Exhibit 4.1
================================================================================
ASSET BACKED FUNDING CORPORATION,
DEPOSITOR
AMERIQUEST MORTGAGE COMPANY,
SERVICER
AND
DEUTSCHE BANK NATIONAL TRUST COMPANY,
TRUSTEE
POOLING AND SERVICING AGREEMENT
DATED AS OF JUNE 1, 2005
ABFC 2005-AQ1 TRUST
ASSET-BACKED CERTIFICATES, SERIES 2005-AQ1
================================================================================
TABLE OF CONTENTS
<TABLE>
Page
----
ARTICLE I DEFINITIONS
5
Section 1.01
Defined
Terms.....................................................................5
Section 1.02
Accounting.......................................................................47
Section 1.03
Rights of the NIMS
Insurer.......................................................47
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES
48
Section 2.01
Conveyance of Mortgage
Loans.....................................................48
Section 2.02
Acceptance by
Trustee............................................................50
Section 2.03
Repurchase of Mortgage Loans by the Originator or the
Seller.....................52
Section 2.04
Execution of Yield Maintenance
Agreement.........................................55
Section 2.05
Representations, Warranties and Covenants of the
Servicer........................55
Section 2.06
Representations and Warranties of the
Depositor..................................57
Section 2.07
Issuance of Certificates and the Uncertificated Regular
Interests................59
ARTICLE III ADMINISTRATION AND SERVICING OF THE TRUST FUND
60
Section 3.01
Servicer to Act as
Servicer......................................................60
Section 3.02
Collection of Mortgage Loan
Payments.............................................62
Section 3.03
Realization Upon Defaulted Mortgage
Loans........................................62
Section 3.04
Collection Accounts, Distribution Account and Reserve
Accounts...................63
Section 3.05
Permitted Withdrawals From the Collection
Accounts...............................67
Section 3.06
Establishment of Escrow Accounts; Deposits in Escrow
Accounts....................68
Section 3.07
Permitted Withdrawals From Escrow
Account........................................69
Section 3.08
Payment of Taxes, Insurance and Other Charges; Collections
Thereunder............70
Section 3.09
Transfer of
Accounts.............................................................70
Section 3.10
Maintenance of Hazard
Insurance..................................................70
Section 3.11
Maintenance of Mortgage Impairment Insurance
Policy..............................71
Section 3.12
Fidelity Bond, Errors and Omissions
Insurance....................................72
Section 3.13
Title, Management and Disposition of REO
Property................................72
Section 3.14
Due-on-Sale Clauses; Assumption and Substitution
Agreements......................75
Section 3.15
[Reserved].......................................................................76
Section 3.16
Optional Purchases of Mortgage Loans by
Servicer.................................76
Section 3.17
Trustee to Cooperate; Release of
Files...........................................76
Section 3.18
Servicing
Compensation...........................................................78
Section 3.19
Annual Statement as to
Compliance................................................78
Section 3.20
Annual Independent Certified Public Accountants'
Reports.........................79
Section 3.21
Access to Certain Documentation and Information Regarding the
Mortgage Loans.....79
Section 3.22
[Reserved].......................................................................80
Section 3.23
Obligations of the Servicer in Respect of Compensating
Interest..................80
</TABLE>
-i-
<TABLE>
Section 3.24
[Reserved].......................................................................80
Section 3.25
Investment of Funds in the Collection
Accounts...................................80
Section 3.26
Liability of Servicer;
Indemnification...........................................81
Section 3.27
Reports of Foreclosure and Abandonment of Mortgaged
Properties...................82
Section 3.28
Protection of
Assets.............................................................82
Section 3.29
[Reserved].......................................................................82
Section 3.30
[Reserved].......................................................................82
Section 3.31
Periodic
Filings.................................................................82
Section 3.32
Credit Reporting; Gramm-Leach-Bliley
Act.........................................85
Section 3.33
Advance
Facility.................................................................85
ARTICLE IV FLOW OF FUNDS
87
Section 4.01
Interest
Distributions...........................................................87
Section 4.02
Distributions of Principal and Monthly Excess Cashflow
Amounts...................88
Section 4.03
Allocation of
Losses.............................................................94
Section 4.04
Method of
Distribution...........................................................94
Section 4.05
Distributions on Book-Entry
Certificates.........................................94
Section 4.06
Statements.......................................................................94
Section 4.07
Remittance Reports;
Advances.....................................................98
Section 4.08
REMIC Distributions and Allocation of
Losses.....................................99
ARTICLE V THE CERTIFICATES
102
Section 5.01
The
Certificates................................................................102
Section 5.02
Registration of Transfer and Exchange of
Certificates...........................103
Section 5.03
Mutilated, Destroyed, Lost or Stolen
Certificates...............................107
Section 5.04
Persons Deemed
Owners...........................................................108
Section 5.05
Appointment of Paying
Agent.....................................................108
ARTICLE VI THE SERVICER AND THE DEPOSITOR
108
Section 6.01
Liability of the Servicer and the
Depositor.....................................108
Section 6.02
Merger or Consolidation of, or Assumption of the Obligations of,
the
Servicer or the Depositor.
109
Section 6.03
Limitation on Liability of the Servicer and
Others..............................109
Section 6.04
Servicer Not to
Resign..........................................................110
Section 6.05
Rights of the Depositor and Others in Respect of the
Servicer...................111
Section 6.06
Sub-Servicing Agreements Between the Servicer and
Sub-Servicers.................111
Section 6.07
Successor
Sub-Servicers.........................................................112
Section 6.08
Liability of the
Servicer.......................................................113
Section 6.09
No Contractual Relationship Between Sub-Servicers and the NIMS
Insurer, the
Trustee or Certificateholders.
113
Section 6.10
Assumption or Termination of Sub-Servicing Agreements by
Trustee................113
Section 6.11
Sub-Servicing
Accounts..........................................................114
</TABLE>
-ii-
<TABLE>
ARTICLE VII DEFAULT
114
Section 7.01
Servicer Events of
Termination..................................................114
Section 7.02
Trustee to Act; Appointment of
Successor........................................116
Section 7.03
Waiver of
Defaults..............................................................118
Section 7.04
Notification to
Certificateholders..............................................118
Section 7.05
Survivability of Servicer
Liabilities...........................................119
ARTICLE VIII THE TRUSTEE
119
Section 8.01
Duties of
Trustee...............................................................119
Section 8.02
Certain Matters Affecting the
Trustee...........................................121
Section 8.03
Trustee Not Liable for Certificates or Mortgage
Loans...........................122
Section 8.04
Trustee May Own
Certificates....................................................123
Section 8.05
Trustee Fees and
Expenses.......................................................123
Section 8.06
Eligibility Requirements for
Trustee............................................123
Section 8.07
Resignation or Removal of
Trustee...............................................124
Section 8.08
Successor
Trustee...............................................................124
Section 8.09
Merger or Consolidation of
Trustee..............................................125
Section 8.10
Appointment of Co-Trustee or Separate
Trustee...................................125
Section 8.11
Limitation of
Liability.........................................................126
Section 8.12
Trustee May Enforce Claims Without Possession of
Certificates...................127
Section 8.13
Suits for
Enforcement...........................................................127
Section 8.14
Waiver of Bond
Requirement......................................................127
Section 8.15
Waiver of Inventory, Accounting and Appraisal
Requirement.......................127
ARTICLE IX REMIC AND GRANTOR TRUST ADMINISTRATION
128
Section 9.01
REMIC
Administration............................................................128
Section 9.02
Prohibited Transactions and
Activities..........................................130
Section 9.03
Indemnification with Respect to Certain Taxes and Loss of REMIC
Status..........130
Section 9.04
REO
Property....................................................................131
Section 9.05
Grantor Trust
Administration....................................................131
ARTICLE X TERMINATION
132
Section 10.01
Termination.....................................................................132
Section 10.02
Additional Termination
Requirements.............................................134
ARTICLE XI MISCELLANEOUS PROVISIONS
134
Section 11.01
Amendment.......................................................................134
Section 11.02
Recordation of Agreement;
Counterparts..........................................136
Section 11.03
Limitation on Rights of
Certificateholders......................................136
Section 11.04
Governing Law;
Jurisdiction.....................................................137
Section 11.05
Notices.........................................................................137
Section 11.06
Severability of
Provisions......................................................137
Section 11.07
Article and Section
References..................................................138
</TABLE>
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<TABLE>
Section 11.08
Notice to the Rating Agencies and the NIMS
Insurer..............................138
Section 11.09
Further
Assurances..............................................................139
Section 11.10
Third Party
Beneficiary.........................................................139
Section 11.11
Acts of
Certificateholders......................................................139
</TABLE>
-iv-
EXHIBITS:
<TABLE>
Exhibit A-1A
Form of Class A-1A Certificate
Exhibit A-1B
Form of Class A-1B Certificate
Exhibit A-2
Form of Class A-2 Certificate
Exhibit A-3
Form of Class A-3 Certificate
Exhibit A-4
Form of Class A-4 Certificate
Exhibit A-5
Form of Class A-5 Certificate
Exhibit A-6
Form of Class A-6 Certificate
Exhibit B-1
Form of Class M-1 Certificate
Exhibit B-2
Form of Class M-2 Certificate
Exhibit B-3
Form of Class M-3 Certificate
Exhibit B-4
Form of Class M-4 Certificate
Exhibit B-5
Form of Class M-5 Certificate
Exhibit B-6
Form of Class M-6 Certificate
Exhibit B-7
Form of Class B-1 Certificate
Exhibit B-8
Form of Class B-2 Certificate
Exhibit C-1
Form of Class CE Certificate
Exhibit C-2
Form of Class P Certificate
Exhibit C-3
Form of Class R Certificate
Exhibit D
Mortgage Loan Schedule
Exhibit E
Form of Request for Release of Documents
Exhibit F-1
Form of Trustee's Initial Certification
Exhibit F-2
Form of Trustee's Final Certification
Exhibit F-3
Form of Receipt of Mortgage Note
Exhibit G
Mortgage Loan Purchase Agreement
Exhibit H
Form of Lost Note Affidavit
Exhibit I
Form of ERISA Representation
Exhibit J
Form of Investment Letter
Exhibit K
Form of Class R Certificate Transfer Affidavit
Exhibit L
Form of Transferor Certificate
Exhibit M
Form of Remittance Report
Exhibit N
Form of Yield Maintenance Agreement relating to the Class A-1A
Certificates
Exhibit O
Form of Certification
Exhibit P-1
Form of Certification to be Provided by the Trustee to the
Depositor
Exhibit P-2
Form of Certification to be Provided by the Servicer to the
Depositor
</TABLE>
-v-
ASSET BACKED FUNDING CORPORATION, as depositor (the "Depositor"),
AMERIQUEST MORTGAGE COMPANY, as servicer (the "Servicer"), and
DEUTSCHE BANK
NATIONAL TRUST COMPANY, as trustee (the "Trustee"), are entering
into this
Pooling and Servicing Agreement, dated as of June 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 eighteen
Classes of
Certificates, designated as (i) the Class A-1A, Class A-1B, Class
A-2, Class
A-3, Class A-4, Class A-5 and Class A-6 Certificates, (ii) the
Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5 and Class M-6 Certificates,
(iii) the Class
B-1 and Class B-2 Certificates, (iv) the Class CE Certificates, (v)
the Class P
Certificates and (vi) the Class R Certificate.
REMIC 1
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and
certain other
related assets subject to this Agreement (but exclusive of the
Yield Maintenance
Agreement, the Reserve Account, the Cap Carryover Amounts and the
Servicer
Prepayment Charge Payment Amounts) as a real estate mortgage
investment conduit
(a "REMIC") for federal income tax purposes, and such segregated
pool of assets
will be designated as "REMIC 1." The Class R-1 Interest will
represent the sole
class of "residual interests" in REMIC 1 for purposes of the REMIC
Provisions.
The following table irrevocably sets forth the designation, the
Uncertificated
REMIC 1 Pass-Through Rate, the initial Uncertificated Principal
Balance, and
solely for purposes of satisfying Treasury Regulations Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each
of the REMIC 1
Regular Interests. None of the REMIC 1 Regular Interests will be
certificated.
<TABLE>
======================================================================================
Uncertificated
REMIC Pass-Through
Initial Uncertificated
Latest Possible Maturity
Designation
Rate
Balance
Date(1)
--------------------------------------------------------------------------------------
LT1AA
Variable(2)
801,796,864.51
May 25, 2035
--------------------------------------------------------------------------------------
LT1A1A
Variable(2)
1,036,380.00
May 25, 2035
--------------------------------------------------------------------------------------
LT1A1B
Variable(2)
1,000,000.00
May 25, 2035
--------------------------------------------------------------------------------------
LT1A2
Variable(2)
2,066,690.00
May 25, 2035
--------------------------------------------------------------------------------------
LT1A3
Variable(2)
424,060.00
May 25, 2035
--------------------------------------------------------------------------------------
LT1A4
Variable(2)
1,658,050.00
May 25, 2035
--------------------------------------------------------------------------------------
LT1A5
Variable(2)
522,910.00
May 25, 2035
--------------------------------------------------------------------------------------
LT1A6
Variable(2)
745,340.00
May 25, 2035
--------------------------------------------------------------------------------------
LT1M1
Variable(2)
368,180.00
May 25, 2035
--------------------------------------------------------------------------------------
LT1M2
Variable(2)
134,990.00
May 25, 2035
--------------------------------------------------------------------------------------
LT1M3
Variable(2)
32,730.00
May 25, 2035
--------------------------------------------------------------------------------------
LT1M4
Variable(2)
28,630.00
May 25, 2035
--------------------------------------------------------------------------------------
LT1M5
Variable(2)
28,640.00
May 25, 2035
--------------------------------------------------------------------------------------
LT1M6
Variable(2)
32,730.00
May 25, 2035
--------------------------------------------------------------------------------------
LT1B1
Variable(2)
32,720.00
May 25, 2035
--------------------------------------------------------------------------------------
LT1B2
Variable(2)
36,820.00
May 25, 2035
--------------------------------------------------------------------------------------
LT1ZZ
Variable(2)
8,214,331.32
May 25, 2035
--------------------------------------------------------------------------------------
LT1P
Variable(2)
100.00
May 25, 2035
======================================================================================
</TABLE>
(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.
The foregoing REMIC structure is intended to cause all the cash
from
the Mortgage Loans to flow through REMIC 2 as cash flow on a
Regular
Certificate, without creating any shortfall, actual or potential
(other than for
losses), to any Regular Certificate. To the extent that the
structure is
believed to diverge from such intention, the party identifying such
ambiguity or
drafting error shall notify the other parties hereto, and the
parties hereto
shall attempt to resolve such ambiguity or drafting error in
accordance with
Section 11.01 herein.
-2-
REMIC 2
As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the REMIC 1 Regular
Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets
will be
designated as "REMIC 2." 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 Principal
Certificate Interest
Assumed Final
Class
Balance
Rate
Maturity Dates(18)
--------------------------------------------------------------------------
A-1A
$103,638,000
(1)
January 25, 2019
--------------------------------------------------------------------------
A-1B
$100,000,000
4.250% per annum (2)
January 25, 2019
--------------------------------------------------------------------------
A-2
$206,669,000
4.300% per annum (3)
August 25, 2027
--------------------------------------------------------------------------
A-3
$ 42,406,000
4.420% per annum (4)
March 25, 2029
--------------------------------------------------------------------------
A-4
$165,805,000
5.010% per annum (5)
January 25, 2034
--------------------------------------------------------------------------
A-5
$ 52,291,000
5.320% per annum (6)
March 25, 2035
--------------------------------------------------------------------------
A-6
$ 74,534,000
4.780% per annum (7)
January 25, 2035
--------------------------------------------------------------------------
M-1
$ 36,818,000
5.240% per annum (8)
November 25, 2034
--------------------------------------------------------------------------
M-2
$ 13,499,000
5.440% per annum (9)
July 25, 2034
--------------------------------------------------------------------------
M-3
$
3,273,000
5.740% per annum (10)
February 25, 2034
--------------------------------------------------------------------------
M-4
$
2,863,000
5.750% per annum (11)
November 25, 2033
--------------------------------------------------------------------------
M-5
$
2,864,000
5.750% per annum (12)
August 25, 2033
--------------------------------------------------------------------------
M-6
$
3,273,000
5.750% per annum (13)
April 25, 2033
--------------------------------------------------------------------------
B-1
$
3,272,000
5.750% per annum (14)
July 25, 2032
--------------------------------------------------------------------------
B-2
$
3,682,000
5.750% per annum (15)
February 25, 2031
--------------------------------------------------------------------------
CE
(16)
(16)
N/A
--------------------------------------------------------------------------
-3-
=========================================================================
Original Class
Certificate Principal
Certificate Interest
Assumed Final
Class
Balance
Rate
Maturity Dates(18)
-------------------------------------------------------------------------
P(17)
$100.00
N/A
N/A
-------------------------------------------------------------------------
R
N/A
N/A
N/A
=========================================================================
(1)
Interest will accrue on the Class A-1A Certificates during each
Interest
Accrual Period at a rate equal to the lesser of: (i) the Class A-1
Pass-Through Rate and (ii) the Pool Cap for such Distribution Date.
(2)
Interest will accrue on the Class A-1B Certificates at the
indicated fixed
rate (increased to 4.750% per annum for Interest Accrual Periods
relating
to Distribution Dates after the Optional Termination Date) subject
to the
Pool Cap for such Distribution Date.
(3)
Interest will accrue on the Class A-2 Certificates at the indicated
fixed
rate (increased to 4.800% per annum for Interest Accrual Periods
relating
to Distribution Dates after the Optional Termination Date) subject
to the
Pool Cap for such Distribution Date.
(4)
Interest will accrue on the Class A-3 Certificates at the indicated
fixed
rate (increased to 4.920% per annum for Interest Accrual Periods
relating
to Distribution Dates after the Optional Termination Date) subject
to the
Pool Cap for such Distribution Date.
(5)
Interest will accrue on the Class A-4 Certificates at the indicated
fixed
rate (increased to 5.510% per annum for Interest Accrual Periods
relating
to Distribution Dates after the Optional Termination Date) subject
to the
Pool Cap for such Distribution Date.
(6)
Interest will accrue on the Class A-5 Certificates at the indicated
fixed
rate (increased to 5.820% per annum for Interest Accrual Periods
relating
to Distribution Dates after the Optional Termination Date) subject
to the
Pool Cap for such Distribution Date.
(7)
Interest will accrue on the Class A-6 Certificates at the indicated
fixed
rate (increased to 5.280% per annum for Interest Accrual Periods
relating
to Distribution Dates after the Optional Termination Date) subject
to the
Pool Cap for such Distribution Date.
(8)
Interest will accrue on the Class M-1 Certificates at the indicated
fixed
rate (increased to 5.740% per annum for Interest Accrual Periods
relating
to Distribution Dates after the Optional Termination Date) subject
to the
Pool Cap for such Distribution Date.
(9)
Interest will accrue on the Class M-2 Certificates at the indicated
fixed
rate (increased to 5.940% per annum for Interest Accrual Periods
relating
to Distribution Dates after the Optional Termination Date) subject
to the
Pool Cap for such Distribution Date.
(10) Interest will accrue on the Class M-3 Certificates at the
indicated fixed
rate (increased to 6.240% per annum for Interest Accrual Periods
relating
to Distribution Dates after the Optional Termination Date) subject
to the
Pool Cap for such Distribution Date.
(11) Interest will accrue on the Class M-4 Certificates at the
indicated fixed
rate (increased to 6.250% per annum for Interest Accrual Periods
relating
to Distribution Dates after the Optional Termination Date) subject
to the
Pool Cap for such Distribution Date.
(12) Interest will accrue on the Class M-5 Certificates at the
indicated fixed
rate (increased to 6.250% per annum for Interest Accrual Periods
relating
to Distribution Dates after the Optional Termination Date) subject
to the
Pool Cap for such Distribution Date.
(13) Interest will accrue on the Class M-6 Certificates at the
indicated fixed
rate (increased to 6.250% per annum for Interest Accrual Periods
relating
to Distribution Dates after the Optional Termination Date) subject
to the
Pool Cap for such Distribution Date.
(14) Interest will accrue on the Class B-1 Certificates at the
indicated fixed
rate (increased to 6.250% per annum for Interest Accrual Periods
relating
to Distribution Dates after the Optional Termination Date) subject
to the
Pool Cap for such Distribution Date.
(15) Interest will accrue on the Class B-2 Certificates at the
indicated fixed
rate (increased to 6.250% per annum for Interest Accrual Periods
relating
to Distribution Dates after the Optional Termination Date) subject
to the
Pool Cap for such Distribution Date.
(16) The Class CE Certificates (i) will have an Original Class
Certificate
Principal Balance equal to the Initial Overcollateralization Amount
and
(ii) will bear interest at its Pass-Through Rate on the Notional
Amount of
the Class CE Certificates.
(17) The Class P Certificate will not bear interest.
(18) 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 Class of Certificates.
As of the Cut-off Date, the Mortgage Loans had an aggregate
scheduled
Principal Balance equal to $818,160,165.83.
-4-
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 Fixed-Rate Certificates will be
calculated on the
basis of a 360-day year consisting of twelve 30-day months.
Interest on the
Class A-1A 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 (measured under the OTS delinquency
calculation
methodology) and each Mortgage Loan relating to an REO Property.
"Account": Any of the Collection Account, the Distribution Account,
the Reserve Account or the Escrow Account.
"Accrued Certificate Interest": With respect to each Distribution
Date
and each Class of Class A, Class M and Class B Certificates, an
amount equal to
the interest accrued at the Certificate Interest Rate of such Class
during the
related Interest Accrual Period on the Certificate Principal
Balance of such
Class of Certificates, reduced by such Class' Interest Percentage
of Prepayment
Interest Shortfalls (not covered by Compensating Interest) and
Relief Act
Interest Shortfalls for such Distribution Date allocated to such
class pursuant
to Section 4.01.
"Advance": As to any Mortgage Loan, any advance made by the
Servicer
in respect of any Distribution Date pursuant to Section 4.07.
"Adverse REMIC Event": As defined in Section 9.01(f) hereof.
"Affiliate": With respect to any Person, any other Person
controlling,
controlled by or under common control with such Person. For
purposes of this
definition, "control" means the power to direct the management and
policies of a
Person, directly or indirectly, whether through ownership of voting
securities,
by contract or otherwise and "controlling" and "controlled" shall
have meanings
correlative to the foregoing.
"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.
-5-
"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 Class A, Class M, Class B and Class P Certificates
(after giving
effect to 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 (excepting therefrom if
applicable,
the mortgage recordation information which has not been returned by
the
applicable recorder's office and/or the assignee's name), 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.
"Assignment, Assumption and Recognition Agreement": The Assignment,
Assumption and Recognition Agreement, dated June 7, 2005, among the
Depositor,
the Seller and the Originator.
"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 Servicer, (b) Liquidation Proceeds,
Insurance
Proceeds, Condemnation Proceeds, Principal Prepayments, 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,
Servicer
Prepayment Charge Payment Amounts and Prepayment Interest Excess)
in respect of
the Mortgage Loans during the related Prepayment Period, (c) the
aggregate of
any amounts received in respect of an REO Property deposited in the
Collection
Account for such Distribution Date, (d) any Compensating Interest
for such
Distribution Date, (e) the aggregate of any Advances made by the
Servicer for
such Distribution Date and (f) any Reimbursement Amount or
Subsequent Recovery
deposited into the Collection Account during the related Prepayment
Period over
(ii) the sum of (a) amounts reimbursable or payable to the Servicer
pursuant to
Sections 3.05 or 6.03, (b) amounts reimbursable or payable to the
Trustee
pursuant to Section 8.05 or Section 9.01(c), (c) Stayed Funds, (d)
the Servicing
Fee and (e) amounts deposited in the Collection Account or the
Distribution
Account, as the case may be, in error.
"Balloon Mortgage Loan": Each of the Mortgage Loans having an
original
term to maturity that is shorter than the related amortization
term.
"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
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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-1A, Class
A-1B, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class
M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1 and
Class B-2
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 New York, the State of
California or
the city in which the Corporate Trust Office of the Trustee is
located are
authorized or obligated by law or executive order to be closed.
"Cap Carryover Amount": If on any Distribution Date, the Accrued
Certificate Interest for the Class A-1A Certificates is based upon
the Pool Cap,
the excess of (i) the amount of interest such Certificates would
have been
entitled to receive on such Distribution Date based on the related
Pass-Through
Rate, over (ii) the amount of interest such Certificates received
on such
Distribution Date based on the Pool 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 Class of Certificates).
"Certificate": Any Regular Certificate or Class R Certificate.
"Certificate Custodian": Initially, Deutsche Bank National Trust
Company; thereafter any other Certificate Custodian acceptable to
the Depository
and selected by the Trustee.
"Certificate Interest Rate": With respect to each Distribution Date
during the Interest Accrual Period and (a) the Class A-1A
Certificates, a per
annum rate equal to the lesser of (i) the related Pass-Through Rate
and (ii) the
Pool Cap for such Distribution Date, (b) each Class of Fixed-Rate
Certificates,
a per annum rate equal to the lesser of (i) the related Fixed Rate
and (ii) the
Pool Cap for such Distribution Date and (c) the Class CE
Certificates, the
related Pass-Through Rate.
"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 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 R Certificates do not have a Certificate Principal
Balance.
With respect to the Class CE Certificate and any Distribution Date,
the excess,
if any, of the then aggregate Uncertificated Principal Balances of
the REMIC 1
Regular Interests over the aggregate Certificate Principal Balance
of the Class
A Certificates, the Class M Certificates, the Class B Certificates
and the Class
P Certificates then outstanding. With respect to any Regular
Certificate of a
Class and any Distribution Date, the
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portion of the Certificate Principal Balance of such Class
represented by such
Regular Certificate equal to the product of the Percentage Interest
evidenced by
such Regular 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 3.31(b) hereof.
