Net WAC Rate, with the rate on the REMIC 2
Regular Interest
MTI-M-5 subject to a cap, for
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<PAGE>
purposes of this calculation, equal to the lesser of (A) 5.281%
per annum on or
prior to the Optional Termination Date and 5.781% per annum
after the Optional
Termination Date and (B) the REMIC 2 Net WAC Rate, with the rate
on the REMIC 2
Regular Interest MTI-M-6 subject to a cap, for purposes of this
calculation,
equal to the lesser of (A) 5.363% per annum on or prior to the
Optional
Termination Date and 5.863% per annum after the Optional
Termination Date and
(B) the REMIC 2 Net WAC Rate, with the rate on the REMIC 2
Regular Interest
MTI-M-7 subject to a cap, for purposes of this calculation,
equal to the lesser
of (A) 5.700% per annum on or prior to the Optional Termination
Date and 6.200%
per annum after the Optional Termination Date and (B) the REMIC
2 Net WAC Rate,
with the rate on the REMIC 2 Regular Interest MTI-M-8 subject to
a cap, for
purposes of this calculation, equal to the lesser of (A) 5.791%
per annum on or
prior to the Optional Termination Date and 6.291% per annum
after the Optional
Termination Date and (B) the REMIC 2 Net WAC Rate, with the rate
on the REMIC 2
Regular Interest MTI-M-9 subject to a cap, for purposes of this
calculation,
equal to the lesser of (A) 6.281% per annum on or prior to the
Optional
Termination Date and 6.781% per annum after the Optional
Termination Date and
(B) the REMIC 2 Net WAC Rate, with the rate on the REMIC 2
Regular Interest
MTI-B-1 subject to a cap, for purposes of this calculation,
equal to the lesser
of (A) 7.000% per annum on or prior to the Optional Termination
Date and 7.500%
per annum after the Optional Termination Date and (B) the REMIC
2 Net WAC Rate,
with the rate on the REMIC 2 Regular Interest MTI-B-2 subject to
a cap, for
purposes of this calculation, equal to the lesser of (A) 7.000%
per annum on or
prior to the Optional Termination Date and 7.500% per annum
after the Optional
Termination Date and (B) the REMIC 2 Net WAC Rate and with the
rate on the REMIC
2 Regular Interest MTI-ZZ subject to a cap, for the purpose of
this calculation,
equal to zero.
REMIC 2 Regular Interests: REMIC 2 Regular Interest MTI-AA,
REMIC 2 Regular Interest MTI-A-1, REMIC 2 Regular Interest
MTI-M-1, REMIC 2
Regular Interest MTI-M-2, REMIC 2 Regular Interest MTI-M-3,
REMIC 2 Regular
Interest MTI-M-4, REMIC 2 Regular Interest MTI-M-5, REMIC 2
Regular Interest
MTI-M-6, REMIC 2 Regular Interest MTI-M-7, REMIC 2 Regular
Interest MTI-M-8,
REMIC 2 Regular Interest MTI-M-9, REMIC 2 Regular Interest
MTI-B-1, REMIC 2
Regular Interest MTI-B-2, REMIC 2 Regular Interest MTI-S, REMIC
2 Regular
Interest MTI-ZZ, REMIC 2 Regular Interest MTI-P and REMIC 2
Regular Interest
MTI-R.
REMIC 2 Targeted Overcollateralization Amount: 1% of the
Targeted Overcollateralization Amount.
REMIC 3: The segregated pool of assets consisting of all of
the REMIC 2 Regular Interests conveyed in the trust to the
Trustee, for the
benefit of the Holders of the Regular Certificates and the Class
A-R
Certificates (in respect of the Class R-3 Interest), and all
amounts deposited
therein, with respect to which a separate REMIC election is to
be made.
REMIC 3 Regular Interests: The Regular Certificates.
REMIC Provisions: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which
appear at sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and
related
provisions, and regulations promulgated thereunder, as the
foregoing may be in
effect from time to time.
REMIC Regular Interests: The REMIC 1 Regular Interests and
REMIC 2 Regular Interests.
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<PAGE>
REO Property: A Mortgaged Property acquired by the Trust
Fund
through foreclosure or deed-in-lieu of foreclosure in connection
with a
defaulted Mortgage Loan and, for the avoidance of doubt,
following the
satisfaction of any related First Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan required
to be purchased by the Seller pursuant to this Agreement or
purchased at the
option of the Majority in Interest Holder of the Class X-2
Certificates pursuant
to this Agreement, an amount equal to the sum of (i) 100% of the
unpaid
principal balance of the Mortgage Loan on the date of such
purchase, (ii)
accrued unpaid interest thereon at the applicable Mortgage Rate
from the date
through which interest was last paid by the Mortgagor to the Due
Date in the
month in which the Repurchase Price is to be distributed to
Certificateholders,
(iii) any unreimbursed Servicing Advances and (iv) any costs and
damages
actually incurred and paid by or on behalf of the Trust
(including, but not
limited to late fees) in connection with any breach of the
representation and
warranty set forth in clause (xx) of Schedule IV hereto as the
result of a
violation of a predatory or abusive lending law applicable to
such Mortgage
Loan.
Request for Release: The Request for Release submitted by
the
Servicer to the Trustee, substantially in the form of Exhibit
M.
Required Insurance Policy: With respect to any Mortgage
Loan,
any insurance policy that is required to be maintained from time
to time under
this Agreement.
Residual Certificates: As specified in the Preliminary
Statement.
Responsible Officer: When used with respect to the Trustee,
any Vice President, any Assistant Vice President, 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
also to whom, with respect to a particular matter, such matter
is referred
because of such officer's knowledge of and familiarity with the
particular
subject and who shall have direct responsibility for the
administration of this
Agreement.
Rolling Three Month Delinquency Rate: For any Distribution
Date will be the fraction, expressed as a percentage, equal to
the average of
the Delinquency Rates for each of the three (or one and two, in
the case of the
first and second Distribution Dates, respectively) immediately
preceding months.
SAIF: The Savings Association Insurance Fund, or any
successor
thereto.
S&P: Standard & Poor's, a division of The
McGraw-Hill
Companies, Inc. For purposes of Section 10.05(b) the address for
notices to S&P
shall be Standard & Poor's, 55 Water Street, New York, New
York 10004,
Attention: Mortgage Surveillance Monitoring, or such other
address as S&P may
hereafter furnish to the Depositor, the Servicer and the
Trustee.
Scheduled Payment: The scheduled monthly payment on a
Mortgage
Loan due on any Due Date allocable to principal and/or interest
on such Mortgage
Loan pursuant to the terms of the related Mortgage Note, as
reduced by any
Relief Act Reductions.
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<PAGE>
Second Mortgage Loan: A Mortgage Loan that is secured by a
second lien on the Mortgaged Property securing the related
Mortgage Note.
Securities Act: The Securities Act of 1933, as amended.
Seller: DLJ Mortgage Capital, Inc.
Senior Certificates: As specified in the Preliminary
Statement.
Senior Enhancement Percentage: For any Distribution Date,
the
fraction, expressed as a percentage, the numerator of which is
the sum of the
aggregate Class Principal Balance of the Class M-1, Class M-2,
Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9,
Class B-1 and Class
B-2 Certificates and the Overcollateralization Amount (which,
for purposes of
this definition only, shall not be less than zero), in each case
after giving
effect to payments on such Distribution Date (assuming no
Trigger Event is in
effect), and the denominator of which is the Aggregate
Collateral Balance for
such Distribution Date.
Senior Principal Payment Amount: For any Distribution Date
on
or after the Stepdown Date and as long as a Trigger Event is not
in effect with
respect to such Distribution Date, will be the amount, if any,
by which (x) the
aggregate Class Principal Balance of the Class A-1, Class P,
Class A-R and Class
A-RL Certificates immediately prior to such Distribution Date
exceeds (y) the
lesser of (A) the product of (i) 33.50% and (ii) the Aggregate
Collateral
Balance for such Distribution Date and (B) the amount, if any,
by which (i) the
Aggregate Collateral Balance for such Distribution Date exceeds
(ii) 0.50% of
the Aggregate Collateral Balance as of the Cut-off Date.
Servicer: Wilshire, or its successors in interest, or any
successor servicer appointed as provided herein.
Servicer Employee: As defined in Section 3.18.
Servicer Cash Remittance Date: With respect to each
Distribution Date, the Business Day immediately preceding such
Distribution
Date.
Servicer Data Remittance Date: With respect to each
Distribution Date, the second Business Day immediately following
the 15th day of
the month of such Distribution Date.
Servicing Advance: All customary, reasonable and necessary
"out of pocket" costs and expenses incurred in the performance
by the Servicer
of its servicing obligations, including, but not limited to, the
cost (including
reasonable attorneys' fees and disbursements) of (i) the
inspection,
preservation, restoration and protection of a Mortgaged
Property, (ii) any
expenses reimbursable to the Servicer pursuant to Section 3.11
and any
enforcement or judicial proceedings, including foreclosures, and
including any
expenses incurred in relation to any such proceedings that
result from the
Mortgage Loan being registered on the MERS System; (iii) the
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management and liquidation of any REO Property (including
default management and
similar services, appraisal services and real estate broker
services); (iv) any
expenses incurred by the Servicer in connection with obtaining
an environmental
inspection or review pursuant to Section 3.11(a)(v) and (vi);
(v) compliance
with the obligations under Section 3.01, 3.09 and 3.11(b); (vi)
the cost of
obtaining any broker's price opinion in accordance with Section
3.11 hereof;
(vii) the costs of obtaining an Opinion of Counsel pursuant to
Section 3.11(c)
hereof; (viii) expenses incurred in connection with any
instrument of
satisfaction or deed of reconveyance as described in Section
3.12 hereof; and
(ix) expenses incurred in connection with the recordation of
Assignments of
Mortgage.
Servicing Fee: As to each Mortgage Loan and any Distribution
Date, an amount equal to one month's interest at the Servicing
Fee Rate on the
Stated Principal Balance of such Mortgage Loan as of the Due
Date in the month
of such Distribution Date (prior to giving effect to any
Scheduled Payments due
on such Mortgage Loan on such Due Date), subject to reduction as
provided in
Section 3.05(b)(vi).
Servicing Fee Rate: As to each Mortgage Loan, the "Wilshire
Servicing Fee Rate" as defined in the Wilshire Letter Agreement,
which rate may
increase up to 0.50% per annum. In the event of the appointment
of a successor
servicer pursuant to Section 6.04 hereof, the Servicing Fee Rate
as to each
Mortgage Loan may increase to up to 0.50% per annum.
Servicing Officer: Any representative of the Servicer
involved
in, or responsible for, the administration and servicing of the
Mortgage Loans
whose name and specimen signature appear on a list of servicing
officers
furnished to the Trustee by the Servicer on the Closing Date
pursuant to this
Agreement, as such list may from time to time be amended.
Significant Net Recoveries: With respect to a defaulted
Mortgage Loan, a determination by the Servicer that either (A)
the potential Net
Recoveries are anticipated to be greater than or equal to the
sum of (i) the
total indebtedness of the senior lien on the related Mortgaged
Property and (ii)
$10,000 (after anticipated expenses and attorneys' fees) or (B)
the related
Mortgagor has shown a willingness and ability to pay over the
previous six
months.
Simple Interest Excess: As of any Determination Date for
each
Simple Interest Qualifying Loan, the excess, if any, of (i) the
portion of the
monthly payment received from the Mortgagor for such Mortgage
Loan allocable to
interest with respect to the related Due Period, over (ii) 30
days' interest on
the Stated Principal Balance of such Mortgage Loan at the
Mortgage Rate.
Simple Interest Excess Sub-Account: The sub-account of the
Collection Account established by the Servicer pursuant to
Section 3.06(d). The
Simple Interest Excess Sub-Account shall be an Eligible
Account.
Simple Interest Mortgage Loan: Any Mortgage Loan for which
the
interest due thereon is calculated based on the actual number of
days elapsed
between the date on which interest was last paid through the
date on which the
most current payment is received.
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Simple Interest Qualifying Loan: As of any Determination
Date,
any Simple Interest Mortgage Loan that was neither prepaid in
full during the
related Due Period, nor delinquent with respect to a payment
that became due
during the related Due Period as of the close of business on the
Determination
Date following such Due Period.
Simple Interest Shortfall: As of any Determination Date for
each Simple Interest Qualifying Loan, the excess, if any, of (i)
30 days'
interest on the Stated Principal Balance of all such Mortgage
Loans at the
Mortgage Rate, over (ii) the portion of the monthly payment
received from the
Mortgagor for such Mortgage Loan allocable to interest with
respect to the
related Due Period.
Startup Day: February 24, 2005.
Stated Principal Balance: As to any Mortgage Loan and Due
Date, the unpaid principal balance of such Mortgage Loan as of
such Due Date as
specified in the amortization schedule at the time relating
thereto (before any
adjustment to such amortization schedule by reason of any
moratorium or similar
waiver or grace period) after giving effect to any previous
Curtailments and
Liquidation Proceeds allocable to principal (other than with
respect to any
Liquidated Mortgage Loan) and to the payment of principal due on
such Due Date
and irrespective of any delinquency in payment by the related
Mortgagor;
provided, however, for purposes of calculating the Servicing Fee
and the Trustee
Fee, the Stated Principal Balance of any REO will be the unpaid
principal
balance immediately prior to foreclosure.
