EXHIBIT 4.1
-----------
6
<PAGE>
EXECUTION COPY
==============================================================================
BOND SECURITIZATION, L.L.C.,
Depositor
CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC,
Seller
LITTON LOAN SERVICING LP,
Servicer
and
U.S. BANK NATIONAL ASSOCIATION,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of October 1, 2005
2005-CB7 Trust
C-BASS Mortgage Loan Asset-Backed Certificates, Series 2005-CB7
==============================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S>
<C>
<C>
ARTICLE I
DEFINITIONS........................................................................6
Section 1.01 Defined
Terms..........................................................6
-------------
Section 1.02
Accounting............................................................48
----------
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 or Substitution of Mortgage Loans by the
Seller............52
----------------------------------------------------------
Section 2.04
Representations and Warranties of the Seller with Respect to
-------------------------------------------------------------
the Mortgage
Loans....................................................54
------------------
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.............................................................58
---------
Section 2.08
Representations and Warranties of the
Seller..........................59
--------------------------------------------
Section 2.09 Covenants
of the Seller...............................................60
-----------------------
ARTICLE III ADMINISTRATION AND SERVICING OF
THE TRUST FUND..................................61
Section 3.01 Servicer
to Act as Servicer...........................................61
---------------------------
Section 3.02
Collection of Mortgage Loan
Payments..................................62
------------------------------------
Section 3.03
Realization Upon Defaulted Mortgage
Loans.............................63
-----------------------------------------
Section 3.04
Collection Account and Distribution
Account...........................64
-------------------------------------------
Section 3.05 Permitted
Withdrawals From the Collection Account.....................65
-------------------------------------------------
Section 3.06
Establishment of Escrow Account; Deposits in Escrow
Account...........66
-----------------------------------------------------------
Section 3.07 Permitted
Withdrawals From Escrow Account.............................67
-----------------------------------------
Section 3.08 Payment
of Taxes, Insurance and Other Charges; Collections
-----------------------------------------------------------
Thereunder............................................................67
----------
Section 3.09 Transfer
of Accounts..................................................68
--------------------
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<PAGE>
TABLE OF CONTENTS
(continued)
Page
Section 3.10
Maintenance of Hazard
Insurance.......................................68
-------------------------------
Section 3.11
Maintenance of Mortgage Impairment Insurance
Policy...................69
---------------------------------------------------
Section 3.12 Fidelity
Bond, Errors and Omissions Insurance.........................69
---------------------------------------------
Section 3.13 Title,
Management and Disposition of REO Property and Certain
--------------------------------------------------------------
Delinquent Mortgage
Loans.............................................70
-------------------------
Section 3.14
Due-on-Sale Clauses; Assumption and Substitution
Agreements...........71
-----------------------------------------------------------
Section 3.15
Notification of
Adjustments...........................................72
---------------------------
Section 3.16 Optional
Purchases of Mortgage Loans by Servicer......................72
------------------------------------------------
Section 3.17 Trustee
to Cooperate; Release of
Files................................73
--------------------------------------
Section 3.18 Servicing
Compensation................................................74
----------------------
Section 3.19 Annual
Statement as to
Compliance.....................................74
---------------------------------
Section 3.20
Annual Independent
Certified Public Accountants' Reports..............75
--------------------------------------------------------
Section 3.21 Access to
Certain Documentation and Information Regarding the
--------------------------------------------------------------
Mortgage
Loans........................................................75
--------------
Section 3.22
Reserved..............................................................75
--------
Section 3.23
Obligations of the Servicer in Respect of Compensating
Interest.......75
---------------------------------------------------------------
Section 3.24
Obligations of the Servicer in Respect of Mortgage Interest
------------------------------------------------------------
Rates and Monthly
Payments............................................76
--------------------------
Section 3.25
Investment of Funds in the Collection Account and the
------------------------------------------------------
Distribution
Account..................................................76
--------------------
Section 3.26 Liability
of Servicer; Indemnification................................77
--------------------------------------
Section 3.27 Reports
of Foreclosure and Abandonment of Mortgaged
Properties........78
--------------------------------------------------------------
Section 3.28
Protection of
Assets..................................................78
--------------------
Section 3.29 Periodic
Filings......................................................78
----------------
Section 3.30 Advance
Facility......................................................80
----------------
ARTICLE IV FLOW OF
FUNDS....................................................................82
Section 4.01 Interest
Distributions................................................82
----------------------
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<PAGE>
TABLE OF CONTENTS
(continued)
Page
Section 4.02
Distributions of Principal and Monthly Excess Cashflow
Amounts........83
--------------------------------------------------------------
Section 4.03
Allocation of
Losses..................................................91
--------------------
Section 4.04 Method of
Distribution................................................91
----------------------
Section 4.05
Distributions on Book-Entry
Certificates..............................91
----------------------------------------
Section 4.06
Statements............................................................92
----------
Section 4.07
Remittance Reports;
Advances..........................................94
----------------------------
Section 4.08 Basis
Risk Reserve
Fund...............................................96
-----------------------
Section 4.09 REMIC
Distributions...................................................97
-------------------
ARTICLE V THE
CERTIFICATES.................................................................100
Section 5.01 The
Certificates.....................................................100
----------------
Section 5.02
Registration of Transfer and Exchange of
Certificates................101
-----------------------------------------------------
Section 5.03
Mutilated, Destroyed, Lost or Stolen
Certificates....................106
-------------------------------------------------
Section 5.04 Persons
Deemed
Owners................................................106
---------------------
Section 5.05
Appointment of Paying
Agent..........................................106
---------------------------
ARTICLE VI THE SELLER, THE SERVICER AND THE
DEPOSITOR......................................107
Section 6.01 Liability
of the Seller, the Servicer and the Depositor..............107
-------------------------------------------------------
Section 6.02 Merger or
Consolidation of, or Assumption of the Obligations
-------------------------------------------------------------
of, the Seller, the Servicer or the
Depositor........................107
---------------------------------------------
Section 6.03
Limitation on Liability of the Servicer and
Others...................107
--------------------------------------------------
Section 6.04 Servicer
Not to Resign...............................................108
----------------------
Section 6.05
Delegation of
Duties.................................................108
--------------------
ARTICLE VII
DEFAULT........................................................................109
Section 7.01 Servicer
Events of Termination.......................................109
------------------------------
Section 7.02 Trustee
to Act; Appointment of
Successor.............................110
----------------------------------------
Section 7.03 Waiver of
Defaults...................................................111
------------------
Section 7.04
Notification to
Certificateholders...................................112
----------------------------------
- iii -
<PAGE>
TABLE OF CONTENTS
(continued)
Page
Section 7.05
Survivability of
Servicer Liabilities................................112
-------------------------------------
ARTICLE VIII THE
TRUSTEE...................................................................112
Section 8.01 Duties of
Trustee....................................................112
-----------------
Section 8.02 Certain
Matters Affecting the
Trustee................................113
-------------------------------------
Section 8.03 Trustee
Not Liable for Certificates or Mortgage
Loans................114
-----------------------------------------------------
Section 8.04 Trustee
May Own
Certificates.........................................115
----------------------------
Section 8.05 Seller to
Pay Trustee Fees and Expenses..............................115
---------------------------------------
Section 8.06
Eligibility Requirements for
Trustee.................................116
------------------------------------
Section 8.07
Resignation or Removal of
Trustee....................................116
---------------------------------
Section 8.08 Successor
Trustee....................................................117
-----------------
Section 8.09 Merger or
Consolidation of Trustee...................................117
----------------------------------
Section 8.10
Appointment of Co-Trustee or Separate
Trustee........................117
---------------------------------------------
Section 8.11
Limitation of
Liability..............................................118
-----------------------
Section 8.12 Trustee
May Enforce Claims Without Possession of
Certificates........119
-------------------------------------------------------------
Section 8.13 Suits for
Enforcement................................................119
---------------------
Section 8.14 Waiver of
Bond Requirement...........................................119
--------------------------
Section 8.15 Waiver of
Inventory, Accounting and Appraisal Requirement............119
---------------------------------------------------------
Section 8.16
Compliance with National Housing Act of
1934.........................119
--------------------------------------------
ARTICLE IX REMIC AND GRANTOR TRUST
ADMINISTRATION..........................................120
Section 9.01 REMIC
Administration.................................................120
--------------------
Section 9.02
Prohibited Transactions and
Activities...............................123
--------------------------------------
Section 9.03
Indemnification with Respect to Certain Taxes and Loss of REMIC
----------------------------------------------------------------
Status...............................................................123
------
Section 9.04 REO
Property.........................................................123
------------
Section 9.05 Grantor
Trust
Administration.........................................124
----------------------------
ARTICLE X
TERMINATION......................................................................124
iv
<PAGE>
TABLE OF CONTENTS
(continued)
Page
Section 10.01
Termination..........................................................124
-----------
Section 10.02 Additional Termination
Requirements..................................126
-----------------------------------
ARTICLE XI MISCELLANEOUS
PROVISIONS........................................................127
Section 11.01
Amendment............................................................127
---------
Section 11.02 Recordation of Agreement;
Counterparts...............................128
--------------------------------------
Section 11.03 Limitation on Rights of
Certificateholders...........................128
------------------------------------------
Section 11.04 Governing Law;
Jurisdiction..........................................129
---------------------------
Section 11.05
Notices..............................................................129
-------
Section 11.06 Severability of
Provisions...........................................129
--------------------------
Section 11.07 Article and Section
References.......................................129
------------------------------
Section 11.08 Notice to the Rating
Agencies........................................130
-----------------------------
Section 11.09 Further
Assurances...................................................130
------------------
Section 11.10 Benefits of
Agreement................................................131
---------------------
Section 11.11 Acts of
Certificateholders...........................................131
--------------------------
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</TABLE>
<PAGE>
EXHIBITS
Exhibit A-1 Form of
Class AF-1 Certificates
Exhibit A-2 Form of
Class AF-2 Certificates
Exhibit A-3 Form of
Class AF-3 Certificates
Exhibit A-4 Form of
Class AF-4 Certificates
Exhibit B-1-1 Form of Class B-1
Certificates (144A)
Exhibit B-1-2 Form of Class B-1
Certificates (Regulation S)
Exhibit B-2-1 Form of Class B-2
Certificates (144A)
Exhibit B-2-2 Form of Class B-2
Certificates (Regulation S)
Exhibit B-3-1 Form of Class B-3
Certificates (144A)
Exhibit B-3-2 Form of Class B-3
Certificates (Regulation S)
Exhibit B-4-1 Form of Class B-4
Certificates (144A)
Exhibit B-4-2 Form of Class B-4
Certificates (Regulation S)
Exhibit B-5-1 Form of Class B 5
Certificates (144A)
Exhibit B-5-2 Form of Class B 5
Certificates (Regulation S)
Exhibit C-1-1 Form of Class R
Certificate
Exhibit C-1-2 Form of Class R-X
Certificates
Exhibit C-2 Form of
Class M-1 Certificates
Exhibit C-3 Form of
Class M-2 Certificates
Exhibit C-4 Form of
Class M-3 Certificates
Exhibit C-5 Form of
Class M-4 Certificates
Exhibit C-6 Form of
Class M-5 Certificates
Exhibit C-7 Form of
Class M-6 Certificates
Exhibit C-8 Form of
Class X Certificates
Exhibit C-9 Form of
Class N Certificates
Exhibit D
Mortgage Loan Schedule
Exhibit E
Form of Request for Release of Documents
Exhibit F-1 Form of
Custodian's Initial Certification
Exhibit F-2 Form of
Custodian'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
Forms of Investment Letters
Exhibit K
Form of Residual Certificate Transfer Affidavit
Exhibit L
Form of Transferor Certificate
Exhibit M
Monthly Information Provided by Servicer
Exhibit N
Form of Certification to be Provided with Form 10-K
Exhibit O
Form of Certification to be Provided by Trustee to the Servicer
Exhibit P
Form of Cap Contract
Exhibit Q
Form of Power of Attorney
Exhibit R
Form of Officer's Certificate with Respect to Prepayments
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<PAGE>
This
Pooling and Servicing Agreement is dated as of October 1, 2005
(the
"Agreement"), among BOND SECURITIZATION,
L.L.C., as depositor (the
"Depositor"), CREDIT-BASED ASSET SERVICING
AND SECURITIZATION LLC, as seller
(the "Seller"), LITTON LOAN SERVICING LP,
as servicer (the "Servicer") and
U.S. BANK NATIONAL ASSOCIATION, as trustee
(the "Trustee").
PRELIMINARY STATEMENT
The
Depositor intends to sell pass-through certificates
(collectively,
the "Certificates"), to be issued hereunder
in multiple Classes, which in the
aggregate will evidence the entire
beneficial ownership interest in the Trust
Fund created hereunder. The Certificates
will consist of nineteen Classes of
Certificates, designated as (i) the Class
AF-1, Class AF-2, Class AF-3 and
Class AF-4 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, Class B-2, Class
B-3, Class B-4 and Class B-5 Certificates,
(iv) the Class N Certificates, (v)
the Class X Certificates, (vi) the Class R
Certificates and the Class R-X
Certificates.
As
provided herein, the Trustee shall elect that the Trust Fund
(other
than the Cap Contract, the Cap Contract
Reserve Fund, the Basis Risk Reserve
Fund and the Grantor Trust) be treated for
federal income tax purposes as
eight separate real estate mortgage
investment conduits (each a "REMIC" or, in
the alternative, "REMIC 1," "REMIC 2,"
"REMIC B-1," "REMIC B-2," "REMIC B-3,"
"REMIC B-4," "REMIC B-5," and "REMIC X/N"
respectively). The REMIC X/N Regular
Interests represent all of the "regular
interests" in REMIC X/N. The REMIC B-5
Regular Interests represent all of the
"regular interests" in REMIC B-5. The
REMIC B-4 Regular Interests represent all
of the "regular interests" in REMIC
B-4. The REMIC B-3 Regular Interests
represent all of the "regular interests"
in REMIC B-3. The REMIC B-2 Regular
Interests represent all of the "regular
interests" in REMIC B-2. The REMIC B-1
Regular Interests represent all of the
"regular interests" in REMIC B-1. The REMIC
2 Regular Interests represent all
of the "regular interests" in REMIC 2. The
REMIC 1 Regular Interests represent
all of the "regular interests" in REMIC 1.
Each Class of Cap Carryover
Certificates (other than the Class B
Certificates) represents beneficial
ownership of the Corresponding REMIC 2
Regular Interest and the right to
receive Adjusted Net WAC Carryover Amounts.
The Class B-1 Certificates
represent beneficial ownership of the REMIC
B-1 Regular Interest and the right
to receive Adjusted Net WAC Carryover
Amounts. The Class B-2 Certificates
represent beneficial ownership of the REMIC
B-2 Regular Interest and the right
to receive Adjusted Net WAC Carryover
Amounts. The Class B-3 Certificates
represent beneficial ownership of the REMIC
B-3 Regular Interest and the right
to receive Adjusted Net WAC Carryover
Amounts. The Class B-4 Certificates
represent beneficial ownership of the REMIC
B-4 Regular Interest and the right
to receive Adjusted Net WAC Carryover
Amounts. The Class B-5 Certificates
represent beneficial ownership of the REMIC
B-5 Regular Interest and the right
to receive Adjusted Net WAC Carryover
Amounts.
For
federal income tax purposes, the Class N and Class X
Certificates
together represent beneficial ownership of
the REMIC X/N X/N Interest subject
to the obligation to pay Adjusted Net WAC
Carryover Amounts (other than
Adjusted Net WAC Carryover Amounts funded
from the Cap Contract or the Cap
Contract Reserve Fund). Each of the Class
R-1 and Class R-2 Interests,
represented collectively by the Class R
Certificates, represents the sole
Class of "residual interest" in REMIC 1 and
REMIC 2, respectively, for
purposes of the REMIC Provisions. Each of
the Class R-B-1, Class R-B-2, Class
R-B-3, Class R-B-4, Class R-B-5 and Class
R-X/N Interests, represented
collectively by the Class R-X Certificates,
represent the sole Class of
"residual interest" in REMIC B-1, REMIC
B-2, REMIC B-3, REMIC B-4, REMIC B-5
and REMIC X/N, respectively, for purposes
of the REMIC provisions. The REMIC 1
Regular Interests will be held as assets of
REMIC 2. The REMIC 2- X/N Interest
will be held as the sole asset of REMIC
X/N. For federal income tax purposes,
the REMIC X/N X/N Interest will be held as
the asset of the Grantor Trust. The
REMIC 2-B1 Interest will be held as the
sole asset of REMIC B-1. The REMIC
2-B2 Interest will be held as the sole
asset of REMIC B-2. The REMIC 2- B3
Interest
<PAGE>
will be held as the sole asset of REMIC
B-3. The REMIC 2-B4 Interest will be
held as the sole asset of REMIC B-4. The
REMIC 2-B5 Interest will be held as
the sole asset of REMIC B-5. The "latest
possible maturity date" for federal
income tax purposes of all interests
created hereby will be the Distribution
Date in November 2035.
REMIC
1
The
following table specifies the class designation, interest rate,
and
initial principal amount for each class of
REMIC 1 Interests.
Designation
Interest Rate Initial Principal
Related
REMIC 2
-----------
------------- -----------------
---------------
Amount
Interest
------
--------
REMIC 1-A1
(1)
(3)
REMIC 2-A1
REMIC 1-A2
(1)
(3)
REMIC 2-A2
REMIC 1-A3
(1)
(3)
REMIC 2-A3
REMIC 1-A4
(1)
(3)
REMIC 2-A4
REMIC 1-M1
(1)
(3)
REMIC 2-M1
REMIC 1-M2
(1)
(3)
REMIC 2-M2
REMIC 1-M3
(1)
(3)
REMIC 2-M3
REMIC 1-M4
(1)
(3)
REMIC 2-M4
REMIC 1-M5
(1)
(3)
REMIC 2-M5
REMIC 1-M6
(1)
(3)
REMIC 2-M6
REMIC 1-B1
(1)
(3)
REMIC 2-B1
REMIC 1-B2
(1)
(3)
REMIC 2-B2
REMIC 1-B3
(1)
(3)
REMIC 2-B3
REMIC 1-B4
(1)
(3)
REMIC 2-B4
REMIC 1-B5
(1)
(3)
REMIC 2-B5
REMIC 1-X
(1)
(4)
N/A
R-1
(2)
(2)
N/A
---------------------
(1) For any Distribution
Date, the interest rate for these interests shall
be
the Net Rate.
(2) The Class R-1 Interest
shall represent the sole class of residual
interest in REMIC 1. The Class R-1 Interest will not have a
principal
amount or an interest rate. The Class R-1 Interest shall be
represented
by
the Class R Certificate.
(3) The initial principal
amount of these interests shall be an amount
equal to 50% of the initial principal amount of the related
certificates.
(4) The initial principal
amount of this interest shall be an amount equal
to
the excess of (i) the aggregate Cut-off Date Principal Balance
of
the
Mortgage Loans over (ii) the aggregate initial principal amount
of
the
Marker Interests.
All
computations with respect to any REMIC 1 Interest shall be taken
out
to ten decimal places.
REMIC
2
The sole
assets of REMIC 2 shall be the REMIC 1 Regular Interests. The
regular interests in REMIC 2 shall be the
REMIC 2 Regular Interests.
2
<PAGE>
The
following table specifies the class designation, interest rate,
and
initial principal amount for each class of
REMIC 2 Interests.
Designation
Interest Rate Initial Principal
Related
-----------
------------- -----------------
-------
Amount
Certificate or
------
--------------
REMIC
-----
REMIC 2-A1
(1)
$177,123,000
Class AF-1
REMIC 2-A2
(2)
$101,220,000
Class AF-2
REMIC 2-A3
(3)
$23,181,000
Class AF-3
REMIC 2-A4
(4)
$33,503,000
Class AF-4
REMIC 2-M1
(5)
$14,122,000
Class M-1
REMIC 2-M2
(6)
$14,122,000
Class M-2
REMIC 2-M3
(7)
$9,777,000
Class M-3
REMIC 2-M4
(8)
$7,604,000
Class M-4
REMIC 2-M5
(9)
$7,604,000
Class M-5
REMIC 2-M6
(10)
$6,301,000
Class M-6
REMIC 2-B1
(11)
$6,735,000
REMIC B-1
REMIC 2-B2
(12)
$5,432,000
REMIC B-2
REMIC 2-B3
(13)
$4,997,000
REMIC B-3
REMIC 2-B4
(14)
$6,301,000
REMIC B-4
REMIC 2-B5
(15)
$4,997,000
REMIC B-5
REMIC 2-XN
(16)
(17)
REMIC XN
R-2
(18)
(18)
N/A
(1) Interest will accrue
on the REMIC 2-A1 Interest during each Interest
Accrual Period at a rate equal to the least of: (i) the Class
AF-1
Pass-Through Rate and (ii) the Net Rate.
(2) Interest will accrue
on the REMIC 2-A2 Interest during each Interest
Accrual Period at a rate equal to the least of: (i) the Class
AF-2
Pass-Through Rate and (ii) the Net Rate.
(3) Interest will accrue
on the REMIC 2-A3 Interest at a rate equal to the
least of: (i) the Class AF-3 Pass-Through Rate and (ii) the Net
Rate.
(4) Interest will accrue
on the REMIC 2-A4 Interest at a rate equal to the
least of: (i) the Class AF-4 Pass-Through Rate and (ii) the Net
Rate.
(5) Interest will accrue
on the REMIC 2-M1 Interest at a rate equal to the
least of: (i) the Class M-1 Pass-Through Rate and (ii) the Net
Rate.
(6) Interest will accrue
on the REMIC 2-M2 Interest at a rate equal to the
least of: (i) the Class M-2 Pass-Through Rate and (ii) the Net
Rate.
(7) Interest will accrue
on the REMIC 2-M3 Interest at a rate equal to the
least of: (i) the Class M-3 Pass-Through Rate and (ii) the Net
Rate.
(8) Interest will accrue
on the REMIC 2-M4 Interest at a rate equal to the
least of: (i) the Class M 4 Pass-Through Rate and (ii) the Net
Rate.
(9) Interest will accrue
on the REMIC 2-M5 Interest at a rate equal to the
least of: (i) the Class M 5 Pass-Through Rate and (ii) the Net
Rate.
(10) Interest will accrue on the
Class M 6 Certificates at a rate equal to
the
least of: (i) the Class M 6 Pass-Through Rate and (ii) the Net
Rate.
(11) Interest will accrue on the
REMIC 2-B1 Interest at a rate equal to the
least of: (i) the Class B-1 Pass-Through Rate and (ii) the Net
Rate.