"Class": Collectively, Certificates or REMIC 1 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 Certificate": Any one of the Certificates with an "A"
designated on the face thereof substantially in the form annexed
hereto as
Exhibits A-1A, A-1B, A-2, A-3, A-4, A-5 and A-6, executed by the
Trustee on
behalf of the Trust and authenticated and delivered by the
Certificate
Registrar, representing the right to distributions as set forth
herein and
therein and representing a regular interest in REMIC 2 for purposes
of the REMIC
Provisions.
"Class A Certificateholders": Collectively, the Holders of the
Class A
Certificates.
"Class A-1A Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date, 0.120% per annum, and (ii)
following the
Optional Termination Date, 0.240% per annum.
"Class A-1A 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-1A Certificate Margin and (b)
the Maximum
Rate Cap.
"Class A-1B Fixed Rate": A fixed coupon rate of 4.25% per annum (or
4.75% for Interest Accrual Periods relating to Distribution Dates
after the
Optional Termination Date).
"Class A-2 Fixed Rate": A fixed coupon rate of 4.30% per annum (or
4.80% for Interest Accrual Periods relating to Distribution Dates
after the
Optional Termination Date).
"Class A-3 Fixed Rate": A fixed coupon rate of 4.42% per annum (or
4.92% for Interest Accrual Periods relating to Distribution Dates
after the
Optional Termination Date).
"Class A-4 Fixed Rate": A fixed coupon rate of 5.01% per annum (or
5.51% for Interest Accrual Periods relating to Distribution Dates
after the
Optional Termination Date).
"Class A-5 Fixed Rate": A fixed coupon rate of 5.32% per annum (or
5.82% for Interest Accrual Periods relating to Distribution Dates
after the
Optional Termination Date).
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"Class A-6 Fixed Rate": A fixed coupon rate of 4.78% per annum (or
5.28% for Interest Accrual Periods relating to Distribution Dates
after the
Optional Termination Date).
"Class A-6 Lockout Certificate Percentage": For the Class A-6
Certificates and any Distribution Date, the percentage equal to the
Certificate
Principal Balance of the Class A-6 Certificates immediately prior
to such
Distribution Date divided by the aggregate Certificate Principal
Balance of the
Class A Certificates immediately prior to such Distribution Date.
"Class A-6 Lockout Distribution Percentage": For the Class A-6
Certificates and any Distribution Date, the product of (a) the
Class A-6 Lockout
Certificate Percentage for such Distribution Date and (b) the
applicable
percentage indicated below:
DISTRIBUTION DATE OCCURRING IN
------------------------------
July 2005 through June 2008
0%
July 2008 through June 2010
45%
July 2010 through June 2011
80%
July 2011 through June 2012
100%
July 2012 and thereafter
300%
"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-7 and Exhibit B-8, executed by the Trustee on behalf of
the Trust and
authenticated and delivered by the Certificate Registrar,
representing the right
to distributions as set forth herein and therein.
"Class B Certificateholders": Collectively, the Holders of the
Class B
Certificates.
"Class B-1 Fixed Rate": A fixed coupon rate of 5.750% per annum (or
6.250% for Interest Accrual Periods relating to Distribution Dates
after the
Optional Termination Date).
"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) and
(viii) the
Certificate Principal Balance of
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the Class B-1 Certificates immediately prior to such Distribution
Date over (y)
the lesser of (A) the product of (i) 98.30% 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
0.40% and the
Pool Balance as of the Cut-off Date.
"Class B-1 Realized Loss Amortization Amount": As to the Class B-1
Certificates and as of any Distribution Date, the lesser of (x) the
Unpaid
Realized Loss Amount for the 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 (xxii) hereof,
in each case
for such Distribution Date.
"Class B-2 Fixed Rate": A fixed coupon rate of 5.500% per annum (or
6.000% for Interest Accrual Periods relating to Distribution Dates
after the
Optional Termination Date).
"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 B-1 Certificates (after
taking into
account the payment of the Class B-1 Principal Distribution Amount
on such
Distribution Date) and (ix) 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) 99.20% 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 0.40% and the Pool
Balance as of
the Cut-off Date.
"Class B-2 Realized Loss Amortization Amount": As to the Class B-2
Certificates and as of any Distribution Date, the lesser of (x) the
Unpaid
Realized Loss Amount for the 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 (xxv) 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 Trustee on behalf of the Trust and
authenticated
and delivered by the Certificate Registrar, representing
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the right to distributions as set forth herein and therein and
representing a
regular interest in REMIC 2 for purposes of the REMIC Provisions.
"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)(xxviii),
(ii) any remaining Aggregate Overcollateralization Release Amounts
and (iii) the
aggregate of amounts remaining in the Reserve Account after the
distributions in
Section 3.04(g)(i)(A), as specified in Section 3.04(g)(i)(B).
"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 and
Exhibit B-6,
executed by the Trustee on behalf of the Trust and authenticated
and delivered
by the Certificate Registrar, representing the right to
distributions as set
forth herein and therein and representing a regular interest in
REMIC 2 for
purposes of the REMIC Provisions.
"Class M Certificateholders": Collectively, the Holders of the
Class M
Certificates.
"Class M-1 Fixed Rate": A fixed coupon rate of 5.240% per annum (or
5.940% for Interest Accrual Periods relating to Distribution Dates
after the
Optional Termination Date).
"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 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) 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) 91.20% 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 0.40% and the Pool Balance as of the Cut-off Date.
"Class M-1 Realized Loss Amortization Amount": As to the Class M-1
Certificates and as of any Distribution Date, the lesser of (x) the
Unpaid
Realized Loss Amount for the Class M-1 Certificates as of such
Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over
(ii) the sum
of the amounts described in Section 4.02(b)(i) through (iv) hereof,
in each case
for such Distribution Date.
"Class M-2 Fixed Rate": A fixed coupon rate of 5.440% per annum (or
5.940% for Interest Accrual Periods relating to Distribution Dates
after the
Optional Termination Date).
"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 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) and (iii) the
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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) 94.50% 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 0.40% and the Pool Balance as of the Cut-off Date.
"Class M-2 Realized Loss Amortization Amount": As to the Class M-2
Certificates and as of any Distribution Date, the lesser of (x) the
Unpaid
Realized Loss Amount for the Class M-2 Certificates as of such
Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over
(ii) the sum
of the amounts described in Section 4.02(b)(i) through (vii)
hereof, in each
case for such Distribution Date.
"Class M-3 Fixed Rate": A fixed coupon rate of 5.740% per annum (or
6.240% for Interest Accrual Periods relating to Distribution Dates
after the
Optional Termination Date).
"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) 95.30% 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
0.40% and the
Pool Balance as of the Cut-off Date.
"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 (x) hereof,
in each case
for such Distribution Date.
"Class M-4 Fixed Rate": A fixed coupon rate of 5.750% per annum (or
6.250% for Interest Accrual Periods relating to Distribution Dates
after the
Optional Termination Date).
"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
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(y) the lesser of (A) the product of (i) 96.00% 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
0.40% and the
Pool Balance as of the Cut-off Date.
"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 (xiii)
hereof, in each
case for such Distribution Date.
"Class M-5 Fixed Rate": A fixed coupon rate of 5.750% per annum (or
6.250% for Interest Accrual Periods relating to Distribution Dates
after the
Optional Termination Date).
"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) 96.70% 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 0.40% and the Pool
Balance as of
the Cut-off Date.
"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 (xvi)
hereof, in each
case for such Distribution Date.
"Class M-6 Fixed Rate": A fixed coupon rate of 5.750% per annum (or
6.250% for Interest Accrual Periods relating to Distribution Dates
after the
Optional Termination Date).
"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
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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) 97.50% 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 0.40% and the Pool Balance as of the Cut-off Date.
"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 (xix)
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 Trustee on behalf of the Trust and
authenticated
and delivered by the Certificate Registrar, representing the right
to
distributions as set forth herein and therein and representing a
regular
interest in REMIC 2 for purposes of the REMIC Provisions.
"Class R Certificate": The Class R Certificate executed by the
Trustee
on behalf of the Trust, and authenticated and delivered by the
Certificate
Registrar, substantially in the form annexed hereto as Exhibit C-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
for purposes of the REMIC Provisions.
"Class R-2 Interest": The uncertificated Residual Interest in REMIC
2
for purposes of the REMIC Provisions.
"Closing Date": June 7, 2005.
"Code": The Internal Revenue Code of 1986, as it may be amended
from
time to time.
"Collection Account": The account or accounts created and
maintained
by the Servicer pursuant to Section 3.04 shall be entitled
"Collection Account,
Ameriquest Mortgage Company, as Servicer for the Trust under the
Pooling and
Servicing Agreement dated as of June 1, 2005, among Asset Backed
Funding
Corporation, as Depositor, Ameriquest Mortgage Company, as
Servicer, and
Deutsche Bank National Trust Company, as Trustee, in trust for
registered
Holders of ABFC 2005-AQ1 Trust, Asset-Backed Certificates, Series
2005-AQ1."
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"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.
"Compensating Interest": As defined in Section 3.23 hereof.
"Condemnation Proceeds": All awards or settlements in respect of a
taking of a Mortgaged Property by exercise of the power of eminent
domain or
condemnation.
"Corporate Trust Office": The principal corporate trust office of
the
Trustee at which at any particular time its corporate trust
business in
connection with this Agreement shall be administered, which office
at the date
of the execution of this instrument is located at 1761 East St.
Andrew Place,
Santa Ana, California 92705-4934, Attention: Trust
Administration-BA05Q1 or at
such other address as the Trustee may designate from time to time
by notice to
the Certificateholders, the Depositor and the 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
-------------------------------------------------------------
LT1A1A
Class A-1A Certificates
-------------------------------------------------------------
LT1A1B
Class A-1B Certificates
-------------------------------------------------------------
LT1A2
Class A-2 Certificates
-------------------------------------------------------------
LT1A3
Class A-3 Certificates
-------------------------------------------------------------
LT1A4
Class A-4 Certificates
-------------------------------------------------------------
LT1A5
Class A-5 Certificates
-------------------------------------------------------------
LT1A6
Class A-6 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
-------------------------------------------------------------
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-------------------------------------------------------------
LT1B1
Class B-1 Certificates
-------------------------------------------------------------
LT1B2
Class B-2 Certificates
-------------------------------------------------------------
LT1P
Class P Certificate
-------------------------------------------------------------
"Cumulative Loss Percentage": With respect to any Distribution
Date,
the percentage equivalent of a fraction, the numerator of which is
the aggregate
of Realized Losses incurred from the Cut-off Date to the last day
of the
preceding calendar month (reduced by the aggregate amount of
Subsequent
Recoveries received from the Cut-off Date through the last day of
the related
Due Period) and the denominator of which is the aggregate Principal
Balance of
the Mortgage Loans as of the Cut-off Date.
"Cut-off Date": June 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.
"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.
"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.
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"Depository Participant": A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository
effects
book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date": With respect to any Distribution Date, the
10th
day of the calendar month in which such Distribution Date occurs
or, if such
10th day is not a Business Day, the Business Day immediately
preceding such 10th
day.
"Directly Operate": With respect to any REO Property, the
furnishing
or rendering of services to the tenants thereof, the management or
operation of
such REO Property, the holding of such REO Property primarily for
sale to
customers, the performance of any construction work thereon or any
use of such
REO Property in a trade or business conducted by the Trust other
than through an
Independent Contractor; provided, however, that the Trustee (or the
Servicer
under this Agreement) shall not be considered to Directly Operate
an REO
Property solely because the Trustee (or the Servicer under this
Agreement)
establishes rental terms, chooses tenants, enters into or renews
leases, deals
with taxes and insurance, or makes decisions as to repairs or
capital
expenditures with respect to such REO Property.
"Disqualified Organization": A "disqualified organization" under
Section 860E of the Code, which as of the Closing Date is any of:
(i) the United
States, any state or political subdivision thereof, any possession
of the United
States, any foreign government, any international organization, or
any agency or
instrumentality of any of the foregoing, (ii) any organization
(other than a
cooperative described in Section 521 of the Code) which is exempt
from the tax
imposed by Chapter 1 of the Code unless such organization is
subject to the tax
imposed by Section 511 of the Code, (iii) any organization
described in Section
1381(a)(2)(C) of the Code, or (iv) any other Person so designated
by the Trustee
based upon an Opinion of Counsel provided by nationally recognized
counsel to
the Trustee that the holding of an ownership interest in 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 trust account or accounts created and
maintained by the Trustee pursuant to Section 3.04(b) which shall
be entitled
"Distribution Account, Deutsche Bank National Trust Company, as
Trustee, in
trust for the registered Holders of ABFC 2005-AQ1 Trust,
Asset-Backed
Certificates, Series 2005-AQ1" 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 July 2005.
"Distribution Date Statement": As defined in Section 4.06(a)
hereof.
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"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 and "F-1+" by Fitch (or comparable ratings
if S&P, and Fitch
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 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 Servicer, the
NIMS Insurer,
the Trustee or any of their respective Affiliates or for which an
Affiliate of
the Trustee serves as an advisor:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or
any
agency or instrumentality thereof, provided such obligations are
backed by
the full faith and credit of the United States;
(ii) (A) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by or federal funds sold by any
depository
institution or trust company (including the Trustee or its agents
acting in
their respective commercial capacities) incorporated under the laws
of the
United States of America or any state thereof and subject to
supervision
and examination by federal and/or state authorities, so long as, at
the
time of such investment or contractual commitment providing for
such
investment, such depository institution or trust company or its
ultimate
parent has a short-term uninsured debt rating in one of the two
highest
available rating categories of S&P and the highest available
rating
category of Fitch and provided that each such investment has an
original
maturity of no more than 365 days and (B) any other demand or time
deposit
or deposit which is fully insured by the FDIC;
(iii) repurchase obligations with a term not to exceed 30 days with
respect to any security described in clause (i) above and entered
into with
a depository institution or trust company (acting as principal)
rated "A"
or higher by S&P and "A+" or higher by Fitch, provided,
however, that
collateral transferred pursuant to such repurchase obligation must
be of
the type described in clause (i) above and must (A) be valued daily
at
current market prices plus accrued interest or (B) pursuant to such
valuation, be equal, at all times, to 105% of the cash transferred
by the
Trustee in exchange for such collateral and (C) be delivered to the
Trustee
or, if the Trustee is supplying the collateral, an agent
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for the Trustee, in such a manner as to accomplish perfection of a
security
interest in the collateral by possession of certificated
securities;
(iv) securities bearing interest or sold at a discount that are
issued
by any corporation incorporated under the laws of the United States
of
America or any State thereof and that are rated by each Rating
Agency in
its highest long-term unsecured rating categories at the time of
such
investment or contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or
on a
specified date not more than 30 days after the date of acquisition
thereof)
that is rated by each Rating Agency in its highest short-term
unsecured
debt rating available at the time of such investment;
(vi) units of money market funds registered under the Investment
Company Act of 1940 (including funds managed or advised by the
Trustee or
affiliates thereof) 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 Trustee 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.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"ERISA-Restricted Certificates": Any of the Class B, Class CE,
Class P
and Class R Certificates, and any Class of Certificates that no
longer satisfies
the applicable rating requirement of Prohibited Transaction
Exemption 2002-41,
67 Fed. Reg. 54487 (August 22, 2002).
"Escrow Account": The account or accounts created and maintained
pursuant to Section 3.06.
"Escrow Payments": The amounts constituting taxes, assessments,
mortgage insurance premiums, fire and hazard insurance premiums and
other
payments required to be escrowed by the Mortgagor with the
mortgagee pursuant to
a voluntary escrow agreement related to any Mortgage Loan.
"Estate in Real Property": A fee simple estate in a parcel of real
property.
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"Exchange Act": The Securities Exchange Act of 1934, as amended.
"Expense Fee Rate": The sum of (i) the Servicing Fee Rate and (ii)
the
Trustee Fee Rate.
"Extended Period": As defined in Section 9.04(b).
"Extra Principal Distribution Amount": As of any Distribution Date,
the lesser of (x) the Monthly Excess Interest Amount for such
Distribution Date
and (y) the Overcollateralization Deficiency for such Distribution
Date.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"Fidelity Bond": Shall have the meaning assigned thereto in Section
3.12.
"Final Recovery Determination": With respect to any defaulted
Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO
Property (i)
purchased by the Originator or the Seller pursuant to or as
contemplated by
Section 2.03, (ii) purchased by the Servicer pursuant to Section
3.16 or (iii)
purchased by the NIMS Insurer, the Majority Class CE
Certificateholders or the
Servicer pursuant to Section 10.01), a determination made by the
Servicer that
all Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds
and other
payments or recoveries which the Servicer, in its reasonable good
faith
judgment, expects to be finally recoverable in respect thereof have
been so
recovered. The Servicer shall maintain records, prepared by a
Servicing Officer,
of each Final Recovery Determination made thereby.
"Fitch": Fitch 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": With respect to each Class of Fixed-Rate
Certificates,
the Class A-1B Fixed Rate, the Class A-2 Fixed Rate, the Class A-3
Fixed Rate,
the Class A-4 Fixed Rate, the Class A-5 Fixed Rate, the Class A-6
Fixed Rate,
the Class M-1 Fixed Rate, the Class M-2 Fixed Rate, the Class M-3
Fixed Rate,
the Class M-4 Fixed Rate, the Class M-5 Fixed Rate, the Class M-6
Fixed Rate,
the Class B-1 Fixed Rate and the Class B-2 Fixed Rate, as
applicable.
"Fixed-Rate Certificates": Each of the Class A-1B, Class A-2, Class
A-3, Class A-4, Class A-5, Class A-6, Class M and Class B
Certificates.
"Foreclosure Price": The amount reasonably expected to be received
from the sale of the related Mortgaged Property net of any expenses
associated
with foreclosure proceedings.
"Form 10-K": As defined in Section 3.31(a) hereof.
"Grantor Trust": That portion of the Trust exclusive of REMIC 1 and
REMIC 2 consisting of (a) any Servicer Prepayment Charge Payment
Amounts and the
right of the Class P Certificateholders to receive such Servicer
Prepayment
Charge Payment Amounts, (b) the right
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of the Class A-1A Certificates to receive Cap Carryover Amounts,
(c) the Yield
Maintenance Agreement, the Reserve Account 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.
"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
Servicer and
their respective Affiliates, (ii) does not have any direct
financial interest in
or any material indirect financial interest in the Depositor or the
Servicer or
any Affiliate thereof, and (iii) is not connected with the
Depositor or the
Servicer or any Affiliate thereof as an officer, employee,
promoter,
underwriter, trustee, partner, director or Person performing
similar functions;
provided, however, that a Person shall not fail to be Independent
of the
Depositor or the Servicer or any Affiliate thereof merely because
such Person is
the beneficial owner of 1% or less of any class of securities
issued by the
Depositor or the Servicer or any Affiliate thereof, as the case may
be.
"Independent Contractor": Either (i) any Person (other than the
Servicer) that would be an "independent contractor" with respect to
the Trust
Fund within the meaning of Section 856(d)(3) of the Code if the
Trust Fund were
a real estate investment trust (except that the ownership tests set
forth in
that section shall be considered to be met by any Person that owns,
directly or
indirectly, 35 percent or more of any Class of Certificates), so
long as the
Trust Fund does not receive or derive any income from such Person
and provided
that the relationship between such Person and the Trust Fund is at
arm's length,
all within the meaning of Treasury Regulations Section
1.856-4(b)(5), or (ii)
any other Person (including the Servicer) if the Trustee has
received an Opinion
of Counsel, which Opinion of Counsel shall be an expense of the
Trust Fund, to
the effect that the taking of any action in respect of any REO
Property by such
Person, subject to any conditions therein specified, that is
otherwise herein
contemplated to be taken by an Independent Contractor will not
cause such REO
Property to cease to qualify as "foreclosure property" within the
meaning of
Section 860G(a)(8) of the Code (determined without regard to the
exception
applicable for purposes of Section 860D(a) of the Code), or cause
any income
realized in respect of such REO Property to fail to qualify as
Rents from Real
Property.
"Initial Certificate Principal Balance": With respect to any
Certificate of a Class other than a Class CE or Class R
Certificate, the amount
designated "Initial Certificate Principal Balance" on the face
thereof.
"Initial Overcollateralization Amount": $3,273,065.83.
"Insurance Proceeds": Proceeds of any title policy, hazard policy
or
other insurance policy covering a Mortgage Loan, to the extent such
proceeds are
not to be applied to the restoration of the related Mortgaged
Property or
released to the Mortgagor in accordance with the procedures that
the Servicer
would follow in servicing mortgage loans held for its own account,
subject to
the terms and conditions of the related Mortgage Note and Mortgage.
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"Interest Accrual Period": With respect to any Distribution Date
and
(i) each Class of Class A-1A Certificates, the period from the
preceding
Distribution Date to the day prior to the current Distribution Date
and (ii)
each Class of Fixed-Rate Certificates, the Class CE Certificates
and the REMIC 1
Regular Interests, the calendar month preceding the month in which
the related
Distribution Date occurs.
"Interest Carry Forward Amount": For any Class of Class A, Class M
and
Class B 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
related Interest
Accrual Period.
"Interest Percentage": With respect to any Class of Class A, Class
M
and Class B Certificates and any Distribution Date, the ratio
(expressed as a
decimal carried to six places) of the Accrued Certificate Interest
for such
Class to the sum of the Accrued Certificate Interest for all
Classes of Class A,
Class M and Class B Certificates, in each case with respect to such
Distribution
Date, without regard to Prepayment Interest Shortfalls (not covered
by
Compensating Interest payments) and Relief Act Interest Shortfalls.
"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 Mortgage Loans
received by the
Servicer on or prior to the Determination Date for such
Distribution Date (less
(A) the Servicing Fee, (B) amounts available for reimbursement of
Advances and
Servicing Advances pursuant to Section 3.05 and (C) expenses
reimbursable
pursuant to Section 6.03), (ii) all Compensating Interest paid by
the Servicer
on the related 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), 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.
"Late Collections": With respect to any Mortgage Loan, all amounts
received subsequent to the Determination Date immediately following
any related
Collection Period, whether as late payments of Monthly Payments or
as Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds, Subsequent
Recoveries or
otherwise, which represent late payments or collections of
principal and/or
interest due (without regard to any acceleration of payments under
the related
Mortgage and Mortgage Note) but delinquent on a contractual basis
for such
Collection Period and not previously recovered.
"LIBOR Business Day": Any day on which banks in London, England and
The City of New York are open and conducting transactions in
foreign currency
and exchange.
"LIBOR Determination Date": With respect to the Class A-1A
Certificates, (i) for the first Distribution Date, the second LIBOR
Business Day
preceding the Closing Date
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and (ii) for each subsequent Distribution Date, the second LIBOR
Business Day
prior to the immediately preceding Distribution Date.
"Liquidated Mortgage Loan": As to any Distribution Date, any
Mortgage
Loan in respect of which the Servicer has determined, in accordance
with the
servicing procedures specified herein, as of the end of the related
Prepayment
Period, that all Liquidation Proceeds, 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 Insurance Proceeds
or
amounts received in respect of the rental of any REO Property prior
to REO
Disposition) received by the Servicer in connection with (i) the
taking of all
or a part of a Mortgaged Property by exercise of the power of
eminent domain or
condemnation, (ii) the liquidation of a defaulted Mortgage Loan by
means of a
trustee's sale, foreclosure sale or otherwise or (iii) the
repurchase,
substitution or sale of a Mortgage Loan or a REO Property.
"Liquidation Report": The report with respect to a Liquidated
Mortgage
Loan in such form as is agreed to by the Servicer and the Trustee
listing (i)
the sale price of the related Mortgaged Property or amount of the
REO
Disposition, (ii) the amount of any Realized Loss (or gain) with
respect to such
Liquidated Mortgage Loan, (iii) the expenses relating to the
liquidation of such
Liquidated Mortgage Loan and (iv) such other information as is
agreed to by the
Servicer and the Trustee.
"Loan-to-Value Ratio": For any Mortgage Loan, the fraction,
expressed
as a percentage, the numerator of which is the Principal Balance of
the Mortgage
Loan at origination the denominator of which is the Value of the
related
Mortgaged Property.