Stepdown Date: The date occurring on the later of (x) the
Distribution Date in March 2008 and (y) the first Distribution
Date on which the
Senior Enhancement Percentage (calculated for this purpose after
giving effect
to payments or other recoveries in respect of the Mortgage Loans
during the
related Due Period but before giving effect to payments on the
Certificates on
such Distribution Date) is greater than or equal to 66.50%.
Subordinate Certificates: As specified in the Preliminary
Statement.
Subsequent Mortgage Loan: Any Mortgage Loan other than an
Initial Mortgage Loan conveyed to the Trust Fund pursuant to
Section 2.01 hereof
and to a Subsequent Transfer Agreement, which Mortgage Loan
shall be listed on
the revised Mortgage Loan Schedule delivered pursuant to this
Agreement and on
Schedule A to such Subsequent Transfer Agreement. When used with
respect to a
single Subsequent Transfer Date, Subsequent Mortgage Loan shall
mean a
Subsequent Mortgage Loan conveyed to the Trust on that
Subsequent Transfer Date.
Subsequent Mortgage Loan Interest: Any amount constituting
an
Interest Remittance Amount (other than an amount withdrawn from
the related
Capitalized Interest Account pursuant to clause (5) of the
definition of
"Interest Remittance Amount") received or advanced with respect
to a Subsequent
Mortgage Loan during the Due Periods relating to the March 2005,
April 2005 or
May 2005 Distribution Dates, but only to the extent of the
excess of such amount
over the amount of interest accruing on such Subsequent Mortgage
Loan during the
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related period at a per annum rate equal to 3.71%, 3.81% and
3.85%,
respectively. The Subsequent Mortgage Loan Interest shall not be
an asset of any
REMIC.
Subsequent Transfer Agreement: A Subsequent Transfer
Agreement
substantially in the form of Exhibit N hereto, executed and
delivered by the
Servicer, the Depositor, the Seller and the Trustee as provided
in Section 2.01
hereof.
Subsequent Transfer Date: For any Subsequent Transfer
Agreement, the date the related Subsequent Mortgage Loans are
transferred to the
Trust Fund pursuant to the related Subsequent Transfer
Agreement.
Subservicer: Any Subservicer which is subservicing the
Mortgage Loans pursuant to a Subservicing Agreement. Any
subservicer shall meet
the qualifications set forth in Section 3.02.
Subservicing Agreement: An agreement between the Servicer
and
a Subservicer for the servicing of the Mortgage Loans.
Substitution Adjustment Amount: As defined in Section 2.03.
Targeted Overcollateralization Amount: For any Distribution
Date prior to the Stepdown Date, 4.25% of the Aggregate
Collateral Balance as of
the Cut-off Date; with respect to any Distribution Date on or
after the Stepdown
Date and with respect to which a Trigger Event is not in effect,
the greater of
(a) 8.50% of the Aggregate Collateral Balance for such
Distribution Date, or (b)
0.50% of the Aggregate Collateral Balance as of the Cut-off
Date; with respect
to any Distribution Date on or after the Stepdown Date with
respect to which a
Trigger Event is in effect and is continuing, the Targeted
Overcollateralization
Amount for the Distribution Date immediately preceding such
Distribution Date.
Notwithstanding the foregoing, on and after any Distribution
Date following the
reduction of the aggregate Class Principal Balance of the Class
A, Class M and
Class B Certificates to zero, the Targeted Overcollateralization
Amount shall be
zero. Upon (x) written direction by the Majority in Interest
Holder of the Class
X-1 Certificates and (y) the issuance by an affiliate of the
Depositor of a
credit enhancement contract in favor of REMIC 1 which is
satisfactory to the
Rating Agencies and (z) receipt by the Trustee of an Opinion of
Counsel, which
opinion shall not be an expense of the Trustee or the Trust
Fund, but shall be
at the expense of the Majority in Interest Holder of the Class
X-1 Certificates,
to the effect that such credit enhancement contract will not
cause the
imposition of any federal tax on the Trust Fund or the
Certificateholders or
cause REMIC 1, REMIC 2 and REMIC 3 to fail to qualify as a REMIC
at any time
that any Certificates are outstanding, the Targeted
Overcollateralization Amount
shall be reduced to the level approved by the Rating Agencies as
a result of
such credit enhancement contract. Any credit enhancement
contract referred to in
the previous sentence shall be collateralized by cash or
mortgage loans,
provided that (i) the aggregate Stated Principal Balance of the
mortgage loans
collateralizing any such credit enhancement contract shall not
be less than the
excess, if any, of (x) the initial Targeted
Overcollateralization Amount over
(y) the then-current Overcollateralization Amount and (ii) the
issuance of any
credit enhancement contract supported
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by mortgage loans shall not result in a downgrading of the
ratings assigned by
the Rating Agencies.
Tax Matters Person: The person designated as "tax matters
person" in the manner provided under Treasury regulation ss.
1.860F-4(d) and
temporary Treasury regulation ss. 301.6231(a)(7)-1T.
Transfer: Any direct or indirect transfer or sale of any
Ownership Interest in a Residual Certificate.
Trigger Event: A Trigger Event will be in effect for any
Distribution Date on or after the Stepdown Date if (a) the
Rolling Three Month
Delinquency Rate as of the last day of the related Due Period
equals or exceeds
14.00% of the Senior Enhancement Percentage for such
Distribution Date or (ii) a
Cumulative Loss Event is occurring. The Trigger Event may be
amended by the
parties hereto in the future with the consent of the Rating
Agencies.
Trust Collateral: As defined in Section 9.01(c).
Trust Fund: Collectively, the assets of REMIC 1, REMIC 2,
REMIC 3, the Pre-Funding Account, the Capitalized Interest
Account and the
Subsequent Mortgage Loan Interest.
Trustee: JPMorgan Chase Bank, N.A. and its successors and,
if
a successor trustee is appointed hereunder, such successor.
Trustee Fee: As to each Mortgage Loan and any Distribution
Date, an amount equal to one month's interest at the Trustee Fee
Rate on the
Stated Principal Balance of such Mortgage Loan as of the Due
Date in the month
of such Distribution Date (prior to giving effect to any
Scheduled Payments due
on such Mortgage Loan on such Due Date).
Trustee Fee Rate: With respect to any Distribution Date,
0.0100% per annum.
Uncertificated Accrued Interest: With respect to each REMIC
Regular Interest on each Distribution Date, an amount equal to
one month's
interest at the related Uncertificated Pass-Through Rate on the
Uncertificated
Principal Balance of such REMIC Regular Interest. In each case,
Uncertificated
Accrued Interest will be reduced by any Net Prepayment Interest
Shortfalls and
Relief Act Reductions (allocated to such REMIC Regular Interests
based on the
priorities set forth in Section 1.03).
Uncertificated Notional Amount: With respect to REMIC 1
Regular Interest LTI-S, the Uncertificated Notional Amount shall
be equal to the
principal balance of the Mortgage Loans; and with respect to
REMIC 2 Regular
Interest MTI-S, the Uncertificated Notional Amount shall be
equal to the
Uncertificated Notional Amount of REMIC 1 Regular Interest
LTI-S.
Uncertificated Pass-Through Rate: The Uncertificated REMIC 1
Pass-Through Rate and the Uncertificated REMIC 2 Pass-Through
Rate.
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Uncertificated Principal Balance: With respect to each REMIC
Regular Interest, the amount of such REMIC Regular Interest
outstanding as of
any date of determination. As of the Closing Date, the
Uncertificated Principal
Balance of each REMIC Regular Interest shall equal the amount
set forth in the
Preliminary Statement hereto as its initial Uncertificated
Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of
each REMIC
Regular Interest shall be reduced by all distributions of
principal made on such
REMIC Regular Interest on such Distribution Date pursuant to
Section 4.07 and,
if and to the extent necessary and appropriate, shall be further
reduced on such
Distribution Date by Realized Losses as provided in Section
4.05(b), and the
Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-ZZ shall be
increased by interest deferrals as provided in Section 4.07. The
Uncertificated
Principal Balance of each REMIC Regular Interest that has an
Uncertificated
Principal Balance shall never be less than zero.
Uncertificated REMIC 1 Pass-Through Rate: With respect to
each
REMIC 1 Regular Interest (other than REMIC 1 Regular Interests
LTI-1PF and
LTI-S) and the Interest Accrual Periods in March 2005, April
2005 and May 2005,
a per annum rate equal to the Initial Mortgage Loan Net WAC
Rate; with respect
to REMIC 1 Regular Interest LTI-1PF and the Interest Accrual
Periods in (a)
March 2005, (b) April 2005 and (c) May 2005, a per annum rate
equal to (a)
3.71%, (b) 3.81% and (c) 3.85%; and with respect to each REMIC 1
Regular
Interest (other than REMIC 1 Regular Interest LTI-S) and each
Interest Accrual
Period thereafter, the weighted average of the Net Mortgage
Rates on the
Mortgage Loans. With respect to REMIC 1 Regular Interest LTI-S,
a per annum
rate, determined on a Mortgage Loan by Mortgage Loan basis,
equal to the excess
of (i) the excess of (a) the Mortgage Rate for each Mortgage
Loan over (b) the
sum of the Servicing Fee Rate, the Credit Risk Manager Fee Rate
and the Trustee
Fee Rate, over (ii) the Net Mortgage Rate of each such Mortgage
Loan.
Uncertificated REMIC 2 Pass-Through Rate: For any
Distribution
Date, with respect to REMIC 2 Regular Interest MTI-AA, REMIC 2
Regular Interest
MTI-A-1, REMIC 2 Regular Interest MTI-M-1, REMIC 2 Regular
Interest MTI-M-2,
REMIC 2 Regular Interest MTI-M-3, REMIC 2 Regular Interest
MTI-M-4, REMIC 2
Regular Interest MTI-M-5, REMIC 2 Regular Interest MTI-M-6,
REMIC 2 Regular
Interest MTI-M-7, REMIC 2 Regular Interest MTI-M-8, REMIC 2
Regular Interest
MTI-M-9, REMIC 2 Regular Interest MTI-B-1, REMIC 2 Regular
Interest MTI-B-2 and
REMIC 2 Regular Interest MTI-ZZ, the REMIC 2 Net WAC Rate, and
for any
Distribution Date with respect to REMIC 2 Regular Interest MT-P
and REMIC 2
Regular Interest MT-R, in March 2005, April 2005 and May 2005,
the Initial
Mortgage Loan Net WAC, and for any Distribution Date thereafter,
the REMIC 2 Net
WAC Rate.
Uncertificated Principal Balance: With respect to each REMIC
Regular Interest, the amount of such REMIC Regular Interest
outstanding as of
any date of determination. As of the Closing Date, the
Uncertificated Principal
Balance of each REMIC Regular Interest shall equal the amount
set forth in the
Preliminary Statement hereto as its initial Uncertificated
Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of
each REMIC
Regular Interest shall be reduced by all distributions of
principal made on such
REMIC Regular Interest on such Distribution Date pursuant to
Section 4.07 and,
if and to the extent necessary and appropriate, shall be further
reduced on such
Distribution Date by Realized Losses
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as provided in Section 4.05(b), and the Uncertificated Principal
Balances of
REMIC 1 Regular Interest LTI-PF shall be increased, pro rata, by
interest
deferrals as provided in Section 4.07. The Uncertificated
Principal Balance of
each REMIC Regular Interest that has an Uncertificated Principal
Balance shall
never be less than zero. REMIC 1 Regular Interest LTI-S and
REMIC 2 Regular
Interest MTI-S shall not have an Uncertificated Principal
Balance.
United States Person: A citizen or resident of the United
States, a corporation or a partnership (including an entity
treated as a
corporation or partnership for United States federal income tax
purposes)
created or organized in, or under the laws of, the United States
or any State
thereof or the District of Columbia (except, in the case of a
partnership, to
the extent provided in regulations) provided that, for purposes
solely of the
restrictions on the transfer of Class A-R Certificates and Class
A-RL
Certificates, no partnership or other entity treated as a
partnership for United
States federal income tax purposes shall be treated as a United
States Person
unless all persons that own an interest in such partnership
either directly or
through any entity that is not a corporation for United States
federal income
tax purposes are required to be United States Persons or an
estate whose income
is subject to United States federal income tax regardless of its
source, or a
trust if a court within the United States is able to exercise
primary
supervision over the administration of the trust and one or more
such United
States Persons have the authority to control all substantial
decisions of the
trust. To the extent prescribed in regulations by the Secretary
of the Treasury,
which have not yet been issued, a trust which was in existence
on August 20,
1996 (other than a trust treated as owned by the grantor under
subpart E of part
I of subchapter J of chapter 1 of the Code), and which was
treated as a United
States person on August 20, 1996 may elect to continue to be
treated as a United
States Person notwithstanding the previous sentence.
