AMERIQUEST MORTGAGE SECURITIES INC.
Depositor
AMERIQUEST MORTGAGE COMPANY
Master Servicer
and
DEUTSCHE BANK NATIONAL TRUST COMPANY
Trustee
________________________________________
POOLING AND SERVICING AGREEMENT
Dated as of February 1, 2005
________________________________________
ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2005-R1
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TABLE OF CONTENTS
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SECTION
PAGE
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ARTICLE I DEFINITIONS
5
SECTION 1.01. Defined
Terms......................................................................5
SECTION 1.02. Allocation of Certain Interest
Shortfalls.........................................60
SECTION 1.03. Rights of the NIMS
Insurer........................................................61
ARTICLE II CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
61
SECTION 2.01. Conveyance of Mortgage
Loans......................................................61
SECTION 2.02. Acceptance of REMIC I by the
Trustee..............................................64
SECTION 2.03. Repurchase or Substitution of
Mortgage Loans by the Seller or the
Depositor; Payment of Prepayment Charge Payment
Amounts...........................65
SECTION 2.04.
[Reserved]........................................................................69
SECTION 2.05. Representations, Warranties and
Covenants of the Master Servicer..................69
SECTION 2.06. Issuance of the REMIC I Regular
Interests and the Class R-I Interest..............72
SECTION 2.07. Conveyance of the REMIC I Regular
Interests; Acceptance of REMIC I by the
Trustee; Issuance of Class R
Certificates.........................................72
ARTICLE III ADMINISTRATION AND SERVICING OF
THE MORTGAGE LOANS
73
SECTION 3.01. Master Servicer to Act as Master
Servicer.........................................73
SECTION 3.02. Collection of Certain Mortgage
Loan Payments......................................75
SECTION 3.03.
[Reserved]........................................................................76
SECTION 3.04. Collection Account, Escrow Account
and Distribution Account.......................76
SECTION 3.05. Permitted Withdrawals From the
Collection
Account, Escrow Account and Distribution
Account..................................80
SECTION 3.06. Investment of Funds in the
Collection Account, the Escrow Account,
the REO Account and the Distribution
Account......................................83
SECTION 3.07. Payment of Taxes, Insurance and
Other Charges.....................................85
SECTION 3.08. Maintenance of Hazard
Insurance...................................................85
SECTION 3.09. Maintenance of Mortgage Blanket
Insurance.........................................86
SECTION 3.10. Fidelity Bond; Errors and
Omissions Insurance.....................................86
SECTION 3.11. Enforcement of Due-On-Sale
Clauses; Assumption Agreements.........................87
SECTION 3.12. Realization Upon Defaulted
Mortgage Loans.........................................88
SECTION 3.13. Title, Management and Disposition
of REO Property.................................90
SECTION 3.14.
[Reserved]........................................................................93
SECTION 3.15. Reports of Foreclosure and
Abandonment of Mortgaged Properties....................93
SECTION 3.16. Optional Purchase of Defaulted
Mortgage Loans.....................................93
SECTION 3.17. Trustee to Cooperate; Release of
Mortgage Files...................................94
SECTION 3.18. Servicing
Compensation............................................................96
SECTION 3.19. Statement as to
Compliance........................................................96
SECTION 3.20. Independent Public Accountants'
Servicing Report..................................97
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SECTION 3.21. Access to Certain
Documentation...................................................97
SECTION 3.22.
[Reserved]........................................................................98
SECTION 3.23. Advance
Facility..................................................................98
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS
99
SECTION 4.01.
Distributions.....................................................................99
SECTION 4.02. Statements to
Certificateholders.................................................111
SECTION 4.03. Remittance Reports and Other
Reports to the Trustee;
Advances; Payments in Respect of Prepayment Interest
Shortfalls..................115
SECTION 4.04. Allocation of Realized
Losses....................................................117
SECTION 4.05. Compliance with Withholding
Requirements.........................................119
SECTION 4.06. Commission
Reporting.............................................................120
SECTION 4.07.
[Reserved].......................................................................121
SECTION 4.08.
[Reserved].......................................................................121
SECTION 4.09.
[Reserved].......................................................................121
SECTION 4.10.
[Reserved].......................................................................121
SECTION 4.11. Net WAC Rate Carryover Reserve
Account...........................................121
ARTICLE V THE CERTIFICATES
124
SECTION 5.01. The
Certificates.................................................................124
SECTION 5.02. Registration of Transfer and
Exchange of Certificates............................126
SECTION 5.03. Mutilated, Destroyed, Lost or
Stolen Certificates................................131
SECTION 5.04. Persons Deemed
Owners............................................................132
SECTION 5.05. Certain Available
Information....................................................132
ARTICLE VI THE DEPOSITOR AND THE MASTER
SERVICER
133
SECTION 6.01. Liability of the Depositor and the
Master Servicer...............................133
SECTION 6.02. Merger or Consolidation of the
Depositor or the Master Servicer..................133
SECTION 6.03. Limitation on Liability of the
Depositor, the Master Servicer and Others.........133
SECTION 6.04. Limitation on Resignation of the
Master Servicer.................................134
SECTION 6.05. Rights of the Depositor in Respect
of the Master Servicer........................135
SECTION 6.06. Sub-Servicing Agreements Between
the Master Servicer and Sub-Servicers...........136
SECTION 6.07. Successor
Sub-Servicers..........................................................137
SECTION 6.08. Liability of the Master
Servicer.................................................137
SECTION 6.09. No Contractual Relationship
Between Sub-Servicers and the NIMS
Insurer, the Trustee or
Certificateholders.......................................137
SECTION 6.10. Assumption or Termination of
Sub-Servicing Agreements by Trustee.................138
SECTION 6.11. Sub-Servicing
Accounts...........................................................138
ARTICLE VII DEFAULT
139
SECTION 7.01. Master Servicer Events of
Default................................................139
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SECTION 7.02. Trustee to Act; Appointment of
Successor.........................................141
SECTION 7.03. Notification to
Certificateholders...............................................143
SECTION 7.04. Waiver of Master Servicer Events
of Default......................................144
ARTICLE VIII CONCERNING THE TRUSTEE
144
SECTION 8.01. Duties of
Trustee................................................................144
SECTION 8.02. Certain Matters Affecting the
Trustee............................................145
SECTION 8.03. The Trustee Not Liable for
Certificates or Mortgage Loans........................147
SECTION 8.04. Trustee May Own
Certificates.....................................................147
SECTION 8.05. Trustee's Fees and
Expenses......................................................147
SECTION 8.06. Eligibility Requirements for
Trustee.............................................148
SECTION 8.07. Resignation and Removal of the
Trustee...........................................148
SECTION 8.08. Successor
Trustee................................................................149
SECTION 8.09. Merger or Consolidation of
Trustee...............................................150
SECTION 8.10. Appointment of Co-Trustee or
Separate Trustee....................................150
SECTION 8.11. Appointment of
Custodians........................................................151
SECTION 8.12. Appointment of Office or
Agency..................................................151
SECTION 8.13. Representations and Warranties of
the Trustee....................................152
ARTICLE IX TERMINATION
153
SECTION 9.01. Termination Upon Repurchase or
Liquidation of All Mortgage Loans.................153
SECTION 9.02. Additional Termination
Requirements..............................................155
ARTICLE X REMIC PROVISIONS
156
SECTION 10.01. REMIC
Administration.............................................................156
SECTION 10.02. Prohibited
Transactions and
Activities...........................................158
SECTION 10.03. Master
Servicer and Trustee
Indemnification......................................159
ARTICLE XI MISCELLANEOUS PROVISIONS
159
SECTION 11.01.
Amendment........................................................................159
SECTION 11.02. Recordation
of Agreement;
Counterparts...........................................161
SECTION 11.03. Limitation on
Rights of
Certificateholders.......................................161
SECTION 11.04. Governing
Law....................................................................162
SECTION 11.05.
Notices..........................................................................162
SECTION 11.06. Severability
of
Provisions.......................................................163
SECTION 11.07. Notice to
Rating Agencies and the NIMS
Insurer...................................163
SECTION 11.08. Article and
Section
References...................................................164
SECTION 11.09. Grant of
Security
Interest.......................................................164
SECTION 11.10. Third Party
Rights...............................................................165
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EXHIBITS
Exhibit A-1A Form of Class
A-1A Certificate
Exhibit A-1B Form of Class
A-1B Certificate
Exhibit A-2A Form of Class
A-2A Certificate
Exhibit A-2B Form of Class
A-2B Certificate
Exhibit A-3A Form of Class
A-3A Certificate
Exhibit A-3B Form of Class
A-3B Certificate
Exhibit A-3C Form of Class
A-3C Certificate
Exhibit A-3D Form of Class
A-3D Certificate
Exhibit A-M-1 Form of Class M-1
Certificate
Exhibit A-M-2 Form of Class M-2
Certificate
Exhibit A-M-3 Form of Class M-3
Certificate
Exhibit A-M-4 Form of Class M-4
Certificate
Exhibit A-M-5 Form of Class M-5
Certificate
Exhibit A-M-6 Form of Class M-6
Certificate
Exhibit A-M-7 Form of Class M-7
Certificate
Exhibit A-M-8 Form of Class M-8
Certificate
Exhibit A-M-9 Form of Class M-9
Certificate
Exhibit A-M-10 Form of Class M-10
Certificate
Exhibit A-CE Form of Class CE
Certificate
Exhibit A-P Form of
Class P Certificate
Exhibit A-R Form of
Class R Certificate
Exhibit B
Form of Lost Note Affidavit
Exhibit C-1 Form of
Trustee's Initial Certification
Exhibit C-2 Form of
Trustee's Final Certification
Exhibit C-3 Form of
Trustee's Receipt of Mortgage Note
Exhibit D
Form of Mortgage Loan Purchase Agreement
Exhibit E
Request for Release
Exhibit F-1 Form of
Transferor Representation Letter and Form of
Transferee Representation Letter in Connection with
Transfer of Class CE and Class P Certificates Pursuant to
Rule 144A Under the 1933 Act
Exhibit F-2 Form of
Transfer Affidavit and Agreement and Form of
Transferor Affidavit in Connection with Transfer of
Residual Certificates
Exhibit G Form of
Certification with respect to ERISA and the Code
Exhibit H
Form of Cap Contracts
Exhibit I
Loss Mitigation Action Plan
Exhibit J-1 Form of
Certification to Be Provided by the Depositor with Form
10-K
Exhibit J-2 Form of
Certification to Be Provided to Depositor by the
Trustee
Exhibit K
[Reserved]
Exhibit L
[Reserved]
Exhibit M
Annual Statement of Compliance pursuant to Section 3.19
Schedule 1
Mortgage Loan Schedule
Schedule 2
Prepayment Charge Schedule
<PAGE>
This Pooling and Servicing Agreement, is dated and effective
as of February 1, 2005, among AMERIQUEST
MORTGAGE SECURITIES INC., as Depositor,
AMERIQUEST MORTGAGE COMPANY, as Master
Servicer and DEUTSCHE BANK NATIONAL TRUST
COMPANY, as 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 shall evidence the
entire beneficial ownership interest
in each REMIC (as defined herein) created
hereunder. The Trust Fund shall
consist of a segregated pool of assets
consisting of the Mortgage Loans and
certain other related assets subject to
this Agreement.