(12) Interest will accrue on the
REMIC 2-B2 Interest at a rate equal to the
least of: (i) the Class B-2 Pass-Through Rate and (ii) the Net
Rate.
(13) Interest will accrue on the
REMIC 2-B3 Interest at a rate equal to the
least of: (i) the Class B-3 Pass-Through Rate and (ii) the Net
Rate.
(14) Interest will accrue on the
REMIC 2-B4 Interest at a rate equal to the
least of: (i) the Class B-4 Pass-Through Rate and (ii) the Net
Rate.
3
<PAGE>
(15) Interest will accrue on the
REMIC 2-B5 Interest at a rate equal to the
least of: (i) the Class B 5 Pass-Through Rate and (ii) the Net
Rate.
(16) For each Interest Accrual
Period the REMIC 2-XN Interests are entitled
to a
specified portion of the interest on the REMIC 1 regular
interests
equal to the excess of the Net Rate over the product of two and
the
weighted average interest rate of the REMIC 1 regular interests
with
each
such REMIC 1 regular interest (other than the R-1-X interest)
subject to a cap and a floor equal to the Interest Rate of the
Corresponding REMIC 2 Interest and the R-2-XN Interest subject to a
cap
of
0.00%. The Pass-Through Rate of the REMIC 2-XN interest shall be
a
rate
sufficient to entitle it to all interest accrued on the
Mortgage
Loans less the interest accrued on the other regular interests
issued
by
the REMIC-2.
(17) The Original Principal
Amount of the REMIC 2-XN will equal the
Overcollateralization Amount.
(18) The Class R-2 Interest shall
represent the sole class of residual
interest in REMIC 2. The Class R-2 Interest will not have a
principal
amount or an interest rate. The Class R-2 Interest shall be
represented
by
the Class R Certificate.
REMIC
B-1
The sole
asset of REMIC B-1 shall be the REMIC 2-B1 Interest. The sole
regular interest in REMIC B-1 will be the
REMIC B-1 B-1 Interest. The residual
interest in REMIC B-1 will be the Class
R-B-1 Interest, which will be
represented by the Class R-X
Certificate.
REMIC
B-2
The sole
asset of REMIC B-2 shall be the REMIC 2-B2 Interest. The sole
regular interest in REMIC B-2 will be the
REMIC B-2 B-2 Interest. The residual
interest in REMIC B-2 will be the Class
R-B-2 Interest, which will be
represented by the Class R-X
Certificate.
REMIC
B-3
The sole
asset of REMIC B-3 shall be the REMIC 2-B3 Interest. The sole
regular interest in REMIC B-3 will be the
REMIC B-3 B-3 Interest. The residual
interest in REMIC B-3 will be the Class
R-B-3 Interest, which will be
represented by the Class R-X
Certificate.
REMIC
B-4
The sole
asset of REMIC B-4 shall be the REMIC 2-B4 Interest. The sole
regular interest in REMIC B-4 will be the
REMIC B-4 B-4 Interest. The residual
interest in REMIC B-4 will be the Class
R-B-4 Interest, which will be
represented by the Class R-X
Certificate.
REMIC
B-5
The sole
asset of REMIC B-5 shall be the REMIC 2-B5 Interest. The sole
regular interest in REMIC B-5 will be the
REMIC B-5 B-5 Interest. The residual
interest in REMIC B-5 will be the Class
R-B-5 Interest, which will be
represented by the Class R-X
Certificate.
REMIC
X/N
The sole
asset of REMIC X/N shall be the REMIC 2-X/N Interest. The sole
regular interest in REMIC X/N will be the
REMIC X/N X/N Interest. The residual
interest in REMIC X/N will be the Class R-
X/N Interest, which will be
represented by the Class R-X
Certificate.
4
<PAGE>
The
following table sets forth (or describes) the Class
designation,
Pass-Through Rate and Original Class
Certificate Principal Balance or Original
Notional Amount, for each Class of
Certificates comprising the interests in
the Trust Fund created hereunder:
Original Class
Certificate
Principal Balance or
Pass-Through
Final
Class
Notional Amount
Rate
Maturity Dates
------------ --------------------
------------
----------------
AF-1
$177,123,000
(1)
November 25, 2035
AF-2
$101,220,000
(2)
November 25, 2035
AF-3
$23,181,000
(3)
November 25, 2035
AF-4
$33,503,000
(4)
November 25, 2035
M-1
$14,122,000
(5)
November 25, 2035
M-2
$14,122,000
(6)
November 25, 2035
M-3
$9,777,000
(7)
November 25, 2035
M-4
$7,604,000
(8)
November 25, 2035
M-5
$7,604,000
(9)
November 25, 2035
M-6
$6,301,000
(10)
November 25, 2035
B-1
$6,735,000
(11)
November 25, 2035
B-2
$5,432,000
(12)
November 25, 2035
B-3
$4,997,000
(13)
November 25, 2035
B-4
$6,301,000
(14)
November 25, 2035
B-5
$4,997,000
(15)
November 25, 2035
N
$11,800,000 (16)
4.50%
N/A
X
N/A
(16)
N/A
N/A
R
N/A
N/A
N/A
R -X
N/A
N/A
N/A
Total
$434,819,000 (17)
(1) Interest will accrue on the
Class AF-1 Certificates during each Interest
Accrual
Period at a rate equal to the least of: (i) the Class AF-1
Pass-Through Rate, (ii) the Net WAC Cap for such Distribution Date
and
(iii) the
Maximum Rate Cap.
(2) Interest will accrue on the
Class AF-2 Certificates during each Interest
Accrual
Period at a rate equal to the least of: (i) the Class AF-2
Pass-Through Rate, (ii) the Net WAC Cap for such Distribution Date
and
(iii) the
Maximum Rate Cap.
(3) Interest will accrue on the
Class AF-3 Certificates at a rate equal to
the least
of: (i) the Class AF-3 Pass-Through Rate, (ii) the Net WAC Cap
for such
Distribution Date and (iii) the Maximum Rate Cap.
(4) Interest will accrue on the
Class AF-4 Certificates at a rate equal to
the least
of: (i) the Class AF-4 Pass-Through Rate, (ii) the Net WAC Cap
for such
Distribution Date and (iii) the Maximum Rate Cap.
(5) Interest will accrue on the
Class M-1 Certificates at a rate equal to
the least
of: (i) the Class M-1 Pass-Through Rate, (ii) the Net WAC Cap
for such
Distribution Date and (iii) the Maximum Rate Cap.
(6) Interest will accrue on the
Class M-2 Certificates at a rate equal to
the least
of: (i) the Class M-2 Pass-Through Rate, (ii) the Net WAC Cap
for such
Distribution Date and (iii) the Maximum Rate Cap.
(7) Interest will accrue on the
Class M-3 Certificates at a rate equal to
the least
of: (i) the Class M-3 Pass-Through Rate, (ii) the Net WAC Cap
for such
Distribution Date and (iii) the Maximum Rate Cap.
5
<PAGE>
(8) Interest will accrue on the
Class M 4 Certificates at a rate equal to
the least
of: (i) the Class M 4 Pass-Through Rate, (ii) the Net WAC Cap
for such
Distribution Date and (iii) the Maximum Rate Cap.
(9) Interest will accrue on the
Class M 5 Certificates at a rate equal to
the least
of: (i) the Class M 5 Pass-Through Rate, (ii) the Net WAC Cap
for such
Distribution Date and (iii) the Maximum Rate Cap.
(10) Interest will accrue on the Class
M 6 Certificates at a rate equal to
the least
of: (i) the Class M 6 Pass-Through Rate, (ii) the Net WAC Cap
for such Distribution
Date and (iii) the Maximum Rate Cap.
(11) Interest will accrue on the Class
B-1 Certificates at a rate equal to
the least
of: (i) the Class B-1 Pass-Through Rate, (ii) the Net WAC Cap
for such
Distribution Date and (iii) the Maximum Rate Cap.
(12) Interest will accrue on the Class
B-2 Certificates at a rate equal to
the least
of: (i) the Class B-2 Pass-Through Rate, (ii) the Net WAC Cap
for such
Distribution Date and (iii) the Maximum Rate Cap.
(13) Interest will accrue on the Class
B-3 Certificates at a rate equal to
the least
of: (i) the Class B-3 Pass-Through Rate, (ii) the Net WAC Cap
for such
Distribution Date and (iii) the Maximum Rate Cap.
(14) Interest will accrue on the Class
B-4 Certificates at a rate equal to
the least
of: (i) the Class B-4 Pass-Through Rate, (ii) the Net WAC Cap
for such
Distribution Date and (iii) the Maximum Rate Cap.
(15) Interest will accrue on the Class
B 5 Certificates at a rate equal to
the least
of: (i) the Class B 5 Pass-Through Rate, (ii) the Net WAC Cap
for such
Distribution Date and (iii) the Maximum Rate Cap.
(16) The Class N and Class X
Certificates, collectively, represent the
beneficial
ownership of the REMIC X/N X/N Interest, subject to the
obligation
to make payments in respect of Adjusted Net WAC Carryover
Amounts
(other than Adjusted Net WAC Carryover Amounts funded from the
Cap
Contract and the Cap Contract Reserve Fund).
(17) Exclusive of the Class N Notional
Amount. The Class N Original Notional
Amount is
$11,800,000.
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 the Class AF-1, Class
AF-2, Class AF-3, Class AF-4, Class B-4,
Class B-5, Class N and Class X
Certificates and the REMIC 1 Regular
Interests and the REMIC 2-X/N Interest
will be calculated on the basis of a
360-day year consisting of twelve 30-day
months. Unless otherwise specified,
interest on 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 and Class B-3
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": With respect to any date of determination,
each Mortgage Loan with respect to which
any portion of a Monthly Payment is,
as of the last day of the prior
Collection
6
<PAGE>
Period, two months or more past due, each
Mortgage Loan in foreclosure, all
REO Property and each Mortgage Loan for
which the Mortgagor has filed for
bankruptcy after the Closing Date.
"Account":
Any of the Collection
Account, the Distribution Account,
the Escrow Account, the Basis Risk Reserve Fund and
the Cap Contract
Reserve
Fund.
"Accrued
Certificate Interest": With respect to each Distribution Date
and Class of Certificates, an amount equal
to the interest accrued at the
applicable rate set forth or described for
such Class in the table in the
Preliminary Statement during the related
Interest Accrual Period on the
Certificate Principal Balance or Notional
Amount of such Class of
Certificates, reduced by such Class's
Interest Percentage of Relief Act
Interest Shortfalls for such Distribution
Date.
"Adjusted
Net WAC Carryover Amounts": For any Distribution Date and for
any of the Class A, Class M and Class B
Certificates, the excess, if any, of
(1) the amount of interest such Class of
Certificates is entitled to receive
over (2) the amount of interest such Class
of Certificates would have been
entitled to receive had the Pass-Through
Rate for such Class been the Net Rate
(as adjusted, in the case of the Class M,
Class B-1, Class B-2 and Class B-3
Certificates, for the actual number of days
in the related Interest Accrual
Period).
"Adjustment Date": With respect to each adjustable rate Mortgage
Loan,
each adjustment date, on which the Mortgage
Interest Rate of an adjustable
rate Mortgage Loan changes pursuant to the
related Mortgage Note. The first
Adjustment Date following the Cut-off Date
as to each adjustable are Mortgage
Loan is set forth in the Mortgage Loan
Schedule.
"Adjustment Period":
As defined in the Preliminary Statement.
"Advance": As to any Mortgage Loan or REO Property, any advance made
by the Servicer in respect of any
Distribution Date pursuant to Section 4.07.
"Advance
Facility": As defined
in Section 3.30(a) hereof.
"Advance
Facility Notice": As
defined in Section 3.30(b) hereof.
"Advance
Financing Person": As
defined in Section 3.30(a) hereof.
"Advance
Reimbursement Amounts": As defined in Section 3.30(b)
hereof.
"Adverse
REMIC Event": As
defined in Section 9.01(f) hereof.
"Affiliate": With respect to any Person, any other Person
controlling,
controlled by or under common control with
such Person. For purposes of this
definition, "control" means the power to
direct the management and policies of
a Person, directly or indirectly, whether
through ownership of voting
securities, by contract or otherwise and
"controlling" and "controlled" shall
have meanings correlative to the
foregoing.
"Agreement": This
Pooling and Servicing
Agreement and all
amendments
and supplements hereto.
"Applicable Regulations": As to any Mortgage Loan, all federal,
state
and local laws, statutes, rules and
regulations applicable thereto, including
with respect to each FHA Loan, the FHA
Regulations
7
<PAGE>
and the related FHA Insurance Contract and
with respect to each VA Loan, the
VA Regulations and the related VA
Guaranty.
"Applied
Realized Loss Amount": With respect to each Distribution Date,
the excess, if any, of (a) the aggregate of
the Certificate Principal Balances
of the Certificates (after giving effect to
all distributions on such
Distribution Date) over (b) the Pool
Balance as of the end of the related
Collection Period.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form,
which is sufficient under the laws
of the jurisdiction wherein the related
Mortgaged Property is located to
reflect or record the sale of the
Mortgage.
"Available
Funds": As to any Distribution Date, an amount equal to the
excess of (i) the sum of (a) the aggregate
of the Monthly Payments due during
the related Collection Period and received
by the Servicer on or prior to the
related Determination Date, (b) Liquidation
Proceeds, Insurance Proceeds,
Condemnation Proceeds, Principal
Prepayments, Substitution Adjustment Amounts,
the Purchase Price for any repurchased
Mortgage Loan, the Termination Price
with respect to the termination of the
Trust pursuant to Section 10.01 hereof,
any Reimbursement Amount or Subsequent
Recovery deposited to the Collection
Account and other unscheduled recoveries of
principal and interest (excluding
prepayment penalties) in respect of the
Mortgage Loans during the related
Prepayment Period, (c) the aggregate of any
amounts received in respect of an
REO Property withdrawn from any REO Account
and deposited in the Collection
Account for such Distribution Date, (d) any
Compensating Interest for such
Distribution Date, and (e) the aggregate of
any Advances made by the Servicer
for such Distribution Date over (ii) the
sum of (a) amounts reimbursable or
payable to the Servicer pursuant to Section
3.05, (b) Stayed Funds, (c) the
Servicing Fee and (d) amounts deposited in
the Collection Account or the
Distribution Account, as the case may be,
in error.
"Balloon
Mortgage Loan": A Mortgage Loan that provides for the payment
of the unamortized principal balance of
such Mortgage Loan in a single payment
at the maturity of such Mortgage Loan that
is substantially greater than the
preceding monthly payment.
"Balloon
Payment": A payment of the unamortized principal balance of a
Mortgage Loan in a single payment at the
maturity of such Mortgage Loan that
is substantially greater than the preceding
Monthly Payment.
"Bankruptcy
Code": Title 11 of the
United States Code, as amended.
"Basis
Risk Reserve Fund." As
defined in Section 4.08.
"Basis
Risk Reserve Fund Deposit." An amount equal to the lesser of
(1)
the sum of (a) any Net WAC Carryover
Amounts for the related Distribution Date
and (b) any other amounts required to be
deposited therein pursuant to Section
4.08 hereof; and (2) any Monthly Excess
Cashflow amount remaining on the
relating Distribution Date following the
distributions pursuant to clauses (i)
to (xxxvii) of Section 4.02(b) hereof.
"Book-Entry Certificates": Any of the Certificates that shall
be
registered in the name of the Depository or
its nominee, the ownership of
which is reflected on the books of the
Depository or on the books of a Person
maintaining an account with the Depository
(directly, as a "Depository
Participant," or indirectly, as an indirect
participant in accordance with the
rules of the Depository and as described in
Section 5.02 hereof). On the
Closing Date, the Class AF-1, Class AF-2,
Class AF-3, Class AF-4, Class
8
<PAGE>
M-1, Class M-2, Class M-3, Class M 4, Class
M 5, Class M 6, Class B-1, Class
B-2, Class B-3, Class B-4 and Class B-5
Certificates shall be Book-Entry
Certificates. "Book-Entry Regulation S
Global Securities": As defined in
Section 5.01.
"Business
Day": Any day other than a Saturday, a Sunday or a day on
which banking institutions in the State of
Delaware, the State of New York,
the State of Texas or in the city in which
the Corporate Trust Office of the
Trustee is located are authorized or
obligated by law or executive order to be
closed.
"Cap":
Either of the Net WAC
Cap or the Maximum Rate Cap.
"Cap
Carryover Certificates": The Class A, Class M and Class B
Certificates.
"Cap
Contract": The confirmation and agreement and any related
confirmation thereto, between the Trust
Fund or Trustee and the Cap Contract
Counterparty (in the form of Exhibit P
hereto).
"Cap
Contract Counterparty": The Bank of New York.
"Cap
Contract Notional Balance": With respect to any Distribution
Date,
the Cap Contract Notional Balance set forth
for such Distribution Date on the
attachment to the Cap Contract attached
hereto.
"Cap
Contract Termination
Date": The day after
the Distribution
Date
in August 2008.
"Cap
Contract Reserve Fund." As defined in Section 4.02(g).
"Cap Rate:
With respect to each Distribution Date with respect to which
payments are received on the Cap Contract,
a rate equal to the lesser of LIBOR
and 9.23% per annum.
"Certificate": Any
Regular Certificate or Residual Certificate.
"Certificate
Custodian": Initially,
U.S. Bank National Association;
thereafter any other Certificate Custodian acceptable to the Depository
and
selected by the Trustee.
"Certificate Owner":
With respect to each Book-Entry Certificate, any
beneficial owner thereof.
"Certificate Principal Balance": With respect to any Class of
Certificates (other than the Class N, Class
X and Residual Certificates) and
any Distribution Date, the Original Class
Certificate Principal Balance
reduced by the sum of (i) all amounts
actually distributed in respect of
principal of such Class on all prior
Distribution Dates and (ii) Applied
Realized Loss Amounts allocated thereto.
The Class N, Class X and Residual
Certificates do not have a Certificate
Principal Balance. With respect to any
Certificate (other than a Class X, Class N
or a Residual Certificate) of a
Class and any Distribution Date, the
portion of the Certificate Principal
Balance of such Class represented by such
Certificate equal to the product of
the Percentage Interest evidenced by such
Certificate and the Certificate
Principal Balance of such Class.
Notwithstanding the foregoing on any
Distribution Date relating to a Collection
Period in which a Subsequent
Recovery has been received by the Servicer,
the Certificate Principal Balance
of any Class of Certificates then
outstanding for which any Applied Realized
Loss Amount has been allocated will be
increased, in order of seniority, by an
amount equal to the lesser of (i) the
Unpaid Realized Loss Amount for such
Class of Certificates and (ii) the amount
of any Subsequent Recovery allocable
to principal distributed on such date to
the Certificateholders (reduced by
the amount of the increase in the
Certificate
9
<PAGE>
Principal Balance of any more senior Class
of Certificates pursuant to this
sentence on such Distribution Date).
"Certificate Register" and "Certificate Registrar": The
register
maintained and registrar appointed pursuant
to Section 5.02 hereof.
"Certificateholder" or "Holder": The Person in whose name a
Certificate
is registered in the Certificate Register,
except that a Disqualified
Organization or Disqualified Non-U.S.
Person shall not be a Holder of a
Residual Certificate for any purpose
hereof.
"Class":
Collectively, Certificates or REMIC Regular Interests which
have the same priority of payment and bear
the same class designation and the
form of which is identical except for
variation in the Percentage Interest
evidenced thereby.
"Class
AF-1 Pass-Through Rate": For each Distribution Date, the least
of
(i) (a) on or prior to the Optional
Termination Date, 5.208% per annum, and
(b) following the Optional Termination
Date, 5.708% per annum, (ii) the Net
WAC Cap and (iii) the Maximum Rate Cap.
"Class
AF-2 Pass-Through Rate": For each Distribution Date the least
of
(i) (a) on or prior to the Optional
Termination Date, 5.147% per annum, and
(b) following the Optional Termination
Date, 5.647% per annum, (ii) the Net
WAC Cap and (iii) the Maximum Rate Cap.
"Class
AF-3 Pass-Through Rate": For each Distribution Date the least
of
(i) (a) on or prior to the Optional
Termination Date, 5.545% per annum, and
(b) following the Optional Termination
Date, 6.045% per annum, (ii) the Net
WAC Cap and (iii) the Maximum Rate Cap.
"Class
AF-4 Lockout Distribution Amount": For any Distribution Date,
the
product of (x) the Class AF-4 Lockout
Distribution Percentage and (y) the
Class AF-4 Pro Rata Distribution Amount. In
no event shall the Class AF-4
Lockout Distribution Amount for a
Distribution Date exceed the Class A
Principal Distribution Amount for such
Distribution Date or the Certificate
Principal Balance of the Class AF-4
Certificates immediately prior to such
Distribution Date.
"Class
AF-4 Lockout Distribution Percentage" means, for a Distribution
Date in any period listed in the table
below, the applicable percentage listed
opposite such period:
Distribution Dates
Lockout Percentage
------------------------------- ------------------
November 2005 through and
0%
including October 2008
November 2008 through and
45%
including October 2010
November 2010 through and
80%
including October 2011
November 2011 through and
100%
including October 2012
November 2012 and thereafter
300%
10
<PAGE>
"Class
AF-4 Pass-Through Rate": For each Distribution Date, the least
of
(i) (a) on or prior to the Optional
Termination Date, 5.434% per annum, and
(b) following the Optional Termination
Date, 5.934% per annum, (ii) the Net
WAC Cap and (iii) the Maximum Rate Cap.
"Class
AF-4 Pro Rata Distribution Amount" means, for any Distribution
Date, an amount equal to the product of (x)
a fraction, the numerator of which
is the Certificate Principal Balance of the
Class AF-4 Certificates
immediately prior to such Distribution Date
and the denominator of which is
the aggregate Certificate Principal Balance
of the Class A Certificates
immediately prior to that Distribution Date
and (y) the Class A Principal
Distribution Amount for that Distribution
Date.
"Class A
Certificate": Any one of the Certificates with an "A"
designated on the face thereof
substantially in the form annexed hereto as
Exhibits A-1, A-2, A-3 and A-4, executed by
the Trustee on behalf of the Trust
and authenticated and delivered by the
Certificate Registrar, representing the
right to distributions as set forth herein
and therein.
"Class A
Certificateholders": Collectively, the Holders of the Class A
Certificates.
"Class A
Interest Carry Forward Amount": For any Distribution Date, the
sum of the Interest Carry Forward Amounts
for the Class A Certificates for
such Distribution Date.