Voting Rights: The portion of the voting rights of all the
Certificates that is allocated to any Certificate for purposes
of the voting
provisions of this Agreement. At all times during the term of
this Agreement,
97% of all Voting Rights shall be allocated among the Class A-1,
Class M-1,
Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class
M-7, Class M-8,
Class M-9, Class B-1 and Class B-2 Certificates. The portion of
such 97% Voting
Rights allocated to the Class A-1, Class M-1, Class M-2, Class
M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class B-1
and Class B-2
Certificates shall be based on the fraction, expressed as a
percentage, the
numerator of which is the aggregate Class Principal Balance then
outstanding and
the denominator of which is the Class Principal Balance of all
such Classes then
outstanding. The Class P, Class X-1 and Class X-S Certificates
shall each be
allocated 1% of the Voting Rights. Voting Rights shall be
allocated among the
Certificates within each such Class (other than the Class P,
Class X-1 and Class
X-S Certificates, which each have only one certificate) in
accordance with their
respective Percentage Interests. The Class X-2, Class A-R and
Class A-RL
Certificates shall have no Voting Rights.
Wilshire: Wilshire Credit Corporation.
Wilshire Letter Agreement: The securitization servicing side
letter agreement, dated as of February 1, 2005, between the
Seller and Wilshire,
as amended, supplemented or superceded from time to time.
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Wilshire Special Servicing: With regard to any Charged Off
Loans, the servicing of such Charged Off Loans using specialized
collection
procedures (including foreclosure, if appropriate) to maximize
recoveries.
SECTION 1.02 Interest Calculations.
The calculation of the Trustee Fee, the Servicing Fee, the
Credit Risk Manager Fee and interest on the Class M-4, Class
M-5, Class M-6,
Class M-7, Class M-8, Class M-9, Class B-1, Class B-2, Class P,
Class A-R, Class
A-RL, Class X-1 and Class X-S Certificates and on the related
Uncertificated
Interests shall be made on the basis of a 360-day year
consisting of twelve
30-day months. The calculation of interest on the Class A-1,
Class M-1, Class
M-2 and Class M-3 Certificates and the related Uncertificated
Interests shall be
made on the basis of a 360-day year and the actual number of
days elapsed in the
related Interest Accrual Period. All dollar amounts calculated
hereunder shall
be rounded to the nearest penny with one-half of one penny being
rounded down.
SECTION 1.03 Allocation of Certain Interest Shortfalls.
For purposes of calculating the amount of Uncertificated
Accrued Interest for the REMIC 1 Regular Interests for any
Distribution Date,
the aggregate amount of any Prepayment Interest Shortfalls (net
of any
Compensating Interest Payment) and any Relief Act Reductions
incurred in respect
of the Mortgage Loans for any Distribution Date shall be
allocated first to
REMIC 1 Regular Interests LTI-1 and LTI-PF and then to REMIC 1
Regular Interests
LTI-P and LTI-R, in each case to the extent of one month's
interest at the then
applicable respective Uncertificated REMIC 1 Pass-Through Rate
on the respective
Uncertificated Principal Balance of each such REMIC 1 Regular
Interest;
provided, however, that with respect to the first three
Distribution Dates, such
amounts relating to the Initial Mortgage Loans shall be
allocated to REMIC 1
Regular Interest LTI-1 and such amounts relating to the
Subsequent Mortgage
Loans shall be allocated to REMIC 1 Regular Interest LT-PF.
For purposes of calculating the amount of Uncertificated
Accrued Interest for the REMIC 2 Regular Interests for any
Distribution Date,
any Prepayment Interest Shortfalls (to the extent not covered by
Compensating
Interest) relating to the Mortgage Loans for any Distribution
Date shall be
allocated in the same priority, and to the same extent, as that
allocated to the
Corresponding Certificates.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01 Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and
delivery hereof, hereby sells, transfers, assigns, sets over and
otherwise
conveys to the Trustee in trust for the benefit of the
Certificateholders,
without recourse, all (i) the right, title and interest of the
Depositor (which
does not include servicing rights) in and to each Initial
Mortgage Loan,
including all interest and principal received or receivable on
or with respect
to such Initial Mortgage Loans after the Cut-off Date and all
interest and
principal payments on the Initial Mortgage Loans received prior
to the Cut-off
Date in respect of installments of interest and principal due
thereafter, but
not including payments of principal and interest due and payable
on the Initial
Mortgage Loans on or before the Cut-off Date (other than the
rights of the
Servicer to service the Mortgage Loans in accordance with this
Agreement), (ii)
the Depositor's rights under the Assignment Agreement (iii) any
such amounts as
may be deposited into and held by the Trustee in the Pre-Funding
Account and the
Capitalized Interest Account and (iv) all proceeds of any of the
foregoing.
(b) In connection with the transfer and assignment set forth
in clause (a) above, the Depositor has delivered or caused to be
delivered to
the Trustee or its designated agent, the Custodian, for the
benefit of the
Certificateholders, the documents and instruments with respect
to each Mortgage
Loan as assigned:
(i) the original Mortgage Note of the Mortgagor in the name
of
the Trustee or endorsed "Pay to the order of ________________
without
recourse" and signed in the name of the last named endorsee by
an
authorized officer, together with all intervening endorsements
showing
a complete chain of endorsements from the originator of the
related
Mortgage Loan to the last endorsee or with respect to any Lost
Mortgage
Note (as such term is defined in the Pooling and Servicing
Agreement),
a lost note affidavit stating that the original Mortgage Note
was lost
or destroyed, together with a copy of such Mortgage Note;
(ii) for each Mortgage Loan that is not a MERS Mortgage
Loan,
the original Mortgage bearing evidence that such instruments
have been
recorded in the appropriate jurisdiction where the Mortgaged
Property
is located as determined by DLJMC (or, in lieu of the original
of the
Mortgage or the assignment thereof, a duplicate or conformed
copy of
the Mortgage or the instrument of assignment, if any, together
with a
certificate of receipt from the Seller or the settlement agent
who
handled the closing of the Mortgage Loan, certifying that such
copy or
copies represent true and correct copy(ies) of the original(s)
and that
such original(s) have been or are currently submitted to be
recorded in
the appropriate governmental recording office of the
jurisdiction where
the
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<PAGE>
Mortgaged Property is located) or a certification or receipt of
the
recording authority evidencing the same and in the case of each
MERS
Mortgage Loan, the original Mortgage, noting the presence of the
MIN of
the related Mortgage Loan and either language indicating that
the
Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM Loan
or if
the Mortgage Loan was not a MOM Loan at origination, the
original
Mortgage and the assignment thereof to MERS, with evidence of
recording
indicated thereon or a copy of the Mortgage certified by the
public
recording office in which such Mortgage has been recorded;
(iii) for each Mortgage Loan that is not a MERS Mortgage
Loan,
the original Assignment of Mortgage, in blank, which assignment
appears
to be in form and substance acceptable for recording and, in the
event
that the related Seller acquired the Mortgage Loan in a merger,
the
assignment must be by "[Seller], successor by merger to [name
of
predecessor]", and in the event that the Mortgage Loan was
acquired or
originated by the related Seller while doing business under
another
name, the assignment must be by "[Seller], formerly known as
[previous
name]";
(iv) for each Mortgage Loan, at any time that such Mortgage
Loan is not a MERS Mortgage Loan, the originals of all
intervening
Assignments of Mortgage not included in (iii) above showing a
complete
chain of assignment from the originator of such Mortgage Loan to
the
Person assigning the Mortgage to the Trustee, including any
warehousing
assignment, with evidence of recording on each such Assignment
of
Mortgage (or, in lieu of the original of any such
intervening
assignment, a duplicate or conformed copy of such
intervening
assignment together with a certificate of receipt from the
related
Seller or the settlement agent who handled the closing of the
Mortgage
Loan, certifying that such copy or copies represent true and
correct
copy(ies) of the original(s) and that such original(s) have been
or are
currently submitted to be recorded in the appropriate
governmental
recording office of the jurisdiction where the Mortgaged
Property is
located) or a certification or receipt of the recording
authority
evidencing the same;
(v) an original of any related security agreement (if such
item is a document separate from the Mortgage) and the originals
of any
intervening assignments thereof showing a complete chain of
assignment
from the originator of the related Mortgage Loan to the last
assignee;
(vi) an original assignment of any related security
agreement
(if such item is a document separate from the Mortgage) executed
by the
last assignee in blank;
(vii) the originals of any assumption, modification,
extension
or guaranty agreement with evidence of recording thereon, if
applicable
(or, in lieu of the original of any such agreement, a duplicate
or
conformed copy of such agreement together with a certificate of
receipt
from the related Seller or the settlement agent who handled the
closing
of the Mortgage Loan, certifying that such copy(ies) represent
true and
correct copy(ies) of the original(s) and that such original(s)
have
been or are currently submitted
49
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to be recorded in the appropriate governmental recording office
of the
jurisdiction where the Mortgaged Property is located), or a
certification or receipt of the recording authority evidencing
the
same;
(viii) if the Mortgage Note or Mortgage or any other
document
or instrument relating to the Mortgage Loan has been signed by a
person
on behalf of the Mortgagor, the original power of attorney or
other
instrument that authorized and empowered such person to sign
bearing
evidence that such instrument has been recorded, if so required,
in the
appropriate jurisdiction where the Mortgaged Property is located
as
determined by DLJMC (or, in lieu thereof, a duplicate or
conformed copy
of such instrument, together with a certificate of receipt from
the
related Seller or the settlement agent who handled the closing
of the
Mortgage Loan, certifying that such copy(ies) represent true
and
complete copy(ies)of the original(s) and that such original(s)
have
been or are currently submitted to be recorded in the
appropriate
governmental recording office of the jurisdiction where the
Mortgaged
Property is located) or a certification or receipt of the
recording
authority evidencing the same; and
(ix) in the case of the First Mortgage Loans, the original
mortgage title insurance policy, or if such mortgage title
insurance
policy has not yet been issued, an original or copy of a
marked-up
written commitment or a pro forma title insurance policy marked
as
binding and countersigned by the title insurance company or
its
authorized agent either on its face or by an acknowledged
closing
instruction or escrow letter.
In the event the Seller delivers to the Trustee certified
copies of any document or instrument set forth in 2.01(b)
because of a delay
caused by the public recording office in returning any recorded
document, the
Seller shall deliver to the Trustee, within 60 days of the
Closing Date, an
Officer's Certificate which shall (i) identify the recorded
document, (ii) state
that the recorded document has not been delivered to the Trustee
due solely to a
delay caused by the public recording office, and (iii) state the
amount of time
generally required by the applicable recording office to record
and return a
document submitted for recordation.
In the event that in connection with any Mortgage Loan the
Depositor cannot deliver (a) the original recorded Mortgage, (b)
all interim
recorded assignments or (c) the lender's title policy (together
with all riders
thereto) satisfying the requirements set forth above,
concurrently with the
execution and delivery hereof because such document or documents
have not been
returned from the applicable public recording office in the case
of clause (a)
or (b) above, or because the title policy has not been delivered
to the Seller
or the Depositor by the applicable title insurer in the case of
clause (c)
above, the Depositor shall promptly deliver to the Trustee, in
the case of
clause (a) or (b) above, such original Mortgage or such interim
assignment, as
the case may be, with evidence of recording indicated thereon
upon receipt
thereof from the public recording office, or a copy thereof,
certified, if
appropriate, by the relevant recording office and in the case of
clause (c)
above, if such lender's title policy is received by the
Depositor, upon receipt
thereof.
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As promptly as practicable subsequent to such transfer and
assignment, and in any event, within thirty (30) days
thereafter, the Trustee
shall (at the Seller's expense) (i) affix the Trustee's name to
each Assignment
of Mortgage, as the assignee thereof, (ii) cause such assignment
to be in proper
form for recording in the appropriate public office for real
property records
within thirty (30) days after receipt thereof and (iii) cause to
be delivered
for recording in the appropriate public office for real property
records the
assignments of the Mortgages to the Trustee, except that, with
respect to any
assignment of a Mortgage as to which the Trustee has not
received the
information required to prepare such assignment in recordable
form, the
Trustee's obligation to do so and to deliver the same for such
recording shall
be as soon as practicable after receipt of such information and
in any event
within thirty (30) days after the receipt thereof, and the
Trustee need not
cause to be recorded (a) any assignment referred to in clause
(iii) above which
relates to a Mortgage Loan in any jurisdiction under the laws of
which, as
evidenced by an Opinion of Counsel delivered to the Trustee (at
the Depositor's
expense, provided such expense has been previously approved by
the Depositor in
writing) within 180 days of the Closing Date, acceptable to the
Rating Agencies,
the recordation of such assignment is not necessary to protect
the Trustee's and
the Certificateholders' interest in the related Mortgage Loan or
(b) if MERS is
identified on the Mortgage or on a properly recorded assignment
of the Mortgage
as the mortgagee of record solely as nominee for the Seller and
its successors
and assigns.