<PAGE>
REMIC I
As provided herein, the Trustee shall elect to treat the
segregated
pool of assets consisting of the Mortgage
Loans and certain other related assets
(other than any Master Servicer Prepayment
Charge Payment Amounts, the Net WAC
Rate Carryover Reserve Account and the Cap
Contracts) subject to this Agreement
as a REMIC for federal income tax purposes,
and such segregated pool of assets
shall be designated as "REMIC I." The Class
R-I Interest shall evidence the sole
class of "residual interests" in REMIC I
for purposes of the REMIC Provisions
under federal income tax law. The following
table irrevocably sets forth the
designation, the REMIC I Remittance Rate,
the initial Uncertificated Balance
and, for purposes of satisfying Treasury
regulation section 1.860G-1(a)(4)(iii),
the "latest possible maturity date" for
each of the REMIC I Regular Interests
(as defined herein). None of the REMIC I
Regular Interests shall be
certificated.
REMIC I Initial
Uncertificated Latest Possible
Designation Remittance
Rate
Balance ($)
Maturity Date(1)
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I-LTAA
Variable(2)
735,000,259.59
March 25, 2035
I-LTA1A
Variable(2)
1,430,890.00
March 25, 2035
I-LTA1B
Variable(2)
357,725.00
March 25, 2035
I-LTA2A
Variable(2)
1,626,105.00
March 25, 2035
I-LTA2B
Variable(2)
406,530.00
March 25, 2035
I-LTA3A
Variable(2)
943,200.00
March 25, 2035
I-LTA3B
Variable(2)
941,050.00
March 25, 2035
I-LTA3C
Variable(2)
177,875.00
March 25, 2035
I-LTA3D
Variable(2)
229,125.00
March 25, 2035
I-LTM1
Variable(2)
401,250.00
March 25, 2035
I-LTM2
Variable(2)
112,500.00
March 25, 2035
I-LTM3
Variable(2)
172,500.00
March 25, 2035
I-LTM4
Variable(2)
120,000.00
March 25, 2035
I-LTM5
Variable(2)
75,000.00
March 25, 2035
I-LTM6
Variable(2)
116,250.00
March 25, 2035
I-LTM7
Variable(2)
67,500.00
March 25, 2035
I-LTM8
Variable(2)
90,000.00
March 25,
2035
I-LTM9
Variable(2)
101,250.00
March 25, 2035
I-LTM10
Variable(2)
56,250.00
March 25, 2035
I-LTZZ
Variable(2)
7,575,005.30
March 25, 2035
I-LTP
Variable(2)
100.00
March 25, 2035
I-LT1SUB
Variable(2)
8,120.15
March 25, 2035
I-LT1GRP
Variable(2)
43,892.46
March 25, 2035
I-LT2SUB
Variable(2)
9,227.97
March 25, 2035
I-LT2GRP
Variable(2)
49,880.67
March 25, 2035
I-LT3SUB
Variable(2)
10,401.94
March 25, 2035
I-LT3GRP
Variable(2)
56,226.94
March 25, 2035
I-XX
Variable(2)
749,822,514.77
March 25, 2035
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2
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1) For purposes of Section
1.860G-1(a)(4)(iii) of the Treasury regulations, the
Distribution Date immediately following the
maturity date for the Mortgage Loan
with the latest maturity date has been
designated as the "latest possible
maturity date" for each REMIC I Regular
Interest.
(2) Calculated in accordance with the
definition of "REMIC I Remittance Rate"
herein.
3
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REMIC II
--------
As provided herein, the Trustee shall elect to treat the
segregated pool of assets consisting of the
REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such
segregated pool of assets shall be
designated as "REMIC II." The Class R-II
Interest shall evidence the sole class
of "residual interests" in REMIC II for
purposes of the REMIC Provisions under
federal income tax law. The following table
irrevocably sets forth the
designation, the Pass-Through Rate, the
initial aggregate Certificate Principal
Balance and, for purposes of satisfying
Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible
maturity date" for the indicated
Classes of Certificates.
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Initial Aggregate
Assumed
Certificate Principal
Latest Possible
Final
Designation
Pass-Through Rate
Balance ($)
Maturity Date(1)
Maturity Date(5)
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Class A-1A
Variable(2)
$ 286,178,000.00
March 25, 2035
March 25, 2035
Class A-1B
Variable(2)
$ 71,545,000.00
March 25, 2035
March 25, 2035
Class A-2A
Variable(2)
$ 325,221,000.00
March 25, 2035
March 25, 2035
Class A-2B
Variable(2)
$ 81,306,000.00
March 25, 2035
March 25, 2035
Class A-3A
Variable(2)
$ 188,640,000.00
March 25, 2035
April 25, 2014
Class A-3B
Variable(2)
$ 188,210,000.00
March 25, 2035
March 25, 2035
Class A-3C
Variable(2)
$ 35,575,000.00
March 25, 2035
March 25, 2035
Class A-3D
Variable(2)
$ 45,825,000.00
March 25, 2035
March 25, 2035
Class M-1
Variable(2)
$ 80,250,000.00
March 25, 2035
March 25, 2035
Class M-2
Variable(2)
$ 22,500,000.00
March 25, 2035
March 25, 2035
Class M-3
Variable(2)
$ 34,500,000.00
March 25, 2035
March 25, 2035
Class M-4
Variable(2)
$ 24,000,000.00
March 25, 2035
March 25, 2035
Class M-5
Variable(2)
$ 15,000,000.00
March 25, 2035
March 25, 2035
Class M-6
Variable(2)
$ 23,250,000.00
March 25, 2035
March 25, 2035
Class M-7
Variable(2)
$ 13,500,000.00
March 25, 2035
March 25, 2035
Class M-8
Variable(2)
$ 18,000,000.00
March 25, 2035
March 25, 2035
Class M-9
Variable(2)
$ 20,250,000.00
March 25, 2035
March 25, 2035
Class M-10
Variable(2)
$ 11,250,535.00
March 25, 2035
March 25, 2035
Class CE
Variable(2)(3)
$ 15,000,530.00
March 25, 2035
March 25, 2035
Class P
Variable(2)(4)
$
100.00
March 25, 2035
March 25, 2035
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________________
(1) For purposes of Section
1.860G-1(a)(4)(iii) of the Treasury regulations,
the Distribution
Date immediately following the maturity date for the
Mortgage Loan
with the latest maturity date has been designated as the
"latest possible maturity
date" for each Class of Certificates.
(2) Calculated in accordance with the
definition of "Pass-Through Rate" herein.
(3) The Class CE Certificates shall
accrue interest at their variable
Pass-Through
Rate on the Notional Amount of the Class CE Certificates
outstanding from
time to time which shall equal the Uncertificated Balance
of the REMIC I
Regular Interests, other than REMIC I Regular Interest
I-LTP. The Class
CE Certificates shall not accrue interest on their
Certificate
Principal Balance.
(4) The Class P Certificates shall not
accrue interest.
(5) The Assumed Final Maturity Date
for the Class A-3A Certificates is the
Distribution
Date in April 2014, which was calculated based on assumptions,
including the
rate or prepayment, as determined by the one or more of the
Rating Agencies.
To the extent that all amounts owed on the Class A-3A
Certificates has
not been distributed on such Certificates by the Assumed
Final
Distribution Date, it will not constitute a default.
4
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As of the Cut-off Date, the Group I Mortgage Loans had an
aggregate Scheduled Principal Balance equal
to $438,924,618.70, the Group II
Mortgage Loans had an aggregate Scheduled
Principal Balance equal to
$498,806,657.59and the Group III Mortgage
Loans had an aggregate Scheduled
Principal Balance equal to
$562,269,353.48.
In consideration of the mutual agreements herein contained,
the Depositor, the Master Servicer and the
Trustee agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.
Whenever used in this Agreement, including, without
limitation, in the Preliminary Statement
hereto, the following words and
phrases, unless the context otherwise
requires, shall have the meanings
specified in this Article. Unless otherwise
specified, all calculations
described herein shall be made on the basis
of a 360-day year consisting of
twelve 30-day months and all calculations
on each Regular Interest shall be made
on the basis of a 360-day year and the
actual number of days in the month.
"Accrued Certificate Interest": With respect to any Class of
Certificates (other than the Class P
Certificates and the Residual Certificates)
and each Distribution Date, interest
accrued during the related Interest Accrual
Period at the Pass-Through Rate for such
Certificate for such Distribution Date
on the Certificate Principal Balance, in
the case of the Adjustable-Rate
Certificates and the Fixed-Rate
Certificates, or on the Notional Amount, in the
case of the Class CE Certificates, of such
Certificate immediately prior to such
Distribution Date. The Class P Certificates
are not entitled to distributions in
respect of interest and, accordingly, shall
not accrue interest. All
distributions of interest on the
Adjustable-Rate Certificates shall be
calculated on the basis of a 360-day year
and the actual number of days in the
applicable Interest Accrual Period. All
distributions of interest on the
Fixed-Rate Certificates and the Class CE
Certificates shall be based on a
360-day year consisting of twelve 30-day
months. Accrued Certificate Interest
with respect to each Distribution Date, as
to any Class A Certificate or
Mezzanine Certificate, shall be reduced by
an amount equal to the portion
allocable to such Certificate pursuant to
Section 1.02 hereof of the sum of (a)
the aggregate Prepayment Interest
Shortfall, if any, for such Distribution Date
to the extent not covered by payments
pursuant to Section 4.03(e) or allocated
to the Class CE Certificates pursuant to
Section 1.02 and (b) the aggregate
amount of any Relief Act Interest
Shortfall, if any, for such Distribution Date
not allocated to the Class CE Certificates
pursuant to Section 1.02. Accrued
Certificate Interest with respect to each
Distribution Date and any Class CE
Certificate shall be reduced by (a)
Prepayment Interest Shortfalls, if any,
allocated to such Class of Certificates
pursuant to Section 1.02 hereof, (b)
Relief Act Interest Shortfalls, if any,
allocated to such Class of Certificates
pursuant to Section 1.02 hereof and (c) an
amount equal to the portion of
Realized Losses, if any, allocable to
interest on the Class CE Certificate
pursuant to Section 4.04 hereof.
5
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"Adjustable-Rate Certificates": The Class A Certificates and
the Mezzanine Certificates.
"Adjustable-Rate Mortgage Loan": Each of the Mortgage Loans
identified on the Mortgage Loan Schedule as
having a Mortgage Rate that is
subject to adjustment.
"Adjustment Date": With respect to each Adjustable-Rate
Mortgage Loan, the first day of the month
in which the Mortgage Rate of such
Mortgage Loan changes pursuant to the
related Mortgage Note. The first
Adjustment Date following the Cut-off Date
as to each Adjustable-Rate Mortgage
Loan is set forth in the Mortgage Loan
Schedule.
"Advance": As to any Mortgage Loan or REO Property, any
advance made by the Master Servicer or a
successor Master Servicer in respect of
any Distribution Date representing the
aggregate of all payments of principal
and interest, net of the Servicing Fee,
that were due during the related Due
Period on the Mortgage Loans and that were
delinquent on the related
Determination Date, plus certain amounts
representing assumed payments not
covered by any current net income on the
Mortgaged Properties acquired by
foreclosure or deed in lieu of foreclosure
as determined pursuant to Section
4.03.