"Class A
Principal Distribution Amount": As of any Distribution Date (a)
prior to the Stepdown Date or with respect
to which a Trigger Event is in
effect, the Principal Distribution Amount
and (b) on or after the Stepdown
Date and as long as a Trigger Event is not
in effect, the excess of (x) the
sum of the Certificate Principal Balances
of the Class A Certificates
immediately prior to such Distribution Date
over (y) the lesser of (A) the
product of (i) 54.20% 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 0.50% and the Pool Balance on
the Cut-off Date.
"Class B
Certificate": Any one of the Certificates with a "B" designated
on the face thereof substantially in the
form annexed hereto as Exhibits B-1,
B-2, B-3, B-4 and B-5, executed by the
Trustee on behalf of the Trust and
authenticated and delivered by the
Certificate Registrar, representing the
right to distributions as set forth herein
and therein.
"Class B
Certificateholders": Collectively, the Holders of the Class B
Certificates.
"Class B-1
Applied Realized Loss Amount": As to the Class B-1
Certificates and as of any Distribution
Date, the lesser of (x) the
Certificate Principal Balance thereof
(after taking into account the
distribution of the Principal Distribution
Amount on such Distribution Date,
but prior to the application of the Class
B-1 Applied Realized Loss Amount, if
any, on such Distribution Date) and (y) the
excess of (i) the Applied Realized
Loss Amount as of such Distribution Date
over (ii) the sum of the Class B-2
Applied Realized Loss Amount, the Class B-3
Applied Realized Loss Amount, the
Class B-4 Applied Realized Loss Amount and
the Class B-5 Applied Realized Loss
Amount in each case as of such Distribution
Date.
"Class B-1
Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date,
1.150% per annum, and (ii) following
the Optional Termination Date, 1.725% per
annum.
"Class B-1
Pass-Through Rate": For each Distribution Date, the least of
(i) LIBOR as of the related LIBOR
Determination Date, plus the Class B-1
Certificate Margin, (ii) the Net WAC Cap
and (iii) the Maximum Rate Cap.
11
<PAGE>
"Class B-1
Principal Distribution Amount": As of any Distribution Date
on or after the Stepdown Date and as long
as a Trigger Event is not in effect,
the excess of (x) the sum of (i) the sum of
the Certificate Principal Balances
of the Class A Certificates (after taking
into account the payment of the
Class A Principal Distribution Amount on
such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account the
payment of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the payment
of the Class M-3 Principal Distribution
Amount on such Distribution Date), (v)
the Certificate Principal Balance of the
Class M-4 Certificates (after taking
into account the payment of the Class M-4
Principal Distribution Amount on
such Distribution Date), (vi) the
Certificate Principal Balance of the Class
M-5 Certificates (after taking into account
the payment of the Class M-5
Principal Distribution Amount on such
Distribution Date), (vii) the
Certificate Principal Balance of the Class
M-6 Certificates (after taking into
account the payment of the Class M-6
Principal Distribution Amount on such
Distribution Date) and (viii) the
Certificate Principal Balance of the Class
B-1 Certificates immediately prior to such
Distribution Date over (y) the
lesser of (A) the product of (i) 84.70% 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 0.50% and the
Pool Balance on 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 Class B-1
Certificates as of such Distribution
Date and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii)
the sum of the amounts described in Section
4.02(b)(i) through (xxiii) hereof,
in each case for such Distribution
Date.
"Class B-2
Applied Realized Loss Amount": As to the Class B-2
Certificates and as of any Distribution
Date, the lesser of (x) the
Certificate Principal Balance thereof
(after taking into account the
distribution of the Principal Distribution
Amount on such Distribution Date,
but prior to the application of the Class
B-2 Applied Realized Loss Amount, if
any, on such Distribution Date) and (y) the
excess of (i) the Applied Realized
Loss Amount as of such Distribution Date
over (ii) the sum of the Class B-3
Applied Realized Loss Amount, the Class B-4
Applied Realized Loss Amount and
the Class B-5 Applied Realized Loss Amount
in each case as of such
Distribution Date.
"Class B-2
Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date,
1.300% per annum, and (ii) following
the Optional Termination Date, 1.950% per
annum.
"Class B-2
Pass-Through Rate": For each Distribution Date, the least of
(i) LIBOR as of the related LIBOR
Determination Date, plus the Class B-2
Certificate Margin, (ii) the Net WAC Cap
and (iii) the Maximum Rate Cap.
"Class B-2
Principal Distribution Amount": As of any Distribution Date
on or after the Stepdown Date and as long
as a Trigger Event is not in effect,
the excess of (x) the sum of (i) the sum of
the Certificate Principal Balances
of the Class A Certificates (after taking
into account the payment of the
Class A Principal Distribution Amount on
such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account the
payment of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the payment
of the Class M-3 Principal Distribution
Amount on such Distribution Date), (v)
12
<PAGE>
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) 87.20% 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 0.50% and the Pool Balance
on 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 Class B-2
Certificates as of such Distribution
Date and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii)
the sum of the amounts described in Section
4.02(b)(i) through (xxvi) hereof,
in each case for such Distribution
Date.
"Class B-3
Applied Realized Loss Amount": As to the Class B-3
Certificates and as of any Distribution
Date, the lesser of (x) the
Certificate Principal Balance thereof
(after taking into account the
distribution of the Principal Distribution
Amount on such Distribution Date,
but prior to the application of the Class
B-3 Applied Realized Loss Amount, if
any, on such Distribution Date) and (y) the
excess of (i) the Applied Realized
Loss Amount as of such Distribution Date
over (ii) the sum of the Class B-4
Applied Realized Loss Amount and the Class
B-5 Applied Realized Loss Amount as
of such Distribution Date.
"Class B-3
Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date,
1.800% per annum, and (ii) following
the Optional Termination Date, 2.700% per
annum.
"Class B-3
Pass-Through Rate": For each Distribution Date, the least of
(i) LIBOR as of the related LIBOR
Determination Date, plus the Class B-3
Certificate Margin, (ii) the Net WAC Cap
and (iii) the Maximum Rate Cap.
"Class B-3
Principal Distribution Amount": As of any Distribution Date
on or after the Stepdown Date and as long
as a Trigger Event is not in effect,
the excess of (x) the sum of (i) the sum of
the Certificate Principal Balances
of the Class A Certificates (after taking
into account the payment of the
Class A Principal Distribution Amount on
such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account the
payment of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the payment
of the Class M-3 Principal Distribution
Amount on such Distribution Date), (v)
the Certificate Principal Balance of the
Class 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), (ix) the Certificate Principal
Balance of the Class B-2 Certificates
(after taking into account the payment
of
13
<PAGE>
the Class B-2 Principal Distribution Amount
on such Distribution Date) and
(x) the Certificate Principal Balance of
the Class B-3 Certificates
immediately prior to such Distribution Date
over (y) the lesser of (A) the
product of (i) 89.50% and (ii) the Pool
Balance as of the last day of the
related Collection Period and (B) the Pool
Balance as of the last day of the
related Collection Period minus the product
of 0.50% and the Pool Balance on
the Cut-off Date.
"Class B-3
Realized Loss Amortization Amount": As to the Class B-3
Certificates and as of any Distribution
Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-3
Certificates as of such Distribution
Date and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii)
the sum of the amounts described in Section
4.02(b)(i) through (xxix) hereof,
in each case for such Distribution
Date.
"Class B-4
Applied Realized Loss Amount": As to the Class B-4
Certificates and as of any Distribution
Date, the lesser of (x) the
Certificate Principal Balance thereof
(after taking into account the
distribution of the Principal Distribution
Amount on such Distribution Date,
but prior to the application of the Class
B-4 Applied Realized Loss Amount, if
any, on such Distribution Date) and (y) the
excess of (i) the Applied Realized
Loss Amount as of such Distribution Date
over (ii) the Class B-5 Applied
Realized Loss Amount as of such
Distribution Date.
"Class B-4
Pass-Through Rate": For each Distribution Date, the least of
(i) (a) on or prior to the Optional
Termination Date, 6.000% per annum, and
(b) following the Optional Termination
Date, 6.500% per annum, (ii) the Net
WAC Cap and (iii) the Maximum Rate Cap.
"Class B-4
Principal Distribution Amount": As of any Distribution Date
on or after the Stepdown Date and as long
as a Trigger Event is not in effect,
the excess of (x) the sum of (i) the sum of
the Certificate Principal Balances
of the Class A Certificates (after taking
into account the payment of the
Class A Principal Distribution Amount on
such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account the
payment of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the payment
of the Class M-3 Principal Distribution
Amount on such Distribution Date), (v)
the Certificate Principal Balance of the
Class 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), (ix) the Certificate Principal
Balance of the Class B-2 Certificates
(after taking into account the payment
of the Class B-2 Principal Distribution
Amount on such Distribution Date), (x)
the Certificate Principal Balance of the
Class B-3 Certificates (after taking
into account the payment of the Class B-3
Principal Distribution Amount on
such Distribution Date) and (xi) the
Certificate Principal Balance of the
Class B-4 Certificates immediately prior to
such Distribution Date over (y)
the lesser of (A) the product of (i) 92.40%
and (ii) the Pool Balance as of
the last day of the related Collection
Period and (B) the Pool Balance as of
the last day of the related Collection
Period minus the product of 0.50% and
the Pool Balance on the Cut-off Date.
"Class B-4
Realized Loss Amortization Amount": As to the Class B-4
Certificates and as of any Distribution
Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-4
Certificates as of such Distribution
Date and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii)
the sum
14
<PAGE>
of the amounts described in Section
4.02(b)(i) through (xxxii) hereof,
in each case for such Distribution
Date.
"Class B-5
Applied Realized Loss Amount": As to the Class B-5
Certificates and as of any Distribution
Date, the lesser of (x) the
Certificate Principal Balance thereof
(after taking into account the
distribution of the Principal Distribution
Amount on such Distribution Date,
but prior to the application of the Class
B-5 Applied Realized Loss Amount, if
any, on such Distribution Date) and (y) the
excess of (i) the Applied Realized
Loss Amount as of such Distribution Date
over (ii) the Applied Realized Loss
Amount as of such Distribution Date.
"Class B-5
Pass-Through Rate": For each Distribution Date, the least of
(i) (a) on or prior to the Optional
Termination Date, 6.000% per annum, and
(b) following the Optional Termination
Date, 6.500% per annum, (ii) the Net
WAC Cap for such Distribution Date and
(iii) the Maximum Rate Cap.
"Class B-5
Principal Distribution Amount": As of any Distribution Date
on or after the Stepdown Date and as long
as a Trigger Event is not in effect,
the excess of (x) the sum of (i) the sum of
the Certificate Principal Balances
of the Class A Certificates (after taking
into account the payment of the
Class A Principal Distribution Amount on
such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account the
payment of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the payment
of the Class M-3 Principal Distribution
Amount on such Distribution Date), (v)
the Certificate Principal Balance of the
Class 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), (ix) the Certificate Principal
Balance of the Class B-2 Certificates
(after taking into account the payment
of the Class B-2 Principal Distribution
Amount on such Distribution Date), (x)
the Certificate Principal Balance of the
Class B-3 Certificates (after taking
into account the payment of the Class B-3
Principal Distribution Amount on
such Distribution Date), (xi) the
Certificate Principal Balance of the Class
B-4 Certificate (after taking into account
the payment of the Class B-4
Principal Distribution Amount for such
Distribution Date) and (xii) the
Certificate Principal Balance of the Class
B-5 Certificates immediately prior
to such Distribution Date over (y) the
lesser of (A) the product of (i) 94.70%
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 0.50% and the Pool
Balance on the Cut-off Date.
"Class B-5
Realized Loss Amortization Amount": As to the Class B-5
Certificates and as of any Distribution
Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-5
Certificates as of such Distribution
Date and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii)
the sum of the amounts described in Section
4.02(b)(i) through (xxxv) hereof,
in each case for such Distribution
Date.
"Class M
Certificate": Any one of the Certificates with an "M"
designated on the face thereof
substantially in the form annexed hereto as
Exhibits C-2, C-3, C-4, C-5, C-6 and C-7
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.
15
<PAGE>
"Class M
Certificateholders": Collectively, the Holders of the Class M
Certificates.
"Class M-1
Applied Realized Loss Amount": As to the Class M-1
Certificates and as of any Distribution
Date, the lesser of (x) the
Certificate Principal Balance thereof
(after taking into account the
distribution of the Principal Distribution
Amount on such Distribution Date,
but prior to the application of the Class
M-1 Applied Realized Loss Amount, if
any, on such Distribution Date) and (y) the
excess of (i) the Applied Realized
Loss Amount as of such Distribution Date
over (ii) the sum of the Class M-2
Applied Realized Loss Amount, the Class M-3
Applied Realized Loss Amount, the
Class M-4 Applied Realized Loss Amount, the
Class M-5 Applied Realized Loss
Amount, the Class M-6 Applied Realized Loss
Amount, the Class B-1 Applied
Realized Loss Amount, the Class B-2 Applied
Realized Loss Amount, the Class
B-3 Applied Realized Loss Amount, the Class
B-4 Applied Realized Loss Amount
and the Class B-5 Applied Realized Loss
Amount, in each case as of such
Distribution Date.
"Class M-1
Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date,
0.410% per annum, and (ii) following
the Optional Termination Date, 0.615% per
annum.
"Class M-1
Pass-Through Rate": For each Distribution Date, the least of
(i) LIBOR as of the related LIBOR
Determination Date, plus the Class M-1
Certificate Margin, (ii) the Net WAC Cap
and (iii) the Maximum Rate Cap.
"Class M-1
Principal Distribution Amount": As of any Distribution Date
on or after the Stepdown Date and as long
as a Trigger Event is not in effect,
the excess of (x) the sum of (i) the
Certificate Principal Balances of the
Class A Certificates (after taking into
account the payment of the Class A
Principal Distribution Amount on such
Distribution Date) and (ii) the
Certificate Principal Balance of the Class
M-1 Certificates immediately prior
to such Distribution Date over (y) the
lesser of (A) the product of (i) 60.70%
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 0.50% and the Pool
Balance on the Cut-off Date.
"Class M-1
Realized Loss Amortization Amount": As to the Class M-1
Certificates and as of any Distribution
Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-1
Certificates as of such Distribution
Date and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii)
the sum of the amounts described in Section
4.02(b)(i) through (v) hereof, in
each case for such Distribution Date.
"Class M-2
Applied Realized Loss Amount": As to the Class M-2
Certificates and as of any Distribution
Date, the lesser of (x) the
Certificate Principal Balance thereof
(after taking into account the
distribution of the Principal Distribution
Amount on such Distribution Date,
but prior to the application of the Class
M-2 Applied Realized Loss Amount, if
any, on such Distribution Date) and (y) the
excess of (i) the related Applied
Realized Loss Amount as of such
Distribution Date over (ii) the sum of the
Class M-3 Applied Realized Loss Amount, the
Class M-4 Applied Realized Loss
Amount, the Class M-5 Applied Realized Loss
Amount, the Class M-6 Applied
Realized Loss Amount, the Class B-1 Applied
Realized Loss Amount, the Class
B-2 Applied Realized Loss Amount, the Class
B-3 Applied Realized Loss Amount,
the Class B-4 Applied Realized Loss Amount
and the Class B-5 Applied Realized
Loss Amount, in each case as of such
Distribution Date.
"Class M-2
Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date,
0.430% per annum, and (ii) following
the Optional Termination Date, 0.645% per
annum.
16
<PAGE>
"Class M-2
Pass-Through Rate": For each Distribution Date, the least of
(i) LIBOR as of the related LIBOR
Determination Date, plus the Class M-2
Certificate Margin, (ii) the Net WAC Cap
and (iii) the Maximum Rate Cap.
"Class M-2
Principal Distribution Amount": As of any Distribution Date
on or after the Stepdown Date and as long
as a Trigger Event is not in effect,
the excess of (x) the sum of (i) the sum of
the Certificate Principal Balances
of the Class A Certificates (after taking
into account the payment of the
Class A Principal Distribution Amount on
such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date) and (iii) the
Certificate Principal Balance of the Class
M-2 Certificates immediately prior to such
Distribution Date over (y) the
lesser of (A) the product of (i) 67.20% 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 0.50% and the
Pool Balance on the Cut-off Date.
"Class M-2
Realized Loss Amortization Amount": As to the Class M-2
Certificates and as of any Distribution
Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-2
Certificates as of such Distribution
Date and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii)
the sum of the amounts described in Section
4.02(b)(i) through (viii) hereof,
in each case for such Distribution
Date.
"Class M-3
Applied Realized Loss Amount": As to the Class M-3
Certificates and as of any Distribution
Date, the lesser of (x) the
Certificate Principal Balance thereof
(after taking into account the
distribution of the Principal Distribution
Amount on such Distribution Date,
but prior to the application of the Class
M-3 Applied Realized Loss Amount, if
any, on such Distribution Date) and (y) the
excess of (i) the related Applied
Realized Loss Amount as of such
Distribution Date over (ii) the sum of the
Class M-4 Applied Realized Loss Amount, the
Class M-5 Applied Realized Loss
Amount, the Class M-6 Applied Realized Loss
Amount, the Class B-1 Applied
Realized Loss Amount, the Class B-2 Applied
Realized Loss Amount, the Class
B-3 Applied Realized Loss Amount, the Class
B-4 Applied Realized Loss Amount
and the Class B-5 Applied Realized Loss
Amount, in each case as of such
Distribution Date.
"Class M-3
Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date,
0.470% per annum, and (ii) following
the Optional Termination Date, 0.705% per
annum.
"Class M-3
Pass-Through Rate": For each Distribution Date, the least of
(i) LIBOR as of the related LIBOR
Determination Date, plus the Class M-3
Certificate Margin, (ii) the Net WAC Cap
and (iii) the Maximum Rate Cap.
"Class M-3
Principal Distribution Amount": As of any Distribution Date
on or after the Stepdown Date and as long
as a Trigger Event is not in effect,
the excess of (x) the sum of (i) the sum of
the Certificate Principal Balances
of the Class A Certificates (after taking
into account the payment of the
Class A Principal Distribution Amount on
such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account the
payment of the Class M-2 Principal
Distribution Amount on such Distribution
Date), and (iv) the Certificate
Principal Balance of the Class M-3
Certificates immediately prior to such
Distribution Date over (y) the lesser of
(A) the product of (i) 71.70% 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 0.50% and the Pool Balance
on the Cut-off Date.
17
<PAGE>
"Class M-3
Realized Loss Amortization Amount": As to the Class M-3
Certificates and as of any Distribution
Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-3
Certificates as of such Distribution
Date and (y) the excess of (i) the Monthly
Excess Cashflow Amount over (ii)
the sum of the amounts described in Section
4.02(b)(i) through (xi) hereof, in
each case for such Distribution Date.
"Class M-4
Applied Realized Loss Amount": As to the Class M-4
Certificates and as of any Distribution
Date, the lesser of (x) the
Certificate Principal Balance thereof
(after taking into account the
distribution of the Principal Distribution
Amount on such Distribution Date,
but prior to the application of the Class
M-4 Applied Realized Loss Amount, if
any, on such Distribution Date) and (y) the
excess of (i) the related Applied
Realized Loss Amount as of such
Distribution Date over (ii) the sum of the
Class M-5 Applied Realized Loss Amount, the
Class M-6 Applied Realized Loss
Amount, the Class B-1 Applied Realized Loss
Amount, the Class B-2 Applied
Realized Loss Amount, the Class B-3 Applied
Realized Loss Amount, the Class
B-4 Applied Realized Loss Amount and the
Class B-5 Applied Realized Loss
Amount, in each case as of such
Distribution Date.
"Class M-4
Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date,
0.590% per annum, and (ii) following
the Optional Termination Date, 0.885% per
annum.
"Class M-4
Pass-Through Rate": For each Distribution Date, the least of
(i) LIBOR as of the related LIBOR
Determination Date, plus the Class M-4
Certificate Margin, (ii) the Net WAC Cap
and (iii) the Maximum Rate Cap.
"Class M-4
Principal Distribution Amount": As of any Distribution Date
on or after the Stepdown Date and as long
as a Trigger Event is not in effect,
the excess of (x) the sum of (i) the sum of
the Certificate Principal Balances
of the Class A Certificates (after taking
into account the payment of the
Class A Principal Distribution Amount on
such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account the
payment of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the payment
of the Class M-3 Principal Distribution
Amount on such Distribution Date), and
(v) the Certificate Principal Balance of
the Class M-4 Certificates
immediately prior to such Distribution Date
over (y) the lesser of (A) the
product of (i) 75.20% 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 0.50% and the Pool Balance on
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 (xiv) hereof,
in each case for such Distribution
Date.
"Class M-5
Applied Realized Loss Amount": As to the Class M-5
Certificates and as of any Distribution
Date, the lesser of (x) the
Certificate Principal Balance thereof
(after taking into account the
distribution of the Principal Distribution
Amount on such Distribution Date,
but prior to the application of the Class
M-5 Applied Realized Loss Amount, if
any, on such Distribution Date) and (y) the
excess of (i) the related Applied
Realized Loss Amount as of such
Distribution Date over (ii) the sum of the
Class M-6 Applied Realized Loss Amount, the
Class B-1 Applied Realized Loss
Amount, the Class B-2 Applied Realized Loss
Amount, the Class B-3 Applied
Realized Loss Amount, the Class B-4 Applied
Realized
18
<PAGE>
Loss Amount and the Class B-5 Applied
Realized Loss Amount, in each case as of
such Distribution Date.
"Class M-5
Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date,
0.620% per annum, and (ii) following
the Optional Termination Date, 0.930% per
annum.
"Class M-5
Pass-Through Rate": For each Distribution Date, the least of
(i) LIBOR as of the related LIBOR
Determination Date, plus the Class M-5
Certificate Margin, (ii) the Net WAC Cap
and (iii) the Maximum Rate Cap.
"Class M-5
Principal Distribution Amount": As of any Distribution Date
on or after the Stepdown Date and as long
as a Trigger Event is not in effect,
the excess of (x) the sum of (i) the sum of
the Certificate Principal Balances
of the Class A Certificates (after taking
into account the payment of the
Class A Principal Distribution Amount on
such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account the
payment of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the payment
of the Class M-3 Principal Distribution
Amount on such Distribution Date), (v)
the Certificate Principal Balance of the
Class 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) 78.70%
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 0.50% and
the Pool Balance on 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 (xvii) hereof,
in each case for such Distribution
Date.
"Class M-6
Applied Realized Loss Amount": As to the Class M-6
Certificates and as of any Distribution
Date, the lesser of (x) the
Certificate Principal Balance thereof
(after taking into account the
distribution of the Principal Distribution
Amount on such Distribution Date,
but prior to the application of the Class
M-6 Applied Realized Loss Amount, if
any, on such Distribution Date) and (y) the
excess of (i) the related Applied
Realized Loss Amount as of such
Distribution Date over (ii) the sum of the
Class B-1 Applied Realized Loss Amount, the
Class B-2 Applied Realized Loss
Amount, the Class B-3 Applied Realized Loss
Amount, the Class B-4 Applied
Realized Loss Amount, the Class B-5 Applied
Realized Loss Amount, in each case
as of such Distribution Date.