"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)
substantially 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 1 Pass-Through Rates for REMIC 1
Regular Interest
LT1A1A, REMIC 1 Regular Interest LT1A1B, REMIC 1 Regular Interest
LT1A2, REMIC 1
Regular Interest LT1A3, REMIC 1 Regular Interest LT1A4, REMIC 1
Regular Interest
LT1A5, REMIC 1 Regular Interest LT1A6,
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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 LT1B1,
REMIC 1 Regular
Interest LT1B2 and REMIC 1 Regular Interest LT1ZZ, (i) with the
rate on REMIC 1
Regular Interest LT1A1A subject to a cap equal to the Pass-Through
Rate on its
Corresponding Class and with the rate on each such other REMIC 1
Regular
Interest (other than REMIC 1 Regular Interest LT1ZZ) subject to a
cap equal to
the Fixed Rate of its Corresponding Class (taking into account in
determining
any such Pass-through Rate or Fixed Rate the imposition of the Pool
Cap on the
Certificate Interest Rate of the Corresponding Certificate) 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 REMIC 1 Regular Interest
LT1A1A 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 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 LT1A1A,
REMIC 1
Regular Interest LT1A1B, REMIC 1 Regular Interest LT1A2, REMIC 1
Regular
Interest LT1A3, REMIC 1 Regular Interest LT1A4, REMIC 1 Regular
Interest LT1A5,
REMIC 1 Regular Interest LT1A6, 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 LT1B1 and REMIC 1 Regular Interest LT1B2 with the rate on
REMIC 1
Regular Interest LT1A1A subject to a cap equal to the Pass-Through
Rate on its
Corresponding Class and with the rate on each such other REMIC 1
Regular
Interest subject to a cap equal to the Fixed Rate of the related
Corresponding
Class (taking into account in determining such Pass-Through Rate or
Fixed Rate
the imposition of the Pool Cap on the Certificate Interest Rate of
its
Corresponding Certificate) for the purposes 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 LT1A1A 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 Rate Cap": With respect to any Distribution Date and the
Class A-1A Certificates, a per annum rate (not less than zero),
equal to (i) on
or prior to the Distribution Date in September 2006, the greater of
(a) the
weighted average of the Net Mortgage Interest Rates of the Mortgage
Loans
(subject to adjustment based on the actual number of days elapsed
in the related
Interest Accrual Period) and (b) 8.0% and (ii) after the
Distribution Date in
September 2006, the weighted average of the Net Mortgage Interest
Rates of the
Mortgage Loans (subject to adjustment based on the actual number of
days elapsed
in the related Interest Accrual Period).
"MERS": Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor to it.
-24-
"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 Class A, Class M and 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 (xi) under Section 4.01.
"Monthly Form 8-K": As defined in Section 3.31(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 Servicer pursuant to Section 3.01; and
(c) on the
assumption that all other amounts, if any, due under such Mortgage
Loan are paid
when due.
"Mortgage": The mortgage, deed of trust or other instrument
creating a
first lien on, or first priority security interest in, a Mortgaged
Property
securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional
documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage 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 shall
remain constant at the rate set forth in the Mortgage Loan Schedule
as the
Mortgage Interest Rate in effect immediately following the Cut-off
Date. With
respect to each Mortgage Loan that becomes an REO Property, as of
any date of
determination, the annual rate determined in accordance with the
immediately
preceding sentence as of the date such Mortgage Loan became an REO
Property.
"Mortgage Loan": Each mortgage loan transferred and assigned to the
Trustee pursuant to Section 2.01 or Section 2.03(d) as from time to
time held as
a part of the Trust Fund, the Mortgage Loans so held being
identified in the
Mortgage Loan Schedule.
"Mortgage Loan Purchase Agreement": The agreement between the
Seller
and the Depositor, dated as of June 7, 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,
identifying such Mortgage Loans, attached hereto as Exhibit D. The
Mortgage Loan
Schedule shall set forth the following information with respect to
each Mortgage
Loan:
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(1)
the Mortgage Loan identifying number;
(2)
the state and zip code of the Mortgaged Property;
(3)
the Mortgagor's FICO Score (the middle of three, the lower of two
or the one);
(4)
[Reserved];
(5)
a code indicating whether the Mortgaged Property is a single
family residence, a condominium, a 2-4 family residence, a
planned unit development (attached or detached);
(6)
the loan type (i.e., fixed, adjustable; 2/28, 2/18, 2/13, 3/27,
3/17, 3/12, etc);
(7)
a code indicating the Company's risk grade of the Mortgage Loan;
(8)
a code indicating the type and term of Prepayment Charge, if any,
of the Mortgage Loan;
(9)
the original months to maturity and the remaining months to
maturity from the related Cut-off Date;
(10) the Loan-to-Value Ratio at origination;
(11) the Appraised Value at origination;
(12) the Mortgage Interest Rate at origination;
(13) the first payment date of the Mortgage Loan;
(14) the stated maturity date;
(15) the amount of the Monthly Payment;
(16) the next Due Date of the Mortgage Loan;
(17) the original principal amount of the Mortgage Loan;
(18) the principal balance of the Mortgage Loan as of the close of
business on the related Cut-off Date, after deduction of payments
of principal received on or before the related Cut-off Date;
(19) the Mortgage Loan purpose with respect to each Mortgage Loan;
(20) the occupancy status of the Mortgaged Property;
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(21) the total monthly payment (including escrowed taxes and
insurance
premiums);
(22) a code indicating the documentation style (i.e, full, limited
or
stated);
(23) the Mortgagor's debt to income ratio;
(24) the points and origination fee with respect to a Mortgage
Loan;
(25) the name of the originator of the Mortgage Loan;
(26) a code indicating whether the Mortgage Loan is a balloon
Mortgage
Loan;
(27) a code indicating whether there is a second lien mortgage loan
secured by the same Mortgaged Property originated at the same
time as the Mortgage Loan;
(28) a code indicating whether the Mortgage Loan is secured by a
ground lease;
(29) the type of appraisal; and
(30) if the Mortgage Loan was originated pursuant to a "lease
option
purchase".
The Mortgage Loan Schedule shall set forth the following
information,
as of the Cut-off Date, with respect to the Mortgage Loans in the
aggregate: (1)
the number of Mortgage Loans; (2) the aggregate outstanding
principal balance of
the Mortgage Loans; (3) the weighted average Mortgage Interest Rate
of the
Mortgage Loans; and (4) the weighted average months to maturity of
the Mortgage
Loans. The Mortgage Loan Schedule shall be amended from time to
time in
accordance with the provisions of this Agreement. The Servicer
shall cooperate
in providing any information available to it necessary in order to
amend the
Mortgage Loan Schedule.
"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 the
Mortgage Loan Schedule 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,
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Servicing Fees and any other accrued and unpaid servicing fees
received and
retained in connection with the liquidation of such Mortgage Loan
or Mortgaged
Property.
"Net Mortgage Interest Rate": With respect to any Mortgage Loan,
the
Mortgage Interest Rate borne by such Mortgage Loan minus the
Expense Fee Rate.
"New Lease": Any lease of REO Property entered into on behalf of
the
Trust, including any lease renewed or extended on behalf of the
Trust if the
Trust has the right to renegotiate the terms of such lease.
"NIMS Insurer": Any insurer that is guaranteeing certain payments
under notes secured by collateral which includes all or a portion
of the Class
CE, Class P and Class R Certificates.
"Nonrecoverable Advance": Any Advance or Servicing Advance
previously
made or proposed to be made in respect of a Mortgage Loan that, in
the good
faith business judgment of the Servicer, will not or, in the case
of a proposed
Advance or Servicing Advance, would not be ultimately recoverable
from Late
Collections on such Mortgage Loan as provided herein.
"Notional Amount": With respect to the Class CE Certificates, a
notional amount equal to the aggregate principal balance of the
REMIC 1 Regular
Interests other than REMIC 1 Regular Interest LT1P.
"Offered Certificates": The Class A and Class M 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) or a principal, and by the Treasurer, the Secretary,
or one of the
assistant treasurers or assistant secretaries of the Servicer, the
Seller or the
Depositor, as applicable.
"One-Month LIBOR": With respect to each Interest Accrual Period,
the
rate determined by the Trustee on the related LIBOR Determination
Date on the
basis of the offered rate for one-month United States dollar
deposits, as such
rate appears on the Telerate Page 3750, as of 11:00 a.m. (London
time) on such
LIBOR Determination Date. If no such quotations are available on an
LIBOR
Determination Date, One-Month LIBOR for the related Interest
Accrual Period will
be established by the Trustee as follows:
(i) If on such LIBOR Determination Date two or more Reference Banks
provide such offered quotations, 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 Trustee
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.
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Dollars to leading European banks for a period of one month in an
amount
approximately equal to the aggregate Certificate Principal Balance
of the
Class A-1A 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.
The establishment of One-Month LIBOR on each LIBOR Determination
Date
by the Trustee and the Trustee's calculation of the rate of
interest applicable
to the Class A-1A Certificates for the related Interest Accrual
Period shall (in
the absence of manifest error) be final and binding.
"Opinion of Counsel": A written opinion of counsel, who may,
without
limitation, be a salaried counsel for the Depositor or the Servicer
except that
any opinion of counsel relating to (a) the qualification of any
REMIC as a REMIC
or (b) compliance with the REMIC Provisions must be an opinion of
Independent
counsel.
"Optional Termination Date": The first Distribution Date on which
the
NIMS Insurer, if there is a NIMS Insurer, the Majority Class CE
Certificateholders or, if such Majority Class CE Certificateholder
is the Seller
or is an affiliate of the Seller, the Servicer, 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 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": Ameriquest Mortgage Company and its successors.
"Originator Mortgage Loan Purchase Agreement": The Master Mortgage
Loan Purchase Agreement, dated as of May 27, 2005, by and between
the Seller, as
purchaser, and Ameriquest Mortgage Company, as seller, as such
agreement is
modified pursuant to the Assignment, Assumption and Recognition
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 the
Class A, Class M, Class B and Class P 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 Class A, Class M, Class B and Class P Certificates
resulting from the
distribution of the Principal Distribution Amount (but not the
Extra Principal
Distribution Amount) on such
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Distribution Date, but prior to taking into account any Applied
Realized Loss
Amount 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 Class A, Class M and 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": The Class A-1 Pass-Through Rate.
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
(R) below, and the denominator of which is the aggregate of the
Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC 1
Regular Interest
LT1A1A, REMIC 1 Regular Interest LT1A1B, REMIC 1 Regular Interest
LT1A2, REMIC 1
Regular Interest LT1A3, REMIC 1 Regular Interest LT1A4, REMIC 1
Regular Interest
LT1A5, REMIC 1 Regular Interest LT1A6, 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 LT1B1, REMIC 1 Regular Interest LT1B2 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 LT1A1 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1A1A;
(C) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1A1B minus the Marker Rate, applied to an amount equal
to the
Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1A1B;
(D) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1A2 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A2;
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(E) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1A3 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A3;
(F) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1A4 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A4;
(G) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1A5 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A5;
(H) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1A6 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A6;
(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 LT1B1 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1B1;
(P) 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;
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(Q) 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;
and
(R) 100% of the Interest on REMIC 1 Regular Interest LT1P.
"Paying Agent": Any paying agent appointed pursuant to Section
5.05.
"Percentage Interest": With respect to any Certificate (other than
a
Class CE 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 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%.
"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, 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 for the Class A-1A
Certificates, equal to
the weighted average of the Net Mortgage Interest Rates of the
Mortgage Loans,
weighted on the basis of the Principal Balances of the Mortgage
Loans as of the
first day of the related Collection Period.
"Prepayment Charge": With respect to any Prepayment Period, any
prepayment premium, fee or charge collected by the 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
Schedule (other than any Servicer Prepayment Charge Payment
Amount).
"Prepayment Interest Excess": 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 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 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
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such Distribution Date occurs and ending on the date on which such
prepayment is
so applied. The Servicer may withdraw such Prepayment Interest
Excess from the
Collection Account in accordance with Section 3.05(g).
"Prepayment Interest Shortfall": With respect to any Distribution
Date, for each Mortgage Loan that was the subject of a Principal
Prepayment
during the portion of the related Prepayment Period occurring in
the prior
calendar month that was applied by the 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 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 related calendar month in
which such
Principal Prepayment was received.
"Prepayment Period": With respect to any Distribution Date and a
Mortgage Loan, 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, commencing
on June 1,
2005) and ending on the Determination Date in the calendar 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 amount equal to the
sum (less
amounts available for reimbursement of Advances and Servicing
Advances pursuant
to Section 3.05 and expenses reimbursable pursuant to Section 6.03)
of: (i) each
payment of principal on a Mortgage Loan due during the related
Collection Period
and received by the Servicer on or prior to the related
Determination Date, and
any Advances with respect thereto, (ii) all full and partial
Principal
Prepayments of Mortgage Loans received by the Servicer during the
related
Prepayment Period, (iii) Insurance Proceeds, Subsequent Recoveries
and Net
Liquidation Proceeds allocable to
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principal actually collected by the Servicer during the related
Prepayment
Period with respect to the Mortgage Loans, (iv) the portion of the
Purchase
Price allocable to principal of all repurchased Mortgage Loans with
respect to
such Prepayment Period and (v) on the Distribution Date on which
the Trust is to
be terminated in accordance with Section 10.01 hereof, that portion
of the
Termination Price in respect of principal.
"Private Certificates": Any of the Class B-1, Class B-2, Class CE,
Class P and Class R Certificates.
"Private Placement Memorandum": That certain Private Placement
Memorandum dated June 7, 2005 relating to the private offering of
the Class B-1
and Class B-2 Certificates.
"Prospectus Supplement": That certain Prospectus Supplement dated
June
3, 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
(x) a Mortgage Loan, accrued interest on such Principal Balance at
the
applicable Mortgage Interest Rate in effect from time to time from
the Due Date
as to which interest was last covered by a payment by the Mortgagor
or an
Advance by the Servicer, which payment or Advance had as of the
date of purchase
been distributed pursuant to Section 4.01, through the end of the
calendar month
in which the purchase is to be effected, and (y) an REO Property,
accrued
interest at the applicable Mortgage Interest Rate on its fair
market value,
determined in good faith by the Servicer, (iii) any unreimbursed
Servicing
Advances and Advances and any unpaid Servicing Fees allocable to
such Mortgage
Loan or REO Property, (iv) any amounts previously withdrawn from
the Collection
Account in respect of such Mortgage Loan or REO Property pursuant
to Section
3.13, (v) in the case of a Mortgage Loan required to be purchased
pursuant to
Section 2.03, expenses reasonably incurred or to be incurred by the
Servicer or
the Trustee in respect of the breach or defect giving rise to the
purchase
obligation, and (vi) any costs and damages incurred by the Trust in
connection
with any violation by such Mortgage Loan of any predatory or
abusive lending
law.
"Rating Agency or Rating Agencies": Fitch and S&P, or their
respective
successors. If such agencies or their successors are no longer in
existence,
"Rating Agencies" shall be such nationally recognized statistical
rating
organizations as set forth on the most current list of such
organizations
released by the Securities and Exchange Commission and designated
by the
Depositor, notice of which designation shall be given to the
Trustee and the
Servicer.
"Realized Loss": With respect to a Liquidated Mortgage Loan, the
amount by which the remaining unpaid principal balance of the
Mortgage Loan
exceeds the amount of Net Liquidation Proceeds applied to the
principal balance
of the related Mortgage Loan. With respect to any Mortgage Loan, a
Deficient
Valuation or a reduction in the Principal Balance thereof resulting
from a
Servicer Modification.
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"Realized Loss Amortization Amount": Any of the Class M-1 Realized
Loss Amortization Amount, the Class M-2 Realized Loss Amortization
Amount, the
Class M-3 Realized Loss Amortization Amount, the Class M-4 Realized
Loss
Amortization Amount, the Class M-5 Realized Loss Amortization
Amount, the Class
M-6 Realized Loss Amortization Amount, the Class B-1 Realized Loss
Amortization
Amount and the Class B-2 Realized Loss Amortization Amount.
"Record Date": With respect to the Class A-1A Certificates, the
Business Day immediately preceding such Distribution Date;
provided, however,
that if such Class A-1A Certificates become Definitive
Certificates, the Record
Date for such Class A-1A Certificates shall be the last Business
Day of the
month immediately preceding the month in which the related
Distribution Date
occurs. With respect to the Fixed-Rate Certificates and 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 Trustee, (iii) whose
quotations appear
on the Telerate Page 3750 on the relevant LIBOR Determination Date
and (iv)
which have been designated as such by the Trustee (after
consultation with the
Depositor); provided, however, that if fewer than two of such banks
provide a
One-Month LIBOR rate, then any leading banks selected by the
Trustee (after
consultation with the Depositor) which are engaged in transactions
in United
States dollar deposits in the international Eurocurrency market.
"Regular Certificate": Any of the Class A Certificates, Class M
Certificates, Class B Certificates, Class CE Certificates and Class
P
Certificates.
"Reimbursement Amount": With respect to any Mortgage Loan, any
costs
or damages incurred by the Trust in connection with a breach of (i)
the
Originator's representations set forth in Section 3.03(g),
3.03(bb), 3.03(ss)
and 3.03(tt) of the Originator Mortgage Loan Purchase Agreement or
(ii) the
Seller's representations set forth in Sections 3.01(i), 3.01(ii)
and 3.01(iii)
of the Mortgage Loan Purchase Agreement.
"Related Documents": With respect to any Mortgage Loan, the related
Mortgage Notes, Mortgages 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 or local 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 or local laws.
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"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) 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 Overcollateralization Target Amount": 1.0% of the Targeted
Overcollateralization Amount.
"REMIC 1 Overcollateralized Amount": With respect to any date of
determination, (i) 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 LT1A1A, REMIC 1 Regular
Interest LT1A1B,
REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest LT1A3,
REMIC 1 Regular
Interest LT1A4, REMIC 1 Regular Interest LT1A5, REMIC 1 Regular
Interest LT1A6,
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 LT1B1,
REMIC 1 Regular
Interest LT1B2 and REMIC 1 Regular Interest LT1P, 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) 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
LT1A1A, REMIC
1 Regular Interest LT1A1B, REMIC 1 Regular Interest LT1A2, REMIC 1
Regular
Interest LT1A3, REMIC 1 Regular Interest LT1A4, REMIC 1 Regular
Interest LT1A5,
REMIC 1 Regular Interest LT1A6, 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 LT1B1 and REMIC 1 Regular Interest LT1B2 and the
denominator of which
is the aggregate of the Uncertificated Principal Balances of REMIC
1 Regular
Interest LT1A1A, REMIC 1 Regular Interest LT1A1B, REMIC 1 Regular
Interest
LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular Interest
LT1A4, REMIC 1
Regular Interest LT1A5, REMIC 1 Regular Interest LT1A6, 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 LT1B1, REMIC 1 Regular Interest
LT1B2 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 for purposes of the REMIC Provisions.
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,
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in an aggregate amount equal to its initial Uncertificated
Principal Balance as
set forth in the Preliminary Statement hereto.
"REMIC 1 Regular Interest LT1A1A": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued
hereunder and
designated as a regular interest in REMIC 1 for purposes of the
REMIC
Provisions. REMIC 1 Regular Interest LT1A1A 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 LT1A1B": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued
hereunder and
designated as a regular interest in REMIC 1 for purposes of the
REMIC
Provisions. REMIC 1 Regular Interest LT1A1B 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 LT1A2": One of the separate
non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and
designated as a
regular interest in REMIC 1 for purposes of the REMIC Provisions.
REMIC 1
Regular Interest LT1A2 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 LT1A3": One of the separate
non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and
designated as a
regular interest in REMIC 1 for purposes of the REMIC Provisions.
REMIC 1
Regular Interest LT1A3 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 LT1A4": One of the separate
non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and
designated as a
regular interest in REMIC 1 for purposes of the REMIC Provisions.
REMIC 1
Regular Interest LT1A4 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 LT1A5": One of the separate
non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and
designated as a
regular interest in REMIC 1 for purposes of the REMIC Provisions.
REMIC 1
Regular Interest LT1A5 shall accrue interest at the related
Uncertificated REMIC
1 Pass-Through Rate in effect from time to
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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 LT1A6": One of the separate
non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and
designated as a
regular interest in REMIC 1 for purposes of the REMIC Provisions.
REMIC 1
Regular Interest LT1A6 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 for purposes of the REMIC Provisions.
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 for purposes of the REMIC Provisions.
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 for purposes of the REMIC Provisions.
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 for purposes of the REMIC Provisions.
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 for purposes of the REMIC Provisions.
REMIC 1
Regular Interest LT1M5 shall
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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 for purposes of the REMIC Provisions.
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 LT1B1": One of the separate
non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and
designated as a
regular interest in REMIC 1 for purposes of the REMIC Provisions.
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 for purposes of the REMIC Provisions.
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 LT1P": One of the separate
non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and
designated as a
regular interest in REMIC 1 for purposes of the REMIC Provisions.
REMIC 1
Regular Interest LT1P 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 for purposes of the REMIC Provisions.
REMIC 1
Regular Interest LT1ZZ shall accrue interest at the related
Uncertificated REMIC
1 Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
"REMIC 1 Regular Interests": REMIC 1 Regular Interest LT1AA, REMIC
1
Regular Interest LT1A1A, REMIC 1 Regular Interest LT1A1B, REMIC 1
Regular
Interest
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LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular Interest
LT1A4, REMIC 1
Regular Interest LT1A5, REMIC 1 Regular Interest LT1A6, 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 LT1B1, REMIC 1 Regular Interest
LT1B2, REMIC 1
Regular Interest LT1P and REMIC 1 Regular Interest LT1ZZ.
"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.
"Remittance Report": A report or reports prepared by the Servicer
and
delivered on a magnetic disc or tape to the Trustee and the NIMS
Insurer
pursuant to Section 4.07 substantially in the form attached hereto
as Exhibit M.
"Rents from Real Property": With respect to any REO Property, gross
income of the character described in Section 856(d) of the Code.
"REO Disposition": The sale or other disposition of an REO Property
on
behalf of the Trust.
"REO Imputed Interest": As to any REO Property, for any Collection
Period, an amount equivalent to interest (at the Net Mortgage
Interest Rate that
would have been applicable to the related Mortgage Loan had it been
outstanding)
for such Collection Period on the unpaid Principal Balance of the
Mortgage Loan
as of the date of acquisition.
"REO Principal Amortization": With respect to any REO Property, for
any calendar month, the aggregate of all amounts received in
respect of such REO
Property during such calendar month, whether in the form of rental
income, sale
proceeds (including, without limitation, that portion of the
Termination Price
paid in connection with a purchase of all of the Mortgage Loans and
REO
Properties pursuant to Section 10.01 that is allocable to such REO
Property) or
otherwise, net of any portion of such amounts (i) payable pursuant
to Section
3.13 in respect of the proper operation, management and maintenance
of such REO
Property or (ii) payable or reimbursable to the Servicer pursuant
to Section
3.13 for unpaid Servicing Fees in respect of the related Mortgage
Loan and
unreimbursed Servicing Advances and Advances in respect of such REO
Property or
the related Mortgage Loan.
"REO Property": A Mortgaged Property acquired by the Servicer on
behalf of the Trust through foreclosure or deed-in-lieu of
foreclosure, as
described in Section 3.13.
"Request for Release": A release signed by a Servicing Officer, in
the
form of Exhibit E attached hereto.
"Reserve Account": The trust account created and maintained by the
Trustee pursuant to Section 3.04(g), which shall be entitled
"Reserve Account,
Deutsche Bank National Trust Company, as Trustee, in trust for
registered
Holders of the Class A-1A Certificates of the ABFC 2005-AQ1 Trust,
Asset-Backed
Certificates, Series 2005-AQ1" and which must be an
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Eligible Account. Amounts on deposit in the Reserve Account shall
not be
invested. The Reserve Account shall not be an asset of any REMIC
formed under
this Agreement.
"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 condominium project, (iv) a
manufactured home, or
(v) a one-family dwelling in a planned unit development or a
townhouse, 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, any
officer assigned to the Corporate Trust Division (or any successor
thereto),
including any Vice President, Assistant Vice President, Trust
Officer, any
Assistant Secretary, any trust officer or any other officer of the
Trustee
customarily performing functions similar to those performed by any
of the above
designated officers and in each case having direct responsibility
for the
administration of this Agreement.
"S&P": Standard & Poor's, a division of The McGraw-Hill
Companies,
Inc., and its successors, and if such company shall for any reason
no longer
perform the functions of a securities rating agency, "S&P"
shall be deemed to
refer to any other "nationally recognized statistical rating
organization" as
set forth on the most current list of such organizations released
by the
Securities and Exchange Commission.
"Seller": Bank of America, National Association, or its successor
in
interest, in its capacity as seller under the Mortgage Loan
Purchase Agreement.
"Senior Certificates": The Class A-1A, Class A-1B, Class A-2, Class
A-3, Class A-4, Class A-5 and Class A-6 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 Class M and Class B Certificates and (ii)
the
Overcollateralization Amount, in each case before taking into
account payments
of principal on the Mortgage Loans and 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
(i)
before the Stepdown Date and as long as a Trigger Event is not in
effect, the
lesser of (a) the aggregate Certificate Principal Balance of the
Class A
Certificates immediately prior to such Distribution Date and (b)
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 Certificates immediately prior to
such
Distribution Date over (b) the lesser of (x) the product of (1)
82.20% and (2)
the Pool Balance as of the last day of the related Collection
Period and (y) the
amount by which the Pool Balance as of the last day of the related
Collection
Period exceeds the product of (1) 0.40% and (2) the Pool Balance as
of the
Cut-off Date.
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"Senior Specified Enhancement Percentage": On any date of
determination thereof, 17.80%.
"Servicer": Ameriquest Mortgage Company, a corporation organized
under
the laws of the State of Delaware, or any successor servicer
appointed as herein
provided, in its capacity as Servicer hereunder.
"Servicer Event of Termination": One or more of the events
described
in Section 7.01.
"Servicer Modification": A modification to the terms of a Mortgage
Loan, in accordance with the terms of Section 3.01, as to which the
Mortgagor is
in default or as to which, in the judgment of the Servicer, default
is
reasonably foreseeable.
"Servicer Prepayment Charge Payment Amount": The amount payable by
the
Servicer in respect of any waived or uncollected Prepayment Charges
pursuant to
Section 2.03(b)(ii), 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,
which amounts
shall not be a part of any REMIC formed hereunder.
"Servicer Remittance Date": With respect to any Distribution Date,
one
Business Day prior to such Distribution Date.
"Servicer Reporting Date": With respect to any Distribution Date,
the
18th day of the calendar month in which such Distribution Date
occurs or, if
such 18th day is not a Business Day, the Business Day immediately
succeeding
such 18th day.
"Servicer Termination Test": With respect to any Distribution Date,
the Servicer Termination Test shall be failed if the Cumulative
Loss Percentage
exceeds 4.0%.