"Affiliate": With respect to any specified Person, any other
Person controlling or controlled by or
under common control with such specified
Person. For the purposes of this
definition, "control," when used with respect
to any specified Person, means the power to
direct the management and policies
of such Person, directly or indirectly,
whether through the ownership of voting
securities, by contract or otherwise, and
the terms "controlling" and
"controlled" have meanings correlative to
the foregoing.
"Agreement": This Pooling and Servicing Agreement and all
amendments hereof and supplements
hereto.
"Allocated Realized Loss Amount": With respect to any
Distribution Date and any Class of
Mezzanine Certificates, the sum of (i) the
Realized Losses allocated to such Class of
Certificates on such Distribution
Date and (ii) the amount of any Allocated
Realized Loss Amount for such Class of
Certificates remaining undistributed from
the previous Distribution Date,
reduced by the amount of the increase in
the Certificate Principal Balance of
such Class of Certificates due to the
receipt of Subsequent Recoveries as
provided in Section 4.01.
"Applicable Regulations": As to any Mortgage Loan, all
federal, state and local laws, statutes,
rules and regulations applicable
thereto.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form
(excepting therefrom if applicable,
the mortgage recordation information which
has not been returned by the
applicable recorder's office and/or the
assignee's name), which is sufficient
under the laws of the jurisdiction wherein
the related Mortgaged Property is
located to reflect of record the sale of
the Mortgage.
"Available Funds": With respect to any Distribution Date, an
amount equal to (1) the sum of (a) the
aggregate of the amounts on deposit in
the Collection Account and
6
<PAGE>
Distribution Account as of the close of
business on the related Determination
Date, including any Subsequent Recoveries,
(b) the aggregate of any amounts
received in respect of an REO Property
withdrawn from any REO Account and
deposited in the Distribution Account for
such Distribution Date pursuant to
Section 3.13, (c) Compensating Interest, if
any, deposited in the Distribution
Account by the Master Servicer in respect
of Prepayment Interest Shortfalls for
such Distribution Date pursuant to Section
4.03(e), (d) the aggregate of any
Advances made by the Master Servicer for
such Distribution Date pursuant to
Section 4.03 and (e) the aggregate of any
Advances made by the successor Master
Servicer or the Trustee for such
Distribution Date pursuant to Section 7.02(b),
reduced (to not less than zero) by (2) the
sum of (x) the portion of the amount
described in clause (1)(a) above that
represents (i) Monthly Payments on the
Mortgage Loans received from a Mortgagor on
or prior to the Determination Date
but due during any Due Period subsequent to
the related Due Period, (ii)
Principal Prepayments on the Mortgage Loans
received after the related
Prepayment Period (together with any
interest payments received with such
Principal Prepayments to the extent they
represent the payment of interest
accrued on the Mortgage Loans during a
period subsequent to the related
Prepayment Period), (iii) Liquidation
Proceeds, Insurance Proceeds and
Subsequent Recoveries received in respect
of the Mortgage Loans after the
related Prepayment Period, (iv) amounts
reimbursable or payable to the
Depositor, the Master Servicer, the
Trustee, the Seller or any Sub-Servicer
pursuant to Section 3.05 or Section 3.06 or
otherwise payable in respect of
Extraordinary Trust Fund Expenses, (v)
Stayed Funds, (vi) the Trustee Fee
payable from the Distribution Account
pursuant to Section 8.05, (vii) amounts
deposited in the Collection Account or the
Distribution Account in error and
(viii) the amount of any Prepayment Charges
collected by the Master Servicer and
the amount of any Master Servicer
Prepayment Charge Payment Amounts and (y)
amounts reimbursable to the Trustee for an
advance made pursuant to Section
7.02(b) which advance the Trustee has
determined to be nonrecoverable from the
Stayed Funds in respect of which it was
made.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11
of the United States Code), as amended.
"Bankruptcy Loss": With respect to any Mortgage Loan, a
Realized Loss resulting from a Deficient
Valuation or Debt Service Reduction.
"Book-Entry Certificate": Any Certificate registered in the
name of the Depository or its nominee.
Initially, the Book-Entry Certificates
shall be the Class A Certificates and the
Mezzanine Certificates.
"Book-Entry Custodian": The custodian appointed pursuant to
Section 5.01.
"Business Day": Any day other than a Saturday, a Sunday or a
day on which banking or savings and loan
institutions in the State of
California, the State of New York, 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 Amount": For each Class of Adjustable-Rate Certificates,
an amount equal to (i) the aggregate amount
received by the Trust Fund from the
related Cap Contract, multiplied
7
<PAGE>
by (ii) a fraction equal to (a) the
Certificate Principal Balance of such Class
immediately prior to the applicable
Distribution Date (minus an amount equal to
the Certificate Principal Balance of such
Class beneficially owned by the Seller
or its Affiliates) divided by (b) the
aggregate Certificate Principal Balance
immediately prior to the applicable
Distribution Date of all Classes of
Adjustable-Rate Certificates, directly
benefiting from such Cap Contract.
"Cap Contract Excess": With respect to any Cap Contract and
Distribution Date, the excess, if any, of
the then applicable maximum rate set
forth in such Cap Contract over the then
applicable strike rate set forth in
such Cap Contract.
"Cap Contracts": The interest rate corridors between Deutsche
Bank National Trust Company, as Trustee,
and the counterparty thereunder, for
the benefit of the Holders of (i) the Group
I Certificates, (ii) the Group II
Certificates, (iii) the Group III
Certificates and (iv) the Mezzanine
Certificates, collectively, forms of which
are attached hereto as Exhibit H.
"Certificate": Any one of the Depositor's Asset-Backed
Pass-Through Certificates, Series 2005-R1,
Class A-1A, Class A-1B, Class A-2A,
Class A-2B, Class A-3A, Class A-3B, Class
A-3C, Class A-3D, Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class
M-6, Class M-7, Class M-8, Class
M-9, Class M-10, Class CE, Class P and
Class R, issued under this Agreement.
"Certificate Factor": With respect to any Class of Regular
Certificates as of any Distribution Date, a
fraction, expressed as a decimal
carried to six places, the numerator of
which is the aggregate Certificate
Principal Balance (or the Notional Amount,
in the case of the Class CE
Certificates) of such Class of Certificates
on such Distribution Date (after
giving effect to any distributions of
principal and allocations of Realized
Losses in reduction of the Certificate
Principal Balance (or the Notional
Amount, in the case of the Class CE
Certificates) of such Class of Certificates
to be made on such Distribution Date), and
the denominator of which is the
initial aggregate Certificate Principal
Balance (or the Notional Amount, in the
case of the Class CE Certificates) of such
Class of Certificates as of the
Closing Date.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the
Certificate Register, except that a
Disqualified Organization or a Non-United
States Person shall not be a Holder of
a Residual Certificate for any purposes
hereof and, solely for the purposes of
giving any consent pursuant to this
Agreement, any Certificate registered in the
name of the Depositor or the Master
Servicer or any Affiliate thereof shall be
deemed not to be outstanding and the Voting
Rights to which it is entitled shall
not be taken into account in determining
whether the requisite percentage of
Voting Rights necessary to effect any such
consent has been obtained, except as
otherwise provided in Section 11.01. The
Trustee and the NIMS Insurer may
conclusively rely upon a certificate of the
Depositor or the Master Servicer in
determining whether a Certificate is held
by an Affiliate thereof. All
references herein to "Holders" or
"Certificateholders" shall reflect the rights
of Certificate Owners as they may
indirectly exercise such rights through the
Depository and participating members
thereof, except as otherwise specified
herein; provided, however, that the Trustee
and the NIMS Insurer shall be
required to recognize as a "Holder" or
"Certificateholder" only the Person in
whose name a Certificate is registered in
the Certificate Register.
8
<PAGE>
"Certificate Margin": With respect to each Class of
Adjustable-Rate Certificates and, for
purposes of the Marker Rate and the
Maximum I-LTZZ Uncertificated Interest
Deferral Amount, the specified REMIC I
Regular Interest, as follows:
Certificate Margin
REMIC I Regular
--------------------------
Class
Interest
(1) (%) (2)
(%)
----------
-------------------------------- ------------
-------------
A-1A
REMIC I Regular Interest I-LTA1A 0.30500
0.61000
A-1B
REMIC I Regular Interest I-LTA1B 0.30000
0.60000
A-2A
REMIC I Regular Interest I-LTA2A 0.25000
0.50000
A-2B
REMIC I Regular Interest I-LTA2B 0.30000
0.60000
A-3A
REMIC I Regular Interest I-LTA3A 0.10000
0.20000
A-3B
REMIC I Regular Interest I-LTA3B 0.21000
0.42000
A-3C
REMIC I Regular Interest I-LTA3C 0.35000
0.70000
A-3D
REMIC I Regular Interest I-LTA3D 0.31000
0.62000
M-1
REMIC I Regular Interest I-LTM1
0.45000
0.67500
M-2
REMIC I Regular Interest I-LTM2
0.48000
0.72000
M-3
REMIC I Regular Interest I-LTM3
0.53000
0.79500
M-4
REMIC I Regular Interest I-LTM4
0.74000
1.11000
M-5
REMIC I Regular Interest I-LTM5
0.78000
1.17000
M-6
REMIC I Regular Interest I-LTM6
1.00000
1.50000
M-7
REMIC I Regular Interest I-LTM7
1.35000
2.02500
M-8
REMIC I Regular Interest I-LTM8
1.75000
2.62500
M-9
REMIC I Regular Interest I-LTM9
2.75000
4.12500
M-10
REMIC I Regular Interest I-LTM10 2.75000
4.12500
__________
(1) For the Interest Accrual Period
for each Distribution Date on or prior
to the Optional Termination Date.
(2) For the Interest Accrual Period
for each Distribution Date after the
Optional Termination Date.
"Certificate Owner": With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of
such Certificate as reflected on the
books of the Depository or on the books of
a Depository Participant or on the
books of an indirect participating
brokerage firm for which a Depository
Participant acts as agent.
"Certificate Principal Balance": With respect to each Class A
Certificate, Mezzanine Certificate or Class
P Certificate as of any date of
determination, the Certificate Principal
Balance of such Certificate on the
Distribution Date immediately prior to such
date of determination plus, with
respect to each Mezzanine Certificate, any
increase in the Certificate Principal
Balance of such Certificate pursuant to
Section 4.01 due to the receipt of
Subsequent Recoveries, minus all
distributions allocable to principal made
thereon on such Distribution Date and, in
the case of a Mezzanine Certificate,
Realized Losses allocated thereto on such
immediately prior Distribution Date
(or, in the case of any date of
determination up to and including the first
Distribution Date, the initial Certificate
Principal Balance of such
Certificate, as stated on the face
thereof). With respect to each Class CE
Certificate as of any date of
determination, an amount equal to the Percentage
Interest evidenced by such Certificate
times the excess, if any, of (A) the then
aggregate Uncertificated Balance of the
REMIC I Regular Interests over (B) the
then aggregate Certificate Principal
Balance of the Class A Certificates, the
Mezzanine Certificates and the Class P
Certificates then outstanding.
"Certificate Register" and "Certificate Registrar": The
register maintained and the registrar
appointed pursuant to Section 5.02.
"Class": Collectively, all of the Certificates bearing the
same class designation.
9
<PAGE>
"Class A Certificate": Any one of the Class A-1A, Class A-1B,
Class A-2A, Class A-2B, Class A-3A, Class
A-3B, Class A-3C or Class A-3D
Certificates.