"Class M-6
Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date,
0.660% per annum, and (ii) following
the Optional Termination Date, 0.990% per
annum.
"Class M-6
Pass-Through Rate": For each Distribution Date, the least of
(i) LIBOR as of the related LIBOR
Determination Date, plus the Class M-6
Certificate Margin, (ii) the Net WAC Cap
and (iii) the Maximum Rate Cap.
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<PAGE>
"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
Class A Principal Distribution Amount on
such Distribution Date), (ii) the
Certificate Principal Balance of the Class
M-1 Certificates (after taking into
account the payment of the Class M-1
Principal Distribution Amount on such
Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account the
payment of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the payment
of the Class M-3 Principal Distribution
Amount on such Distribution Date), (v)
the Certificate Principal Balance of the
Class 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) 81.60%
and (ii) the Pool Balance as of the last
day of the related Collection Period
and (B) the Pool Balance as of the last day
of the related Collection Period
minus the product of 0.50% and the Pool
Balance on 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 (xx) hereof, in
each case for such Distribution Date.
"Class N
Certificate": Any one of the Certificates with an "N"
designated on the face thereof
substantially in the form annexed hereto as
Exhibit C-9, executed by the Trustee on
behalf of the Trust and authenticated
and delivered by the Certificate Registrar,
representing the right to
distributions as set forth herein and
therein.
"Class N
Notional Amount": As of any date, the Notional Amount of the
Class N Certificates.
"Class R
Certificate": The Class R Certificate executed by the Trustee
on behalf of the Trust, and authenticated
and delivered by the Certificate
Registrar, substantially in the form
annexed hereto as Exhibit C-1-1 and
evidencing the ownership of the Residual
Interest in each of REMIC 1 and REMIC
2. The Class R Certificate represents the
ownership of the Class R-1 Interest
and Class R-2 Interest.
"Class R
Excess Interest Amount": [Reserved.]
"Class R
Excess Interest Carryforward Amount": [Reserved.]
"Class R-1
Interest": The
uncertificated residual interest in REMIC 1.
"Class R-2
Interest": The
uncertificated residual interest in REMIC 2.
"Class
R-B-1 Interest": The
uncertificated
residual interest in
REMIC
B-1.
"Class
R-B-2 Interest": The
uncertificated
residual interest in
REMIC
B-2.
"Class
R-B-3 Interest": The
uncertificated
residual interest in
REMIC
B-3.
"Class
R-B-4 Interest": The
uncertificated
residual interest in
REMIC
B-4.
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<PAGE>
"Class
R-B-5 Interest": The
uncertificated
residual interest in
REMIC
B-5.
"Class
R-X/N Interest": The
uncertificated
residual interest in
REMIC
X/N.
"Class R-X
Certificate": The Class R-X Certificate executed by the
Trustee on behalf of the Trust, and
authenticated and delivered by the
Certificate Registrar, substantially in the
form annexed hereto as Exhibit
C-1-2 and evidencing the ownership of the
Residual Interest in each of REMIC
B-1, REMIC B-2, REMIC B-3, REMIC B-4, REMIC
B-5 and REMIC X/N. The Class R-X
Certificate represents the ownership of the
Class R-B-1 Interest, Class R-B-2
Interest, Class R-B-3 Interest, Class R-B-4
Interest, Class R-B-5 Interest and
Class R-X/N Interest.
"Class X":
Any one of the Class X Certificates as designated on the face
thereof substantially in the form annexed
hereto as Exhibit C-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 X/N
Interest": An uncertificated interest in the Trust held by
the Trustee on behalf of the holders of the
Class X and Class N Certificates,
representing, for federal income tax
purposes, ownership of the REMIC X/N X/N
Interest, and which is entitled to all
distributions in respect of the REMIC
X/N X/N Interest less the amount of any
Adjusted Net WAC Carryover Amounts
(other than Adjusted Net WAC Carryover
Amounts funded from the Cap Contract or
the Cap Contract Reserve Fund).
"Class X
Distributable Amount": With respect to any Distribution Date,
the excess of (i) the aggregate of amounts
distributable on the Class X/N
Interest for such Distribution Date, over
(ii) the aggregate of amounts
distributable to the Class N Certificates
pursuant to Section 4.02(b).
"Closing
Date": November 9,
2005.
"Code":
The Internal
Revenue Code of 1986, as it may be amended from
time to time.
"Collection Account": The account or accounts created and
maintained by
the Servicer pursuant to Section 3.04,
which shall be entitled "Collection
Account, Litton Loan Servicing LP, as
Servicer for the registered Holders of
the 2005-CB7 Trust, C-BASS Mortgage Loan
Asset-Backed Certificates, Series
2005-CB7," and which must be an Eligible
Account.
"Collection Period": With respect to any Distribution Date, the
period
from the second day of the calendar month
preceding the month in which such
Distribution Date occurs through the first
day of the month in which such
Distribution Date occurs.
"Combined
Loan-to-Value Ratio": As of any date and Mortgage Loan, the
fraction, expressed as a percentage, the
numerator of which is the Principal
Balance of the Mortgage Loan as of the
Cut-off Date plus the principal balance
of any related senior mortgage loan, if
any, at origination of the Mortgage
Loan and the denominator of which is the
Value of the related Mortgaged
Property.
"Compensating Interest": As defined in Section 3.23
hereof.
"Condemnation
Proceeds": All
awards or settlements in respect of a
taking of a Mortgaged Property by exercise of the power
of eminent domain
or
condemnation.
"Conventional Mortgage
Loan": Any Mortgage Loan that is not an FHA
Loan or VA Loan.
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<PAGE>
"Corporate
Trust Office": With respect to the Trustee, the principal
corporate trust office of the Trustee at
which at any particular time its
corporate trust business in connection with
this Agreement shall be
administered, which office at the date of
the execution of this instrument is
located at 60 Livingston Avenue, St. Paul,
Minnesota 55107, Attention:
Structured Finance, C-BASS 2005-CB7, or at
such other addresses as the Trustee
may designate from time to time by notice
to the Certificateholders, the
Depositor, the Servicer and the Seller.
"Corresponding Cap Carryover Certificate" and "Corresponding REMIC
2
Regular Interest": For any REMIC 2 Regular
Interest set forth below, the
corresponding Cap Carryover Certificate set
forth below, and for any Cap
Carryover Certificate set forth below, the
corresponding REMIC 2 Regular
Interest set forth below:
Corresponding Cap Carryover Certificate
Corresponding
REMIC 2 Regular Interest
---------------------------------------
--------------------------------------
Class AF-1 Certificate
REMIC 2-A1 Interest
Class AF-2 Certificate
REMIC 2-A2 Interest
Class AF-3 Certificate
REMIC 2-A3 Interest
Class AF-4 Certificate
REMIC 2-A4 Interest
Class M-1 Certificate
REMIC 2-M1 Interest
Class M-2 Certificate
REMIC 2-M2 Interest
Class M-3 Certificate
REMIC 2-M3 Interest
Class M-4 Certificate
REMIC 2-M4 Interest
Class M-5 Certificate
REMIC 2-M5 Interest
Class M-6 Certificate
REMIC 2-M6 Interest
Class B-1 Certificate
REMIC 2-B1 Interest
Class B-2 Certificate
REMIC 2-B2 Interest
Class B-3 Certificate
REMIC 2-B3 Interest
Class B-4 Certificate
REMIC 2-B4 Interest
Class B-5 Certificate
REMIC 2-B5 Interest
"Custodial
Agreement": The Custodial Agreement, dated as of October 1,
2005, among the Trustee, the Servicer and
the Custodian, as the same may be
amended or supplemented pursuant to the
terms thereof.
"Custodian": The Bank
of New York, a New York banking corporation, or
any successor custodian appointed pursuant to the terms of the Custodial
Agreement.
"Cut-off
Date": October 1,
2005.
22
<PAGE>
"Cut-off
Date Principal Balance": With respect to any Mortgage Loan, the
unpaid principal balance thereof as of the
Cut-off Date after application of
funds received or advanced on or before
such date (or as of the applicable
date of substitution with respect to an
Eligible Substitute Mortgage Loan).
"Debt
Service Reduction": With respect to any Mortgage Loan, a
reduction
in the scheduled Monthly Payment for such
Mortgage Loan by a court of
competent jurisdiction in a proceeding
under the Bankruptcy Code, except such
a reduction resulting from a Deficient
Valuation.
"Defective
Mortgage Loan": A Mortgage Loan replaced or to be replaced by
one or more Eligible Substitute Mortgage
Loans.
"Deficient
Valuation": With respect to any Mortgage Loan, a valuation of
the related Mortgaged Property by a court
of competent jurisdiction in an
amount less than the then outstanding
principal balance of the Mortgage Loan,
which valuation results from a proceeding
initiated under the Bankruptcy Code.
"Definitive Certificates": As defined in Section 5.02(c)
hereof.
"Delinquent": Any Mortgage Loan with respect to which the
Monthly
Payment and/or any Escrow Payment due on a
Due Date is not made by the close
of business on the next scheduled Due Date
for such Mortgage Loan or any
Mortgage Loan with respect to which any
Servicing Advances made on or before
the Cut-off Date has not been reimbursed by
the related Mortgagor.
"Depositor": Bond
Securitization,
L.L.C., a Delaware limited liability
company, or any successor in interest.
"Depository": The initial depository shall be The Depository
Trust
Company, whose nominee is Cede & Co.,
or any other organization registered as
a "clearing agency" pursuant to Section 17A
of the Securities Exchange Act of
1934, as amended. The Depository shall
initially be the registered Holder of
the Book-Entry Certificates. The Depository
shall at all times be a "clearing
corporation" as defined in Section 8-102(3)
of the Uniform Commercial Code of
the State of New York.
"Depository 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.
"Disqualified Non-U.S. Person": With respect to a Residual
Certificate,
any (A) non-U.S. Person or agent thereof or
(B) U.S. Person with respect to
whom income from a Residual Certificate is
attributable to a foreign permanent
establishment or fixed base, within the
meaning of an applicable income tax
treaty, of such Person or any other U.S.
Person.
"Disqualified Organization": A "disqualified organization" under
Section
860E of the Code, which as of the Closing
Date is any of: (i) the United
States, any state or political subdivision
thereof, any possession of the
United States, any foreign government, any
international organization, or any
agency or instrumentality of any of the
foregoing, (ii) any organization
(other than a cooperative described in
Section 521 of the Code) which is
exempt from the tax imposed by Chapter 1 of
the Code unless such organization
is subject to the tax imposed by Section
511 of the Code, (iii) any
organization
23
<PAGE>
described in Section 1381(a)(2)(C) of the
Code, or (iv) any other Person so
designated by the Trustee based upon an
Opinion of Counsel provided by
nationally recognized counsel to the
Trustee that the holding of an ownership
interest in a Residual Certificate by such
Person may cause the Trust Fund or
any Person having an ownership interest in
any Class of Certificates (other
than such Person) to incur liability for
any federal tax imposed under the
Code that would not otherwise be imposed
but for the transfer of an ownership
interest in a Residual Certificate to such
Person. A corporation will not be
treated as an instrumentality of the United
States or of any state or
political subdivision thereof if all of its
activities are subject to tax and
a majority of its board of directors is not
selected by a governmental unit.
The term "United States," "state" and
"international organization" shall have
the meanings set forth in Section 7701 of
the Code.
"Distribution Account": The trust account or accounts created
and
maintained by the Trustee pursuant to
Section 3.04(b) which shall be entitled
"Distribution Account, U.S. Bank National
Association, as Trustee, in trust
for the registered Holders of 2005-CB7
Trust, C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2005-CB7"
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 November 2005.
"Distribution Information": The items calculated and reported by
the
Trustee pursuant to Section 4.06(a)(i),
(ii), (iii) and (xiv) through (xxiii)
and any other information included in the
Monthly Statement aggregated or
calculated by the Trustee from (a)
information contained in the Remittance
Report or (b) other information furnished
to the Trustee by the Servicer
pursuant to Section 4.07.
"DBRS":
Dominion Bond Rating Service and its successors and if such
company shall for any reason no longer
perform the functions of a securities
rating agency, "DBRS" shall be deemed to
refer to any other "nationally
recognized statistical rating organization"
as set forth on the most current
list of such organizations released by the
Securities and Exchange Commission.
"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-2" (or the
equivalent) by each of the Rating Agencies at
the time any amounts are held on deposit
therein, (ii) an account or accounts
the deposits in which are fully insured by
the FDIC (to the limits established
by such corporation), the uninsured
deposits in which account are otherwise
secured such that, as evidenced by an
Opinion of Counsel delivered to the
Trustee and to each Rating Agency, the
Certificateholders will have a claim
with respect to the funds in such account
or a perfected first priority
security interest against such collateral
(which shall be limited to Permitted
Investments) securing such funds that is
superior to claims of any other
depositors or creditors of the depository
institution with which such account
is maintained, (iii) a trust account or
accounts maintained with the trust
department of a federal or state chartered
depository institution, national
banking association or trust company acting
in its fiduciary capacity or (iv)
an account otherwise acceptable to each
Rating Agency without reduction or
withdrawal of their then current ratings of
the Certificates as evidenced by a
letter from each Rating Agency to the
Trustee.
"Eligible
Substitute Mortgage Loan": A mortgage loan substituted for a
Defective Mortgage Loan pursuant to the
terms of this Agreement which must, on
the date of such substitution, (i) have
an
24
<PAGE>
outstanding principal balance, after
application of all scheduled payments of
principal and interest due during or prior
to the month of substitution, not
in excess of, and not more than 5% less
than, the outstanding principal
balance of the Defective Mortgage Loan as
of the Due Date in the calendar
month during which the substitution occurs,
(ii) have a Mortgage Interest
Rate, with respect to an adjustable rate
Mortgage Loan, not less than the
Mortgage Interest Rate of the Defective
Mortgage Loan and not more than 1% in
excess of the Mortgage Interest Rate of
such Defective Mortgage Loan, (iii) if
an adjustable rate Mortgage Loan, have a
Maximum Loan Rate not less than the
Maximum Loan Rate for the Defective
Mortgage Loan, (iv) if an adjustable rate
Mortgage Loan, have a Minimum Loan Rate not
less than the Minimum Loan Rate of
the Defective Mortgage Loan, (v) if an
adjustable rate Mortgage Loan, have a
Gross Margin equal to or greater than the
Gross Margin of the Defective
Mortgage Loan, (vi) if an adjustable rate
Mortgage Loan, have the same Index
as the Defective Mortgage Loan, (vii) if an
adjustable rate Mortgage Loan,
have a next Adjustment Date not more than
two months later than the next
Adjustment Date on the Defective Mortgage
Loan, (viii) have a remaining term
to maturity not greater than (and not more
than one year less than) that of
the Defective Mortgage Loan, (ix) be
current as of the date of substitution,
(x) have a Combined Loan-to-Value Ratio as
of the date of substitution equal
to or lower than the Combined Loan-to-Value
Ratio of the Defective Mortgage
Loan as of such date, (xi) have a risk
grading determined by the Seller at
least equal to the risk grading assigned on
the Defective Mortgage Loan, (xii)
have been reunderwritten by the Seller in
accordance with the same
underwriting criteria and guidelines as the
Defective Mortgage Loan, (xiii)
have the same Due Date as the Defective
Mortgage Loan and (xiv) conform to
each representation and warranty set forth
in Section 2.04 hereof applicable
to the Defective Mortgage Loan. In the
event that one or more mortgage loans
are substituted for one or more Defective
Mortgage Loans, the amounts
described in clause (i) hereof shall be
determined on the basis of aggregate
principal balances, the Mortgage Interest
Rates described in clause (ii)
hereof shall be determined on the basis of
weighted average Mortgage Interest
Rates, the risk gradings described in
clause (xi) hereof shall be satisfied as
to each such mortgage loan, the terms
described in clause (viii) hereof shall
be determined on the basis of weighted
average remaining term to maturity, the
Combined Loan-to-Value Ratios described in
clause (x) hereof shall be
satisfied as to each such mortgage loan
and, except to the extent otherwise
provided in this sentence, the
representations and warranties described in
clause (xiv) hereof must be satisfied as to
each Eligible Substitute Mortgage
Loan or in the aggregate, as the case may
be.
"ERISA":
The Employee Retirement Income Security Act of 1974, as
amended.
"ERISA-Qualifying Underwriting": A best efforts or firm
commitment
underwriting or private placement that
would satisfy the requirements of
Prohibited Transaction Exemption 90-33, 55
Fed. Reg. 23151 (1990), as amended,
granted to a predecessor of the Underwriter
by the United States Department of
Labor (or any other applicable
underwriter's exemption granted by the United
States Department of Labor), except, in
relevant part, for the requirement
that the certificates have received a
rating at the time of acquisition that
is in one of the three (or four, in the
case of a "designated transaction")
highest generic rating categories by at
least one of the Rating Agencies.
"ERISA-Restricted Certificate": The Class M, Class B, Class N,
Class X,
Class R-X and Class R Certificates and any
other Certificate of a class that
ceases to satisfy the applicable rating
requirement of Prohibited Transaction
Exemption 90-33, 55 Fed. Reg. 23151 (1990),
as amended (or any other
applicable underwriter's exemption granted
by the United States Department of
Labor).
"Escrow
Account": The account or accounts created and maintained
pursuant to Section 3.06.
"Escrow
Payments": The amounts constituting ground rents, taxes,
assessments, water rates, mortgage
insurance premiums, fire and hazard
insurance premiums and other payments
required to be escrowed by the Mortgagor
with the mortgagee pursuant to any Mortgage
Loan.
25
<PAGE>
"Estate in
Real Property": A fee simple estate in a parcel of real
property.
"Expense
Fee Rate": The sum of (i) the Trustee Fee Rate and (ii) the
Servicing Fee Rate.
"Extended
Period": As defined in
Section 9.04(b).
"Extra
Principal Distribution Amount": As of any Distribution Date,
the
lesser of (x) the Monthly Excess Cashflow
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
Maturity Date": As to
each Class of
Certificates, the date
set
forth as such in the Preliminary
Statement.
"Final
Recovery Determination": With respect to any defaulted Mortgage
Loan or any REO Property (other than a
Mortgage Loan or REO Property purchased
by the Seller or the Servicer pursuant to
or as contemplated by Section 2.03
or 10.01), a determination made by the
Servicer that all Insurance Proceeds,
Liquidation Proceeds and other payments or
recoveries which the Servicer, in
its reasonable good faith judgment, expects
to be finally recoverable in
respect thereof have been so recovered. The
Servicer shall maintain records,
prepared by a Servicing Officer, of each
Final Recovery Determination made
thereby.
"First
Lien Mortgage Loan": Any of the Mortgage Loans which are
secured
by a first mortgage lien that is senior to
a Second Lien Mortgage Loan on the
related Mortgaged Property.
"Fitch":
Fitch Ratings and its successors, and if such company shall for
any reason no longer perform the functions
of a securities rating agency,
"Fitch" shall be deemed to refer to any
other "nationally recognized
statistical rating organization" as set
forth on the most current list of such
organizations released by the Securities
and Exchange Commission.
"Foreclosure Price": The amount reasonably expected to be received
from
the sale of the related Mortgaged Property
net of any expenses associated with
foreclosure proceedings.
"Grantor
Trust": That portion of the Trust Fund exclusive of REMIC 1,
REMIC 2, REMIC B-1, REMIC B-2, REMIC B-3,
REMIC B-4, REMIC B-5 and REMIC X/N
which holds (a) the REMIC X/N X/N Interest
and (b) the obligation to pay
Adjusted Net WAC Carryover Amounts (other
than Adjusted Net WAC Carryover
Amounts funded from the Cap Contract or the
Cap Contract Reserve Fund).
"Gross
Margin": With respect to each adjustable rate Mortgage Loan,
the
fixed percentage, if any, set forth in the
related Mortgage Note that is added
to the Index on each Adjustment Date in
accordance with the terms of the
related Mortgage Note used to determine the
Mortgage Interest Rate for such
Mortgage Loan.
"HUD": The
United States Department of Housing and Urban Development, or
any successor thereto, including the
Federal Housing Commissioner and the
Secretary of Housing and Urban Development
where appropriate under the FHA
Regulations.
26
<PAGE>
"Independent": When used with respect to any specified Person, any
such
Person who (i) is in fact independent of
the Depositor, the Servicer and their
respective Affiliates, (ii) does not have
any direct financial interest in or
any material indirect financial interest in
the Depositor or the Servicer or
any Affiliate thereof, and (iii) is not
connected with the Depositor or the
Servicer or any Affiliate thereof as an
officer, employee, promoter,
underwriter, trustee, partner, director or
Person performing similar
functions; provided, however, that a Person
shall not fail to be Independent
of the Depositor or the Servicer or any
Affiliate thereof merely because such
Person is the beneficial owner of 1% or
less of any Class of securities issued
by the Depositor or the Servicer or any
Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than the
Servicer) that would be an "independent
contractor" with respect to the Trust
Fund within the meaning of Section
856(d)(3) of the Code if the Trust Fund
were a real estate investment trust (except
that the ownership tests set forth
in that section shall be considered to be
met by any Person that owns,
directly or indirectly, 35 percent or more
of any Class of Certificates), so
long as the Trust Fund does not receive or
derive any income from such Person
and provided that the relationship between
such Person and the Trust Fund is
at arm's length, all within the meaning of
Treasury Regulation Section
1.856-4(b)(5), or (ii) any other Person
(including the Servicer) if the
Trustee has received an Opinion of Counsel,
which Opinion of Counsel shall be
an expense of the Trust Fund, to the effect
that the taking of any action in
respect of any REO Property by such Person,
subject to any conditions therein
specified, that is otherwise herein
contemplated to be taken by an Independent
Contractor will not cause such REO Property
to cease to qualify as
"foreclosure property" within the meaning
of Section 860G(a)(8) of the Code
(determined without regard to the exception
applicable for purposes of Section
860D(a) of the Code), or cause any income
realized in respect of such REO
Property to fail to qualify as Rents from
Real Property.
"Index":
With respect to each adjustable rate Mortgage Loan and with
respect to each related Adjustment Date,
the index as specified in the related
Mortgage Note.
"Initial
Certificate Principal Balance": With respect to any Certificate
of a Class other than a Class N, Class X or
Residual Certificate, the amount
designated "Initial Certificate Principal
Balance" on the face thereof.