"Servicing Advances": All customary, reasonable and necessary "out
of
pocket" costs and expenses incurred by the Servicer (including
reasonable
attorneys' fees and disbursements) in the performance of its
servicing
obligations, including, but not limited to, the cost of (i) the
preservation,
restoration, inspection and protection of the Mortgaged Property,
(ii) any
enforcement or judicial proceedings, including foreclosures, (iii)
the
management and liquidation of the REO Property and (iv) compliance
with the
obligations under Section 3.08. The Servicer shall not be required
to make any
Servicing Advances in respect of a Mortgage Loan or REO Property
that, in the
good faith business judgment of the Servicer, would not be
ultimately
recoverable from related Insurance Proceeds or Liquidation Proceeds
on such
Mortgage Loan or REO Property as provided herein.
"Servicing Fee": With respect to each Mortgage Loan (including each
REO Property) and for any calendar month, an amount equal to one
month's
interest (or in the event of any payment of interest which
accompanies a
Principal Prepayment in full made by the Mortgagor during such
calendar month,
interest for the number of days covered by such payment of
interest) at the
Servicing Fee Rate on the same principal amount on which interest
on such
Mortgage Loan accrues for such calendar month. The Servicing Fee
shall be
payable monthly
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and shall be prorated on a per diem basis for any portion of a
month during
which such Mortgage Loan is serviced hereunder.
"Servicing Fee Rate": With respect to each Mortgage Loan, 0.50% per
annum.
"Servicing Officer": Any representative or officer of the Servicer
involved in, or responsible for, the administration and servicing
of Mortgage
Loans, whose name and specimen signature appear on a list of
servicing officers
furnished by the Servicer to the Trustee and the Depositor on the
Closing Date,
as such list may from time to time be amended.
"Servicing Standard": The standards set forth in Section 3.01.
"Similar Law": As defined in Section 5.02(d) hereof.
"Startup Day": As defined in Section 9.01(b) hereof.
"Stayed Funds": Any payment required to be made under the terms of
the
Certificates and this Agreement but which is not remitted by the
Servicer
because the Servicer is the subject of a proceeding under the
Bankruptcy Code
and the making of such remittance is prohibited by Section 362 of
the Bankruptcy
Code.
"Stepdown Date": The 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 July
2008 and (y) the first Distribution Date on which the Senior
Enhancement
Percentage is greater than or equal to the Senior Specified
Enhancement
Percentage.
"Sub-Servicer": Any Person with which the Servicer has entered into
a
Sub-Servicing Agreement and which meets the qualifications of a
Sub-Servicer
pursuant to Section 6.06.
"Sub-Servicing Account": An account established by a Sub-Servicer
which meets the requirements set forth in Section 6.11 and is
otherwise
acceptable to the Servicer.
"Sub-Servicing Agreement": The written contract between the
Servicer
and a Sub-Servicer relating to servicing and administration of
certain Mortgage
Loans as provided in Section 6.06.
"Subordinated Certificates": The Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class CE and
Class R
Certificates.
"Subsequent Recovery": As of any Distribution Date, 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 prior to the related Prepayment Period.
"Targeted Overcollateralization Amount": As of any Distribution
Date,
(x) prior to the Stepdown Date, 0.40% of the Pool Balance as of the
Cut-off Date
and (y) on and after the
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Stepdown Date, (i) if a Trigger Event has not occurred, the greater
of (A) 0.80%
of the Pool Balance as of the last day of the related Collection
Period and (B)
0.40% of the Pool Balance as of the Cut-off Date and (ii) if a
Trigger Event has
occurred, the Targeted Overcollateralization Amount for the
immediately
preceding Distribution Date.
"Tax Matters Person": The tax matters person appointed pursuant to
Section 9.01(e) hereof.
"Tax Returns": The federal income tax returns on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit
Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual
Interest
Holders of the REMIC Taxable Income or Net Loss Allocation, or any
successor
forms, to be filed on behalf of the Trust for each of the 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 50.00%
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
------------------------------
----------
July 2008 through June 2009
2.20% for the first month, plus an
additional 1/12th of 0.75% for each
month thereafter
July 2009 through June 2010
2.95% for the first month, plus an
additional 1/12th of 0.55% for each
month thereafter
July 2010 through June 2011
3.50% for the first month, plus an
additional 1/12th of 0.20% for each
month thereafter
July 2011 and thereafter
3.70%
"Trust": ABFC 2005-AQ1 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
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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 (other than scheduled payments due on the Mortgage
Loans prior
to the Cut-off Date), (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 Originator Mortgage Loan Purchase Agreement, the Assignment,
Assumption and
Recognition Agreement and the Mortgage Loan Purchase Agreement
(including any
security interest created thereby), (v) the Trustee's rights under
the Yield
Maintenance Agreement and (vi) the Collection Accounts, the
Distribution Account
and the Reserve Account and such assets that are deposited therein
from time to
time and any investments thereof, together with any and all income,
proceeds and
payments with respect thereto.
"Trustee": Deutsche Bank National Trust Company, a national banking
association organized under the laws of the United States, or any
successor
Trustee appointed as herein provided.
"Trustee Fee": With respect to any Distribution Date, the product
of
(x) one-twelfth of the Trustee Fee Rate and (y) the aggregate of
the Principal
Balances of all Mortgage Loans as of the opening of business on the
first day of
the related Collection Period.
"Trustee Fee Rate": With respect to any Distribution Date, 0.0025%
per
annum.
"Uncertificated Accrued Interest": With respect to each REMIC 1
Regular Interest on each Distribution Date, an amount equal to one
month's
interest at the related Uncertificated REMIC 1 Pass-Through Rate on
the
Uncertificated Principal Balance of such REMIC 1 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 1 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 Principal Balance of each REMIC 1 Regular
Interest shall
equal the amount set forth in the Preliminary Statement hereto as
its initial
uncertificated balance. On each Distribution Date, the
Uncertificated Principal
Balance of each REMIC 1 Regular Interest shall be reduced by all
distributions
of principal made on such REMIC 1 Regular Interest on such
Distribution Date
pursuant to Section 4.08 and, if and to the extent necessary and
appropriate,
shall be further reduced on such Distribution Date by Realized
Losses as
provided in Section 4.08(b) or increased by Subsequent Recoveries
through
Available Funds. 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 each
REMIC
1 Regular Interest, the Weighted Average Net Mortgage Rate of the
Mortgage
Loans.
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"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 M and Class B
Certificates and as to any Distribution Date, the excess of (x) the
aggregate
Applied Realized Loss Amounts allocated to such Class for all prior
Distribution
Dates over (y) the sum of (a) the cumulative amount of any
Subsequent Recoveries
allocated to such Class and (b) the aggregate Realized Loss
Amortization Amounts
with respect to such Class for all prior Distribution Dates.
"Value": With respect to any Mortgaged Property, the lesser of (a)
an
amount determined by an appraisal or other valuation done at
origination of the
Mortgage Loan and (b) 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 (a) 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 Class A, Class M and 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
Class A, Class M and 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 Servicer, the Depositor or the
Trustee or any of
their respective affiliates shall not be included in the
calculation of Voting
Rights; provided that only such Certificates as are known by a
Responsible
Officer of the Trustee to be so registered will be so excluded. One
percent 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, 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.
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"Written Order to Authenticate": A written order by which the
Depositor directs the Trustee to execute, authenticate and deliver
the
Certificates.
"Yield Maintenance Agreement": The interest rate cap agreement
between
the Trustee, on behalf of the Trust, and the Yield Maintenance
Agreement
Provider substantially in the form attached hereto as Exhibit N.
The Yield
Maintenance Agreement shall not be an asset of any REMIC formed
under this
Agreement.
"Yield Maintenance Agreement Payment": On each Distribution Date
through the Distribution Date in September 2006, the amount equal
to the product
of (a) the excess of the lesser of (i) One-Month LIBOR and (ii) the
applicable
ceiling rate over the applicable strike rate for such Distribution
Date, in each
case as set forth on the schedule attached to the confirmation to
the Yield
Maintenance Agreement for such Distribution Date, (b) the lesser of
(y) the
related cap notional amount as set forth on the schedule attached
to the
confirmation to the Yield Maintenance Agreement for such
Distribution Date and
(z) the aggregate Certificate Principal Balance of the Class A-1A
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.
"Yield Maintenance Agreement Provider": Swiss Re Financial Products
Corporation and any successors thereto.
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.
-47-
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 of the right, title and interest of the Depositor, including
any security
interest therein for the benefit of the Depositor, in and to (i)
each Mortgage
Loan identified on the Mortgage Loan Schedule, including the
related Cut-off
Date Principal Balance, all interest accruing thereon after the
Cut-off Date and
all collections in respect of interest and principal due after the
Cut-off Date;
(ii) property which secured each such Mortgage Loan and which has
been acquired
by foreclosure or deed in lieu of foreclosure; (iii) its interest
in any
insurance policies in respect of the Mortgage Loans; (iv) all 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 Originator
Mortgage Loan
Purchase Agreement, the Assignment, Assumption and Recognition
Agreement and the
Mortgage Loan Purchase Agreement and (vii) all proceeds of any of
the foregoing.
Such assignment includes all interest and principal due to the
Depositor or the
Servicer after the Cut-off Date with respect to the Mortgage Loans.
In connection with such transfer and assignment, the Depositor does
hereby deliver to, and deposit with the Trustee, or its designated
agent, the
following documents or instruments with respect to each Mortgage
Loan (a
"Mortgage File") so transferred and assigned:
(a)
the original Mortgage Note including any riders thereto, endorsed
either (A) in blank or (B) in the following form: "Pay to the order
of
Deutsche Bank National Trust Company, as Trustee under the Pooling
and
Servicing Agreement, dated as of June 1, 2005, among Asset Backed
Funding Corporation, Ameriquest Mortgage Company and Deutsche Bank
National Trust Company, ABFC 2005-AQ1 Trust, Asset-Backed
Certificates, Series 2005-AQ1, without recourse," or with respect
to
any lost Mortgage Note, an original Lost Note Affidavit, together
with
a copy of the related Mortgage Note;
(b)
the original Mortgage with evidence of recording thereon including
any
riders thereto, 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;
(c)
except with respect to each MERS Mortgage Loan, an original
Assignment, in form and substance acceptable for recording. The
Mortgage shall be assigned either (A) in blank or (B) to "Deutsche
Bank National Trust Company, as Trustee under the Pooling and
Servicing Agreement, dated as of June 1, 2005, among Asset Backed
Funding
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Corporation, Ameriquest Mortgage Company, ABFC 2005-AQ1 Trust,
Asset-Backed Certificates, Series 2005-AQ1, without recourse";
(d)
the originals of all recorded or unrecorded intervening Assignments
(if any) evidencing a complete chain of assignment from the
applicable
originator to the last endorsee;
(e)
the original or a certified copy of lender's title insurance policy
or
an attorney's opinion of title or similar guarantee of title
acceptable to mortgage lenders generally in the jurisdiction where
the
Mortgaged Property is located, together with all endorsements or
riders which were issued with or subsequent to the issuance of such
policy, or in the event such original title policy is unavailable,
a
written commitment or uniform binder or preliminary report of title
issued by the title insurance or escrow company; and
(f)
the original or copies of each assumption, modification, written
assurance or substitution agreement, if any.
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 Notes
(with any exceptions noted), substantially in the form attached as
Exhibit F-3
hereto.
If any of the documents referred to in Section 2.01(b), (c) or (d)
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 no later than the
Closing Date, of a
copy of each such document certified by the Seller or the
Originator 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 or the Originator,
delivery to
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. If the original lender's title
insurance
policy was not delivered pursuant to Section 2.01(e) above, the
Seller shall
deliver or cause to be delivered to the Trustee, a written
commitment or interim
binder or preliminary report of title issued by the title insurance
or escrow
company, with the original to be delivered to the Trustee, promptly
upon receipt
thereof. The Depositor shall deliver or cause to be delivered to
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.
The Servicer (in its capacity of Originator) shall promptly (and in
no
event later than thirty (30) Business Days, subject to extension
upon a mutual
agreement between the Servicer and the Trustee, following the later
of (i) the
Closing Date, (ii) the date on which the Seller receives the
Assignment from the
Trustee and (iii) the date of receipt by the Servicer of the
recording
information for a Mortgage) submit or cause to be submitted for
recording, at no
expense to the Trust Fund or the Trustee, in the appropriate public
office for
real property records, each Assignment referred to in Sections
2.01(c) and (d)
above. In the event that any such Assignment is lost or returned
unrecorded
because of a defect therein, the Servicer (in its
-49-
capacity as Seller) shall promptly prepare or cause to be prepared
a substitute
Assignment or cure or cause to be cured such defect, as the case
may be, and
thereafter cause each such Assignment to be duly recorded.
Notwithstanding the foregoing, however, for administrative
convenience
and facilitation of servicing and to reduce closing costs, the
Assignments shall
not be required to be submitted for recording unless such failure
to record
would result in a withdrawal or a downgrading by any Rating Agency
of the rating
on any Class of Certificates; provided further, however, each
Assignment shall
be submitted for recording by the Servicer (in its capacity as
Originator) in
the manner described above, at no expense to the Trust Fund or the
Trustee, upon
the earliest to occur of: (i) reasonable direction by Holders of
Certificates
entitled to at least 25% of the Voting Rights or the NIMS Insurer,
(ii) failure
of the Servicer Termination Test, (iii) the occurrence of a
bankruptcy or
insolvency relating to the Originator, (iv) the occurrence of a
servicing
transfer as described in Section 7.02 hereof and (v) if the
Originator is not a
Servicer and with respect to any one Assignment or Mortgage, the
occurrence of a
bankruptcy, insolvency or foreclosure relating to the Mortgagor
under the
related Mortgage. Notwithstanding the foregoing, if the Servicer is
unable to
pay the cost of recording the Assignments, such expense shall be
paid by the
Trustee from the Distribution Account.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File,
the Seller
shall have 120 days to cure such defect or 150 days following the
Closing Date,
in the case of missing Mortgages or Assignments or deliver such
missing document
to the Trustee. If the Seller (or if applicable, the Originator)
does not cure
such defect or deliver such missing document within such time
period, the Seller
shall repurchase such Mortgage Loan in accordance with Section
2.03.
The Depositor herewith delivers to the Trustee executed copies of
the
Originator Mortgage Loan Purchase Agreement, the Assignment,
Assumption and
Recognition 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 of, subject to the provisions
of
Section 2.01 and subject to the review described below and any
exceptions noted
on the exception report described in the next paragraph below, the
documents
referred to in Section 2.01 above and all other assets included in
the
definition of "Trust Fund" and declares that it holds and will hold
such
documents and the other documents delivered to it constituting a
Mortgage File,
and that it holds or will hold all such assets and such other
assets included in
the definition of "Trust Fund" in trust for the exclusive use and
benefit of all
present and future Certificateholders.
-50-
The Trustee reviewed, for the benefit of the Certificateholders,
each
Mortgage File prior to the Closing Date (or, with respect to any
document
delivered after the Startup Day, within 60 days of receipt) and
will certify in
substantially the form attached hereto as Exhibit F-1 that, as to
each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in
full or any Mortgage Loan specifically identified in the exception
report
annexed thereto as not being covered by such certification), (i)
all documents
required to be delivered to it pursuant to Section 2.01 of this
Agreement are in
its possession, (ii) such documents have been reviewed by it and
have not been
mutilated, damaged or torn and relate to such Mortgage Loan and
(iii) based on
its examination and only as to the foregoing, the information set
forth in the
Mortgage Loan Schedule that corresponds to items (1), (2), (12),
(13), (14) and
(17) of the definition of "Mortgage Loan Schedule" accurately
reflects
information set forth in the Mortgage File. It is herein
acknowledged that, in
conducting such review, 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
shall deliver to the Depositor, the Servicer 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. Upon request by the Servicer, any exception report shall
be provided in
an electronic computer readable format as mutually agreed upon by
the Servicer
and the Trustee.
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
finds any document or documents constituting a part of a Mortgage
File to be
missing or not in compliance with such review criteria, at the
conclusion of its
review the Trustee shall so notify the Seller, the Depositor, the
NIMS Insurer
and the Servicer. In addition, upon the discovery by the
Originator, the Seller,
the Depositor, the NIMS Insurer, the Trustee or the Servicer (or
upon receipt by
the Trustee of written notification of such breach) of a breach of
any of the
representations and warranties made by the Originator in the
Originator Mortgage
Loan Purchase 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.
-51-
Section 2.03 Repurchase of Mortgage Loans by the Originator or the
Seller.
(a) Upon discovery that any document does not satisfy, or is not in
compliance with the review criteria or receipt of written notice of
any
materially defective document in, or that a document is missing
from, a Mortgage
File or that any document in a Mortgage File is materially
inconsistent with the
Mortgage Loan Schedule or of the breach by the Originator or the
Seller of any
representation or warranty under the Originator Mortgage Loan
Purchase 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 Originator or the Seller, as the
case may be,
the 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 (or if
an obligation of the Originator under the Originator Mortgage Loan
Purchase
Agreement, the Originator) shall cure such defect or deliver such
missing
document within 120 days from the date the Seller or the Originator
was notified
of such missing document or defect or, in the case of a breach of a
representation or warranty, request the Originator or the Seller,
as applicable,
cure such breach within 90 days from the date the Originator or the
Seller, as
the case may be, was notified of such breach. If the Originator or
the Seller,
as applicable, does not deliver such missing document or cure such
defect or
does not cure such breach in all material respects during such
period, the
Trustee shall enforce the Originator's or the Seller's obligation,
as the case
may be, under the Originator Mortgage Loan Purchase Agreement or
the Mortgage
Loan Purchase Agreement, as applicable, and cause the Originator or
the Seller,
as applicable, 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(c)). The Purchase Price for
the repurchased
Mortgage Loan shall be deposited in the Collection Account, and the
Trustee,
upon receipt of written notice from the Servicer of such deposit,
shall release
to the 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 Originator or the Seller, as
applicable, shall
furnish to it and as shall be necessary to vest in the 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.
It is understood and agreed that the representations and warranties
set forth in the Originator Mortgage Loan Purchase Agreement and
the Mortgage
Loan Purchase Agreement shall survive delivery of the Mortgage
Files to 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
Originator
and the Seller set forth in this Section 2.03(a) to cure or
repurchase a
Mortgage Loan pursuant to the Originator Mortgage Loan Purchase
Agreement or 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 Originator Mortgage Loan Purchase
Agreement and the
Mortgage Loan Purchase Agreement. The preceding sentence shall not,
however,
limit any remedies available to the Certificateholders, the
Depositor or the
Trustee on behalf of the Certificateholders pursuant to the
Originator Mortgage
Loan Purchase Agreement signed by the Servicer in its capacity as
Originator,
respecting a breach of the representations, warranties and
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covenants of the Servicer in its capacity as Originator contained
in the
Originator Mortgage Loan Purchase Agreement.
Claims with respect to the breaches of representations and
warranties
of the Originator relating to the Mortgage Loans in the Originator
Mortgage Loan
Purchase Agreement, which have been assigned to the Trustee
hereunder, may not
be made on or after May 27, 2008. 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 Originator under the Originator
Mortgage Loan
Purchase 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(i),
3.01(ii) and
3.01(iii) of the Mortgage Loan Purchase Agreement), the only right
or remedy of
the Trustee or of any Certificateholder for claims made prior to
May 27, 2008
shall be the Trustee's right to enforce the obligations of the
Originator with
respect to a breach of the applicable representation or warranty
made by it. The
Trustee acknowledges that prior to May 27, 2008 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 the
Originator in the Originator Mortgage Loan Purchase Agreement,
without regard to
whether the Originator fulfills its contractual obligations in
respect of such
representation or warranty. In addition, to the extent that any
fact, condition
or event with respect to a Mortgage Loan constitutes a breach
(regardless of the
date of such breach) of both (x) the Originator's representations
with respect
to predatory and abusive lending laws in Section 3.03(g), (bb),
(ss) and (tt) of
the Originator Mortgage Loan Purchase Agreement and (y) the
Seller's
representations with respect to predatory and abusive lending laws
in Section
3.01(i), 3.01(ii) or 3.01(iii) of the Mortgage Loan Purchase
Agreement, the
Originator shall be obligated to pay the Reimbursement Amount
relating to such
Mortgage Loan to the extent provided in the Originator Mortgage
Loan Purchase
Agreement. To the extent the Originator fails or is not obligated
to pay the
Reimbursement Amount, the Trustee shall be entitled to enforce the
Seller's
obligation to pay such Reimbursement Amount. In any event, the
Reimbursement
Amount shall be delivered to the Servicer for deposit into the
Collection
Account within ten (10) days from the date the Originator or the
Seller, as
applicable, was notified by the Trustee of the Reimbursement
Amount.
(b) (i) Within 90 days of the earlier of discovery by the Servicer
or
receipt of notice by the Servicer of the breach of any
representation, warranty
or covenant of the Servicer set forth in Section 2.05 which
materially and
adversely affects the interests of the Certificateholders in any
Mortgage Loan,
the Servicer shall cure such breach in all material respects.
(ii) Notwithstanding the provisions of Section 2.03(b)(i) above,
(A) on the later of (x) the Servicer Remittance Date next
following the earlier of discovery by the Servicer or receipt of
notice by the Servicer of the breach of the representation made by
the
Servicer in Section 2.05(x), which breach materially and adversely
affects the interests of the Holders of the Class P Certificates to
any Prepayment Charge and (y) the Servicer Remittance Date next
following the Prepayment Period relating to such a breach, the
Servicer shall
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deposit into the Collection Account the amount of the scheduled
Prepayment Charge, less any amount collected and deposited by the
Servicer into the Collection Account in respect of such Prepayment
Charge; and
(B) on the later of (x) the Servicer Remittance Date next
following the earlier of discovery by the Servicer or receipt of
notice by the Servicer of the breach of the covenant made by the
Servicer in Section 2.05(xi), which breach materially and adversely
affects the interests of the Holders of the Class P Certificates to
any Prepayment Charge and (y) the Servicer Remittance Date next
following the Prepayment Period relating to such a breach, the
Servicer shall deposit into the Collection Account, as a Servicer
Prepayment Charge Payment Amount, the amount of the waived
Prepayment
Charge, but only to the extent required under Section 2.03(b)(iii)
below.
(iii) If with respect to any Prepayment Period,
(A) the dollar amount of Prepayment Charges that are the subject
of breaches by the Servicer of the covenant made by the Servicer in
Section 2.05(xiii), which breaches materially and adversely affect
the
interest of the Holders of the Class P Certificates to such
Prepayment
Charges, exceeds
(B) 5% of the total dollar amount of Prepayment Charges payable
by Mortgagors in connection with Principal Prepayments on the
related
Mortgage Loans that occurred during such Prepayment Period,
then the amount required to be paid by the Servicer pursuant to
Section
2.03(b)(ii)(B) above shall be limited to an amount, that when added
to the
amount of Prepayment Charges actually collected by the Servicer in
respect
of Prepayment Charges relating to Principal Prepayments on the
related
Mortgage Loans that occurred during such Prepayment Period, shall
yield a
sum equal to 95% of the total dollar amount of Prepayment Charges
(exclusive of (A) Prepayment Charges not enforced or collected upon
because
(i) the enforceability thereof shall have been limited by
bankruptcy,
insolvency, moratorium, receivership and other similar laws
relating to
creditors' rights generally or (ii) the collectability thereof
shall have
been limited due to acceleration in connection with a foreclosure
or other
involuntary payment and (B) Prepayment Charges waived by the
Servicer when
such waiver does not breach the covenant set forth in Section
2.05(xi))
payable by Mortgagors in connection with Principal Prepayments on
the
related Mortgage Loans that occurred during such Prepayment Period.
(iv) The right of the Holders of the Class P Certificates to any
Servicer Prepayment Charge Payment Amounts as described in this
section
2.03(b) shall not be an asset of any REMIC.
(c) Upon discovery by the Originator, the Seller, the Servicer, the
NIMS Insurer 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
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Business Days (or in the case of the Originator, such other
timeframe required
pursuant to the Originator Mortgage Loan Purchase Agreement) give
written notice
thereof to the other parties. In connection therewith, the
Originator or the
Seller, as applicable, shall repurchase 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
Originator or the
Seller, as the case may be, shall cure the defect or make the
required purchase
no later than 90 days after the discovery of the defect. Any such
repurchase
shall be made in the same manner as set forth in Section 2.03(a).
The Trustee
shall reconvey to the Originator or the Seller, as applicable, 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 Execution of Yield Maintenance Agreement.
The Depositor hereby directs the Trustee to enter into and execute
the
Yield Maintenance Agreement on the Closing Date on behalf of the
Trust for the
benefit of the Holders of the Class A-1A Certificates. The
Depositor, the
Servicer and the Holders of the Class A-1A Certificates (by their
acceptance of
such Certificates) acknowledge that Deutsche Bank National Trust
Company is
entering into the Yield Maintenance Agreement solely in its
capacity as Trustee
of the Trust Fund and not in its individual capacity.
Section 2.05 Representations, Warranties and Covenants of the
Servicer.
