EXHIBIT 4
================================================================================
ASSET BACKED FUNDING CORPORATION,
Depositor
WELLS FARGO BANK, N.A.,
Master Servicer and Securities Administrator
and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2005
ABFC 2005-HE1 Trust
ABFC Asset-Backed Certificates, Series 2005-HE1
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms
.................................................
Section 1.02 Accounting
....................................................
Section 1.03 Rights of the NIMS Insurer
....................................
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans
..................................
Section 2.02 Acceptance by Trustee
.........................................
Section 2.03 Repurchase or Substitution of
Mortgage Loans by an
Originator or the Seller ......................................
Section 2.04 [Reserved]
....................................................
Section 2.05 Representations, Warranties and
Covenants of the
Master Servicer ...............................................
Section 2.06 Representations and Warranties of
the Depositor ...............
Section 2.07 Issuance of Certificates and the
Uncertificated
Regular Interests .............................................
ARTICLE III
ADMINISTRATION AND MASTER SERVICING
OF THE TRUST FUND
Section 3.01 Master Servicer to Act as Master
Servicer .....................
Section 3.02 Monitoring of Servicers
.......................................
Section 3.03 Maintenance of Primary Mortgage
Insurance
Policy; Claims ................................................
Section 3.04 Rights of the Depositor, the
Securities
Administrator and the Trustee in Respect of
the Master Servicer ...........................................
Section 3.05 Trustee to Act as Master Servicer
.............................
Section 3.06 Collection Accounts
...........................................
Section 3.07 Master Servicer Custodial Account,
Distribution
Account and Reserve Accounts ..................................
Section 3.08 Collection of Taxes, Assessments
and Similar
Items; Escrow Accounts ........................................
Section 3.09 Permitted Withdrawals from the
Master Servicer
Custodial Account and the Distribution Account ................
Section 3.10 Maintenance of Hazard Insurance
...............................
Section 3.11 Presentment of Claims and
Collection of Proceeds ..............
Section 3.12 Realization Upon Defaulted
Mortgage Loans; REO
Property ......................................................
Section 3.13 Due-on-Sale Clauses; Assumption
and Substitution
Agreements ....................................................
Section 3.14 Trustee to Cooperate; Release of
Files ........................
Section 3.15 Master Servicing Compensation
.................................
Section 3.16 Annual Statement as to Compliance
.............................
Section 3.17 Annual Independent Certified
Public Accountants'
Reports .......................................................
Section 3.18 Access to Certain Documentation
and Information
Regarding the Mortgage Loans ..................................
Section 3.19 Duties of Credit Risk Manager
.................................
Section 3.20 Liability of Master Servicer;
Indemnification .................
Section 3.21 Limitation of Liability of the
Credit Risk Manager ............
Section 3.22 No Personal Solicitation
......................................
Section 3.23 Periodic Filings
..............................................
Section 3.24 Fidelity Bond; Errors and
Omissions Insurance .................
ARTICLE IV
FLOW OF FUNDS
Section 4.01 Interest Distributions
........................................
Section 4.02 Distributions of Principal and
Monthly Excess
Cashflow Amounts ..............................................
Section 4.03 Allocation of Losses
..........................................
Section 4.04 Method of Distribution
........................................
Section 4.05 Distributions on Book-Entry
Certificates ......................
Section 4.06 Statements
....................................................
Section 4.07 Remittance Reports
............................................
Section 4.08 REMIC Distributions
...........................................
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates
..............................................
Section 5.02 Registration of Transfer and
Exchange of Certificates .........
Section 5.03 Mutilated, Destroyed, Lost or
Stolen Certificates .............
Section 5.04 Persons Deemed Owners
.........................................
Section 5.05 Appointment of Paying Agent
...................................
ARTICLE VI
THE MASTER SERVICER AND THE DEPOSITOR
Section 6.01 Liability of the Master Servicer
and the Depositor ............
Section 6.02 Merger or Consolidation of, or
Assumption of the
Obligations of, the Master Servicer or the Depositor ..........
Section 6.03 Master Servicer Not to Resign
.................................
ARTICLE VII
DEFAULT
Section 7.01 Master Servicer Event of
Termination ..........................
Section 7.02 Remedies of Trustee
...........................................
Section 7.03 Directions by Certificateholders
and Duties of
Trustee During Master Servicer Event of Termination ...........
Section 7.04 Action upon Certain Failures of
the Master Servicer
and upon Master Servicer Event of Termination .................
Section 7.05 Trustee to Act; Appointment of
Successor ......................
Section 7.06 Notification to Certificateholders
............................
ARTICLE VIII
THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 8.01 Duties of Trustee and Securities
Administrator ................
Section 8.02 Certain Matters Affecting the
Trustee and the
Securities Administrator ......................................
Section 8.03 Neither the Trustee nor the
Securities Administrator
Liable for Certificates or Mortgage Loans .....................
Section 8.04 Trustee and Securities
Administrator May Own
Certificates ..................................................
Section 8.05 Securities Administrator's Fees
and Expenses and
Trustee Fees and Expenses .....................................
Section 8.06 Eligibility Requirements for
Trustee and the
Securities Administrator ......................................
Section 8.07 Resignation or Removal of Trustee
and the Securities
Administrator .................................................
Section 8.08 Successor Trustee or Securities
Administrator .................
Section 8.09 Merger or Consolidation of Trustee
or Securities
Administrator .................................................
Section 8.10 Appointment of Co-Trustee or
Separate Trustee .................
Section 8.11 Limitation of Liability
.......................................
Section 8.12 Trustee or Securities
Administrator May Enforce
Claims Without Possession of Certificates .....................
Section 8.13 Suits for Enforcement
.........................................
Section 8.14 Waiver of Bond Requirement
....................................
Section 8.15 Waiver of Inventory, Accounting
and Appraisal
Requirement ...................................................
Section 8.16 Appointment of Custodian
......................................
ARTICLE IX
REMIC AND GRANTOR TRUST ADMINISTRATION
Section 9.01 REMIC Administration
..........................................
Section 9.02 Prohibited Transactions and
Activities ........................
Section 9.03 Indemnification with Respect to
Certain Taxes and
Loss of REMIC Status ..........................................
Section 9.04 Grantor Trust Administration
..................................
ARTICLE X
TERMINATION
Section 10.01 Termination
..................................................
Section 10.02 Additional Termination
Requirements ..........................
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment
....................................................
Section 11.02 Recordation of Agreement;
Counterparts .......................
Section 11.03 Limitation on Rights of
Certificateholders ...................
Section 11.04 Governing Law; Jurisdiction
..................................
Section 11.05 Notices
......................................................
Section 11.06 Severability of Provisions
...................................
Section 11.07 Article and Section References
...............................
Section 11.08 Notice to the Rating Agencies and
the NIMS Insurer ...........
Section 11.09 Further Assurances
...........................................
Section 11.10 Third Party Beneficiary
......................................
Section 11.11 Acts of Certificateholders
...................................
<PAGE>
EXHIBITS:
Exhibit A-1SS Form of Class
A-1SS Certificates
Exhibit A-1MZ Form of Class
A-1MZ Certificates
Exhibit A-2SS Form of Class
A-2SS Certificates
Exhibit A-2MZ Form of Class
A-2MZ Certificates
Exhibit A-3A Form of
Class A-3A Certificates
Exhibit A-3B Form of
Class A-3B Certificates
Exhibit A-3C Form of
Class A-3C Certificates
Exhibit B-1 Form
of Class M-1 Certificates
Exhibit B-2 Form
of Class M-2 Certificates
Exhibit B-3 Form
of Class M-3 Certificates
Exhibit B-4 Form
of Class M-4 Certificates
Exhibit B-5 Form
of Class M-5 Certificates
Exhibit B-6 Form
of Class M-6 Certificates
Exhibit B-7 Form
of Class M-7 Certificates
Exhibit B-8 Form
of Class M-8 Certificates
Exhibit B-9 Form
of Class M-9 Certificates
Exhibit B-10 Form of
Class B-1 Certificates
Exhibit B-11 Form of
Class B-2 Certificates
Exhibit B-12 Form of
Class B-3 Certificates
Exhibit C-1 Form
of Class CE Certificates
Exhibit C-2 Form
of Class P Certificates
Exhibit C-3 Form of
Class R Certificates
Exhibit D-1
Group 1 Mortgage Loan Schedule
Exhibit D-2
Group 2 Mortgage Loan Schedule
Exhibit D-3
Group 3 Mortgage Loan Schedule
Exhibit E
Form of Request for Release
Exhibit F-1 Form
of Initial Certification
Exhibit F-2 Form
of Final Certification
Exhibit F-3 Form
of Receipt of Mortgage Note
Exhibit G
Mortgage Loan Purchase Agreement
Exhibit H
Form of Lost Note Affidavit
Exhibit I
Form of ERISA Representation
Exhibit J-1 Form
of Investment Letter (Non-Rule 144A)
Exhibit J-2 Form
of Rule 144A Investment Letter
Exhibit K
Form of Class R Certificate Transfer Affidavit
Exhibit L
Form of Transferor Certificate
Exhibit M
Monthly Information Provided by Master Servicer
Exhibit N-1 Form
of Class A-1 Yield Maintenance Agreements
Exhibit N-2 Form
of Class A-2 Yield Maintenance Agreements
Exhibit N-3 Form
of Class A-3 Yield Maintenance Agreements
Exhibit N-4 Form
of Class M/B Yield Maintenance Agreements
Exhibit O
Form of Certification
Exhibit P
Form of Certification of the Securities Administrator to be
Provided to Master Servicer
<PAGE>
ASSET BACKED FUNDING CORPORATION, as depositor (the
"Depositor"),
WELLS FARGO BANK, N.A., as master servicer
(in such capacity, the "Master
Servicer") and as securities administrator
(in such capacity, the "Securities
Administrator"), and JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION, as trustee (the
"Trustee"), are entering into this Pooling
and Servicing Agreement, dated as of
March 1, 2005 (the "Agreement").
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 twenty-two
Classes of Certificates, designated as (i)
the Class A-1SS, Class A-1MZ, Class
A-2SS, Class A-2MZ, Class A-3A, Class A-3B
and Class A-3C Certificates, (ii) 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 and Class M-9 Certificates, (iii)
the Class B-1, Class B-2 and Class
B-3 Certificates, (iv) the Class CE
Certificates, (v) the Class P Certificates
and (vi) the Class R Certificate.
REMIC 1
As provided herein, the Securities Administrator will make an
election to treat the segregated pool of
assets consisting of the Mortgage Loans
and certain other related assets subject to
this Agreement (but exclusive of the
Yield Maintenance Agreements, the Reserve
Accounts, the Cap Carryover Amounts,
the Prepayment Charges, the Originator
Prepayment Charge Payment Amounts and the
Servicer Prepayment Charge Payment Amounts)
as a real estate investment conduit
(a "REMIC") for federal income tax
purposes, and such segregated pool of assets
will be designated as "REMIC 1." The Class
R-1 Interest will represent the sole
class of "residual interests" in REMIC 1
for purposes of the REMIC Provisions
under federal income tax law. The following
table irrevocably sets forth the
designation, the Uncertificated REMIC 1
Pass-Through Rate, the initial
Uncertificated Principal Balance, and
solely for purposes of satisfying Treasury
Regulations Section 1.860G-1(a)(4)(iii),
the "latest possible maturity date" for
each of the REMIC 1 Regular Interests. None
of the REMIC 1 Regular Interests
will be certificated.
================================================================================
Uncertificated
Initial
REMIC Pass-Through Uncertificated
Latest Possible
Designation
Rate
Balance
Maturity Date
--------------------------------------------------------------------------------
LT1AA
Variable(2)
$872,667,370.84
April 25, 2035
LT1A1SS
Variable(2)
$2,444,015.00
April 25, 2035
LT1A1MZ
Variable(2)
$271,560.00
April 25, 2035
LT1A2SS
Variable(2)
$2,170,050.00
April 25, 2035
LT1A2MZ
Variable(2)
$542,515.00 April 25,
2035
LT1A3A
Variable(2)
$682,720.00
April 25, 2035
LT1A3B
Variable(2)
$703,360.00
April 25, 2035
LT1A3C
Variable(2)
$140,400.00
April 25, 2035
LT1M1
Variable(2)
$463,050.00
April 25, 2035
LT1M2
Variable(2)
$284,955.00
April 25, 2035
LT1M3
Variable(2)
$155,830.00
April 25, 2035
LT1M4
Variable(2)
$155,835.00
April 25, 2035
LT1M5
Variable(2)
$155,835.00
April 25, 2035
LT1M6
Variable(2)
$133,570.00
April 25, 2035
LT1M7
Variable(2)
$102,405.00
April 25, 2035
LT1M8
Variable(2)
$93,500.00
April 25, 2035
LT1M9
Variable(2)
$62,335.00
April 25, 2035
LT1B1
Variable(2)
$57,880.00
April 25, 2035
LT1B2
Variable(2)
$89,045.00
April 25, 2035
LT1B3
Variable(2)
$106,860.00
April 25, 2035
LT1ZZ
Variable(2)
$8,993,818.18
April 25, 2035
LT1SUB
Variable(2)
$15,229.59
April 25, 2035
LT1GRP
Variable(2)
$69,541.09
April 25, 2035
LT2SUB
Variable(2)
$15,212.64
April 25, 2035
LT2GRP
Variable(2)
$69,463.94
April 25, 2035
LT3SUB
Variable(2)
8,560.75
April 25, 2035
LT3GRP
Variable(2)
$39,090.35
April 25, 2035
LT1XX
Variable(2)
$890,259,810.66
April 25, 2035
--------------------------------------------------------------------------------
(1) Solely for purposes of
Treasury Regulations Section
1.860G-1(a)(4)(iii), the Distribution Date in the month following
the
maturity
date for the Mortgage Loan with the latest maturity date has
been
designated as the "latest possible maturity date" for each REMIC
1
Regular
Interest.
(2) Calculated in accordance
with the definition of "Uncertificated REMIC 1
Pass-Through Rate" herein.
REMIC
2
As provided herein, the Securities Administrator shall make an
election to treat the segregated pool of
assets consisting of the REMIC 1
Regular Interests as a REMIC for federal
income tax purposes, and such
segregated pool of assets will be
designated as "REMIC 2." The Class R-2
Interest represents the sole class of
"residual interests" in REMIC 2 for
purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class
designation,
Certificate Interest Rate and Original
Class Certificate Principal Balance for
each Class of Certificates comprising the
interests in the Trust Fund created
hereunder:
================================================================================
Original
Class
Certificate
Certificate
Assumed Final
Class
Principal Balance Interest Rate
Maturity Dates
--------------------------------------------------------------------------------
A-1SS
$488,803,000
(1)
December 25, 2034
A-1MZ
$54,312,000
(2)
December 25, 2034
A-2SS
$434,010,000
(3)
November 25, 2034
A-2MZ
$108,503,000
(4)
November 25, 2034
A-3A
$136,544,000
(5)
January 25, 2024
A-3B
$140,672,000
(6)
June 25, 2033
A-3C
$28,080,000
(7)
December 25, 2034
M-1
$92,610,000
(8)
November 25, 2034
M-2
$56,991,000
(9)
October 25, 2034
M-3
$31,166,000
(10)
October 25, 2034
M-4
$31,167,000
(11)
September 25, 2034
M-5
$31,167,000
(12)
September 25, 2034
M-6
$26,714,000
(13)
August 25, 2034
M-7
$20,481,000
(14)
July 25, 2034
M-8
$18,700,000
(15)
June 25, 2034
M-9
$12,467,000
(16)
May 25, 2034
B-1
$11,576,000
(17)
March 25, 2034
B-2
$17,809,000
(18)
February 25, 2034
B-3
$21,372,000
(19)
September 25, 2033
CE
(20)
(20)
N/A
P
N/A
N/A
N/A
R
N/A
N/A
N/A
--------------------------------------------------------------------------------
Total
$1,763,144,000
================================================================================
(1) Interest will accrue on the
Class A-1SS Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class A-1SS
Pass-Through Rate and (ii) the Group 1 Cap for such Distribution
Date.
(2) Interest will accrue on the
Class A-1MZ Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class A-1MZ
Pass-Through Rate and (ii) the Group 1 Cap for such Distribution
Date.
(3) Interest will accrue on the
Class A-2SS Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class A-2SS
Pass-Through Rate and (ii) the Group 2 Cap for such Distribution
Date.
(4) Interest will accrue on the
Class A-2MZ Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class A-2MZ
Pass-Through Rate and (ii) the Group 2 Cap for such Distribution
Date.
(5) Interest will accrue on the
Class A-3A Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class A-3A
Pass-Through Rate and (ii) the Group 3 Cap for such Distribution
Date.
(6) Interest will accrue on the
Class A-3B Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class A-3B
Pass-Through Rate and (ii) the Group 3 Cap for such Distribution
Date.
(7) Interest will accrue on the
Class A-3C Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class A-3C
Pass-Through Rate and (ii) the Group 3 Cap for such Distribution
Date.
(8) Interest will accrue on the
Class M-1 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class M-1
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(9) Interest will accrue on the
Class M-2 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class M-2
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(10) Interest will accrue on the Class
M-3 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class M-3
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(11) Interest will accrue on the Class
M-4 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class M-4
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(12) Interest will accrue on the Class
M-5 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class M-5
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(13) Interest will accrue on the Class
M-6 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class M-6
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(14) Interest will accrue on the Class
M-7 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class M-7
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(15) Interest will accrue on the Class
M-8 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class M-8
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(16) Interest will accrue on the Class
M-9 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class M-9
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(17) Interest will accrue on the Class
B-1 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class B-1
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(18) Interest will accrue on the Class
B-2 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class B-2
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(19) Interest will accrue on the Class
B-3 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class B-3
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(20) Solely for REMIC purposes, the
Class CE Certificates will have an Original
Class
Certificate Principal Balance equal to the Initial
Overcollateralization Amount and will bear interest on their
Notional
Amount.
ARTICLE I
DEFINITIONS
Section 1.01 Defined
Terms.
Whenever used in this Agreement or in the Preliminary Statement,
the
following words and phrases, unless the
context otherwise requires, shall have
the meanings specified in this Article.
Interest on all Classes of REMIC 1
Regular Interests and the Class CE
Certificates will be calculated on the basis
of a 360-day year consisting of twelve
30-day months. Interest on all Regular
Certificates (other than the Class CE
Certificates) will be calculated on the
basis of the actual number of days in the
related Interest Accrual Period and a
360-day year.
"1933 Act": The
Securities Act of 1933, as amended.
"60+ Day Delinquent Loan": Each Mortgage Loan (including each
Mortgage Loan in foreclosure and each
Mortgage Loan for which the Mortgagor has
filed for bankruptcy after the Closing
Date) with respect to which any portion
of a Monthly Payment is, as of the last day
of the prior Collection Period, two
months or more past due and each Mortgage
Loan relating to an REO Property.
"Account": Any of the Collection Accounts, the Master Servicer
Custodial Account, the Distribution
Account, the Class A-1 Reserve Account, the
Class A-2 Reserve Account, the Class A-3
Reserve Account, the Class M/B Reserve
Account or the Escrow Accounts.
"Accredited":
Accredited Home
Lenders, Inc. or its
successor in
interest.
"Accredited Mortgage
Loans": The Mortgage
Loans purchased by the
Seller pursuant to the Accredited
Sale Agreement or any
Eligible
Substitute
Mortgage Loan substituted for an Accredited
Mortgage Loan.
"Accredited Sale Agreement": The Flow Sale and Interim
Servicing
Agreement, dated as of December 1, 2004
between the Seller and Accredited as
amended by the Assignment, Assumption and
Recognition Agreement, dated March 30,
2005, among the Seller, the Depositor, the
Trustee, the Master Servicer and
Accredited.
"Accrued Certificate Interest": With respect to each
Distribution
Date and Class of Offered Certificates and
Private Class B Certificates, an
amount equal to the interest accrued at the
Certificate Interest Rate described
opposite such Class in the table in the
Preliminary Statement during the related
Interest Accrual Period on the Certificate
Principal Balance of such Class of
Certificates, reduced by such Class'
Interest Percentage of Relief Act Interest
Shortfalls for such Distribution Date.
"Adjustable-Rate Mortgage Loan": A Mortgage Loan which has a rate
at
which interest accrues that adjusts based
on the Index plus a related Gross
Margin, as set forth and subject to the
limitations in the related Mortgage
Note.
"Adjustment Date": With respect to each Adjustable-Rate
Mortgage
Loan, each adjustment date on which the
Mortgage Interest Rate of an
Adjustable-Rate Mortgage Loan changes
pursuant to the related Mortgage Note. The
first Adjustment Date following the Cut-off
Date as to each Adjustable-Rate
Mortgage Loan is set forth in the related
Mortgage Loan Schedule.
"Advance": With respect to each Servicer, the meaning given to
the
term "Monthly Advance" in the applicable
Servicing Agreement.
"Adverse REMIC Event": As defined in Section 9.01(f) hereof.
"Affiliate": With respect to any Person, any other Person
controlling, controlled by or under common
control with such Person. For
purposes of this definition, "control"
means the power to direct the management
and policies of a Person, directly or
indirectly, whether through ownership of
voting securities, by contract or otherwise
and "controlling" and "controlled"
shall have meanings correlative to the
foregoing.
"Aggregate Overcollateralization Release Amount": With respect
to
any Distribution Date, the lesser of (i)
the Principal Remittance Amount and
(ii) the Overcollateralization Release
Amount.
"Agreement":
This Pooling
and Servicing Agreement and all
amendments and supplements hereto.
"Applicable
Regulations": As to
any Mortgage Loan, all
federal,
state and local laws, statutes, rules and
regulations applicable thereto.
"Applied Realized Loss Amount": With respect to each
Distribution
Date, the excess, if any, of (a) the
aggregate of the Certificate Principal
Balances of the Certificates (after taking
into account the distribution of the
Principal Distribution Amount on such
Distribution Date and any increase in any
Certificate Principal Balance as a result
of Subsequent Recoveries) over (b) the
Pool Balance as of the end of the related
Collection Period.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form,
which is sufficient under the laws of
the jurisdiction wherein the related
Mortgaged Property is located to reflect or
record the sale of the Mortgage.
"Assumed Final Maturity Date": As to each Class of Certificates,
the
date set forth as such in the Preliminary
Statement.
"Available Funds": As to any Distribution Date, an amount equal
to
the excess of (i) the sum of (a) the
aggregate of the Monthly Payments due
during the related Collection Period and
received on or prior to the related
Determination Date by the Servicers, (b)
Liquidation Proceeds, Insurance
Proceeds, Condemnation Proceeds, Principal
Prepayments, Substitution Adjustment
Amounts, the Purchase Price for any
repurchased Mortgage Loan, the Termination
Price with respect to the termination of
the Trust pursuant to Section 10.01
hereof and other unscheduled recoveries of
principal and interest (excluding
Prepayment Charges, Originator Prepayment
Charge Payment Amounts, Servicer
Prepayment Charge Payment Amounts and
Prepayment Interest Excess) in respect of
the Mortgage Loans received by the
Servicers during the related Prepayment
Period, (c) the aggregate of any amounts
received in respect of REO Properties
received on or prior to the related
Determination Date by the Servicers, (d) all
Advances and payments of Compensating
Interest made by the applicable Servicer
in respect of such Distribution Date
received on or prior to the related
Remittance Date by the Master Servicer and
(e) any Reimbursement Amount or
Subsequent Recovery deposited into the
Collection Accounts during the related
Prepayment Period and received on or prior
to the related Remittance Date by the
Master Servicer over (ii) the sum of (a)
amounts reimbursable to the Servicers
pursuant to the Servicing Agreements, (b)
amounts reimbursable or payable to the
Master Servicer pursuant to this Agreement,
including, without limitation,
Sections 3.09 or 3.20, (c) amounts
reimbursable or payable to the Securities
Administrator or Trustee pursuant to this
Agreement, including, without
limitation, Section 8.05 or Section
9.01(c), (d) the Servicing Fees and (e)
amounts deposited in the Master Servicer
Custodial Account or Distribution
Account in error.
"Bankruptcy Code": Title 11 of the United States Code, as
amended.
"Book-Entry Certificates": Any of the Certificates that shall
be
registered in the name of the Depository or
its nominee, the ownership of which
is reflected on the books of the Depository
or on the books of a Person
maintaining an account with the Depository
(directly, as a "Depository
Participant," or indirectly, as an indirect
participant in accordance with the
rules of the Depository and as described in
Section 5.02 hereof). On the Closing
Date, the Class A-1SS, Class A-1MZ, Class
A-2SS, Class A-2MZ, Class A-3A, Class
A-3B, Class A-3C, 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 B-3
Certificates shall be Book-Entry
Certificates.
"Business Day": Any day other than a Saturday, a Sunday or a day
on
which banking institutions in the State of
Delaware, the State of New York, the
State of New Jersey, the State of Maryland,
the State of Minnesota, the State of
California, the State of Texas, or in the
cities in which the Corporate Trust
Offices of the Securities Administrator and
the Trustee are located are
authorized or obligated by law or executive
order to be closed.
"Cap": Any of the Group 1 Cap, the Group 2 Cap, the Group 3 Cap
or
the Pool Cap.
"Cap Carryover Amount": If on any Distribution Date, the
Accrued
Certificate Interest for any Offered or
Private Class B Certificate is based
upon the related Cap, the excess of (i) the
amount of interest such Certificate
would have been entitled to receive on such
Distribution Date based on the
related Pass-Through Rate, over (ii) the
amount of interest such Certificate
received on such Distribution Date based on
the related Cap, together with the
unpaid portion of any such excess from
prior Distribution Dates (and interest
accrued thereon at the then applicable
Pass-Through Rate on such Certificate).