"Class A Principal Distribution Amount": With respect to any
Distribution Date, an amount equal to the
sum of (i) the Senior Group I
Principal Distribution Amount; (ii) the
Senior Group II Principal Distribution
Amount and (iii) the Senior Group III
Principal Distribution Amount.
"Class A-1A Certificate": Any one of the Class A-1A
Certificates executed by the Trustee, and
authenticated and delivered by the
Certificate Registrar, substantially in the
form annexed hereto as Exhibit A-1A
and evidencing a Regular Interest in REMIC
II for purposes of the REMIC
Provisions.
"Class A-1B Certificate": Any one of the Class A-1B
Certificates executed by the Trustee, and
authenticated and delivered by the
Certificate Registrar, substantially in the
form annexed hereto as Exhibit A-1B
and evidencing a Regular Interest in REMIC
II for purposes of the REMIC
Provisions.
"Class A-2A Certificate": Any one of the Class A-2A
Certificates executed by the Trustee, and
authenticated and delivered by the
Certificate Registrar, substantially in the
form annexed hereto as Exhibit A-2A
and evidencing a Regular Interest in REMIC
II for purposes of the REMIC
Provisions.
"Class A-2B Certificate": Any one of the Class A-2B
Certificates executed by the Trustee, and
authenticated and delivered by the
Certificate Registrar, substantially in the
form annexed hereto as Exhibit A-2B
and evidencing a Regular Interest in REMIC
II for purposes of the REMIC
Provisions.
"Class A-3A Certificate": Any one of the Class A-3A
Certificates executed by the Trustee, and
authenticated and delivered by the
Certificate Registrar, substantially in the
form annexed hereto as Exhibit A-3A
and evidencing a Regular Interest in REMIC
II for purposes of the REMIC
Provisions.
"Class A-3B Certificate": Any one of the Class A-3B
Certificates executed by the Trustee, and
authenticated and delivered by the
Certificate Registrar, substantially in the
form annexed hereto as Exhibit A-3B
and evidencing a Regular Interest in REMIC
II for purposes of the REMIC
Provisions.
"Class A-3C Certificate": Any one of the Class A-3C
Certificates executed by the Trustee, and
authenticated and delivered by the
Certificate Registrar, substantially in the
form annexed hereto as Exhibit A-3C
and evidencing a Regular Interest in REMIC
II for purposes of the REMIC
Provisions.
"Class A-3D Certificate": Any one of the Class A-3D
Certificates executed by the Trustee, and
authenticated and delivered by the
Certificate Registrar, substantially in the
form annexed hereto as Exhibit A-3D
and evidencing a Regular Interest in REMIC
II for purposes of the REMIC
Provisions.
10
<PAGE>
"Class CE Certificate": Any one of the Class CE Certificates
executed by the Trustee, and authenticated
and delivered by the Certificate
Registrar, substantially in the form
annexed hereto as Exhibit A-CE and
evidencing a Regular Interest in REMIC II
for purposes of the REMIC Provisions.
"Class M-1 Certificate": Any one of the Class M-1 Certificates
executed by the Trustee, and authenticated
and delivered by the Certificate
Registrar, substantially in the form
annexed hereto as Exhibit A-M-1 and
evidencing a Regular Interest in REMIC II
for purposes of the REMIC Provisions.
"Class M-1 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than
zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class
M-1 Certificates immediately prior to
such Distribution Date and (II) the excess
of (x) the sum of (i) the aggregate
Certificate Principal Balance 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) 73.70% and (ii) the
aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of
the related Due Period (after giving
effect to scheduled payments of principal
due during the related Due Period, to
the extent received or advanced, and
unscheduled collections of principal
received during the related Prepayment
Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as
of the last day of the related Due
Period (after giving effect to scheduled
payments of principal due during the
related Due Period, to the extent received
or advanced, and unscheduled
collections of principal received during
the related Prepayment Period) minus
$7,500,003.15.
"Class M-2 Certificate": Any one of the Class M-2 Certificates
executed by the Trustee, and authenticated
and delivered by the Certificate
Registrar, substantially in the form
annexed hereto as Exhibit A-M-2 and
evidencing a Regular Interest in REMIC II
for purposes of the REMIC Provisions.
"Class M-2 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than
zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class
M-2 Certificates immediately prior to
such Distribution Date and (II) the excess
of (x) the sum of (i) the aggregate
Certificate Principal Balance 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) 76.70% and (ii)
the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day
of the related Due Period (after giving
effect to scheduled payments of
principal due during the related Due
Period, to the extent received or advanced,
and unscheduled collections of principal
received during the related Prepayment
Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as
of the last day of the related Due Period
(after giving effect to scheduled
payments of principal due during the
related Due Period, to the extent received
or advanced, and unscheduled collections of
principal received during the
related Prepayment Period) minus
$7,500,003.15.
11
<PAGE>
"Class M-3 Certificate": Any one of the Class M-3 Certificates
executed by the Trustee, and authenticated
and delivered by the Certificate
Registrar, substantially in the form
annexed hereto as Exhibit A-M-3 and
evidencing a Regular Interest in REMIC II
for purposes of the REMIC Provisions.
"Class M-3 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than
zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class
M-3 Certificates immediately prior to
such Distribution Date and (II) the excess
of (x) the sum of (i) the aggregate
Certificate Principal Balance 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)
81.30% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as
of the last day of the related Due Period
(after giving effect to scheduled
payments of principal due during the
related Due Period, to the extent received
or advanced, and unscheduled collections of
principal received during the
related Prepayment Period) and (B) the
aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the
related Due Period (after giving effect
to scheduled payments of principal due
during the related Due Period, to the
extent received or advanced, and
unscheduled collections of principal received
during the related Prepayment Period) minus
$7,500,003.15.
"Class M-4 Certificate": Any one of the Class M-4 Certificates
executed by the Trustee, and authenticated
and delivered by the Certificate
Registrar, substantially in the form
annexed hereto as Exhibit A-M-4 and
evidencing a Regular Interest in REMIC II
for purposes of the REMIC Provisions.
"Class M-4 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than
zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class
M-4 Certificates immediately prior to
such Distribution Date and (II) the excess
of (x) the sum of (i) the aggregate
Certificate Principal Balance 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) 84.50% and (ii) the
aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of
the related Due Period (after giving
effect to scheduled payments of principal
due during the related Due Period, to
the extent received or advanced, and
unscheduled collections of principal
received during the related Prepayment
Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as
of the last day
12
<PAGE>
of the related Due Period (after giving
effect to scheduled payments of
principal due during the related Due
Period, to the extent received or advanced,
and unscheduled collections of principal
received during the related Prepayment
Period) minus $7,500,003.15.
"Class M-5 Certificate": Any one of the Class M-5 Certificates
executed by the Trustee, and authenticated
and delivered by the Certificate
Registrar, substantially in the form
annexed hereto as Exhibit A-M-5 and
evidencing a Regular Interest in REMIC II
for purposes of the REMIC Provisions.
"Class M-5 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than
zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class
M-5 Certificates immediately prior to
such Distribution Date and (II) the excess
of (x) the sum of (i) the aggregate
Certificate Principal Balance 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) 86.50% and (ii)
the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day
of the related Due Period (after giving
effect to scheduled payments of
principal due during the related Due
Period, to the extent received or advanced,
and unscheduled collections of principal
received during the related Prepayment
Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as
of the last day of the related Due Period
(after giving effect to scheduled
payments of principal due during the
related Due Period, to the extent received
or advanced, and unscheduled collections of
principal received during the
related Prepayment Period) minus
$7,500,003.15.
"Class M-6 Certificate": Any one of the Class M-6 Certificates
executed by the Trustee, and authenticated
and delivered by the Certificate
Registrar, substantially in the form
annexed hereto as Exhibit A-M-6 and
evidencing a Regular Interest in REMIC II
for purposes of the REMIC Provisions.
"Class M-6 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than
zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class
M-6 Certificates immediately prior to
such Distribution Date and (II) the excess
of (x) the sum of (i) the aggregate
Certificate Principal Balance 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
13
<PAGE>
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)
89.60% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as
of the last day of the related Due Period
(after giving effect to scheduled
payments of principal due during the
related Due Period, to the extent received
or advanced, and unscheduled collections of
principal received during the
related Prepayment Period) and (B) the
aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the
related Due Period (after giving effect
to scheduled payments of principal due
during the related Due Period, to the
extent received or advanced, and
unscheduled collections of principal received
during the related Prepayment Period) minus
$7,500,003.15.
"Class M-7 Certificate": Any one of the Class M-7 Certificates
executed by the Trustee, and authenticated
and delivered by the Certificate
Registrar, substantially in the form
annexed hereto as Exhibit A-M-7 and
evidencing a Regular Interest in REMIC II
for purposes of the REMIC Provisions.
"Class M-7 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than
zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class
M-7 Certificates immediately prior to
such Distribution Date and (II) the excess
of (x) the sum of (i) the aggregate
Certificate Principal Balance 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 M-7
Certificates immediately prior to such
Distribution Date over (y) the lesser of
(A) the product of (i) 91.40% and (ii) the
aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of
the related Due Period (after giving
effect to scheduled payments of principal
due during the related Due Period, to
the extent received or advanced, and
unscheduled collections of principal
received during the related Prepayment
Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as
of the last day of the related Due
Period (after giving effect to scheduled
payments of principal due during the
related Due Period,
14
<PAGE>
to the extent received or advanced, and
unscheduled collections of principal
received during the related Prepayment
Period) minus $7,500,003.15.
"Class M-8 Certificate": Any one of the Class M-8 Certificates
executed by the Trustee, and authenticated
and delivered by the Certificate
Registrar, substantially in the form
annexed hereto as Exhibit A-M-8 and
evidencing a Regular Interest in REMIC II
for purposes of the REMIC Provisions.
"Class M-8 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than
zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class
M-8 Certificates immediately prior to
such Distribution Date and (II) the excess
of (x) the sum of (i) the aggregate
Certificate Principal Balance 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 M-7
Certificates (after taking into account the
payment of the Class M-7 Principal
Distribution Amount on such Distribution
Date) and (ix) the Certificate
Principal Balance of the Class M-8
Certificates immediately prior to such
Distribution Date over (y) the lesser of
(A) the product of (i) 93.80% and (ii)
the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day
of the related Due Period (after giving
effect to scheduled payments of
principal due during the related Due
Period, to the extent received or advanced,
and unscheduled collections of principal
received during the related Prepayment
Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as
of the last day of the related Due Period
(after giving effect to scheduled
payments of principal due during the
related Due Period, to the extent received
or advanced, and unscheduled collections of
principal received during the
related Prepayment Period) minus
$7,500,003.15.
"Class M-9 Certificate": Any one of the Class M-9 Certificates
executed by the Trustee, and authenticated
and delivered by the Certificate
Registrar, substantially in the form
annexed hereto as Exhibit A-M-9 and
evidencing a Regular Interest in REMIC II
for purposes of the REMIC Provisions.