In connection with the assignment of any Mortgage Loan
registered on the MERS(R) System, the Depositor further agrees
that it will
cause, at the Depositor's own expense, on or prior to the
Closing Date, the
MERS(R) System to indicate that such Mortgage Loans have been
assigned by the
Depositor to the Trustee in accordance with this Agreement for
the benefit of
the Certificateholders by including (or deleting, in the case of
Mortgage Loans
which are repurchased in accordance with this Agreement) in such
computer files
(a) the code "[IDENTIFY TRUSTEE SPECIFIC CODE]" in the field
"[IDENTIFY THE
FIELD NAME FOR TRUSTEE]" which identifies the Trustee and (b)
the code
"[IDENTIFY SERIES SPECIFIC CODE NUMBER]" in the field "Pool
Field" which
identifies the series of the Certificates issued in connection
with such
Mortgage Loans. The Depositor further agrees that it will not,
and will not
permit the Servicer to, and the Servicer agrees that it will
not, alter the
codes referenced in this paragraph with respect to any Mortgage
Loan during the
term of this Agreement unless and until such Mortgage Loan is
repurchased in
accordance with the terms of this Agreement.
(c) The Trustee is authorized to appoint any bank or trust
company approved by the Depositor as Custodian of the documents
or instruments
referred to in this Section 2.01 for any of the Mortgage Loans,
and to enter
into a Custodial Agreement for such purpose and any documents
delivered
thereunder shall be delivered to the Custodian and any Officer's
Certificates
delivered with respect thereto shall be delivered to the Trustee
and the
Custodian.
(d) It is the express intent of the parties to this
Agreement
that the conveyance of the Mortgage Loans by the Depositor to
the Trustee as
provided in this Section 2.01 be, and be construed as, a sale of
the Mortgage
Loans by the Depositor to the Trustee. It is, further, not the
intention of the
parties to this Agreement that such conveyance be deemed a
pledge of the
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Mortgage Loans by the Depositor to the Trustee to secure a debt
or other
obligation of the Depositor. However, in the event that,
notwithstanding the
intent of the parties to this Agreement, the Mortgage Loans are
held to be the
property of the Depositor, or if for any other reason this
Agreement is held or
deemed to create a security interest in the Mortgage Loans then
(a) this
Agreement shall also be deemed to be a security agreement within
the meaning of
Articles 8 and 9 of the New York Uniform Commercial Code; (b)
the conveyance
provided for in this Section 2.01 shall be deemed to be a grant
by the Depositor
to the Trustee for the benefit of the Certificateholders of a
security interest
in all of the Depositor's right, title and interest in and to
the Mortgage Loans
and all amounts payable to the holders of the Mortgage Loans in
accordance with
the terms thereof and all proceeds of the conversion, voluntary
or involuntary,
of the foregoing into cash, instruments, securities or other
property, including
without limitation all amounts, other than investment earnings,
from time to
time held or invested in the Certificate Account, whether in the
form of cash,
instruments, securities or other property; (c) the possession by
the Trustee or
any Custodian of such items of property and such other items of
property as
constitute instruments, money, negotiable documents or chattel
paper shall be
deemed to be "in possession by the secured party" for purposes
of perfecting the
security interest pursuant to Section 9-305 of the New York
Uniform Commercial
Code; and (d) notifications to persons holding such property,
and
acknowledgments, receipts or confirmations from persons holding
such property,
shall be deemed notifications to, or acknowledgments, receipts
or confirmations
from, financial intermediaries, bailees or agents (as
applicable) of the Trustee
for the benefit of the Certificateholders for the purpose of
perfecting such
security interest under applicable law (except that nothing in
this clause (e)
shall cause any person to be deemed to be an agent of the
Trustee for any
purpose other than for perfection of such security interests
unless, and then
only to the extent, expressly appointed and authorized by the
Trustee in
writing). The Depositor and the Trustee, upon directions from
the Depositor,
shall, to the extent consistent with this Agreement, take such
actions as may be
necessary to ensure that, if this Agreement were deemed to
create a security
interest in the Mortgage Loans, such security interest would be
deemed to be a
perfected security interest of first priority under applicable
law and will be
maintained as such throughout the term of this Agreement.
(e) The Depositor hereby sells, transfers, assigns, sets
over
and otherwise conveys to the Trustee in trust for the benefit of
the
Certificateholders, without recourse, all right, title and
interest in such
Subsequent Mortgage Loans (which does not include servicing
rights), including
all interest and principal due on or with respect to such
Subsequent Mortgage
Loans on or after the related Subsequent Transfer Date and all
interest and
principal payments on such Subsequent Mortgage Loans received
prior to the
Subsequent Transfer Date in respect of installments of interest
and principal
due thereafter, but not including principal and interest due on
such Subsequent
Mortgage Loans prior to the related Subsequent Transfer Date,
any insurance
policies in respect of such Subsequent Mortgage Loans and all
proceeds of any of
the foregoing.
(f) Upon one Business Day's prior written notice to the
Trustee, the Servicer and the Rating Agencies, on any Business
Day during the
Pre-Funding Period designated by the Depositor, the Depositor,
DLJMC, the
Servicer and the Trustee shall complete, execute and deliver a
Subsequent
Transfer Agreement so long as no Rating Agency has provided
notice that
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the execution and delivery of such Subsequent Transfer Agreement
will result in
a reduction or withdrawal of the ratings assigned to the
Certificates.
The transfer of Subsequent Mortgage Loans and the other
property and rights relating to them on a Subsequent Transfer
Date is subject to
the satisfaction of each of the following conditions:
(i) each Subsequent Mortgage Loan conveyed on such
Subsequent
Transfer Date satisfies the representations and warranties
applicable
to it under this Agreement as of the applicable Subsequent
Transfer
Date; provided, however, that with respect to a breach of a
representation and warranty with respect to a Subsequent
Mortgage Loan,
the obligation under Section 2.03(f) of this Agreement of the
Seller to
cure, repurchase or replace such Subsequent Mortgage Loan
shall
constitute the sole remedy against the Seller respecting such
breach
available to Certificateholders, the Depositor or the
Trustee;
(ii) the Trustee and the Rating Agencies are provided with
an
Opinion of Counsel or Opinions of Counsel, at the expense of
the
Depositor, stating that each REMIC in the Trust Fund is and
shall
continue to qualify as a REMIC following the transfer of the
Subsequent
Mortgage Loans, to be delivered as provided pursuant to
Section
2.01(g);
(iii) the Rating Agencies and the Trustee are provided with
an
Opinion of Counsel or Opinions of Counsel, at the expense of
the
Depositor, confirming that the transfer of the Subsequent
Mortgage
Loans conveyed on such Subsequent Transfer Date is a true sale,
to be
delivered as provided pursuant to Section 2.01(g);
(iv) the execution and delivery of such Subsequent Transfer
Agreement or conveyance of the related Subsequent Mortgage Loans
does
not result in a reduction or withdrawal of any ratings assigned
to the
Certificates by the Rating Agencies;
(v) no Subsequent Mortgage Loan conveyed on such Subsequent
Transfer Date is 30 or more days contractually delinquent as of
such
date;
(vi) the remaining term to stated maturity of such
Subsequent
Mortgage Loan does not exceed 30 years for fully amortizing
loans or 15
years for balloon loans;
(vii) such Subsequent Mortgage Loan does not have a Net
Mortgage Rate less than 4.00% per annum;
(viii) the Depositor shall have deposited in the Collection
Account all principal and interest collected with respect to
the
related Subsequent Mortgage Loans on or after the related
Subsequent
Transfer Date;
(ix) such Subsequent Mortgage Loan does not have a Combined
Loan-to-Value Ratio greater than 100.00%;
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<PAGE>
(x) such Subsequent Mortgage Loan has a principal balance
not
greater than $400,000;
(xi) no Subsequent Mortgage Loan shall have a final maturity
date after May 1, 2035;
(xii) such Subsequent Mortgage Loan is secured by a first or
second lien;
(xiii) such Subsequent Mortgage Loan is otherwise acceptable
to the Rating Agencies;
(xiv) [reserved];
(xv) following the conveyance of such Subsequent Mortgage
Loans on such Subsequent Transfer Date the characteristics of
the
Mortgage Loans (based on the Initial Mortgage Loans as of the
Cut-off
Date and the Subsequent Mortgage Loans as of their related
Subsequent
Transfer Date) will be as follows:
A. a weighted average Mortgage Rate of at least 9.75% per
annum;
B. a weighted average remaining term to stated maturity of
less than 246 months;
C. a weighted average Combined Loan-to-Value Ratio of not
more
than 99.61%;
D. a weighted average credit score of at least 675;
E. no more than 68.26% of the Mortgage Loans by aggregate
Cut-off Date Principal Balance are balloon loans;
F. no more than 40.00% of the Mortgage Loans by aggregate
Cut-off Date Principal Balance are concentrated in one state;
and
G. no more than 8.75% of the Mortgage Loans by aggregate
Cut-off Date Principal Balance relate to non-owner occupied
properties;
(xvi) neither the Seller nor the Depositor shall be
insolvent
or shall be rendered insolvent as a result of such transfer;
(xvii) no Event of Default has occurred hereunder; and
(xviii) the Depositor shall have delivered to the Trustee an
Officer's Certificate confirming the satisfaction of each of
these
conditions precedent.
(g) Upon (1) delivery to the Trustee by the Depositor of the
Opinions of Counsel referred to in Sections 2.01(f)(ii) and
(iii), (2) delivery
to the Trustee by the Depositor of
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<PAGE>
a revised Mortgage Loan Schedule reflecting the Subsequent
Mortgage Loans
conveyed on such Subsequent Transfer Date and the related
Subsequent Mortgage
Loans and (3) delivery to the Trustee by the Depositor of an
Officer's
Certificate confirming the satisfaction of each of the
conditions precedent set
forth in Section 2.01(f), the Trustee shall remit to the
Depositor the Aggregate
Subsequent Transfer Amount related to the Subsequent Mortgage
Loans transferred
by the Depositor on such Subsequent Transfer Date from funds in
the Pre-Funding
Account.
The Trustee shall not be required to investigate or
otherwise
verify compliance with the conditions set forth in the preceding
paragraph,
except for its own receipt of documents specified above, and
shall be entitled
to rely on the required Officer's Certificate.
SECTION 2.02 Acceptance by the Trustee.
The Trustee acknowledges receipt by itself or the Custodian
of
the documents identified in the Initial Certification in the
form annexed hereto
as Exhibit G and declares that it or the Custodian on its behalf
hold and will
hold the documents delivered to it or the Custodian,
respectively, constituting
the Mortgage Files, and that it or the Custodian holds or will
hold such other
assets as are included in the Trust Fund, in trust for the
exclusive use and
benefit of all present and future Certificateholders. The
Trustee acknowledges
that it or the Custodian will maintain possession of the
Mortgage Notes in the
State of Texas or the State of Illinois, as directed by the
Seller, unless
otherwise permitted by the Rating Agencies.
The Custodian is required under the Custodial Agreement to
execute and deliver on the Closing Date to the Depositor, the
Seller, the
Trustee and the Servicer an Initial Certification in the form
annexed hereto as
Exhibit G with respect to the Mortgage Loans delivered to the
Custodian. The
Trustee shall deliver on the Closing Date to the Depositor, the
Seller, the
Trustee and the Servicer an Initial Certification in the form
annexed hereto as
Exhibit G with respect to the Mortgage Loans delivered to the
Trustee. Based on
its respective review and examination, and only as to the
documents identified
in such related Initial Certification, pursuant to the Custodial
Agreement, the
Custodian will acknowledge that such documents delivered to it
appear regular on
their face and relate to such Mortgage Loan and pursuant to this
Agreement the
Trustee will acknowledge that such documents delivered to it
appear regular on
their face and relate to such Mortgage Loan. Neither the Trustee
nor the
Custodian shall be under any duty or obligation to inspect,
review or examine
said documents, instruments, certificates or other papers to
determine that the
same are genuine, enforceable or appropriate for the represented
purpose or that
they have actually been recorded in the real estate records or
that they are
other than what they purport to be on their face.
Not later than 90 days after the Closing Date, the Trustee
and
the Custodian are each required to deliver to the Depositor, the
Seller, the
Trustee and the Servicer a Final Certification with respect to
the Mortgage
Loans delivered to it in the form annexed hereto as Exhibit H,
with any
applicable exceptions noted thereon.
If, in the course of such review, the Trustee or the
Custodian, as applicable, finds any document constituting a part
of a Mortgage
File which does not meet the requirements of
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<PAGE>
Section 2.01, the Trustee or, pursuant to the Custodial
Agreement, the
Custodian, will list such as an exception in the Final
Certification; provided,
however, that neither the Trustee nor the Custodian shall make
any determination
as to whether (i) any endorsement is sufficient to transfer all
right, title and
interest of the party so endorsing, as noteholder or assignee
thereof, in and to
that Mortgage Note or (ii) any assignment is in recordable form
or is sufficient
to effect the assignment of and transfer to the assignee thereof
under the
mortgage to which the assignment relates.