"Initial
Notional Amount": With respect to any Class N Certificate, the
amount designated "Initial Notional Amount"
on the face thereof.
"Initial
Overcollateralization Amount": $11,516,748.
"Insurance
Proceeds": Proceeds of any title policy, hazard policy or
other insurance policy covering a Mortgage
Loan, to the extent such proceeds
are not to be applied to the restoration of
the related Mortgaged Property or
released to the Mortgagor in accordance
with the procedures that the Servicer
would follow in servicing mortgage loans
held for its own account, subject to
the terms and conditions of the related
Mortgage Note and Mortgage.
"Interest
Accrual Period": With respect to any Distribution Date and (i)
with respect to the Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5,
Class M-6, Class B-1, Class B-2 and Class
B-3 Certificates, the period from
and including the preceding Distribution
Date through and including the day
prior to the current Distribution Date (or,
in the case of the first
Distribution Date, the period from the
Closing Date through and including
November 24, 2005), and (ii) with respect
to the Class AF-1, Class AF-
2, Class AF-3, Class AF-4, Class B-4, Class
B-5, Class N and Class X
Certificates, the REMIC 1 Regular Interests
and the REMIC 2-X/N Interest, the
calendar month immediately preceding the
month in which such Distribution Date
occurs.
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"Interest
Carry Forward Amount": For any Class of Certificates (other
than the Residual Certificates) and any
Distribution Date, the sum of (a) the
excess, if any, of the Accrued Certificate
Interest and any Interest Carry
Forward Amount for each Class for the prior
Distribution Date, over the amount
in respect of interest actually distributed
on such Class on such prior
Distribution Date and (b) interest on such
excess at the applicable
Pass-Through Rate (x) with respect to the
Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1,
Class B-2 and Class B-3
Certificates, on the basis of the actual
number of days elapsed on the basis
of a 360-day year since the prior
Distribution Date, and (y) with respect to
the Class AF-1, Class AF-2, Class AF-3,
Class AF-4, Class B-4, Class B-5,
Class N and Class X Certificates, on the
basis of a 360-day year consisting of
twelve 30 day months.
"Interest
Percentage": With respect to any Class of Certificates and any
Distribution Date, the ratio (expressed as
a decimal carried to ten places) of
the Accrued Certificate Interest for such
Class to the sum of the Accrued
Certificate Interest for all Classes of
Certificates, in each case with
respect to such Distribution Date and
without regard to shortfalls caused by
the Relief Act or similar state law.
"Interest
Remittance Amount": As of any Distribution Date, the sum,
without duplication, of (i) all interest
received by the Servicer on or prior
to the related Determination Date for such
Distribution Date or advanced with
respect to Monthly Payments due during the
related Collection Period on the
Mortgage Loans (less the Servicing Fee,
amounts available for reimbursement of
Advances and Servicing Advances pursuant to
Section 3.05 and expenses
reimbursable pursuant to Section 6.03),
(ii) the portion of any full or
partial Principal Prepayment related to
interest with respect to an adjustable
rate Mortgage Loan received during the
related Prepayment Period, (iii) all
Compensating Interest paid by the Servicer
on the related Determination Date
with respect to the Mortgage Loans, (iv)
the portion of any payment in
connection with any Purchase Price, Net
Liquidation Proceeds, Insurance
Proceeds or Condemnation Proceeds relating
to interest with respect to the
Mortgage Loans received during the related
Prepayment Period, (v) the portion
of any Substitution Adjustment Amount
relating to interest with respect to the
Mortgage Loans received during the related
Prepayment Period, (vi) with
respect to the related Distribution Date on
which the Trust is to be
terminated in accordance with the Section
10.01 hereof, that portion of the
Termination Price with respect to the
Mortgage Loans in respect of interest
and (vii) the portion of any Reimbursement
Amount or Subsequent Recovery
allocable to interest related to the
Mortgage Loans received during the
related Prepayment Period.
"Late
Collections": With respect to any Mortgage Loan, all amounts
received subsequent to the Determination
Date immediately following any
related Collection Period, whether as late
payments of Monthly Payments or as
Insurance Proceeds, Liquidation Proceeds or
otherwise, which represent late
payments or collections of principal and/or
interest due (without regard to
any acceleration of payments under the
related Mortgage and Mortgage Note) but
delinquent on a contractual basis for such
Collection Period and not
previously recovered.
"Lender":
As defined in Section
3.30(a) hereof.
"LIBOR":
With respect to each Interest Accrual Period, the rate
determined by the Trustee on the related
LIBOR Determination Date on the basis
of the offered rate for one-month United
States dollar deposits, as such rate
appears on the Telerate Page 3750, as of
11:00 a.m. (London time) on such
LIBOR Determination Date. If no such
quotations are available on an LIBOR
Determination Date, LIBOR for the related
Interest Accrual Period will be
established by the Trustee as follows:
(i) If on such LIBOR Determination Date two or more Reference
Banks provide quotations as to the rate at
which deposits in U.S. Dollars are
offered as of 11:00 a.m. (London time) to
prime banks in the London interbank
market for a period of one month in amounts
approximately equal to the
aggregate Certificate Principal Balance of
the Class M-1, Class M-2, Class
M-3, Class M-4,
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Class M-5, Class M-6, Class B-1, Class B-2
and Class B-3 Certificates, LIBOR
for the related Interest Accrual Period
shall be the arithmetic mean of such
offered quotations (rounded upwards if
necessary to the nearest whole multiple
of 0.001%);
(ii) If on such LIBOR Determination Date fewer than two
Reference
Banks provide such offered quotations,
LIBOR for the related Interest Accrual
Period shall be the arithmetic mean of the
rates quoted by one or more major
banks in New York City, selected by the
Trustee after consultation with the
Servicer, as of 11:00 a.m., New York City
time, on such date for loans in U.S.
Dollars to leading European banks for a
period of one month in amounts
approximately equal to the aggregate
Certificate Principal Balance of 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 and Class B-3 Certificates;
and
(iii) If no such quotations can be obtained, LIBOR for the
related
Interest Accrual Period shall be LIBOR for
the prior Distribution Date.
"LIBOR
Business Day": Any day on which banks in London, England and
The
City of New York are open and conducting
transactions in foreign currency and
exchange.
"LIBOR
Determination Date": With respect to the Class M, Class B-1,
Class B-2 and Class B-3 Certificates, (i)
for the first Distribution Date, the
second LIBOR Business Day preceding the
Closing Date and (ii) for each
subsequent Distribution Date, the second
LIBOR Business Day prior to the
immediately preceding Distribution
Date.
"Liquidated Mortgage Loan": As to any Distribution Date, any
Mortgage
Loan in respect of which the Servicer has
determined, in accordance with the
servicing procedures specified herein, as
of the end of the related Prepayment
Period, that all Liquidation Proceeds and
Insurance Proceeds which it expects
to recover with respect to the liquidation
of the Mortgage Loan or disposition
of the related REO Property have been
recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of
the
following events: (i) such Mortgage Loan is
paid in full; (ii) a Final
Recovery Determination is made as to such
Mortgage Loan; or (iii) such
Mortgage Loan is removed from the Trust
Fund by reason of its being purchased,
sold or replaced pursuant to or as
contemplated by Section 2.03 or Section
10.01. With respect to any REO Property,
either of the following events: (i) a
Final Recovery Determination is made as to
such REO Property; or (ii) such REO
Property is removed from the Trust Fund by
reason of its being sold or
purchased pursuant to Section 3.13 or
Section 10.01.
"Liquidation Proceeds": The amount (other than amounts received
in
respect of the rental of any REO Property
prior to REO Disposition) received
by the Servicer in connection with (i) the
taking of all or a part of a
Mortgaged Property by exercise of the power
of eminent domain or condemnation
or (ii) the liquidation of a defaulted
Mortgage Loan by means of a trustee's
sale, foreclosure sale or otherwise.
"Liquidation Report": The report with respect to a Liquidated
Mortgage
Loan in such form and containing such
information as is agreed to by the
Servicer and the Trustee.
"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
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the related Mortgage Note and indemnifying
the Trust against any loss, cost or
liability resulting from the failure to
deliver the original Mortgage Note) in
the form of Exhibit H hereto.
"Majority
Certificateholders":
The Holders of
Certificates
evidencing
at least 51% of the Voting Rights.
"Majority
Class R Certificateholders": The Holders of Class R
Certificates evidencing at least a 51%
Percentage Interest in the Class R
Certificates.
"Marker
Interest": Each of the REMIC 1-A1 Interest, the REMIC 1-A2
Interest, the REMIC 1-A3 Interest, the
REMIC 1-A4 Interest, the REMIC 1-M1
Interest, the REMIC 1-M2 Interest, the
REMIC 1-M3 Interest, the REMIC 1-M4
Interest, the REMIC 1-M5 Interest, the
REMIC 1-M6 Interest, the REMIC 1-B1
Interest, the REMIC 1-B2 Interest, the
REMIC 1-B3 Interest, the REMIC 1-B4
Interest and the REMIC 1-B5 Interest.
"Maximum
Loan Rate": With respect to each adjustable rate Mortgage Loan,
the percentage set forth in the related
Mortgage Note as the maximum Mortgage
Interest Rate thereunder.
"Maximum
Rate Cap": With respect to any Distribution Date, a per annum
rate equal to 12 times the quotient of (x)
the total scheduled interest that
would have accrued on the Mortgage Loans at
their maximum lifetime Net
Mortgage Interest Rates and (y) the
aggregate Principal Balance of the
Mortgage Loans (as of the first day of the
related Collection Period)
expressed in the case of the Class M, Class
B-1, Class B-2 and Class B-3
Certificates on the basis of a 360 day year
and the actual number of days
elapsed in the related Interest Accrual
Period.
"Minimum
Loan Rate": With respect to each adjustable rate Mortgage Loan,
the percentage set forth in the related
Mortgage Note as the minimum Mortgage
Interest Rate thereunder or if no such
percentage is set forth in the related
Mortgage Note, the Gross Margin set forth
in the related Mortgage Note.
"Monthly
Excess Cashflow Allocation": Shall have the meaning assigned
thereto in Section 4.02.
"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 (xiv) under Section 4.01.
"Monthly
Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest
on such Mortgage Loan which is
payable by the related Mortgagor from time
to time under the related Mortgage
Note, determined: (a) after giving effect
to (i) any Deficient Valuation
and/or Debt Service Reduction with respect
to such Mortgage Loan and (ii) any
reduction in the amount of interest
collectible from the related Mortgagor
pursuant to the Relief Act or similar state
laws; (b) without giving effect to
any extension granted or agreed to by the
Servicer pursuant to Section 3.01;
and (c) on the assumption that all other
amounts, if any, due under such
Mortgage Loan are paid when due.
"Moody's":
Moody's Investors Service, Inc. and its successors, and if
such company shall for any reason no longer
perform the functions of a
securities rating agency, "Moody's" shall
be deemed to
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refer to any other "nationally recognized
statistical rating organization" as
set forth on the most current list of such
organizations released by the
Securities and Exchange Commission.
"Mortgage": The mortgage, deed of trust or other instrument
creating a
first or second lien on, or first or second
priority security interest in, a
Mortgaged Property securing a Mortgage
Note.
"Mortgage
File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan
and any additional documents required
to be added to the Mortgage File pursuant
to this Agreement.
"Mortgage
Interest Rate": With respect to each Mortgage Loan, the annual
rate at which interest accrues on such
Mortgage Loan from time to time in
accordance with the provisions of the
related Mortgage Note, which rate (i) in
the case of each adjustable rate Mortgage
Loan (A) as of any date of
determination until the first Adjustment
Date following the Cut-off Date shall
be the rate set forth in the Mortgage Loan
Schedule as the Mortgage Interest
Rate in effect immediately following the
Cut-off Date and (B) as of any date
of determination thereafter shall be the
rate as adjusted on the most recent
Adjustment Date, to equal the sum, rounded
to the nearest 0.125% as provided
in the Mortgage Note, of the Index,
determined as set forth in the related
Mortgage Note, plus the related Gross
Margin subject to the limitations set
forth in the related Mortgage Note and (ii)
in the case of each fixed rate
Mortgage Loan shall remain constant at the
rate set forth in the Mortgage Loan
Schedule as the Mortgage Interest Rate in
effect immediately following the
Cut-off Date. 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 and set forth in
Exhibit D attached hereto.
"Mortgage
Loan Purchase Agreement": The agreement between the Seller and
the Depositor, dated as of October 1, 2005,
regarding the transfer of the
Mortgage Loans by the Seller to or at the
direction of the Depositor attached
hereto as Exhibit G.
"Mortgage
Loan Schedule": As of any date (i) with respect to the
Mortgage Loans, the list of such Mortgage
Loans included in the Trust Fund on
such date. The Mortgage Loan Schedule shall
be prepared by the Seller and
shall set forth the following information
with respect to each Mortgage Loan:
(1)
the Seller's
Mortgage Loan identifying number;
(2)
the city, state,
and zip code of the Mortgaged Property;
(3)
the type of
Residential Dwelling constituting the Mortgaged
Property or a designation that the Mortgaged Property is a
multi-family property;
(4)
the occupancy
status of the Mortgaged Property at origination;
(5)
the original
months to maturity;
(6)
the date of
origination;
(7)
the first
payment date;
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(8)
the stated
maturity date;
(9)
the stated
remaining months to maturity;
(10)
the original principal
amount of the Mortgage Loan;
(11)
the Principal Balance
of each Mortgage Loan as of the Cut-off
Date;
(12)
the Mortgage Interest
Rate of the Mortgage Loan as of the Cut-off
Date;
(13)
the current principal
and interest payment of the Mortgage Loan as
of the Cut-off Date;
(14)
the contractual
interest paid to date of the Mortgage Loan;
(15)
if the Mortgage Loan
is not owner-financed, the Combined
Loan-to-Value Ratio at origination;
(16)
a code indicating the
loan performance status of the Mortgage Loan
as of the Cut-off Date;
(17)
a code indicating
whether the Mortgaged Property is in bankruptcy
or in its forbearance period as of the Cut-off Date;
(18)
[reserved];
(19)
a code indicating the
Index that is associated with such Mortgage
Loan;
(20)
the Gross Margin;
(21)
the Periodic Rate
Cap;
(22)
the Minimum Loan
Rate;
(23)
the Maximum Loan
Rate;
(24)
a code indicating
whether the Mortgage Loan has a prepayment
penalty and the type of prepayment penalty;
(25)
the first Adjustment
Date immediately following the Cut-off Date;
(26)
the rate adjustment
frequency;
(27)
the payment adjustment
frequency;
(28)
a code indicating
whether the Mortgage Loan is owner-financed;
(29)
a code indicating
whether the Mortgage Loan is an interest only
Mortgage Loan and, if so, the interest only period at
origination;
(30)
a code indicating
whether the Mortgage Loan is a Second Lien
Mortgage Loan.
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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
current Principal Balance of the
Mortgage Loans; (3) the weighted average
Mortgage Interest Rate of the
Mortgage Loans; and (4) the weighted
average maturity of the Mortgage Loans.
The Mortgage Loan Schedule shall be amended
from time to time by the Seller in
accordance with the provisions of this
Agreement. With respect to any Eligible
Substitute Mortgage Loan, Cut-off Date
shall refer to the related Cut-off Date
for such Mortgage Loan, determined in
accordance with the definition of
Cut-off Date herein.
"Mortgage
Note": The original executed note or other evidence of
indebtedness evidencing the indebtedness of
a Mortgagor under a Mortgage Loan.
"Mortgage
Pool": The pool of Mortgage Loans, identified on Exhibit D
from time to time, and any REO Properties
acquired in respect thereof.
"Mortgaged
Property": The underlying property securing a Mortgage Loan,
including any REO Property, consisting of
an Estate in Real Property improved
by a Residential Dwelling or multi-family
dwelling.
"Mortgagor": The
obligor on a Mortgage Note.
"Net
Liquidation Proceeds": With respect to any Liquidated Mortgage
Loan
or any other disposition of related
Mortgaged Property (including REO
Property) the related Liquidation Proceeds
net of Advances, Servicing
Advances, Servicing Fees and any other
accrued and unpaid servicing fees
received and retained in connection with
the liquidation of such Mortgage Loan
or Mortgaged Property.
"Net
Mortgage Interest Rate": With respect to any Mortgage Loan, the
Mortgage Interest Rate borne by such
Mortgage Loan minus the Expense Fee Rate.
"Net
Rate": With respect to any Distribution Date, a per annum rate
equal to 12 times the quotient of (x) the
total scheduled interest on the
Mortgage Loans for the related Collection
Period at their Net Mortgage Rates
and (y) the aggregate Principal Balance of
the Mortgage Loans (as of the first
day of the related Collection Period).
"Net WAC
Cap": With respect to any Distribution Date, a per annum rate
equal to 12 times the quotient of (x) the
total scheduled interest on the
Mortgage Loans for the related Collection
Period at the Net Mortgage Interest
Rates and (y) the aggregate Certificate
Principal Balance of the Class A,
Class M and Class B Certificates, expressed
in the case of the Class M, Class
B-1, Class B-2 and Class B-3 Certificates
on the basis of a 360 day year and
the actual number of days elapsed in the
related Interest Accrual Period.
"Net WAC
Carryover Amount": If on any Distribution Date, the Accrued
Certificate Interest for any of the Class
A, Class M or Class B Certificates
is based upon the Net WAC Cap, the excess
of (i) the amount of interest such
class would have been entitled to receive
on such Distribution Date based on
clauses (i) and (iii) only of its
Pass-Through Rate over (ii) the amount of
interest such class was entitled to receive
on such Distribution Date based on
the Net WAC 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 (based on clauses (i) and
(iii) only of its Pass-Through
Rate) on such class).
"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.
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"Nonrecoverable Advance": Any Advance or Servicing Advance
previously
made or proposed to be made in respect of a
Mortgage Loan or REO Property
that, in the good faith business judgment
of the Servicer, will not or, in the
case of a proposed Advance or Servicing
Advance, would not be ultimately
recoverable from Late Collections on such
Mortgage Loan or REO Property as
provided herein.
"Notional
Amount": With respect to the Class N Certificates, an amount
equal to the Original Class N Notional
Amount reduced by the aggregate
distributions made to the Class N
Certificates in respect of the Class N
Notional Amount pursuant to Section
4.02(b)(xxxix) or Section 4.02(c).
"Offered
Certificates": The
Class A and Class M Certificates.
"Officer's
Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the
President or a vice president
(however denominated), or by the Treasurer,
the Secretary, or one of the
assistant treasurers or assistant
secretaries of the Servicer, the Seller or
the Depositor, as applicable.
"Opinion
of Counsel": A written opinion of counsel, who may, without
limitation, be a salaried counsel for the
Depositor or the Servicer except
that any opinion of counsel relating to (a)
the qualification of any REMIC as
a REMIC or (b) compliance with the REMIC
Provisions must be an opinion of
Independent counsel.
"Optional
Termination Date": The first Distribution Date on which the
Servicer may opt to terminate the Mortgage
Pool pursuant to Section 10.01.
"Original
Class N Notional Amount": The Notional Amount of the Class N
Certificates on the Closing Date, as set
forth opposite such Class in the
Preliminary Statement.
"Original
Class Certificate Principal Balance": With respect to each
Class of Certificates, the Certificate
Principal Balance thereof on the
Closing Date, as set forth opposite such
Class in the Preliminary Statement,
except with respect to the Class N, Class X
and Residual Certificates, which
have an Original Class Certificate
Principal Balance of zero.
"Original
Notional Amount": The
Original Class N Notional Amount.
"Overcollateralization Amount": As of any Distribution Date, the
excess,
if any, of (x) the Pool Balance as of the
last day of the immediately
preceding Collection Period over (y) the
aggregate Certificate Principal
Balances of the Class A, Class M and Class
B Certificates (after taking into
account all distributions of principal on
such Distribution Date).
"Overcollateralization Deficiency": As of any Distribution Date,
the
excess, if any, of (x) the Targeted
Overcollateralization Amount for such
Distribution Date over (y) the
Overcollateralization Amount for such
Distribution Date, calculated for this
purpose after taking into account the
reduction on such Distribution Date of the
Certificate Principal Balances of
the Class A, Class M and Class B
Certificates resulting from the distribution
of the Principal Distribution Amount (but
not the Extra Principal Distribution
Amount) on such Distribution Date, but
prior to taking into account any
Applied Realized Loss Amounts on such
Distribution Date.
"Overcollateralization Release Amount": With respect to any
Distribution
Date on or 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
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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": Any of the Class AF-1 Pass-Through Rate, the
Class
AF-2 Pass-Through Rate, the Class AF-3
Pass-Through Rate, the Class AF-4
Pass-Through Rate, the Class M-1
Pass-Through Rate, the Class M-2 Pass-Through
Rate, the Class M-3 Pass-Through Rate, the
Class M-4 Pass-Through Rate, the
Class M-5 Pass-Through Rate, the Class M-6
Pass-Through Rate, the Class B-1
Pass-Through Rate, the Class B-2
Pass-Through Rate, the Class B-3 Pass-Through
Rate, the Class B-4 Pass-Through Rate and
the Class B-5 Pass-Through Rate.
With respect to the Class N Certificates,
the Pass-Through Rate is 4.50% per
annum.
"Paying
Agent": Any paying
agent appointed pursuant to Section 5.05.
"Percentage Interest": With respect to any Certificate (other than
a
Class N, Class X or Residual Certificate),
a fraction, expressed as a
percentage, the numerator of which is the
Initial Certificate Principal
Balance represented by such Certificate and
the denominator of which is the
Original Class Certificate Principal
Balance of the related Class. With
respect to a Class N Certificate, the
undivided percentage interest obtained
by dividing the Initial Notional Amount
evidenced by such Certificate by the
Original Class N Notional Amount, as the
case may be, of such Class. With
respect to a Class X or Residual
Certificate, the portion of the Class
evidenced thereby, expressed as a
percentage, as stated on the face of such
Certificate; provided, however, that the
sum of all such percentages for each
such Class totals 100%.
"Periodic
Rate Cap": With respect to each adjustable rate Mortgage Loan
and any Adjustment Date therefor, the fixed
percentage set forth in the
related Mortgage Note, which is the maximum
amount by which the Mortgage
Interest Rate for such Mortgage Loan may
increase or decrease (without regard
to the Maximum Loan Rate or the Minimum
Loan Rate) on such Adjustment Date
from the Mortgage Interest Rate in effect
immediately prior to such Adjustment
Date.