"Class M-9 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than
zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class
M-9 Certificates immediately prior to
such Distribution Date and (II) the excess
of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class
A Certificates (after taking
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<PAGE>
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 M-7
Certificates (after taking into account the
payment of the Class M-7 Principal
Distribution Amount on such Distribution
Date), (ix) and the Certificate
Principal Balance of the Class M-8
Certificates (after taking into account the
payment of the Class M-8 Principal
Distribution Amount on such Distribution
Date) and (x) the Certificate Principal
Balance of the Class M-9 Certificates
immediately prior to such Distribution Date
over (y) the lesser of (A) the
product of (i) 96.50% and (ii) the
aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the
related Due Period (after giving effect
to scheduled payments of principal due
during the related Due Period, to the
extent received or advanced, and
unscheduled collections of principal received
during the related Prepayment Period) and
(B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the
last day of the related Due Period
(after giving effect to scheduled payments
of principal due during the related
Due Period, to the extent received or
advanced, and unscheduled collections of
principal received during the related
Prepayment Period) minus $7,500,003.15.
"Class M-10 Certificate": Any one of the Class M-10
Certificates executed by the Trustee, and
authenticated and delivered by the
Certificate Registrar, substantially in the
form annexed hereto as Exhibit
A-M-10 and evidencing a Regular Interest in
REMIC II for purposes of the REMIC
Provisions.
"Class M-10 Principal Distribution Amount": With respect to
any Distribution Date, an amount, not less
than zero, equal to the lesser of (I)
the Certificate Principal Balance of the
Class M-10 Certificates immediately
prior to such Distribution Date and (II)
the excess of (x) the sum of (i) the
aggregate Certificate Principal Balance 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
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<PAGE>
taking into account the payment of the
Class M-5 Principal Distribution Amount
on such Distribution Date), (vii) the
Certificate Principal Balance of the Class
M-6 Certificates (after taking into account
the payment of the Class M-6
Principal Distribution Amount on such
Distribution Date), (viii) the Certificate
Principal Balance of the Class M-7
Certificates (after taking into account the
payment of the Class M-7 Principal
Distribution Amount on such Distribution
Date), (ix) and the Certificate Principal
Balance of the Class M-8 Certificates
(after taking into account the payment of
the Class M-8 Principal Distribution
Amount on such Distribution Date), (x) the
Certificate Principal Balance of the
Class M-9 Certificates immediately prior to
such Distribution Date (after taking
into account the payment of the Class M-9
Principal Distribution Amount on such
Distribution Date) and (xi) the Certificate
Principal Balance of the Class M-10
Certificates immediately prior to such
Distribution Date over (y) the lesser of
(A) the product of (i) 98.00% and (ii) the
aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of
the related Due Period (after giving
effect to scheduled payments of principal
due during the related Due Period, to
the extent received or advanced, and
unscheduled collections of principal
received during the related Prepayment
Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as
of the last day of the related Due
Period (after giving effect to scheduled
payments of principal due during the
related Due Period, to the extent received
or advanced, and unscheduled
collections of principal received during
the related Prepayment Period) minus
$7,500,003.15.
"Class P Certificate": Any one of the Class P Certificates
executed by the Trustee, and authenticated
and delivered by the Certificate
Registrar, substantially in the form
annexed hereto as Exhibit A-P, representing
the right to distributions as set forth
herein and therein and evidencing a
regular interest in REMIC II for purposes
of the REMIC Provisions.
"Class R Certificate": Any one of the Class R Certificates
executed, authenticated and delivered by
the Trustee, substantially in the form
annexed hereto as Exhibit A-R and
evidencing the ownership of the Class R-I
Interest and the Class R-II Interest.
"Class R-I Interest": The uncertificated Residual Interest in
REMIC I.
"Class R-II Interest": The uncertificated Residual Interest in
REMIC II.
"Closing Date": February 23, 2005.
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Account": The account or accounts created and
maintained by the Master Servicer pursuant
to Section 3.04(a), which shall be
entitled "Ameriquest Mortgage Company, as
Master Servicer for Deutsche Bank
National Trust Company, as Trustee, in
trust for the registered holders of
Ameriquest Mortgage Securities Inc.,
Asset-Backed Pass-Through Certificates,
Series 2005-R1." The Collection Account
must be an Eligible Account.
"Commission": The Securities and Exchange Commission.
"Compensating Interest": As defined in Section 4.03(e) hereof.
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<PAGE>
"Corporate Trust Office": The principal corporate trust office
of the Trustee at which at any particular
time its corporate trust business in
connection with this Agreement shall be
administered, which office at the date
of the execution of this instrument is
located at 1761 East St. Andrew Place,
Santa Ana, California 92705-4934, or at
such other address as the Trustee may
designate from time to time by notice to
the Certificateholders, the Depositor
and the Master Servicer.
"Corresponding Certificate": With respect to each REMIC I
Regular Interest, as follows:
REMIC I Regular Interest
Class
--------------------------------
------
REMIC I Regular Interest I-LTA1A
A-1A
REMIC I Regular Interest I-LTA1B
A-1B
REMIC I Regular Interest I-LTA2A
A-2A
REMIC I Regular Interest I-LTA2B
A-2B
REMIC I Regular Interest I-LTA3A
A-3A
REMIC I Regular Interest I-LTA3B
A-3B
REMIC I Regular Interest I-LTA3C
A-3C
REMIC I Regular Interest I-LTA4C
A-3D
REMIC I Regular Interest I-LTM1
M-1
REMIC I Regular Interest I-LTM2
M-2
REMIC I Regular Interest I-LTM3
M-3
REMIC I Regular Interest I-LTM4
M-4
REMIC I Regular Interest I-LTM5
M-5
REMIC I Regular Interest I-LTM6
M-6
REMIC I Regular Interest I-LTM7
M-7
REMIC I Regular Interest I-LTM8
M-8
REMIC I Regular Interest I-LTM9
M-9
REMIC I Regular Interest I-LTM10
M-10
REMIC I Regular Interest I-LTP
P
"Credit Enhancement Percentage": For any Distribution Date and
the Class A Certificates and any Class of
Mezzanine Certificates, the percentage
equivalent of a fraction, calculated after
taking into account distribution of
the Group I Principal Distribution Amount,
the Group II Principal Distribution
Amount and the Group III Principal
Distribution Amount to the Certificates then
entitled to distributions of principal on
such Distribution Date, the numerator
of which is the sum of the aggregate
Certificate Principal Balance of the
Classes of Certificates with a lower
distribution priority than such Class, and
the denominator of which is the aggregate
Stated Principal Balance of the
Mortgage Loans as of the last day of the
related Due Period (after giving effect
to scheduled payments of principal due
during the related Due Period, to the
extent received or advanced, and
unscheduled collections of principal received
during the related Prepayment Period).
"Cumulative Loss Percentage": With respect to any Distribution
Date, the percentage equivalent of a
fraction, the numerator of which is the
aggregate amount of Realized Losses
incurred from the Cut-off Date to the last
day of the preceding calendar month
(reduced by the aggregate amount of
Subsequent Recoveries received from the
Cut-off Date through the last day of the
related Due Period) and the denominator of
which is the the aggregate Stated
Principal Balance of the Mortgage Loans as
of the Cut-off Date.
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<PAGE>
"Custodian": A Custodian, which shall initially be Deutsche
Bank National Trust Company.
"Cut-off Date": With respect to any Mortgage Loan, the close
of business on February 1, 2005. With
respect to all Qualified Substitute
Mortgage Loans, their respective dates of
substitution. References herein to the
"Cut-off Date," when used with respect to
more than one Mortgage Loan, shall be
to the respective Cut-off Dates for such
Mortgage Loans.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment
for such Mortgage Loan by a court of
competent jurisdiction in a proceeding
under the Bankruptcy Code, except such a
reduction resulting from a Deficient
Valuation.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property
by a court of competent jurisdiction
in an amount less than the then outstanding
Stated Principal Balance of the
Mortgage Loan, which valuation results from
a proceeding initiated under the
Bankruptcy Code.
"Definitive Certificates": As defined in Section 5.01(b).
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage
Loan.
"Delinquency Percentage": With respect to any Distribution
Date, the percentage equivalent of a
fraction, the numerator of which is the
aggregate Stated Principal Balance of all
Mortgage Loans as of the last day of
the previous calendar month that, as of
such last day of the previous calendar
month, are 60 or more days delinquent
(measured under the OTS delinquency
calculation methodology and with respect to
modifications, measured as set forth
below), are in foreclosure, have been
converted to REO Properties or have been
discharged by reason of bankruptcy, and the
denominator of which is the
aggregate Stated Principal Balance of the
Mortgage Loans and REO Properties as
of the last day of the previous calendar
month; provided, however, that any
Mortgage Loan purchased by the Master
Servicer or the NIMS Insurer pursuant to
Section 3.16 shall not be included in
either the numerator or the denominator
for purposes of calculating the Delinquency
Percentage.
"Depositor": Ameriquest Mortgage Securities Inc., a Delaware
corporation, or its successor in
interest.
"Depository": The Depository Trust Company, or any successor
Depository hereafter named. The nominee of
the initial Depository, for purposes
of registering those Certificates that are
to be Book-Entry Certificates, is
Cede & Co. 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 and a "clearing agency" registered
pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934,
as amended.
"Depository Institution": Any depository institution or trust
company, including the Trustee, that (a) is
incorporated under the laws of the
United States of America or any State
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<PAGE>
thereof, (b) is subject to supervision and
examination by federal or state
banking authorities and (c) has outstanding
unsecured commercial paper or other
short-term unsecured debt obligations that
are rated "P-1" by Moody's, "F-1" by
Fitch, "A-1" by S&P and "R-1 (highest)"
by DBRS, if rated by DBRS (or comparable
ratings if Moody's, Fitch, S&P and DBRS
are not the Rating Agencies).
"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 each Distribution Date,
the 10th day of the calendar month in which
such Distribution Date occurs or, if
such 10th day is not a Business Day, the
Business Day immediately preceding such
10th day.
"Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the
tenants thereof, the management or
operation of such REO Property, the holding
of such REO Property primarily for
sale to customers, the performance of any
construction work thereon or any use
of such REO Property in a trade or business
conducted by REMIC I other than
through an Independent Contractor;
provided, however, that the Trustee (or the
Master Servicer on behalf of the Trustee)
shall not be considered to Directly
Operate an REO Property solely because the
Trustee (or the Master Servicer on
behalf of the Trustee) establishes rental
terms, chooses tenants, enters into or
renews leases, deals with taxes and
insurance, or makes decisions as to repairs
or capital expenditures with respect to
such REO Property.
"Disqualified Organization": Any of the following: (i) the
United States, any State or political
subdivision thereof, any possession of the
United States, or any agency or
instrumentality of any of the foregoing (other
than an instrumentality which is a
corporation if all of its activities are
subject to tax and, except for Freddie Mac,
a majority of its board of directors
is not selected by such governmental unit),
(ii) any foreign government, any
international organization, or any agency
or instrumentality of any of the
foregoing, (iii) any organization (other
than certain farmers' cooperatives
described in Section 521 of the Code) which
is exempt from the tax imposed by
Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on
unrelated business taxable income), (iv)
rural electric and telephone
cooperatives described in Section
1381(a)(2)(C) of the Code, (v) an "electing
large partnership" and (vi) any other
Person so designated by the Trustee based
upon an Opinion of Counsel that the holding
of an Ownership Interest in a
Residual Certificate by such Person may
cause any Trust REMIC or any Person
having an Ownership Interest in any Class
of Certificates (other than such
Person) to incur a 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. The
terms "United States," "State" and
"international organization" shall have the
meanings set forth in Section 7701
of the Code or successor provisions.