The Seller shall promptly correct or cure such defect within
120 days from the date it was so notified of such defect and, if
the Seller does
not correct or cure such defect within such period and such
defect materially
and adversely affects the interests of the Certificateholders in
the related
Mortgage Loan, the Seller shall either (a) substitute for the
related Mortgage
Loan a Qualified Substitute Mortgage Loan, which substitution
shall be
accomplished in the manner and subject to the conditions set
forth in Section
2.03, or (b) purchase such Mortgage Loan from the Trustee within
120 days from
the date the Seller was notified of such defect in writing at
the Repurchase
Price of such Mortgage Loan; provided, however, that in no event
shall such
substitution or repurchase occur more than 540 days from the
Closing Date,
except that if the substitution or repurchase of a Mortgage Loan
pursuant to
this provision is required by reason of a delay in delivery of
any documents by
the appropriate recording office, then such substitution or
repurchase shall
occur within 720 days from the Closing Date; and further
provided, that the
Seller shall have no liability for recording any Assignment of
Mortgage in favor
of the Trustee or for the Trustee's failure to record such
Assignment of
Mortgage, and the Seller shall not be obligated to repurchase or
cure any
Mortgage Loan solely as a result of the Trustee's failure to
record such
Assignment of Mortgage. The Trustee shall deliver written notice
to each Rating
Agency within 360 days from the Closing Date indicating each
Mortgage Loan (a)
the Assignment of Mortgage which has not been returned by the
appropriate
recording office or (b) as to which there is a dispute as to
location or status
of such Mortgage Loan. Such notice shall be delivered every 90
days thereafter
until the Assignment of Mortgage for the related Mortgage Loan
is returned to
the Trustee or the dispute as to location or status has been
resolved. Any such
substitution pursuant to (a) above shall not be effected prior
to the delivery
to the Trustee of the Opinion of Counsel required by Section
2.05 hereof, if
any, and any substitution pursuant to (a) above shall not be
effected prior to
the additional delivery to the Trustee of a Request for Release
substantially in
the form of Exhibit M. No substitution is permitted to be made
in any calendar
month after the Determination Date for such month. The
Repurchase Price for any
such Mortgage Loan shall be deposited by the Seller in the
Certificate Account
on or prior to the Business Day immediately preceding such
Distribution Date in
the month following the month of repurchase and, upon receipt of
such deposit
and certification with respect thereto in the form of Exhibit M
hereto, the
Trustee shall release the related Mortgage File to the Seller
and shall execute
and deliver at such entity's request such instruments of
transfer or assignment
prepared by such entity, in each case without recourse, as shall
be necessary to
vest in such entity, or a designee, the Trustee's interest in
any Mortgage Loan
released pursuant hereto. In furtherance of the foregoing, if
the Seller is not
a member of MERS and repurchases a Mortgage Loan which is
registered on the
MERS(R) System, the Seller, at its own expense and without any
right of
reimbursement, shall cause MERS to execute and deliver an
assignment of the
Mortgage in recordable form to transfer the Mortgage
56
<PAGE>
from MERS to the Seller and shall cause such Mortgage to be
removed from
registration on the MERS(R) System in accordance with MERS'
rules and
regulations.
Pursuant to the Custodial Agreement, the Custodian is
required
to execute and deliver on the Subsequent Transfer Date to the
Depositor, the
Seller, the Trustee and the Servicer an Initial Certification in
the form
annexed hereto as Exhibit G. Based on its review and
examination, and only as to
the documents identified in such Initial Certification, the
Custodian shall
acknowledge that such documents appear regular on their face and
relate to such
Subsequent Mortgage Loan. Neither the Trustee nor the Custodian
shall be under a
duty or obligation to inspect, review or examine said documents,
instruments,
certificates or other papers to determine that the same are
genuine, enforceable
or appropriate for the represented purpose or that they have
actually been
recorded in the real estate records or that they are other than
what they
purport to be on their face.
Pursuant to the Custodial Agreement, not later than 90 days
after the end of the Pre-Funding Period, the Custodian is
required to deliver to
the Depositor, the Seller, the Trustee and the Servicer a Final
Certification
with respect to the Subsequent Mortgage Loans in the form
annexed hereto as
Exhibit H with any applicable exceptions noted thereon.
If, in the course of such review of the Mortgage Files
relating to the Subsequent Mortgage Loans, the Custodian finds
any document
constituting a part of a Mortgage File which does not meet the
requirements of
Section 2.01, pursuant to the Custodial Agreement, the Custodian
will be
required to list such as an exception in the Final
Certification; provided,
however that neither the Trustee nor the Custodian shall make
any determination
as to whether (i) any endorsement is sufficient to transfer all
right, title and
interest of the party so endorsing, as noteholder or assignee
thereof, in and to
that Mortgage Note or (ii) any assignment is in recordable form
or is sufficient
to effect the assignment of and transfer to the assignee thereof
under the
mortgage to which the assignment relates. The Seller shall cure
any such defect
or repurchase or substitute for any such Mortgage Loan in
accordance with
Section 2.02(a).
It is understood and agreed that the obligation of the
Seller
to cure, substitute for or to repurchase any Mortgage Loan which
does not meet
the requirements of Section 2.01 shall constitute the sole
remedy respecting
such defect available to the Trustee, the Depositor and any
Certificateholder
against the Seller.
The Trustee shall pay to the Custodian from time to time
reasonable compensation for all services rendered by it
hereunder or under the
Custodial Agreement, and the Trustee shall pay or reimburse the
Custodian upon
its request for all reasonable expenses, disbursements and
advances incurred or
made by the Custodian in accordance with any of the provisions
of this Agreement
or the Custodial Agreement, except any such expense,
disbursement or advance as
may arise from its negligence or bad faith.
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SECTION 2.02 Representations and Warranties of the Seller
and
Servicer.
(a) The Seller hereby makes the representations and
warranties
applicable to it set forth in Schedule II hereto, and by this
reference
incorporated herein, to the Depositor and the Trustee, as of the
Closing Date,
or if so specified therein, as of the Cut-off Date or such other
date as may be
specified.
(b) Wilshire, in its capacity as Servicer, hereby makes the
representations and warranties applicable to it set forth in
Schedule III
hereto, and by this reference incorporated herein, to the
Depositor and the
Trustee, as of the Closing Date, or if so specified therein, as
of the Cut-off
Date or such other date as may be specified.
(c) Wilshire, in its capacity as Servicer, will use its
reasonable efforts to become a member of MERS in good standing,
and will comply
in all material respects with the rules and procedures of MERS
in connection
with the servicing of the Mortgage Loans that are registered
with MERS.
(d) The Seller hereby makes the representations and
warranties
set forth in Schedule IV as applicable hereto, and by this
reference
incorporated herein, to the Trustee, as of the Closing Date, or
the Subsequent
Transfer Date, as applicable, or if so specified therein, as of
the Cut-off Date
or such other date as may be specified.
(e) Upon discovery by any of the parties hereto of a breach
of
a representation or warranty made pursuant to Section 2.03(d)
that materially
and adversely affects the interests of the Certificateholders in
any Mortgage
Loan, the party discovering such breach shall give prompt notice
thereof to the
other parties. The Seller hereby covenants that within 120 days
of the earlier
of its discovery or its receipt of written notice from any party
of a breach of
any representation or warranty made by it pursuant to Section
2.03(d) which
materially and adversely affects the interests of the
Certificateholders in any
Mortgage Loan sold by the Seller to the Depositor, it shall cure
such breach in
all material respects, and if such breach is not so cured,
shall, (i) if such
120-day period expires prior to the second anniversary of the
Closing Date,
remove such Mortgage Loan (a "Deleted Mortgage Loan") from the
Trust Fund and
substitute in its place a Qualified Substitute Mortgage Loan, in
the manner and
subject to the conditions set forth in this Section; or (ii)
repurchase the
affected Mortgage Loan from the Trustee at the Repurchase Price
in the manner
set forth below; provided, however, that any such substitution
pursuant to (i)
above shall not be effected prior to the delivery to the Trustee
of the Opinion
of Counsel required by Section 2.05 hereof, if any, and any such
substitution
pursuant to (i) above shall not be effected prior to the
additional delivery to
the Trustee of a Request for Release substantially in the form
of Exhibit M and
the Mortgage File for any such Qualified Substitute Mortgage
Loan. The Seller
shall promptly reimburse the Trustee for any actual
out-of-pocket expenses
reasonably incurred by the Trustee in respect of enforcing the
remedies for such
breach. With respect to any representation and warranties
described in this
Section which are made to the best of a Seller's knowledge if it
is discovered
by the Depositor, the Seller 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
interests of the
58
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Certificateholders therein, notwithstanding the Seller's lack of
knowledge with
respect to the substance of such representation or warranty,
such inaccuracy
shall be deemed a breach of the applicable representation or
warranty.
With respect to any Qualified Substitute Mortgage Loan or
Loans, the Seller shall deliver to the Trustee for the benefit
of the
Certificateholders the Mortgage Note, the Mortgage, the related
assignment of
the Mortgage, and such other documents and agreements as are
required by Section
2.01(b), with the Mortgage Note endorsed and the Mortgage
assigned as required
by Section 2.01. No substitution is permitted to be made in any
calendar month
after the Determination Date for such month. Scheduled Payments
due with respect
to Qualified Substitute Mortgage Loans in the month of
substitution shall not be
part of the Trust Fund and will be retained by the Seller on the
next succeeding
Distribution Date. For the month of substitution, distributions
to
Certificateholders will include the monthly payment due on any
Deleted Mortgage
Loan for such month and thereafter the Seller shall be entitled
to retain all
amounts received in respect of such Deleted Mortgage Loan. The
Seller shall
amend the Mortgage Loan Schedule for the benefit of the
Certificateholders to
reflect the removal of such Deleted Mortgage Loan and the
substitution of the
Qualified Substitute Mortgage Loan or Loans and the Seller shall
deliver the
amended Mortgage Loan Schedule to the Trustee. Upon such
substitution, the
Qualified Substitute Mortgage Loan or Loans shall be subject to
the terms of
this Agreement in all respects, and the Seller shall be deemed
to have made with
respect to such Qualified Substitute Mortgage Loan or Loans, as
of the date of
substitution, the representations and warranties made pursuant
to Section
2.03(e) with respect to such Mortgage Loan. Upon any such
substitution and the
deposit to the Certificate Account of the amount required to be
deposited
therein in connection with such substitution as described in the
following
paragraph, the Trustee shall release the Mortgage File held for
the benefit of
the Certificateholders relating to such Deleted Mortgage Loan to
the Seller and
shall execute and deliver at the Seller's direction such
instruments of transfer
or assignment prepared by the Seller, in each case without
recourse, as shall be
necessary to vest title in the Seller, or its designee, the
Trustee's interest
in any Deleted Mortgage Loan substituted for pursuant to this
Section 2.03.
For any month in which the Seller substitutes one or more
Qualified Substitute Mortgage Loans for one or more Deleted
Mortgage Loans, the
Trustee shall determine the amount (if any) by which the
aggregate principal
balance of all such Qualified Substitute Mortgage Loans as of
the date of
substitution is less than the aggregate Stated Principal Balance
of all such
Deleted Mortgage Loans (after application of the scheduled
principal portion of
the monthly payments due in the month of substitution). The
amount of such
shortage (the "Substitution Adjustment Amount") plus an amount
equal to the sum
of (i) the aggregate of any unreimbursed Advances with respect
to such Deleted
Mortgage Loans and (ii) any costs and damages actually incurred
and paid by or
on behalf of the Trust in connection with any breach of the
representation and
warranty set forth in Schedule III(xx) as the result of a
violation of a
predatory or abusive lending law applicable to such Mortgage
Loan shall be
deposited in the Certificate Account by the Seller on or before
the Business Day
immediately preceding the Distribution Date in the month
succeeding the calendar
month during which the related Mortgage Loan became required to
be repurchased
or replaced hereunder.
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In the event that the Seller shall have repurchased a
Mortgage
Loan, the Repurchase Price therefor shall be deposited in the
Certificate
Account on or before the Business Day immediately preceding the
Distribution
Date in the month following the month during which the Seller
became obligated
hereunder to repurchase or replace such Mortgage Loan and upon
such deposit of
the Repurchase Price, the delivery of the Opinion of Counsel if
required by
Section 2.05 and receipt of a Request for Release in the form of
Exhibit M
hereto, the Trustee shall release the related Mortgage File held
for the benefit
of the Certificateholders to such Person, and the Trustee shall
execute and
deliver at such Person's direction such instruments of transfer
or assignment
prepared by such Person, in each case without recourse, as shall
be necessary to
transfer title from the Trustee. It is understood and agreed
that the obligation
under this Agreement of any Person to cure, repurchase or
substitute any
Mortgage Loan as to which a breach has occurred and is
continuing shall
constitute the sole remedy against such Persons respecting such
breach available
to Certificateholders, the Depositor or the Trustee on their
behalf.
The representations and warranties made pursuant to this
Section 2.03 shall survive delivery of the respective Mortgage
Files to the
Trustee for the benefit of the Certificateholders.