"Certificate": Any Regular Certificate, Class P Certificate or
Class
R Certificate.
"Certificate Custodian": Initially, Wells Fargo Bank, N.A.;
thereafter any other Certificate Custodian
acceptable to the Depository and
selected by the Securities
Administrator.
"Certificate Interest Rate": With respect to each Distribution
Date
and Class of Certificates, the per annum
rate described in the table in the
Preliminary Statement during the related
Interest Accrual Period on the
Certificate Principal Balance.
"Certificate Owner": With respect to each Book-Entry
Certificate,
any beneficial owner thereof.
"Certificate Principal Balance": With respect to any Class of
Certificates (other than the Class CE,
Class P and Class R Certificates) and any
Distribution Date, the Original Class
Certificate Principal Balance (a) reduced
by the sum of (i) all amounts actually
distributed in respect of principal of
such Class on all prior Distribution Dates
and (ii) Applied Realized Loss
Amounts allocated thereto for previous
Distribution Dates and (b) increased by
any Subsequent Recoveries allocated to such
Class for previous Distribution
Dates. The Class CE, Class P and Class R
Certificates do not have a Certificate
Principal Balance. With respect to any
Certificate (other than a Class CE, Class
P or Class R Certificate) of a Class and
any Distribution Date, the portion of
the Certificate Principal Balance of such
Class represented by such Certificate
equal to the product of the Percentage
Interest evidenced by such Certificate
and the Certificate Principal Balance of
such Class.
"Certificate Register" and "Certificate Registrar": The
register
maintained and registrar appointed pursuant
to Section 5.02 hereof.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the
Certificate Register, except that a
Disqualified Organization or non-U.S.
Person shall not be a Holder of the Class
R Certificate for any purpose hereof.
"Certification": As defined in Section 3.23(b) hereof.
"Class": Collectively, Certificates or REMIC Regular Interests
which
have the same priority of payment and bear
the same class designation and the
form of which is identical except for
variation in the Percentage Interest
evidenced thereby.
"Class A-1 Cap Amount": With respect to each Distribution Date
and
the Class A-1SS and Class A-1MZ
Certificates, the product of (a) the Class A-1
Yield Maintenance Agreement Payment for
such Distribution Date and (b) a
fraction, the numerator of which is the
Certificate Principal Balance of such
Class immediately prior to such
Distribution Date and the denominator of which
is the aggregate Certificate Principal
Balance of the Class A-1SS and Class
A-1MZ Certificates immediately prior to
such Distribution Date.
"Class A-1 Reserve Account": The trust account created and
maintained by the Securities Administrator
pursuant to Section 3.07(i) which
shall be entitled "Class A-1 Reserve
Account, Wells Fargo Bank, N.A., as
Securities Administrator for JPMorgan Chase
Bank, National Association, as
Trustee, in trust for registered Holders of
the Class A-1SS and Class A-1MZ
Certificates of the ABFC 2005-HE1 Trust,
ABFC Asset-Backed Certificates, Series
2005-HE1" and which must be an Eligible
Account. Amounts on deposit in the Class
A-1 Reserve Account shall not be invested.
The Class A-1 Reserve Account shall
not be an asset of any REMIC formed under
this Agreement.
"Class A-1 Yield Maintenance Agreement": The interest rate cap
agreement between the Securities
Administrator, on behalf of the Trust, and the
Class A-1 Yield Maintenance Agreement
Provider substantially in the form
attached hereto as Exhibit N-1. The Class
A-1 Yield Maintenance Agreement shall
not be an asset of any REMIC formed under
this Agreement.
"Class A-1 Yield Maintenance Agreement Payment": On each
Distribution Date through the Distribution
Date in the amount equal to the
product of (a) the excess of the lesser of
(i) One-Month LIBOR and (ii) 9.78%
over the applicable Cap Rate I for such
Distribution Date, as set forth on the
schedule attached to the confirmation to
the Class A-1 Yield Maintenance
Agreement for such Distribution Date, (b)
the lesser of (i) the cap notional
amount as set forth on the schedule
attached to the confirmation to the Class
A-1 Yield Maintenance Agreement for such
Distribution Date and (ii) the
aggregate Class Certificate Balance of the
Class A-1SS and Class A-1MZ
Certificates immediately prior to such
Distribution Date and (c) a fraction, the
numerator of which is the actual number of
days elapsed since the previous
Distribution Date (or the Closing Date, in
the case of the first Distribution
Date) to but excluding the current
Distribution Date and the denominator of
which is 360.
"Class A-1 Yield Maintenance Agreement Provider": Swiss Re
Financial
Products Corporation and any successor
thereto.
"Class A-1MZ Applied Realized Loss Amount": As to the Class
A-1MZ
Certificates and as of any Distribution
Date, the lesser of (x) the Certificate
Principal Balance thereof (after taking
into account the distribution of the
Principal Distribution Amount on such
Distribution Date and any increase as a
result of Subsequent Recoveries, but prior
to the application of the Class A-1MZ
Applied Realized Loss Amount, if any, on
such Distribution Date) and (y) the
excess of the aggregate Certificate
Principal Balance of the Class A-1SS and
Class A-1MZ Certificates over the aggregate
Principal Balance of the Group 1
Mortgage Loans after taking into account
the application of the Applied Realized
Loss Amounts for the Class M Certificates
and Class B Certificates, in each case
as of such Distribution Date.
"Class A-1MZ Certificate Margin": For each Distribution Date (i)
on
or prior to the Optional Termination Date,
0.260% per annum, and (ii) following
the Optional Termination Date, 0.520% per
annum.
"Class A-1MZ Pass-Through Rate": For each Distribution Date, a
rate
per annum equal to the lesser of (a)
One-Month LIBOR as of the related LIBOR
Determination Date, plus the Class A-1MZ
Certificate Margin and (b) the Group 1
Maximum Rate Cap.
"Class A Realized Loss Amortization Amount": As to the Class
A-1MZ
and Class A-1SS Certificates and as of any
Distribution Date, the lesser of (x)
the sum of the Unpaid Realized Loss Amounts
for the Class A-1MZ and Class A-1SS
Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum of
the amounts described in Section
4.02(b)(i) and (ii) hereof, in each case
for such Distribution Date.
"Class A-1SS Certificate Margin": For each Distribution Date (i)
on
or prior to the Optional Termination Date,
0.215% per annum, and (ii) following
the Optional Termination Date, 0.430% per
annum.
"Class A-1SS Pass-Through Rate": For each Distribution Date, a
rate
per annum equal to the lesser of (a)
One-Month LIBOR as of the related LIBOR
Determination Date, plus the Class A-1SS
Certificate Margin and (b) the Group 1
Maximum Rate Cap.
"Class A-2 Cap Amount": With respect to each Distribution Date
and
the Class A-2SS and Class A-2MZ
Certificates, the product of (a) the Class A-2
Yield Maintenance Agreement Payment for
such Distribution Date and (b) a
fraction, the numerator of which is the
Certificate Principal Balance of such
Class immediately prior to such
Distribution Date and the denominator of which
is the aggregate Certificate Principal
Balance of the Class A-2SS and Class
A-2MZ Certificates immediately prior to
such Distribution Date.
"Class A-2 Reserve Account": The trust account created and
maintained by the Securities Administrator
pursuant to Section 3.07(i) which
shall be entitled "Class A-2 Reserve
Account, Wells Fargo Bank, N.A., as
Securities Administrator for JPMorgan Chase
Bank, National Association, as
Trustee, in trust for registered Holders of
the Class A-2SS and Class A-2MZ
Certificates of the ABFC 2005-HE1 Trust,
ABFC Asset-Backed Certificates, Series
2005-HE1" and which must be an Eligible
Account. Amounts on deposit in the Class
A-2 Reserve Account shall not be invested.
The Class A-2 Reserve Account shall
not be an asset of any REMIC formed under
this Agreement.
"Class A-2 Yield Maintenance Agreement": The interest rate cap
agreement between the Securities
Administrator, on behalf of the Trust, and the
Class A-2 Yield Maintenance Agreement
Provider substantially in the form
attached hereto as Exhibit N-2. The Class
A-2 Yield Maintenance Agreement shall
not be an asset of any REMIC formed under
this Agreement.
"Class A-2 Yield Maintenance Agreement Payment": On each
Distribution Date through the Distribution
Date the amount equal to the product
of (a) the excess of the lesser of (i)
One-Month LIBOR and (ii) 9.78% over the
applicable Cap Rate I for such Distribution
Date, as set forth on the schedule
attached to the confirmation to the Class
A-2 Yield Maintenance Agreement for
such Distribution Date, (b) the lesser of
(i) the cap notional amount as set
forth on the schedule attached to the
confirmation to the Class A-2 Yield
Maintenance Agreement for such Distribution
Date and (ii) the aggregate Class
Certificate Balance of the Class A-2SS and
Class A-2MZ Certificates immediately
prior to such Distribution Date and (c) a
fraction, the numerator of which is
the actual number of days elapsed since the
previous Distribution Date (or the
Closing Date, in the case of the first
Distribution Date) to but excluding the
current Distribution Date and the
denominator of which is 360.
"Class A-2 Yield Maintenance Agreement Provider": Swiss Re
Financial
Products Corporation and any successor
thereto.
"Class A-2MZ Certificate Margin": For each Distribution Date (i)
on
or prior to the Optional Termination Date,
0.260% per annum, and (ii) following
the Optional Termination Date, 0.520% per
annum.
"Class A-2MZ Pass-Through Rate": For each Distribution Date, a
rate
per annum equal to the lesser of (a)
One-Month LIBOR as of the related LIBOR
Determination Date, plus the Class A-2MZ
Certificate Margin and (b) the Group 2
Maximum Rate Cap.
"Class A-2MZ Applied Realized Loss Amount": As to the Class
A-2MZ
Certificates and as of any Distribution
Date, the lesser of (x) the Certificate
Principal Balance thereof (after taking
into account the distribution of the
Principal Distribution Amount on such
Distribution Date and any increase as a
result of Subsequent Recoveries, but prior
to the application of the Class A-2MZ
Applied Realized Loss Amount, if any, on
such Distribution Date) and (y) the
excess of the aggregate Certificate
Principal Balance of the Class A-2SS and
Class A-2MZ Certificates over the aggregate
Principal Balance of the Group 2
Mortgage Loans after taking into account
the application of the Applied Realized
Loss Amounts for the Class M Certificates
and Class B Certificates, in each case
as of such Distribution Date.
"Class A-2SS Certificate Margin": For each Distribution Date (i)
on
or prior to the Optional Termination Date,
0.210% per annum, and (ii) following
the Optional Termination Date, 0.420% per
annum.
"Class A-2SS Pass-Through Rate": For each Distribution Date, a
rate
per annum equal to the lesser of (a)
One-Month LIBOR as of the related LIBOR
Determination Date, plus the Class A-2SS
Certificate Margin and (b) the Group 2
Maximum Rate Cap.
"Class A-3 Cap Amount": With respect to each Distribution Date
and
the Class A-3A, Class A-3B and Class A-3C
Certificates, the product of (a) the
Class A-3 Yield Maintenance Agreement
Payment for such Distribution Date and (b)
a fraction, the numerator of which is the
Certificate Principal Balance of such
Class immediately prior to such
Distribution Date and the denominator of which
is the aggregate Certificate Principal
Balance of the Class A-3A, Class A-3B and
Class A-3C Certificates immediately prior
to such Distribution Date.
"Class A-3 Reserve Account": The trust account created and
maintained by the Securities Administrator
pursuant to Section 3.07(i) which
shall be entitled "Class A-3 Reserve
Account, Wells Fargo Bank, N.A., as
Securities Administrator for JPMorgan Chase
Bank, National Association, as
Trustee, in trust for registered Holders of
the Class A-3A, Class A-3B and Class
A-3C Certificates of the ABFC 2005-HE1
Trust, ABFC Asset-Backed Certificates,
Series 2005-HE1" and which must be an
Eligible Account. Amounts on deposit in
the Class A-3 Reserve Account shall not be
invested. The Class A-3 Reserve
Account shall not be an asset of any REMIC
formed under this Agreement.
"Class A-3 Yield Maintenance Agreement": The interest rate cap
agreement between the Securities
Administrator, on behalf of the Trust, and the
Class A-3 Yield Maintenance Agreement
Provider substantially in the form
attached hereto as Exhibit N-3. The Class
A-3 Yield Maintenance Agreement shall
not be an asset of any REMIC formed under
this Agreement.
"Class A-3 Yield Maintenance Agreement Payment": On each
Distribution Date through the Distribution
Date in May 2007, the amount equal to
the product of (a) the excess of the lesser
of (i) One-Month LIBOR and (ii) the
applicable Cap Rate II for such
Distribution Date over the applicable Cap Rate I
for such Distribution Date, in each case as
set forth on the schedule attached
to the confirmation to the Class A-3 Yield
Maintenance Agreement for such
Distribution Date, (b) the lesser of (i)
the cap notional amount as set forth on
the schedule attached to the confirmation
to the Class A-3 Yield Maintenance
Agreement for such Distribution Date and
(ii) the aggregate Class Certificate
Balance of the Class A-3A, Class A-3B and
Class A-3C Certificates immediately
prior to such Distribution Date and (c) a
fraction, the numerator of which is
the actual number of days elapsed since the
previous Distribution Date (or the
Closing Date, in the case of the first
Distribution Date) to but excluding the
current Distribution Date and the
denominator of which is 360.
"Class A-3 Yield Maintenance Agreement Provider": Swiss Re
Financial
Products Corporation and any successor
thereto.
"Class A-3A Certificate Margin": For each Distribution Date (i)
on
or prior to the Optional Termination Date,
0.070% per annum, and (ii) following
the Optional Termination Date, 0.140% per
annum.
"Class A-3A Pass-Through Rate": For each Distribution Date, a
rate
per annum equal to the lesser of (a)
One-Month LIBOR as of the related LIBOR
Determination Date, plus the Class A-3A
Certificate Margin and (b) the Group 3
Maximum Rate Cap.
"Class A-3B Certificate Margin": For each Distribution Date (i)
on
or prior to the Optional Termination Date,
0.170% per annum, and (ii) following
the Optional Termination Date, 0.340% per
annum.
"Class A-3B Pass-Through Rate": For each Distribution Date, a
rate
per annum equal to the lesser of (a)
One-Month LIBOR as of the related LIBOR
Determination Date, plus the Class A-3B
Certificate Margin and (b) the Group 3
Maximum Rate Cap.
"Class A-3C Certificate Margin": For each Distribution Date (i)
on
or prior to the Optional Termination Date,
0.320% per annum, and (ii) following
the Optional Termination Date, 0.640% per
annum.
"Class A-3C Pass-Through Rate": For each Distribution Date, a
rate
per annum equal to the lesser of (a)
One-Month LIBOR as of the related LIBOR
Determination Date, plus the Class A-3C
Certificate Margin and (b) the Group 3
Maximum Rate Cap.
"Class A Certificate": Any one of the Certificates with an "A"
designated on the face thereof
substantially in the form annexed hereto as
Exhibit A-1SS, Exhibit A-1MZ, Exhibit
A-2SS, Exhibit A-2MZ, Exhibit A-3A,
Exhibit A-3B and Exhibit A-3C, executed by
the Securities Administrator on
behalf of the Trust and authenticated and
delivered by the Certificate
Registrar, representing the right to
distributions as set forth herein and
therein.
"Class B Certificate": Any one of the Certificates with a "B"
designated on the face thereof
substantially in the form annexed hereto as
Exhibit B-10, Exhibit B-11 and Exhibit
B-12, executed by the Securities
Administrator on behalf of the
authenticated and delivered by the Certificate
Registrar, representing the right to
distributions as set forth herein and
therein.
"Class B-1 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date,
3.500% per annum, and (ii) following the
Optional Termination Date, 5.250% per
annum.
"Class B-1 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the
related LIBOR Determination Date, plus
the Class B-1 Certificate Margin and (b)
the Pool Maximum Rate Cap.
"Class B-1 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as
long as a Trigger Event is not in
effect, the excess of (x) the sum of (i)
the sum of the Certificate Principal
Balances of the Class A Certificates (after
taking into account the payment of
the Senior Principal Distribution Amount on
such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account the
payment of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the payment of
the Class M-3 Principal Distribution Amount
on such Distribution Date), (v) the
Certificate Principal Balance of the Class
M-4 Certificates (after taking into
account the payment of the Class M-4
Principal Distribution Amount on such
Distribution Date), (vi) the Certificate
Principal Balance of the Class M-5
Certificates (after taking into account the
payment of the Class M-5 Principal
Distribution Amount on such Distribution
Date), (vii) the Certificate Principal
Balance of the Class M-6 Certificates
(after taking into account the payment of
the Class M-6 Principal Distribution Amount
on such Distribution Date), (viii)
the Certificate Principal Balance of the
Class M-7 Certificates (after taking
into account the payment of the Class M-7
Principal Distribution Amount on such
Distribution Date), (ix) the Certificate
Principal Balance of the Class M-8
Certificates (after taking into account the
payment of the Class M-8 Principal
Distribution Amount on such Distribution
Date), (x) the Certificate Principal
Balance of the Class M-9 Certificates
immediately prior to such Distribution
Date and (xi) the Certificate Principal
Balance of the Class B-1 Certificates
immediately prior to such Distribution Date
over (y) the lesser of (A) the
product of (i) 93.60% and (ii) the Pool
Balance as of the last day of the
related Collection Period and (B) the Pool
Balance as of the last day of the
related Collection Period minus the product
of 0.50% and the Cut-off Date
Aggregate Principal Balance.
"Class B-1 Realized Loss Amortization Amount": As to the Class
B-1
Certificates and as of any Distribution
Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-1
Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum
of the amounts described in Section
4.02(b)(i) through (xxxii) hereof, in each
case for such Distribution Date.
"Class B-2 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date,
3.500% per annum, and (ii) following the
Optional Termination Date, 5.250% per
annum.
"Class B-2 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the
related LIBOR Determination Date, plus
the Class B-2 Certificate Margin and (b)
the Pool Maximum Rate Cap.
"Class B-2 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as
long as a Trigger Event is not in
effect, the excess of (x) the sum of (i)
the sum of the Certificate Principal
Balances of the Class A Certificates (after
taking into account the payment of
the Senior Principal Distribution Amount on
such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account the
payment of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the payment of
the Class M-3 Principal Distribution Amount
on such Distribution Date), (v) the
Certificate Principal Balance of the Class
M-4 Certificates (after taking into
account the payment of the Class M-4
Principal Distribution Amount on such
Distribution Date), (vi) the Certificate
Principal Balance of the Class M-5
Certificates (after taking into account the
payment of the Class M-5 Principal
Distribution Amount on such Distribution
Date), (vii) the Certificate Principal
Balance of the Class M-6 Certificates
(after taking into account the payment of
the Class M-6 Principal Distribution Amount
on such Distribution Date), (viii)
the Certificate Principal Balance of the
Class M-7 Certificates (after taking
into account the payment of the Class M-7
Principal Distribution Amount on such
Distribution Date), (ix) the Certificate
Principal Balance of the Class M-8
Certificates (after taking into account the
payment of the Class M-8 Principal
Distribution Amount on such Distribution
Date), (x) the Certificate Principal
Balance of the Class M-9 Certificates
(after taking into account the payment of
the Class M-9 Principal Distribution Amount
on such Distribution Date), (xi) the
Certificate Principal Balance of the Class
B-1 Certificates (after taking into
account the payment of the Class B-1
Principal Distribution Amount on such
Distribution Date) and (xii) the
Certificate Principal Balance of the Class B-2
Certificates immediately prior to such
Distribution Date over (y) the lesser of
(A) the product of (i) 95.60% and (ii) the
Pool Balance as of the last day of
the related Collection Period and (B) the
Pool Balance as of the last day of the
related Collection Period minus the product
of 0.50% and the Cut-off Date
Aggregate Principal Balance.
"Class B-2 Realized Loss Amortization Amount": As to the Class
B-2
Certificates and as of any Distribution
Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-2
Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum
of the amounts described in Section
4.02(b)(i) through (xxxv) hereof, in each
case for such Distribution Date.
"Class B-3 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date,
3.500% per annum, and (ii) following the
Optional Termination Date, 5.250% per
annum.
"Class B-3 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the
related LIBOR Determination Date, plus
the Class B-3 Certificate Margin and (b)
the Pool Maximum Rate Cap.
"Class B-3 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as
long as a Trigger Event is not in
effect, the excess of (x) the sum of (i)
the sum of the Certificate Principal
Balances of the Class A Certificates (after
taking into account the payment of
the Senior Principal Distribution Amount on
such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account the
payment of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the payment of
the Class M-3 Principal Distribution Amount
on such Distribution Date), (v) the
Certificate Principal Balance of the Class
M-4 Certificates (after taking into
account the payment of the Class M-4
Principal Distribution Amount on such
Distribution Date), (vi) the Certificate
Principal Balance of the Class M-5
Certificates (after taking into account the
payment of the Class M-5 Principal
Distribution Amount on such Distribution
Date), (vii) the Certificate Principal
Balance of the Class M-6 Certificates
(after taking into account the payment of
the Class M-6 Principal Distribution Amount
on such Distribution Date), (viii)
the Certificate Principal Balance of the
Class M-7 Certificates (after taking
into account the payment of the Class M-7
Principal Distribution Amount on such
Distribution Date), (ix) the Certificate
Principal Balance of the Class M-8
Certificates (after taking into account the
payment of the Class M-8 Principal
Distribution Amount on such Distribution
Date), (x) the Certificate Principal
Balance of the Class M-9 Certificates
(after taking into account the payment of
the Class M-9 Principal Distribution Amount
on such Distribution Date), (xi) the
Certificate Principal Balance of the Class
B-1 Certificates (after taking into
account the payment of the Class B-1
Principal Distribution Amount on such
Distribution Date), (xii) the Certificate
Principal Balance of the Class B-2
Certificates (after taking into account the
payment of the Class B-2 Principal
Distribution Amount on such Distribution
Date) and (xiii) the Certificate
Principal Balance of the Class B-3
Certificates immediately prior to such
Distribution Date over (y) the lesser of
(A) the product of (i) 98.00% and (ii)
the Pool Balance as of the last day of the
related Collection Period and (B) the
Pool Balance as of the last day of the
related Collection Period minus the
product of 0.50% and the Cut-off Date
Aggregate Principal Balance.
"Class B-3 Realized Loss Amortization Amount": As to the Class
B-3
Certificates and as of any Distribution
Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-3
Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum
of the amounts described in Section
4.02(b)(i) through (xxxviii) hereof, in each
case for such Distribution Date.
"Class CE Certificates": Any one of the Class CE Certificates
as
designated on the face thereof
substantially in the form annexed hereto as
Exhibit C-1, executed by the Securities
Administrator on behalf of the Trust and
authenticated and delivered by the
Certificate Registrar, representing the right
to distributions as set forth herein and
therein.
"Class CE Distributable Amount": With respect to any
Distribution
Date, the sum of (i) the interest accrued
on such Class CE Certificate at its
Pass-Through Rate calculated on its
Notional Amount less the amount (without
duplication) of Cap Carryover Amounts paid
pursuant to Section 4.02(b)(xl), (ii)
any remaining Aggregate
Overcollateralization Release Amounts, and (iii) the
aggregate of amounts remaining in the
Reserve Accounts after the distributions
in Section 3.07(i)(i)(A) through Section
3.07(i)(i)(I).
"Class CE Uncertificated Principal Balance": As of any date of
determination, the Initial
Overcollateralization Amount minus the sum of (i) any
Realized Losses allocated thereto and (ii)
any amounts distributed (or deemed
distributed) to the Class CE Certificates
with respect thereto.
"Class M Certificate": Any one of the Certificates with an "M"
designated on the face thereof
substantially in the form annexed hereto as
Exhibit B-1, Exhibit B-2, Exhibit B-3,
Exhibit B-4, Exhibit B-5, Exhibit B-6,
Exhibit B-7, Exhibit B-8 and Exhibit B-9,
executed by the Securities
Administrator on behalf of the Trust and
authenticated and delivered by the
Certificate Registrar, representing the
right to distributions as set forth
herein and therein.
"Class M/B Cap Amount": With respect to each Distribution Date
and
each Class of Class M and Class B
Certificates, the product of (a) the Class M/B
Yield Maintenance Agreement Payment for
such Distribution Date and (b) a
fraction, the numerator of which is the
Certificate Principal Balance of such
Class immediately prior to such
Distribution Date and the denominator of which
is the aggregate Certificate Principal
Balance of the Class M and Class B
Certificates immediately prior to such
Distribution Date.
"Class M/B Reserve Account": The trust account created and
maintained by the Securities Administrator
pursuant to Section 3.07(i) which
shall be entitled "Class M/B Reserve
Account, Wells Fargo Bank, N.A., as
Securities Administrator for JPMorgan Chase
Bank, National Association, as
Trustee, in trust for registered Holders of
the Class M and Class B Certificates
of the ABFC 2005-HE1 Trust, ABFC
Asset-Backed Certificates, Series 2005-HE1" and
which must be an Eligible Account. Amounts
on deposit in the Class M/B Reserve
Account shall not be invested. The Class
M/B Reserve Account shall not be an
asset of any REMIC formed under this
Agreement.