"Distribution Account": The trust account or accounts created
and maintained by the Trustee pursuant to
Section 3.04(e), which shall be
entitled "Deutsche Bank National Trust
Company, as Trustee, in trust for the
registered Holders of Ameriquest Mortgage
Securities Inc.,
20
<PAGE>
Asset-Backed Pass-Through Certificates,
Series 2005-R1." The Distribution
Account must be an Eligible Account.
"Distribution Date": The 25th day of any month, or if such
25th day is not a Business Day, the next
succeeding Business Day, commencing in
March 2005.
"Due Date": With respect to each Distribution Date, the first
day of the calendar month in which such
Distribution Date occurs, which is the
day of the month on which the Monthly
Payment is due on a Mortgage Loan,
exclusive of any days of grace.
"Due Period": With respect to any Distribution Date, the
period commencing on the second day of the
month immediately preceding the month
in which such Distribution Date occurs and
ending on the related Due Date.
"Eligible Account": Any of (i) an account or accounts
maintained with a Depository Institution or
trust company the short-term
unsecured debt obligations of which are
rated "F-1" by Fitch, "P-1" by Moody's,
"R-1 (highest)" by DBRS and "A-1+" by
S&P (or comparable ratings if Fitch,
Moody's, DBRS and S&P are not 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 or (iii) a trust
account or accounts maintained with
the corporate trust department of a federal
or state chartered depository
institution or trust company acting in its
fiduciary capacity. Eligible Accounts
may bear interest.
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended.
"Escrow Account": The account or accounts created and
maintained pursuant to Section 3.04(c).
"Escrow Payments": The amounts constituting taxes, and/or fire
and hazard insurance premiums escrowed by
the Mortgagor with the mortgagee
pursuant to a voluntary escrow agreement
related to any Mortgage Loan.
"Estate in Real Property": A fee simple estate or leasehold
estate in a parcel of land.
"Excess Overcollateralized Amount": With respect to the Class
A Certificates and the Mezzanine
Certificates and any Distribution Date, the
excess, if any, of (i) the
Overcollateralized Amount for such Distribution Date
(calculated for this purpose only after
assuming that 100% of the Principal
Remittance Amount on such Distribution Date
has been distributed) over (ii) the
Overcollateralization Target Amount for
such Distribution Date.
"Expense Adjusted Net Maximum Mortgage Rate": With respect to
any Mortgage Loan (or the related REO
Property), as of any date of
determination, a per annum rate of interest
equal to the applicable Maximum
Mortgage Rate (or the Mortgage Rate for
such Mortgage Loan in the case of any
Fixed-Rate Mortgage Loan) as of the first
day of the month preceding the month
in which the Distribution Date occurs minus
the sum of (i) the Trustee Fee Rate
and (ii) the Servicing Fee Rate.
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<PAGE>
"Expense Adjusted Net Mortgage Rate": With respect to any
Mortgage Loan (or the related REO
Property), as of any date of determination, a
per annum rate of interest equal to the
applicable Mortgage Rate thereon as of
the first day of the month preceding the
month in which the Distribution Date
occurs minus the sum of (i) the Trustee Fee
Rate and (ii) the Servicing Fee
Rate.
"Extraordinary Trust Fund Expense": Any amounts reimbursable
to the Trustee, or any director, officer,
employee or agent of the Trustee, from
the Trust Fund pursuant to Section 8.05,
any amounts payable from the
Distribution Account in respect of taxes
pursuant to Section 10.01(g)(iii) and
any amounts payable by the Trustee for the
recording of the Assignments pursuant
to Section 2.01.
"Fannie
Mae": Fannie Mae, formally known as the Federal
National Mortgage Association, or any
successor thereto.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"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, the Depositor or
the Master Servicer pursuant to or as
contemplated by Section 2.03, Section
3.16(a) or Section 9.01), a determination
made by the Master Servicer that all
Insurance Proceeds, Liquidation Proceeds
and other payments or recoveries which the
Master Servicer, in its reasonable
good faith judgment, expects to be finally
recoverable in respect thereof have
been so recovered. The Master Servicer
shall maintain records, prepared by a
Servicing Officer, of each Final Recovery
Determination made thereby.
"Final Stated Maturity Date": The Distribution Date occurring
in January 2035.
"Fitch": Fitch
Ratings, or its successor in interest.
"Fixed-Rate Certificates": None.
"Fixed-Rate Mortgage Loan": Each of the Mortgage Loans
identified on the Mortgage Loan Schedule as
having a fixed Mortgage Rate.
"Formula Rate": For any Distribution Date and each Class of
Adjustable-Rate Certificates, the lesser of
(i) One-Month LIBOR plus the related
Certificate Margin and (ii) the related
Maximum Cap Rate.
"Freddie Mac": Freddie Mac, formally known as the Federal Home
Loan Mortgage Corporation, or any successor
thereto.
"Gross Margin": With respect to each Adjustable-Rate Mortgage
Loan, the fixed percentage set forth in the
related Mortgage Note that is added
to the Index on each Adjustment Date in
accordance with the terms of the related
Mortgage Note to determine the Mortgage
Rate for such Adjustable-Rate Mortgage
Loan.
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<PAGE>
"Group I Allocation Percentage": With respect to the Group I
Certificates and any Distribution Date, the
percentage equivalent of a fraction,
the numerator of which is (x) the Group I
Principal Remittance Amount for such
Distribution Date and the denominator of
which is (y) the Principal Remittance
Amount for such Distribution Date.
"Group I Certificates": The Class A-1A and Class A-1B
Certificates.
"Group I Interest Remittance Amount": With respect to any
Distribution Date, that portion of the
Available Funds for such Distribution
Date that represents interest received or
advanced on the Group I Mortgage
Loans.
"Group I Mortgage Loan": A Mortgage Loan assigned to Loan
Group I. All Group I Mortgage Loans have a
principal balance at origination that
conforms to Fannie Mae and Freddie Mac loan
limits.
"Group I Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the
principal portion of each Monthly Payment
on the Group I Mortgage Loans due during
the related Due Period, to the extent
received on or prior to the related
Determination Date or advanced prior to such
Distribution Date; (ii) the Stated
Principal Balance of any Group I Mortgage
Loan that was purchased during the related
Prepayment Period pursuant to or as
contemplated by Section 2.03, Section
3.16(a) or Section 9.01 and the amount of
any shortfall deposited in the Collection
Account in connection with the
substitution of a Deleted Mortgage Loan in
Loan Group I pursuant to Section 2.03
during the related Prepayment Period; (iii)
the principal portion of all other
unscheduled collections (including, without
limitation, Principal Prepayments,
Insurance Proceeds, Liquidation Proceeds,
Subsequent Recoveries and REO
Principal Amortization) received during the
related Prepayment Period on the
Group I Mortgage Loans, net of any portion
thereof that represents a recovery of
principal for which an Advance was made by
the Master Servicer pursuant to
Section 4.03 in respect of a preceding
Distribution Date; and (iv) the Group I
Allocation Percentage of the amount of any
Overcollateralization Increase Amount
for such Distribution Date; minus (v) the
Group I Allocation Percentage of the
amount of any Overcollateralization
Reduction Amount for such Distribution Date.
In no event shall the Group I Principal
Distribution Amount with respect to any
Distribution Date be (x) less than zero or
(y) greater than the then outstanding
aggregate Certificate Principal Balance of
the Class A and Mezzanine
Certificates.
"Group I Principal Remittance Amount": With respect to any
Distribution Date, the sum of the amounts
described in clauses (i) through (iii)
of the definition of Group I Principal
Distribution Amount.
"Group II Allocation Percentage": With respect to the Group II
Certificates and any Distribution Date, the
percentage equivalent of a fraction,
the numerator of which is (x) the Group II
Principal Remittance Amount for such
Distribution Date and the denominator of
which is (y) the Principal Remittance
Amount for such Distribution Date.
"Group II Certificates": The Class A-2A, Class A-2B
Certificates.
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<PAGE>
"Group II Interest Remittance Amount": With respect to any
Distribution Date, that portion of the
Available Funds for such Distribution
Date that represents interest received or
advanced on the Group II Mortgage
Loans.
"Group II Mortgage Loan": A Mortgage Loan assigned to Loan
Group II. All with a principal balance at
origination that may or may not
conform to Fannie Mae or Freddie Mac loan
limits.
"Group II Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the
principal portion of each Monthly Payment
on the Group II Mortgage Loans due during
the related Due Period, to the extent
received on or prior to the related
Determination Date or advanced prior to such
Distribution Date; (ii) the Stated
Principal Balance of any Group II Mortgage
Loan that was purchased during the related
Prepayment Period pursuant to or as
contemplated by Section 2.03, Section
3.16(a) or Section 9.01 and the amount of
any shortfall deposited in the Collection
Account in connection with the
substitution of a Deleted Mortgage Loan in
Loan Group II pursuant to Section
2.03 during the related Prepayment Period;
(iii) the principal portion of all
other unscheduled collections (including,
without limitation, Principal
Prepayments, Insurance Proceeds,
Liquidation Proceeds, Subsequent Recoveries and
REO Principal Amortization) received during
the related Prepayment Period on the
Group II Mortgage Loans, net of any portion
thereof that represents a recovery
of principal for which an Advance was made
by the Master Servicer pursuant to
Section 4.03 in respect of a preceding
Distribution Date and (iv) the Group II
Allocation Percentage of the amount of any
Overcollateralization Increase Amount
for such Distribution Date; minus (v) the
Group II Allocation Percentage of the
amount of any Overcollateralization
Reduction Amount for such Distribution Date.
In no event shall the Group II Principal
Distribution Amount with respect to any
Distribution Date be (x) less than zero or
(y) greater than the then outstanding
aggregate Certificate Principal Balance of
the Class A and Mezzanine
Certificates.
"Group II Principal Remittance Amount": With respect to any
Distribution Date, the sum of the amounts
described in clauses (i) through (iii)
of the definition of Group II Principal
Distribution Amount.
"Group III Allocation Percentage": With respect to the Group
III Certificates and any Distribution Date,
the percentage equivalent of a
fraction, the numerator of which is (x) the
Group III Principal Remittance
Amount for such Distribution Date and the
denominator of which is (y) the
Principal Remittance Amount for such
Distribution Date.
"Group III Certificates": The Class A-3A Certificates, the
Class A-3B Certificates, the Class A-3C
Certificates and the Class A-3D
Certificates.
"Group III Interest Remittance Amount": With respect to any
Distribution Date, that portion of the
Available Funds for such Distribution
Date that represents interest received or
advanced on the Group III Mortgage
Loans.
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<PAGE>
"Group III Mortgage Loan": A Mortgage Loan assigned to Loan
Group III. All Group III Mortgage Loans
have a principal balance at origination
that may or may not conform to Fannie Mae
and Freddie Mac loan limits.
"Group III Principal Distribution Amount": With respect to any
Distribution Date, the sum of: (i) the
principal portion of each Monthly Payment
on the Group III Mortgage Loans due during
the related Due Period, to the extent
received on or prior to the related
Determination Date or advanced prior to such
Distribution Date; (ii) the Stated
Principal Balance of any Group III Mortgage
Loan that was purchased during the related
Prepayment Period pursuant to or as
contemplated by Section 2.03, Section 3.16
or Section 9.01 and the amount of any
shortfall deposited in the Collection
Account in connection with the
substitution of a Deleted Mortgage Loan in
Loan Group III pursuant to Section
2.03 during the related Prepayment Period;
(iii) the principal portion of all
other unscheduled collections (including,
without limitation, Principal
Prepayments, Subsequent Recoveries,
Insurance Proceeds, Liquidation Proceeds and
REO Principal Amortization) received during
the related Prepayment Period on the
Group III Mortgage Loans, net of any
portion thereof that represents a recovery
of principal for which an Advance was made
by the Master Servicer pursuant to
Section 4.03 in respect of a preceding
Distribution Date and (iv) the Group III
Allocation Percentage of the amount of any
Overcollateralization Increase Amount
for such Distribution Date; minus (v) the
Group III Allocation Percentage of the
amount of any Overcollateralization
Reduction Amount for such Distribution Date.