The Servicer hereby represents, warrants and covenants to the
Trustee,
for the benefit of each of the Trustee and the Certificateholders
and to the
Depositor and the NIMS Insurer that as of the Closing Date or as of
such date
specifically provided herein:
(i) The Servicer is a corporation duly organized, validly existing
and
in good standing under the laws of the State of Delaware and is
duly
authorized and qualified to transact any and all business
contemplated by
this Agreement to be conducted by the Servicer in any state in
which a
Mortgaged Property is located or is otherwise not required under
applicable
law to effect such qualification and, in any event, is in
compliance with
the doing business laws of any such State to the extent necessary
to ensure
its ability to enforce each Mortgage Loan and to service the
Mortgage Loans
in accordance with the terms of this Agreement;
(ii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Servicer
and will
not result in the breach of any term or provision of the
organizational
documents of the Servicer or result in the breach of any term or
provision
of, or conflict with or constitute a default under or result in the
acceleration of any obligation under, any material agreement,
indenture or
loan or credit agreement or other instrument to which the Servicer
or its
property is subject, or result in the violation of any law, rule,
regulation, order, judgment or decree to which the Servicer or its
property
is subject;
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(iii) The Servicer is an approved seller/servicer of conventional
residential mortgage loans for Fannie Mae or Freddie Mac. The
Servicer is a
HUD approved mortgagee pursuant to Section 203 of the National
Housing Act
and is in good standing to sell mortgage loans to and service
mortgage
loans for Fannie Mae or Freddie Mac;
(iv) This Agreement, and all documents and instruments contemplated
hereby which are executed and delivered by the Servicer, constitute
and
will constitute valid, legal and binding obligations of the
Servicer,
enforceable in accordance with their respective terms, except as
the
enforcement thereof may be limited by applicable bankruptcy,
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) Except as disclosed in the Prospectus Supplement, no litigation
is
pending or, to its knowledge, threatened against the Servicer that,
either
individually or in the aggregate, may result in any material
adverse change
in the business, operations, financial condition, properties or
assets of
the Servicer, or in any material impairment of the right or ability
of the
Servicer to carry on its business substantially as now conducted,
or in any
material liability on the part of the Servicer, or that would draw
into
question the validity or enforceability of this Agreement or of any
action
taken or to be taken in connection with the obligations of the
Servicer
contemplated herein, or that would be likely to impair materially
the
ability of the Servicer to perform under the terms of this
Agreement;
(vi) No consent, approval or order of any court or governmental
agency
or body is required for the execution, delivery and performance by
the
Servicer of or compliance by the Servicer with this Agreement or
the
consummation of the transactions contemplated by this Agreement,
except for
such consents, approvals, authorizations and orders, if any, that
have been
obtained;
(vii) The initial electronic data tape and the monthly Remittance
Reports provided to the Trustee or any of its Affiliates shall be
true and
correct in all material respects;
(viii) The Servicer has fully furnished, and shall continue to
fully
furnish for so long as it is servicing the Mortgage Loans
hereunder, in
accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information on the Mortgagor
credit
files to Equifax, Experian and Trans Union Credit Information
Company on a
monthly basis;
(ix) The Servicer acknowledges and agrees that the Servicing Fee
represents reasonable compensation for performing such services and
that
the entire Servicing Fee shall be treated by the Servicer, for
accounting
and tax purposes, as compensation for the servicing and
administration of
the Mortgage Loans pursuant to this Agreement;
(x) Each Prepayment Charge is permissible and enforceable in
accordance with its terms (except to the extent that (i) the
enforceability
thereof may be limited by
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bankruptcy, insolvency, moratorium, receivership and other similar
laws
relating to creditors' rights generally and (ii) the collectability
thereof
may be limited due to acceleration in connection with a foreclosure
or
other involuntary payment); and
(xi) The Servicer shall not waive any Prepayment Charge or part of
a
Prepayment Charge unless, (i) the enforceability thereof shall have
been
limited by bankruptcy, insolvency, moratorium, receivership and
other
similar laws relating to creditors' rights generally, (ii) the
collectability thereof shall have been limited due to acceleration
in
connection with a foreclosure or other involuntary payment or (iii)
in the
Servicer's reasonable judgment as described in Section 3.01 hereof,
(x)
such waiver relates to a default or a reasonably foreseeable
default, (y)
such waiver would maximize recovery of total proceeds taking into
account
the value of such Prepayment Charge and related Mortgage Loan and
(z) doing
so is standard and customary in servicing similar Mortgage Loans
(including
any waiver of a Prepayment Charge in connection with a refinancing
of a
Mortgage Loan that is related to a default or a reasonably
foreseeable
default). In no event shall the Servicer waive a Prepayment Charge
in
connection with a refinancing of a Mortgage Loan that is not
related to a
default or a reasonably foreseeable default.
It is understood and agreed that the representations, warranties
and
covenants set forth in this Section 2.05 shall survive delivery of
the Mortgage
Files to the Trustee and shall inure to the benefit of the Trustee,
the
Depositor, the NIMS Insurer and the Certificateholders. Upon
discovery by any of
the Depositor, the Servicer, the NIMS Insurer 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. Subject to
Section 7.01,
the obligation of the Servicer set forth in Section 2.03(b) to cure
breaches (or
in the case of the representations, warranties and covenants set
forth in
Section 2.05(x) and Section 2.05(xi) above, to otherwise remedy
such breaches
pursuant to Section 2.03(b)) shall constitute the sole remedies
against the
Servicer available to the Certificateholders, the Depositor or the
Trustee on
behalf of the Certificateholders respecting a breach of the
representations,
warranties and covenants contained in this Section 2.05. The
preceding sentence
shall not, however, limit any remedies available to the
Certificateholders, the
Depositor or the Trustee on behalf of the Certificateholders (other
than in the
case of the representations, warranties and covenants set forth in
Section
2.05(x) and Section 2.05(xi) above) pursuant to the Originator
Mortgage Loan
Purchase Agreement signed by the Servicer in its capacity as
seller, respecting
a breach of the representations, warranties and covenants of the
Servicer in its
capacity as seller contained in the Originator Mortgage Loan
Purchase Agreement.
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 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
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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 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
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with any court or governmental agency or body of the United States
or any
other jurisdiction is required for the issuance of the
Certificates, or the
consummation by the Depositor of the other transactions
contemplated by
this Agreement, except such consents, approvals, authorizations,
registrations or qualifications as (a) may be required under State
securities or Blue Sky laws, (b) have been previously obtained or
(c) the
failure of which to obtain would not have a material adverse effect
on the
performance by the Depositor of its obligations under, or the
validity or
enforceability of, this Agreement; and
(ix) There are no actions, proceedings or investigations pending
before or, to the Depositor's knowledge, threatened by any court,
administrative agency or other tribunal to which the Depositor is a
party
or of which any of its properties is the subject: (a) which if
determined
adversely to the Depositor would have a material adverse effect on
the
business, results of operations or financial condition of the
Depositor;
(b) asserting the invalidity of this Agreement or the Certificates;
(c)
seeking to prevent the issuance of the Certificates or the
consummation by
the Depositor of any of the transactions contemplated by this
Agreement, as
the case may be; (d) which might materially and adversely affect
the
performance by the Depositor of its obligations under, or the
validity or
enforceability of, this Agreement.
Section 2.07 Issuance of Certificates and the Uncertificated
Regular
Interests.
The Trustee acknowledges the assignment to it of the Mortgage Loans
and the delivery to it of the Mortgage Files, subject to the
provisions of
Sections 2.01 and 2.02, and the Trustee acknowledges the assignment
to it of all
other assets included in the Trust Fund, receipt of which is hereby
acknowledged. Concurrently with such assignment and delivery and in
exchange
therefor, the Trustee, pursuant to the Written Order to
Authenticate executed by
an officer of the Depositor, has executed, and the Certificate
Registrar has
authenticated and delivered to or upon the order of the Depositor,
the
Certificates (other than the Class CE, Class P and Class R
Certificates) in
minimum dollar denominations of $25,000 and integral dollar
multiples of $1 in
excess thereof or in the case of the Class P Certificates, in
minimum
denominations of $20 and integral multiples of $20 in excess
thereof. The Class
CE 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 such regular interests as assets of REMIC 2.
The Trustee
acknowledges the obligation of the Class CE Certificates to pay Cap
Carryover
Amounts, and declares that it hold the same as assets of the
Grantor Trust on
behalf of the Holders of the Class A-1A Certificates, which shall
be treated as
beneficially owning the right to receive the Cap Carryover Amounts
from the
Grantor Trust. In addition to the assets described in the preceding
sentence,
the assets of the Grantor Trust shall also include (i) any Servicer
Prepayment
Charge Payment Amounts and the beneficial interest of the Class P
Certificates
with respect thereto and (ii) the Yield Maintenance Agreement, the
Reserve
Account and the beneficial interest of the Class CE Certificates
with respect
thereto, subject to the obligation to pay Cap Carryover Amounts.
The interests
evidenced by the Certificates constitute the entire beneficial
ownership
interest in the Trust Fund.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01 Servicer to Act as Servicer.
The Servicer shall service and administer the Mortgage Loans on
behalf
of the Trust and in the best interests of and for the benefit of
the
Certificateholders in accordance with this Agreement and the normal
and usual
standards of practice of prudent mortgage servicers servicing
similar mortgage
loans and, to the extent consistent with such terms, in the same
manner in which
it services and administers similar mortgage loans for its own
portfolio, and
shall have full power and authority, acting alone, to do or cause
to be done any
and all things in connection with such servicing and administration
which the
Servicer may deem necessary or desirable and consistent with the
terms of this
Agreement (the "Servicing Standard").
Consistent with the terms of this Agreement, the Servicer may
waive,
modify or vary any term of any Mortgage Loan or consent to the
postponement of
strict compliance with any such term or in any manner grant
indulgence to any
Mortgagor if in the Servicer's reasonable and prudent determination
such waiver,
modification, postponement or indulgence is not materially adverse
to the
Certificateholders; provided, however, that the Servicer shall not
make future
advances and, except as set forth in the following sentence or
Section 3.03, the
Servicer shall not permit any modification with respect to any
Mortgage Loan
that would (i) change the Mortgage Interest Rate, defer or forgive
the payment
thereof of any principal or interest payments, reduce the
outstanding principal
amount (except for actual payments of principal) or extend the
final maturity
date with respect to such Mortgage Loan or (ii) cause an Adverse
REMIC Event.
Notwithstanding anything to the contrary contained in this
Agreement, in the
event that any Mortgage Loan is in default or, if such default is
reasonably
foreseeable, the Servicer, consistent with the standards set forth
in this
Section 3.01, may also waive, modify or vary any term of such
Mortgage Loan
(including modifications that would change the Mortgage Rate,
forgive the
payment of principal or interest, extend the final maturity date of
such
Mortgage Loan (including modifications that would change the
Mortgage Rate,
forgive the payment of principal or interest, extend the final
maturity date of
such Mortgage Loan or waive, in whole or in part, a Prepayment
Charge)), accept
payment from the related Mortgagor of an amount less than the
unpaid Principal
Balance in final satisfaction of such Mortgage Loan, or consent to
the
postponement of strict compliance with any such term or otherwise
grant
indulgence to any Mortgagor (any and all such waivers,
modifications, variances,
forgiveness of principal or interest, postponements, or indulgences
collectively
referred to herein as "forbearance"); provided, however, that the
final maturity
date of any Mortgage Loan may not be extended beyond the latest
Assumed Final
Distribution Date. The Servicer's analysis supporting any
forbearance and the
conclusion that any forbearance meets the standards of this Section
3.01 shall
be reflected in writing in the Servicing File. Notwithstanding the
foregoing,
the Servicer shall not permit any modification with respect to any
Mortgage Loan
that would both (x) effect an exchange or reissuance of such
Mortgage Loan under
Section 1.860G-2(b) of the Treasury Regulations and (y) cause an
Adverse REMIC
Event. The NIMS Insurer's prior written consent shall be required
for any
modification, waiver or amendment if the aggregate number of
outstanding
Mortgage Loans which have been modified, waived or amended exceeds
5% of the
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number of Mortgage Loans as of the Cut-off Date. Without limiting
the generality
of the foregoing, the Servicer shall continue, and is hereby
authorized and
empowered to execute and deliver on behalf of itself, and the
Trustee, all
instruments of satisfaction or cancellation, or of partial or full
release,
discharge and all other comparable instruments, with respect to the
Mortgage
Loans and with respect to the Mortgaged Property. The Servicer
shall make all
required Servicing Advances and shall service and administer the
Mortgage Loans
in accordance with Applicable Regulations, and shall provide to the
Mortgagor
any reports required to be provided to them thereby. The Trustee
shall execute
and deliver to the Servicer within at least fifteen (15) Business
Days of
receipt, upon request, any powers of attorney furnished to it in
the Trustee's
standard and customary form by the Servicer empowering the Servicer
to execute
and deliver instruments of satisfaction or cancellation, or of
partial or full
release or discharge, and to foreclose upon or otherwise liquidate
any Mortgaged
Property, and to appeal, prosecute or defend in any court action
relating to the
Mortgage Loans or the Mortgaged Properties, in accordance with this
Agreement,
and the Trustee shall execute and deliver such other documents as
the Servicer
may request, necessary or appropriate to enable the Servicer to
service and
administer the Mortgage Loans and carry out its duties hereunder,
in each case
in accordance with Servicing Standard (and the Trustee shall have
no liability
for misuse of any such powers of attorney by the Servicer).
Notwithstanding
anything contained herein to the contrary, the Servicer shall not
without the
Trustee's written consent: (i) initiate any action, suit or
proceeding solely
under the Trustee's name without indicating the Servicer's
representative
capacity or (ii) take any action with the intent to cause, and
which results in,
the Trustee being registered to do business in any state.
In servicing and administering the Mortgage Loans, the Servicer
shall
employ procedures including collection procedures and exercise the
same care
that it customarily employs and exercises in servicing and
administering
mortgage loans for its own account giving due consideration to
accepted mortgage
servicing practices of prudent lending institutions and the
Certificateholders'
reliance on the Servicer.
The Servicer shall give prompt notice to the Trustee in the event
it
has been served with respect to any action (i) asserting a claim
against the
Trust Fund or (ii) asserting jurisdiction over the Trust Fund.
To the extent consistent with the terms of this Agreement,
including
Section 2.03 and Section 2.05, the Servicer may waive (or permit a
subservicer
to waive) a Prepayment Charge only under the following
circumstances: (i) such
waiver is standard and customary in servicing similar Mortgage
Loans and (ii)
such waiver relates to a default or a reasonably foreseeable
default and would,
in the reasonable judgment of the Servicer, maximize recovery of
total proceeds
taking into account the value of such Prepayment Charge and the
related Mortgage
Loan. If the Servicer has waived or does not collect all or a
portion of a
Prepayment Charge relating to a voluntary Principal Prepayment in
full due to
any action or omission of the Servicer, other than as provided
above, the
Servicer shall, on the date on which the Principal Prepayment is
remitted to the
Trustee, deliver to the Trustee the Servicer Prepayment Charge
Amount with
respect to such Mortgage Loan for distribution in accordance with
the terms of
this Agreement.
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Section 3.02 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest
on
all Mortgage Loans are paid in full or as long as the Mortgage Loan
remains
subject to this Agreement, the Servicer will diligently collect all
payments due
under each Mortgage Loan when the same shall become due and payable
and shall,
to the extent such procedures shall be consistent with this
Agreement and
Applicable Regulations, follow such collection procedures as it
follows with
respect to mortgage loans comparable to the Mortgage Loans and held
for its own
account. Further, the Servicer will take special care in
ascertaining and
estimating on escrowed Mortgage Loans annual taxes, fire and hazard
insurance
premiums, mortgage insurance premiums, and all other charges that,
as provided
in the Mortgage, will become due and payable to that end that the
installments
payable by the Mortgagors will be sufficient to pay such charges as
and when
they become due and payable.
Section 3.03 Realization Upon Defaulted Mortgage Loans.
In the event that any payment due under any Mortgage Loan is not
paid
when the same becomes due and payable, or in the event the
Mortgagor fails to
perform any other covenant or obligation under the Mortgage Loan
and such
failure continues beyond any applicable grace period, the Servicer
shall take
such action as it shall deem to be in the best interest of the
Certificateholders; provided, however, that any costs and expenses
incurred with
respect thereto shall be recoverable as Servicing Advances by the
Servicer as
contemplated in Section 3.05 and Section 3.13. With respect to any
defaulted
Mortgage Loan, the Servicer shall have the right to review the
status of the
related forbearance plan and, subject to the second paragraph of
Section 3.01,
may modify such forbearance plan; including extending the Mortgage
Loan
repayment date for a period of one year or reducing the Mortgage
Interest Rate
up to 50 basis points.
In connection with a foreclosure or other conversion, the Servicer
shall exercise such rights and powers vested in it hereunder and
use the same
degree of care and skill in its exercise as prudent mortgage
servicers would
exercise or use under the circumstances in the conduct of their own
affairs and
consistent with Applicable Regulations and the Servicing Standard,
including,
without limitation, advancing funds for the payment of taxes and
insurance
premiums.
Notwithstanding the foregoing provisions of this Section 3.03, with
respect to any Mortgage Loan as to which the Servicer has received
actual notice
of, or has actual knowledge of, the presence of any toxic or
hazardous substance
on the related Mortgaged Property, the Servicer shall not either
(i) obtain
title to such Mortgaged Property as a result of or in lieu of
foreclosure or
otherwise, or (ii) otherwise acquire possession of, or take any
other action
with respect to, such Mortgaged Property if, as a result of any
such action, the
Trust would be considered to hold title to, to be a
mortgagee-in-possession of,
or to be an owner or operator of such Mortgaged Property within the
meaning of
the Comprehensive Environmental Response, Compensation and
Liability Act of
1980, as amended from time to time, or any comparable law, unless
the Servicer
has received the prior written consent of the NIMS Insurer and has
received a
prudent report prepared by a Person who regularly conducts
environmental audits
using customary industry standards, that:
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A. such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best
economic interest of
the Certificateholders to take such actions as are necessary to
bring the
Mortgaged Property into compliance therewith; and
B. there are no circumstances present at such Mortgaged Property
relating to the use, management or disposal of any hazardous
substances,
hazardous materials, hazardous wastes, or petroleum-based materials
for which
investigation, testing, monitoring, containment, clean-up or
remediation could
be required under any federal, state or local law or regulation, or
that if any
such materials are present for which such action could be required,
that it
would be in the best economic interest of the Certificateholders to
take such
actions with respect to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this
Section 3.03 shall be advanced by the Servicer, subject to the
Servicer's right
to be reimbursed therefor from the Collection Account as provided
in Section
3.05(a)(iv).
If the Servicer determines, as described above, that it is in the
best
economic interest of the Certificateholders to take such actions as
are
necessary to bring any such Mortgaged Property into compliance with
applicable
environmental laws, or to take such action with respect to the
containment,
clean-up or remediation of hazardous substances, hazardous
materials, hazardous
wastes, or petroleum-based materials affecting any such Mortgaged
Property, then
the Servicer shall take such action as it deems to be in the best
economic
interest of the Certificateholders. The cost of any such
compliance,
containment, clean-up or remediation shall be advanced by the
Servicer, subject
to the Servicer's right to be reimbursed therefor from the
Collection Account as
provided in Section 3.05(a).
Section 3.04 Collection Accounts, Distribution Account and Reserve
Accounts.
(a) The Servicer shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan separate and apart from any
of its own
funds and general assets and shall establish and maintain one or
more Collection
Accounts. Each Collection Account shall be an Eligible Account.
The Servicer shall deposit or cause to be deposited on a daily
basis
and in no event more than two Business Days after receipt thereof
in the
clearing account (which must be an Eligible Account) in which it
customarily
deposits payments and collections on mortgage loans in connection
with its
mortgage loan servicing activities, and shall thereafter deposit in
the
Collection Account, in no event more than two Business Days after
deposit of
such funds in the clearing account, and retain therein, the
following payments
and collections received or made by it after the Cut-off Date with
respect to
the Mortgage Loans (other than in respect of principal and interest
due on or
before the Cut-off Date):
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans,
adjusted to the Mortgage Interest Rate less the Servicing Fee Rate
and any
Prepayment Interest Excess;
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(iii) all Liquidation Proceeds and any Subsequent Recoveries;
(iv) all Insurance Proceeds including amounts required to be
deposited
pursuant to Section 3.10, other than proceeds to be held in the
Escrow
Account and applied to the restoration or repair of the Mortgaged
Property
or released to the Mortgagor in accordance with the Servicer's
normal
servicing procedures, the loan documents or applicable law;
(v) all Condemnation Proceeds affecting any Mortgaged Property
which
are not released to the Mortgagor in accordance with the Servicer's
normal
servicing procedures, the loan documents or applicable law;
(vi) any amounts required to be deposited by the Servicer in
connection with any REO Property pursuant to Section 3.13;
(vii) all Prepayment Charges collected by the Servicer and all
Servicer Prepayment Charge Payment Amounts required to be paid by
the
Servicer pursuant to Section 2.03(b)(ii)(A) and pursuant to Section
2.03(b)(ii)(B) as limited by Section 2.03(b)(iii);
(viii) all amounts required to be deposited by the Servicer
pursuant
to Section 2.03; and
(ix) any amount required to be deposited by the Servicer pursuant
to
Section 3.25(b) in connection with any losses realized on Permitted
Investments with respect to funds held in the Collection Account.
Any interest paid on funds deposited in the Collection Accounts,
subject to Section 3.25, shall accrue to the benefit of the
Servicer and the
Servicer shall be entitled to retain and withdraw such interest
from the
Collection Accounts pursuant to Section 3.05(e). The foregoing
requirements for
deposit into the Collection Account shall be exclusive, it being
understood and
agreed that, without limiting the generality of the foregoing,
payments in the
nature of late payment charges, bad check fees, prepayment charges
that are not
Prepayment Charges or Servicer Prepayment Charge Payment Amounts,
assumption
fees and other similar fees need not be deposited by the Servicer
into the
Collection Account. Amounts deposited in the Collection Accounts in
error may be
withdrawn by the Servicer at any time.
(b) On behalf of the Trust Fund, the Trustee shall establish and
maintain one or more accounts (such account or accounts, the
"Distribution
Account"), held in trust for the benefit of the Certificateholders.
On behalf of
the Trust Fund, the Servicer shall deliver to the Trustee in
immediately
available funds for deposit in the Distribution Account by 3:00
p.m. New York
time on the Servicer Remittance Date, (i) that portion of the
Available Funds
(calculated without regard to the references in the definition
thereof to
amounts that may be deposited to the Distribution Account from a
different
source as provided herein) then on deposit in the Collection
Accounts and (ii)
the amount of all Prepayment Charges collected by the Servicer and
all Servicer
Prepayment Charge Payment Amounts required to be paid by the
Servicer then on
deposit in the Collection Account (other than any such Prepayment
Charges
received and Servicer Prepayment Charge Payment Amounts paid after
the related
Prepayment Period) and
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any amounts reimbursable to an Advancing Person pursuant to Section
3.33 and the
terms of the related Advance Facility. Amounts in the Distribution
Account shall
be deemed to be held on behalf of the related REMICs and the
Grantor Trust in
accordance with the REMIC distributions set forth in Section 4.08.
The Trustee
shall be entitled to withdraw from the Distribution Account any
amounts owing to
it pursuant to Section 8.05 and Section 9.01(c) and any amounts
owed to the
Trustee which have not been paid or reimbursed pursuant to Section
3.05(h) prior
to the distribution of any amounts on deposit to the
Certificateholders;
provided, however, in the case of amounts owing to it other than
the Trustee
Fee, the Trustee shall provide the Depositor, the NIMS Insurer and
the Servicer
with a written account of such amounts within ten (10) Business
Days following
the withdrawal of such funds, provided further, that the Trustee
shall not be
entitled to withdraw such amounts for funds on deposit in the
Distribution
Account representing Prepayment Charges and Servicer Prepayment
Charge Payment
Amounts. In connection with any failure by the Servicer to make any
remittance
required to be made by the Servicer to the Trustee for deposit in
the
Distribution Account on the day and by the time such remittance is
required to
be made under the terms of this Section 3.04(b) (without giving
effect to any
grace or cure period), the Servicer shall pay to the Trustee for
the account of
the Trustee interest at the prime rate of United States money
center commercial
banks as published in The Wall Street Journal on any amount not
timely remitted
from and including the day such remittance was required to be made
to, but not
including, the day on which such remittance was actually made.
(c) Funds on deposit in the Collection Accounts may be invested in
Eligible Investments in accordance with the provisions set forth in
Section
3.25. The Servicer shall give notice to the Trustee and the NIMS
Insurer of the
location of the Collection Accounts maintained by it when
established and prior
to any change thereof. The Trustee shall give notice to the
Servicer, the NIMS
Insurer and the Depositor of the location of the Distribution
Account when
established and prior to any change thereof.
(d) In the event the Servicer shall deliver to the Trustee for
deposit
in the Distribution Account any amount not required to be deposited
therein, it
may at any time request that the Trustee withdraw such amount from
the
Distribution Account and remit to the Servicer any such amount, any
provision
herein to the contrary notwithstanding. In addition, the Servicer
shall deliver
to the Trustee from time to time for deposit, and the Trustee shall
so deposit,
in the Distribution Account in respect of REMIC 1:
(i) any Advances, as required pursuant to Section 4.07;
(ii) any Stayed Funds, as soon as permitted by the federal
bankruptcy
court having jurisdiction in such matters;
(iii) any amounts required to be delivered by the Servicer to the
Trustee for deposit in the Distribution Account pursuant to
Sections 2.03,
3.04 (except as specified in clause (f) below), 3.13, 3.15, 3.16,
3.23,
3.24, 4.07 or 10.01; and
(iv) any amounts required to be deposited by the Servicer pursuant
to
Section 3.11 in connection with the deductible clause in any
blanket hazard
insurance
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policy, such deposit being made from the Servicer's own funds,
without
reimbursement therefor.
(e) Promptly upon receipt of any Stayed Funds, whether from the
Servicer, a trustee in bankruptcy, or federal bankruptcy court or
other source,
the Trustee shall notify the Servicer of such receipt and deposit
such funds in
the Distribution Account, subject to withdrawal thereof as
permitted hereunder.