"Permitted
Investments": Any one or more of the following obligations or
securities acquired at a purchase price of
not greater than par, regardless of
whether issued or managed by the Depositor,
the Servicer, the Trustee or any
of their respective Affiliates or for which
an Affiliate of the Trustee serves
as an advisor:
(i) direct obligations of, or obligations fully guaranteed as
to
timely
payment of principal and interest by, the United States or any
agency or
instrumentality thereof, provided such obligations are backed
by the
full faith and credit of the United States;
(ii) (A) demand
and time deposits in, certificates of deposit of,
bankers'
acceptances issued by or federal funds sold by any depository
institution or trust company (including the Trustee or its agents
acting
in their
respective commercial capacities) incorporated under the laws
of the
United States of America or any state thereof and subject to
supervision and examination by federal and/or state authorities, so
long
as, at the
time of such investment or contractual commitment providing
for such
investment, such depository institution or trust company or its
ultimate
parent has a short-term uninsured debt rating in one of the two
highest
available rating categories of S&P and Moody's and the
highest
available rating
category of Fitch and provided
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<PAGE>
that each
such investment has an original maturity of no more than 365
days and
(B) any other demand or time deposit or deposit which is fully
insured by
the FDIC;
(iii) repurchase obligations with a term not to exceed 30 days
with
respect to any security described in clause (i) above and
entered
into with
a depository institution or trust company (acting as
principal) rated A or higher by
S&P and Fitch and rated A2 or higher by
Moody's,
provided, however, that collateral transferred pursuant to such
repurchase
obligation must be of the type described in clause (i) above
and must
(A) be valued daily at current market prices plus accrued
interest
or (B) pursuant to such valuation, be equal, at all times, to
105% of
the cash transferred by the Trustee in exchange for such
collateral
and (C) be delivered to the Trustee or, if the Trustee is
supplying
the collateral, an agent for the Trustee, in such a manner as
to
accomplish perfection of a security interest in the collateral
by
possession
of certificated securities;
(iv) securities bearing interest or sold at a discount that are
issued by
any corporation incorporated under the laws of the United
States of
America or any State thereof and that are rated by each Rating
Agency in
its highest long-term unsecured rating categories at the time
of such
investment or contractual commitment providing for such
investment;
(v) commercial paper (including both non-interest-bearing
discount
obligations and interest-bearing obligations payable on demand or
on a
specified date not
more than 30 days after the date of acquisition
thereof)
that is rated by each Rating Agency in its highest short-term
unsecured
debt rating available at the time of such investment;
(vi) units of money market funds registered under the
Investment
Company
Act of 1940 including funds managed or advised by the Trustee
or
affiliates
thereof having the highest rating category by each applicable
Rating
Agency; and
(vii) if previously confirmed in writing to the Trustee, any
other
demand,
money market or time deposit, or any other obligation, security
or
investment, as may be acceptable to the Rating Agencies in writing
as
a
permitted investment of funds backing securities having ratings
equivalent
to its highest initial rating of the Class A Certificates;
provided, that (i) 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 and
(ii) each such investment must be a
"permitted investment" within the meaning
of Section 860G(a)(5) of the Code.
"Permitted
Transferee":
Any transferee of a
Residual Certificate other
than a Disqualified Organization or a
Disqualified Non-U.S. Person.
"Person":
Any individual, corporation, partnership, joint venture,
association, joint stock company, trust,
limited liability company,
unincorporated organization or government
or any agency or political
subdivision thereof.
"Pool
Balance": As of any date of determination, the aggregate
Principal
Balance of the Mortgage Loans.
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<PAGE>
"Prepayment Interest Shortfall": With respect to any Distribution
Date,
for each Mortgage Loan that was during the
related Prepayment Period the
subject of a Principal Prepayment in full
that was applied by the Servicer to
reduce the outstanding principal balance of
such loan on a date preceding the
related Due Date, an amount equal to
interest at the applicable Mortgage
Interest Rate (net of the Servicing Fee
Rate) on the amount of such Principal
Prepayment for the number of days
commencing on the date on which the
prepayment is applied and ending on the
last day of the related Prepayment
Period.
"Prepayment Period": With respect to any Distribution Date, the
calendar
month preceding the month in which such
Distribution Date occurs.
"Primary
Insurance Policy": Each policy of primary guaranty mortgage
insurance issued by a Qualified Insurer in
effect with respect to any Mortgage
Loan, or any replacement policy therefor
obtained by the Servicer pursuant to
Section 3.08.
"Principal
Balance": As to any Mortgage Loan and any day, other than a
Liquidated Mortgage Loan, the related
Cut-off Date Principal Balance, minus
the sum of (i) all collections and other
amounts credited against the
principal balance of any such Mortgage
Loan, (ii) the principal portion of
Advances, (iii) any Deficient Valuation and
(iv) any principal reduction
resulting from a Servicer Modification. For
purposes of this definition, a
Liquidated Mortgage Loan shall be deemed to
have a Principal Balance equal to
the Principal Balance of the related
Mortgage Loan as of the final recovery of
related Liquidation Proceeds and a
Principal Balance of zero thereafter. As to
any REO Property and any day, the Principal
Balance of the related Mortgage
Loan immediately prior to such Mortgage
Loan becoming REO Property minus any
REO Principal Amortization received with
respect thereto on or prior to such
day.
"Principal
Distribution Amount": As to any Distribution Date, the sum of
(i) the Principal Remittance Amount minus,
for Distribution Dates occurring on
and after the Stepdown Date and for which a
Trigger Event is not in effect,
the Overcollateralization Release Amount,
if any, and (ii) the Extra Principal
Distribution Amount, if any.
"Principal
Prepayment": Any payment of principal made by the Mortgagor
on a Mortgage Loan which is received in
advance of its scheduled Due Date and
which is not accompanied by an amount of
interest representing the full amount
of scheduled interest due on any Due Date
in any month or months subsequent to
the month of prepayment.
"Principal
Remittance Amount": With respect to any Distribution Date, to
the extent of funds available therefor, the
sum (less amounts available for
reimbursement of Advances and Servicing
Advances pursuant to Section 3.05 and
expenses reimbursable pursuant to Section
6.03) of: (i) each payment of
principal on a Mortgage Loan due during the
related Collection Period and
received by the Servicer on or prior to the
related Determination Date, and
any Advances with respect thereto, (ii) the
portion of all full and partial
Principal Prepayments or Insurance
Proceeds, Condemnation Proceeds and
Subsequent Recoveries allocable to
principal received by the Servicer during
the related Prepayment Period, (iii) the
Net Liquidation Proceeds allocable to
principal actually collected by the
Servicer during the related Prepayment
Period, (iv) with respect to Defective
Mortgage Loans repurchased with respect
to such Prepayment Period, the portion of
the Purchase Price allocable to
principal, (v) any Substitution Adjustment
Amounts allocable to principal
received during the related Prepayment
Period and (vi) on the Distribution
Date on which the Trust is to be terminated
in accordance with Section 10.01
hereof, that portion of the Termination
Price in respect of principal.
"Private
Certificates": Any of the Class B, Class N, Class X and
Residual Certificates.
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<PAGE>
"Property
Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy covering a
Mortgage Loan, to the extent such
proceeds are received by the Servicer and
are not to be applied to the
restoration of the related Mortgaged
Property or released to the Mortgagor in
accordance with the Servicer's servicing
procedures, subject to the terms and
conditions of the related Mortgage Note and
Mortgage.
"Proportionate Holder": A Person that beneficially owns pro rata
shares
of the Class N and Class X
Certificates.
"Prospectus Supplement": That certain Prospectus Supplement
dated
November 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, and as
confirmed by an Officer's Certificate from
the Servicer to the Trustee, an
amount equal to the sum of (i) 100% of the
Principal Balance thereof as of the
date of purchase (or such other price as
provided in Section 10.01), (ii) in
the case of (x) a Mortgage Loan, accrued
interest on such Principal Balance at
the applicable Mortgage Interest Rate in
effect from time to time from the Due
Date as to which interest was last covered
by a payment by the Mortgagor or an
Advance by the Servicer, which payment or
Advance had as of the date of
purchase been distributed pursuant to
Section 4.01, through the end of the
calendar month in which the purchase is to
be effected, and (y) an REO
Property, its fair market value, determined
in good faith by the Servicer,
(iii) any unreimbursed Servicing Advances
and Advances and any unpaid
Servicing Fees allocable to such Mortgage
Loan or REO Property, (iv) any
amounts previously withdrawn from the
Collection Account in respect of such
Mortgage Loan or REO Property pursuant to
Section 3.13, and (v) in the case of
a Mortgage Loan required to be purchased
pursuant to Section 2.03, (x) any
costs and damages incurred by the Trust in
connection with any violation by
such Mortgage Loan of any predatory and
abusive lending law and (y) expenses
reasonably incurred or to be incurred by
the Servicer or the Trustee in
respect of the breach or defect giving rise
to the purchase obligation.
"Qualified
Insurer": Any insurance company acceptable to Fannie Mae or
Freddie Mac.
"Rating
Agency or Rating Agencies": Fitch, Moody's, S&P and DBRS,
or
their respective successors. If such
agencies or their successors are no
longer in existence, "Rating Agencies"
shall be such nationally recognized
statistical rating organizations as set
forth on the most current list of such
organizations released by the Securities
and Exchange Commission and
designated by the Depositor, notice of
which designation shall be given to the
Trustee and the Servicer.
"Realized
Loss": With respect to a Liquidated Mortgage Loan, the amount
by which the remaining unpaid Principal
Balance of the Mortgage Loan plus
accrued and unpaid interest thereon at the
Mortgage Interest Rate through the
last day of the month of liquidation,
exceeds the amount of Net Liquidation
Proceeds applied to the principal balance
of the related Mortgage Loan. With
respect to any Mortgage Loan, a Deficient
Valuation or a reduction in the
Principal Balance thereof resulting from a
Servicer Modification.
"Realized
Loss Amortization Amount": Any of the Class M-1 Realized Loss
Amortization Amount, the Class M-2 Realized
Loss Amortization Amount, the
Class M-3 Realized Loss Amortization
Amount, the Class 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, the Class B-2 Realized
Loss Amortization Amount, the
Class B-3 Realized Loss Amortization
Amount, the Class B-4 Realized Loss
Amortization Amount and the Class B-5
Realized Loss Amortization Amount.
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<PAGE>
"Record
Date": With respect to Class M, Class B-1, Class B-2 and Class
B-3 Certificates, the Business Day
immediately preceding such Distribution
Date; provided, however, that if any such
Certificate becomes a Definitive
Certificate, the Record Date for such
Certificate shall be the last Business
Day of the month immediately preceding the
month in which the related
Distribution Date occurs. With respect to
Class AF-1, Class AF-2, Class AF-3,
Class AF-4, Class B-4, Class B-5, Class N,
Class X, Class R and Class R-X
Certificates, the last Business Day of the
month immediately preceding the
month in which the related Distribution
Date occurs or the Closing Date, in
the case of the first Distribution
Date.
"Reference
Banks": Those banks (i) with an established place of business
in London, England, (ii) not controlling,
under the control of or under common
control with the Depositor or the Trustee,
(iii) that have been designated as
such by the Trustee, after consultation
with the Servicer and (iv) that are
engaged in transactions in the London
interbank market.
"Regular
Certificate": Any of
the Class N and Class X Certificates.
"Regulation S": Regulation S promulgated under the Securities Act
or any
successor provision thereto, in each case
as the same may be amended from time
to time; and all references to any rule,
section or subsection of, or
definition or term contained in, Regulation
S means such rule, section,
subsection, definition or term, as the case
may be, or any successor thereto,
in each case as the same may be amended
from time to time.
"Regulation S Global
Securities": The
Book-Entry
Regulation S
Global
Securities and the Definitive Regulation S
Global Securities.
"Reimbursement Amount": As defined in Section 2.03.
"Related
Documents":
With respect to any Mortgage
Loan, the related
Mortgage Notes, Mortgages and other related
documents.
"Relief
Act": The Servicemembers Civil Relief Act, as amended,
and
similar state laws.
"Relief
Act Interest Shortfall": With respect to any Distribution Date,
for any Mortgage Loan with respect to which
there has been a reduction in the
amount of interest collectible thereon for
the most recently ended Collection
Period as a result of the application of
the Relief Act or similar state laws,
the amount by which (i) interest
collectible on such Mortgage Loan during such
Collection Period is less than (ii) one
month's interest on the Principal
Balance of such Mortgage Loan at the
Mortgage Interest Rate for such Mortgage
Loan before giving effect to the
application of the Relief Act or similar
state laws.
"REMIC": A
"real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
"REMIC
Provisions": Provisions of the federal income tax law relating
to
real estate mortgage investment conduits
which appear at Section 860A through
860G of Subchapter M of Chapter 1 of the
Code, and related provisions, and
regulations and rulings promulgated
thereunder, as the foregoing may be in
effect from time to time.
"REMIC
Regular Interest": Any REMIC 1 Regular Interest, REMIC 2
Regular
Interest, REMIC B-1 Regular Interest, REMIC
B-2 Regular Interest, REMIC B-3
Regular Interest, REMIC B-4 Regular
Interest, REMIC B-5 Regular Interest or
REMIC X/N Regular Interest.
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<PAGE>
"REMIC 1":
As defined in the
Preliminary Statement.
"REMIC 1
Interest": Each interest in REMIC 1 as described in the
Preliminary Statement.
"REMIC 1
Regular Interest": Each REMIC 1 Interest other than the Class
R-1 Interest.
"REMIC 1
Subordinated Balance Ratio": [Reserved.]
"REMIC 2":
As defined in the
Preliminary Statement.
"REMIC 2
Interest": Each of the REMIC 2 Regular Interests and the Class
R-2 Interest.
"REMIC 2
Regular Interest": Each of the REMIC 2-A1 Interest, the REMIC
2-A2 Interest, the REMIC 2-A3 Interest, the
REMIC 2-A4 Interest, the REMIC
2-M1 Interest, the REMIC 2-M2 Interest, the
REMIC 2-M3 Interest, the REMIC
2-M4 Interest, the REMIC 2-M5 Interest, the
REMIC 2-M6 Interest, the REMIC
2-B1 Interest, the REMIC 2-B2 Interest, the
REMIC 2-B3 Interest, the REMIC
2-B4 Interest, the REMIC 2-B5 Interest and
the REMIC 2-X/N Interest.
"REMIC
2-A1 Interest": An uncertificated "regular interest" in REMIC 2
represented by the Class AF-1 Certificates
having the same rights to payments
as the Class AF-1 Certificates other than
the right to any payments in respect
of Adjusted Net WAC Carryover Amounts.
"REMIC
2-A2 Interest": An uncertificated "regular interest" in REMIC 2
represented by the Class AF-2 Certificates
having the same rights to payments
as the Class AF-2 Certificates other than
the right to any payments in respect
of Adjusted Net WAC Carryover Amounts.
"REMIC
2-A3 Interest": An uncertificated "regular interest" in REMIC 2
represented by the Class AF-3 Certificates
having the same rights to payments
as the Class AF-3 Certificates other than
the right to any payments in respect
of Adjusted Net WAC Carryover Amounts.
"REMIC
2-A4 Interest": An uncertificated "regular interest" in REMIC 2
represented by the Class AF-4 Certificates
having the same rights to payments
as the Class AF-4 Certificates other than
the right to any payments in respect
of Adjusted Net WAC Carryover Amounts.
"REMIC
2-M1 Interest": An uncertificated "regular interest" in REMIC 2
represented by the Class M-1 Certificates
having the same rights to payments
as the Class M-1 Certificates other than
the right to any payments in respect
of Adjusted Net WAC Carryover Amounts.
"REMIC
2-M2 Interest": An uncertificated "regular interest" in REMIC 2
represented by the Class M-2 Certificates
having the same rights to payments
as the Class M-2 Certificates other than
the right to any payments in respect
of Adjusted Net WAC Carryover Amounts.
"REMIC
2-M3 Interest": An uncertificated "regular interest" in REMIC 2
represented by the Class M-3 Certificates
having the same rights to payments
as the Class M-3 Certificates other than
the right to any payments in respect
of Adjusted Net WAC Carryover Amounts.
"REMIC
2-M4 Interest": An uncertificated "regular interest" in REMIC 2
represented by the Class M 4 Certificates
having the same rights to payments
as the Class M 4 Certificates other than
the right to any payments in respect
of Adjusted Net WAC Carryover Amounts.
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<PAGE>
"REMIC
2-M5 Interest": An uncertificated "regular interest" in REMIC 2
represented by the Class M 5 Certificates
having the same rights to payments
as the Class M 5 Certificates other than
the right to any payments in respect
of Adjusted Net WAC Carryover Amounts.
"REMIC
2-M6 Interest": An uncertificated "regular interest" in REMIC 2
represented by the Class M 6 Certificates
having the same rights to payments
as the Class M 6 Certificates other than
the right to any payments in respect
of Adjusted Net WAC Carryover Amounts.
"REMIC 2-B1 Interest": An
uncertificated "regular interest" in REMIC 2
held by REMIC B-1 having the same rights to
payments as the Class B-1
Certificates other than the right to any
payments in respect of Adjusted Net
WAC Carryover Amounts.
"REMIC
2-B2 Interest": An uncertificated "regular interest" in REMIC 2
held by REMIC B-2 having the same rights to
payments as the Class B-2
Certificates other than the right to any
payments in respect of Adjusted Net
WAC Carryover Amounts.
"REMIC
2-B3 Interest": An uncertificated "regular interest" in REMIC 2
held by REMIC B-3 having the same rights to
payments as the Class B-3
Certificates other than the right to any
payments in respect of Adjusted Net
WAC Carryover Amounts.
"REMIC
2-B4 Interest": An uncertificated "regular interest" in REMIC 2
held by REMIC B-4 having the same rights to
payments as the Class B-4
Certificates other than the right to any
payments in respect of Adjusted Net
WAC Carryover Amounts.
"REMIC
2-B5 Interest": An uncertificated "regular interest" in REMIC 2
held by REMIC B-5 having the same rights to
payments as the Class B 5
Certificates other than the right to any
payments in respect of Adjusted Net
WAC Carryover Amounts.
"REMIC
2-X/N Interest": An uncertificated "regular interest" in REMIC
2
held by REMIC X/N having an initial
principal balance equal to the Initial
Overcollateralization Amount and bearing
interest at the REMIC 2-X/N Interest
Distributable Interest Rate on a notional
balance equal to the aggregate of
the Principal Balance of the Mortgage Loans
outstanding as of the beginning of
the related Interest Accrual Period. The
REMIC 2-X/N Interest shall be
entitled to all prepayment penalties
(including amounts deposited in
connection with the full or partial waiver
of such prepayment penalties
pursuant to Section 3.01).
"REMIC
2-X/N Interest Current Interest": As of any Distribution Date,
the interest accrued during the related
Interest Accrual Period at the REMIC
2-X/N Interest Distributable Interest Rate
on a notional amount equal to the
aggregate of the Principal Balance of the
Mortgage Loans outstanding as of the
beginning of such Interest Accrual Period
(such amount of interest
representing a "specified portion" (within
the meaning of Treasury Regulations
Section 1.860G-1(a)(2)(i)(C)) of interest
payments on the REMIC 1 Regular
Interests).
"REMIC
2-X/N Interest Distributable Interest Rate": The excess, if
any,
of (a) the weighted average of the interest
rates on the REMIC 1 Regular
Interests over (b) two times the weighted
average of the interest rates on the
Marker Interests and the REMIC 1-X Interest
(treating for purposes of this
clause (b) the interest rate on each of the
Marker Interests as being subject
to a cap and a floor equal to the
Pass-Through Rate (as adjusted to reflect a
30-day accrual period) of the Related
Certificate of such Marker Interest (as
described in the Preliminary Statement) and
treating the interest rate on the
REMIC 1-X Interest as being capped at
zero). The averages described in the
preceding sentence shall be weighted on
41
<PAGE>
the basis of the respective principal
balances of the relevant REMIC 1 Regular
Interests immediately prior to any date of
determination.
"REMIC B-1": As
defined in the Preliminary Statement.
"REMIC B-1
Interest": Each of the REMIC B-1 Regular Interests and the
Class R-B-1 Interest.
"REMIC B-1
Regular Interest": The REMIC B-1 B-1 Interest.
"REMIC B-1
B-1 Interest": An uncertificated "regular interest" in REMIC
B-1 represented by the Class B-1
Certificates having the same rights to
payments as the Class B-1 Certificates
other than the right to any payments in
respect of Adjusted Net WAC Carryover
Amounts.
"REMIC
B-2": As defined in the Preliminary Statement.
"REMIC B-2
Interest": Each of the REMIC B-2 Regular Interests and the
Class R-B-2 Interest.
"REMIC B-2
Regular Interest": The REMIC B-2 B-2 Interest.
"REMIC B-2
B-2 Interest": An uncertificated "regular interest" in REMIC
B-2 represented by the Class B-2
Certificates having the same rights to
payments as the Class B-2 Certificates
other than the right to any payments in
respect of Adjusted Net WAC Carryover
Amounts.
"REMIC
B-3": As defined in the Preliminary Statement.
"REMIC B-3
Interest": Each of the REMIC B-3 Regular Interests and the
Class R-B-3 Interest.
"REMIC B-3
Regular Interest": The REMIC B-3 B-3 Interest.
"REMIC B-3
B-3 Interest": An uncertificated "regular interest" in REMIC
B-3 represented by the Class B-3
Certificates having the same rights to
payments as the Class B-3 Certificates
other than the right to any payments in
respect of Adjusted Net WAC Carryover
Amounts.
"REMIC
B-4": As defined in the Preliminary Statement.
"REMIC B-4
Interest": Each of the REMIC B-4 Regular Interests and the
Class R-B-4 Interest.
"REMIC B-4
Regular Interest": The REMIC B-4 B-4 Interest.
"REMIC B-4
B-4 Interest": An uncertificated "regular interest" in REMIC
B-4 represented by the Class B-4
Certificates having the same rights to
payments as the Class B-4 Certificates
other than the right to any payments in
respect of Adjusted Net WAC Carryover
Amounts.
"REMIC
B-5": As defined in the Preliminary Statement.
"REMIC B-5
Interest": Each of the REMIC B-5 Regular Interests and the
Class R-B-5 Interest.
"REMIC B-5
Regular Interest": The REMIC B-5 B-5 Interest.
"REMIC B-5
B-5 Interest": An uncertificated "regular interest" in REMIC
B-5 represented by the Class B-5
Certificates having the same rights to
payments as the Class B-5 Certificates
other than the right to any payments in
respect of Adjusted Net WAC Carryover
Amounts.
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<PAGE>
"REMIC X/N": As
defined in the Preliminary Statement.
"REMIC X/N
Interest": Each of the REMIC X/N Regular Interests and the
Class R-X/N Interest.