SECTION 2.03 Representations and Warranties of the Depositor
as to the Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee
with respect to the Mortgage Loans that, as of the Closing Date,
assuming good
title has been conveyed to the Depositor, the Depositor had good
title to the
Mortgage Loans and Mortgage Notes, and did not encumber the
Mortgage Loans
during its period of ownership thereof, other than as
contemplated by the
Agreement.
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.
SECTION 2.04 Delivery of Opinion of Counsel in Connection
with
Substitutions.
Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.02 shall be made more than
120 days after the
Closing Date unless the Seller delivers to the Trustee an
Opinion of Counsel,
which Opinion of Counsel shall not be at the expense of either
the Trustee or
the Trust Fund, addressed to the Trustee, to the effect that
such substitution
will not (i) result in the imposition of the tax on "prohibited
transactions" on
the Trust Fund or contributions after the Startup Date, as
defined in Sections
860F(a)(2) and 860G(d) of the Code, respectively, or (ii) cause
any REMIC
created hereunder to fail to qualify as a REMIC at any time that
any
Certificates are outstanding.
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SECTION 2.05 Execution and Delivery of Certificates.
The Trustee (or the Custodian) acknowledges receipt of the
items described in Section 2.02 of this Agreement and the
documents identified
in the Initial Certification in the form annexed hereto as
Exhibit G and,
concurrently with such receipt, has executed and delivered to or
upon the order
of the Depositor, the Certificates in authorized denominations
evidencing
directly or indirectly the entire ownership of the Trust Fund.
The Trustee
agrees to hold the Trust Fund and exercise the rights referred
to above for the
benefit of all present and future Holders of the Certificates
and to perform the
duties set forth in this Agreement to the best of its ability,
to the end that
the interests of the Holders of the Certificates may be
adequately and
effectively protected.
SECTION 2.06 REMIC Matters.
The Preliminary Statement sets forth the designations and
"latest possible maturity date" for federal income tax purposes
of all interests
created hereby. The "Startup Day" for purposes of the REMIC
Provisions shall be
the Closing Date. The REMIC 1 Regular Interests shall be
designated as the
"regular interests" in REMIC 1. The REMIC 2 Regular Interests
shall be
designated as the "regular interests" in REMIC 2. The Class A-1,
Class M-1,
Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class
M-7, Class M-8,
Class M-9, Class B-1, Class B-2, Class P, Class X-1 and Class
X-S Certificates
shall be designated as the "regular interests" in REMIC 3. The
Class A-RL
Certificates will constitute the sole class of residual
interests in REMIC 1 and
the Class A-R Certificates will represent beneficial ownership
of two residual
interests, Class R-2 Interest and Class R-3 Interest, each of
which will
constitute the sole class of residual interests in each of REMIC
2 and REMIC 3,
respectively. The Trustee shall not permit the creation of any
"interests"
(within the meaning of Section 860G of the Code) in REMIC 1,
REMIC 2 or REMIC 3
other than the Certificates, the REMIC 1 Regular Interests or
the REMIC 2
Regular Interests. The "tax matters person" with respect to each
of REMIC 1,
REMIC 2 and REMIC 3 shall be the Holder of the Class A-R
Certificate and Class
A-RL Certificate at any time holding the largest Percentage
Interest thereof in
the manner provided under Treasury regulations section
1.860F-4(d) and Treasury
regulations section 301.6231(a)(7)-1. The fiscal year for each
REMIC shall be
the calendar year. In addition, the Class X-1 Certificateholders
shall be deemed
to have entered into a contractual arrangement with the Class
A-R
Certificateholders or Class A-RL Certificateholders whereby the
Class A-R
Certificateholders or Class A-RL Certificateholders agree to pay
to the Class
X-1 Certificateholders on each Distribution Date amounts that
would, in the
absence of such contractual agreement, be distributable with
respect to the
residual interest in REMIC 1, REMIC 2, and REMIC 3 pursuant to
Section
4.02(b)(iv)(P) (which amounts are expected to be zero).
SECTION 2.07 Covenants of the Servicer.
The Servicer hereby covenants to the Depositor and the
Trustee
that no written information, certificate of an officer,
statement furnished in
writing or written report prepared by the Servicer and delivered
to the
Depositor, any affiliate of the Depositor or the Trustee and
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prepared by the Servicer pursuant to this Agreement will contain
any untrue
statement of a material fact.
SECTION 2.08 Conveyance of REMIC Regular Interests and
Acceptance of REMIC 1, REMIC 2 and REMIC 3 by the
Trustee; Issuance of Certificates.
(a) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and
otherwise convey in
trust to the Trustee without recourse all the right, title and
interest of the
Depositor in and to the REMIC 1 Regular Interests for the
benefit of the Holder
of the REMIC 2 Regular Interests and the Holders of the Class
R-2 Interest. The
Trustee acknowledges receipt of the REMIC 1 Regular Interests
(each of which is
uncertificated) and declares that it holds and will hold the
same in trust for
the exclusive use and benefit of the Holders of the REMIC 2
Regular Interests
and Holder of the Class R-2 Interest. The interests evidenced by
the Class R-2
Interest, together with the REMIC 2 Regular Interests,
constitute the entire
beneficial ownership interest in REMIC 2.
(b) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and
otherwise convey in
trust to the Trustee without recourse all the right, title and
interest of the
Depositor in and to the REMIC 2 Regular Interests for the
benefit of the Holders
of the Regular Certificates and the Class R-3 Interest. The
Trustee acknowledges
receipt of the REMIC 2 Regular Interests (each of which is
uncertificated) and
declares that it holds and will hold the same in trust for the
exclusive use and
benefit of the Holders of the Regular Certificates and of the
Class R-3
Interest. The interests evidenced by the Class R-3 Interest,
together with the
REMIC 3 Regular Interests, constitute the entire beneficial
ownership interest
in REMIC 3.
(c) In exchange for the REMIC 2 Regular Interests and,
concurrently with the assignment to the Trustee thereof,
pursuant to the written
request of the Depositor executed by an officer of the
Depositor, the Trustee
has executed, authenticated and delivered to or upon the order
of the Depositor,
the Regular Certificates in authorized denominations evidencing
(together with
the Class R-3 Interest) the entire beneficial ownership interest
in REMIC 3.
(d) Concurrently with (i) the assignment and delivery to the
Trustee of REMIC 1 (including the Residual Interest therein
represented by the
Class A-RL Certificates) and the acceptance by the Trustee
thereof, pursuant to
Section 2.01, Section 2.02 and Section 2.09(a); and (ii) the
assignment and
delivery to the Trustee of REMIC 2 (including the Residual
Interest therein
represented by the Class R-2 Interest) and the acceptance by the
Trustee
thereof, pursuant to Section 2.09(b); and (iii) the assignment
and delivery to
the Trustee of REMIC 3 (including the Residual Interest therein
represented by
the Class R-3 Interest) and the acceptance by the Trustee
thereof, pursuant to
Section 2.09(c), the Trustee, pursuant to the written request of
the Depositor
executed by an officer of the Depositor, has executed,
authenticated and
delivered to or upon the order of the Depositor, the Class A-RL
and the Class
A-R Certificates in authorized denominations evidencing the
Class R-2 Interest
and the Class R-3 Interest.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01 Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Servicer
shall service and administer the Mortgage Loans in accordance
with the terms of
this Agreement and with Accepted Servicing Practices.
Notwithstanding anything
in this Agreement, any Subservicing Agreement or the Credit Risk
Management
Agreement to the contrary, Wilshire shall not have any duty or
obligation to
enforce the Credit Risk Management Agreement or to supervise,
monitor or oversee
the activities of the Credit Risk Manager under the Credit Risk
Management
Agreement with respect to any action taken or not taken by
Wilshire pursuant to
a recommendation of the Credit Risk Manager. In connection with
such servicing
and administration, the Servicer shall have full power and
authority, acting
alone and/or through Subservicers as provided in Section 3.02
hereof, to do or
cause to be done any and all things that it may deem necessary
or desirable in
connection with such servicing and administration, including but
not limited to,
the power and authority, subject to the terms hereof (i) to
execute and deliver,
on behalf of the Certificateholders and the Trustee, customary
consents or
waivers and other instruments and documents, (ii) to consent to
transfers of any
Mortgaged Property and assumptions of the Mortgage Notes and
related Mortgages
(but only in the manner provided in this Agreement), (iii) to
collect any
Insurance Proceeds and other Liquidation Proceeds, and (iv) to
effectuate
foreclosure or other conversion of the ownership of the
Mortgaged Property
securing any Mortgage Loan; provided that the Servicer shall not
take any action
that is materially inconsistent with or materially prejudices
the interests of
the Trust Fund or the Certificateholders in any Mortgage Loan or
the rights and
interests of the Depositor, the Trustee or the
Certificateholders under this
Agreement unless such action is specifically called for by the
terms hereof. The
Trustee will provide a limited power of attorney to the
Servicer, prepared by
the Servicer and reasonably acceptable to the Trustee, to permit
the Servicer to
act on behalf of the Trustee under this Agreement. The Servicer
hereby
indemnifies the Trustee for all costs and expenses incurred by
the Trustee in
connection with the negligent or willful misuse of such power of
attorney. The
Servicer shall represent and protect the interests of the Trust
Fund in the same
manner as it protects its own interests in mortgage loans in its
own portfolio
in any claim, proceeding or litigation regarding a Mortgage
Loan. The Servicer
further is hereby authorized and empowered in its own name or in
the name of the
Subservicer, when the Servicer or the Subservicer, as the case
may be, believes
it is appropriate in its best judgment to register any Mortgage
Loan on the
MERS(R) System, or cause the removal from the registration of
any Mortgage Loan
on the MERS(R) System, to execute and deliver, on behalf of the
Trustee and the
Certificateholders or any of them, any and all instruments of
assignment and
other comparable instruments with respect to such assignment or
re-recording of
a Mortgage in the name of MERS, solely as nominee for the
Trustee and its
successors and assigns. Any reasonable expenses incurred in
connection with the
actions described in the preceding sentence or as a result of
MERS discontinuing
or becoming unable to continue operations in connection with
the
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MERS(R) System, shall be reimbursable by the Trust Fund to the
Servicer.
Notwithstanding the foregoing, subject to Section 3.05(a), the
Servicer shall
not make or permit any modification, waiver or amendment of any
Mortgage Loan
that would both constitute a sale or exchange of such Mortgage
Loan within the
meaning of Section 1001 of the Code and any proposed, temporary
or final
regulations promulgated thereunder (other than in connection
with a proposed
conveyance or assumption of such Mortgage Loan that is treated
as a Principal
Prepayment in Full pursuant to Section 3.10 hereof) which would
cause any of
REMIC 1, REMIC 2 or REMIC 3 to fail to qualify as a REMIC.
Without limiting the
generality of the foregoing, the Servicer, in its own name or in
the name of the
Depositor and the Trustee, is hereby authorized and empowered by
the Depositor
and the Trustee, when the Servicer believes it appropriate in
its reasonable
judgment, to execute and deliver, on behalf of the Trustee, the
Depositor, the
Certificateholders or any of them, any and all instruments of
satisfaction or
cancellation, or of partial or full release or discharge and all
other
comparable instruments, with respect to the Mortgage Loans, and
with respect to
the Mortgaged Properties held for the benefit of the
Certificateholders. The
Servicer shall prepare and deliver to the Depositor and/or the
Trustee such
documents requiring execution and delivery by either or both of
them as are
necessary or appropriate to enable the Servicer to service and
administer the
Mortgage Loans to the extent that the Servicer is not permitted
to execute and
deliver such documents pursuant to the preceding sentence. Upon
receipt of such
documents and a written request signed by an authorized officer,
the Depositor
and/or the Trustee shall execute such documents and deliver them
to the
Servicer.
In accordance with the standards of the preceding paragraph,
the Servicer shall advance or cause to be advanced funds as
necessary for the
purpose of effecting the payment of taxes and assessments on any
Mortgaged
Property (to the extent the Servicer has been notified that such
taxes or
assessments have not paid by the related Mortgagor or the owner
or the servicer
of the related First Mortgage Loan), which advances shall be
reimbursable in the
first instance from related collections from the Mortgagors
pursuant to Section
3.06, and further as provided in Section 3.08; provided,
however, that the
Servicer shall be required to advance only to the extent that
such advances, in
the good faith judgment of the Servicer, will be recoverable by
the Servicer out
of Insurance Proceeds, Liquidation Proceeds, or otherwise out of
the proceeds of
the related Mortgage Loan; and provided, further, that such
payments shall be
advanced within such time period required to avoid the loss of
the Mortgaged
Property by foreclosure of a tax or other lien. The costs
incurred by the
Servicer, if any, in effecting the timely payments of taxes and
assessments on
the Mortgaged Properties and related insurance premiums shall
not, for the
purpose of calculating monthly distributions to the
Certificateholders, be added
to the Stated Principal Balances of the related Mortgage Loans,
notwithstanding
that the terms of such Mortgage Loans so permit.