In addition, the Trustee shall deposit in the Distribution Account
any amounts
required to be deposited pursuant to Section 3.25(b) in connection
with losses
realized on Eligible Investments with respect to funds held in the
Distribution
Account.
(f) Any Servicer Prepayment Charge Payment Amounts deposited
pursuant
to Section 3.04(a)(vii) shall not be assets of any REMIC created
hereunder, but
shall be considered assets of the Grantor Trust held by the Trustee
for the
benefit of the Class P Certificateholders.
(g) (i) The Trustee shall establish and maintain the Reserve
Account,
held in trust for the benefit of the Holders of the Class A-1A
Certificates. The
Trustee shall deposit in the Reserve Account on the date received
by it, any
Yield Maintenance Agreement Payment received from the Yield
Maintenance
Agreement Provider for the related Distribution Date.
On each Distribution Date, the Trustee shall withdraw from the
Reserve
Account any Yield Maintenance Agreement Payment and apply it in the
following order of priority:
(A) to the Class A-1A Certificates from the Reserve Account, any
remaining unpaid Cap Carryover Amounts for such Distribution Date
after
distributions to the Class A-1A Certificates pursuant to Section
3.04(g)(iii) hereof; and
(B) to the Class CE Certificates, any remaining amount on deposit
in the Reserve Accounts.
(ii) The Trustee shall account for the Reserve Account as an asset
of
a grantor trust under subpart E, part I of subchapter J of the Code
and not
an asset of any REMIC created pursuant to this Agreement. The
Reserve Fund
will constitute an "outside reserve fund" for purposes of the REMIC
Provisions. The beneficial owner of the Reserve Account is the
Class CE
Certificateholder. For all federal tax purposes, amounts
transferred or
reimbursed by REMIC 2 to the Reserve Account shall be treated as
distributions by the Trustee to the Class CE Certificateholder.
(iii) Any Cap Carryover Amounts (exclusive of payments from the
Yield
Maintenance Agreement) paid by the Trustee pursuant to this Section
3.04(g)
to the Class A-1A Certificates, shall be accounted for by the
Trustee as
amounts paid first to the Class CE Certificates and then to the
Class A-1A
Certificates from the Grantor Trust. In addition, the Trustee shall
account
for the Class A-1A Certificates' rights to receive payments of Cap
Carryover Amounts as rights in limited recourse interest rate cap
contracts
written by the Class CE Certificates in favor of the Class A-1A
Certificates.
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(iv) For federal tax return and information reporting, the right of
the Holders of the Class A-1A Certificates to receive payments
under the
Yield Maintenance Agreement shall be assigned a value of zero.
(v) Amounts in the Reserve Fund shall be held uninvested.
Section 3.05 Permitted Withdrawals From the Collection Accounts.
The Servicer may, from time to time, withdraw from the Collection
Account for the following purposes:
(a) to remit to the Trustee for deposit in the Distribution Account
the amounts required to be so remitted pursuant to Section 3.04(b)
or permitted
to be so remitted pursuant to the first sentence of Section
3.04(d);
(b) to reimburse itself for (i) any unreimbursed Advances to the
extent of amounts received which represent Late Collections (net of
the related
Servicing Fees) of Monthly Payments, Liquidation Proceeds and
Insurance Proceeds
on Mortgage Loans with respect to which such Advances were made in
accordance
with the provisions of Section 4.07; (ii) any unreimbursed Advances
that are
Nonrecoverable Advances; or (iii) subject to Section 4.07(b), any
unreimbursed
Advances to the extent of funds held in the Collection Account for
future
distribution that were not included in Available Funds for the
preceding
Distribution Date;
(c) to reimburse itself for any unreimbursed Servicing Advances
with
respect to each Mortgage Loan, but only to the extent of any Late
Collections,
Liquidation Proceeds, Insurance Proceeds and condemnation proceeds
received with
respect to such Mortgage Loan, or (ii) any Servicing Advances that
are
Nonrecoverable Advances;
(d) to reimburse itself for any amounts paid or expenses incurred
pursuant to Section 3.03 (and not otherwise previously reimbursed);
(e) to pay to itself as servicing compensation (a) any interest
earned
on funds in the Collection Account (all such interest to be
withdrawn monthly
not later than each Servicer Remittance Date), and (b) the
Servicing Fee from
that portion of any payment or recovery as to interest to a
particular Mortgage
Loan to the extent not retained pursuant to Section 3.04(a)(ii);
(f) to pay or reimburse itself or the Depositor for any amounts
payable or paid pursuant to Section 6.03 (and not otherwise
previously
reimbursed);
(g) to pay to itself any Prepayment Interest Excess on the related
Mortgage Loans to the extent not retained pursuant to Section
3.04(a)(ii);
(h) to remit to the Trustee any amounts that the Trustee is
permitted
to be paid or reimbursed from the assets of the Trust Fund pursuant
to the terms
of this Agreement, including the terms of Section 7.01, Section
7.02(a) and
Section 8.05 of this Agreement;
(i) to reimburse the NIMS Insurer, the Servicer (if the Servicer is
not an Affiliate of the Originator) or the Trustee, as the case may
be, for
enforcement expenses
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reasonably incurred in respect of the breach or defect giving rise
to the
purchase obligation under Section 2.03 of this Agreement that were
included in
the Purchase Price of the Mortgage Loan, including any expenses
arising out of
the enforcement of the purchase obligation;
(j) to pay to the Servicer, the Originator or the Seller, as the
case
may be, with respect to each Mortgage Loan that has previously been
purchased or
replaced pursuant to Section 2.03 or Section 3.16 all amounts
received thereon
subsequent to the date of purchase or substitution, as the case may
be;
(k) to transfer funds to the Collection Account maintained at a
particular depository to the Collection Account maintained at a
different
depository, pursuant to Section 3.09; and
(l) to clear and terminate the Collection Account upon the
termination
of this Agreement.
On each Business Day as of the commencement of which the balance on
deposit in the Collection Account exceeds $75,000 following any
withdrawals
pursuant to the next succeeding sentence, the amount of such excess
shall be
remitted to the Trustee, but only if the Collection Account
constitutes an
Eligible Account solely pursuant to clause (ii) of the definition
of "Eligible
Account." If the balance on deposit in the Collection Account
exceeds $75,000 as
of the commencement of business on any Business Day and the
Collection Account
constitutes an Eligible Account solely pursuant to clause (ii) of
the definition
of "Eligible Account," the Servicer, shall on or before 3:00 p.m.
New York time
on such Business Day, withdraw from the Collection Account any and
all amounts
payable or reimbursable to the Depositor, the Servicer, the Trustee
or any
Sub-Servicer pursuant to Section 3.05 and shall pay such amounts to
the Persons
entitled thereto.
The foregoing requirements for withdrawal from each of the
Collection
Accounts shall be exclusive. In the event the Servicer shall
deposit in either
Collection Account any amount not required to be deposited therein,
it may at
any time withdraw such amount from such Collection Account, any
provision herein
to the contrary notwithstanding.
The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying
any
withdrawal from the Collection Account, to the extent held by or on
behalf of
it, pursuant to subclauses (b), (c), (d), (e), (f), (g) and (j)
above. The
Servicer shall provide written notification to the Trustee and the
NIMS Insurer
on or prior to the next succeeding servicer reporting date, upon
making any
withdrawals from the Collection Account pursuant to subclause (f)
above.
Section 3.06 Establishment of Escrow Accounts; Deposits in Escrow
Accounts.
The Servicer shall segregate and hold all funds collected and
received
pursuant to each Mortgage Loan which constitute Escrow Payments
separate and
apart from any of its own funds and general assets and shall
establish and
maintain one or more Escrow Accounts, in the form of time deposit
or demand
accounts. A copy of such letter agreement shall be furnished to the
Trustee upon
request. The Escrow Account shall be an Eligible Account.
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The Servicer shall deposit or cause to be deposited on a daily
basis
and in no event more than two Business Days after receipt thereof
in the
clearing account (which must be an Eligible Account) in which it
customarily
deposits payments and collections on mortgage loans in connection
with its
mortgage loan servicing activities, and shall thereafter deposit in
the Escrow
Account or Accounts, in no event more than two Business Days after
deposit of
such funds in the clearing account, and retain therein, (i) all
Escrow Payments
collected on account of the Mortgage Loans, for the purpose of
effecting timely
payment of any such items as required under the terms of this
Agreement, and
(ii) all Insurance Proceeds which are to be applied to the
restoration or repair
of any Mortgaged Property. The Servicer shall make withdrawals
therefrom only to
effect such payments as are required under this Agreement, and for
such other
purposes as shall be set forth in, or in accordance with, Section
3.07. The
Servicer shall be entitled to retain any interest paid on funds
deposited in the
Escrow Account by the depository institution other than interest on
escrowed
funds required by law to be paid to the Mortgagor and, to the
extent required by
the related Mortgage Loan or Applicable Regulations, the Servicer
shall pay
interest on escrowed funds to the Mortgagor notwithstanding that
the Escrow
Account is non-interest bearing or that interest paid thereon is
insufficient
for such purposes.
Section 3.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by the Servicer (i)
to
effect timely payments of ground rents, taxes, assessments, water
rates, fire,
flood and hazard insurance premiums and comparable items in a
manner and at a
time that assures that the lien priority of the Mortgage is not
jeopardized (or,
with respect to the payment of taxes, in a manner and at a time
that avoids the
loss of the Mortgaged Property due to a tax sale or the foreclosure
as a result
of a tax lien), (ii) to reimburse the Servicer for any Servicing
Advance made by
the Servicer with respect to a related Mortgage Loan but only from
amounts
received on the related Mortgage Loan which represent late payments
or Late
Collections of Escrow Payments thereunder with respect to taxes and
assessments
and with respect to hazard insurance, (iii) to refund to the
Mortgagor any funds
as may be determined to be overages, (iv) for transfer to the
Collection Account
in accordance with the terms of this Agreement, (v) for application
to
restoration or repair of the Mortgaged Property, (vi) to pay to the
Servicer, or
to the Mortgagor to the extent required by the related Mortgage
Loan or
Applicable Regulations, any interest paid on the funds deposited in
the Escrow
Account, (vii) to clear and terminate the Escrow Account on the
termination of
this Agreement, or (viii) to transfer to the Collection Account any
insurance
proceeds. As part of its servicing duties, the Servicer shall pay
to the
Mortgagor interest on funds in the Escrow Account, to the extent
required by the
related Mortgage Loan or Applicable Regulations, and to the extent
that interest
earned on funds in the Escrow Account is insufficient, shall pay
such interest
from its own funds, without any reimbursement therefor.
In the event the Servicer shall deposit in the Escrow Account any
amount not required to be deposited therein, it may at any time
withdraw such
amount from the Escrow Account, any provision herein to the
contrary
notwithstanding.
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Section 3.08 Payment of Taxes, Insurance and Other Charges;
Collections Thereunder.
With respect to each Mortgage Loan that provides for Escrow
Payments,
the Servicer shall maintain accurate records reflecting the status
of ground
rents, taxes, assessments, water rates and other charges which are
or may become
a lien upon the Mortgaged Property and the status of fire, flood
and hazard
insurance coverage and shall obtain, from time to time, all bills
for the
payment of such charges (including renewal premiums) and shall
effect payment of
taxes, assessments, hazard insurance premiums, and comparable items
in a manner
and at a time that assures that the lien priority of the Mortgage
is not
jeopardized (or, with respect to the payment of taxes, in a manner
and at a time
that avoids the loss of the Mortgaged Property due to a tax sale or
the
foreclosure as a result of a tax lien). To the extent that a
Mortgage does not
provide for Escrow Payments, the Servicer (i) shall determine
whether any such
payments are made by the Mortgagor in a manner and at a time that
is necessary
to avoid the loss of the Mortgaged Property due to a tax sale or
the foreclosure
as a result of a tax lien and (ii) shall ensure that all insurance
required to
be maintained on the Mortgaged Property pursuant to this Agreement
is
maintained. If any such payment has not been made and the Servicer
receives
notice of a tax lien with respect to the Mortgage Loan being
imposed, the
Servicer will, promptly and to the extent required to avoid loss of
the
Mortgaged Property, advance or cause to be advanced funds necessary
to discharge
such lien on the Mortgaged Property. The Servicer assumes full
responsibility
for the payment of all such bills and shall effect payments of all
such bills
irrespective of the Mortgagor's faithful performance in the payment
of same or
the making of the Escrow Payments and shall make Servicing Advances
from its own
funds to effect such payments.
Section 3.09 Transfer of Accounts.
The Servicer may transfer the Collection Accounts and the Escrow
Account to a different depository institution from time to time.
Upon such
transfer, the Servicer shall deliver to the Trustee, the NIMS
Insurer and the
Depositor, a certification or letter agreement, as the case may be,
as required
pursuant to Sections 3.04 and 3.06.
Section 3.10 Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each Mortgage Loan
fire
and hazard insurance with extended coverage as is customary in the
area where
the Mortgaged Property is located in an amount which is at least
equal to the
least of (i) the amount necessary to fully compensate for any
damage or loss to
the improvements which are a part of such property on a replacement
cost basis,
(ii) the Principal Balance of the Mortgage Loan or (iii) the
maximum insurable
value of the improvements that are part of such Mortgaged Property,
in each case
in an amount not less than such amount as is necessary to prevent
the Mortgagor
and/or the Mortgagee from becoming a co-insurer. If the Mortgaged
Property is in
an area identified in the Federal Register by the Flood Emergency
Management
Agency as having special flood hazards and flood insurance has been
made
available, the Servicer will cause to be maintained a flood
insurance policy
meeting the requirements of the current guidelines of the Federal
Insurance
Administration with a generally acceptable insurance carrier, in an
amount
representing coverage not less than the least of (i) the Principal
Balance of
the Mortgage Loan, (ii) the maximum
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insurable value of the improvements securing such Mortgage Loan
plus accrued
interest at the Mortgage Interest Rate and related Servicing
Advances (each
measured at the time it became an REO Property) or (iii) the
maximum amount of
insurance which is available under the National Flood Insurance Act
of 1968, as
amended. The Servicer shall also maintain on the REO Properties for
the benefit
of the Certificateholders, (x) fire and hazard insurance with
extended coverage
in an amount which is at least equal to the lesser of (i) 100% of
the maximum
insurable value of the improvements securing the Mortgage Loan and
(ii) the
outstanding Principal Balance of the Mortgage Loan at the time it
became an REO
Property, (y) public liability insurance and, (z) to the extent
required and
available under the National Flood Insurance Act of 1968, as
amended, flood
insurance in an amount as provided above. Any amounts collected by
the Servicer
under any such policies other than amounts to be deposited in the
Escrow Account
and applied to the restoration or repair of the Mortgaged Property
or REO
Property, or released to the Mortgagor in accordance with the
Servicer's normal
servicing procedures, shall be deposited in the Collection Account,
subject to
withdrawal pursuant to Section 3.05(a). It is understood and agreed
that no
earthquake or other additional insurance is required to be
maintained by the
Servicer or the Mortgagor or maintained on property acquired in
respect of the
Mortgage Loan, other than pursuant to such Applicable Regulations
as shall at
any time be in force and as shall require such additional
insurance. All such
policies shall be endorsed with standard mortgagee clauses with
loss payable to
the Servicer. The Servicer shall not interfere with the Mortgagor's
freedom of
choice in selecting either his insurance carrier or agent,
provided, however,
that the Servicer shall not accept any such insurance policies from
insurance
companies unless such companies currently reflect a general policy
rating of A:X
or better in Best's Key Rating Guide and are licensed to do
business in the
state wherein the property subject to the policy is located or are
otherwise
acceptable to Fannie Mae and Freddie Mac.
Section 3.11 Maintenance of Mortgage Impairment Insurance Policy.
In the event that the Servicer shall obtain and maintain a blanket
policy that has a general policy rating of A:V or better in Best's
Key Rating
Guide insuring against hazard losses on all of the Mortgage Loans,
then, to the
extent such policy provides coverage in an amount equal to the
amount required
pursuant to Section 3.10 and otherwise complies with all other
requirements of
Section 3.10, it shall conclusively be deemed to have satisfied its
obligations
as set forth in Section 3.10, it being understood and agreed that
such policy
may contain a deductible clause, in which case the Servicer shall,
in the event
that there shall not have been maintained on the related Mortgaged
Property or
REO Property a policy complying with Section 3.10, and there shall
have been a
loss which would have been covered by such policy, deliver to the
Trustee for
deposit in the Distribution Account the amount not otherwise
payable under the
blanket policy because of such deductible clause, which amount
shall not be
reimbursable to the Servicer from the Trust Fund. In connection
with its
activities as servicer of the Mortgage Loans, the Servicer agrees
to prepare and
present, on behalf of the Trustee, claims under any such blanket
policy in a
timely fashion in accordance with the terms of such policy. Upon
request of the
Trustee, the Servicer shall cause to be delivered to the Trustee a
certified
true copy of such policy and a statement from the insurer
thereunder that such
policy shall in no event be terminated or materially modified
without thirty
days prior written notice to the Trustee.
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Section 3.12 Fidelity Bond, Errors and Omissions Insurance.
The Servicer shall maintain, at its own expense, a blanket fidelity
bond (the "Fidelity Bond") and an errors and omissions insurance
policy, with
broad coverage with financially responsible companies on all
officers, employees
or other persons acting in any capacity with regard to the Mortgage
Loans to
handle funds, money, documents and papers relating to the Mortgage
Loans. The
Fidelity Bond and errors and omissions insurance shall be in the
form of the
Mortgage Banker's Blanket Bond and shall protect and insure the
Servicer against
losses, including forgery, theft, embezzlement, fraud, errors and
omissions and
negligent acts of such persons. Such Fidelity Bond shall also
protect and insure
the Servicer against losses in connection with the failure to
maintain any
insurance policies required pursuant to this Agreement and the
release or
satisfaction of a Mortgage Loan without having obtained payment in
full of the
indebtedness secured thereby. No provision of this Section 3.12
requiring the
Fidelity Bond and errors and omissions insurance shall diminish or
relieve the
Servicer from its duties and obligations as set forth in this
Agreement. The
minimum coverage under any such bond and insurance policy shall be
at least
equal to the corresponding amounts required by Fannie Mae in the
Fannie Mae MBS
Selling and Servicing Guide or by Freddie Mac in the Freddie Mac
Servicer's
Guide, unless the Servicer has obtained a waiver of such
requirements from
Fannie Mae or Freddie Mac. The Servicer shall be deemed to have
complied with
this provision if an Affiliate of the Servicer has such errors and
omissions and
fidelity bond coverage and, by the terms of such insurance policy
or fidelity
bond, the coverage afforded thereunder extends to the Servicer.
Upon request of
the Trustee or the NIMS Insurer, the Servicer shall cause to be
delivered to the
requesting party a true copy of the Fidelity Bond and errors and
omissions
insurance policy. Any such errors and omissions policy and fidelity
bond shall
by its terms not be cancelable without thirty days' prior written
notice to the
Trustee. The Servicer shall also cause each Sub-Servicer to
maintain a policy of
insurance covering errors and omissions and a fidelity bond which
would meet
such requirements.
Section 3.13 Title, Management and Disposition of REO Property.
(a) In the event that title to a Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or
certificate of sale
shall be taken (pursuant to a limited power of attorney to be
provided by the
Trustee to the Servicer) in the name of the Trustee or its nominee,
on behalf of
the Certificateholders, or in the event the Trustee is not
authorized or
permitted to hold title to real property in the state where the REO
Property is
located, or would be adversely affected under the "doing business"
or tax laws
of such state by so holding title, the deed or certificate of sale
shall be
taken in the name of such Person or Persons as shall be consistent
with an
Opinion of Counsel obtained by the Servicer from an attorney duly
licensed to
practice law in the state where the REO Property is located. Any
Person or
Persons holding such title other than the Trustee shall acknowledge
in writing
that such title is being held as nominee for the benefit of the
Trustee.
(b) In the event that the Trust Fund acquires any REO Property as
aforesaid or otherwise in connection with a default or imminent
default on a
Mortgage Loan, the Servicer shall dispose of such REO Property
before the end of
the third taxable year beginning after the year of its acquisition
by the Trust
Fund for purposes of Section 860G(a)(8) of the Code unless the
Servicer has
received a grant of extension from the Internal Revenue Service of
the
above-
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mentioned grace period such that the holding by the Trust Fund of
such REO
Property subsequent to such period will not: (i) result in the
imposition of any
tax on "prohibited transactions" as defined in Section 860F of the
Code; (ii)
cause any REO Property to fail to qualify as "foreclosure property"
within the
meaning of Section 860G(a)(8) of the Code; or (iii) cause any REMIC
constituting
any part of the Trust Fund to fail to qualify as a REMIC at any
time that any
Certificates are outstanding, in which case the Trust Fund may
continue to hold
such REO Property.
Subject to compliance with applicable laws and regulations as shall
at
any time be in force, and notwithstanding any other provisions of
this
Agreement, no REO Property acquired by the Trust Fund shall be
rented (or
allowed to continue to be rented) or otherwise used by or on behalf
of the Trust
Fund in such a manner or pursuant to any terms that would: (i)
cause such REO
Property to fail to qualify as "foreclosure property" within the
meaning of
Section 860G(a)(8) of the Code; or (ii) subject any REMIC
constituting part of
the Trust Fund to the imposition of any federal or state income
taxes on the
income earned from such REO Property, including any taxes imposed
by reason of
Sections 860F or 860G(c) of the Code, unless the Servicer has
agreed to
indemnify and hold harmless the Trust Fund with respect to the
imposition of any
such taxes.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Certificateholders and the Trust Fund solely for
the purpose of
its prompt disposition and sale in a manner which does not cause
such REO
Property to fail to qualify as "foreclosure property" within the
meaning of
Section 860G(a)(8) of the Code or result in the receipt by the
related REMIC of
any "income from non-permitted assets" within the meaning of
Section
860F(a)(2)(B) of the Code, or any "net income from foreclosure
property" which
is subject to taxation under the REMIC Provisions. The Servicer
shall cause each
REO Property to be inspected promptly upon the acquisition of title
thereto and
shall cause each REO Property to be inspected at least annually
thereafter. The
Servicer shall make or cause to be made a written or electronic
report of each
such inspection. Such reports shall be retained in the Mortgage
File and copies
thereof shall be forwarded by the Servicer to the Trustee upon
request. The
Servicer shall attempt to sell the same (and may temporarily rent
the same) on
such terms and conditions as the Servicer deems to be in the best
interest of
the Certificateholders and the Trust Fund.
The Servicer may contract with any Independent Contractor for the
operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract shall not be
inconsistent herewith;
(ii) any such contract shall require, or shall be administered to
require, that the Independent Contractor pay all costs and expenses
incurred in connection with the operation and management of such
REO
Property, including those listed above and remit all related
revenues (net
of such costs and expenses) to the Servicer as soon as practicable,
but in
no event later than thirty days following the receipt thereof by
such
Independent Contractor;
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(iii) none of the provisions of this Section 3.13 relating to any
such
contract or to actions taken through any such Independent
Contractor shall
be deemed to relieve the Servicer of any of its duties and
obligations to
the Trustee on behalf of the Certificateholders with respect to the
operation and management of any such REO Property; and
(iv) the Servicer shall be obligated with respect thereto to the
same
extent as if it alone were performing all duties and obligations in
connection with the operation and management of such REO Property.
The Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its
duties and
obligations hereunder for indemnification of the Servicer by such
Independent
Contractor, and nothing in this Agreement shall be deemed to limit
or modify
such indemnification. The Servicer shall be solely liable for all
fees owed by
it to any such Independent Contractor, irrespective of whether the
Servicer's
compensation pursuant to Section 3.18 is sufficient to pay such
fees. The
Servicer shall not engage an Independent Contractor to engage in
any activities
that the Servicer would not be permitted to engage in itself in
accordance with
the other provisions of this Agreement.
With respect to each REO Property, the Servicer shall account
separately for each REO Property with respect to all funds
collected and
received in connection with the operation of such REO Property.
The income earned from the management of any REO Properties, net of
reimbursement to the Servicer for expenses incurred (including any
property or
other taxes) in connection with such management and net of
unreimbursed
Servicing Fees, Advances and Servicing Advances related thereto,
shall be
applied to the payment of principal of and interest on the related
defaulted
Mortgage Loans (with interest accruing as though such Mortgage
Loans were still
current) and all such income shall be deemed, for all purposes in
this
Agreement, to be payments on account of principal and interest on
the related
Mortgage Notes and shall be deposited into the Collection Account.
To the extent
the net income received during any calendar month is in excess of
the amount on
a daily basis, within two Business Days of receipt attributable to
amortizing
principal and accrued interest at the related Mortgage Rate on the
related
Mortgage Loan for such calendar month, such excess shall be
considered to be a
partial prepayment of principal of the related Mortgage Loan.
The proceeds from any liquidation of a Mortgage Loan, as well as
any
income from an REO Property, will be applied in the following order
of priority:
first, to reimburse the Servicer for any related unreimbursed
Servicing Advances
and Servicing Fees; second, to reimburse the Servicer for any
related
unreimbursed Advances; third, to reimburse the Certificate Account
for any
Nonrecoverable Advances (or portions thereof) that were previously
withdrawn by
the Servicer pursuant to Section 3.05(b)(ii) and 3.05(c)(ii) that
related to
such Mortgage Loan; fourth, to accrued and unpaid interest (to the
extent no
Advance has been made for such amount or any such Advance has been
reimbursed)
on the Mortgage Loan or related REO Property, at the Mortgage Rate
(net of the
Servicing Fee) to the Due Date occurring in the month in which such
amounts are
required to be distributed; and fifth, as a recovery of principal
of the
Mortgage Loan.