In no event shall the Group III Principal
Distribution Amount with respect to
any Distribution Date be (x) less than zero
or (y) greater than the then
outstanding aggregate Certificate Principal
Balance of the Class A and Mezzanine
Certificates.
"Group III Principal Remittance Amount": With respect to any
Distribution Date, the sum of the amounts
described in clauses (i) through (iii)
of the definition of Group III Principal
Distribution Amount.
"Highest Priority": As of any date of determination, the Class
of Mezzanine Certificates then outstanding
with a Certificate Principal Balance
greater than zero, with the highest
priority for payments pursuant to Section
4.01, in the following order of decreasing
priority: the Class M-1 Certificates,
the Class M-2 Certificates, the Class M-3
Certificates, the Class M-4
Certificates, the Class M-5 Certificates,
the Class M-6 Certificates, the Class
M-7 Certificates, the Class M-8
Certificates, the Class M-9 Certificates and the
Class M-10 Certificates.
"HOEPA": The Home Ownership and Equity Protection Act of 1994.
"Indenture": An indenture relating to the issuance of notes
secured by all or a portion of the Class CE
Certificates, the Class P
Certificates and/or the Class R
Certificates, which may or may not be guaranteed
by the NIMS Insurer.
"Independent": When used with respect to any specified Person,
any such Person who (a) is in fact
independent of the Depositor, the Master
Servicer, the Seller and their respective
Affiliates, (b) does not have any
direct financial interest in or any
material indirect financial interest in the
Depositor, the Seller, the Master Servicer
or any Affiliate thereof, and (c)
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is not connected with the Depositor, the
Seller, the Master Servicer or any
Affiliate thereof as an officer, employee,
promoter, underwriter, trustee,
partner, director or Person performing
similar functions; provided, however,
that a Person shall not fail to be
Independent of the Depositor, the Seller, the
Master 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 Master Servicer or any
Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than
the Master Servicer) that would be an
"independent contractor" with respect to
REMIC I within the meaning of Section
856(d)(3) of the Code if such REMIC 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% or more of any Class of
Certificates), so long as such REMIC
does not receive or derive any income from
such Person and provided that the
relationship between such Person and such
REMIC 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 Master Servicer) if
the Trustee has received an Opinion of
Counsel 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 shall 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 each related Adjustment Date, the
average of the interbank offered rates for
six-month United States dollar deposits in
the London market as published in The
Wall Street Journal and as most recently
available as of the first business day
45 days or more prior to such Adjustment
Date, as specified in the related
Mortgage Note.
"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
Master Servicer would follow in servicing
mortgage loans held for its own
account, subject to the terms and
conditions of the related Mortgage Note and
Mortgage.
"Interest Accrual Period": With respect to any Distribution
Date and the Adjustable-Rate Certificates,
the period commencing on the
Distribution Date in the month immediately
preceding the month in which such
Distribution Date occurs (or, in the case
of the first Distribution Date,
commencing on the Closing Date) and ending
on the day preceding such
Distribution Date. With respect to any
Distribution Date and the Class CE
Certificates and the REMIC I Regular
Interests, the one-month period ending on
the last day of the calendar month
preceding the month in which such
Distribution Date occurs.
"Interest Carry Forward Amount": With respect to any
Distribution Date and any Class of Class A
Certificates or Mezzanine
Certificates, the sum of (i) the amount, if
any, by which (a) the Interest
Distribution Amount for such Class of
Certificates as of the immediately
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<PAGE>
preceding Distribution Date exceeded (b)
the actual amount distributed on such
Class of Certificates in respect of
interest on such immediately preceding
Distribution Date and (ii) the amount of
any Interest Carry Forward Amount for
such Class of Certificates remaining
undistributed from the previous
Distribution Date, plus accrued interest
thereon calculated at the related
Pass-Through Rate for the most recently
ended Interest Accrual Period.
"Interest Determination Date": With respect to the
Adjustable-Rate Certificates, and solely
for purposes of calculating the Marker
Rate, REMIC I Regular Interest I-LTA1A,
REMIC I Regular Interest I-LTA1B, REMIC
I Regular Interest I-LTA2A, REMIC I Regular
Interest I-LTA2B, REMIC I Regular
Interest I-LTA3A, REMIC I Regular Interest
I-LTA3B, REMIC I Regular Interest
I-LTA3C, REMIC I Regular Interest I-LTA3D,
REMIC I Regular Interest I-LTM1,
REMIC I Regular Interest I-LTM2, REMIC I
Regular Interest I-LTM3, REMIC I
Regular Interest I-LTM4, REMIC I Regular
Interest I-LTM5, REMIC I Regular
Interest I-LTM6, REMIC I Regular Interest
I-LTM7, REMIC I Regular Interest
I-LTM8, REMIC I Regular Interest I-LTM9 and
REMIC I Regular Interest I-LTM10 and
any Interest Accrual Period therefore
(other than the first Interest Accrual
Period), the second LIBOR Business Day
preceding the commencement of such
Interest Accrual Period.
"Interest Distribution Amount": With respect to any
Distribution Date and any Class of Class A
Certificates or Mezzanine
Certificates and the Class CE Certificates,
the aggregate Accrued Certificate
Interest on the Certificates of such Class
for such Distribution Date.
"Late Collections": With respect to any Mortgage Loan and any
Due Period, all amounts received subsequent
to the Determination Date
immediately following such Due Period,
whether as late payments of Monthly
Payments or as Insurance Proceeds,
Liquidation Proceeds, Subsequent Recoveries
or otherwise, which represent late payments
or collections of principal and/or
interest due (without regard to any
acceleration of payments under the related
Mortgage and Mortgage Note) but delinquent
for such Due Period and not
previously recovered.
"LIBOR Business Day": Any day on which banks in the City of
London and the City of New York are open
and conducting transactions in United
States dollars.
"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 REMIC I by reason of
its being purchased, sold or replaced
pursuant to or as contemplated by Section
2.03, Section 3.16(a) or Section 9.01.
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 REMIC I by reason
of its being purchased pursuant to
Section 9.01.
"Liquidation Proceeds": The amount (other than Insurance
Proceeds or amounts received in respect of
the rental of any REO Property prior
to REO Disposition) received by the Master
Servicer in connection with (i) the
taking of all or a part of a Mortgaged
Property by exercise of the power of
eminent domain or condemnation, (ii) the
liquidation of a defaulted Mortgage
Loan through a trustee's sale, foreclosure
sale or otherwise or (iii) the
repurchase,
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<PAGE>
substitution or sale of a Mortgage Loan or
an REO Property pursuant to or as
contemplated by Section 2.03, Section 3.13,
Section 3.16(a) or Section 9.01.
"Loan Group": Loan Group I, Loan Group II or Loan Group III,
as the context requires.
"Loan Group I": The group of Mortgage Loans identified in the
Mortgage Loan Schedule as having been
assigned to Loan Group I.
"Loan Group II": The group of Mortgage Loans identified in the
Mortgage Loan Schedule as having been
assigned to Loan Group II.
"Loan Group III": The group of Mortgage Loans identified in
the Mortgage Loan Schedule as having been
assigned to Loan Group III.
"Loan-to-Value Ratio": As of any date of determination, the
fraction, expressed as a percentage, the
numerator of which is the Stated
Principal Balance of the related Mortgage
Loan at such date and the denominator
of which is the Value of the related
Mortgaged Property.
"Loss Mitigation Action Plan": The policies and procedures set
forth in Exhibit I hereto relating to the
realization on delinquent Mortgage
Loans, which are incorporated by reference
into this Agreement and shall be
deemed a part hereof.
"Lost Note Affidavit": With respect to any Mortgage Loan as to
which the original Mortgage Note has been
permanently lost, misplaced or
destroyed and has not been replaced, an
affidavit from the Seller certifying
that the original Mortgage Note has been
lost, misplaced or destroyed (together
with a copy of the related Mortgage Note)
and indemnifying the Trust Fund
against any loss, cost or liability
resulting from the failure to deliver the
original Mortgage Note, in the form of
Exhibit B hereto.
"Marker Rate": With respect to the Class CE Certificates and
any Distribution Date, a per annum rate
equal to two (2) times the weighted
average of the REMIC I Remittance Rate for
REMIC I Regular Interest I-LTA1A,
REMIC I Regular Interest I-LTA1B, REMIC I
Regular Interest I-LTA2A, REMIC I
Regular Interest I-LTA2B, REMIC I Regular
Interest I-LTA3A, REMIC I Regular
Interest I-LTA3B, REMIC I Regular Interest
I-LTA3C, REMIC I Regular Interest
I-LTA3D, REMIC I Regular Interest I-LTM1,
REMIC I Regular Interest I-LTM2, REMIC
I Regular Interest I-LTM3, REMIC I Regular
Interest I-LTM4, REMIC I Regular
Interest I-LTM5, REMIC I Regular Interest
I-LTM6, REMIC I Regular Interest
I-LTM7, REMIC I Regular Interest I-LTM8,
REMIC I Regular Interest I-LTM9, REMIC
I Regular Interest I-LTM10, and REMIC I
Regular Interest I-LTZZ, with the rate
on each such REMIC I Regular Interest
(other than REMIC I Regular Interest
I-LTZZ) subject to the lesser of (i) LIBOR
plus the related Certificate Margin
and (ii) the related Net WAC Pass-Through
Rate for the purpose of this
calculation for such Distribution Date and
with the rate on REMIC I Regular
Interest I-LTZZ subject to a cap of zero
for the purpose of this calculation;
provided, however, that solely for this
purpose, calculations of the REMIC I
Remittance Rate and the related caps with
respect to REMIC I Regular Interest
I-LTA1A, REMIC I Regular Interest I-
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<PAGE>
LTA1B, REMIC I Regular Interest I-LTA2A,
REMIC I Regular Interest I-LTA2B, REMIC
I Regular Interest I-LTA3A, REMIC I Regular
Interest I-LTA3B, REMIC I Regular
Interest I-LTA3C, REMIC I Regular Interest
I-LTA3D, REMIC I Regular Interest
I-LTM1, REMIC I Regular Interest I-LTM2,
REMIC I Regular Interest I-LTM3, REMIC
I Regular Interest I-LTM4, REMIC I Regular
Interest I-LTM5, REMIC I Regular
Interest I-LTM6, REMIC I Regular Interest
I-LTM7, REMIC I Regular Interest
I-LTM8, REMIC I Regular Interest I-LTM9 and
REMIC I Regular Interest I-LTM10
shall be multiplied by a fraction, the
numerator of which is the actual number
of days in the Interest Accrual Period and
the denominator of which is 30.
"Master Servicer": Ameriquest Mortgage Company or any
successor master servicer appointed as
herein provided, in its capacity as
Master Servicer hereunder.