"REMIC X/N
Regular Interest": The REMIC X/N X/N Interest.
"REMIC X/N
X/N Interest": An uncertificated "regular interest" in REMIC
X/N held by the Trustee on behalf of the
holders of the Class X and Class N
Certificates and entitled to all payments
in respect of the REMIC 2-X/N
Interest.
"Remittance Report": A report prepared by the Servicer and
delivered to
the Trustee pursuant to Section 4.07,
containing the information attached
hereto as Exhibit 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 Fund.
"REO
Principal Amortization": With respect to any REO Property, for
any
calendar month, the aggregate of all
amounts received in respect of such REO
Property during such calendar month,
whether in the form of rental income,
sale proceeds (including, without
limitation, that portion of the Termination
Price paid in connection with a purchase of
all of the Mortgage Loans and REO
Properties pursuant to Section 10.01 that
is allocable to such REO Property)
or otherwise, net of any portion of such
amounts (i) payable pursuant to
Section 3.13 in respect of the proper
operation, management and maintenance of
such REO Property or (ii) payable or
reimbursable to the Servicer pursuant to
Section 3.13 for unpaid Servicing Fees in
respect of the related Mortgage Loan
and unreimbursed Servicing Advances and
Advances in respect of such REO
Property or the related Mortgage Loan.
"REO
Property": A Mortgaged Property acquired by the Servicer on
behalf
of the Trust Fund through foreclosure or
deed-in-lieu of foreclosure, as
described in Section 3.13.
"Request
for Release": A release signed by a Servicing Officer, in the
form of Exhibit E attached hereto.
"Required
Basis Risk Reserve Fund Amount": With respect to any
Distribution Date on which the related Net
Excess Spread is less than 0.25%,
an amount equal to the lesser of (x)
$15,000 and (y) the product of (i) 0.50%
and (ii) the Pool Balance as of the last
day of the related Collection Period.
With respect to any Distribution Date on
which the Net Excess Spread is equal
to or greater than 0.25%, an amount equal
to $5,000.
"Required
Basis Risk Reserve Fund Deposit": With respect to any
Distribution Date, the excess, if any, of
(i) the Required Basis Risk Reserve
Fund Amount over (ii) the amount of funds
on deposit in the Basis Risk Reserve
Fund as of the close of business on the
Business Day immediately preceding
such Distribution Date.
"Reserve
Account": The separate Eligible Account created and maintained
by the Trustee pursuant to Section
4.02(f)(iv) in the name of the Trustee for
the benefit of the Trust Fund and
designated "U.S. Bank National Association,
as trustee, in trust for registered holders
of the C-BASS, Mortgage Loan
Asset-Backed Certificates, Series
2005-CB7." Funds in the Cap Contract Reserve
Fund shall be held in trust for the Trust
Fund for the uses and purposes set
forth in this Agreement.
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<PAGE>
"Residential Dwelling": Any one of the following: (i) a
one-family
dwelling, (ii) a two- to four-family
dwelling, (iii) a one-family dwelling
unit in a Fannie Mae eligible condominium
project, (iv) a one-family dwelling
in a planned unit development, which is not
a co-operative, or (v) a mobile or
manufactured home (as defined in 42 United
States Code, Section 5402(6)).
"Residual
Certificates": The Class R Certificates and the Class R-X
Certificates.
"Residual
Interest": The sole Class of "residual interests" in each
REMIC within the meaning of Section
860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee,
any
officer assigned to the Corporate Trust
Division (or any successor thereto),
including any Vice President, Assistant
Vice President, Trust Officer, any
Assistant Secretary, any trust officer or
any other officer of the Trustee
customarily performing functions similar to
those performed by any of the
above designated officers and in each case
having direct responsibility for
the administration of this Agreement.
"S&P":
Standard & Poor's, a division of The McGraw-Hill Companies,
Inc.,
and its successors, and if such company
shall for any reason no longer perform
the functions of a securities rating
agency, "S&P" shall be deemed to refer to
any other "nationally recognized
statistical rating organization" as set forth
on the most current list of such
organizations released by the Securities and
Exchange Commission.
"Second
Lien Mortgage Loan": Any of the Mortgage Loans which are
secured
by a second mortgage lien that is junior to
a First Lien Mortgage Loan on the
related Mortgaged Property.
"Seller":
Credit-Based Asset Servicing and Securitization LLC, or its
successor in interest, in its capacity as
seller under the Mortgage Loan
Purchase Agreement.
"Senior
Enhancement Percentage": For any Distribution Date, the
percentage obtained by dividing (x) the sum
of (i) the aggregate Certificate
Principal Balances of the Subordinated
Certificates and (ii) the
Overcollateralization Amount, in each case
before taking into account the
distribution of the Principal Distribution
Amount on such Distribution Date by
(y) the Pool Balance as of the last day of
the related Collection Period.
"Senior
Specified Enhancement Percentage": On any date of determination
thereof, 45.80%.
"Servicer": Litton Loan Servicing LP, a Delaware limited
partnership, or
any successor servicer appointed as herein
provided, in its capacity as
Servicer hereunder.
"Servicer
Affiliate": A Person (i) controlling, controlled by or under
common control with the Servicer or which
is 50% or more owned by the Servicer
and (ii) which is qualified to service
residential mortgage loans.
"Servicer
Event of Termination": One or more of the events described in
Section 7.01.
"Servicer
Modification": A modification to the terms of a Mortgage Loan,
in accordance with the terms of Section
3.01, as to which the Mortgagor is in
default or as to which, in the judgment of
the Servicer, default is reasonably
foreseeable.
"Servicer
Remittance Date": With respect to any Distribution Date, one
Business Day prior to such Distribution
Date.
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"Servicer's Assignee": As defined in Section 3.30(b) hereof.
"Servicing
Advances": All customary, reasonable and necessary "out of
pocket" costs and expenses incurred by the
Servicer in the performance of its
servicing obligations to the extent such
costs or expenses constitute
"unanticipated expenses" within the meaning
of Treasury Regulations
1.860G-1(b)(3)(ii), including, but not
limited to, the cost of (i) the
preservation, restoration and protection of
the Mortgaged Property, (ii) any
enforcement or judicial proceedings,
including foreclosures, (iii) the
management and liquidation of the REO
Property and (iv) compliance with the
obligations under Section 3.08.
"Servicing
Fee": With respect to each Mortgage Loan (including each REO
Property) and for any calendar month, an
amount equal to one month's interest
(or in the event of any payment of interest
which accompanies a Principal
Prepayment in full made by the Mortgagor
during such calendar month, interest
for the number of days covered by such
payment of interest) at the Servicing
Fee Rate on the same principal amount on
which interest on such Mortgage Loan
accrues for such calendar month.
"Servicing
Fee Rate": With respect to each Mortgage Loan, 0.50% per
annum.
"Servicing
Officer": Any officer of the Servicer involved in, or
responsible for, the administration and
servicing of Mortgage Loans, whose
name and specimen signature appear on a
list of servicing officers furnished
by the Servicer to the Trustee and the
Depositor on the Closing Date, as such
list may from time to time be amended.
"Servicing
Rights Pledgee": One or more lenders, selected by the
Servicer, to which the Servicer may pledge
and assign all of its right, title
and interest in, to and under this
Agreement (other than rights with respect
to Advances and Servicing Advances herein),
including JPMorgan Chase. Bank
National Association, as the representative
of certain lenders.
"Servicing
Standard":
Shall mean the standards set forth in Section
3.01.
"Special
Hazard Loss": Any Realized Losses that result from direct
physical damage to Mortgaged Properties
caused by natural disasters and other
hazards (i) which are not covered by hazard
insurance policies (such as
earthquakes) and (ii) for which claims have
been submitted and rejected by the
related hazard insurer and any shortfall in
insurance proceeds for partial
damage due to the application of the
co-insurance clauses contained in hazard
insurance policies.
"SPV":
As defined in Section
3.30(a) 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 later to occur of (x) the earlier to occur of (A)
the Distribution Date in November 2008 and
(B) the Distribution Date on which
the aggregate Certificate Principal Balance
of the Class A Certificates is
reduced to zero, and (y) the first
Distribution Date on which the Senior
Enhancement Percentage is greater than or
equal to the Senior Specified
Enhancement Percentage.
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"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 B-3, Class B-4, Class
B-5, Class N, Class X, Class R and Class
R-X Certificates.
"Subsequent Overcollateralization Amount": As of any Distribution
Date,
after the application of principal payments
and Applied Realized Loss Amounts,
an amount equal to the excess, if any of
(a) the Pool Balance over (b) the sum
of (i) the Certificate Principal Balance of
each Class of Class A, Class M and
Class B Certificates and (ii) the remaining
Initial Overcollateralization
Amount.
"Subsequent Recovery": Any amount received on a Mortgage Loan
subsequent
to such Mortgage Loan being determined to
be a Liquidated Mortgage Loan.
"Substitution Adjustment Amount": As defined in Section 2.03(d)
hereof.
"Targeted
Overcollateralization Amount": As of any Distribution Date,
(x) prior to the Stepdown Date, 2.65% of
the Pool Balance on the Cut-off Date
and (y) on and after the Stepdown Date, (i)
if a Trigger Event has not
occurred, the lesser of (a) 2.65% of the
Pool Balance on the Cut-off Date and
(b) the greater of (A) 5.30% of the Pool
Balance as of the last day of the
related Collection Period and (B) 0.50% of
the Pool Balance on the Cut-off
Date and (ii) if a Trigger Event has
occurred, the Targeted
Overcollateralization Amount for the
immediately preceding Distribution Date.
Notwithstanding the foregoing, on and after
any Distribution Date following
the reduction of the aggregate Certificate
Principal Balance of the Class A,
Class M and Class B Certificates to zero,
the Targeted Overcollateralization
Amount shall be zero.
"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 REMICs created
pursuant to this Agreement under the REMIC
Provisions, together with any and
all other information reports or returns
that may be required to be furnished
to the Certificateholders or filed with the
Internal Revenue Service or any
other governmental taxing authority under
any applicable provisions of
federal, state or local tax laws.
"Telerate
Page 3750": The display page currently so designated on the
Moneyline Telerate Service (or such other
page as may replace the Telerate
Page 3750 page on that service for the
purpose of displaying London interbank
offered rates of major banks).
"Termination Price":
As defined in Section 10.01(a) hereof.
"Trigger
Event": With respect to any Distribution Date, if (i) the
six-month rolling average of 60+ Day
Delinquent Loans equals or exceeds 35.00%
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 divided by the Pool
Balance as of the Cut-off Date exceeds
the applicable percentages set forth below
with respect to such Distribution
Date:
Distribution Date Occurring In
Percentage
November 2007 through October 2008 1.35%
November 2008 through October 2009 3.05%
November 2009
through October 2010 4.75%
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November 2010 through October 2011 6.15%
November 2011 and thereafter
6.90%
"Trust":
2005-CB7 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 REMIC
elections are to be made, such entire
Trust Fund consisting of: (i) such Mortgage
Loans as from time to time are
subject to this Agreement, together with
the Mortgage Files relating thereto,
and together with all collections thereon
and proceeds thereof, (ii) any REO
Property, together with all collections
thereon and proceeds thereof, (iii)
the Trustee's rights with respect to the
Mortgage Loans under all insurance
policies required to be maintained pursuant
to this Agreement and any proceeds
thereof, (iv) the Depositor's rights under
the Mortgage Loan Purchase
Agreement (including any security interest
created thereby), (v) the Cap
Contract and Cap Contract Reserve Fund and
(vi) the Collection Account, the
Distribution Account, the Basis Risk
Reserve Fund and any REO Account and such
assets that are deposited therein from time
to time and any investments
thereof, together with any and all income,
proceeds and payments with respect
thereto.
"Trustee":
U.S. Bank National Association, a national banking
association organized and existing under
the laws of United States of America,
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, 0.0065% per
annum.
"Underwriters": J.P.
Morgan Securities Inc.
and Barclays Capital Inc.,
as underwriters with respect to the Offered
Certificates.
"United
States Person" or "U.S. Person": (i) A citizen or resident of
the United States, (ii) a corporation,
partnership or other entity treated as
a corporation or partnership for United
States federal income tax purposes
organized in or under the laws of the
United States or any state thereof or
the District of Columbia (unless, in the
case of a partnership, Treasury
regulations provide otherwise) or (iii) an
estate the income of which is
includible in gross income for United
States tax purposes, regardless of its
source, or (iv) a trust if a court within
the United States is able to
exercise primary supervision over the
administration of the trust and one or
more United States persons have authority
to control all substantial decisions
of the trust. Notwithstanding the preceding
sentence, to the extent provided
in Treasury regulations, certain Trusts in
existence on August 20, 1996, and
treated as United States persons prior to
such date, that elect to continue to
be treated as United States persons will
also be a U.S. Person.
"Unpaid
Realized Loss Amount": For any 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 B-3, Class B-4
and Class B-5 Certificates and as to any
Distribution Date, the excess of (1)
the cumulative amount of related Applied
Realized Loss Amounts with respect to
such Class for all prior Distribution Dates
over (2) the sum of (x) the
cumulative amount of related Realized Loss
Amortization Amounts with respect
to such Class for all prior Distribution
Dates and (y) all increases in the
Certificate Principal Balance of such Class
pursuant to the last sentence of
the definition of "Certificate Principal
Balance."
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"Value":
With respect to any Mortgaged Property, the lower of the value
thereof as determined by an independent
appraisal made at the time of the
origination of the related Mortgage Loan or
the sale price, if the appraisal
is not available; except that, with respect
to any Mortgage Loan that is a
purchase money mortgage loan, the lesser of
(i) the value thereof as
determined by an independent appraisal made
at the time of the origination of
such Mortgage Loan, if any, and (ii) the
sales price of the related Mortgaged
Property.
"Voting
Rights": The portion of the voting rights of all of the
Certificates which is allocated to any
Certificate. The Voting Rights
allocated among Holders of the 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. On each
Distribution Date (a) prior to the
date on which the Notional Amount of the
Class N Certificates is reduced to
zero, the percentage of all the Voting
Rights allocated among the Holders of
the Class N and Class X Certificates,
respectively, shall be 1% and (b) on and
after the date on which the Notional Amount
of the Class N Certificates is
reduced to zero, the percentage of all the
Voting Rights allocated among the
Holders of the Class N Certificates shall
be 0% and the percentage of all the
Voting Rights allocated among the Holder of
the Class X Certificates shall be
2%. The Residual Certificates shall have no
Voting Rights.
"Written
Order to Authenticate": A written order by which the Depositor
directs the Trustee to execute,
authenticate and deliver the Certificates.
Section
1.02 Accounting.
Unless otherwise specified herein,
for the purpose of any definition or
calculation, whenever amounts are required
to be netted, subtracted or added
or any distributions are taken into account
such definition or calculation and
any related definitions or calculations
shall be determined without
duplication of such functions.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section
2.01 Conveyance of Mortgage Loans.
The
Depositor, concurrently with the execution and delivery hereof,
does
hereby transfer, assign, set over and
otherwise convey to the Trustee, on
behalf of the Trust, without recourse, for
the benefit of the
Certificateholders, all the right, title
and interest of the Depositor,
including any security interest therein for
the benefit of the Depositor, in
and to (i) each Mortgage Loan identified on
the Mortgage Loan Schedule,
including the related Cut-off Date
Principal Balance, all interest accruing
thereon after the Cut-off Date and all
collections in respect of interest and
principal due after the Cut-off Date; (ii)
property which secured each such
Mortgage Loan and which has been acquired
by foreclosure or deed in lieu of
foreclosure; (iii) its interest in any
insurance policies in respect of the
Mortgage Loans; (iv) all proceeds
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<PAGE>
of any of the foregoing; (v) the rights of
the Depositor under the Mortgage
Loan Purchase Agreement, and (vi) all other
assets included or to be included
in the Trust Fund. 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.
The
Depositor, the Seller, the Servicer and the Trustee hereto agree
and
understand that it is not intended that any
Mortgage Loan be included in the
Trust Fund that is, without limitation, a
"High-Cost Home Loan" as defined by
the Home Ownership and Equity Protection
Act of 1994 or any other applicable
anti-predatory lending laws, including but
not limited to (i) a "High-Cost
Home Loan" as defined in the New Jersey
Home Ownership Act effective November
27, 2003; (ii) a "High-Cost Home Loan" as
defined in the New Mexico Home Loan
Protection Act effective January 1, 2004;
(iii) a "High-Cost Home Loan" as
defined in the Massachusetts Predatory Home
Loan Practices Act effective
November 7, 2004 (iv) a "High-Cost Home
Loan" as defined by the Indiana High
Cost Home Loan Law effective January 1,
2005; or (v) a "High-Cost Home Loan"
as defined by the Illinois High-Risk Home
Loan Act effective January 1, 2004.
In
connection with such transfer and assignment, the Seller, on
behalf
of the Depositor, does hereby deliver to,
and deposit with the Trustee, or its
designated agent (the "Custodian"), the
following documents or instruments
with respect to each Mortgage Loan (a
"Mortgage File") so transferred and
assigned:
(i) the original Mortgage Note including any riders thereto,
endorsed either (A) in blank or (B) in the
following form: "Pay to the order
of U.S. Bank National Association, as
Trustee for the C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2005-CB7,
without recourse," or with respect
to any lost Mortgage Note, an original Lost
Note Affidavit, together with a
copy of the related Mortgage Note;
(ii) the original Mortgage including any riders thereto,
with evidence of recording thereon, and the
original recorded power of
attorney, if the Mortgage was executed
pursuant to a power of attorney, with
evidence of recording thereon or, if such
Mortgage or power of attorney has
been submitted for recording but has not
been returned from the applicable
public recording office, has been lost or
is not otherwise available, a copy
of such Mortgage or power of attorney, as
the case may be, certified to be a
true and complete copy of the original
submitted for recording;
(iii) an original Assignment of Mortgage, in form and
substance acceptable for recording. The
Mortgage shall be assigned either (A)
in blank or (B) to "U.S. Bank National
Association, as Trustee for the C-BASS
Mortgage Loan Asset-Backed Certificates,
Series 2005-CB7, without recourse";
(iv) an original or a certified copy of any intervening
assignment of Mortgage showing a complete
chain of assignments;
(v) the original or a certified copy of lender's title
insurance policy; and
(vi) the original or copies of each assumption,
modification, written assurance or
substitution agreement, if any.
The
Trustee agrees to execute and deliver (or cause the Custodian
to
execute and deliver) to the Depositor on or
prior to the Closing Date an
acknowledgment of receipt of the original
Mortgage Note (with any exceptions
noted), substantially in the form attached
as Exhibit F-3 hereto.
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<PAGE>
If any of
the documents referred to in Section 2.01(ii), (iii) or (iv)
above has as of the Closing Date been
submitted for recording but either (x)
has not been returned from the applicable
public recording office or (y) has
been lost or such public recording office
has retained the original of such
document, the obligations of the Seller to
deliver such documents shall be
deemed to be satisfied upon (1) delivery to
the Trustee or the Custodian no
later than the Closing Date, of a copy of
each such document certified by the
Seller in the case of (x) above or the
applicable public recording office in
the case of (y) above to be a true and
complete copy of the original that was
submitted for recording and (2) if such
copy is certified by the Seller,
delivery to the Trustee or the Custodian,
promptly upon receipt thereof of
either the original or a copy of such
document certified by the applicable
public recording office to be a true and
complete copy of the original. The
Seller shall deliver or cause to be
delivered to the Trustee or the Custodian
promptly upon receipt thereof any other
documents constituting a part of a
Mortgage File received with respect to any
Mortgage Loan, including, but not
limited to, any original documents
evidencing an assumption or modification of
any Mortgage Loan.
Upon
discovery or receipt of notice of any materially defective
document
in, or that a document is missing from, a
Mortgage File, the Seller shall have
120 days to cure such defect or 150 days
following the Closing Date, in the
case of missing Mortgages or Assignments or
deliver such missing document to
the Trustee or the Custodian. If the Seller
does not cure such defect or
deliver such missing document within such
time period, the Seller shall either
repurchase or substitute for such Mortgage
Loan in accordance with Section
2.03.
The
Servicer shall cause the Assignments of Mortgage which were
delivered in blank to be completed and
shall cause all Assignments referred to
in Section 2.01(iii) hereof and, to the
extent necessary, in Section 2.01(iv)
hereof to be recorded at the Servicer's
expense and of no cost to the Trust
Fund; provided, however, the Servicer need
not cause to be recorded any
Assignment which relates to a Mortgage Loan
in any jurisdiction under the laws
of which, as evidenced by an Opinion of
Counsel delivered by the Servicer to
the Trustee and the Rating Agencies, the
recordation of such assignment is not
necessary to protect the Trustee's
interest, on behalf of the Trust, in the
related Mortgage Loan. The Servicer shall
be required to deliver such
assignments for recording within 30 days of
the Closing Date. The Servicer
shall furnish the Trustee, or its
designated agent, with a copy of each
assignment of Mortgage submitted for
recording. In the event that any such
Assignment is lost or returned unrecorded
because of a defect therein, the
Servicer shall promptly have a substitute
Assignment prepared or have such
defect cured, as the case may be, and
thereafter cause each such Assignment to
be duly recorded. In the event that any
Mortgage Note is endorsed in blank as
of the Closing Date, promptly following the
Closing Date the Servicer shall
cause to be completed such endorsements
"Pay to the order of U.S. Bank
National Association, as Trustee for the
C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2005-CB7, without
recourse."
In the
event that any Assignments of Mortgage is not recorded or is
improperly recorded (as a result of actions
taken or not taken by a person
other than the Servicer), neither the
Servicer nor the Trustee shall have any
liability for its failure to receive
notices related to such Assignment of
Mortgage.
The
Depositor herewith delivers to the Trustee executed copies of
the
Mortgage Loan Purchase Agreement.
Section
2.02 Acceptance by Trustee.
The
Trustee acknowledges its (or the Custodian's) 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 (or the
Custodian) holds and will
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<PAGE>
hold such documents and the other documents
delivered to it constituting a
Mortgage File, and that it (or the
Custodian) holds or will hold all such
assets and such other assets included in
the definition of "Trust Fund" in
trust for the exclusive use and benefit of
all present and future
Certificateholders.