Subject to the provisions of the first paragraph of this
Section, the Trustee shall execute, at the written request of
the Servicer, and
furnish to the Servicer and any Subservicer such documents as
are necessary or
appropriate to enable the Servicer or any Subservicer to carry
out their
servicing and administrative duties hereunder, and the Trustee
hereby grants to
the Servicer a power of attorney, to be completed in the form of
Exhibit AA
hereto, to carry out such
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duties. The Trustee shall not be liable for the actions of the
Servicer or any
Subservicers under such powers of attorney.
If the Mortgage relating to a Mortgage Loan had a lien
senior
to the Mortgage Loan on the related Mortgaged Property as of the
Cut-off Date,
then the Servicer, in such capacity, may consent to the
refinancing of the prior
senior lien, provided that the following requirements are
met:
(i) the resulting Combined Loan-to-Value Ratio of such
Mortgage Loan is no higher than the Combined Loan-to-Value Ratio
prior
to such refinancing; and
(ii) the interest rate, or, in the case of an adjustable
rate
existing senior lien, the maximum interest rate, for the
loan
evidencing the refinanced senior lien is no more than 2.0%
higher than
the interest rate or the maximum interest rate, as the case may
be, on
the loan evidencing the existing senior lien immediately prior
to the
date of such refinancing; and
(iii) the loan evidencing the refinanced senior lien is not
subject to negative amortization.
With respect to the Mortgage Loans, the Servicer agrees
that,
with respect to the Mortgagors of such Mortgage Loans, the
Servicer shall
furnish, in accordance with the Fair Credit Reporting Act and
its implementing
regulations, accurate and complete information on its borrower
credit files to
Equifax, Experian and Trans Union Credit Information Company on
a monthly basis.
SECTION 3.02 Subservicing; Enforcement of the Obligations of
Subservicers.
(a) The Mortgage Loans may be subserviced by a Subservicer
on
behalf of the Servicer in accordance with the servicing
provisions of this
Agreement, provided that the Subservicer is an approved Fannie
Mae or Freddie
Mac seller/servicer in good standing. The Servicer may perform
any of its
servicing responsibilities hereunder or may cause the
Subservicer to perform any
such servicing responsibilities on its behalf, but the use by
the Servicer of
the Subservicer shall not release the Servicer from any of its
obligations
hereunder and the Servicer shall remain responsible hereunder
for all acts and
omissions of the Subservicer as fully as if such acts and
omissions were those
of the Servicer. The Servicer shall pay all fees and expenses of
any Subservicer
engaged by the Servicer from its own funds.
Notwithstanding the foregoing, the Servicer shall be
entitled
to outsource one or more separate servicing functions to a
Person (each, an
"Outsourcer") that does not meet the eligibility requirements
for a Subservicer,
so long as such outsourcing does not constitute the delegation
of the Servicer's
obligation to perform all or substantially all of the servicing
of the related
Mortgage Loans to such Outsourcer. In such event, the use by the
Servicer of any
such Outsourcer shall not release the Servicer from any of its
obligations
hereunder and the Servicer
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shall remain responsible hereunder for all acts and omissions of
such Outsourcer
as fully as if such acts and omissions were those of the
Servicer, and the
Servicer shall pay all fees and expenses of the Outsourcer from
the Servicer's
own funds.
(b) At the cost and expense of the Servicer, without any
right
of reimbursement from the Depositor, Trustee, the Trust Fund, or
the Collection
Account, the Servicer shall be entitled to terminate the rights
and
responsibilities of its Subservicer and arrange for any
servicing
responsibilities to be performed by a successor Subservicer
meeting the
requirements set forth in Section 3.02(a), provided, however,
that nothing
contained herein shall be deemed to prevent or prohibit the
Servicer, at the
Servicer's option, from electing to service the related Mortgage
Loans itself.
In the event that the Servicer's responsibilities and duties
under this
Agreement are terminated pursuant to Section 7.01, and if
requested to do so by
the Trustee, the Servicer shall at its own cost and expense
terminate the rights
and responsibilities of its Subservicer as soon as is reasonably
possible. The
Servicer shall pay all fees, expenses or penalties necessary in
order to
terminate the rights and responsibilities of its Subservicer
from the Servicer's
own funds without any right of reimbursement from the Depositor,
Trustee, the
Trust Fund, or the Collection Account.
(c) Notwithstanding any of the provisions of this Agreement
relating to agreements or arrangements between the Servicer and
its Subservicer,
the Servicer and its Outsourcer, or any reference herein to
actions taken
through the Subservicer, the Outsourcer, or otherwise, the
Servicer shall not be
relieved of its obligations to the Depositor, Trustee or
Certificateholders and
shall be obligated to the same extent and under the same terms
and conditions as
if it alone were servicing and administering the Mortgage Loans.
The Servicer
shall be entitled to enter into an agreement with its
Subservicer and Outsourcer
for indemnification of the Servicer or Outsourcer, as
applicable, by such
Subservicer and nothing contained in this Agreement shall be
deemed to limit or
modify such indemnification.
For purposes of this Agreement, the Servicer shall be deemed
to have received any collections, recoveries or payments with
respect to the
related Mortgage Loans that are received by a related
Subservicer or Outsourcer,
as applicable, regardless of whether such payments are remitted
by the
Subservicer or Outsourcer, as applicable, to the Servicer.
Any Subservicing Agreement and any other transactions or
services relating to the Mortgage Loans involving a Subservicer
or an Outsourcer
shall be deemed to be between the Subservicer or an Outsourcer,
and the Servicer
alone, and the Depositor and the Trustee shall have no
obligations, duties or
liabilities with respect to a Subservicer including no
obligation, duty or
liability of the Depositor and Trustee or the Trust Fund to pay
a Subservicer's
fees and expenses.
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SECTION 3.03 [Reserved].
SECTION 3.04 Trustee to Act as Servicer.
(a) In the event that the Servicer shall for any reason no
longer be the Servicer hereunder (including by reason of an
Event of Default),
the Trustee or its successor shall thereupon assume all of the
rights and
obligations of the Servicer hereunder arising thereafter (except
that the
Trustee shall not be (i) liable for losses of the Servicer
pursuant to Section
3.09 hereof or any acts or omissions of the related predecessor
Servicer
hereunder, (ii) obligated to make Advances if it is prohibited
from doing so by
applicable law or (iii) deemed to have made any representations
and warranties
of the Servicer hereunder). Any such assumption shall be subject
to Section 7.02
hereof.
The Servicer shall, upon request of the Trustee, but at the
expense of the Servicer, deliver to the assuming party all
documents and records
relating to each Subservicing Agreement or substitute
Subservicing Agreement and
the Mortgage Loans then being serviced thereunder and hereunder
by the Servicer
and an accounting of amounts collected or held by it and
otherwise use its best
efforts to effect the orderly and efficient transfer of the
substitute
Subservicing Agreement to the assuming party.
(b) [reserved]
SECTION 3.05 Collection of Mortgage Loans; Collection
Accounts; Certificate Account; Pre-Funding
Account; Capitalized Interest Account.
(a) Continuously from the date hereof until the principal
and
interest on all Mortgage Loans have been paid in full or such
Mortgage Loans
have become Liquidated Mortgage Loans, the Servicer shall
proceed in accordance
with Accepted Servicing Practices to collect all payments due
under each of the
Mortgage Loans when the same shall become due and payable to the
extent
consistent with this Agreement and, consistent with such
standard, with respect
to Escrow Mortgage Loans, the Servicer shall ascertain and
estimate Escrow
Payments and all other charges that will become due and payable
with respect to
the Mortgage Loans and the Mortgaged Properties, to the end that
the
installments payable by the Mortgagors will be sufficient to pay
such charges as
and when they become due and payable. Consistent with the terms
of this
Agreement, the Servicer may also waive, modify or vary any term
of any Mortgage
Loan or consent to the postponement of strict compliance with
any such term or
in any manner grant indulgence to any Mortgagor if in the
Servicer's
determination such waiver, modification, postponement or
indulgence is not
materially adverse to the interests of the Certificateholders
(taking into
account any estimated Realized Loss that might result absent
such action);
provided, however, that the Servicer may not modify materially
or permit any
Subservicer to modify any Mortgage Loan (unless such Mortgage
Loan is in default
or, in the judgment of the Servicer, such default is reasonably
foreseeable),
including without limitation any modification that would change
the Mortgage
Rate, forgive the payment of any principal or interest (unless
in connection
with the liquidation of the related Mortgage Loan or except in
connection with
Principal
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Prepayments to the extent that such reamortization is not
inconsistent with the
terms of the Mortgage Loan), increase the principal balance, or
extend the final
maturity date of such Mortgage Loan, and, provided however, that
in no event
shall such modification reduce the interest rate on a Mortgage
Loan below the
rate at which the Servicing Fee with respect to such Mortgage
Loan accrues and
provided, further, that any such waiver, modification,
postponement or
indulgence granted to a Mortgagor by the Servicer in connection
with its
servicing of the related First Mortgage Loan shall not be
considered relevant to
a determination of whether the Servicer has acted consistently
with the terms
and standards of this Agreement, so long as in the Servicer's
determination such
action is not materially adverse to the interests of the
Certificateholders. In
the event of any such arrangement that permits the deferment of
principal and
interest payment on any Mortgage Loan, the Servicer shall make
Advances on the
related Mortgage Loan in accordance with the provisions of
Section 4.01 during
the scheduled period in accordance with the amortization
schedule of such
Mortgage Loan without modification thereof by reason of such
arrangements. The
Servicer shall not be required to institute or join in
litigation with respect
to collection of any payment (whether under a Mortgage, Mortgage
Note or
otherwise or against any public or governmental authority with
respect to a
taking or condemnation) if it reasonably believes that enforcing
the provision
of the Mortgage or other instrument pursuant to which such
payment is required
is prohibited by applicable law.
(b) The Servicer shall segregate and hold all funds
collected
and received pursuant to a Mortgage Loan separate and apart from
any of its own
funds and general assets and shall establish and maintain one or
more Collection
Accounts, each of which shall be an Eligible Account, titled
"[Servicer's name],
in trust for the Holders of Credit Suisse First Boston Mortgage
Securities
Corp., Home Equity Mortgage Pass-Through Certificates, Series
2005-1" or, if
established and maintained by a Subservicer on behalf of the
Servicer,
"[Subservicer's name], in trust for [Servicer's name]" or
"[Subservicer's name],
as agent, trustee and/or bailee of principal and interest
custodial account for
[Servicer's name], its successors and assigns, for various
owners of interest in
[Servicer's name] mortgage-backed pools". Any funds deposited in
a Collection
Account shall at all times be either invested in Eligible
Investments or shall
be fully insured to the full extent permitted under applicable
law. Funds
deposited in a Collection Account may be drawn on by the
Servicer in accordance
with Section 3.08.
The Servicer shall deposit in the Collection Account within
two Business Days of receipt and retain therein, the following
collections
remitted by Subservicers or payments received by the Servicer
and payments made
by the Servicer subsequent to the Cut-off Date, other than
Scheduled Payments
due on or before the Cut-off Date:
(i) all payments on account of principal on the Mortgage
Loans, including all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage
Loans
adjusted to the per annum rate equal to the Mortgage Rate
reduced by
the related Servicing Fee Rate;
(iii) all Liquidation Proceeds on the Mortgage Loans;
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(iv) all Insurance Proceeds on the Mortgage Loans including
amounts required to be deposited pursuant to Section 3.09 (other
than
proceeds to be held in the Escrow Account and applied to the
restoration or repair of the Mortgaged Property or released to
the
Mortgagor in accordance with Section 3.09);
(v) all Advances made by the Servicer pursuant to Section
4.01;
(vi) with respect to each Principal Prepayment on the
Mortgage
Loans, the Compensating Interest Payment, if any, for the
related
Prepayment Period;
(vii) any amounts required to be deposited by the Servicer
in
respect of net monthly income from REO Property pursuant to
Section
3.11; and
(viii) any other amounts required to be deposited hereunder
including all collected Prepayment Charges.
The foregoing requirements for deposit into each Collection
Account shall be exclusive, it being understood and agreed that,
without
limiting the generality of the foregoing, Ancillary Income need
not be deposited
by the Servicer into such Collection Account. In addition,
notwithstanding the
provisions of this Section 3.05, the Servicer may deduct from
amounts received
by it, prior to deposit to the applicable Collection Account,
any portion of any
Scheduled Payment representing the applicable Servicing Fee. In
the event that
the Servicer shall remit any amount not required to be remitted,
it may at any
time withdraw or direct the institution maintaining the related
Collection
Account to withdraw such amount from such Collection Account,
any provision
herein to the contrary notwithstanding. Such withdrawal or
direction may be
accomplished by delivering written notice thereof to the Trustee
or such other
institution maintaining such Collection Account which describes
the amounts
deposited in error in such Collection Account. The Servicer
shall maintain
adequate records with respect to all withdrawals made by it
pursuant to this
Section. All funds deposited in a Collection Account shall be
held in trust for
the Certificateholders until withdrawn in accordance with
Section 3.08.