"Class M/B Yield Maintenance Agreement": The interest rate cap
agreement between the Securities
Administrator, on behalf of the Trust, and the
Class M/B Yield Maintenance Agreement
Provider substantially in the form
attached hereto as Exhibit N-4. The Class
M/B Yield Maintenance Agreement shall
not be an asset of any REMIC formed under
this Agreement.
"Class M/B Yield Maintenance Agreement Payment": On each
Distribution Date through the Distribution
Date in November 2007, the amount
equal to the product of (a) the excess of
the lesser of (i) One-Month LIBOR and
(ii) the applicable Cap Rate II for such
Distribution Date over the applicable
Cap Rate I for such Distribution Date, each
as set forth on the schedule
attached to the confirmation to the Class
M/B Yield Maintenance Agreement for
such Distribution Date, (b) the lesser of
(i) the cap notional amount as set
forth on the schedule attached to the
confirmation to the Class M/B Yield
Maintenance Agreement for such Distribution
Date and (ii) the aggregate Class
Certificate Balance of the Class M and
Class B Certificates immediately prior to
such Distribution Date and (c) a fraction,
the numerator of which is the actual
number of days elapsed since the previous
Distribution Date (or the Closing
Date, in the case of the first Distribution
Date) to but excluding the current
Distribution Date and the denominator of
which is 360.
"Class M/B Yield Maintenance Agreement Provider": Swiss Re
Financial
Products Corporation and any successor
thereto.
"Class M-1 Certificate
Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date,
0.420% per annum, and (ii) following the
Optional Termination Date, 0.630% per
annum.
"Class M-1 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the
related LIBOR Determination Date, plus
the Class M-1 Certificate Margin and (b)
the Pool Maximum Rate Cap.
"Class M-1 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as
long as a Trigger Event is not in
effect, the excess of (x) the sum of (i)
the Certificate Principal Balances of
the Class A Certificates (after taking into
account the payment of the Senior
Principal Distribution Amount on such
Distribution Date) and (ii) the
Certificate Principal Balance of the Class
M-1 Certificates immediately prior to
such Distribution Date over (y) the lesser
of (A) the product of (i) 66.60% and
(ii) the Pool Balance as of the last day of
the related Collection Period and
(B) the Pool Balance as of the last day of
the related Collection Period minus
the product of 0.50% and the Cut-off Date
Aggregate Principal Balance.
"Class M-1 Realized Loss Amortization Amount": As to the Class
M-1
Certificates and as of any Distribution
Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-1
Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum
of the amounts described in Section
4.02(b)(i) through (v) hereof, in each case
for such Distribution Date.
"Class M-2 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date,
0.440% per annum, and (ii) following the
Optional Termination Date, 0.660% per
annum.
"Class M-2 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the
related LIBOR Determination Date, plus
the Class M-2 Certificate Margin and (b)
the Pool Maximum Rate Cap.
"Class M-2 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as
long as a Trigger Event is not in
effect, the excess of (x) the sum of (i)
the Certificate Principal Balances of
the Class A Certificates (after taking into
account the payment of the Senior
Principal Distribution Amount on such
Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1
Certificates (after taking into account the
payment of the Class M-1 Principal
Distribution Amount on such Distribution
Date) and (iii) the Certificate Principal
Balance of the Class M-2 Certificates
immediately prior to such Distribution Date
over (y) the lesser of (A) the
product of (i) 73.00% and (ii) the Pool
Balance as of the last day of the
related Collection Period and (B) the Pool
Balance as of the last day of the
related Collection Period minus the product
of 0.50% and the Cut-off Date
Aggregate Principal Balance.
"Class M-2 Realized Loss Amortization Amount": As to the Class
M-2
Certificates and as of any Distribution
Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-2
Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum
of the amounts described in Section
4.02(b)(i) through (viii) hereof, in each
case for such Distribution Date.
"Class M-3 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date,
0.490% per annum, and (ii) following the
Optional Termination Date, 0.735% per
annum.
"Class M-3 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the
related LIBOR Determination Date, plus
the Class M-3 Certificate Margin and (b)
the Pool Maximum Rate Cap.
"Class M-3 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as
long as a Trigger Event is not in
effect, the excess of (x) the sum of (i)
the sum of the Certificate Principal
Balances of the Class A Certificates (after
taking into account the payment of
the Senior Principal Distribution Amount on
such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account the
payment of the Class M-2 Principal
Distribution Amount on such Distribution
Date), and (iv) the Certificate
Principal Balance of the Class M-3
Certificates immediately prior to such
Distribution Date over (y) the lesser of
(A) the product of (i) 76.50% and (ii)
the Pool Balance as of the last day of the
related Collection Period and (B) the
Pool Balance as of the last day of the
related Collection Period minus the
product of 0.50% and the Cut-off Date
Aggregate Principal Balance.
"Class M-3 Realized Loss Amortization Amount": As to the Class
M-3
Certificates and as of any Distribution
Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-3
Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum
of the amounts described in Section
4.02(b)(i) through (xi) hereof, in each case
for such Distribution Date.
"Class M-4 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date,
0.670% per annum, and (ii) following the
Optional Termination Date, 1.005% per
annum.
"Class M-4 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the
related LIBOR Determination Date, plus
the Class M-4 Certificate Margin and (b)
the Pool Maximum Rate Cap.
"Class M-4 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as
long as a Trigger Event is not in
effect, the excess of (x) the sum of (i)
the sum of the Certificate Principal
Balances of the Class A Certificates (after
taking into account the payment of
the Senior Principal Distribution Amount on
such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account the
payment of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the payment of
the Class M-3 Principal Distribution Amount
on such Distribution Date) and (v)
the Certificate Principal Balance of the
Class M-4 Certificates immediately
prior to such Distribution Date over (y)
the lesser of (A) the product of (i)
80.00% and (ii) the Pool Balance as of the
last day of the related Collection
Period and (B) the Pool Balance as of the
last day of the related Collection
Period minus the product of 0.50% and the
Cut-off Date Aggregate Principal
Balance.
"Class M-4 Realized Loss Amortization Amount": As to the Class
M-4
Certificates and as of any Distribution
Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-4
Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum
of the amounts described in Section
4.02(b)(i) through (xiv) hereof, in each
case for such Distribution Date.
"Class M-5 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date,
0.700% per annum, and (ii) following the
Optional Termination Date, 1.050% per
annum.
"Class M-5 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the
related LIBOR Determination Date, plus
the Class M-5 Certificate Margin and (b)
the Pool Maximum Rate Cap.
"Class M-5 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as
long as a Trigger Event is not in
effect, the excess of (x) the sum of (i)
the sum of the Certificate Principal
Balances of the Class A Certificates (after
taking into account the payment of
the Senior Principal Distribution Amount on
such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account the
payment of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the payment of
the Class M-3 Principal Distribution Amount
on such Distribution Date), (v) the
Certificate Principal Balance of the Class
M-4 Certificates (after taking into
account the payment of the Class M-4
Principal Distribution Amount on such
Distribution Date) and (vi) the Certificate
Principal Balance of the Class M-5
Certificates immediately prior to such
Distribution Date over (y) the lesser of
(A) the product of (i) 83.50% and (ii) the
Pool Balance as of the last day of
the related Collection Period and (B) the
Pool Balance as of the last day of the
related Collection Period minus the product
of 0.50% and the Cut-off Date
Aggregate Principal Balance.
"Class M-5 Realized Loss Amortization Amount": As to the Class
M-5
Certificates and as of any Distribution
Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-5
Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum
of the amounts described in Section
4.02(b)(i) through (xvii) hereof, in each
case for such Distribution Date.
"Class M-6 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date,
0.780% per annum, and (ii) following the
Optional Termination Date, 1.170% per
annum.
"Class M-6 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the
related LIBOR Determination Date, plus
the Class M-6 Certificate Margin and (b)
the Pool Maximum Rate Cap.
"Class M-6 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as
long as a Trigger Event is not in
effect, the excess of (x) the sum of (i)
the sum of the Certificate Principal
Balances of the Class A Certificates (after
taking into account the payment of
the Senior Principal Distribution Amount on
such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account the
payment of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the payment of
the Class M-3 Principal Distribution Amount
on such Distribution Date), (v) the
Certificate Principal Balance of the Class
M-4 Certificates (after taking into
account the payment of the Class M-4
Principal Distribution Amount on such
Distribution Date), (vi) the Certificate
Principal Balance of the Class M-5
Certificates (after taking into account the
payment of the Class M-5 Principal
Distribution Amount on such Distribution
Date) and (vii) the Certificate
Principal Balance of the Class M-6
Certificates immediately prior to such
Distribution Date over (y) the lesser of
(A) the product of (i) 86.50% and (ii)
the Pool Balance as of the last day of the
related Collection Period and (B) the
Pool Balance as of the last day of the
related Collection Period minus the
product of 0.50% and the Cut-off Date
Aggregate Principal Balance.
"Class M-6 Realized Loss Amortization Amount": As to the Class
M-6
Certificates and as of any Distribution
Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-6
Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum
of the amounts described in Section
4.02(b)(i) through (xx) hereof, in each case
for such Distribution Date.
"Class M-7 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date,
1.240% per annum, and (ii) following the
Optional Termination Date, 1.860% per
annum.
"Class M-7 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the
related LIBOR Determination Date, plus
the Class M-7 Certificate Margin and (b)
the Pool Maximum Rate Cap.
"Class M-7 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as
long as a Trigger Event is not in
effect, the excess of (x) the sum of (i)
the sum of the Certificate Principal
Balances of the Class A Certificates (after
taking into account the payment of
the Senior Principal Distribution Amount on
such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account the
payment of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the payment of
the Class M-3 Principal Distribution Amount
on such Distribution Date), (v) the
Certificate Principal Balance of the Class
M-4 Certificates (after taking into
account the payment of the Class M-4
Principal Distribution Amount on such
Distribution Date), (vi) the Certificate
Principal Balance of the Class M-5
Certificates (after taking into account the
payment of the Class M-5 Principal
Distribution Amount on such Distribution
Date), (vii) the Certificate Principal
Balance of the Class M-6 Certificates
(after taking into account the payment of
the Class M-6 Principal Distribution Amount
on such Distribution Date) and
(viii) the Certificate Principal Balance of
the Class M-7 Certificates
immediately prior to such Distribution Date
over (y) the lesser of (A) the
product of (i) 88.80% and (ii) the Pool
Balance as of the last day of the
related Collection Period and (B) the Pool
Balance as of the last day of the
related Collection Period minus the product
of 0.50% and the Cut-off Date
Aggregate Principal Balance.
"Class M-7 Realized Loss Amortization Amount": As to the Class
M-7
Certificates and as of any Distribution
Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-7
Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum
of the amounts described in Section
4.02(b)(i) through (xxiii) hereof, in each
case for such Distribution Date.
"Class M-8 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date,
1.330% per annum, and (ii) following the
Optional Termination Date, 1.995% per
annum.
"Class M-8 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the
related LIBOR Determination Date, plus
the Class M-8 Certificate Margin and (b)
the Pool Maximum Rate Cap.
"Class M-8 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as
long as a Trigger Event is not in
effect, the excess of (x) the sum of (i)
the sum of the Certificate Principal
Balances of the Class A Certificates (after
taking into account the payment of
the Senior Principal Distribution Amount on
such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account the
payment of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the payment of
the Class M-3 Principal Distribution Amount
on such Distribution Date), (v) the
Certificate Principal Balance of the Class
M-4 Certificates (after taking into
account the payment of the Class M-4
Principal Distribution Amount on such
Distribution Date), (vi) the Certificate
Principal Balance of the Class M-5
Certificates (after taking into account the
payment of the Class M-5 Principal
Distribution Amount on such Distribution
Date), (vii) the Certificate Principal
Balance of the Class M-6 Certificates
(after taking into account the payment of
the Class M-6 Principal Distribution Amount
on such Distribution Date), (viii)
the Certificate Principal Balance of the
Class M-7 Certificates (after taking
into account the payment of the Class M-7
Principal Distribution Amount on such
Distribution Date) and (ix) the Certificate
Principal Balance of the Class M-8
Certificates immediately prior to such
Distribution Date over (y) the lesser of
(A) the product of (i) 90.90% and (ii) the
Pool Balance as of the last day of
the related Collection Period and (B) the
Pool Balance as of the last day of the
related Collection Period minus the product
of 0.50% and the Cut-off Date
Aggregate Principal Balance.
"Class M-8 Realized Loss Amortization Amount": As to the Class
M-8
Certificates and as of any Distribution
Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-8
Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum
of the amounts described in Section
4.02(b)(i) through (xxvi) hereof, in each
case for such Distribution Date.
"Class M-9 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date,
1.950% per annum, and (ii) following the
Optional Termination Date, 2.925% per
annum.
"Class M-9 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the
related LIBOR Determination Date, plus
the Class M-9 Certificate Margin and (b)
the Pool Maximum Rate Cap.
"Class M-9 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as
long as a Trigger Event is not in
effect, the excess of (x) the sum of (i)
the sum of the Certificate Principal
Balances of the Class A Certificates (after
taking into account the payment of
the Senior Principal Distribution Amount on
such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account the
payment of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the payment of
the Class M-3 Principal Distribution Amount
on such Distribution Date), (v) the
Certificate Principal Balance of the Class
M-4 Certificates (after taking into
account the payment of the Class M-4
Principal Distribution Amount on such
Distribution Date), (vi) the Certificate
Principal Balance of the Class M-5
Certificates (after taking into account the
payment of the Class M-5 Principal
Distribution Amount on such Distribution
Date), (vii) the Certificate Principal
Balance of the Class M-6 Certificates
(after taking into account the payment of
the Class M-6 Principal Distribution Amount
on such Distribution Date), (viii)
the Certificate Principal Balance of the
Class M-7 Certificates (after taking
into account the payment of the Class M-7
Principal Distribution Amount on such
Distribution Date), (ix) the Certificate
Principal Balance of the Class M-8
Certificates (after taking into account the
payment of the Class M-8 Principal
Distribution Amount on such Distribution
Date) and (x) the Certificate Principal
Balance of the Class M-9 Certificates
immediately prior to such Distribution
Date over (y) the lesser of (A) the product
of (i) 92.30% and (ii) the Pool
Balance as of the last day of the related
Collection Period and (B) the Pool
Balance as of the last day of the related
Collection Period minus the product of
0.50% and the Cut-off Date Aggregate
Principal Balance.
"Class M-9 Realized Loss Amortization Amount": As to the Class
M-9
Certificates and as of any Distribution
Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-9
Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum
of the amounts described in Section
4.02(b)(i) through (xxix) hereof, in each
case for such Distribution Date.
"Class P Certificate": Any one of the Certificates with a "P"
designated on the face thereof
substantially in the form annexed hereto as
Exhibit C-2, executed by the Securities
Administrator on behalf of the Trust and
authenticated and delivered by the
Certificate Registrar, representing the right
to distributions as set forth herein and
therein.
"Class R Certificate": The Class R Certificate executed by the
Securities Administrator on behalf of the
Trust, and authenticated and delivered
by the Certificate Registrar, substantially
in the form annexed hereto as
Exhibit C-3 and evidencing the ownership of
the Residual Interest in each of
REMIC 1 and REMIC 2. The Class R
Certificate represents the ownership of the
Class R-1 Interest and the Class R-2
Interest.
"Class R-1 Interest": The uncertificated residual interest in
REMIC
1.
"Class R-2 Interest": The uncertificated residual interest in
REMIC
2.
"Closing Date": March 30, 2005.
"Code": The Internal Revenue Code of 1986, as it may be amended
from
time to time.
"Collection Accounts": The separate accounts created and
maintained
by each of the Servicers pursuant to the
applicable Servicing Agreement.
"Collection Period": With respect to any Distribution Date, the
period from the second day of the calendar
month preceding the month in which
such Distribution Date occurs through the
first day of the month in which such
Distribution Date occurs.
"Combined Loan-to-Value Ratio": For any Mortgage Loan, the
fraction,
expressed as a percentage, the numerator of
which is the sum of (i) the
Principal Balance of the Mortgage Loan at
origination and (ii) the principal
balance of the senior mortgage loan, if
any, on the date of origination of the
Mortgage Loan and the denominator of which
is the Value of the related Mortgaged
Property.
"Compensating Interest": With respect to any Prepayment Period
and
Servicer, an amount equal to the lesser of
(a) its aggregate Servicing Fee
received in the related Collection Period
and (b) the aggregate of the
Prepayment Interest Shortfalls on the
Mortgage Loans serviced by such Servicer
resulting from Principal Prepayments on the
Mortgage Loans during the related
Prepayment Period.
"Condemnation Proceeds": All awards or settlements in respect of
a
taking of a Mortgaged Property by exercise
of the power of eminent domain or
condemnation.
"Consulting Agreement": The Consulting Agreement, dated as of
March
30, 2005, between The Murrayhill Company,
as Credit Risk Manager, and the
Depositor.
"Corporate Trust Office": With respect to the Trustee, the
principal
corporate trust office of the Trustee at
which at any particular time its
corporate trust business in connection with
this Agreement shall be
administered, which office at the date of
the execution of this instrument is
located at 4 New York Plaza, 6th Floor, New
York, New York 10004, Attention:
Institutional Trust Services, ABFC, Series
2005-HE1 or at such other address as
the Trustee may designate from time to time
by notice to the Certificateholders,
the Depositor, the Securities Administrator
and the Master Servicer. With
respect to the Securities Administrator,
the principal corporate trust office of
the Securities Administrator at which at
any particular time its corporate trust
business in connection with this Agreement
shall be administered, which office
at the date of the execution of this
instrument is located at (i) for
certificate transfer purposes, Wells Fargo
Center, Sixth Street and Marquette
Avenue, Minneapolis, Minnesota, 55479-0113,
Attention: Client Manager-ABFC,
Series 2005-HE1 and (ii) for all other
purposes, 9062 Old Annapolis Road,
Columbia, Maryland 21045, Attention: Client
Manager-ABFC, Series 2005-HE1 or at
such other address as the Securities
Administrator may designate from time to
time by notice to the Certificateholders,
the Depositor, the Trustee and the
Master Servicer.
"Corresponding Classes": With respect to REMIC 1 and REMIC 2,
the
following Classes shall be Corresponding
Classes:
--------------------------------------------------------------------------------
Corresponding REMIC 1 Classes
Corresponding REMIC 2 Classes
--------------------------------------------------------------------------------
LT1A1SS
Class A-1SS Certificates
LT1A1MZ
Class A-1MZ Certificates
LT1A2SS
Class A-2SS Certificates
LT1A2MZ
Class A-2MZ Certificates
LT1A3A
Class A-3A Certificates
LT1A3B
Class A-3B Certificates
LT1A3C
Class A-3C Certificates
LT1M1
Class M-1 Certificates
LT1M2
Class M-2 Certificates
LT1M3
Class M-3 Certificates
LT1M4
Class M-4 Certificates
LT1M5
Class M-5 Certificates
LT1M6
Class M-6 Certificates
LT1M7
Class M-7 Certificates
LT1M8
Class M-8 Certificates
LT1M9
Class M-9 Certificates
LT1B1
Class B-1 Certificates
LT1B2
Class B-2 Certificates
LT1B3
Class B-3 Certificates
--------------------------------------------------------------------------------
"Countrywide": Countrywide Home Loans Servicing LP.
"Countrywide Servicing Agreement": The Interim Servicing
Agreement,
dated as of June 1, 2004, by and between
the Seller and Countrywide, as amended
by the Assignment, Assumption and
Recognition Agreement, dated March 30, 2005
among the Seller, the Depositor, the
Trustee, the Master Servicer, Countrywide
and Countrywide Home Loans, Inc.
"Credit Risk Manager": The Murrayhill Company, a Colorado
corporation.
"Credit Risk Manager Fee": The fee payable to the Credit Risk
Manager on each Distribution Date for its
services as Credit Risk Manager, in an
amount equal to the product of (i)
one-twelfth of the Credit Risk Manager Fee
Rate and (ii) the Pool Balance as of the
opening of business on the first day of
the related Collection Period.
"Credit Risk Manager Fee Rate": With respect to any
Distribution
Date, 0.0150% per annum.
"Credit Risk Management Agreements": Each of (i) the Credit
Risk
Management Agreement, dated as of March 30,
2005, between the Credit Risk
Manager and Option One and (ii) the Credit
Risk Management Agreement, dated as
of March 30, 2005, between the Credit Risk
Manager and Countrywide and (iii) the
Credit Risk Management Agreement, dated as
of March 30, 2005, between the Credit
Risk Manager and the Master Servicer. .
"Custodial Agreement": Initially, the Custodial Agreement,
dated
March 30, 2005, by and among the Trustee,
the Depositor, Option One, as
servicer, the Master Servicer and Wells
Fargo Bank, N.A., not individually, but
solely as Custodian and thereafter any
custodial agreement entered in to
pursuant to Section 8.16.
"Custodian": Initially, Wells Fargo Bank, N.A. (with respect to
the
Option One Mortgage Loans) and the Trustee
(with respect to the Accredited
Mortgage Loans) and thereafter the
Custodian or Custodians, if any, hereafter
appointed by the Trustee pursuant to
Section 8.16. Any Custodian may (but need
not) be the Trustee or the Securities
Administrator or any Person directly or
indirectly controlling or controlled by or
under common control of either of
them. Neither the Depositor nor any Person
directly or indirectly controlling or
controlled by or under common control with
the Depositor may be appointed
Custodian.
"Customary Servicing Procedures": With respect to a Servicer,
procedures (including collection
procedures) that such Servicer customarily
employs and exercises in servicing and
administering mortgage loans for its own
account and which are in accordance with
accepted mortgage servicing practices
of prudent lending institutions servicing
mortgage loans of the same type as the
Mortgage Loans in the jurisdictions in
which the related Mortgaged Properties
are located.
"Cut-off Date": March 1, 2005.
"Cut-off Date Aggregate Principal Balance": The aggregate of
the
Cut-off Date Principal Balances of the
Mortgage Loans.
"Cut-off Date Principal Balance": With respect to any Mortgage
Loan,
the unpaid principal balance thereof as of
the Cut-off Date after application of
funds received or advanced on or before
such date (or as of the applicable date
of substitution with respect to an Eligible
Substitute Mortgage Loan).
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment
for such Mortgage Loan by a court of
competent jurisdiction in a proceeding
under the Bankruptcy Code, except such a
reduction resulting from a Deficient
Valuation.
"Defective Mortgage Loan": A Mortgage Loan replaced or to be
replaced by one or more Eligible Substitute
Mortgage Loans.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property
by a court of competent jurisdiction
in an amount less than the then outstanding
principal balance of the Mortgage
Loan, which valuation results from a
proceeding initiated under the Bankruptcy
Code.
"Definitive Certificates": As defined in Section 5.02(c)
hereof.
"Delinquent": Any Mortgage Loan with respect to which the
Monthly
Payment due on a Due Date is not made by
the close of business on the next
scheduled Due Date for such Mortgage
Loan.
"Depositor": Asset Backed Funding Corporation, a Delaware
corporation, or any successor in
interest.
"Depository": The initial depository shall be The Depository
Trust
Company, whose nominee is Cede & Co.,
or any other organization registered as a
"clearing agency" pursuant to Section 17A
of the Exchange Act. The Depository
shall initially be the registered Holder of
the Book-Entry Certificates. The
Depository shall at all times be a
"clearing corporation" as defined in Section
8-102(3) of the Uniform Commercial Code of
the State of New York.
"Depository Participant": A broker, dealer, bank or other
financial
institution or other person for whom from
time to time a Depository effects
book-entry transfers and pledges of
securities deposited with the Depository.
"Determination Date": With respect to any Distribution Date,
the
15th day of the calendar month in which
such Distribution Date occurs or, if
such 15th day is not a Business Day, the
Business Day immediately preceding such
15th day.
"Disqualified Organization": A "disqualified organization"
under
Section 860E of the Code, which as of the
Closing Date is any of: (i) the United
States, any state or political subdivision
thereof, any possession of the United
States, any foreign government, any
international organization, or any agency or
instrumentality of any of the foregoing,
(ii) any organization (other than a
cooperative described in Section 521 of the
Code) which is exempt from the tax
imposed by Chapter 1 of the Code unless
such organization is subject to the tax
imposed by Section 511 of the Code, (iii)
any organization described in Section
1381(a)(2)(C) of the Code, or (iv) any
other Person so designated by the
Securities Administrator based upon an
Opinion of Counsel provided by nationally
recognized counsel to the Securities
Administrator that the holding of an
ownership interest in the Class R
Certificate by such Person may cause the Trust
Fund or any Person having an ownership
interest in any Class of Certificates
(other than such Person) to incur liability
for any federal tax imposed under
the Code that would not otherwise be
imposed but for the transfer of an
ownership interest in the Class R
Certificate to such Person. A corporation will
not be treated as an instrumentality of the
United States or of any state or
political subdivision thereof if all of its
activities are subject to tax and a
majority of its board of directors is not
selected by a governmental unit. The
term "United States," "state" and
"international organization" shall have the
meanings set forth in Section 7701 of the
Code.
"Distribution Account": The account or accounts created and
maintained by the Securities Administrator
pursuant to Section 3.07, which shall
be entitled "Distribution Account, Wells
Fargo Bank, N.A., as Securities
Administrator under the Pooling and
Servicing Agreement dated as of March 1,
2005 among Asset Backed Funding
Corporation, as Depositor, Wells Fargo Bank,
N.A., as Securities Administrator and
Master Servicer, and JPMorgan Chase Bank,
National Association, as Trustee, in trust
for registered Holders of ABFC
2005-HE1 Trust, ABFC Asset-Backed
Certificates, Series 2005-HE1," and which must
be an Eligible Account.