The
Trustee agrees, for the benefit of the Certificateholders, to
review
(or cause the Custodian to review) each
Mortgage File within 60 days after the
Closing Date (or, with respect to any
document delivered after the Startup
Day, within 60 days of receipt and with
respect to any Qualified Substitute
Mortgage, within 60 days after the
assignment thereof) and to certify (or
cause the Custodian to certify) in
substantially the form attached hereto as
Exhibit F-1 that, as to each Mortgage Loan
listed in the Mortgage Loan
Schedule (other than any Mortgage Loan paid
in full or any Mortgage Loan
specifically identified in the exception
report annexed thereto as not being
covered by such certification), (i) all
documents required to be delivered to
it pursuant 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), (3), (5), (13) and (26) (in the
case of (26), only as to whether there is a
prepayment penalty) of the
Mortgage Loan Schedule accurately reflects
information set forth in the
Mortgage File. It is herein acknowledged
that, in conducting such review, the
Trustee (or the Custodian, as applicable)
is under no duty or obligation to
inspect, review or examine any such
documents, instruments, certificates or
other papers to determine that they are
genuine, enforceable, or appropriate
for the represented purpose or that they
have actually been recorded or that
they are other than what they purport to be
on their face.
Prior to
the first anniversary date of this Agreement the Trustee shall
deliver (or cause the Custodian to deliver)
to the Depositor and the Servicer
a final certification in the form annexed
hereto as Exhibit F-2 evidencing the
completeness of the Mortgage Files, with
any applicable exceptions noted
thereon.
If in the
process of reviewing the Mortgage Files and making or
preparing, as the case may be, the
certifications referred to above, the
Trustee (or the Custodian, as applicable)
finds any document or documents
constituting a part of a Mortgage File to
be missing or defective in any
material respect, at the conclusion of its
review the Trustee (upon its
notification by the Custodian) shall so
notify the Seller, the Depositor and
the Servicer. In addition, upon the
discovery by the Seller, Depositor, the
Trustee or the Servicer (or upon receipt by
the Trustee of written
notification of such breach) of a breach of
any of the representations and
warranties made by the Seller in the
related Mortgage Loan Purchase Agreement
in respect of any Mortgage Loan which
materially adversely affects such
Mortgage Loan or the interests of the
related Certificateholders in such
Mortgage Loan, the party discovering such
breach shall give prompt written
notice to the other parties.
The
Depositor and the Trustee intend that the assignment and
transfer
herein contemplated constitute a sale of
the Mortgage Loans and the Related
Documents, conveying good title thereto
free and clear of any liens and
encumbrances, from the Depositor to the
Trustee and that such property not be
part of the Depositor's estate or property
of the Depositor in the event of
any insolvency by the Depositor. In the
event that such conveyance is deemed
to be, or to be made as security for, a
loan, the parties intend that the
Depositor shall be deemed to have granted
and does hereby grant to the
Trustee, on behalf of the Trust, a first
priority perfected security interest
in all of the Depositor's right, title and
interest in and to the Mortgage
Loans and the Related Documents, and that
this Agreement shall constitute a
security agreement under applicable
law.
The
Trustee is hereby directed to execute, deliver and perform its
obligations under the Cap Contract on the
Closing Date and thereafter on
behalf of the Holders of the Class M-1,
Class M-2, Class M-3, Class M-4, Class
M-5 and Class M-6 Certificates. The Seller,
the Servicer, the Depositor and
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<PAGE>
the Holders of the Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5 and
Class M-6 Certificates by acceptance of
their Certificates acknowledge and
agree that the Trustee shall execute,
deliver and perform its obligations
under the Cap Contract and shall do so
solely in its capacity as Trustee of
the Trust Fund and not in its individual
capacity.
The
Trustee is hereby directed to represent and warrant to the Cap
Contract Counterparty under the Cap
Contract that the beneficial owner for
United States federal income tax purposes
of payments made under the Cap
Contract is either:
a "U.S. person" (as that term is used in section
1.1441-4(a)(3)(ii) of United States Treasury Regulations
(the "Regulations")) for United States federal income tax
purposes, or
a "non-U.S. branch of a foreign person" as that term is
used in section 1.1441-4(a)(3)(ii) of the Regulations for
United States federal income tax purposes, and a "foreign
person" as that term is used in section 1.6041-4(a)(4) of
the Regulations for United States federal income tax
purposes.
Section
2.03 Repurchase or Substitution of Mortgage Loans by the
Seller.
(a) Upon discovery or receipt of written notice of any
materially
defective document in, or that a document
is missing from, a Mortgage File or
of the breach by the Seller of any
representation, warranty or covenant under
the Mortgage Loan Purchase Agreement or in
Section 2.04 in respect of any
Mortgage Loan which materially adversely
affects the value of such Mortgage
Loan or the interest therein of the
Certificateholders, the Trustee (or the
Custodian, as applicable) shall promptly
notify the Seller, the Servicer and
the Trustee of such defect, missing
document or breach and request that the
Seller deliver such missing document or
cure such defect or breach within 120
days or 150 days following the Closing
Date, in the case of missing Mortgages
or Assignments from the date the Seller was
notified of such missing document,
defect or breach, and if the Seller does
not deliver such missing document or
cure such defect or breach in all material
respects during such period, the
Trustee shall enforce the Seller's
obligation under the Mortgage Loan Purchase
Agreement and inform the Seller of its
obligation to repurchase such Mortgage
Loan from the Trust Fund at the Purchase
Price on or prior to the
Determination Date following the expiration
of such 120 day period (subject to
Section 2.03(e)); provided that, in
connection with any such breach that is
susceptible to cure but that could not
reasonably have been cured within such
120 day or 150 day period, if the Seller
shall have commenced to cure such
breach within such 120 day or 150 day
period, the Seller shall be permitted to
proceed thereafter diligently and
expeditiously to cure the same within 120
days. The Purchase Price for the
repurchased Mortgage Loan shall be deposited
in the Collection Account, and the Trustee,
upon receipt of written
certification from the Servicer of such
deposit, shall release to the Seller
the related Mortgage File and shall execute
and deliver such instruments of
transfer or assignment, in each case
without recourse, representation or
warranty, as the Seller shall furnish to it
and as shall be necessary to vest
in the Seller any Mortgage Loan released
pursuant hereto and the Trustee shall
have no further responsibility with regard
to such Mortgage File. In lieu of
repurchasing any such Mortgage Loan as
provided above, the Seller may cause
such Mortgage Loan to be removed from the
Trust Fund (in which case it shall
become a Defective Mortgage Loan) and
substitute one or more Eligible
Substitute Mortgage Loans in the manner and
subject to the limitations set
forth in Section 2.03(d). In addition to
the foregoing, in the case of a
breach of the Seller's representation set
forth in Section 3.01(f) of the
Mortgage Loan Purchase Agreement, the
Seller shall reimburse the Trust for all
costs or damages incurred by the Trust as a
result of the violation of such
law (such amount, the "Reimbursement
Amount"). The Reimbursement Amount shall
be delivered to the Servicer for deposit
into the Collection Account within 10
days from the date the Seller was notified
by the Trustee of the amount of
such costs and damages. It is understood
and agreed that the obligation of
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the Seller to pay the Reimbursement Amount
and to either cure or repurchase
(or substitute for) any Mortgage Loan as to
which a document is missing, a
material defect in a constituent document
exists or as to which such a breach
has occurred and is continuing shall
constitute the sole remedy against the
Seller respecting such omission, defect or
breach available to the Trustee and
the Trustee on behalf of the
Certificateholders.
(b) [Reserved].
(c) Within 90 days of the earlier of discovery by the Servicer
or
receipt of notice by the Servicer of the
breach of any representation,
warranty or covenant of the Servicer set
forth in Section 2.05 which
materially and adversely affects the
interests of the Certificateholders in
any Mortgage Loan, the Servicer shall cure
such breach in all material
respects.
(d) Any substitution of Eligible Substitute Mortgage Loans for
Defective Mortgage Loans made pursuant to
Section 2.03(a) must be effected
prior to the last Business Day that is
within two years after the Closing
Date. As to any Defective Mortgage Loan for
which the Seller substitutes a
Eligible Substitute Mortgage Loan or Loans,
such substitution shall be
effected by the Seller delivering to the
Trustee for such Eligible Substitute
Mortgage Loan or Loans, the Mortgage Note,
the Mortgage, the Assignment to the
Trustee, and such other documents and
agreements, with all necessary
endorsements thereon, as are required by
Section 2.01, together with an
Officer's Certificate providing that each
such Eligible Substitute Mortgage
Loan satisfies the definition thereof and
specifying the Substitution
Adjustment Amount (as described below), if
any, in connection with such
substitution. The Trustee shall acknowledge
receipt for such Eligible
Substitute Mortgage Loan or Loans and,
within ten Business Days thereafter,
shall review (or cause the Custodian to
review) such documents as specified in
Section 2.02 and deliver (or cause the
Custodian to deliver) to the Servicer,
with respect to such Eligible Substitute
Mortgage Loan or Loans, a
certification substantially in the form
attached hereto as Exhibit F-1, with
any applicable exceptions noted thereon.
Within one year of the date of
substitution, the Trustee shall deliver (or
cause the Custodian to deliver) to
the Servicer a certification substantially
in the form of Exhibit F-2 hereto
with respect to such Eligible Substitute
Mortgage Loan or Loans, with any
applicable exceptions noted thereon.
Monthly Payments due with respect to
Eligible Substitute Mortgage Loans in the
month of substitution are not part
of the Trust Fund and will be retained by
the Seller. For the month of
substitution, distributions to
Certificateholders will reflect the collections
and recoveries in respect of such Defective
Mortgage Loan in the Collection
Period preceding the month of substitution
and the Depositor or the Seller, as
the case may be, shall thereafter be
entitled to retain all amounts
subsequently received in respect of such
Defective Mortgage Loan. The Seller
shall give or cause to be given written
notice to the Certificateholders that
such substitution has taken place, shall
amend the Mortgage Loan Schedule to
reflect the removal of such Defective
Mortgage Loan from the terms of this
Agreement and the substitution of the
Eligible Substitute Mortgage Loan or
Loans and shall deliver a copy of such
amended Mortgage Loan Schedule to the
Trustee. Upon such substitution, such
Eligible Substitute Mortgage Loan or
Loans shall constitute part of the Mortgage
Pool and shall be subject in all
respects to the terms of this Agreement
and, in the case of a substitution
effected by the Seller, the Mortgage Loan
Purchase Agreement, including, in
the case of a substitution effected by the
Seller all applicable
representations and warranties thereof
included in the Mortgage Loan Purchase
Agreement and all applicable
representations and warranties thereof set forth
in Section 2.04, in each case as of the
date of substitution.
For any
month in which the Seller substitutes one or more Eligible
Substitute Mortgage Loans for one or more
Defective Mortgage Loans, the
Servicer will determine the amount (the
"Substitution Adjustment Amount"), if
any, by which the aggregate Purchase Price
of all such Defective Mortgage
Loans exceeds the aggregate, as to each
such Eligible Substitute Mortgage
Loan, of the principal balance thereof as
of the date of substitution,
together with one month's interest on such
principal balance at the
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applicable Net Mortgage Interest Rate. On
the date of such substitution, the
Seller will deliver or cause to be
delivered to the Servicer for deposit in
the Collection Account an amount equal to
the Substitution Adjustment Amount,
if any, and the Trustee, upon receipt by it
or the Custodian of the related
Eligible Substitute Mortgage Loan or Loans
and certification by the Servicer
of such deposit, shall release to the
Seller the related Mortgage File or
Files and shall execute and deliver such
instruments of transfer or
assignment, in each case without recourse,
representation or warranty, as the
Seller shall deliver to it and as shall be
necessary to vest therein any
Defective Mortgage Loan released pursuant
hereto.
In
addition, the Seller shall obtain at its own expense and deliver
to
the Trustee an Opinion of Counsel to the
effect that such substitution will
not cause (a) any federal tax to be imposed
on the Trust Fund, including
without limitation, any federal tax imposed
on "prohibited transactions" under
Section 860F(a)(l) of the Code or on
"contributions after the startup date"
under Section 860G(d)(l) of the Code, or
(b) any REMIC formed under this
Agreement to fail to qualify as a REMIC at
any time that any Certificate is
outstanding. If such Opinion of Counsel
cannot be delivered, then such
substitution may only be effected at such
time as the required Opinion of
Counsel can be given.
(e) Upon discovery by the Seller, the Servicer or the Trustee
that
any Mortgage Loan does not constitute a
"qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code,
the party discovering such fact
shall within two Business Days give written
notice thereof to the other
parties. In connection therewith, the
Seller shall repurchase or, subject to
the limitations set forth in Section
2.03(d), substitute one or more Eligible
Substitute Mortgage Loans for the affected
Mortgage Loan within 90 days of the
earlier of discovery or receipt of such
notice with respect to such affected
Mortgage Loan. In addition, upon discovery
that a Mortgage Loan is defective
in a manner that would cause it to be a
"defective obligation" within the
meaning of Treasury regulations relating to
REMICs, the Seller shall cure the
defect or make the required purchase or
substitution no later than 90 days
after the discovery of the defect. Any such
repurchase or substitution shall
be made in the same manner as set forth in
Section 2.03(a), if made by the
Seller. The Trustee shall reconvey to the
Seller the Mortgage Loan to be
released pursuant hereto in the same
manner, and on the same terms and
conditions, as it would a Mortgage Loan
repurchased for breach of a
representation or warranty.
Notwithstanding anything to the contrary contained herein, the
parties
hereto acknowledge that the functions of
the Trustee with respect to the
custody, acceptance, inspection and release
of the Mortgage Files pursuant to
Sections 2.01, 2.02 and 2.03 and
preparation and delivery of the
certifications in the form of Exhibit F-1
and Exhibit F-2 shall be performed
by the Custodian pursuant to the terms and
conditions of the Custodial
Agreement. The fees and expenses of the
Custodian shall be paid by the
Servicer.
Section
2.04 Representations and Warranties of the Seller with Respect
to the Mortgage Loans.
The Seller
hereby represents and warrants to the Trustee for the benefit
of the Certificateholders that as of the
Closing Date or as of such other date
specifically provided herein:
(a) The
representations and warranties made by the Seller pursuant
to Section 3.01 of the Mortgage Loan
Purchase Agreement are hereby being made
to the Trustee and are true and correct as
of the Closing Date.
(b) Any written agreement between the Mortgagor in respect of a
Mortgage Loan and the Servicer modifying
such Mortgagor's obligation to make
payments under the Mortgage Loan (such
modified Mortgage Loan, a "Modified
Mortgage Loan") involved some assessment of
the Mortgagor's ability to repay
the Modified Mortgage Loan.
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With
respect to the representations and warranties set forth in this
Section 2.04 that are made to the best of
the Seller's knowledge or as to
which the Seller has no knowledge, if it is
discovered by the Depositor, the
Seller, the Servicer or the Trustee that
the substance of such representation
and warranty is inaccurate and such
inaccuracy materially and adversely
affects the value of the related Mortgage
Loan or the interest therein of the
Certificateholders then, notwithstanding
the Seller's lack of knowledge with
respect to the substance of such
representation and warranty being inaccurate
at the time the representation or warranty
was made, such inaccuracy shall be
deemed a breach of the applicable
representation or warranty.
Upon
discovery by the Depositor, the Seller, the Servicer or the
Trustee
of a breach of any of the representations
and warranties contained in this
Section that materially and adversely
affects the value of any Mortgage Loan
or the interest therein of the
Certificateholders, the party discovering the
breach shall give prompt written notice to
the others and in no event later
than two Business Days from the date of
such discovery. Within ninety days of
its discovery or its receipt of notice of
any such missing or materially
defective documentation or any such breach
of a representation or warranty,
the Seller shall promptly deliver such
missing document or cure such defect or
breach in all material respects, or in the
event such defect or breach cannot
be cured, the Seller shall repurchase the
affected Mortgage Loan or cause the
removal of such Mortgage Loan from the
Trust Fund and substitute for it one or
more Eligible Substitute Mortgage Loans, in
either case, in accordance with
Section 2.03.
It is
understood and agreed that the representations and warranties
set
forth in this Section 2.04 shall survive
delivery of the Mortgage Files to the
Trustee and shall inure to the benefit of
the Certificateholders
notwithstanding any restrictive or
qualified endorsement or assignment. It is
understood and agreed that the obligations
of the Seller set forth in Section
2.03(a) and (c) to cure, substitute for or
repurchase a Mortgage Loan pursuant
to the Mortgage Loan Purchase Agreement and
to reimburse the Trust the
Reimbursement Amount, constitute the sole
remedies available to the
Certificateholders or to the Trustee on
their behalf respecting a breach of
the representations and warranties
contained in this Section 2.04.
Section
2.05 Representations, Warranties and Covenants of the Servicer.
The
Servicer hereby represents, warrants and covenants to the
Trustee,
for the benefit of each of the Trustee and
the Certificateholders and to the
Depositor that as of the Closing Date or as
of such date specifically provided
herein:
(i) The Servicer is duly organized, validly existing, and in
good standing under the laws of the
jurisdiction of its formation and has all
licenses necessary to carry on its business
as now being conducted, except for
such licenses, certificates and permits the
absence of which, individually or
in the aggregate, would not have a material
adverse effect on the ability of
the Servicer to conduct its business as it
is presently conducted, and is
licensed, qualified and in good standing in
the states where the Mortgaged
Property is located if the laws of such
state require licensing or
qualification in order to conduct business
of the type conducted by the
Servicer or to ensure the enforceability or
validity of each Mortgage Loan;
the Servicer has the power and authority to
execute and deliver this Agreement
and to perform in accordance herewith; the
execution, delivery and performance
of this Agreement (including all
instruments of transfer to be delivered
pursuant to this Agreement) by the Servicer
and the consummation of the
transactions contemplated hereby have been
duly and validly authorized; this
Agreement evidences the valid, binding and
enforceable obligation of the
Servicer, subject to applicable bankruptcy,
insolvency, reorganization,
moratorium or other similar laws affecting
the enforcement of creditors'
rights generally; and all requisite
corporate action has been taken by the
Servicer to make this Agreement valid and
binding upon the Servicer in
accordance with its terms;
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(ii) The consummation of the transactions contemplated by
this Agreement are in the ordinary course
of business of the Servicer and will
not result in the breach of any term or
provision of the certificate of
formation or the partnership agreement of
the Servicer or result in the breach
of any term or provision of, or conflict
with or constitute a default under or
result in the acceleration of any
obligation under, any agreement, indenture
or loan or credit agreement or other
instrument to which the Servicer or its
property is subject, or result in the
violation of any law, rule, regulation,
order, judgment or decree to which the
Servicer or its property is subject;
(iii) The Servicer is an approved servicer of conventional
mortgage loans for Fannie Mae and has the
facilities, procedures and
experienced personnel necessary for the
sound servicing of mortgage loans of
the same type as the Mortgage Loans. The
Servicer is, and shall remain for as
long as it is servicing the Mortgage Loans
hereunder, in good standing and to
service mortgage loans for HUD, Fannie Mae
or Freddie Mac, and no event has
occurred, including but not limited to a
change in insurance coverage, which
would make the Servicer unable to comply
with HUD, Fannie Mae or Freddie Mac
eligibility requirements or which would
require notification to any of HUD,
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 laws and general
principles of equity;
(v) The Servicer does not believe, nor does it have any
reason or cause to believe, that it cannot
perform each and every covenant
contained in this Agreement;
(vi) There is no action, suit, proceeding or investigation
pending or, to its knowledge, threatened
against the Servicer that, either
individually or in the aggregate, may
result in any material adverse change in
the business, operations, financial
condition, properties or assets of the
Servicer, or in any material impairment of
the right or ability of the
Servicer to carry on its business
substantially as now conducted, or in any
material liability on the part of the
Servicer, or that would draw into
question the validity or enforceability of
this Agreement or of any action
taken or to be taken in connection with the
obligations of the Servicer
contemplated herein, or that would be
likely to impair materially the ability
of the Servicer to perform under the terms
of this Agreement;
(vii) No consent, approval or order of any court or
governmental agency or body is required for
the execution, delivery and
performance by the Servicer of or
compliance by the Servicer with this
Agreement or the consummation of the
transactions contemplated by this
Agreement, except for such consents,
approvals, authorizations and orders, if
any, that have been obtained;
(viii) Neither this Agreement nor any information,
certificate of an officer, statement
furnished in writing or report delivered
to the Trustee by the Servicer in
connection with the transactions
contemplated hereby contains or will
contain any untrue statement of a
material fact or omits or will omit to
state a material fact necessary in
order to make the statements contained
therein, in light of the circumstances
under which they were made, not misleading;
and
(ix) The Servicer has fully furnished, and shall continue to
fully furnish for so long as it is
servicing the Mortgage Loans hereunder, in
accordance with the Fair Credit Reporting
Act and its implementing
regulations, accurate and complete
information on the Mortgagor credit files
to Equifax, Experian and Trans Union Credit
Information Company on a monthly
basis.
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It is
understood and agreed that the representations, warranties and
covenants set forth in this Section 2.05
shall survive delivery of the
Mortgage Files to the Trustee and shall
inure to the benefit of the Trustee,
the Depositor and the Certificateholders.
Upon discovery by any of the
Depositor, the Servicer, the Seller or the
Trustee of a breach of any of the
foregoing representations, warranties and
covenants which materially and
adversely affects the value of any Mortgage
Loan or the interests therein of
the Certificateholders, the party
discovering such breach shall give prompt
written notice (but in no event later than
two Business Days following such
discovery) to the other parties hereto.
Section
2.06 Representations and Warranties of the Depositor.
The
Depositor represents and warrants to the Trust and the Trustee
on
behalf of the Certificateholders as
follows:
(i) This agreement constitutes a legal, valid and binding
obligation of the Depositor, enforceable
against the Depositor in accordance
with its terms, except as enforceability
may be limited by applicable
bankruptcy, insolvency, reorganization,
moratorium or other similar laws now
or hereafter in effect affecting the
enforcement of creditors' rights in
general and except as such enforceability
may be limited by general principles
of equity (whether considered in a
proceeding at law or in equity);
(ii) Immediately prior to the sale and assignment by the
Depositor to the Trustee on behalf of the
Trust of each Mortgage Loan, the
Depositor had good and marketable title to
each Mortgage Loan (insofar as such
title was conveyed to it by the Seller)
subject to no prior lien, claim,
participation interest, mortgage, security
interest, pledge, charge or other
encumbrance or other interest of any
nature;
(iii) As of the Closing Date, the Depositor has transferred
all right, title interest in the Mortgage
Loans to the Trustee on behalf of
the Trust;
(iv) The Depositor has not transferred the Mortgage Loans to
the Trustee on behalf of the Trust with any
intent to hinder, delay or defraud
any of its creditors;
(v) The Depositor has been duly incorporated and is validly
existing as a corporation in good standing
under the laws of the State of
Delaware, with full corporate power and
authority to own its assets and
conduct its business as presently being
conducted;
(vi) The Depositor is not in violation of its certificate of
incorporation or by-laws or in default in
the performance or observance of any
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