(c) On or prior to the Closing Date, the Trustee shall
establish and maintain, on behalf of the Certificateholders, the
Certificate
Account. The Trustee shall, promptly upon receipt, deposit in
the Certificate
Account and retain therein the following:
(i) the aggregate amount remitted by the Servicer to the
Trustee pursuant to Section 3.08(viii);
(ii) any amount deposited by the Trustee pursuant to Section
3.05(d) in connection with any losses on Eligible Investments;
and
(iii) any other amounts deposited hereunder which are
required
to be deposited in the Certificate Account.
In the event that the Servicer shall remit to the Trustee
any
amount not required to be remitted, it may at any time direct
the Trustee to
withdraw such amount from the Certificate
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Account, any provision herein to the contrary notwithstanding.
Such direction
may be accomplished by delivering an Officer's Certificate to
the Trustee which
describes the amounts deposited in error in the Certificate
Account. All funds
deposited in the Certificate Account shall be held by the
Trustee in trust for
the Certificateholders until disbursed in accordance with this
Agreement or
withdrawn in accordance with Section 3.08(b). In no event shall
the Trustee
incur liability for withdrawals from the Certificate Account at
the direction of
the Servicer.
(d) Each institution at which a Collection Account, the
Certificate Account or the Pre-Funding Account is maintained
shall either hold
such funds on deposit uninvested or shall invest the funds
therein as directed
in writing by the Servicer (in the case of a Collection
Account), the Trustee
(in the case of the Certificate Account) or the Depositor (in
the case of the
Pre-Funding Account), in Eligible Investments, which shall
mature not later than
(i) in the case of a Collection Account, the second Business Day
immediately
preceding the related Distribution Date and (ii) in the case of
the Certificate
Account and the Pre-Funding Account, the Business Day
immediately preceding the
Distribution Date and, in each case, shall not be sold or
disposed of prior to
its maturity. All income and gain net of any losses realized
from any such
balances or investment of funds on deposit in a Collection
Account shall be for
the benefit of the Servicer as servicing compensation and shall
be remitted to
it monthly as provided herein. The amount of any realized losses
in a Collection
Account incurred in any such account in respect of any such
investments shall
promptly be deposited by the Servicer in the related Collection
Account. The
Trustee in its fiduciary capacity shall not be liable for the
amount of any loss
incurred in respect of any investment or lack of investment of
funds held in a
Collection Account or the Pre-Funding Account. All income and
gain net of any
losses realized from any such investment of funds on deposit in
the Certificate
Account shall be for the benefit of the Trustee as compensation
and shall be
remitted to it monthly as provided herein. The amount of any
realized losses in
the Certificate Account incurred in any such account in respect
of any such
investments shall promptly be deposited by the Trustee in the
Certificate
Account. All income and gain net of any losses realized from any
such balances
or investment of funds on deposit in the Pre-Funding Account
shall be for the
benefit of the Depositor and shall be remitted to it
monthly.
(e) The Servicer shall give notice to the Trustee, the
Seller,
each Rating Agency and the Depositor of any proposed change of
the location of
the related Collection Account prior to any change thereof. The
Trustee shall
give notice to the Servicer, the Seller, each Rating Agency and
the Depositor of
any proposed change of the location of the Certificate Account
prior to any
change thereof.
(f) The Trustee shall establish and maintain, on behalf of
the
Certificateholders, the Pre-Funding Account. On the Closing
Date, the Depositor
shall remit the Pre-Funding Amount to the Trustee for deposit in
the Pre-Funding
Account. On each Subsequent Transfer Date, upon satisfaction of
the conditions
for such Subsequent Transfer Date set forth in Section 2.01(f),
with respect to
the related Subsequent Transfer Agreement, the Trustee shall
remit to the
Depositor the applicable Aggregate Subsequent Transfer Amount as
payment of the
purchase price for the related Subsequent Mortgage Loans.
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If any funds remain in the Pre-Funding Account on May 24,
2005, to the extent they represent interest earnings on the
amounts originally
deposited into the Pre-Funding Account, the Trustee shall
distribute them to the
order of the Depositor. The remaining funds in the Pre-Funding
Account shall be
transferred to the Certificate Account to be included as part of
principal
distributions to the Certificates, in accordance with the
priorities set forth
herein, on the May 2005 Distribution Date.
(g) The Trustee shall establish and maintain, on behalf of
the
Certificateholders, the Capitalized Interest Account. On the
Closing Date, the
Depositor shall remit the Capitalized Interest Deposit to the
Trustee for
deposit in the Capitalized Interest Account. On the Business Day
prior to each
of the March 2005, April 2005 and May 2005 Distribution Dates,
the Trustee shall
transfer from each Capitalized Interest Account to the
Certificate Account an
amount equal to the Capitalized Interest Requirement for such
Distribution Date.
On each of the March 2005 and April 2005 Distribution Dates, the
Overfunded
Interest Amount shall be withdrawn from the Capitalized Interest
Account and
paid to the Depositor. Any funds remaining in the Capitalized
Interest Account
immediately after the May 2005 Distribution Date shall be paid
to the Depositor.
SECTION 3.06 Establishment of and Deposits to Escrow
Accounts;
Permitted Withdrawals from Escrow Accounts;
Payments of Taxes, Insurance and Other Charges.
(a) To the extent required by the related Mortgage Note and
not in violation of current law, the Servicer shall segregate
and hold all funds
collected and received pursuant to a Mortgage Loan constituting
Escrow Payments
separate and apart from any of its own funds and general assets
and shall
establish and maintain one or more Escrow Accounts, each of
which shall be an
Eligible Account, titled, "[Servicer's name], in trust for
"Credit Suisse First
Boston Mortgage Securities Corp., Home Equity Mortgage
Pass-Through
Certificates, Series 2005-1 and various mortgagors" or, if
established and
maintained by a Subservicer on behalf of the Servicer,
"[Subservicer's name], in
trust for [Servicer's name]" or "[Subservicer's name], as agent,
trustee and/or
bailee of taxes and insurance custodial account for [Servicer's
name], its
successors and assigns, for various owners of interest in
[Servicer's name]
mortgage-backed pools". Funds deposited in the Escrow Account
may be drawn on by
the Servicer in accordance with Section 3.06(b). The creation of
any Escrow
Account shall be evidenced by a certification in the form of
Exhibit P-1 hereto,
in the case of an account established with the Servicer, or by a
letter
agreement in the form of Exhibit P-2 hereto, in the case of an
account held by a
depository other than the Servicer. A copy of such certification
shall be
furnished to the Depositor and Trustee.
(b) The Servicer shall deposit in its Escrow Account or
Accounts on a daily basis within one Business Day of receipt and
retain therein:
(i) all Escrow Payments collected on account of the related
Mortgage Loans, for the purpose of effecting timely payment of
any such
items as required under the terms of this Agreement; and
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(ii) all amounts representing Insurance Proceeds which are
to
be applied to the restoration or repair of any Mortgaged
Property.
The Servicer shall make withdrawals from the Escrow Account
only to effect such payments as are required under this
Agreement, as set forth
in Section 3.06(c). The Servicer shall be entitled to retain any
interest paid
on funds deposited in the related Escrow Account by the
depository institution,
other than interest on escrowed funds required by law to be paid
to the
Mortgagor. To the extent required by law, the Servicer shall pay
interest on
escrowed funds to the Mortgagor notwithstanding that the Escrow
Account may be
non-interest bearing or that interest paid thereon is
insufficient for such
purposes.
(c) Withdrawals from the Escrow Account or Accounts may be
made by the Servicer only:
(i) to effect timely payments of ground rents, taxes,
assessments, water rates, mortgage insurance premiums,
condominium
charges, fire and hazard insurance premiums or other items
constituting
Escrow Payments for the related Mortgage;
(ii) to reimburse the Servicer for any Servicing Advances
made
by the Servicer pursuant to this Agreement with respect to a
related
Mortgage Loan, but only from amounts received on the related
Mortgage
Loan which represent late collections of Escrow Payments
thereunder;
(iii) to refund to any Mortgagor any funds found to be in
excess of the amounts required under the terms of the related
Mortgage
Loan;
(iv) for transfer to the related Collection Account to
reduce
the principal balance of the related Mortgage Loan in accordance
with
the terms of the related Mortgage and Mortgage Note;
(v) for application to restore or repair of the related
Mortgaged Property in accordance with the procedures outlined
in
Section 3.09;
(vi) to pay to the Servicer, or any Mortgagor to the extent
required by law, any interest paid on the funds deposited in
such
Escrow Account;
(vii) to clear and terminate such Escrow Account on the
termination of this Agreement; and
(viii) to remove funds inadvertently placed in the Escrow
Account by the Servicer.
(d) No later than the Closing Date, the Servicer shall
establish and maintain a sub-account of the Collection Account
titled
"[Servicer's name], Simple Interest Excess Sub-Account in trust
for the Holders
of Credit Suisse First Boston Mortgage Securities Corp., Home
Equity Mortgage
Pass-Through Certificates, Series 2005-1". The Servicer shall,
on each
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Determination Date transfer from the Collection Account to the
Simple Interest
Excess Sub-Account all Net Simple Interest Excess, if any,
pursuant to Section
3.08(ix), and shall maintain a record of all such deposits.
(e) The Servicer shall withdraw amounts on deposit in the
Simple Interest Excess Sub-Account on each Determination Date
for deposit to the
Certificate Account in an amount equal to the lesser of (i) the
amount on
deposit therein, and (ii) the Net Simple Interest Shortfall for
such
Distribution Date.
(f) The Servicer shall remit to the Trustee which shall
thereupon distribute to the Class X-1 Certificateholder, based
on the
information provided to it by the Servicer, 90% of the balance
in the Simple
Interest Excess Sub-Account on the Distribution Date each year
occurring in
February, commencing in February 2006. Such distributions shall
be deemed to be
made on a first-in, first-out basis. In addition, the Servicer
shall clear and
terminate the Simple Interest Excess Sub-Account upon the
termination of this
Agreement and retain any funds remaining therein.
(g) Amounts on deposit in the Simple Interest Excess
Sub-Account may be invested in Eligible Investments. All income
and gain net of
any losses realized from any such balances or investment of
funds on deposit in
the Simple Interest Excess Sub-Account shall be for the benefit
of the Servicer
as servicing compensation and shall be remitted to it monthly.
The amount of any
net investment losses in the Simple Interest Excess Sub-Account
shall promptly
be deposited by the Servicer in such Simple Interest Excess
Sub-Account.
SECTION 3.07 Access to Certain Documentation and Information
Regarding the Mortgage Loans; Inspections.
(a) The Servicer shall afford the Depositor and the Trustee
reasonable access to all records and documentation regarding the
Mortgage Loans
and all accounts, insurance information and other matters
relating to this
Agreement, such access being afforded without charge, but only
upon reasonable
request and during normal business hours at the office
designated by the
Servicer.
(b) The Servicer shall inspect the Mortgaged Properties as
often as deemed necessary by the Servicer in the Servicer's sole
discretion, to
assure itself that the value of such Mortgaged Property is being
preserved. In
addition, if any Mortgage Loan is more than 60 days delinquent,
the Servicer
shall conduct subsequent inspections in accordance with Accepted
Servicing
Practices or as may be required by the primary mortgage guaranty
insurer. The
Servicer shall keep a written or electronic report of each such
inspection.
SECTION 3.08 Permitted Withdrawals from the Collection
Accounts and Certificate Account.
The Servicer may (and in the case of clause (viii) below,
shall) from time to time make withdrawals from the related
Collection Account
for the following purposes:
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(i) to pay to the Servicer (to the extent not previously
retained by the Servicer) the servicing compensation to which it
is
entitled pursuant to Section 3.14, and to pay to the Servicer,
as
additional servicing compensation, earnings on or investment
income
with respect to funds in or credited to such Collection
Account;
(ii) to reimburse the Servicer for unreimbursed Advances
made
by it, such right of reimbursement pursuant to this subclause
(ii)
being limited to amounts received on the Mortgage Loan(s) in
respect of
which any such Advance was made (including late recoveries of
payments,
Liquidation Proceeds and Insurance Proceeds, amounts
representing
proceeds of other insurance policies, if any, covering the
related
Mortgaged Property, rental and other income from REO Property
and
proceeds of any purchase or repurchase of the related Mortgage
Loan to
the extent deposited in the Collection Account);
(iii) to reimburse the Servicer for any Nonrecoverable
Advance;
(iv) to reimburse the Servicer for (A) unreimbursed
Servicing
Advances, the Servicer's right to reimbursement pursuant to this
clause
(A) with respect to any Mortgage Loan being limited to amounts
received
on such Mortgage Loan which represent late payments of principal
and/or
interest (including, without limitation, Liquidation Proceeds
and
Insurance Proceeds, amounts representing proceeds of other
insurance
policies, if any, covering the related Mortgaged Property,
rental and
other income from REO Property and proceeds of any purchase
or
repurchase of the related Mortgage Loan with respect to such
Mortgage
Loan) respecting which any such advance was made and (B) for
unpaid
Servicing Fees as provided in Section 3.11;
(v) to pay to the purchaser, with respect to each Mortgage
Loan or property acquired in respect thereof that has been
purchased
pursuant to Section 2.02, 2.03 or 3.1
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