"Distribution Date": The 25th day of any calendar month, or if
such
25th day is not a Business Day, the
Business Day immediately following such 25th
day, commencing in April 2005.
"Distribution Date Statement": As defined in Section 4.06(a)
hereof.
"Due Date": With respect to each Mortgage Loan and any
Distribution
Date, the day of the calendar month in
which such Distribution Date occurs on
which the Monthly Payment for such Mortgage
Loan was due, exclusive of any grace
period.
"Eligible Account": Any of (i) an account or accounts
maintained
with a federal or state chartered
depository institution or trust company the
short-term unsecured debt obligations of
which (or, in the case of a depository
institution or trust company that is the
principal subsidiary of a holding
company, the short-term unsecured debt
obligations of such holding company) are
rated "A-1" by S&P, "F-1" by Fitch and
"P-1" by Moody's (or comparable ratings
if S&P, Fitch and Moody's are not the
Rating Agencies) by each of the Rating
Agencies at the time any amounts are held
on deposit therein, (ii) an account or
accounts the deposits in which are fully
insured by the FDIC, (iii) a trust
account or accounts maintained with the
trust department of a federal or state
chartered depository institution, national
banking association or trust company
acting in its fiduciary capacity or (iv) an
account otherwise acceptable to each
Rating Agency without reduction or
withdrawal of their then current ratings of
the Certificates as evidenced by a letter
from each Rating Agency to the
Securities Administrator, the Trustee and
the NIMS Insurer. Eligible Accounts
may bear interest.
"Eligible Investments": Any one or more of the following
obligations
or securities acquired at a purchase price
of not greater than par, regardless
of whether issued or managed by the
Depositor, the Master Servicer, the
Securities Administrator, the NIMS Insurer,
the Trustee or any of their
respective Affiliates or for which an
Affiliate of the Securities Administrator
serves as an advisor:
(i) direct obligations of, or obligations fully guaranteed as
to
timely
payment of principal and interest by, the United States or any
agency or
instrumentality thereof, provided such obligations are backed
by
the full
faith and credit of the United States;
(ii) (A) demand and time deposits in, certificates of deposit
of,
bankers'
acceptances issued by or federal funds sold by any depository
institution or trust company (including the Securities
Administrator or
its agents
acting in their respective commercial capacities) incorporated
under the
laws of the United States of America or any state thereof and
subject to
supervision and examination by federal and/or state
authorities, so long as, at the time of such investment or
contractual
commitment
providing for such investment, such depository institution or
trust
company or its ultimate parent has a short-term uninsured debt
rating in
one of the two highest available rating categories of S&P
and
Moody's
and the highest available rating category of Fitch and provided
that each
such investment has an original maturity of no more than 365
days and
(B) any other demand or time deposit or deposit which is fully
insured by
the FDIC;
(iii) repurchase obligations with a term not to exceed 30 days
with
respect to
any security described in clause (i) above and entered into
with a
depository institution or trust company (acting as principal)
rated
"A" or
higher by S&P, "A+" or higher by Fitch and "A2" or higher
by
Moody's,
provided, however, that collateral transferred pursuant to such
repurchase
obligation must be of the type described in clause (i) above
and must (A) be valued
daily at current market prices plus accrued
interest
or (B) pursuant to such valuation, be equal, at all times, to
105% of
the cash transferred by the Securities Administrator in
exchange
for such
collateral and (C) be delivered to the Securities Administrator
or, if the
Securities Administrator is supplying the collateral, an agent
for the
Securities Administrator, in such a manner as to accomplish
perfection
of a security interest in the collateral by possession of
certificated securities;
(iv) securities bearing interest or sold at a discount that are
issued by
any corporation incorporated under the laws of the United
States
of America
or any State thereof and that are rated by each Rating Agency
in its
highest long-term unsecured rating categories at the time of
such
investment
or contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount
obligations and interest-bearing obligations payable on demand or
on a
specified
date not more than 30 days after the date of acquisition
thereof)
that is rated by each Rating Agency in its highest short-term
unsecured
debt rating available at the time of such investment;
(vi) units of money market funds registered under the
Investment
Company
Act of 1940 (including funds managed or advised by the
Securities
Administrator or affiliates thereof) that, if rated by each Rating
Agency,
are rated
in its highest rating category (if so rated by such Rating
Agency);
and
(vii) if previously confirmed in writing to the Securities
Administrator and consented to by the NIMS Insurer, any other
demand,
money
market or time deposit, or any other obligation, security or
investment, as may be acceptable to the Rating Agencies in writing
as an
eligible
investment of funds backing securities having ratings
equivalent
to its highest initial
rating of the Senior Certificates;
provided, that no instrument described
hereunder shall evidence either the right
to receive (a) only interest with respect
to the obligations underlying such
instrument or (b) both principal and
interest payments derived from obligations
underlying such instrument and the interest
and principal payments with respect
to such instrument provide a yield to
maturity at par greater than 120% of the
yield to maturity at par of the underlying
obligations.
"Eligible Substitute Mortgage Loan": A mortgage loan substituted
by
the related Originator or the Seller, as
applicable, for a Defective Mortgage
Loan which must, on the date of such
substitution, (i) have an outstanding
Principal Balance (or in the case of a
substitution of more than one Mortgage
Loan for a Defective Mortgage Loan, an
aggregate Principal Balance) not in
excess of the Principal Balance of the
Defective Mortgage Loan; (ii) have a
Mortgage Interest Rate not less than the
Mortgage Interest Rate of the Defective
Mortgage Loan and not more than 2% in
excess of the Mortgage Interest Rate of
such Defective Mortgage Loan; (iii) have a
remaining term to maturity not more
than one year earlier and not later than
the remaining term to maturity of the
Defective Mortgage Loan; (iv) comply with
each representation and warranty as to
the Mortgage Loans set forth in the
applicable Originator Mortgage Loan Purchase
Agreement and the Mortgage Loan Purchase
Agreement (deemed to be made as of the
date of substitution); (v) be of the same
type as the Defective Mortgage Loan
(i.e., fixed-rate or adjustable-rate, same
Credit Score, Combined Loan-to-Value
Ratio, Gross Margin, lien priority,
underwriting grade, periodic rate cap and
Index) and (vi) have a Prepayment Charge
with a term and amount at least equal
to the Prepayment Charge of the Defective
Mortgage Loan.
"ERISA": The Employee Retirement Income Security Act of 1974,
as
amended.
"ERISA-Restricted Certificates": Any of the Class B-2, Class
B-3,
Class CE, Class P and Class R
Certificates.
"Escrow Account": The account or accounts created and
maintained
pursuant to Section 3.08.
"Estate in Real Property": A fee simple estate in a parcel of
real
property.
"Exchange Act": The Securities Exchange Act of 1934, as
amended.
"Expense Fee Rate": The sum of (i) the related Servicing Fee
Rate
and (ii) the Credit Risk Manager Fee
Rate.
"Extra Principal Distribution Amount": As of any Distribution
Date,
the lesser of (x) the Monthly Excess
Interest Amount for such Distribution Date
and (y) the Overcollateralization
Deficiency for such Distribution Date.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"Fitch": Fitch Ratings, and its successors, and if such company
shall for any reason no longer perform the
functions of a securities rating
agency, "Fitch" shall be deemed to refer to
any other "nationally recognized
statistical rating organization" as set
forth on the most current list of such
organizations released by the Securities
and Exchange Commission.
"Fixed-Rate Mortgage Loan": A Mortgage Loan which has a
constant
annual rate at which interest accrues in
accordance with the provisions of the
related Mortgage Note.
"Form 10-K": As defined in Section 3.23(a) hereof.
"Grantor Trust": That portion of the Trust exclusive of REMIC 1
and
REMIC 2 consisting of (a) the Prepayment
Charges, any Originator Prepayment
Charge Payment Amounts, any Servicer
Prepayment Charge Payment Amounts, proceeds
thereof in the Master Servicer Custodial
Account or Distribution Account and the
right of the Class P Certificateholders to
receive such Prepayment Charges,
Originator Prepayment Charge Payment
Amounts and Servicer Prepayment Charge
Payment Amounts, (b) the right of the
Offered Certificates and the Private Class
B Certificates to receive Cap Carryover
Amounts, (c) each Yield Maintenance
Agreement, the Reserve Accounts and the
beneficial interest of the Class CE
Certificates with respect thereto and (d)
the obligation of the Class CE
Certificates to pay Cap Carryover
Amounts.
"Gross Margin": With respect to each Adjustable-Rate Mortgage
Loan,
the fixed percentage set forth in the
related Mortgage Note that is added to the
Index on each Adjustment Date in accordance
with the terms of the related
Mortgage Note used to determine the
Mortgage Interest Rate for such Mortgage
Loan.
"Group 1 Cap": As to any Distribution Date and the Class A-1SS
and
Class A-1MZ Certificates, a per annum rate
adjusted by multiplying such rate by
a fraction equal to 30 over the actual
number of days in the related Interest
Accrual Period, equal to the average of the
Net Mortgage Interest Rates for the
Group 1 Mortgage Loans, weighted on the
basis of the Principal Balances of the
Group 1 Mortgage Loans as of the first day
of the related Collection Period.
"Group 1 Interest Remittance Amount": As of any Distribution
Date,
the sum, without duplication, of (i) all
interest due and collected or advanced
with respect to the related Collection
Period on the Group 1 Mortgage Loans
received by the Servicers on or prior to
the Determination Date for such
Distribution Date (less the applicable
Servicing Fee, amounts available for
reimbursement of Advances, Servicing
Advances and expenses pursuant to the
applicable Servicing Agreement, amounts
reimbursable or payable to the Master
Servicer pursuant to this Agreement,
including without limitation, Sections 3.09
and 3.20, and amounts reimbursable or
payable to the Securities Administrator or
Trustee pursuant to this Agreement,
including without limitation, Sections 8.05
and 9.01(c), (ii) all Compensating Interest
paid by the Servicers for such
Distribution Date with respect to such
Mortgage Loans, (iii) the portion of any
payment in connection with any Principal
Prepayment (other than any Prepayment
Interest Excess), substitution, Purchase
Price, Termination Price, Insurance
Proceeds or Net Liquidation Proceeds
relating to interest with respect to such
Mortgage Loans received during the related
Prepayment Period and (iv) the
portion of any Reimbursement Amount
relating to such Mortgage Loans received
during the related Prepayment Period.
"Group 1 Maximum Net Rate": As to any Distribution Date, the
average
of the Net Maximum Mortgage Interest Rates
for the Adjustable-Rate Mortgage
Loans in Loan Group 1 and the Net Mortgage
Interest Rates for the Fixed-Rate
Mortgage Loans in Loan Group 1, weighted on
the basis of the Principal Balances
of the Group 1 Mortgage Loans as of the
first day of the related Collection
Period.
"Group 1 Maximum Rate Cap": With respect to any Distribution
Date
and for the Class A-1SS and Class A-1MZ
Certificates, a per annum rate, adjusted
by multiplying such rate by a fraction
equal to 30 over the actual number of
days in the related Interest Accrual
Period, equal to (i) on or prior to the
Distribution Date in December 2007, greater
of (a) the Group 1 Maximum Net Rate
and (b) 10.00% and (ii) on and after the
Distribution Date in January 2008, the
Group 1 Maximum Net Rate.
"Group 1 Mortgage Loan": Each Mortgage Loan listed on Exhibit
D-1
hereto.
"Group 1 Principal Percentage": With respect to any
Distribution
Date and the Class A-1SS and Class A-1MZ
Certificates, the percentage equivalent
to a fraction, the numerator of which is
the Principal Remittance Amount
allocable to the Group 1 Mortgage Loans for
such Distribution Date and the
denominator of which is the Principal
Remittance Amount for such Distribution
Date.
"Group 1 Senior Principal Distribution Amount": With respect to
any
Distribution Date, (i) before the Stepdown
Date or as to which a Trigger Event
is in effect, the lesser of (a) the
aggregate Certificate Principal Balance of
the Class A-1SS and Class A-1MZ
Certificates immediately prior to such
Distribution Date and (b) the Group 1
Principal Percentage of the Principal
Distribution Amount and (ii) on or after
the Stepdown Date and as long as a
Trigger Event is not in effect, the excess
of (a) the aggregate Certificate
Principal Balance of the Class A-1SS and
Class A-1MZ Certificates immediately
prior to such Distribution Date over (b)
the lesser of (x) the product of (1)
56.20% and (2) the aggregate Principal
Balance of the Group 1 Mortgage Loans as
of the last day of the related Collection
Period and (y) the amount by which the
aggregate Principal Balance of the Group 1
Mortgage Loans as of the last day of
the related Collection Period exceeds the
product of (1) 0.50% and (2) the
aggregate Principal Balance of the Group 1
Mortgage Loans on the Cut-off Date.
"Group 2 Cap": As to any Distribution Date and the Class A-2SS
and
Class A-2MZ Certificates, a per annum rate
adjusted by multiplying such rate by
a fraction equal to 30 over the actual
number of days in the related Interest
Accrual Period, equal to the average of the
Net Mortgage Interest Rates for the
Group 2 Mortgage Loans, weighted on the
basis of the Principal Balances of the
Group 2 Mortgage Loans as of the first day
of the related Collection Period.
"Group 2 Interest Remittance Amount": As of any Distribution
Date,
the sum, without duplication, of (i) all
interest due and collected or advanced
with respect to the related Collection
Period on the Group 2 Mortgage Loans
received by the Servicers on or prior to
the Determination Date for such
Distribution Date (less the applicable
Servicing Fee, amounts available for
reimbursement of Advances, Servicing
Advances and expenses pursuant to the
applicable Servicing Agreement, amounts
reimbursable or payable to the Master
Servicer pursuant to this Agreement,
including without limitation, Sections 3.09
and 3.20, and amounts reimbursable or
payable to the Securities Administrator or
Trustee pursuant to this Agreement,
including without limitation, Sections 8.05
and 9.01(c), (ii) all Compensating Interest
paid by the Servicers for such
Distribution Date with respect to such
Mortgage Loans, (iii) the portion of any
payment in connection with any Principal
Prepayment (other than any Prepayment
Interest Excess), substitution, Purchase
Price, Termination Price, Insurance
Proceeds or Net Liquidation Proceeds
relating to interest with respect to such
Mortgage Loans received during the related
Prepayment Period and (iv) the
portion of any Reimbursement Amount
relating to such Mortgage Loans received
during the related Prepayment Period.
"Group 2 Maximum Net Rate": As to any Distribution Date, the
average
of the Net Maximum Mortgage Interest Rates
for the Adjustable-Rate Mortgage
Loans in Loan Group 2 and the Net Mortgage
Interest Rates for the Fixed-Rate
Mortgage Loans in Loan Group 2, weighted on
the basis of the Principal Balances
of the Group 2 Mortgage Loans as of the
first day of the related Collection
Period.
"Group 2 Maximum Rate Cap": With respect to any Distribution
Date
and for the Class A-2SS and Class A-2MZ
Certificates, a per annum rate, adjusted
by multiplying such rate by a fraction
equal to 30 over the actual number of
days in the related Interest Accrual
Period, equal to (i) on or prior to the
Distribution Date in December 2007, the
greater of (a) the Group 2 Maximum Net
Rate and (b) 10.00% and (ii) on and after
the Distribution Date in January 2008,
the Group 2 Maximum Net Rate.
"Group 2 Mortgage Loan": Each Mortgage Loan listed on
Exhibit D-2
hereto.
"Group 2 Principal Percentage": With respect to any
Distribution
Date and the Class A-2SS and Class A-2MZ
Certificates, the percentage equivalent
to a fraction, the numerator of which is
the Principal Remittance Amount
allocable to the Group 2 Mortgage Loans for
such Distribution Date and the
denominator of which is the Principal
Remittance Amount for such Distribution
Date.
"Group 2 Senior Principal Distribution Amount": With respect to
any
Distribution Date, (i) before the Stepdown
Date or as to which a Trigger Event
is in effect, the lesser of (a) the
aggregate Certificate Principal Balance of
the Class A-2SS and Class A-2MZ
Certificates immediately prior to such
Distribution Date and (b) the Group 2
Principal Percentage of the Principal
Distribution Amount and (ii) on or after
the Stepdown Date and as long as a
Trigger Event is not in effect, the excess
of (a) the aggregate Certificate
Principal Balance of the Class A-2SS and
Class A-2MZ Certificates immediately
prior to such Distribution Date over (b)
the lesser of (x) the product of (1)
56.20% and (2) the aggregate Principal
Balance of the Group 2 Mortgage Loans as
of the last day of the related Collection
Period and (y) the amount by which the
aggregate Principal Balance of the Group 2
Mortgage Loans as of the last day of
the related Collection Period exceeds the
product of (1) 0.50% and (2) the
aggregate Principal Balance of the Group 2
Mortgage Loans on the Cut-off Date.
"Group 3 Cap": As to any Distribution Date and the Class A-3A,
Class
A-3B and Class A-3C Certificates, a per
annum rate adjusted by multiplying such
rate by a fraction equal to 30 over the
actual number of days in the related
Interest Accrual Period, equal to the
average of the Net Mortgage Interest Rates
for the Group 3 Mortgage Loans, weighted on
the basis of the Principal Balances
of the Group 3 Mortgage Loans as of the
first day of the related Collection
Period.
"Group 3 Interest Remittance Amount": As of any Distribution
Date,
the sum, without duplication, of (i) all
interest due and collected or advanced
with respect to the related Collection
Period on the Group 3 Mortgage Loans
received by the Servicers on or prior to
the Determination Date for such
Distribution Date (less the applicable
Servicing Fee, amounts available for
reimbursement of Advances, Servicing
Advances and expenses pursuant to the
applicable Servicing Agreement, amounts
reimbursable or payable to the Master
Servicer pursuant to this Agreement,
including without limitation, Sections 3.09
and 3.20, and amounts reimbursable or
payable to the Securities Administrator or
Trustee pursuant to this Agreement,
including without limitation, Sections 8.05
and 9.01(c), (ii) all Compensating Interest
paid by the Servicers for such
Distribution Date with respect to such
Mortgage Loans, (iii) the portion of any
payment in connection with any Principal
Prepayment (other than any Prepayment
Interest Excess), substitution, Purchase
Price, Termination Price, Insurance
Proceeds or Net Liquidation Proceeds
relating to interest with respect to such
Mortgage Loans received during the related
Prepayment Period and (iv) the
portion of any Reimbursement Amount
relating to such Mortgage Loans received
during the related Prepayment Period.
"Group 3 Maximum Net Rate": As to any Distribution Date, the
average
of the Net Maximum Mortgage Interest Rates
for the Adjustable-Rate Mortgage
Loans in Loan Group 3 and the Net Mortgage
Interest Rates for the Fixed-Rate
Mortgage Loans in Loan Group 3, weighted on
the basis of the Principal Balances
of the Group 3 Mortgage Loans as of the
first day of the related Collection
Period.
"Group 3 Maximum Rate Cap": With respect to any Distribution
Date
and for the Class A-3A, Class A-3B and
Class A-3C Certificates, a per annum
rate, adjusted by multiplying such rate by
a fraction equal to 30 over the
actual number of days in the related
Interest Accrual Period, equal to (i) on or
prior to the Distribution Date in May 2007,
the greater of (a) the Group 3
Maximum Net Rate and (b) 8.50% and (ii) on
and after the Distribution Date in
June 2007, the Group 3 Maximum Net
Rate.
"Group 3 Mortgage Loan": Each Mortgage Loan listed on Exhibit
D-3
hereto. Each Group 3 Mortgage Loan had, as
of the Cut-off Date, a Principal
Balance that may or may not conform to
Fannie Mae and Freddie Mac guidelines.
"Group 3 Principal Percentage": With respect to any
Distribution
Date and the Class A-3A, Class A-3B and
Class A-3C Certificates, the percentage
equivalent to a fraction, the numerator of
which is the Principal Remittance
Amount allocable to the Group 3 Mortgage
Loans for such Distribution Date and
the denominator of which is the Principal
Remittance Amount for such
Distribution Date.
"Group 3 Senior Principal Distribution Amount": With respect to
any
Distribution Date, (i) before the Stepdown
Date or as to which a Trigger Event
is in effect, the lesser of (a) the
aggregate Certificate Principal Balance of
the Class A-3A, Class A-3B and Class A-3C
Certificates immediately prior to such
Distribution Date and (b) the Group 3
Principal Percentage of the Principal
Distribution Amount and (ii) on or after
the Stepdown Date and as long as a
Trigger Event is not in effect, the excess
of (a) the aggregate Certificate
Principal Balance of the Class A-3A, Class
A-3B and Class A-3C Certificates
immediately prior to such Distribution Date
over (b) the lesser of (x) the
product of (1) 56.20% and (2) the aggregate
Principal Balance of the Group 3
Mortgage Loans as of the last day of the
related Collection Period and (y) the
amount by which the aggregate Principal
Balance of the Group 3 Mortgage Loans as
of the last day of the related Collection
Period exceeds the product of (1)
0.50% and (2) the aggregate Principal
Balance of the Group 3 Mortgage Loans on
the Cut-off Date.
"Group Subordinate Amount": For any Distribution Date and (i)
the
Group 1 Mortgage Loans, an amount equal to
the greater of zero and the excess of
the aggregate Principal Balance of the
Group 1 Mortgage Loans as of the first
day of the related Collection Period over
the aggregate Certificate Principal
Balance of the Class A-1SS and Class A-1MZ
Certificates immediately prior to
such Distribution Date, (ii) the Group 2
Mortgage Loans, an amount equal to the
greater of zero and the excess of the
aggregate Principal Balance of the Group 2
Mortgage Loans as of the first day of the
related Collection Period over the
aggregate Certificate Principal Balance of
the Class A-2SS and Class A-2MZ
Certificates immediately prior to such
Distribution Date, and (iii) the Group 3
Mortgage Loans, an amount equal to the
greater of zero and the excess of the
aggregate Principal Balance of the Group 3
Mortgage Loans as of the first day of
the related Collection Period over the
aggregate Certificate Principal Balance
of the Class A-3A, Class A-3B and Class
A-3C Certificates immediately prior to
such Distribution Date.
"Indenture": An indenture relating to the issuance of net
interest
margin notes secured by the Class CE
Certificates and the Class P Certificates,
which may or may not be guaranteed by the
NIMS Insurer.
"Independent": When used with respect to any specified Person,
any
such Person who (i) is in fact independent
of the Depositor, the Master
Servicer, any Servicer and their respective
Affiliates, (ii) does not have any
direct financial interest in or any
material indirect financial interest in the
Depositor, the Master Servicer or any
Servicer or any Affiliate thereof, and
(iii) is not connected with the Depositor,
the Master Servicer, any Servicer or
any Affiliate thereof as an officer,
employee, promoter, underwriter, trustee,
partner, director or Person performing
similar functions; provided, however,
that a Person shall not fail to be
Independent of the Depositor, the Master
Servicer, any Servicer or any Affiliate
thereof merely because such Person is
the beneficial owner of 1% or less of any
class of securities issued by the
Depositor, the Master Servicer, any
Servicer or any Affiliate thereof, as the
case may be.
"Index": With respect to each Adjustable-Rate Mortgage Loan and
with
respect to each related Adjustment Date,
the index as specified in the related
Mortgage Note.
"Initial Certificate Principal Balance": With respect to any
Certificate of a Class other than a Class
CE, Class P or Class R Certificate,
the amount designated "Initial Certificate
Principal Balance" on the face
thereof.
"Initial Overcollateralization Amount": $17,809,818.04 .
"Insurance Proceeds": Proceeds of any title policy, hazard
policy,
primary mortgage insurance policy or other
insurance policy covering a Mortgage
Loan, to the extent such proceeds are not
to be applied to the restoration of
the related Mortgaged Property or released
to the Mortgagor in accordance with
the procedures that the applicable Servicer
would follow in servicing mortgage
loans held for its own account, subject to
the terms and conditions of the
related Mortgage Note and Mortgage.
"Interest Accrual Period": With respect to any Distribution Date
and
the Offered Certificates and the Private
Class B Certificates, the period from
and including the preceding Distribution
Date, or in the case of the first
Distribution Date, from the Closing Date,
through and including the day prior to
the current Distribution Date.
"Interest Carry Forward Amount": For any Class of Certificates
(other than the Class CE, Class P and Class
R Certificates) and any Distribution
Date, the sum of (a) the excess, if any, of
the Accrued Certificate Interest and
any Interest Carry Forward Amount for the
prior Distribution Date, over the
amount in respect of interest actually
distributed on such Class on such prior
Distribution Date and (b) interest on such
excess at the applicable Certificate
Interest Rate for the actual number of days
elapsed on the basis of a 360-day
year since the prior Distribution Date.
"Interest Percentage": With respect to any Class of Certificates
and
any Distribution Date, the ratio (expressed
as a decimal carried to six places)
of the Accrued Certificate Interest for
such Class to the sum of the Accrued
Certificate Interest for all Classes, in
each case with respect to such
Distribution Date, without regard to Relief
Act Interest Shortfalls.
"Interest Remittance Amount": As of any Distribution Date, the
sum
of the Group 1 Interest Remittance Amount,
the Group 2 Interest Remittance
Amount and the Group 3 Interest Remittance
Amount.
"LIBOR Business Day": Any day on which banks in London, England
and
The City of New York are open and
conducting transactions in foreign currency
and exchange.
"LIBOR Determination Date": With respect to the Offered
Certificates
and the Private Class B Certificates, (i)
for the first Distribution Date, the
second LIBOR Business Day preceding the
Closing Date and (ii) for each
subsequent Distribution Date, the second
LIBOR Business Day prior to the
immediately preceding Distribution
Date.