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The Servicer shall furnish to the Trustee, on each Servicer
Reporting
Date, an operating statement for each REO Property covering the
operation of
each REO Property for the previous month. Such operating statement
shall be
accompanied by such other information as the Trustee shall
reasonably request.
The Servicer shall use its best efforts to dispose of the REO
Property
as promptly as is practically consistent with protecting the
Certificateholders'
interests.
Each REO Disposition shall be carried out by the Servicer at such
price and upon such terms and conditions as the Servicer deems to
be in the best
interest of the Certificateholders. If as of the date title to any
REO Property
was acquired by the Servicer there were outstanding unreimbursed
Servicing
Advances, Servicing Fees and Advances with respect to the REO
Property, the
Servicer, upon an REO Disposition of such REO Property, shall be
entitled to
reimbursement for any related unreimbursed Servicing Advances,
Servicing Fees
and Advances from proceeds received in connection with such REO
Disposition. The
proceeds from the REO Disposition, net of any payment to the
Servicer as
provided above, shall be deposited in the Collection Account for
transfer to the
Distribution Account on the succeeding Servicer Remittance Date in
accordance
with Section 3.04(a)(vi).
Any REO Disposition shall be for cash only (unless changes in the
REMIC Provisions made subsequent to the Startup Day allow a sale
for other
consideration and an Opinion of Counsel is obtained by the Servicer
to the
effect that such sale shall not cause any REMIC constituting part
of the Trust
Fund to fail to qualify as a REMIC).
Section 3.14 Due-on-Sale Clauses; Assumption and Substitution
Agreements.
When a Mortgaged Property has been or is about to be conveyed by
the
Mortgagor, the Servicer shall, to the extent it has knowledge of
such conveyance
or prospective conveyance, exercise its rights to accelerate the
maturity of the
related Mortgage Loan under any "due-on-sale" clause contained in
the related
Mortgage or Mortgage Note; provided, however, that the Servicer
shall not
exercise any such right if the "due-on-sale" clause, in the
reasonable belief of
the Servicer, is not enforceable under applicable law. In such
event, the
Servicer shall make reasonable efforts to enter into an assumption
and
modification agreement with the Person to whom such property has
been or is
about to be conveyed, pursuant to which such Person becomes liable
under the
Mortgage Note and, unless prohibited by applicable law or the
Mortgage, the
Mortgagor remains liable thereon. If the foregoing is not permitted
under
applicable law, the Servicer is authorized to enter into a
substitution of
liability agreement with such Person, pursuant to which the
original Mortgagor
is released from liability and such Person is substituted as
Mortgagor and
becomes liable under the Note; provided that no such substitution
will be
permitted unless such person satisfies the underwriting criteria of
the
Servicer. The Mortgage Loan, as assumed, shall conform in all
respects to the
requirements, representations and warranties of this Agreement. The
Servicer
shall not take or enter into any assumption and modification
agreement, however,
unless (to the extent practicable under the circumstances) it shall
have
received confirmation, in writing, of the continued effectiveness
of any
applicable hazard insurance policy or a new policy meeting the
requirements of
this Section is obtained. The Servicer shall notify the Trustee
that any such
assumption or substitution agreement has been completed by
forwarding to the
Trustee the original copy of such assumption
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or substitution agreement (indicating the Mortgage File to which it
relates)
which copy shall be added by the Trustee to the related Mortgage
File and which
shall, for all purposes, be considered a part of such Mortgage File
to the same
extent as all other documents and instruments constituting a part
thereof. In
connection with any such assumption or substitution agreement, the
Monthly
Payment on the related Mortgage Loan shall not be changed but shall
remain as in
effect immediately prior to the assumption or substitution, the
stated maturity
or outstanding principal amount of such Mortgage Loan shall not be
changed nor
shall any required monthly payments of principal or interest be
deferred or
forgiven. Any fee collected by the Servicer for consenting to any
such
conveyance or entering into an assumption or substitution agreement
shall be
retained by or paid to the Servicer as additional servicing
compensation.
Notwithstanding the foregoing paragraph or any other provision of
this
Agreement, the Servicer shall not be deemed to be in default,
breach or any
other violation of its obligations hereunder by reason of any
assumption of a
Mortgage Loan by operation of law or any assumption which the
Servicer may be
restricted by law from preventing, for any reason whatsoever. For
purposes of
this Section 3.14, the term "assumption" is deemed to include a
sale of the
Mortgaged Property subject to the Mortgage that is not accompanied
by an
assumption or substitution of liability agreement.
Section 3.15 [Reserved]
Section 3.16 Optional Purchases of Mortgage Loans by Servicer.
The Servicer may, at its option, or, shall, at the direction of the
NIMS Insurer (which shall be at the expense of the NIMS Insurer),
purchase a
Mortgage Loan or REO Property which becomes 90 or more days
Delinquent or for
which the Servicer has accepted a deed in lieu of foreclosure.
Prior to purchase
pursuant to this Section 3.16, the Servicer shall be required to
continue to
make Advances pursuant to Section 4.07. The Servicer shall not use
any procedure
in selecting Mortgage Loans to be purchased which is materially
adverse to the
interests of the Certificateholders. The Servicer shall purchase
such Delinquent
Mortgage Loan or REO Property at a price equal to the Purchase
Price. The
Servicer will not be entitled to any Servicing Fee with respect to
any such
purchased Mortgage Loan. Any such purchase of a Mortgage Loan or
REO Property
pursuant to this Section 3.16 shall be accomplished by delivery to
the Trustee
for deposit in the Distribution Account of the amount of the
Purchase Price. The
Trustee shall immediately effectuate the conveyance of such
delinquent Mortgage
Loan or REO Property to the Servicer to the extent necessary,
including the
prompt delivery of all documentation to the Servicer.
Section 3.17 Trustee to Cooperate; Release of Files.
(a) Upon the payment in full of any Mortgage Loan (including any
liquidation of such Mortgage Loan through foreclosure or otherwise,
or the
receipt by the Servicer of a notification that payment in full will
be escrowed
in a manner customary for such purposes), the Servicer shall
deliver to the
Trustee, in written form (with two executed copies) or electronic
form, of a
completed "Request for Release" in the form of Exhibit E or such
other form
supplied by the Servicer provided that it does not differ from the
substantive
content of Exhibit E (which certification shall include a statement
to the
effect that all amounts received or to be received in
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connection with such payment which are required to be deposited in
the
Collection Account pursuant to Section 3.04(a) have been or shall
be so
deposited). Upon receipt of such Request for Release of Documents,
the Trustee
shall promptly release the related Mortgage File within three (3)
Business Days,
in trust, to (i) the Servicer, or (ii) such other party identified
in the
related Request for Release. No expenses incurred in connection
with any
instrument of satisfaction or deed of reconveyance shall be
chargeable to the
Collection Account or the Distribution Account but shall be borne
by the
Servicer to the extent not reimbursable from the related Mortgagor.
Upon any
such payment in full, or the receipt of such notification that such
funds have
been placed in escrow, the Trustee hereby authorizes and empowers
the Servicer
to execute an instrument of satisfaction (or Assignment without
recourse)
regarding the Mortgaged Property relating to such Mortgage, which
instrument of
satisfaction or Assignment shall be delivered to the Person or
Persons entitled
thereto against receipt therefor of payment in full, it being
understood and
agreed that no expense incurred in connection with such instrument
of
satisfaction or assignment, as the case may be, shall be chargeable
to the
Collection Accounts. In lieu of executing any such satisfaction or
assignment,
as the case may be, the Servicer may prepare and submit to the
Trustee a
satisfaction (or assignment without recourse, if requested by the
Person or
Persons entitled thereto) in form for execution by the Trustee with
all
requisite information completed by the Servicer; in such event, the
Trustee
shall execute and acknowledge such satisfaction or assignment, as
the case may
be, and deliver the same with the related Mortgage File, as
aforesaid.
(b) From time to time and as appropriate in the servicing of any
Mortgage Loan, including, without limitation, foreclosure or other
comparable
conversion of a Mortgage Loan or collection under any insurance
policy relating
to a Mortgage Loan, the Trustee shall (except in the case of the
payment or
liquidation pursuant to which the related Mortgage File is released
to an escrow
agent or an employee, agent or attorney of the Trustee), upon
written request of
the Servicer and delivery to the Trustee, in written form (with two
executed
copies) or electronic form, of a "Request for Release" in the form
of Exhibit E
(or such other form supplied by the Servicer provided that it does
not differ
from the substantive content of Exhibit E) signed by a Servicing
Officer,
release the related Mortgage File to the Servicer within three (3)
Business Days
and shall execute such documents as shall be necessary to the
prosecution of any
such proceedings, including, without limitation, an assignment
without recourse
of the related Mortgage to the Servicer. Such receipt shall
obligate the
Servicer to return the Mortgage File to the Trustee when the need
therefor by
the Servicer no longer exists unless the Mortgage Loan shall be
liquidated, in
which case, upon receipt of a Request for Release evidencing such
liquidation,
the receipt shall be released by the Trustee to the Servicer.
(c) Subject to Section 3.01, the Servicer shall have the right to
accept applications of Mortgagors for consent to (i) partial
releases of
Mortgages, (ii) alterations, (iii) removal, demolition or division
of properties
subject to Mortgages, (iv) modifications, and (v) second mortgage
subordination
agreements. No application for approval shall be considered by the
Servicer
unless: (w) it has received an Opinion of Counsel, addressed to the
Trustee
(which opinion shall not be an expense of the Trustee or the Trust
Fund) that
such sale, disposition, substitution, acquisition or contribution
will not
affect adversely the status of any REMIC constituting part of the
Trust Fund as
a REMIC or cause any REMIC constituting part of the Trust Fund to
be subject to
a tax on "prohibited transactions" or "contributions" pursuant to
the REMIC
Provisions; (x) the provisions of the related Note and Mortgage
have been
complied
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with; (y) the Loan-to-Value Ratio and debt-to-income ratio after
any release
does not exceed the maximum Loan-to-Value Ratio and debt-to-income
ratio
established in accordance with the underwriting standards of the
Mortgage Loans;
and (z) the lien priority of the related Mortgage is not affected.
Upon receipt
by the Trustee of a Servicing Officer's certificate setting forth
the action
proposed to be taken in respect of a particular Mortgage Loan and
certifying
that the criteria set forth in the immediately preceding sentence
have been
satisfied, the Trustee shall execute and deliver to the Servicer
the consent or
partial release so requested by the Servicer. A proposed form of
consent or
partial release, as the case may be, shall accompany any Servicing
Officer's
certificate delivered by the Servicer pursuant to this paragraph.
Section 3.18 Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain the amount of the Servicing Fee with respect to
each Mortgage
Loan (including REO Properties) payable solely from payments of
interest in
respect of such Mortgage Loan (including from Insurance Proceeds,
Liquidation
Proceeds and Subsequent Recoveries). The Servicer shall be entitled
to retain
additional servicing compensation in the form of release fees, bad
check
charges, assumption fees, modification or extension fees, late
payment charges,
prepayment charges that are not Prepayment Charges or Servicer
Prepayment Charge
Payment Amounts, or any other service-related fees and similar
items, to the
extent collected from Mortgagors. The Servicer shall also be
entitled pursuant
to Section 3.05(e) to withdraw from the Collection Account and
pursuant to
Section 3.07(vi) to withdraw from any Escrow Account, as additional
servicing
compensation, interest or other income earned on deposits therein,
subject to
Section 3.25. In addition, the Servicer shall be entitled to retain
or withdraw
from the Collection Account, pursuant to Section 3.05(g), any
Prepayment
Interest Excess with respect to the Mortgage Loans as additional
servicing
compensation.
The Servicer shall be required to pay all expenses incurred by it
in
connection with its servicing activities hereunder (including
payment of
premiums for any blanket policy insuring against hazard losses
pursuant to
Section 3.11 and the fees and expenses of independent accountants
and any agents
appointed by the Servicer), and shall not be entitled to
reimbursement therefor
from the Trust Fund except as specifically provided in Section
3.05.
Section 3.19 Annual Statement as to Compliance.
(a) Beginning in 2006, the Servicer, at its own expense, will
deliver
to the Trustee, the NIMS Insurer, the Depositor and each Rating
Agency, not
later than March 15th of each calendar year, a Servicing Officer's
certificate
stating, as to each signer thereof, that (i) a review of the
activities of the
Servicer during such preceding fiscal year and of performance under
this
Agreement has been made under such officers' supervision, and (ii)
to the best
of such officers' knowledge, based on such review, the Servicer has
fulfilled
all its obligations under this Agreement for such year, or, if
there has been a
default in the fulfillment of all such obligations, specifying each
such default
known to such officers and the nature and status thereof including
the steps
being taken by the Servicer to remedy such default. Copies of any
such statement
shall be provided by the Trustee to any Certificateholder and to
any Person
identified to the Trustee as a prospective transferee of a
Certificate, upon the
request and at the expense of the requesting party, provided that
such statement
is delivered by the Servicer to the Trustee.
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(b) Delivery of such certificate to the Trustee is for
informational
purposes only and their receipt of such shall not constitute
constructive notice
of any information contained therein or determinable, from
information contained
therein, including the Servicer's compliance with any of its
covenants hereunder
(as to which the Trustee is entitled to rely exclusively on
Officers'
Certificates).
Section 3.20 Annual Independent Certified Public Accountants'
Reports.
(a) Beginning in 2006, not later than March 15th of each calendar
year, the Servicer, at its expense, shall cause a nationally
recognized firm of
independent certified public accountants to furnish to the Servicer
and within
such timeframe the Servicer shall furnish to the Trustee, the
Depositor, the
NIMS Insurer and each Rating Agency, a report stating that (i) it
has obtained a
letter of representation regarding certain matters from the
management of the
Servicer which includes an assertion that the Servicer has complied
with certain
minimum residential mortgage loan servicing standards, identified
in either the
Uniform Single Attestation Program for Mortgage Bankers established
by the
Mortgage Bankers Association of America or the Audit Program for
Mortgages
serviced by Freddie Mac, with respect to the servicing of
residential mortgage
loans during the most recently completed fiscal year and (ii) on
the basis of an
examination conducted by such firm in accordance with standards
established by
the American Institute of Certified Public Accountants, such
representation is
fairly stated in all material respects, subject to such exceptions
and other
qualifications that may be appropriate. In rendering its report
such firm may
rely, as to matters relating to the direct servicing of residential
mortgage
loans by Sub-Servicers, upon comparable reports of firms of
independent
certified public accountants rendered on the basis of examinations
conducted in
accordance with the same standards (rendered within one year of
such report)
with respect to those Sub-Servicers. Copies of such statement shall
be provided
by the Trustee to any Certificateholder upon request at the
Servicer's expense,
provided that such statement is delivered by the Servicer to the
Trustee. In the
event such firm of independent certified public accountants
requires the Trustee
to agree to the procedures performed by such firm, the Servicer
shall direct the
Trustee in writing to so agree; it being understood and agreed that
the Trustee
shall deliver such letter of agreement in conclusive reliance upon
the direction
of the Servicer, and the Trustee has not made any independent
inquiry or
investigation as to, and shall have no obligation or liability in
respect of,
the sufficiency, validity or correctness of such procedures. Copies
of such
statement shall be provided by the Trustee to any Certificateholder
upon
request, at the Servicer's expense, provided that such statement is
delivered by
the Servicer to the Trustee.
(b) Delivery of such reports to the Trustee is for informational
purposes only and their receipt of such shall not constitute
constructive notice
of any information contained therein or determinable from
information contained
therein, including the Servicer's compliance with any of its
covenants hereunder
(as to which the Trustee is entitled to rely exclusively on
Officers'
Certificates).
Section 3.21 Access to Certain Documentation and Information
Regarding
the Mortgage Loans.
(a) The Servicer shall provide to the Depositor, the Trustee,
Certificateholders that are federally insured savings and loan
associations, the
Office of Thrift Supervision, the
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Office of the Comptroller of the Currency, the FDIC and the
supervisory agents
and examiners of each of the foregoing (which, in the case of
supervisory agents
and examiners, may be required by applicable state and federal
regulations)
access to the available documentation regarding the Mortgage Loans,
such access
being afforded without charge but only upon reasonable advance
request and
during normal business hours at the offices of the Servicer
designated by it.
(b) The Servicer shall afford the NIMS Insurer, upon reasonable
advance notice, during normal business hours, access to all records
maintained
by the Servicer regarding the Mortgage Loans.
Section 3.22 [Reserved].
Section 3.23 Obligations of the Servicer in Respect of Compensating
Interest.
Not later than the close of business on each Servicer Remittance
Date,
the Servicer shall deliver to the Trustee for deposit in the
Distribution
Account an amount ("Compensating Interest") from its own funds
equal to the
lesser of (A) the aggregate of the Prepayment Interest Shortfalls
on the
Mortgage Loans for the related Distribution Date resulting from
Principal
Prepayments in full on the Mortgage Loans during the portion of the
related
Prepayment Period occurring in the prior calendar month and (B) the
sum of its
aggregate Servicing Fee received in the related Collection Period.
The Servicer
shall apply Compensating Interest to offset any Prepayment Interest
Shortfalls
resulting from Principal Prepayments in full on the Mortgage Loans.
The Servicer
shall not have the right to reimbursement for any amounts remitted
to the
Trustee in respect of Compensating Interest. Such amounts so
remitted shall be
included in the Available Funds and distributed therewith on the
next
Distribution Date. The Servicer shall not be obligated to pay
Compensating
Interest with respect to Relief Act Interest Shortfalls.
Section 3.24 [Reserved].
Section 3.25 Investment of Funds in the Collection Accounts.
(a) The Servicer may direct any depository institution maintaining
one
or more Collection Accounts, to invest the funds in such Collection
Account in
one or more Eligible Investments bearing interest or sold at a
discount, and
maturing, unless payable on demand, (i) no later than the Business
Day
immediately preceding the date on which such funds are required to
be withdrawn
from such account pursuant to this Agreement, if a Person other
than the Trustee
is the obligor thereon, and (ii) no later than the date on which
such funds are
required to be withdrawn from such account pursuant to this
Agreement, if the
Trustee is the obligor thereon or if such investment is managed or
advised by
the Trustee or an Affiliate of the Trustee. All such Eligible
Investments shall
be held to maturity, unless payable on demand. Any investment of
funds in a
Collection Account shall be made in the name of the Trustee or the
Servicer, as
applicable (in its capacity as such) or in the name of a nominee of
the Trustee.
The Trustee shall be entitled to sole possession (except with
respect to
investment direction of funds held in the Collection Accounts) over
each such
investment and the income thereon, and any certificate or other
instrument
evidencing any such investment shall be delivered directly to the
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Trustee or its agent, together with any document of transfer
necessary to
transfer title to such investment to the Trustee or its nominee. In
the event
amounts on deposit in a Collection Account are at any time invested
in an
Eligible Investment payable on demand, the Trustee shall at the
direction of the
Servicer:
(x)
consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Eligible Investment may otherwise mature hereunder in an
amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on
such date; and
(y)
demand payment of all amounts due thereunder promptly upon
determination by a Responsible Officer of the Trustee that
such Eligible Investment would not constitute an Eligible
Investment in respect of funds thereafter on deposit in such
Collection Account.
(b) All income and gain realized from the investment of funds in
the
Collection Accounts shall be for the benefit of the Servicer. The
Servicer shall
deposit in the applicable Collection Account or (to the extent
funds in the
Escrow Account are invested if permitted by applicable law) the
Escrow Account,
as applicable, from its own funds the amount of any loss incurred
in respect of
any such Eligible Investment made with funds in such account
immediately upon
realization of such loss. Funds in the Distribution Account shall
remain
uninvested.
(c) Except as otherwise expressly provided in this Agreement, if
any
default occurs in the making of a payment due under any Eligible
Investment, or
if a default occurs in any other performance required under any
Eligible
Investment, the Trustee may and, subject to Section 8.01 and
Section 8.02(e),
upon the request of the NIMS Insurer or Holders of Certificates
representing
more than 50% of the Voting Rights allocated to any Class of
Certificates, shall
take such action as may be appropriate to enforce such payment or
performance,
including the institution and prosecution of appropriate
proceedings.
Section 3.26 Liability of Servicer; Indemnification.
The Servicer (except the Trustee if it is required to succeed the
Servicer hereunder) indemnifies and holds the Trustee, the
Depositor, the NIMS
Insurer and the Trust Fund harmless against any and all claims,
losses,
penalties, fines, forfeitures, reasonable legal fees and related
costs,
judgments, and any other costs, fees and expenses that the Trustee,
the
Depositor, the NIMS Insurer and the Trust Fund may sustain in any
way related to
the failure of the Servicer to perform its duties and service the
Mortgage Loans
in compliance with the Servicing Standard. The Servicer shall
immediately notify
the Trustee, the NIMS Insurer and the Depositor if a claim is made
that may
result in such claims, losses, penalties, fines, forfeitures, legal
fees or
related costs, judgments, or any other costs, fees and expenses,
and the
Servicer shall assume (with notice to the Trustee) the defense of
any such claim
and pay all expenses in connection therewith, including reasonable
counsel fees,
and promptly pay, discharge and satisfy any judgment or decree
which may be
entered against the Servicer, the Trustee, the Depositor, the NIMS
Insurer
and/or the Trust Fund in respect of such claim. The provisions of
this
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Section 3.26 shall survive the termination of this Agreement and
the payment of
the outstanding Certificates.
Section 3.27 Reports of Foreclosure and Abandonment of Mortgaged
Properties.
Beginning in 2006, the Servicer shall file the reports of
foreclosure
and abandonment of any Mortgaged Property required by Section 6050J
of the Code
with the Internal Revenue Service on or before the due date for any
such report.
Not later than 90 days following the end of each calendar year,
beginning in
2006, the Servicer will deliver an Officer's Certificate to the
Trustee and the
NIMS Insurer certifying its compliance with this Section 3.27. The
reports from
the Servicer shall be in form and substance sufficient to meet the
reporting
requirements imposed by such Section 6050J.
Section 3.28 Protection of Assets.
(a) Except for transactions and activities entered into in
connection
with the securitization that is the subject of this Agreement, the
Trust is not
authorized and has no power to:
(1)
borrow money or issue debt;
(2)
merge with another entity, reorganize, liquidate or sell
assets; or
(3)
engage in any business or activities.
(b) Notwithstanding any prior termination of this Agreement, each
party hereto agrees that, until after one year and one day
following the payment
in full of the last of the Certificates issued hereunder, it shall
not
acquiesce, petition or otherwise invoke or cause the Depositor or
the Trust to
invoke the process of any court or government authority for the
purpose of
commencing or sustaining a case against the Depositor or the Trust
under any
federal or state bankruptcy, insolvency or similar law, or
appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or
other
similar official of the Depositor or the Trust or any substantial
part of the
property of either, or ordering the winding up or liquidation of
the affairs of
the Depositor or the Trust.
Section 3.29 [Reserved]
Section 3.30 [Reserved]
Section 3.31 Periodic Filings.
(a) The Trustee and the Servicer shall reasonably cooperate with
the
Depositor in connection with the Trust's satisfying its reporting
requirements
under the Exchange Act. Without limiting the generality of the
foregoing, the
Trustee shall prepare, or cause to be prepared, on behalf of the
Trust any
monthly Current Reports on Form 8-K (each, a "Monthly Form 8-K")
and Annual
Reports on Form 10-K (each, a "Form 10-K") customary for similar
securities as
required by the Exchange Act and the rules and regulations of the
Securities
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and Exchange Commission thereunder, and the Trustee shall sign
(other than any
Form 10-K) and file (via the Securities and Exchange Commission's
Electronic
Data Gathering and Retrieval System) such Forms on behalf of the
Trust. The
Depositor hereby grants to the Trustee a limited power of attorney
to execute
and file each such document on behalf of the Depositor. Such power
of attorney
shall continue until either the earlier of (i) receipt by the
Trustee from the
Depositor of written termination of such power of attorney and (ii)
the
termination of the Trust. Notwithstanding the foregoing, the
Depositor shall
sign any Form 10-K with respect to which the Depositor signs a
Certification.
(b) Each Monthly Form 8-K shall be filed by the Trustee within 15
days
after each Distribution Date, including a copy of the Distribution
Date
Statement for such Distribution Date as an exhibit thereto. Prior
to March 30th
of each year (or such earlier date as may be required by the
Exchange Act and
the rules and regulations of the Securities and Exchange
Commission), the
Trustee shall file a Form 10-K, in substance as required by
applicable law or
applicable Securities and Exchange Commission staff
interpretations. Such Form
10-K shall include as exhibits the Servicer's annual statement of
compliance
described under Section 3.19 and the accountant's report described
under Section
3.20, in each case, to the extent they have been timely delivered
to the
Trustee. If they are not so timely delivered, the Trustee shall
file an amended
Form 10-K (to the extent permissible) including such documents as
exhibits
reasonably promptly after they are delivered to the Trustee. The
Trustee shall
have no liability with respect to any failure to properly prepare
or file such
periodic reports resulting from or relating to the Trustee's
inability or
failure to obtain any information not resulting from its own
negligence, willful
misconduct or bad faith. The Form 10-K shall also include a
certification in the
form attached hereto as Exhibit O (the "Certification"), which
shall be signed
by a senior officer of the Depositor in charge of securitization.