"Liquidated Mortgage Loan": As to any Distribution Date, any
Mortgage Loan in respect of which the
applicable Servicer has determined, in
accordance with Customary Servicing
Procedures, as of the end of the related
Prepayment Period, that all Liquidation
Proceeds, Condemnation Proceeds and
Insurance Proceeds which it expects to
recover with respect to the liquidation
of the Mortgage Loan or disposition of the
related REO Property have been
recovered.
"Liquidation Proceeds": The amount (other than amounts received
in
respect of the rental of any REO Property
prior to REO Disposition) received by
the applicable Servicer in connection with
(i) the taking of all or a part of a
Mortgaged Property by exercise of the power
of eminent domain or condemnation or
(ii) the liquidation of a defaulted
Mortgage Loan by means of a trustee's sale,
foreclosure sale or otherwise.
"Loan Group": Any of Loan Group 1, Loan Group 2 or Loan Group
3.
"Loan Group 1": The Group 1 Mortgage Loans.
"Loan Group 2": The Group 2 Mortgage Loans.
"Loan Group 3": The Group 3 Mortgage Loans.
"Losses": As defined in Section 9.03.
"Lost Note Affidavit": With respect to any Mortgage Loan as to
which
the original Mortgage Note has been
permanently lost or destroyed and has not
been replaced, an affidavit from the Seller
certifying that the original
Mortgage Note has been lost, misplaced or
destroyed (together with a copy of the
related Mortgage Note and indemnifying the
Trust against any loss, cost or
liability resulting from the failure to
deliver the original Mortgage Note) in
the form of Exhibit H hereto.
"Majority Certificateholders": The Holders of Certificates
evidencing at least 51% of the Voting
Rights.
"Majority Class CE Certificateholders": The Holders of Class CE
Certificates evidencing at least a 51%
Percentage Interest in the Class CE
Certificates.
"Marker Rate": With respect to the Class CE Certificates and
any
Distribution Date, a per annum rate equal
to two (2) times the weighted average
of the Uncertificated REMIC Pass-Through
Rates for REMIC 1 Regular Interest
LT1A1SS, REMIC 1 Regular Interest LT1A1MZ,
REMIC 1 Regular Interest LT1A2SS,
REMIC 1 Regular Interest LT1A2MZ, REMIC 1
Regular Interest LT1A3A, REMIC 1
Regular Interest LT1A3B, REMIC 1 Regular
Interest LT1A3C, REMIC 1 Regular
Interest LT1M1, REMIC 1 Regular Interest
LT1M2, REMIC 1 Regular Interest LT1M3,
REMIC 1 Regular Interest LT1M4, REMIC 1
Regular Interest LT1M5, REMIC 1 Regular
Interest LT1M6, REMIC 1 Regular Interest
LT1M7, REMIC 1 Regular Interest LT1M8,
REMIC 1 Regular Interest LT1M9, REMIC 1
Regular Interest LT1B1, REMIC 1 Regular
Interest LT1B2, REMIC 1 Regular Interest
LT1B3 and REMIC 1 Regular Interest
LT1ZZ, (i) with the rate on each such REMIC
Regular Interest (other than REMIC 1
Regular Interest LT1ZZ) subject to a cap
equal to the Pass-Through Rate of its
Corresponding Class (taking into account in
determining any such Pass-through
Rate the imposition of the Group 1 Cap,
Group 2 Cap, Group 3 Cap or the Pool
Cap, as applicable, as described in
footnotes (1) through (19) to the table in
the Preliminary Statement relating to the
Certificates) for the purposes of this
calculation and (ii) with the rate on REMIC
1 Regular Interest LT1ZZ subject to
a cap of zero for the purpose of this
calculation; provided, however, that for
this purpose, calculations of the
Uncertificated REMIC 1 Pass-Through Rate and
the related caps with respect to each such
REMIC Regular Interest (other than
REMIC 1 Regular Interest LT1ZZ) shall be
multiplied by a fraction, the numerator
of which is the actual number of days in
the Interest Accrual Period and the
denominator of which is 30.
"Master Servicer": Wells Fargo Bank, N.A., a national banking
association, or any successor master
servicer appointed as herein provided, in
its capacity as Master Servicer
hereunder.
"Master Servicer Custodial Account": The account or accounts
created
and maintained by the Master Servicer
pursuant to Section 3.07, which shall be
entitled "Master Servicer Custodial
Account, Wells Fargo Bank, N.A., as Master
Servicer under the Pooling and Servicing
Agreement dated as of March 1, 2005
among Asset Backed Funding Corporation, as
Depositor, Wells Fargo Bank, N.A., as
Securities Administrator and Master
Servicer, and JPMorgan Chase Bank, National
Association, as Trustee, in trust for
registered Holders of ABFC 2005-HE1 Trust,
ABFC Asset-Backed Certificates, Series
2005-HE1," and which must be an Eligible
Account.
"Master Servicer Custodial Account Reinvestment Income": For
each
Distribution Date, all income and gains net
of any losses realized since the
preceding Distribution Date from Eligible
Investments of funds in the Master
Servicer Custodial Account.
"Master Servicing Officer": With respect to the Master Servicer,
any
officer of the Master Servicer involved in,
or responsible for, the
administration and master servicing of the
Mortgage Loans whose name appears on
a list of servicing officers furnished to
the Securities Administrator and the
Trustee by the Master Servicer, as such
list may from time to time be amended.
"Master Servicing Transfer Costs": All reasonable costs and
expenses
incurred by the Trustee in connection with
the transfer of master servicing from
a predecessor master servicer, including,
without limitation, any costs or
expenses associated with the complete
transfer of all master servicing data and
the completion, correction or manipulation
of such master servicing data as may
be required by the Trustee to correct any
errors or insufficiencies in the
master servicing data or otherwise to
enable the Trustee or other successor
master servicer to master service the
Mortgage Loans properly and effectively.
"Maximum LT1ZZ Uncertificated Accrued Interest Deferral
Amount":
With respect to any Distribution Date, the
excess of (a) accrued interest at the
Uncertificated REMIC 1 Pass-Through Rate
applicable to REMIC 1 Regular Interest
LT1ZZ for such Distribution Date on a
balance equal to the Uncertificated
Principal Balance of REMIC 1 Regular
Interest LT1ZZ minus the REMIC 1
Overcollateralized Amount, in each case for
such Distribution Date, over (b)
Uncertificated Accrued Interest on REMIC 1
Regular Interest LT1A1SS, REMIC 1
Regular Interest LT1A1MZ, REMIC 1 Regular
Interest LT1A2SS, REMIC 1 Regular
Interest LT1A2MZ, REMIC 1 Regular Interest
LT1A3A, REMIC 1 Regular Interest
LT1A3B, REMIC 1 Regular Interest LT1A3C,
REMIC 1 Regular Interest LT1M1, REMIC 1
Regular Interest LT1M2, REMIC 1 Regular
Interest LT1M3, REMIC 1 Regular Interest
LT1M4, REMIC 1 Regular Interest LT1M5,
REMIC 1 Regular Interest LT1M6, REMIC 1
Regular Interest LT1M7, REMIC 1 Regular
Interest LT1M8, REMIC 1 Regular Interest
LT1M9, REMIC 1 Regular Interest LT1B1,
REMIC 1 Regular Interest LT1B2, REMIC 1
Regular Interest LT1B3, each subject to a
cap equal to the Pass-Through Rate of
the related Corresponding Class for the
purpose of this calculation; provided,
however, that for this purpose,
calculations of the Uncertificated REMIC 1
Pass-Through Rate and the related caps with
respect to Uncertificated Accrued
Interest on REMIC 1 Regular Interest
LT1A1SS, REMIC 1 Regular Interest LT1A1MZ,
REMIC 1 Regular Interest LT1A2SS, REMIC 1
Regular Interest LT1A2MZ, REMIC 1
Regular Interest LT1A3A, REMIC 1 Regular
Interest LT1A3B, REMIC 1 Regular
Interest LT1A3C, REMIC 1 Regular Interest
LT1M1, REMIC 1 Regular Interest LT1M2,
REMIC 1 Regular Interest LT1M3, REMIC 1
Regular Interest LT1M4, REMIC 1 Regular
Interest LT1M5, REMIC 1 Regular Interest
LT1M6, REMIC 1 Regular Interest LT1M7,
REMIC 1 Regular Interest LT1M8, REMIC 1
Regular Interest LT1M9, REMIC 1 Regular
Interest LT1B1, REMIC 1 Regular Interest
LT1B2, REMIC 1 Regular Interest LT1B3
shall be multiplied by a fraction, the
numerator of which is the actual number
of days in the Interest Accrual Period and
the denominator of which is 30.
"Maximum Mortgage Interest Rate": With respect to each
Adjustable-Rate Mortgage Loan, the
percentage set forth in the related Mortgage
Note as the maximum Mortgage Interest Rate
thereunder.
"MERS": The Mortgage Electronic Registration Systems, Inc.
"MERS Mortgage Loan": Any MOM Mortgage Loan or any other
Mortgage
Loan as to which MERS or its designee is
(or is intended to be) the mortgagee of
record and as to which a MIN has been
assigned.
"MIN": A MERS Mortgage Identification Number assigned to a
Mortgage
Loan registered under MERS.
"Minimum Mortgage Interest Rate": With respect to each
Adjustable-Rate Mortgage Loan, the
percentage set forth in the related Mortgage
Note as the minimum Mortgage Interest Rate
thereunder.
"MOM": A Mortgage Loan where the related Mortgage names MERS or
its
designee as the original mortgagee thereof,
as to which a MIN has been assigned,
and which Mortgage has not been assigned to
any other person.
"Monthly Excess Cashflow Amount": The sum of the Monthly Excess
Interest Amount, the Overcollateralization
Release Amount and (without
duplication) any portion of the Principal
Distribution Amount remaining after
principal distributions on the Offered
Certificates and Private Class B
Certificates.
"Monthly Excess Interest Amount": With respect to each
Distribution
Date, the amount, if any, by which the
Interest Remittance Amount for such
Distribution Date exceeds the aggregate
amount distributed on such Distribution
Date pursuant to paragraphs (i) through
(xvii) under Section 4.01.
"Monthly Form 8-K": As defined in Section 3.23(a) hereof.
"Monthly Payment": With respect to any Mortgage Loan, the
scheduled
monthly payment of principal and interest
on such Mortgage Loan which is payable
by the related Mortgagor from time to time
under the related Mortgage Note,
determined: (a) after giving effect to (i)
any Deficient Valuation and/or Debt
Service Reduction with respect to such
Mortgage Loan and (ii) any reduction in
the amount of interest collectible from the
related Mortgagor pursuant to the
Relief Act or similar state laws; (b)
without giving effect to any extension
granted or agreed to by the applicable
Servicer pursuant to the applicable
Servicing Agreement; and (c) on the
assumption that all other amounts, if any,
due under such Mortgage Loan are paid when
due.
"Moody's": Moody's Investors Service, Inc., and its successors,
and
if such company shall for any reason no
longer perform the functions of a
securities rating agency, "Moody's" shall
be deemed to refer to any other
"nationally recognized statistical rating
organization" as set forth on the most
current list of such organizations released
by the Securities and Exchange
Commission.
"Mortgage": The mortgage, deed of trust or other instrument
creating
a first or second lien on, or first or
second priority security interest in, a
Mortgaged Property securing a Mortgage
Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage
Loan.
"Mortgage Interest Rate": With respect to each Mortgage Loan,
the
annual rate at which interest accrues on
such Mortgage Loan from time to time in
accordance with the provisions of the
related Mortgage Note, which rate (i) in
the case of each Fixed-Rate Mortgage Loan
shall remain constant at the rate set
forth in the related Mortgage Loan Schedule
as the Mortgage Interest Rate in
effect immediately following the Cut-off
Date and (ii) in the case of each
Adjustable-Rate Mortgage Loan (A) as of any
date of determination until the
first Adjustment Date following the Cut-off
Date shall be the rate set forth in
the related Mortgage Loan Schedule as the
Mortgage Interest Rate in effect
immediately following the Cut-off Date and
(B) as of any date of determination
thereafter shall be the rate as adjusted on
the most recent Adjustment Date, to
equal the sum, rounded as provided in the
Mortgage Note, of the Index,
determined as set forth in the related
Mortgage Note, plus the related Gross
Margin subject to the limitations set forth
in the related Mortgage Note. With
respect to each Mortgage Loan that becomes
an REO Property, as of any date of
determination, the annual rate determined
in accordance with the immediately
preceding sentence as of the date such
Mortgage Loan became an REO Property.
"Mortgage Loan": Each mortgage loan transferred and assigned to
the
Trustee pursuant to Section 2.01, Section
2.03(c) or Section 2.03(d) as from
time to time held as a part of the Trust
Fund, the Mortgage Loans so held being
identified in the Mortgage Loan
Schedules.
"Mortgage Loan Purchase Agreement": The agreement between the
Seller
and the Depositor, dated as of March 1,
2005, regarding the transfer of the
Mortgage Loans by the Seller to or at the
direction of the Depositor.
"Mortgage Loan Schedule": As of any date with respect to the
Mortgage Loans, the lists of such Mortgage
Loans included in the Trust Fund on
such date attached hereto as Exhibit D-1,
Exhibit D-2 and Exhibit D-3. The
Mortgage Loan Schedules shall set forth the
following information with respect
to each Mortgage Loan:
(1) the
Mortgage Loan identifying number;
(2) the
state and zip code of the Mortgaged Property;
(3) the
type of Residential Dwelling constituting the Mortgaged
Property;
(4) the
occupancy status of the Mortgaged Property at origination;
(5) the
original months to maturity;
(6) the
date of origination;
(7) the
first payment date;
(8) the
stated maturity date;
(9) the
stated remaining months to maturity;
(10) the
original principal amount of the Mortgage Loan;
(11) the
Principal Balance of each Mortgage Loan as of the Cut-off Date;
(12) the
Mortgage Interest Rate of the Mortgage Loan as of the Cut-off
Date;
(13) the
current principal and interest payment of the Mortgage Loan as
of
the Cut-off Date;
(14) the
contractual interest paid to date of the Mortgage Loan;
(15) the
Combined Loan-to-Value Ratio at origination and as of the
Cut-off
Date;
(16) a
code indicating the loan performance status of the Mortgage Loan
as
of the Cut-off Date;
(17) a
code indicating the Index that is associated with such Mortgage
Loan;
(18) the
Gross Margin;
(19) the
Periodic Rate Cap;
(20) the
Minimum Mortgage Interest Rate;
(21) the
Maximum Mortgage Interest Rate;
(22) a
code indicating whether the Mortgage Loan has a Prepayment
Charge
and the type of Prepayment Charge and the
term;
(23) the
first Adjustment Date immediately following the Cut-off Date;
(24) the
rate adjustment frequency;
(25) the
payment adjustment frequency;
(26) the
purpose of the Mortgage Loan;
(27) a
code indicating the initial Servicer;
(28) a
code indicating whether the Mortgage Loan has a lender-paid
primary
mortgage insurance policy; and
(29) a
code indicating whether the Mortgage Loan is a second lien.
The Mortgage Loan Schedules shall set forth the following
information, as of the Cut-off Date, with
respect to the Mortgage Loans in the
aggregate,: (1) the number of Mortgage
Loans; (2) the current Principal Balance
of the Mortgage Loans; (3) the weighted
average Mortgage Interest Rate of the
Mortgage Loans; and (4) the weighted
average maturity of the Mortgage Loans. The
Mortgage Loan Schedules shall be amended
from time to time in accordance with
the provisions of this Agreement and a copy
of such amended Mortgage Loan
Schedules shall be furnished by the Master
Servicer to the NIMS Insurer. With
respect to any Eligible Substitute Mortgage
Loan, Cut-off Date shall refer to
the applicable date of substitution.
"Mortgage Note": The original executed note or other evidence
of
indebtedness evidencing the indebtedness of
a Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on
Exhibit
D-1, Exhibit D-2 and Exhibit D-3 from time
to time, and any REO Properties
acquired in respect thereof.
"Mortgaged Property": The underlying property securing a
Mortgage
Loan, including any REO Property,
consisting of an Estate in Real Property
improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net
Liquidation Proceeds": With respect to any Liquidated Mortgage
Loan or any other disposition of related
Mortgaged Property (including REO
Property), the related Liquidation Proceeds
net of unreimbursed Advances,
unreimbursed Servicing Advances, Servicing
Fees and any other accrued and unpaid
servicing fees received and retained in
connection with the liquidation of such
Mortgage Loan or Mortgaged Property.
"Net Maximum Mortgage Interest Rate": With respect to any
Adjustable-Rate Mortgage Loan, the
applicable Maximum Mortgage Interest Rate
minus the Expense Fee Rate.
"Net Mortgage Interest Rate": With respect to any Mortgage Loan,
the
Mortgage Interest Rate borne by such
Mortgage Loan minus the Expense Fee Rate.
"NIMS Insurer": Any
insurer that is guaranteeing certain payments
under notes secured by collateral which
includes all or a portion of the Class
CE and Class P Certificates.
"Notional Amount": With respect to the Class CE Certificates,
an
amount equal to the aggregate principal
balance of the REMIC 1 Regular
Interests.
"Offered Certificates": The Class A-1SS, Class A-1MZ, Class
A-2SS,
Class A-2MZ, Class A-3A, Class A-3B, Class
A-3C, 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.
"Officers' Certificate": A certificate signed by the Chairman of
the
Board, the Vice Chairman of the Board, the
President, a vice president (however
denominated), a principal, the Treasurer,
the Secretary, or one of the assistant
treasurers or assistant secretaries of the
Master Servicer, the Seller or the
Depositor, as applicable.
"One-Month LIBOR": With respect to each Interest Accrual Period,
the
rate determined by the Securities
Administrator on the related LIBOR
Determination Date on the basis of the
offered rate for one-month United States
dollar deposits, as such rate appears on
the Telerate Page 3750, as of 11:00
a.m. (London time) on such LIBOR
Determination Date. If no such quotations are
available on an LIBOR Determination Date,
One-Month LIBOR for the related
Interest Accrual Period will be established
by the Securities Administrator as
follows:
(i) If on such LIBOR Determination Date two or more Reference
Banks
provide
such offered quotations, One-Month LIBOR for the related
Interest
Accrual
Period shall be the arithmetic mean of such offered quotations
(rounded
upwards if necessary to the nearest whole multiple of 0.001%);
(ii) If on such LIBOR Determination Date fewer than two
Reference
Banks
provide such offered quotations, One-Month LIBOR for the
related
Interest
Accrual Period shall be the arithmetic mean of the rates quoted
by one or
more major banks in New York City, selected by the Securities
Administrator after consultation with the Depositor and the NIMS
Insurer,
as of
11:00 A.M., New York City time, on such date for loans in U.S.
Dollars to
leading European banks for a period of one month in amounts
approximately equal to the aggregate Certificate Principal Balance
of the
Offered
Certificates and the Private Class B Certificates; and
(iii) If no such quotations can be obtained, One-Month LIBOR for
the
related
Interest Accrual Period shall be One-Month LIBOR for the prior
Distribution Date.
"Opinion of Counsel": A written opinion of counsel, who may,
without
limitation, be a salaried counsel for the
Depositor or the Master Servicer
except that any opinion of counsel relating
to (a) the qualification of any
REMIC as a REMIC or (b) compliance with the
REMIC Provisions must be an opinion
of Independent counsel.
"Option One": Option One Mortgage Corporation.
"Option One Mortgage
Loans": The Mortgage
Loans purchased by the
Seller pursuant to the Option One Sale and Servicing Agreement or any
Eligible Substitute Mortgage Loans,
substituted therefor.
"Option One Sale and Servicing Agreement": The Flow Sale and
Servicing Agreement dated as of April 29,
2004, among the Seller, Option One,
Option One Owner Trust 2001-1A, Option One
Owner Trust 2001-1B, Option One Owner
Trust 2001-2, Option One Owner Trust
2002-3, Option One Owner Trust 2003-4 and
Option One Owner Trust 2003-5 as amended by
(1) Amendment No. 1, dated as of
August 17, 2004, between the Seller and
Option One, (2) Amendment No. 2, dated
as of January 27, 2005, between the seller
and Option One and (3) the
Assignment, Assumption and Recognition
Agreement, dated March 30, 2005, among
the Seller, the Depositor, the Trustee, the
Master Servicer and Option One.
"Optional Termination Date": The first Distribution Date on
which
the NIMS Insurer, if there is a NIMS
Insurer, or if there is no NIMS Insurer,
the Majority Class CE Certificateholders
or, if such holder is the Seller or is
affiliated with the Seller or there is no
Majority Class CE Certificateholders,
the Master Servicer, or if the Master
Servicer fails to act, Countrywide, may
opt to terminate the Mortgage Pool pursuant
to Section 10.01.
"Original Class Certificate Principal Balance": With respect to
each
Class of Certificates, the Certificate
Principal Balance thereof on the Closing
Date, as set forth opposite such Class in
the Preliminary Statement, except with
respect to (i) the Class P and Class R
Certificates, which have an Original
Class Certificate Principal Balance of zero
and (ii) the Class CE Certificates,
which, solely for REMIC purposes, have an
Original Class Certificate Principal
Balance equal to the Initial
Overcollateralization Amount.
"Originator": Either Option One or Accredited, as the case may
be.
"Originator Prepayment Charge Payment Amount": The amount payable
by
(i) Option One pursuant to Section 4.22(b)
of the Option One Sale and Servicing
Agreement or (ii) Accredited pursuant to
Section 4.21(b) of the Accredited Sale
Agreement, in respect of certain Prepayment
Charges that are not collected from
the applicable Mortgagor.
"Originator Sale Agreement": Either of the Accredited Sale
Agreement
or the Option One Sale and Servicing
Agreement.
"Overcollateralization Amount": As of any Distribution Date,
the
excess, if any, of (x) the Pool Balance as
of the last day of the related
Collection Period over (y) the aggregate
Certificate Principal Balance of all
Classes of Offered Certificates and Private
Class B Certificates (after taking
into account all distributions of principal
on such Distribution Date and the
increase of any Certificate Principal
Balance as a result of Subsequent
Recoveries).
"Overcollateralization Deficiency": As of any Distribution Date,
the
excess, if any, of (x) the Targeted
Overcollateralization Amount for such
Distribution Date over (y) the
Overcollateralization Amount for such
Distribution Date, calculated for this
purpose after taking into account the
reduction on such Distribution Date of the
Certificate Principal Balances of all
Classes of Offered Certificates and Private
Class B Certificates resulting from
the distribution of the Principal
Distribution Amount (but not the Extra
Principal Distribution Amount) on such
Distribution Date, but prior to taking
into account any Applied Realized Loss
Amounts on such Distribution Date.
"Overcollateralization Release Amount": With respect to any
Distribution Date after the Stepdown Date
on which a Trigger Event is not in
effect, the lesser of (x) the Principal
Remittance Amount for such Distribution
Date and (y) the excess, if any, of (i) the
Overcollateralization Amount for
such Distribution Date, assuming that 100%
of the Principal Remittance Amount is
applied as a principal payment on the
Offered Certificates and the Private Class
B Certificates on such Distribution Date,
over (ii) the Targeted
Overcollateralization Amount for such
Distribution Date. With respect to any
Distribution Date on which a Trigger Event
is in effect, the
Overcollateralization Release Amount will
be zero.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate,
including any interest in such
Certificate as the Holder thereof and any
other interest therein, whether direct
or indirect, legal or beneficial, as owner
or as pledgee.
"Pass-Through Rate": Any of the Class A-1SS Pass-Through Rate,
the
Class A-1MZ Pass-Through Rate, the Class
A-2SS Pass-Through Rate, the Class
A-2MZ Pass-Through Rate, the Class A-3A
Pass-Through Rate, the Class A-3B
Pass-Through Rate, the Class A-3C
Pass-Through Rate, the Class M-1 Pass-Through
Rate, the Class M-2 Pass-Through Rate, the
Class M-3 Pass-Through Rate, the
Class M-4 Pass-Through Rate, the Class M-5
Pass-Through Rate, the Class M-6
Pass-Through Rate, the Class M-7
Pass-Through Rate, the Class M-8 Pass-Through
Rate, the Class M-9 Pass-Through Rate, the
Class B-1 Pass-Through Rate, the
Class B-2 Pass-Through Rate and the Class
B-3 Pass-Through Rate; and in the case
of any Regular Interest, the Pass-Through
Rate set forth in the definition
thereof.
With respect to the Class CE 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
(U) below, and the denominator of which is
the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular
Interest LT1AA, REMIC 1 Regular Interest
LT1A1SS, REMIC 1 Regular Interest LT1A1MZ,
REMIC 1 Regular Interest LT1A2SS,
REMIC 1 Regular Interest LT1A2MZ, REMIC 1
Regular Interest LT1A3A, REMIC 1
Regular Interest LT1A3B, REMIC 1 Regular
Interest LT1A3C, REMIC 1 Regular
Interest LT1M1, REMIC 1 Regular Interest
LT1M2, REMIC 1 Regular Interest LT1M3,
REMIC 1 Regular Interest LT1M4, REMIC 1
Regular Interest LT1M5, REMIC 1 Regular
Interest LT1M6, REMIC 1 Regular Interest
LT1M7, REMIC 1 Regular Interest LT1M8,
REMIC 1 Regular Interest LT1M9, REMIC 1
Regular Interest LT1B1, REMIC 1 Regular
Interest LT1B2, REMIC 1 Regular Interest
LT1B3 and REMIC 1 Regular Interest
LT1ZZ. For purposes of calculating the
Pass-Through Rate for the Class CE
Certificates, the numerator is equal to the
sum of the following components:
(A) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1AA minus the Marker Rate,
applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1
Regular Interest LT1AA;
(B) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1A1SS, minus the Marker Rate,
applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1
Regular Interest LT1A1SS;
(C) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1A1MZ, minus the Marker Rate,
applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1
Regular Interest LT1A1MZ;
(D) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1A2SS, minus the Marker Rate,
applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1
Regular Interest LT1A2SS;
(E) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1A2MZ, minus the Marker Rate,
applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1
Regular Interest LT1A2MZ;
(F) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1A3A, minus the Marker Rate,
applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1
Regular Interest LT1A3A;
(G) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1A3B, minus the Marker Rate,
applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1
Regular Interest LT1A3B;
(H) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1A3C, minus the Marker Rate,
applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1
Regular Interest LT1A3C;
(I) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1M1 minus the Marker Rate,
applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1
Regular Interest LT1M1;
(J) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1M2 minus the Marker Rate,
applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1
Regular Interest LT1M2;
(K) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1M3 minus the Marker Rate,
applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1
Regular Interest LT1M3;
(L) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1M4 minus the Marker Rate,
applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1
Regular Interest LT1M4;
(M) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1M5 minus the Marker Rate,
applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1
Regular Interest LT1M5;
(N) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1M6 minus the Marker Rate,
applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1
Regular Interest LT1M6;
(O) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1M7 minus the Marker Rate,
applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1
Regular Interest LT1M7;
(P) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1M8 minus the Marker Rate,
applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1
Regular Interest LT1M8;
(Q) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1M9 minus the Marker Rate,
applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1
Regular Interest LT1M9;
(R) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1B1 minus the Marker Rate,
applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1
Regular Interest LT1B1;
(S) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1B2 minus the Marker Rate,
applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1
Regular Interest LT1B2;
(T) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1B3 minus the Marker Rate,
applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1
Regular Interest LT1B3; and
(U) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1ZZ minus the Marker Rate,
applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1
Regular Interest LT1ZZ.
"Paying Agent": Any paying agent appointed pursuant to Section
5.05.
"Percentage Interest": With respect to any Certificate (other than
a
Class CE, Class P or Class R Certificate),
a fraction, expressed as a
percentage, the numerator of which is the
Initial Certificate Principal Balance,
as the case may be, represented by such
Certificate and the denominator of which
is the Original Class Certificate Principal
Balance of the related Class. With
respect to a Class CE or Class P
Certificate, the portion of the Class evidenced
thereby, expressed as a percentage, as
stated on the face of such Certificate;
provided, however, that the sum of all such
percentages for each such Class
totals 100%. With respect to the Class R
Certificate, 100%.
"Periodic Rate Cap": With respect to each Adjustable-Rate
Mortgage
Loan and any Adjustment Date therefor, the
fixed percentage set forth in the
related Mortgage Note, which is the maximum
amount by which the Mortgage
Interest Rate for such Mortgage Loan may
increase or decrease (without regard to
the Maximum Mortgage Interest Rate or the
Minimum Mortgage Interest Rate) on
such Adjustment Date from the Mortgage
Interest Rate in effect immediately prior
to such Adjustment Date.
"Permitted Transferee": Any transferee of a Class R Certificate
other than a Disqualified Organization, a
non-U.S. Person or a U.S. Person with
respect to whom income on the Class R
Certificate is attributable to a foreign
permanent establishment or fixed base,
within the meaning of an applicable
income tax treaty, of such Person or any
other U.S. Person.
"Person": Any individual, corporation, partnership, joint
venture,
association, joint stock company, trust,
limited liability company,
unincorporated organization or government
or any agency or political subdivision
thereof.
"Pool Balance": As of any date of determination, the aggregate
Principal Balance of the Mortgage
Loans.
"Pool Cap": As of any Distribution Date and the Class M and Class
B
Certificates, a per annum rate, adjusted by
multiplying such rate by a fraction
equal to 30 over the actual number of days
in the related Interest Accrual
Period, equal to the weighted average of
the Group 1 Cap, the Group 2 Cap and
the Group 3 Cap, weighted on the basis of
the related Group Subordinate Amount.
For federal income tax purposes, the
economic equivalent of such rate shall be
expressed as the weighted average of the
REMIC 1 Remittance Rate on (a) REMIC 1
Regular Interest LT1SUB, subject to a cap
and floor equal to the Weighted
Average Net Mortgage Interest Rates of the
Group 1 Mortgage Loans, (b) REMIC 1
Regular Interest LT2SUB, subject to a cap
and floor equal to the Weighted
Average Net Mortgage Interest Rates of the
Group 2 Mortgage Loans, weighted on
the basis of the Uncertificated Balance of
such REMIC 1 Regular Interest and (c)
REMIC 1 Regular Interest LT3SUB, subject to
a cap and floor equal to the
Weighted Average Net Mortgage Interest
Rates of the Group 3 Mortgage Loans,
weighted on the basis of the Uncertificated
Balance of such REMIC 1 Regular
Interest.
"Pool Maximum Rate Cap": With respect to any Distribution Date
and
for the Class M and Class B Certificates, a
per annum rate adjusted by
multiplying such rate by a fraction equal
to 30 over the actual number of days
in the related Interest Accrual Period,
equal to (i) on or prior to the
Distribution Date in November 2007, the
greater of (a) the weighted average of
the Group 1 Maximum Rate Cap, the Group 2
Maximum Rate Cap and the Group 3
Maximum Rate Cap, weighted on the basis of
the related Group Subordinate Amount
and (b) 9.50% and (ii) on or after the
Distribution Date in December 2007, the
Pool Maximum Net Rate.
"Prepayment Charge": With respect to any Prepayment Period, any
prepayment premium, penalty or charge
collected by a Servicer from a Mortgagor
in connection with any voluntary Principal
Prepayment in full pursuant to the
terms of the related Mortgage Note as from
time to time held as a part of the
Trust Fund, the Prepayment Charges so held
being identified in the Mortgage Loan
Schedules (other than any Originator
Prepayment Charge Payment Amount or
Servicer Prepayment Charge Payment
Amount).
"Prepayment Interest Excess": With respect to any Distribution
Date,
for each Option One Mortgage Loan that was
the subject of a Principal Prepayment
in full during the portion of the related
Prepayment Period beginning on the
first day of the calendar month in which
such Distribution Date occurs through
the Determination Date of the calendar
month in which such Distribution Date
occurs, an amount equal to interest (to the
extent received) at the applicable
Mortgage Interest Rate (net of the
applicable Servicing Fee Rate) on the amount
of such Principal Prepayment for the number
of days commencing on the first day
of the calendar month in which such
Distribution Date occurs and ending on the
date on which such prepayment is so
applied.
"Prepayment Interest Shortfall": With respect to any
Distribution
Date, for each Mortgage Loan that was the
subject of a Principal Prepayment in
full during the portion of the related
Prepayment Period occurring in the prior
calendar month that was applied by the
applicable Servicer to reduce the
outstanding Principal Balance of such
Mortgage Loan on a date preceding the
related Due Date, an amount equal to
interest at the applicable Mortgage
Interest Rate (net of the applicable
Servicing Fee Rate) on the amount of such
Principal Prepayment for the number of days
commencing on the date on which the
Principal Prepayment is applied and ending
on the last day of the calendar month
in which applied.
"Prepayment Period": With respect to any Distribution Date and
(i)
the Option One Mortgage Loans, the period
commencing on the day after the
Determination Date in the calendar month
preceding the calendar month in which
such Distribution Date occurs (or, in the
case of the first Distribution Date,
on March 1, 2005) and ending on the
Determination Date in the calendar month in
which such Distribution Date occurs and
(ii) the Accredited Mortgage Loans, the
calendar month preceding the month in which
such Distribution Date occurs.
"Principal Balance": As to any Mortgage Loan and any day, other
than
a Liquidated Mortgage Loan, the related
Cut-off Date Principal Balance, minus
the sum of (i) all collections and other
amounts credited against the principal
balance of any such Mortgage Loan, (ii) the
principal portion of Advances, (iii)
any Deficient Valuation and (iv) any
principal reduction resulting from a
Servicer Modification. For purposes of this
definition, a Liquidated Mortgage
Loan shall be deemed to have a Principal
Balance equal to the Principal Balance
of the related Mortgage Loan as of the
final recovery of related Liquidation
Proceeds and a Principal Balance of zero
thereafter. As to any REO Property and
any day, the Principal Balance of the
related Mortgage Loan immediately prior to
such Mortgage Loan becoming REO Property
minus any REO Principal Amortization
received with respect thereto on or prior
to such day.
"Principal Distribution Amount": As to any Distribution Date,
the
sum of (i) the Principal Remittance Amount
minus the Overcollateralization
Release Amount, if any, and (ii) the Extra
Principal Distribution Amount, if
any.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is
received in advance of its scheduled Due
Date and which is not accompanied by an
amount of interest representing the full
amount of scheduled interest due on any Due
Date in any month or months
subsequent to the month of prepayment.
"Principal Remittance Amount": With respect to any Distribution
Date, to the extent of funds available
therefor, the sum (less amounts available
for reimbursement of Advances and Servicing
Advances and expenses pursuant to
the applicable Servicing Agreement, amounts
reimbursable or payable to the
Master Servicer pursuant to this Agreement,
including, without limitation,
Sections 3.09 or 3.20 and amounts
reimbursable or payable to the Securities
Administrator or Trustee pursuant to this
Agreement, including, without
limitation, Sections 8.05 and Section
9.01(c)) of: (i) each payment of principal
on a Mortgage Loan due during the related
Collection Period and received by the
Servicers on or prior to the related
Determination Date, and any Advances with
respect thereto, (ii) all full and partial
Principal Prepayments received by the
applicable Servicer during the related
Prepayment Period, (iii) Insurance
Proceeds, Net Liquidation Proceeds and
Subsequent Recoveries allocable to
principal actually collected by the
applicable Servicer during the related
Prepayment Period, (iv) with respect to
Defective Mortgage Loans repurchased
with respect to such Prepayment Period, the
portion of the Purchase Price
allocable to principal, (v) any
Substitution Adjustment Amounts paid during the
related Prepayment Period and (vi) on the
Distribution Date on which the Trust
is to be terminated in accordance with
Section 10.01 hereof, that portion of the
Termination Price in respect of
principal.
"Private Certificates": Any of the Class B-2, Class B-3, Class
CE,
Class P and Class R Certificates.
"Private Class B Certificates": Any of the Class B-2 and Class
B-3
Certificates.
"Prospectus Supplement": That certain Prospectus Supplement
dated
March 28, 2005 relating to the public
offering of the Offered Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO
Property
to be purchased pursuant to or as
contemplated by Section 2.03 or 10.01, an
amount equal to the sum of (i) 100% of the
Principal Balance thereof as of the
date of purchase (or such other price as
provided in Section 10.01), (ii) in the
case of a Mortgage Loan, accrued interest
on such Principal Balance at the
applicable Mortgage Interest Rate in effect
from time to time from the Due Date
as to which interest was last covered by a
payment by the Mortgagor or an
Advance by the applicable Servicer, which
payment or Advance had as of the date
of purchase been distributed pursuant to
Section 4.01, through the end of the
calendar month in which the purchase is to
be effected, (iii) any unreimbursed
Servicing Advances and Advances and any
unpaid Servicing Fees allocable to such
Mortgage Loan or REO Property, and (iv) in
the case of a Mortgage Loan required
to be purchased pursuant to Section 2.03,
expenses reasonably incurred or to be
incurred by the Master Servicer, the
Securities Administrator or the Trustee in
respect of the breach or defect giving rise
to the purchase obligation.
"Rating Agency or Rating Agencies": Moody's, Fitch and S&P, or
their
respective successors. If such agencies or
their successors are no longer in
existence, "Rating Agencies" shall be such
nationally recognized statistical
rating organizations as set forth on the
most current list of such organizations
released by the Securities and Exchange
Commission and designated by the
Depositor, notice of which designation
shall be given to the Trustee, the
Securities Administrator and the Master
Servicer.
"Realized Loss": With respect to a Liquidated Mortgage Loan,
the
amount by which the remaining unpaid
principal balance of the Mortgage Loan
exceeds the amount of Net Liquidation
Proceeds applied to the principal balance
of the related Mortgage Loan. With respect
to any Mortgage Loan, a Deficient
Valuation or a reduction in the Principal
Balance thereof resulting from a
Servicer Modification.
"Realized Loss Amortization Amount": Any of the Class A
Realized
Loss Amortization Amount, the Class M-1
Realized Loss Amortization Amount, the
Class M-2 Realized Loss Amortization
Amount, the Class M-3 Realized Loss
Amortization Amount, the Class M-4 Realized
Loss Amortization Amount, the Class
M-5 Realized Loss Amortization Amount, the
Class M-6 Realized Loss Amortization
Amount, the Class M-7 Realized Loss
Amortization Amount, the Class M-8 Realized
Loss Amortization Amount, the Class M-9
Realized Loss Amortization Amount, the
Class B-1 Realized Loss Amortization
Amount, the Class B-2 Realized Loss
Amortization Amount and the Class B-3
Realized Loss Amortization Amount.
"Record Date": With respect to all of the Certificates (other
than
the Class CE, Class P and Class R
Certificates), the Business Day immediately
preceding such Distribution Date; provided,
however, that if any such
Certificate becomes a Definitive
Certificate, the Record Date for such
Certificate shall be the last Business Day
of the month immediately preceding
the month in which the related Distribution
Date occurs. With respect to the
Class CE, Class P and Class R Certificates,
the last Business Day of the month
immediately preceding the month in which
the related Distribution Date occurs.
"Reference Banks": Those banks (i) with an established place of
business in London, England, (ii) not
controlling, under the control of or under
common control with the Depositor or the
Securities Administrator, (iii) whose
quotations appear on the Telerate Page 3750
on the relevant LIBOR Determination
Date and (iv) which have been designated as
such by the Securities
Administrator; provided, however, that if
fewer than two of such banks provide a
One-Month LIBOR rate, then any leading
banks selected by the Securities
Administrator which are engaged in
transactions in United States dollar deposits
in the international Eurocurrency
market.
"Regular Certificate": Any of the Offered Certificates, the
Private
Class B Certificates and the Class CE
Certificates.
"Reimbursement Amount": With respect to any Mortgage Loan, any
costs
or damages incurred by the Trust in
connection with a breach of (i) Option One's
representations and warranties set forth in
Section 3.03(i) or Section 3.03(ddd)
of the Option One Sale and Servicing
Agreement and (ii) Accredited's
representation and warranties regarding
predatory and abusive lending laws set
forth in Section 3.02(i), Section 3.02(eee)
or Section 3.02(hhh) of the
Accredited Sale Agreement.
"Related Documents": With respect to any Mortgage Loan, the
related
Mortgage Notes and other related
documents.
"Relief Act": The Servicemembers Civil Relief Act, as it may be
amended from time to time.
"Relief Act Interest Shortfall": With respect to any
Distribution
Date, for any Mortgage Loan with respect to
which there has been a reduction in
the amount of interest collectible thereon
for the most recently ended
Collection Period as a result of the
application of the Relief Act or similar
state laws, the amount by which (i)
interest collectible on such Mortgage Loan
during such Collection Period is less than
(ii) one month's interest on the
Principal Balance of such Mortgage Loan at
the Mortgage Interest Rate for such
Mortgage Loan before giving effect to the
application of the Relief Act or
similar state laws.
"REMIC": A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"REMIC 1 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a)
the product of (i) 50% of the sum of
the aggregate Principal Balance of the
Mortgage Loans and related REO Properties
then outstanding and (ii) the
Uncertificated REMIC 1 Pass-Through Rate for REMIC
1 Regular Interest LT1AA minus the Marker
Rate, divided by (b) 12.
"REMIC 1 Marker Allocation Percentage": 50% of any amount
payable
from or loss attributable to the Mortgage
Loans, which shall be allocated to
REMIC 1 Regular Interest LT1AA, REMIC 1
Regular Interest LT1A1SS, REMIC 1
Regular Interest LT1A1MZ, REMIC 1 Regular
Interest LT1A2SS, REMIC 1 Regular
Interest LT1A2MZ, REMIC 1 Regular Interest
LT1A3A, REMIC 1 Regular Interest
LT1A3B, REMIC 1 Regular Interest LT1A3C,
REMIC 1 Regular Interest LT1M1, REMIC 1
Regular Interest LT1M2, REMIC 1 Regular
Interest LT1M3, REMIC 1 Regular Interest
LT1M4, REMIC 1 Regular Interest LT1M5,
REMIC 1 Regular Interest LT1M6, REMIC 1
Regular Interest LT1M7, REMIC 1 Regular
Interest LT1M8, REMIC 1 Regular Interest
LT1M9, REMIC 1 Regular Interest LT1B1,
REMIC 1 Regular Interest LT1B2, REMIC 1
Regular Interest LT1B3 and REMIC 1 Regular
Interest LT1ZZ as provided in Section
4.08.
"REMIC 1 Overcollateralization Target Amount": 0.50% of the
Targeted
Overcollateralization Amount.
"REMIC 1 Overcollateralized Amount": With respect to any date
of
determination, (i) 0.50% of the aggregate
Uncertificated Principal Balances of
the REMIC 1 Regular Interests minus (ii)
the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular
Interest LT1A1SS, REMIC 1 Regular Interest
LT1A1MZ, REMIC 1 Regular Interest LT1A2SS,
REMIC 1 Regular Interest LT1A2MZ,
REMIC 1 Regular Interest LT1A3A, REMIC 1
Regular Interest LT1A3B, REMIC 1
Regular Interest LT1A3C, REMIC 1 Regular
Interest LT1M1, REMIC 1 Regular
Interest LT1M2, REMIC 1 Regular Interest
LT1M3, REMIC 1 Regular Interest LT1M4,
REMIC 1 Regular Interest LT1M5, REMIC 1
Regular Interest LT1M6, REMIC 1 Regular
Interest LT1M7, REMIC 1 Regular Interest
LT1M8, REMIC 1 Regular Interest LT1M9,
REMIC 1 Regular Interest LT1B1, REMIC 1
Regular Interest LT1B2, REMIC 1 Regular
Interest LT1B3, in each case as of such
date of determination.
"REMIC 1 Principal Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to the
product of (i) 50% of the aggregate
Principal Balance of the Mortgage Loans and
related REO Properties then
outstanding and (ii) 1 minus a fraction,
the numerator of which is two times the
aggregate of the Uncertificated Principal
Balances of REMIC 1 Regular Interest
LT1A1SS, REMIC 1 Regular Interest LT1A1MZ,
REMIC 1 Regular Interest LT1A2SS,
REMIC 1 Regular Interest LT1A2MZ, REMIC 1
Regular Interest LT1A3A, REMIC 1
Regular Interest LT1A3B, REMIC 1 Regular
Interest LT1A3C, REMIC 1 Regular
Interest LT1M1, REMIC 1 Regular Interest
LT1M2, REMIC 1 Regular Interest LT1M3,
REMIC 1 Regular Interest LT1M4, REMIC 1
Regular Interest LT1M5, REMIC 1 Regular
Interest LT1M6, REMIC 1 Regular Interest
LT1M7, REMIC 1 Regular Interest LT1M8,
REMIC 1 Regular Interest LT1M9, REMIC 1
Regular Interest LT1B1, REMIC 1 Regular
Interest LT1B2 and REMIC 1 Regular Interest
LT1B3, and the denominator of which
is the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular
Interest LT1A1SS, REMIC 1 Regular Interest
LT1A1MZ, REMIC 1 Regular Interest
LT1A2SS, REMIC 1 Regular Interest LT1A2MZ,
REMIC 1 Regular Interest LT1A3A,
REMIC 1 Regular Interest LT1A3B, REMIC 1
Regular Interest LT1A3C, REMIC 1
Regular Interest LT1M1, REMIC 1 Regular
Interest LT1M2, REMIC 1 Regular Interest
LT1M3, REMIC 1 Regular Interest LT1M4,
REMIC 1 Regular Interest LT1M5, REMIC 1
Regular Interest LT1M6, REMIC 1 Regular
Interest LT1M7, REMIC 1 Regular Interest
LT1M8, REMIC 1 Regular Interest LT1M9,
REMIC 1 Regular Interest LT1B1, REMIC 1
Regular Interest LT1B2, REMIC 1 Regular
Interest LT1B3 and REMIC 1 Regular
Interest LT1ZZ.
"REMIC 1 Regular Interest LT1AA": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1AA
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1A1SS": 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 LT1A1SS
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 LT1A1MZ": 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 LT1A1MZ
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 LT1A2SS": 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 LT1A2SS
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 LT1A2MZ": 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 LT1A2MZ
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 LT1A3A": 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 LT1A3A
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
asset forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1A3B": 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 LT1A3B
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
asset forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1A3C": 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 LT1A3C
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
asset forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1B1": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1B1
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1B2": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1B2
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1B3": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1M9
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1GRP": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1GRP
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M1": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1M1
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M2": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1M2
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M3": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1M3
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M4": 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 LT1M4
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 LT1M5": 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 LT1M5
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 LT1M6": 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 LT1M6
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 LT1M7": 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 LT1M7
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 LT1M8": 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 LT1M8
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 LT1M9": 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 LT1M9
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1SUB": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1SUB
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1XX": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1XX
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1ZZ": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT1ZZ
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT2GRP": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT2GRP
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT2SUB": One of the separate
non-certificated beneficial ownership
interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
1. REMIC 1 Regular Interest LT2SUB
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT3GRP": 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 LT3GRP
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 LT3SUB": 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 LT3SUB
shall accrue interest at the related
Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be
entitled to distributions of principal,
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interests": REMIC 1 Regular Interest LT1AA, REMIC
1
Regular Interest LT1A1SS, REMIC 1 Regular
Interest LT1A1MZ, REMIC 1 Regular
Interest LT1A2SS, REMIC 1 Regular Interest
LT1A2MZ, REMIC 1 Regular Interest
LT1A3A, REMIC 1 Regular Interest LT1A3B,
REMIC 1 Regular Interest LT1A3C, REMIC
1 Regular Interest LT1M1, REMIC 1 Regular
Interest LT1M2, REMIC 1 Regular
Interest LT1M3, REMIC 1 Regular Interest
LT1M4, REMIC 1 Regular Interest LT1M5,
REMIC 1 Regular Interest LT1M6, REMIC 1
Regular Interest LT1M7, REMIC 1 Regular
Interest LT1M8, REMIC 1 Regular Interest
LT1M9, REMIC 1 Regular Interest LT1B1,
REMIC 1 Regular Interest LT1B2, REMIC 1
Regular Interest LT1B3, REMIC 1 Regular
Interest LT1SUB, REMIC 1 Regular Interest
LT1GRP, REMIC 1 Regular Interest
LT2SUB, REMIC 1 Regular Interest LT2GRP,
REMIC 1 Regular Interest LT3GRP, REMIC
1 Regular Interest LT3SUB, REMIC 1 Regular
Interest LT1XX and REMIC 1 Regular
Interest LT1ZZ.
"REMIC 1 Sub WAC Allocation Percentage": 50% of any amount
payable
or loss attributable from the Mortgage
Loans, which shall be allocated to REMIC
1 Regular Interest LT1SUB, REMIC 1 Regular
Interest LT1GRP, REMIC 1 Regular
Interest LT2SUB, REMIC 1 Regular Interest
LT2GRP, REMIC 1 Regular Interest
LT3SUB, REMIC 1 Regular Interest LT3GRP,
REMIC 1 Regular Interest LT1XX as
provided in Section 4.08.
"REMIC 1 Subordinated Balance Ratio": The ratio among the
Uncertificated Principal Balances of each
REMIC 1 Regular Interest ending with
the designation "SUB," equal to the ratio
among, with respect to each such REMIC
1 Regular Interest, the excess of (x) the
aggregate Principal Balance of the
Mortgage Loans in the related Loan Group
over (y) the current Certificate
Principal Amount of the Class A
Certificates in the related Loan Group.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment
conduits which appear at Section
860A through 860G of Subchapter M of
Chapter 1 of the Code, and related
provisions, and regulations and rulings
promulgated thereunder, as the foregoing
may be in effect from time to time.
"REMIC Regular Interest": Any REMIC 1 Regular Interest or any of
the
Certificates (other than the Class P and
Class R Certificates).
"Remittance Date": With respect to each Mortgage Loan serviced
by
Option One and any Distribution Date, the
3rd Business Day following the
Determination Date of the calendar month in
which such Distribution Date occurs
and in any event, no later than the 20th
day of the calendar month in which such
Distribution Date occurs. With respect to
each Mortgage Loan serviced by
Countrywide and any Distribution Date, the
24th day of the calendar month in
which such Distribution Date occurs or, if
such day is not a Business Day, the
Business Day immediately preceding such
day.
"Remittance Report": A report prepared by the Master Servicer,
based
on information provided by the Servicers,
and delivered to the Securities
Administrator and the NIMS Insurer pursuant
to Section 4.07, containing the
information attached hereto as Exhibit
M.
"REO
Disposition": The sale or other disposition of an REO Property
on behalf of the Trust.