The Depositor
shall deliver the Certification to the Trustee prior to March 15th
of each year
in which a Form 10-K is required to be filed with respect to the
Trust. The
Trustee, the Depositor and the Servicer shall reasonably cooperate
to enable the
Securities and Exchange Commission requirements with respect to the
Trust to be
met in the event that the Securities and Exchange Commission issues
additional
interpretive guidelines or promulgates rules or regulations, or in
the event of
any other change of law that would require reporting arrangements
or the
allocation of responsibilities with respect thereto, as described
in this
Section 3.31, to be conducted or allocated in a different manner.
(c) Not later than 15 calendar days prior to the latest date on
which
the Form 10-K may be timely filed each year, (i) the Trustee shall
sign and
deliver to the Depositor a certification (in the form attached
hereto as Exhibit
P-1) for the benefit of the Depositor and its officers, directors
and Affiliates
(provided, however, that the Trustee shall not undertake an
analysis of the
accountant's report attached as an exhibit to the Form 10-K) and
(ii) the
Servicer shall sign and deliver to the Depositor a certification
(in the form
attached hereto as Exhibit P-2) for the benefit of the Depositor
and its
officers, directors and Affiliates. In addition, (i) the Trustee
shall also
indemnify and hold harmless the Depositor, each Person, if any, who
"controls"
the Depositor within the meaning of the 1933 Act, and its officers,
directors
and Affiliates from and against any losses, damages, penalties,
fines,
forfeitures, reasonable and necessary legal fees and related costs,
judgments
and other costs and expenses arising out of or based upon any
inaccuracy in the
certification provided by the Trustee pursuant to this Section
3.31(c), any
breach of the Trustee's obligations under this Section 3.31(c) or
the Trustee's
negligence, bad faith or willful misconduct in connection therewith
and (ii) the
Servicer shall
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indemnify and hold harmless the Depositor, the Trustee, each
Person, if any, who
"controls" the Depositor or the Trustee within the meaning of the
1933 Act, and
their respective officers, directors and Affiliates from and
against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and
related costs, judgments and other costs and expenses arising out
of or based
upon any inaccuracy in the certification provided by the Servicer
pursuant to
this Section 3.31(c), any breach of the Servicer's obligations
under this
Section 3.31(c) or the Servicer's negligence, bad faith or willful
misconduct in
connection therewith. If the indemnification provided for herein is
unavailable
or insufficient to hold harmless the Depositor, each Person, if
any, who
"controls" the Depositor within the meaning of the 1933 Act, and
its officers,
directors and Affiliates, then (i) the Trustee agrees that it shall
contribute
to the amount paid or payable by the Depositor, its officers,
directors or
Affiliates as a result of the losses, claims, damages or
liabilities of the
Depositor, its officers, directors or Affiliates in such proportion
as is
appropriate to reflect the relative fault of the Depositor and its
officers,
directors and Affiliates on the one hand and the Trustee on the
other in
connection with a breach of the Trustee's obligations under this
Section 3.31(c)
or the Trustee's negligence, bad faith or willful misconduct in
connection
therewith and (ii) the Servicer agrees that it shall contribute to
the amount
paid or payable by the Depositor and/or the Trustee, their
respective officers,
directors or Affiliates as a result of the losses, claims, damages
or
liabilities of the Depositor and/or the Trustee, their respective
officers,
directors or Affiliates in such proportion as is appropriate to
reflect the
relative fault of the Depositor or the Trustee, as the case may be,
and their
respective officers, directors and Affiliates on the one hand and
the Servicer
on the other in connection with a breach of the Servicer's
obligations under
this Section 3.31(c) or the Servicer's negligence, bad faith or
willful
misconduct in connection therewith. The Servicer hereby
acknowledges and agrees
that the Depositor and the Trustee are relying on the Servicer's
performance of
its obligations under Sections 3.19 and 3.20 in order to perform
their
respective obligations under this Section 3.31.
(d) Upon any filing with the Securities and Exchange Commission,
the
Trustee shall promptly deliver to the Depositor a copy of any such
executed
report, statement or information.
(e) The obligations set forth in paragraphs (a) through (d) of this
Section shall only apply with respect to periods for which the
Trustee is
obligated to file reports on Form 8-K or 10-K pursuant to paragraph
(b) of this
Section. Prior to January 30th of the first year in which the
Trustee is able to
do so, the Trustee shall prepare, execute and file with the
Securities and
Exchange Commission a Form 15 Suspension Notification with respect
to the Trust,
and thereafter there shall be no further obligations under
paragraphs (a)
through (d) of this Section commencing with the calendar year in
which the Form
15 is filed (other than the obligations to be performed in such
calendar year
that relate back to the prior calendar year).
(f) If the Securities and Exchange Commission issues additional
interpretative guidance or promulgates additional rules or
regulations, or if
other changes in applicable law occur, which would require the
reporting
arrangements, or the allocation of responsibilities with respect
thereto,
described in this Section 3.31, to be conducted differently than as
described,
the Depositor, the Servicer and the Trustee will reasonably
cooperate to amend
the provisions of this Section 3.31 in order to comply with such
amended
reporting requirements and such amendment of this Section 3.31. Any
such
amendment shall be made in accordance with Section 11.01
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without the consent of the Certificateholders, and may result in a
change in the
reports filed by the Trustee on behalf of the Trust under the
Exchange Act.
Notwithstanding the foregoing, none of the Depositor, the Servicer
or the
Trustee shall be obligated to enter into any amendment pursuant to
this Section
3.31 that adversely affects its obligations and immunities under
this Agreement.
Section 3.32 Credit Reporting; Gramm-Leach-Bliley Act.
(a) With respect to each Mortgage Loan, the Servicer agrees to
fully
furnish, in accordance with Fannie Mae Guide Announcement 95-19 and
the Fair
Credit Reporting Act and its implementing regulations, accurate and
complete
information (e.g., favorable and unfavorable) on its borrower
credit files to
Equifax, Experian and TransUnion Credit Information Company (three
of the credit
repositories) on a monthly basis and agrees it shall report one of
the following
statuses each month as follows: new origination, current,
delinquent (30-, 60-,
90-days, etc.), foreclosed, or charged-off.
(b) The Servicer shall comply with Title V of the
Gramm-Leach-Bliley
Act of 1999 and all applicable regulations promulgated thereunder,
relating to
the Mortgage Loans and the related borrowers and shall provide all
required
notices thereunder.
Section 3.33 Advance Facility.
(a) The Servicer and/or the Trustee on behalf of the Trust Fund, in
either case, with the consent of the NIMS Insurer and the Servicer
in the case
of the Trustee, is hereby authorized to enter into a facility (an
"Advance
Facility") with any Person (an "Advancing Person") (1) under which
the Servicer
sells, assigns or pledges to the Advancing person the Servicer's
rights under
this Agreement to be reimbursed for any Advances and/or Servicing
Advances or
(2) which provides that the Advancing Person may fund Advances
and/or Servicing
Advances to the Trust Fund under this Agreement, although no such
facility shall
reduce or otherwise affect the Servicer's obligation to fund such
Advances
and/or Servicing Advances. If the Servicer enters into such an
Advance Facility
pursuant to this Section 3.33, upon reasonable request of the
Advancing Person,
the Trustee shall execute a letter of acknowledgment, confirming
its receipt of
notice of the existence of such Advance Facility. To the extent
that an
Advancing Person funds any Advance or any Servicing Advance or is
assigned the
right to be reimbursed for any Advance or Servicing Advance and
provides the
Trustee with notice acknowledged by the Servicer that such
Advancing Person is
entitled to reimbursement directly from the Trustee pursuant to the
terms of the
Advance Facility, such Advancing Person shall be entitled to
receive
reimbursement pursuant to this Agreement for such amount to the
extent provided
in Section 3.33(b). Such notice from the Advancing Person must
specify the
amount of the reimbursement, the Section of this Agreement that
permits the
applicable Advance or Servicing Advance to be reimbursed and the
section(s) of
the Advance Facility that entitle the Advancing Person to request
reimbursement
from the Trustee, rather than the Servicer, and include the
Servicer's
acknowledgment thereto or proof of an Event of Default under the
Advance
Facility. The Trustee shall have no duty or liability with respect
to any
calculation of any reimbursement to be paid to an Advancing Person
and shall be
entitled to rely without independent investigation on the Advancing
Person's
notice provided pursuant to this Section 3.33. An Advancing Person
whose
obligations hereunder are limited to the funding of Advances
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and/or Servicing Advances shall not be required to meet the
qualifications of a
Servicer or a Sub-Servicer pursuant to Section 6.06 or Section 7.02
and shall
not be deemed to be a Sub-Servicer under this Agreement. If the
terms of a
facility proposed to be entered into with an Advancing Person by
the Trust Fund
would not materially and adversely affect the interests of any
Certificateholder, then the NIMS Insurer shall not withhold its
consent to the
Trust Fund's entering such facility.
(b) If, pursuant to the terms of the Advance Facility, an Advancing
Person is entitled to reimbursement directly from the Trustee, then
the Servicer
shall not reimburse itself therefor under Section 3.05(b), Section
3.05(c) or
Section 3.05(d) prior to the remittance to the Trust Fund, but
instead the
Servicer shall include such amounts in the applicable remittance to
the Trustee
made pursuant to Section 3.04(b) to the extent of amounts on
deposit in the
Collection Account on the related Servicer Remittance Date. The
Trustee is
hereby authorized to pay to the Advancing Person reimbursements for
Advances and
Servicing Advances from the Distribution Account, to the extent
permitted under
the terms of the Advance Facility, to the same extent the Servicer
would have
been permitted to reimburse itself for such Advances and/or
Servicing Advances
in accordance with Section 3.05(b), Section 3.05(c) or Section
3.05(d), as the
case may be, had the Servicer itself funded such Advance or
Servicing Advance.
The Trustee is hereby authorized to pay directly to the Advancing
Person such
portion of the Servicing Fee as the parties to any Advance Facility
agree to in
writing delivered to the Trustee. An Advance Facility may provide
that the
Servicer will otherwise cause the remittance of Advance and/or
Servicing Advance
reimbursement amounts to the Advancing Person, in which case the
foregoing
sentences in this Section 3.33(b) shall not apply.
(c) All Advances and Servicing Advances made pursuant to the terms
of
this Agreement shall be deemed made and shall be reimbursed on a
"first in first
out" (FIFO) basis.
(d) In the event the Servicer is terminated pursuant to Section
7.01,
the Advancing Person shall succeed to the terminated Servicer's
right of
reimbursement set forth in Section 7.02(c) to the extent of such
Advancing
Person's financing of or receipt of assignment or pledge of the
right to be
reimbursed for Advances or Servicing Advances hereunder then
remaining
unreimbursed.
(e) None of the Trust Fund, any party to this Agreement or any
other
Person shall have any right or claim (including without limitation
any right of
offset or recoupment) to any amounts allocable under this Agreement
to the
reimbursement of Advances or Servicing Advances that have been
assigned,
conveyed or pledged to an Advancing Person, or that relate to
Advances or
Servicing Advances that were funded by an Advancing Person.
(f) Any amendment to this Section 3.33 or to any other provision of
this Agreement that may be necessary or appropriate to effect the
terms of an
Advance Facility as described generally in this Section 3.33,
including
amendments to add provisions relating to a successor servicer, may
be entered
into by the Trustee and the Servicer without the consent of any
Certificateholder but with the consent of the NIMS Insurer and (i)
written
confirmation from each Rating Agency that the amendment shall not
result in the
reduction or withdrawal of the then-current ratings of any
outstanding Class of
Certificates or any other notes secured by collateral which
includes all or a
portion of the Class CE Certificates, the Class P Certificates
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and/or the Residual Certificates, notwithstanding anything to the
contrary in
this Agreement and (ii) an Opinion of Counsel that such amendment
will not
result in an Adverse REMIC Event.
ARTICLE IV
FLOW OF FUNDS
Section 4.01 Interest Distributions.
On each Distribution Date, the Trustee shall withdraw from the
Distribution Account the Interest Remittance Amount and apply it in
the
following order of priority (based upon the Mortgage Loan
information provided
to it in the Remittance Report, upon which the Trustee may
conclusively rely),
and the calculations required to be made by the Trustee, to the
extent
available:
(i) to the Trustee, the Trustee Fee for such Distribution Date;
(ii) concurrently, to the Class A Certificates, pro rata, the
Accrued
Certificate Interest on each such Class for such Distribution Date;
(iii) concurrently, to the Class A Certificates, pro rata, the
Interest Carry Forward Amount on each such Class for such
Distribution
Date;
(iv) to the Class M-1 Certificates, the Accrued Certificate
Interest
thereon for such Distribution Date;
(v) to the Class M-2 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date;
(vi) to the Class M-3 Certificates, the Accrued Certificate
Interest
thereon for such Distribution Date;
(vii) to the Class M-4 Certificates, the Accrued Certificate
Interest
thereon for such Distribution Date;
(viii) to the Class M-5 Certificates, the Accrued Certificate
Interest
thereon for such Distribution Date;
(ix) to the Class M-6 Certificates, the Accrued Certificate
Interest
thereon for such Distribution Date;
(x) to the Class B-1 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date;
(xi) to the Class B-2 Certificates, the Accrued Certificate
Interest
thereon for such Distribution Date; and
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(xii) the amount, if any, of the Interest Remittance Amount
remaining
after application with respect to the priorities set forth above
will be
applied as described under Section 4.02(b) hereof.
On any Distribution Date, any shortfalls resulting from Prepayment
Interest
Shortfalls not covered by Compensating Interest payments made by
the Servicer or
from the application of the Relief Act or similar state laws will
be allocated
as a reduction to the Accrued Certificate Interest for the Offered
Certificates
and Class B Certificates on a pro rata basis based on the
respective amounts of
interest accrued on those Certificates for that Distribution Date.
The holders
of the Offered Certificates and Class B Certificates will not be
entitled to
reimbursement on future Distribution Dates of any such Prepayment
Interest
Shortfalls or Relief Act Interest Shortfalls following their
allocation to such
Certificates.
Section 4.02 Distributions of Principal and Monthly Excess Cashflow
Amounts.
(a) On each Distribution Date, the Trustee shall make the following
distributions in the following order of priority (based upon the
Mortgage Loan
information provided to it in the Remittance Report and the
calculations
required to be made by the Trustee), to the extent of the Principal
Distribution
Amount:
(i) before the Stepdown Date or with respect to which a Trigger
Event
is in effect, sequentially, as follows:
first, to the Class A-6 Certificates, up to the Class A-6 Lockout
Distribution Percentage of the Senior Principal Distribution Amount
for
such Distribution Date;
second, to the Class A-1A and Class A-1B Certificates, pro rata,
up to the Senior Principal Distribution Amount remaining after
priority
first above, until the aggregate Certificate Principal Balance
thereof has
been reduced to zero;
third, to the Class A-2 Certificates, up to the Senior Principal
Distribution Amount remaining after priority first and second
above, until
the Certificate Principal Balance thereof has been reduced to zero;
fourth, to the Class A-3 Certificates, up to the Senior Principal
Distribution Amount remaining after priority first, second and
third above,
until the Certificate Principal Balance thereof has been reduced to
zero;
fifth, to the Class A-4 Certificates, up to the Senior Principal
Distribution Amount remaining after priority first, second, third
and
fourth above, until the Certificate Principal Balance thereof has
been
reduced to zero;
sixth, to the Class A-5 Certificates, up to the Senior Principal
Distribution Amount remaining after priority first, second, third,
fourth
and fifth above, until the Certificate Principal Balance thereof
has been
reduced to zero;
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seventh, to the Class A-6 Certificates, up to the Senior
Principal Distribution Amount remaining after priority first,
second,
third, fourth, fifth and sixth above, until the Certificate
Principal
Balance thereof has been reduced to zero;
eighth, to the Class M-1 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
ninth, to the Class M-2 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
tenth, to the Class M-3 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
eleventh, to the Class M-4 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
twelfth, to the Class M-5 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
thirteenth, to the Class M-6 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
fourteenth, to the Class B-1 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
fifteenth, to the Class B-2 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; and
sixteenth, any remaining Principal Distribution Amount will be
distributed as part of the Monthly Excess Cashflow Amount as set
forth in
Section 4.02(b).
(ii) on or after the Stepdown Date and as long as a Trigger Event
is
not in effect:
first, to the Class A-6 Certificates, up to the Class A-6 Lockout
Distribution Percentage of the Senior Principal Distribution Amount
for
such Distribution Date;
second, to the Class A-1A and Class A-1B Certificates, pro rata,
up to the Senior Principal Distribution Amount remaining after
priority
first above, until the aggregate Certificate Principal Balance
thereof has
been reduced to zero;
third, to the Class A-2 Certificates, up to the Senior Principal
Distribution Amount remaining after priority first and second
above, until
the Certificate Principal Balance thereof has been reduced to zero;
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fourth, to the Class A-3 Certificates, up to the Senior Principal
Distribution Amount remaining after priority first, second and
third above,
until the Certificate Principal Balance thereof has been reduced to
zero;
fifth, to the Class A-4 Certificates, up to the Senior Principal
Distribution Amount remaining after priority first, second, third
and
fourth above, until the Certificate Principal Balance thereof has
been
reduced to zero;
sixth, to the Class A-5 Certificates, up to the Senior Principal
Distribution Amount remaining after priority first, second, third,
fourth
and fifth above, until the Certificate Principal Balance thereof
has been
reduced to zero;
seventh, to the Class A-6 Certificates, up to the Senior
Principal Distribution Amount remaining after priority first,
second,
third, fourth, fifth and sixth above, until the Certificate
Principal
Balance thereof has been reduced to zero;
eighth, to the Class M-1 Certificates, up to the Class M-1
Principal Distribution Amount, until the Certificate Principal
Balance
thereof has been reduced to zero;
ninth, to the Class M-2 Certificates, up to the Class M-2
Principal Distribution Amount, until the Certificate Principal
Balance
thereof has been reduced to zero;
tenth, to the Class M-3 Certificates, up to the Class M-3
Principal Distribution Amount, until the Certificate Principal
Balance
thereof has been reduced to zero;
eleventh, to the Class M-4 Certificates, up to the Class M-4
Principal Distribution Amount, until the Certificate Principal
Balance
thereof has been reduced to zero;
twelfth, to the Class M-5 Certificates, up to the Class M-5
Principal Distribution Amount, until the Certificate Principal
Balance
thereof has been reduced to zero;
thirteenth, to the Class M-6 Certificates, up to the Class M-6
Principal Distribution Amount, until the Certificate Principal
Balance
thereof has been reduced to zero;
fourteenth, to the Class B-1 Certificates, up to the Class B-1
Principal Distribution Amount, until the Certificate Principal
Balance
thereof has been reduced to zero;
fifteenth, to the Class B-2 Certificates, up to the Class B-2
Principal Distribution Amount, until the Certificate Principal
Balance
thereof has been reduced to zero; and
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sixteenth, any remaining Principal Distribution Amount will be
distributed as part of the Monthly Excess Cashflow Amount as set
forth in
Section 4.02(b).
(b) On each Distribution Date, any Monthly Excess Cashflow Amount
shall be distributed, to the extent available, in the following
order of
priority on such Distribution Date:
(i) to pay any remaining Accrued Certificate Interest for such
Distribution Date, pro rata, on each Class of Class A Certificates;
(ii) to pay any Interest Carry Forward Amount for such Distribution
Date, pro rata, for each Class of Class A Certificates;
(iii) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date on the Class M-1 Certificates;
(iv) to pay the remaining Interest Carry Forward Amount, if any,
for
the Class M-1 Certificates for such Distribution Date;
(v) to pay the Class M-1 Realized Loss Amortization Amount for such
Distribution Date;
(vi) to pay any remaining unpaid Accrued Certificate Interest for
such
Distribution Date on the Class M-2 Certificates;
(vii) to pay the remaining Interest Carry Forward Amount, if any,
for
the Class M-2 Certificates for such Distribution Date;
(viii) to pay the Class M-2 Realized Loss Amortization Amount for
such
Distribution Date;
(ix) to pay any remaining unpaid Accrued Certificate Interest for
such
Distribution Date on the Class M-3 Certificates;
(x) to pay the remaining Interest Carry Forward Amount, if any, for
the Class M-3 Certificates for such Distribution Date;
(xi) to pay the Class M-3 Realized Loss Amortization Amount for
such
Distribution Date;
(xii) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date on the Class M-4 Certificates;
(xiii) to pay the remaining Interest Carry Forward Amount, if any,
for
the Class M-4 Certificates for such Distribution Date;
(xiv) to pay the Class M-4 Realized Loss Amortization Amount for
such
Distribution Date;
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(xv) to pay any remaining unpaid Accrued Certificate Interest for
such
Distribution Date on the Class M-5 Certificates;
(xvi) to pay the remaining Interest Carry Forward Amount, if any,
for
the Class M-5 Certificates for such Distribution Date;
(xvii) to pay the Class M-5 Realized Loss Amortization Amount for
such
Distribution Date;
(xviii) to pay any remaining unpaid Accrued Certificate Interest
for
such Distribution Date on the Class M-6 Certificates;
(xix) to pay the remaining Interest Carry Forward Amount, if any,
for
the Class M-6 Certificates for such Distribution Date;
(xx) to pay the Class M-6 Realized Loss Amortization Amount for
such
Distribution Date;
(xxi) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date on the B-1 Certificates;
(xxii) to pay the remaining Interest Carry Forward Amount, if any,
for
the Class B-1 Certificates for such Distribution Date;
(xxiii) to pay the Class B-1 Realized Loss Amortization Amount for
such Distribution Date;
(xxiv) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date on the B-2 Certificates;
(xxv) to pay the remaining Interest Carry Forward Amount, if any,
for
the Class B-2 Certificates for such Distribution Date;
(xxvi) to pay the Class B-2 Realized Loss Amortization Amount for
such
Distribution Date;
(xxvii) to the Reserve Account, any payment in respect of Cap
Carryover Amounts for the Class A-1A Certificates;
(xxviii) to the Class A-1A Certificates, any Cap Carryover Amount
for
such Class; and
(xxix) to the Class CE Certificates, up to the Class CE
Distributable
Amount for such Distribution Date.
On each Distribution Date, there shall be distributed to the Holder
of
the Class R Certificate in respect of the Class R-2 Interest, any
remaining
amount in the Distribution
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Account on such date after the application pursuant to Sections
4.01, 4.02(a)
and 4.02(b)(i)-(xxix).
(c) On each Distribution Date, the Trustee shall withdraw any
amounts
then on deposit in the Distribution Account that represent
Prepayment Charges
collected by the Servicer in connection with the Principal
Prepayment of any of
the Mortgage Loans, any Servicer Prepayment Charge Payment Amount
and shall
distribute such amounts to the Holders of the Class P Certificates.
Any such
amounts in respect of Servicer Prepayment Charge Payment Amounts
shall be
treated as having been distributed to the Holders of the Class P
Certificates
from the Grantor Trust. Such distributions shall not be applied to
reduce the
Certificate Principal Balance of the Class P Certificates. On the
first
Distribution Date following the expiration of the latest prepayment
term with
respect to the related Mortgage Loans and if funds are available on
such date,
the Class P Certificates shall be entitled to its outstanding
Certificate
Principal Balance prior to any distributions of Monthly Excess
Cashflow Amounts
pursuant to Section 4.02(b) on such Distribution Date.
(d) Any amounts distributed to the Class A-1A Certificates in
respect
of interest pursuant to Section 4.02(b)(xxviii) which constitute
Cap Carryover
Amounts (excluding amounts paid under the Yield Maintenance
Agreement) shall
first be deemed distributed by REMIC 2 as a distribution to the
Class CE
Certificates, and then distributed to the Class A-1A Certificates
from the
Grantor Trust as payments on notional principal contracts in the
nature of cap
contracts. Any remaining amount with respect to the Class CE
Certificates or any
remaining Yield Maintenance Agreement Payments shall be treated as
having been
distributed to the Holders of the Class CE Certificates from the
Grantor Trust.
(e) On each Distribution Date, following the foregoing
distributions,
an amount equal to the amount of Subsequent Recoveries deposited
into the
Collection Account pursuant to Section 3.05 and included in the
Available Funds
for such Distribution Date shall be applied to increase the
Certificate
Principal Balance of the Class of Class M or Class B Certificates
then
outstanding with the highest distribution priority up to the extent
of the
Applied Realized Loss Amount previously allocated to that Class of
Certificates
pursuant to Section 4.03. An amount equal to the amount of any
remaining
Subsequent Recoveries shall be applied to increase the Certificate
Principal
Balance of the Class of Class M or Class B Certificates then
outstanding with
the next highest distribution priority, up to the amount of the
Applied Realized
Loss Amount previously allocated to that Class of certificates
pursuant to
Section 4.03, and so on. Holders of such Certificates shall not be
entitled to
any distribution in respect of interest on the amount of such
increases for any
Interest Accrual Period preceding the Distribution Date on which
such increase
occurs. Any such increases shall be applied to the Certificate
Principal Balance
of each Certificate of such Class in accordance with its respective
Percentage
Interest.
(f) On each Distribution Date, Unpaid Realized Loss Amounts on the
Class M and Class B Certificates will be reduced by the amount of
any Subsequent
Recoveries received during the related Prepayment Period in the
same order as
Realized Loss Amortization Amounts are paid to the Class M and
Class B
Certificates pursuant to Section 4.02(b) above.
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Section 4.03 Allocation of Losses.
An Applied Realized Loss Amount for a Distribution Date will be
allocated first against the Class CE Certificates, until the
Notional Amount
thereof is reduced to zero and then against the Class B-2, Class
B-1, Class M-6,
Class M-5, Class M-4, Class M-3, Class M-2 and Class M-1
Certificates, in that
order and until the respective Certificate Principal Balances
thereof are
reduced to zero.
Section 4.04 Method of Distribution.
The Trustee shall make distributions in respect of a Distribut