"REO Principal Amortization": With respect to any REO Property,
for
any calendar month, the aggregate of all
amounts received in respect of such REO
Property during such calendar month,
whether in the form of rental income, sale
proceeds (including, without limitation,
that portion of the Termination Price
paid in connection with a purchase of all
of the Mortgage Loans and REO
Properties pursuant to Section 10.01 that
is allocable to such REO Property) or
otherwise, net of any portion of such
amounts payable or reimbursable to a
Servicer pursuant to the applicable
Servicing Agreement for unpaid Servicing
Fees in respect of the related Mortgage
Loan and unreimbursed Servicing Advances
and Advances in respect of such REO
Property or the related Mortgage Loan.
"REO Property": A Mortgaged Property acquired by a Servicer on
behalf of the Trust through foreclosure or
deed-in-lieu of foreclosure.
"Request for Release": A release signed by a Servicing Officer,
in
the form of Exhibit E attached hereto.
"Reserve Account": Any of the Class A-1 Reserve Account, the
Class
A-2 Reserve Account, the Class A-3 Reserve
Account or the Class M/B Reserve
Account.
"Residential Dwelling": Any one of the following: (i) a
detached
one-family dwelling, (ii) a detached two-
to four-family dwelling, (iii) a
one-family dwelling unit in a Fannie Mae
eligible condominium project, (iv) a
manufactured home, (v) a townhouse, (vi) a
modular home or (vii) a detached
one-family dwelling in a planned unit
development, none of which is a
co-operative or mobile home.
"Residual Interest": The sole Class of "residual interests" in
each
REMIC within the meaning of Section
860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee or
the
Securities Administrator, any officer
assigned to the Corporate Trust Department
of the Trustee or the Securities
Administrator, as applicable, including any
Vice President, Assistant Vice President,
Trust Officer, any Assistant
Secretary, any trust officer or any other
officer of the Trustee or Securities
Administrator customarily performing
functions similar to those performed by any
of the above designated officers and in
each case having direct responsibility
for the administration of this
Agreement.
"S&P": Standard & Poor's, a division of The McGraw-Hill
Companies,
Inc., and its successors, and if such
company shall for any reason no longer
perform the functions of a securities
rating agency, "S&P" shall be deemed to
refer to any other "nationally recognized
statistical rating organization" as
set forth on the most current list of such
organizations released by the
Securities and Exchange Commission.
"Securities
Administrator": Wells
Fargo Bank, N.A., and its
successors-in-interest and, if a successor securities administrator is
appointed hereunder, such successor, as
securities administrator.
"Seller": Bank of America, N.A., or its successor in interest,
in
its capacity as seller under the Mortgage
Loan Purchase Agreement.
"Senior Certificates": The Class A-1SS, Class A-1MZ, Class
A-2SS,
Class A-2MZ, Class A-3A, Class A-3B and
Class A-3C Certificates.
"Senior Enhancement Percentage": For any Distribution Date, the
percentage obtained by dividing (x) the sum
of (i) the aggregate Certificate
Principal Balance of the Subordinated
Certificates and (ii) the
Overcollateralization Amount, in each case
before taking into account the
distribution of the Principal Distribution
Amount on such Distribution Date by
(y) the Pool Balance as of the last day of
the related Collection Period.
"Senior
Principal Distribution Amount": For any Distribution Date,
the sum of the Group 1 Senior Principal
Distribution Amount, Group 2 Senior
Principal Distribution Amount and the Group
3 Senior Principal Distribution
Amount.
"Senior Specified Enhancement Percentage": On any date of
determination thereof, 43.80%.
"Sequential Trigger Event": With respect to any Distribution Date
on
or prior to the Distribution Date in March
2008, the aggregate amount of
Realized Losses incurred since the Cut-off
Date through the last day of the
related Collection Period (reduced by the
aggregate amount of Subsequent
Recoveries received since the Cut-off Date
through the last day of the related
Collection Period) divided by the Cut-off
Date Aggregate Principal Balance
exceeds 2.40% and with respect to any
Distribution Date on or after the
Distribution Date in April 2008, a Trigger
Event is in effect.
"Servicer": With respect to the Option One Mortgage Loans,
Option
One and with respect to the Accredited
Mortgage Loans, Countrywide, as the
context requires, each in their capacity as
a servicer of such related Mortgage
Loans, or any successor servicer appointed
as herein provided.
"Servicer Modification": A modification to the terms of a
Mortgage
Loan, in accordance with the terms of the
applicable Servicing Agreement.
"Servicer Prepayment Charge Payment Amount": The amount payable by
a
Servicer in respect of any waived
Prepayment Charges pursuant to the applicable
Servicing Agreement, which amount shall be
equal to the difference between the
amount of Prepayment Charge due by a
Mortgagor before any waiver and the actual
amount of the Prepayment Charge that was
paid by the Mortgagor.
"Servicing Advances": With respect to each Servicer, the
meaning
given to such term in the applicable
Servicing Agreement.
"Servicing Agreement": Any of the Option One Sale and Servicing
Agreement or the Countrywide Servicing
Agreement.
"Servicing Fee": With respect to each Mortgage Loan and each
month,
an amount equal to the product of the
applicable Servicing Fee Rate and the
Principal Balance of such Mortgage Loan on
which interest accrues for such
calendar month.
"Servicing Fee Rate": With respect to each Option One Mortgage
Loan,
0.30% per annum for the first 10 calendar
months following the Closing Date,
0.40% per annum for the 11th through 30th
calendar months following the Closing
Date and 0.65% per annum for all calendar
months thereafter. With respect to
each Accredited Mortgage Loan, 0.50% per
annum.
"Servicing Officer": With respect to each Servicer, as defined
in
the related Servicing Agreement.
"Similar Law": As defined in Section 5.02(d) hereof.
"Startup Day": As defined in Section 9.01(b) hereof.
"Stepdown Date": The earlier to occur of (i) the Distribution
Date
on which the aggregate Certificate
Principal Balance of the Class A Certificates
is reduced to zero and (ii) the later to
occur of (x) the Distribution Date in
April 2008 and (y) the Distribution Date on
which the Senior Enhancement
Percentage is greater than or equal to the
Senior Specified Enhancement
Percentage.
"Subordinated Certificates": 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,
Class B-2, Class B-3, Class CE and Class R
Certificates.
"Subordination Depletion Date": The Distribution Date on which
the
aggregate Certificate Principal Balance of
the Class M and Class B Certificates
is reduced to zero.
"Subsequent Recovery": Any amount (net of reimbursable
expenses)
received on a Mortgage Loan subsequent to
such Mortgage Loan being determined to
be a Liquidated Mortgage Loan that resulted
in a Realized Loss in a prior month.
"Substitution Adjustment Amount": As defined in Section 2.03(c)
hereof.
"Targeted Overcollateralization Amount": As of any Distribution
Date, (x) prior to the Stepdown Date, 1.00%
of the Cut-off Date Aggregate
Principal Balance and (y) on and after the
Stepdown Date, (i) if a Trigger Event
has not occurred, the greater of (A) 2.00%
of the Pool Balance as of the last
day of the related Collection Period and
(B) 0.50% of the Cut-off Date Aggregate
Principal Balance and (ii) if a Trigger
Event has occurred, the Targeted
Overcollateralization Amount for the
immediately preceding Distribution Date.
"Tax Matters Person": The tax matters person appointed pursuant
to
Section 9.01(e) hereof.
"Tax Returns": The federal income tax returns on Internal
Revenue
Service Form 1066, U.S. Real Estate
Mortgage Investment Conduit Income Tax
Return, including Schedule Q thereto,
Quarterly Notice to Residual Interest
Holders of the REMIC Taxable Income or Net
Loss Allocation, or any successor
forms, to be filed on behalf of the Trust
for each of the two REMICs created
pursuant to this Agreement under the REMIC
Provisions, together with any and all
other information reports or returns that
may be required to be furnished to the
Certificateholders or filed with the
Internal Revenue Service or any other
governmental taxing authority under any
applicable provisions of federal, state
or local tax laws.
"Telerate Page 3750": The display page currently so designated
on
the Moneyline Telerate Service (or such
other page as may replace the Telerate
Page 3750 page on that service for the
purpose of displaying London interbank
offered rates of major banks).
"Termination Price": As defined in Section 10.01(a) hereof.
"Trigger Event": With respect to any Distribution Date, if (i)
the
three-month rolling average of 60+ Day
Delinquent Loans equals or exceeds 36.00%
of the Senior Enhancement Percentage or
(ii) the aggregate amount of Realized
Losses incurred since the Cut-off Date
through the last day of the related
Collection Period (reduced by the aggregate
amount of Subsequent Recoveries
received since the Cut-off Date through the
last day of the related Collection
Period) divided by the Cut-off Date
Aggregate Principal Balance exceeds the
applicable percentages set forth below with
respect to such Distribution Date:
Distribution Date Occurring In
Percentage
------------------------------
----------
April 2008 through March 2009
2.40% for the first month, plus
an additional 1/12th of 1.40%
for each month thereafter
April 2009 through March 2010
3.80% for the first
month, plus
an additional 1/12th of 1.10%
for each month thereafter
April 2010 through March 2011
4.90% for the first month, plus
an additional 1/12th of 0.60%
for each month thereafter
April 2011 and thereafter
5.50%
"Trust": ABFC 2005-HE1 Trust, the trust created hereunder.
"Trust Fund": The segregated pool of assets subject hereto,
constituting the primary trust created
hereby and to be administered hereunder,
with respect to a portion of which two
REMIC elections are to be made, such
entire Trust Fund consisting of: (i) such
Mortgage Loans as from time to time
are subject to this Agreement, together
with the Mortgage Files relating
thereto, and together with all collections
thereon and proceeds thereof, (ii)
any REO Property, together with all
collections thereon and proceeds thereof,
(iii) the Trustee's rights with respect to
the Mortgage Loans under all
insurance policies required to be
maintained pursuant to this Agreement and any
proceeds thereof, (iv) the Depositor's
rights under the Servicing Agreements,
the Accredited Sale Agreement and the
Mortgage Loan Purchase Agreement
(including any security interest created
thereby), (v) the Securities
Administrator's rights under each Yield
Maintenance Agreement and (vi) the
Master Servicer Custodial Account, the
Distribution Account and the Reserve
Accounts and such assets that are deposited
therein from time to time and any
investments thereof, together with any and
all income, proceeds and payments
with respect thereto.
"Trustee": JPMorgan Chase Bank, National Association, a
national
banking association, or any successor
Trustee appointed as herein provided.
"Uncertificated Accrued Interest": With respect to each REMIC 1
Regular Interest on each Distribution Date,
an amount equal to one month's
interest at the related Uncertificated
REMIC 1 Pass-Through Rate on the
Uncertificated Principal Balance of such
REMIC Regular Interest. In each case,
Uncertificated Accrued Interest will be
reduced by any Prepayment Interest
Shortfalls and Relief Act Interest
Shortfalls (allocated to such REMIC Regular
Interests based on their respective
entitlements to interest irrespective of any
Prepayment Interest Shortfalls and Relief
Act Interest Shortfalls for such
Distribution Date).
"Uncertificated Principal Balance": The amount of any REMIC 1
Regular Interest outstanding as of any date
of determination. As of the Closing
Date, the Uncertificated Balance of each
REMIC 1 Regular Interest shall equal
the principal amount set forth in the
Preliminary Statement hereto as its
initial uncertificated balance. On each
Distribution Date, the Uncertificated
Principal Balance of each REMIC 1 Regular
Interest shall be reduced by all
distributions of principal made on such
REMIC 1 Regular Interest on such
Distribution Date pursuant to Section 4.08
and, if and to the extent necessary
and appropriate, shall be further reduced
on such Distribution Date by Realized
Losses as provided in Section 4.08(b) and
shall be increased by all Subsequent
Recoveries allocated to such REMIC 1 Reguar
Interest on such Distribution Date
pursuant to Section 4.08(c). The
Uncertificated Balance of REMIC 1 Regular
Interest LT1ZZ shall be increased by
interest deferrals as provided in Section
4.08(a)(i). The Uncertificated Balance of
each REMIC 1 Regular Interest shall
never be less than zero.
"Uncertificated REMIC 1 Pass-Through Rate": With respect to REMIC
1
Regular Interest LT1AA, REMIC 1 Regular
Interest LT1A1SS, REMIC 1 Regular
Interest LT1A1MZ, REMIC 1 Regular Interest
LT1A2SS, REMIC 1 Regular Interest
LT1A2MZ, REMIC 1 Regular Interest LT1A3A,
REMIC 1 Regular Interest LT1A3B, REMIC
1 Regular Interest LT1A3C, REMIC 1 Regular
Interest LT1M1, REMIC 1 Regular
Interest LT1M2, REMIC 1 Regular Interest
LT1M3, REMIC 1 Regular Interest LT1M4,
REMIC 1 Regular Interest LT1M5, REMIC 1
Regular Interest LT1M6, REMIC 1 Regular
Interest LT1M7, REMIC 1 Regular Interest
LT1M8, REMIC 1 Regular Interest LT1M9,
REMIC 1 Regular Interest LT1B1, REMIC 1
Regular Interest LT1B2, REMIC 1 Regular
Interest LT1B3, REMIC 1 Regular Interest
LT1ZZ, REMIC 1 Regular Interest LT1SUB,
REMIC 1 Regular Interest LT2SUB, REMIC 1
Regular Interest LT3SUB and REMIC 1
Regular Interest LT1XX, the Weighted
Average Net Mortgage Rate of the Mortgage
Loans. With respect to REMIC 1 Regular
Interest LT1GRP, the Weighted Average Net
Mortgage Rate of the Group 1 Mortgage
Loans. With respect REMIC 1 Regular
Interest LT2GRP, the Weighted Average Net
Mortgage Interest Rate of the Group 2
Mortgage Loans. With respect REMIC 1
Regular Interest LT3GRP, the Weighted
Average Net Mortgage Interest Rate of the
Group 3 Mortgage Loans.
"United States Person" or "U.S. Person": (i) A citizen or
resident
of the United States, (ii) a corporation,
partnership or other entity treated as
a corporation or partnership for United
States federal income tax purposes
organized in or under the laws of the
United States or any state thereof or the
District of Columbia (unless, in the case
of a partnership, Treasury Regulations
provide otherwise), (iii) an estate the
income of which is includible in gross
income for United States tax purposes,
regardless of its source, or (iv) a trust
if a court within the United States is able
to exercise primary supervision over
the administration of the trust and one or
more United States persons have
authority to control all substantial
decisions of the trust. Notwithstanding the
preceding sentence, to the extent provided
in Treasury Regulations, certain
Trusts in existence on August 20, 1996, and
treated as United States persons
prior to such date, that elect to continue
to be treated as United States
persons will also be a U.S. Person;
provided, that for purposes of the
definition of a "Permitted Transferee," a
U.S. Person shall not include any
person whose income is attributable to a
foreign permanent establishment or
fixed base, within the meaning of an
applicable income tax treaty, of such
Person or any other U.S. Person.
"Unpaid Realized Loss Amount": For any of the Class A-1MZ,
Class
A-2MZ, 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 B-3 Certificates and
as to any Distribution Date, the excess of
(x) the aggregate Applied Realized
Loss Amounts allocated to such Class (or,
in the case of the Class A-1MZ and
Class A-2MZ Certificates, the aggregate
Class A-1MZ Applied Realized Loss
Amounts or the aggregate Class A-2MZ
Applied Realized Loss Amounts,
respectively) for all prior Distribution
Dates over (y) the sum of (a) the
cumulative amount of any Subsequent
Recoveries allocated to such Class and (b)
the aggregate Realized Loss Amortization
Amounts with respect to such Class for
all prior Distribution Dates.
"Value": With respect to any Mortgaged Property, the lesser of:
(i)
an amount determined by an appraisal done
at origination of the Mortgage Loan
or, in the case of certain Option One
Mortgage Loans, a review appraisal and
(ii) the purchase price paid for the
related Mortgaged Property by the Mortgagor
with the proceeds of the Mortgage Loan;
provided, however, that in the case of a
refinanced Mortgage Loan, the value of the
Mortgaged Property is based solely
upon clause (i) above.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any
Certificate. The Voting Rights allocated
among Holders of the Offered Certificates
and the Private Class B Certificates
shall be 98%, and shall be allocated among
each such Class according to the
fraction, expressed as a percentage, the
numerator of which is the aggregate
Certificate Principal Balance of all the
Certificates of such Class then
outstanding and the denominator of which is
the aggregate Certificate Principal
Balance of all the Offered Certificates and
the Private Class B Certificates
then outstanding. The Voting Rights
allocated to each such Class of Certificates
shall be allocated among all holders of
each such Class in proportion to the
outstanding Certificate Principal Balance
of such Certificates; provided,
however, that any Certificate registered in
the name of the Master Servicer, the
Depositor, the Securities Administrator or
the Trustee or any of their
respective affiliates shall not be included
in the calculation of Voting Rights;
provided that only such Certificates as are
known by a Responsible Officer of
the Securities Administrator to be so
registered will be so excluded. 1% of all
the Voting Rights will be allocated to the
Holders of each of the Class CE and
Class P Certificates. The Class R
Certificates shall have no Voting Rights.
"Weighted Average Net Mortgage Rate": The weighted average (based
on
Principal Balance as of the first day of
the related Collection Period or, in
the case of the first Distribution Date,
the Cut-off Date) of the Net Mortgage
Interest Rates of the Mortgage Loans, the
Group 1 Mortgage Loans, the Group 2
Mortgage Loans or the Group 3 Mortgage
Loans, as applicable, expressed for each
such Mortgage Loan as an annual rate and
calculated on the basis of twelve
months consisting of 30 days each and a
360-day year.
"Written Order to Authenticate": A written order by which the
Depositor directs the Securities
Administrator to execute, authenticate and
deliver the Certificates.
"Yield Maintenance Agreement": Any of the Class A-1 Yield
Maintenance Agreement, the Class A-2 Yield
Maintenance Agreement, the Class A-3
Yield Maintenance Agreement or the Class
M/B Yield Maintenance Agreement.
"Yield Maintenance Agreement Payment": Any of the Class A-1
Yield
Maintenance Agreement Payment, the Class
A-2 Yield Maintenance Agreement, the
Class A-3 Yield Maintenance Agreement
Payment or the Class M/B Yield Maintenance
Agreement Payment.
"Yield Maintenance Agreement Provider": Any of the Class A-1
Yield
Maintenance Agreement Provider, the Class
A-2 Yield Maintenance Agreement
Provider, the Class A-3 Yield Maintenance
Agreement Provider or the Class M/B
Yield Maintenance Agreement Provider.
Section 1.02
Accounting.
Unless otherwise specified herein, for the purpose of any
definition
or calculation, whenever amounts are
required to be netted, subtracted or added
or any distributions are taken into account
such definition or calculation and
any related definitions or calculations
shall be determined without duplication
of such functions.
Section 1.03 Rights of
the NIMS Insurer.
Each of the rights of the NIMS Insurer set forth in this
Agreement
shall exist so long as (i) the NIMS Insurer
has undertaken to guarantee certain
payments of notes issued pursuant to the
Indenture and (ii) any series of notes
issued pursuant to the Indenture remains
outstanding or the NIMS Insurer is owed
amounts in respect of its guarantee of
payment on such notes; provided, however,
the NIMS Insurer shall not have any rights
hereunder (except pursuant to Section
11.01 in the case of clause (ii) below)
during the period of time, if any, that
(i) the NIMS Insurer has not undertaken to
guarantee certain payments of notes
issued pursuant to the Indenture or (ii)
any default has occurred and is
continuing under the insurance policy
issued by the NIMS Insurer with respect to
such notes.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01
Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery
hereof,
does hereby transfer, assign, set over and
otherwise convey to the Trustee, on
behalf of the Trust, without recourse for
the benefit of the Certificateholders
all the right, title and interest of the
Depositor, including any security
interest therein for the benefit of the
Depositor, in and to (i) each Mortgage
Loan identified on the Mortgage Loan
Schedules, including the related Cut-off
Date Principal Balance, all interest
accruing thereon after the Cut-off Date and
all collections in respect of interest and
principal due after the Cut-off Date;
(ii) property which secured each such
Mortgage Loan and which has been acquired
by foreclosure or deed in lieu of
foreclosure; (iii) its interest in any
insurance policies in respect of the
Mortgage Loans; (iv) all other assets
included or to be included in the Trust
Fund; (v) all proceeds of any of the
foregoing; (vi) the rights of the Depositor
under the Consulting Agreement; and
(vii) the rights of the Depositor under the
Servicing Agreements, the Accredited
Sale Agreement and the Mortgage Loan
Purchase Agreement. Such assignment
includes all interest and principal due to
the Depositor after the Cut-off Date
with respect to the Mortgage Loans.
In connection with such transfer and assignment, the Depositor
does
hereby deliver to, and deposit with the
Trustee (or Custodians on behalf of the
Trustee) the following documents or
instruments with respect to each Mortgage
Loan (a "Mortgage File") so transferred and
assigned:
(i)
the original
Mortgage Note, endorsed in blank or, with respect to
any lost Mortgage Note, an original Lost Note Affidavit
together
with a copy of the related Mortgage Note;
(ii)
the original Mortgage
with evidence of recording thereon, and the
original recorded power of attorney, if the Mortgage was
executed
pursuant to a power of attorney, with evidence of recording
thereon
or, if such Mortgage or power of attorney has been submitted
for
recording but has not been returned from the applicable public
recording office, has been lost or is not otherwise available,
a
copy of such Mortgage or power of attorney, as the case may be,
certified to be a true and complete copy of the original
submitted
for recording;
(iii)
except with respect to each MERS Mortgage Loan, an original
Assignment of Mortgage, in form and substance acceptable for
recording. The Mortgage shall be assigned in blank;
(iv)
an original copy of
any intervening assignment of Mortgage showing a
complete chain of assignments and for each Mortgage Loan that is
a
MERS Mortgage Loan but is not a MOM Mortgage Loan, the original
assignment showing MERS or its designee as the assignee of the
Mortgage;
(v)
the original or
a certified copy of lender's title insurance policy;
and
(vi)
the original or copies
of each assumption, modification, written
assurance or substitution agreement, if any.
The Trustee (or Custodians on behalf of the Trustee) agrees to
execute and deliver to the Depositor on or
prior to the Closing Date an
acknowledgment of receipt of the original
Mortgage Note (with any exceptions
noted), substantially in the form attached
as Exhibit F-3 hereto.
If any of the documents referred to above has as of the Closing
Date
been submitted for recording but either (x)
has not been returned from the
applicable public recording office or (y)
has been lost or such public recording
office has retained the original of such
document, the obligations of the
Depositor to deliver such documents shall
be deemed to be satisfied upon (1)
delivery to the Trustee (or Custodians on
behalf of the Trustee), no later than
the Closing Date, of a copy of each such
document certified by the Seller in the
case of (x) above or the applicable public
recording office in the case of (y)
above to be a true and complete copy of the
original that was submitted for
recording and (2) if such copy is certified
by the Seller, delivery to the
Trustee (or Custodians on behalf of the
Trustee) promptly upon receipt thereof
of either the original or a copy of such
document certified by the applicable
public recording office to be a true and
complete copy of the original. The
Depositor shall deliver or cause to be
delivered to the Trustee (or Custodians
on behalf of the Trustee) promptly upon
receipt thereof any other documents
constituting a part of a Mortgage File
received with respect to any Mortgage
Loan, including, but not limited to, any
original documents evidencing an
assumption or modification of any Mortgage
Loan.
With respect to any MERS Mortgage Loan, the Master Servicer
shall
cause the applicable Servicer to take all
actions as are necessary to cause the
Trust to be shown as the owner of the
related Mortgage Loan on the records of
MERS for the purpose of the system of
recording transfers of beneficial
ownership of mortgages maintained by
MERS.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing
from, a Mortgage File, the Seller
shall have 120 days to cure such defect or
deliver such missing document to the
Trustee (or Custodians on behalf of the
Trustee). If the Seller does not cure
such defect or deliver such missing
document within such time period, the Seller
shall either repurchase or substitute for
such Mortgage Loan in accordance with
Section 2.03.
The Depositor herewith delivers to the Trustee (or Custodians
on
behalf of the Trustee), executed copies of
the Servicing Agreements, the
Accredited Sale Agreement and the Mortgage
Loan Purchase Agreement.
It is agreed and understood by the parties hereto that it is
not
intended that any mortgage loan be included
in the Trust that is a "High-Cost
Home Loan" as defined in any of (i) the New
Jersey Home Ownership Act effective
November 27, 2003, (ii) the New Mexico Home
Loan Protection Act effective
January 1, 2004, (iii) the Massachusetts
Predatory Home Loan Practices Act
effective November 7, 2004 or (iv) the
Indiana Home Loan Practices Act,
effective January 1, 2005.
Section 2.02
Acceptance by Trustee.
The Trustee acknowledges the receipt (or receipt by the Custodian
on
its behalf) of, subject to the provisions
of Section 2.01 and subject to the
review described below and any exceptions
noted on the exception report
described in the next paragraph below, the
documents required to be delivered
pursuant to Section 2.01 above and all
other assets included in the definition
of "Trust Fund" and declares that it holds
and will hold such documents and the
other documents delivered to it
constituting a Mortgage File, and that it holds
or will hold all such assets and such other
assets included in the definition of
"Trust Fund" in trust for the exclusive use
and benefit of all present and
future Certificateholders.
The Trustee (or Custodians on behalf of the Trustee) agrees, for
the
benefit of the Certificateholders, to
review each Mortgage File within 60 days
after the Closing Date (or, with respect to
any document delivered after the
Startup Day, within 60 days of receipt and
with respect to any Qualified
Substitute Mortgage, within 60 days after
the assignment thereof) and to certify
in substantially the form attached hereto
as Exhibit F-1 that, as to each
Mortgage Loan listed in the Mortgage Loan
Schedules (other than any Mortgage
Loan paid in full or any Mortgage Loan
specifically identified in the exception
report annexed thereto as not being covered
by such certification), (i) all
documents constituting part of such
Mortgage File (other than such documents
described in Section 2.01(iv) or (vi))
required to be delivered to it pursuant
to this Agreement are in its possession,
(ii) such documents have been reviewed
by it and have not been mutilated, damaged
or torn and relate to such Mortgage
Loan and (iii) based on its examination and
only as to the foregoing, the
information set forth in the Mortgage Loan
Schedules that corresponds to items
(1), (2), (10) and (22) of the Mortgage
Loan Schedules accurately reflects
information set forth in the Mortgage File.
It is herein acknowledged that, in
conducting such review, the Trustee (or
Custodians on behalf of the Trustee) is
under no duty or obligation to inspect,
review or examine any such documents,
instruments, certificates or other papers
to determine that they are genuine,
enforceable, or appropriate for the
represented purpose or that they have
actually been recorded or that they are
other than what they purport to be on
their face.
Prior to the first anniversary date of this Agreement, the
Trustee
(or Custodians on behalf of the Trustee)
shall deliver to the Depositor, the
Master Servicer, the applicable Servicer,
the Securities Administrator and the
NIMS Insurer a final certification in the
form annexed hereto as Exhibit F-2
evidencing the completeness of the Mortgage
Files, with any applicable
exceptions noted thereon.
If in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the
certifications referred to above, the Trustee
(or Custodians on behalf of the Trustee)
finds any document or documents
constituting a part of a Mortgage File to
be missing or defective in any
material respect, at the conclusion of its
review the Trustee (or Custodians on
behalf of the Trustee) shall so notify the
Seller, the Depositor, the NIMS
Insurer, the Master Servicer and the
Securities Administrator. In addition, upon
the discovery by the applicable Originator,
the Seller, the Depositor, the NIMS
Insurer, the Custodians, the Trustee, the
Securities Administrator or the Master
Servicer (or upon receipt by the Trustee or
a Custodian of written notification
of such breach) of a breach of any of the
representations and warranties made by
an Originator in the applicable Originator
Sale Agreement or the Seller in the
Mortgage Loan Purchase Agreement in respect
of any Mortgage Loan which
materially adversely affects such Mortgage
Loan or the interests of the related
Certificateholders in such Mortgage Loan,
the party discovering such breach
shall give prompt written notice to the
other parties.
The Depositor and the Trustee intend that the assignment and
transfer herein contemplated constitute a
sale of the Mortgage Loans and the
Related Documents, conveying good title
thereto free and clear of any liens and
encumbrances, from the Depositor to the
Trustee and that such property not be
part of the Depositor's estate or property
of the Depositor in the event of any
insolvency by the Depositor. In the event
that such conveyance is deemed to be,
or to be made as security for, a loan, the
parties intend that the Depositor
shall be deemed to have granted and does
hereby grant to the Trustee, on behalf
of the Trust, a first priority perfected
security interest in all of the
Depositor's right, title and interest in
and to the Mortgage Loans and the
Related Documents, and that this Agreement
shall constitute a security agreement
under applicable law.
The Securities Administrator is hereby directed to execute and
deliver, on behalf of the Trust, the Class
A-1 Yield Maintenance Agreement,
Class A-2 Yield Maintenance Agreement,
Class A-3 Yield Maintenance Agreement and
Class M/B Yield Maintenance Agreement.
Section 2.03
Repurchase or Substitution of Mortgage Loans by an
Originator or the Seller.
(a) Upon discovery or receipt of written notice of any
materially
defective document in, or that a document
is missing from, a Mortgage File or of
the breach by an Originator or the Seller
of any representation or warranty
under the related Originator Sale Agreement
or the Mortgage Loan Purchase
Agreement, as applicable, in respect of any
Mortgage Loan which materially
adversely affects the value of such
Mortgage Loan, Prepayment Charge or the
interest therein of the Certificateholders,
the Trustee shall promptly notify
the applicable Originator or the Seller, as
the case may be, the Master
Servicer, the applicable Servicer and the
NIMS Insurer of such defect, missing
document or breach and request that, in the
case of a defective or missing
document, the Seller cure such defect or
deliver such missing document within
120 days from the date the Seller was
notified of such missing document or
defect or, in the case of a breach of a
representation or warranty, request the
applicable Originator or the Seller, as
applicable, cure such breach within 90
days from the date the applicable
Originator or the Seller, as the case may be,
was notified of such breach. If the Seller
does not deliver such missing
document or cure such defect or if the
applicable Originator or the Seller, as
the case may be, does not cure such breach
in all material respects during such
period, the Trustee shall enforce the
applicable Originator's or the Seller's
obligation, as the case may be, under the
related Originator Sale Agreement or
the Mortgage Loan Purchase Agreement, as
applicable, and cause the applicable
Originator or the Seller, as the case may
be, to repurchase such Mortgage Loan
from the Trust Fund at the Purchase Price
on or prior to the Determination Date
following the expiration of such period
(subject to Section 2.03(d)). The
Purchase Price for the repurchased Mortgage
Loan shall be deposited in the
Master Servicer Custodial Account, and the
Trustee (or applicable Custodian on
behalf of the Trustee), upon receipt of
written notice from the Master Servicer
of such deposit, shall release to the
applicable Originator or the Seller, as
applicable, the related Mortgage File and
shall execute and deliver such
instruments of transfer or assignment, in
each case without recourse, as the
applicable Originator or the Seller, as
applicable, shall furnish to it and as
shall be necessary to vest in such
Originator or the Seller, as the case may be,
any Mortgage Loan released pursuant hereto
and the Trustee shall have no further
responsibility with regard to such Mortgage
File. In lieu of repurchasing any
such Mortgage Loan as provided above, the
applicable Originator or the Seller,
as the case may be, may cause such Mortgage
Loan to be removed from the Trust
Fund (in which case it shall become a
Defective Mortgage Loan) and substitute
one or more Eligible Substitute Mortgage
Loans in the manner and subject to the
limitations set forth in Section
2.03(c).
With respect to the representations and warranties set forth in
the
Originator Sale Agreements and the Mortgage
Loan Purchase Agreement that are
made to the best of the applicable
Originator's or the Seller's knowledge, as
the case may be, or as to which the
applicable Originator or the Seller, as the
case may be, has no knowledge, if it is
discovered by the Depositor, the Master
Servicer, the NIMS Insurer, the Securities
Administrator or the Trustee that the
substance of such representation and
warranty is inaccurate and such inaccuracy
materially and adversely affects the value
of the related Mortgage Loan,
Prepayment Charge or the interest therein
of the Certificateholders then,
notwithstanding the applicable Originator's
or the Seller's lack of knowledge
with respect to the substance of such
representation and warranty being
inaccurate at the time the representation
or warranty was made, such inaccuracy
shall be deemed a breach of the applicable
representation or warranty.
It is understood and agreed that the representations and
warranties
set forth in the Originator Sale Agreements
and the Mortgage Loan Purchase
Agreement shall survive delivery of the
Mortgage Files to the Trustee (or
Custodians on behalf of the Trustee) and
the Closing Date and shall inure to the
benefit of the Certificateholders
notwithstanding any restrictive or qualified
endorsement or assignment. It is understood
and agreed that the obligations of
the Originators and the Seller set forth in
this Section 2.03(a) to cure,
substitute for or repurchase a Mortgage
Loan pursuant to the related Originator
Sale Agreement and the Mortgage Loan
Purchase Agreement, as applicable, and to
pay the Reimbursement Amount constitute the
sole remedies available to the
Certificateholders and to the Trustee on
their behalf respecting a breach of the
representations and warranties contained in
the related Originator Sale
Agreement and the Mortgage Loan Purchase
Agreement.
The representations and warranties of the Originators with
respect
to the Originator Sale Agreements, which
have been assigned to the Trustee
hereunder, were made as of the dates
specified in the Originator Sale
Agreements. To the extent that any fact,
condition or event with respect to a
Mortgage Loan constitutes a breach of both
(i) a representation or warranty of
the applicable Originator under the
applicable Originator Sale Agreement and
(ii) a representation or warranty of the
Seller under the Mortgage Loan Purchase
Agreement (other than Seller's
representations with respect to predatory and
abusive lending laws in Sections 3.01(k)
and 3.01(t) of the Mortgage Loan
Purchase Agreement), the only right or
remedy of the Trustee or of any
Certificateholder shall be the Trustee's
right to enforce the obligations of the
applicable Originator under any applicable
representation or warranty made by
it. The Trustee acknowledges that the
Seller shall have no obligation or
liability with respect to any breach of a
representation or warranty made by it
with respect to the Mortgage Loans (except
as otherwise set forth in this
paragraph) if the fact, condition or event
constituting such breach also
constitutes a breach of a representation or
warranty made by an Originator in
the related Originator Sale Agreement
without regard to whether the applicable
Originator fulfills its contractual
obligations in respect of such
representation or warranty. In addition,
the related Originator shall be
obligated to pay the Reimbursement Amount
relating to such Mortgage Loan, and,
to the extent such Originator fails to do
so, the Trustee shall be entitled to
enforce the Seller's obligation to pay such
Reimbursement Amount.
(b) Within 90 days of the earlier of discovery by the Master
Servicer or receipt of notice by the Master
Servicer of the breach of any
representation, warranty or covenant of the
Master Servicer set forth in Section
2.05 which materially and adversely affects
the interests of the
Certificateholders in any Mortgage Loan,
the Master Servicer shall cure such
breach in all material respects.
(c)
Any substitution of Eligible Substitute Mortgage Loans for
Defective Mortgage Loans made pursuant to
Section 2.03(a) must be effected prior
to the last Business Day that is within two
years after the Closing Date. As to
any Defective Mortgage Loan for which an
Originator or the Seller substitutes an
Eligible Substitute Mortgage Loan or Loans,
such substitution shall be effected
by such Originator or the Seller, as
applicable, delivering to the Trustee (or
applicable Custodian on behalf of the
Trustee) for such Eligible Substitute
Mortgage Loan or Loans, the documents and
agreements, with all necessary
endorsements thereon, as are required by
Section 2.01, together with an
Officers' Certificate of the Seller
providing that each such Eligible Substitute
Mortgage Loan satisfies the definition
thereof and specifying the Substitution
Adjustment Amount (as described below), if
any, in connection with such
substitution. The Trustee (or applicable
Custodian on behalf of the Trustee)
shall acknowledge receipt for such Eligible
Substitute Mortgage Loan or Loans
and, within ten Business Days thereafter,
shall review such documents as
specified in Section 2.02 and deliver to
the Master Servicer, the applicable
Servicer and the NIMS Insurer, with respect
to such Eligible Substitute Mortgage
Loan or Loans, a certification
substantially in the form attached hereto as
Exhibit F-1, with any applicable exceptions
noted thereon. Within one year of
the date of substitution, the Trustee (or
applicable Custodian on behalf of the
Trustee) shall deliver to the Master
Servicer, the applicable Servicer and the
NIMS Insurer a certification substantially
in the form of Exhibit F-2 hereto
with respect to such Eligible Substitute
Mortgage Loan or Loans, with any
applicable exceptions noted thereon.
Monthly Payments due with respect to
Eligible Substitute Mortgage Loans in the
month of substitution are not part of
the Trust Fund and will be retained by
applicable Originator or the Seller, as
the case may be. For the month of
substitution, distributions to
Certificateholders will reflect the
collections and recoveries in respect of
such Defective Mortgage Loan in the
Collection Period or Prepayment Period, as
applicable, preceding the date of
substitution and the Depositor, the applicable
Originator or the Seller, as the case may
be, shall thereafter be entitled to
retain all amounts subsequently received in
respect of such Defective Mortgage
Loan. The Depositor shall give or cause to
be given written notice to the
Certificateholders and the NIMS Insurer
that such substitution has taken place,
shall amend the Mortgage Loan Schedules to
reflect the removal of such Defective
Mortgage Loan from the terms of this
Agreement and the substitution of the
Eligible Substitute Mortgage Loan or Loans
and shall deliver a copy of such
amended Mortgage Loan Schedule to the
Trustee, the Master Servicer, the
Custodians and the NIMS Insurer. Upon such
substitution, such Eligible
Substitute Mortgage Loan or Loans shall
constitute part of the Mortgage Pool and
shall be subject in all respects to the
terms of this Agreement and, in the case
of a substitution effected by an Originator
or the Seller, the applicable
Originator Sale Agreement or the Mortgage
Loan Purchase Agreement, as the case
may be, including, in the case of a
substitution effected by an Originator or
the Seller, all applicable representations
and warranties thereof included in
the applicable Originator Sale Agreement or
the Mortgage Loan Purchase
Agreement, as the case may be, as of the
date of substitution.
For any month in which an Originator or the Seller substitutes
one
or more Eligible Substitute Mortgage Loans
for one or more Defective Mortgage
Loans, the Master Servicer will determine
the amount (the "Substitution
Adjustment Amount"), if any, by which the
aggregate Purchase Price of all such
Defective Mortgage Loans exceeds the
aggregate, as to each such Eligible
Substitute Mortgage Loan, of the principal
balance thereof as of the date of
substitution, together with one month's
interest on such principal balance at
the applicable Net Mortgage Interest Rate.
On the date of such substitution, an
Originator or the Seller, as the case may
be, will deliver or cause to be
delivered to the Master Servicer for
deposit in the Master Servicer Custodial
Account an amount equal to the Substitution
Adjustment Amount, if any, and the
Trustee (or the applicable Custodian on
behalf of the Trustee), upon receipt of
the related Eligible Substitute Mortgage
Loan or Loans and notice by the Master
Servicer of such deposit, shall release to
the applicable Originator or the
Seller, as the case may be, the related
Mortgage File or Files and the Trustee
shall execute and deliver such instruments
of transfer or assignment, in each
case without recourse, as such Originator
or the Seller, as the case may be,
shall deliver to it and as shall be
necessary to vest therein any Defective
Mortgage Loan released pursuant hereto.
In addition, the related Originator or the Seller, as
applicable,
shall obtain at its own expense and deliver
to the Trustee and the NIMS Insurer
an Opinion of Counsel to the effect that
such substitution will not cause (a)
any federal tax to be imposed on the Trust
Fund, including without limitation,
any federal tax imposed on "prohibited
transactions" under Section 860F(a)(l) of
the Code or on "contributions after the
startup date" under Section 860G(d)(l)
of the Code, or (b) any REMIC created
hereunder to fail to qualify as a REMIC at
any time that any Certificate is
outstanding. If such Opinion of Counsel cannot
be delivered, then such substitution may
only be effected at such time as the
required Opinion of Counsel can be
given.
(d) Upon discovery by the Seller, the Master Servicer, the NIMS
Insurer, the Securities Administrator, the
Custodians or the Trustee that any
Mortgage Loan does not constitute a
"qualified mortgage" within the meaning of
Section 860G(a)(3) of the Code, the party
discovering such fact shall within two
Business Days give written notice thereof
to the other parties. In connection
therewith, the related Originator or the
Seller, as applicable, shall repurchase
or, subject to the limitations set forth in
Section 2.03(c), substitute one or
more Eligible Substitute Mortgage Loans for
the affected Mortgage Loan within 90
days of the earlier of discovery or receipt
of such notice with respect to such
affected Mortgage Loan. In addition, upon
discovery that a Mortgage Loan is
defective in a manner that would cause it
to be a "defective obligation" within
the meaning of Treasury Regulations
relating to REMICs, the related Originator
or the Seller, as the case may be, shall
cure the defect or make the required
purchase or substitution no later than 90
days after the discovery of the
defect. Any such repurchase or substitution
shall be made in the same manner as
set forth in Section 2.03(a). The Trustee
(or applicable Custodian on behalf of
the Trustee) shall reconvey to the related
Originator or the Seller, as the case
may be, the Mortgage Loan to be released
pursuant hereto in the same manner, and
on the same terms and conditions, as it
would a Mortgage Loan repurchased for
breach of a representation or warranty.
Section 2.04
[Reserved].
Section 2.05
Representations, Warranties and Covenants of the
Master Servicer.
The Master Servicer hereby represents, warrants and covenants to
the
Trustee, for the benefit of each of the
Trustee and the Certificateholders and
to the Depositor, the Securities
Administrator and the NIMS Insurer that as of
the Closing Date or as of such date
specifically provided herein:
(i) The Master Servicer is a national banking association duly
chartered
and validly existing in good standing under the laws of the
United
States of America and has all licenses necessary to carry on
its
business
as now being conducted. The Master Servicer has power and
authority
to execute and deliver this Agreement and to perform in
accordance
herewith; the execution, delivery and performance of this
Agreement
(including all instruments of transfer to be delivered pursuant
to this
Agreement) by the Master Servicer and the consummation of the
transactions contemplated hereby have been duly and validly
authorized.
This
Agreement, assuming due authorization, execution and delivery by
the
other
parties hereto, evidences the valid, binding and enforceable
obligation
of the Master Servicer, subject to applicable law except as
enforceability may be limited by (A) bankruptcy, insolvency,
liquidation,
receivership, moratorium, reorganization or other similar laws
affecting
the
enforcement of the rights of creditors and (B) general principles
of
equity,
whether enforcement is sought in a proceeding in equity or at
law.
All
requisite corporate action has been taken by the Master Servicer
to
make this
Agreement valid and binding upon the Master Servicer in
accordance
with its terms;
(ii) No consent, approval, authorization or order is required
for
the
transactions contemplated by this Agreement from any court,
governmental agency or body, or federal or state regulatory
authority
having
jurisdiction over the Master Servicer is required or, if
required,
such
consent, approval, authorization or order has been or will, prior
to
the
Closing Date, be obtained;
(iii) The consummation of the transactions contemplated by this
Agreement
are in the ordinary course of business of the Master Servicer
and will
not result in the breach of any term or provision of the
articles
of
incorporation or by-laws of the Master Servicer or result in the
breach
of any
term or provision of, or conflict with or constitute a default
under or
result in the acceleration of any obligation under, any
agreement,
indenture or loan or credit agreement or other instrument to
which the
Master Servicer or its property is subject, or result in the
violation
of any law, rule, regulation, order, judgment or decree to
which
the Master
Servicer or its property is subject;
(iv) This Agreement, and all documents and instruments
contemplated
hereby
which are executed and delivered by the Master Servicer,
constitute
and will
constitute valid, legal and binding obligations of the Master
Servicer,
enforceable in accordance with their respective terms, except
as
the
enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting the
enforcement of creditors' rights generally (whether considered in
a
proceeding
at law or in equity);
(v) The Master Servicer does not believe, nor does it have any
reason or
cause to believe, that it cannot perform each and every
covenant
contained
in this Agreement;
(vi) There is no action, suit, proceeding or investigation
pending
or, to its
knowledge, threatened against the Master Servicer that, either
individually or in the aggregate, may result in any material
adverse
change in
the business, operations, financial condition, properties or
assets of
the Master Servicer, or in any material impairment of the right
or ability
of the Master Servicer to carry on its business substantially
as now
conducted, or in any material liability on the part of the
Master
Servicer,
or that would draw into question the validity or enforceability
of this
Agreement or of any action taken or to be taken in connection
with
the
obligations of the Master Servicer contemplated herein, or that
would
be likely
to impair materially the ability of the Master Servicer to
perform
under the terms of this Agreement; and
(vii) No consent, approval or order of any court or
governmental
agency or
body is required for the execution, delivery and performance by
the Master
Servicer of or compliance by the Master Servicer with this
Agreement
or the consummation of the transactions contemplated by this
Agreement,
except for such consents, approvals, authorizations and orders,
if any,
that have been obtained.
It is understood and agreed that the representations, warranties
and
covenants set forth in this Section 2.05
shall survive delivery of the Mortgage
Files to the Trustee (or Custodians on
behalf of the Trustee) and shall inure to
the benefit of the Trustee, the Depositor,
the Securities Administrator, the
NIMS Insurer and the Certificateholders.
Upon discovery by any of the Depositor,
the Master Servicer, the NIMS Insurer, the
Securities Administrator or the
Trustee of a breach of any of the foregoing
representations, warranties and
covenants which materially and adversely
affects the value of any Mortgage Loan,
Prepayment Charge or the interests therein
of the Certificateholders, the party
discovering such breach shall give prompt
written notice (but in no event later
than two Business Days following such
discovery) to the other parties hereto.
Section 2.06
Representations and Warranties of the Depositor.
The Depositor represents and warrants to the Trust and the
Trustee
on behalf of the Certificateholders and to
the Securities Administrator, the
Master Servicer and the NIMS Insurer as
follows:
(i) This agreement constitutes a legal, valid and binding
obligation
of the
Depositor, enforceable against the Depositor in accordance with
its
terms,
except as enforceability may be limited by applicable
bankruptcy,
insolvency, reorganization, moratorium or other similar laws now
or
hereafter
in effect affecting the enforcement of creditors' rights in
general
and except as such enforceability may be limited by general
principles
of equity (whether considered in a proceeding at law or in
equity);
(ii) Immediately prior to the sale and assignment by the
Depositor
to the
Trustee on behalf of the Trust of each Mortgage Loan, the
Depositor
had good
and marketable title to each Mortgage Loan (insofar as such
title
was
conveyed to it by the Seller) subject to no prior lien, claim,
participation interest, mortgage, security interest, pledge, charge
or
other
encumbrance or other interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred all
right,
title interest in the Mortgage Loans to the Trustee on behalf
of
the
Trust;
(iv) The Depositor has not transferred the Mortgage Loans to
the
Trustee on
behalf of the Trust with any intent to hinder, delay or defraud
any of its
creditors;
(v) The Depositor has been duly incorporated and is validly
existing
as a
corporation in good standing under the laws of the State of
Delaware,
with full
corporate power and authority to own its assets and conduct its
business
as presently being conducted;
(vi) The Depositor is not in violation of its certificate of
incorporation or by-laws or in default in the performance or
observance of
any
material obligation, agreement, covenant or condition contained in
any
contract,
indenture, mortgage, loan agreement, note, lease or other
instrument
to which the Depositor is a party or by which it or its
properties
may be bound, which default might result in any material
adverse
changes in the financial condition, earnings, affairs or
business
of the
Depositor or which might materially and adversely affect the
properties
or assets, taken as a whole, of the Depositor;
(vii) The execution, delivery and performance of this Agreement
by
the
Depositor, and the consummation of the transactions
contemplated
thereby, do not and
will not result in a material breach or violation of
any of the
terms or provisions of, or, to the knowledge of the Depositor,
constitute
a default under, any indenture, mortgage, deed of trust, loan
agreement
or other agreement or instrument to which the Depositor is a
party or
by which the Depositor is bound or to which any of the property
or assets
of the Depositor is subject, nor will such actions result in
any
violation
of the provisions of the certificate of incorporation or
by-laws
of the
Depositor or, to the best of the Depositor's knowledge without
independent investigation, any statute or any order, rule or
regulation of
any court
or governmental agency or body having jurisdiction over the
Depositor
or any of its properties or assets (except for such conflicts,
breaches,
violations and defaults as would not have a material adverse
effect on
the ability of the Depositor to perform its obligations under
this Agreement);
(viii)To the best of the Depositor's knowledge without any
independent investigation, no consent, approval, authorization,
order,
registration or qualification of or with any court or governmental
agency
or body of
the United States or any other jurisdiction is required for the
issuance
of the Certificates, or the consummation by the Depositor of
the
other
transactions contemplated by this Agreement, except such
consents,
approvals,
authorizations, registrations or qualifications as (a) may be
required
under State securities or Blue Sky laws, (b) have been
previously
obtained
or (c) the failure of which to obtain would not have a material
adverse
effect on the performance by the Depositor of its obligations
under, or
the validity or enforceability of, this Agreement; and
(ix) There are no actions, proceedings or investigations
pending
before or,
to the Depositor's knowledge, threatened by any court,
administrative agency or other tribunal to which the Depositor is a
party
or of
which any of its properties is the subject: (a) which if
determined
adversely
to the Depositor would have a material adverse effect on the
business,
results of operations or financial condition of the Depositor;
(b)
asserting the invalidity of this Agreement or the Certificates;
(c)
seeking to
prevent the issuance of the Certificates or the consummation by
the
Depositor of any of the transactions contemplated by this
Agreement,
as the
case may be; (d) which might materially and adversely affect
the
performance by the Depositor of its obligations under, or the
validity or
enforceability of, this Agreement.
Section 2.07 Issuance
of Certificates and the Uncertificated
Regular Interests.
The Trustee acknowledges the assignment to it of the Mortgage
Loans
and the Trustee acknowledges the assignment
to it of all other assets included
in the Trust Fund, receipt of which is
hereby acknowledged. Concurrently with
such assignment and delivery and in
exchange therefor, the Securities
Administrator, pursuant to the Written
Order to Authenticate executed by an
officer of the Depositor, has executed, and
the Certificate Registrar has
authenticated and delivered to or upon the
order of the Depositor, the
Certificates (other than the Class CE,
Class P and Class R Certificates) in
minimum dollar denominations or $25,000 and
integral dollar multiples of $1 in
excess. The Class CE and Class P
Certificates are issuable only in minimum
Percentage Interests of 10%. The Class R
Certificate is issuable only as a
single certificate. The Trustee
acknowledges the issuance of the uncertificated
REMIC 1 Regular Interests and declares that
it hold