"Master Servicer Event of Default": One or more of the events
described in Section 7.01.
"Master Servicer Prepayment Charge Payment Amount": The
amounts payable by the Master Servicer
pursuant to Section 2.03(b) in respect of
any waived (or, with respect to subsequent
changes of law, any unenforceable)
Prepayment Charges.
"Master Servicer Remittance Date": With respect to any
Distribution Date, 3:00 p.m. New York time
on the last Business Day preceding
such Distribution Date.
"Master Servicer Reporting Date": With respect to any
Distribution Date, 3:00 p.m. New York time
on the 18th day of the calendar month
in which such Distribution Date occurs or,
if such 18th day is not a Business
Day, the Business Day immediately
succeeding such 18th day.
"Master Servicer Termination Test": With respect to any
Distribution Date, the Master Servicer
Termination Test shall be failed if the
Cumulative Loss Percentage exceeds
4.00%.
"Maximum Cap Rate": For any Distribution Date with respect to
the Group I Certificates, a per annum rate
equal to the sum of (i) the product
of (x) the weighted average of the Expense
Adjusted Net Maximum Mortgage Rates
of the Group I Mortgage Loans, weighted on
the basis of the outstanding Stated
Principal Balances of the Group I Mortgage
Loans as of the first day of the
month preceding the month of such
Distribution Date (after giving effect to
scheduled payments of principal due during
the related Due Period, to the extent
received or advanced, and unscheduled
collections of principal received during
the related Prepayment Period) and (y) a
fraction, the numerator of which is 30
and the denominator of which is the actual
number of days elapsed in the related
Interest Accrual Period and (ii) the
related Cap Contract Excess. If the
aggregate Certificate Principal Balance of
the applicable Certificates exceeds
the applicable notional balance for such
Distribution Date, the Cap Contract
Excess is to be adjusted by multiplying the
applicable Cap Contract Excess by a
fraction, the numerator of which is the
applicable notional balance for such
Distribution Date and the denominator of
which is the aggregate Certificate
Principal Balance of the Group I
Certificates immediately prior to such
Distribution Date.
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<PAGE>
For any Distribution Date with respect to the Group II
Certificates, a
per annum rate equal to the sum of (i) the
product of (x) the weighted average
of the Expense Adjusted Net Maximum
Mortgage Rates of the Group II Mortgage
Loans, weighted on the basis of the
outstanding Stated Principal Balances of the
Group II Mortgage Loans as of the first day
of the month preceding the month of
such Distribution Date (after giving effect
to scheduled payments of principal
due during the related Due Period, to the
extent received or advanced, and
unscheduled collections of principal
received during the related Prepayment
Period) and (y) a fraction, the numerator
of which is 30 and the denominator of
which is the actual number of days elapsed
in the related Interest Accrual
Period and (ii) the related Cap Contract
Excess. If the aggregate Certificate
Principal Balance of the applicable
Certificates exceeds the applicable notional
balance for such Distribution Date, the Cap
Contract Excess is to be adjusted by
multiplying the applicable Cap Contract
Excess by a fraction, the numerator of
which is the applicable notional balance
for such Distribution Date and the
denominator of which is the aggregate
Certificate Principal Balance of the Group
II Certificates immediately prior to such
Distribution Date.
For any Distribution Date with respect to the Group III
Certificates, a
per annum rate equal to the sum of (i) the
product of (x) the weighted average
of the Expense Adjusted Net Maximum
Mortgage Rates of the Group III Mortgage
Loans, weighted on the basis of the
outstanding Stated Principal Balances of the
Group III Mortgage Loans as of the first
day of the month preceding the month of
such Distribution Date (after giving effect
to scheduled payments of principal
due during the related Due Period, to the
extent received or advanced, and
unscheduled collections of principal
received during the related Prepayment
Period) and (y) a fraction, the numerator
of which is 30 and the denominator of
which is the actual number of days elapsed
in the related Interest Accrual
Period and (ii) the related Cap Contract
Excess. If the aggregate Certificate
Principal Balance of the applicable
Certificates exceeds the applicable notional
balance for such Distribution Date, the Cap
Contract Excess is to be adjusted by
multiplying the applicable Cap Contract
Excess by a fraction, the numerator of
which is the applicable notional balance
for such Distribution Date and the
denominator of which is the aggregate
Certificate Principal Balance of the Group
III Certificates immediately prior to such
Distribution Date.
For any Distribution Date with respect to the Mezzanine
Certificates, a
per annum rate equal to the sum of (i) the
product of (x) the weighted average
(weighted on the basis of the results of
subtracting from the aggregate Stated
Principal Balance of the applicable Loan
Group, the current Certificate
Principal Balance of the related Class A
Certificates) of the weighted average
of the Expense Adjusted Net Maximum
Mortgage Rates of the Group I Mortgage
Loans, the Group II Mortgage Loans and the
Group III Mortgage Loans, in each
case, weighted on the basis of the
outstanding Stated Principal Balances of the
related Mortgage Loans as of the first day
of the month preceding the month of
such Distribution Date (after giving effect
to scheduled payments of principal
due during the related Due Period, to the
extent received or advanced, and
unscheduled collections of principal
received during the related Prepayment
Period) and (y) a fraction, the numerator
of which is 30 and the denominator of
which is the actual number of days elapsed
in the related Interest Accrual
Period and (ii) the related Cap Contract
Excess. If the aggregate Certificate
Principal Balance of the applicable
Certificates exceeds the applicable notional
balance for such Distribution Date, the Cap
Contract Excess is to be adjusted by
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<PAGE>
multiplying the applicable Cap Contract
Excess by a fraction, the numerator of
which is the applicable notional balance
for such Distribution Date and the
denominator of which is the aggregate
Certificate Principal Balance of the
Mezzanine Certificates immediately prior to
such Distribution Date.
"Maximum I-LTZZ Uncertificated Interest Deferral Amount": With
respect to any Distribution Date, the
excess of (i) accrued interest at the
REMIC I Remittance Rate applicable to REMIC
I Regular Interest I-LTZZ for such
Distribution Date on a balance equal to the
Uncertificated Balance of REMIC I
Regular Interest I-LTZZ minus the REMIC I
Overcollateralization Amount, in each
case for such Distribution Date, over (ii)
Uncertificated Interest on REMIC I
Regular Interest I-LTA1A, REMIC I Regular
Interest I-LTA1B, REMIC I Regular
Interest I-LTA2A, REMIC I Regular Interest
I-LTA2B, REMIC I Regular Interest
I-LTA3A, REMIC I Regular Interest I-LTA3B,
REMIC I Regular Interest I-LTA3C,
REMIC I Regular Interest I-LTA3D, REMIC I
Regular Interest I-LTM1, REMIC I
Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular
Interest I-LTM4, REMIC I Regular Interest
I-LTM5, REMIC I Regular Interest
I-LTM6, REMIC I Regular Interest I-LTM7,
REMIC I Regular Interest I-LTM8, REMIC
I Regular Interest I-LTM9 and REMIC I
Regular Interest I-LTM10 for such
Distribution Date, with the rate on each
such REMIC I Regular Interest subject
to a cap equal to the lesser of (i) LIBOR
plus the related Certificate Margin
and (ii) the related Net WAC Pass-Through
Rate; provided, however, that solely
for this purpose, calculations of the REMIC
I Remittance Rate and the related
caps with respect to REMIC I Regular
Interest I-LTA1A, REMIC I Regular Interest
I-LTA1B, REMIC I Regular Interest I-LTA2A,
REMIC I Regular Interest I-LTA2B,
REMIC I Regular Interest I-LTA3A, REMIC I
Regular Interest I-LTA3B, REMIC I
Regular Interest I-LTA3C, REMIC I Regular
Interest I-LTA3D, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest I-LTM4,
REMIC I Regular Interest I-LTM5, REMIC
I Regular Interest I-LTM6, REMIC I Regular
Interest I-LTM7, REMIC I Regular
Interest I-LTM8, REMIC I Regular Interest
I-LTM9 and REMIC I Regular Interest
I-LTM10 shall be multiplied by a fraction,
the numerator of which is the actual
number of days in the Interest Accrual
Period and the denominator of which is
30.
"Maximum Mortgage Rate": With respect to each Adjustable-Rate
Mortgage Loan, the percentage set forth in
the related Mortgage Note as the
maximum Mortgage Rate thereunder.
"Mezzanine Cap Contract": The cap contract between Deutsche
Bank National Trust Company, as Trustee and
the counterparty thereunder, which
is for the benefit of the Holders of the
Mezzanine Certificates, a form of which
is attached hereto as Exhibit H.
"Mezzanine Certificate": Any one of the Class M-1
Certificates, Class M-2 Certificates, Class
M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class
M-6 Certificates, Class M-7
Certificates, Class M-8 Certificates, Class
M-9 Certificates and Class M-10
Certificates.
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<PAGE>
"Minimum Mortgage Rate": With respect to each Adjustable-Rate
Mortgage Loan, the percentage set forth in
the related Mortgage Note as the
minimum Mortgage Rate thereunder.
"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; (b) without giving effect to
any extension granted or agreed to by
the Master Servicer pursuant to Section
3.02; 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., or its successor
in interest.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first lien on, or first priority
security interest in, a Mortgaged
Property securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan
and any additional documents required
to be added to the Mortgage File pursuant
to this Agreement.
"Mortgage Loan": Each mortgage loan transferred and assigned
to the Trustee pursuant to Section 2.01 or
Section 2.03(d) of this Agreement, as
held from time to time as a part of REMIC
I, the Mortgage Loans so held being
identified in the Mortgage Loan
Schedule.
"Mortgage Loan Purchase Agreement": The agreement between the
Seller and the Depositor, regarding the
transfer of the Mortgage Loans by the
Seller to or at the direction of the
Depositor, substantially in the form of
Exhibit D annexed hereto.
"Mortgage Loan Schedule": As of any date, the list of Mortgage
Loans included in REMIC I on such date,
separately identifying the Group I
Mortgage Loans, the Group II Mortgage Loans
and the Group III Mortgage Loans,
attached hereto as Schedule 1. The Mortgage
Loan Schedule shall set forth the
following information with respect to each
Mortgage Loan:
(1) the Seller's Mortgage Loan identifying number;
(2) [Reserved];
(3) the state and zip code of the Mortgaged Property;
(4) a code indicating whether the Mortgaged Property is
owner-occupied;
(5) the type of Residential Dwelling constituting the
Mortgaged Property;
(6) the original months to maturity;
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<PAGE>
(7) the Loan-to-Value Ratio at origination;
(8) the Mortgage Rate in effect immediately following the
Cut-off Date;
(9) the date on which the first Monthly Payment was due on the
Mortgage Loan;
(10) the stated maturity date;
(11) the amount of the Monthly Payment due on the first Due
Date after the Cut-off Date;
(12) the last Due Date on which a Monthly Payment was actually
applied to the unpaid Stated Principal Balance;
(13) the original principal amount of the Mortgage Loan;
(14) the Scheduled Principal Balance of the Mortgage Loan as
of the close of business on the Cut-off Date;
(15) with respect to the Adjustable-Rate Mortgage Loans, the
Gross Margin;
(16) a code indicating the purpose of the Mortgage Loan (i.e.,
purchase, refinance debt consolidation cashout, or refinance
debt
consolidation no cashout);
(17) with respect to the Adjustable-Rate Mortgage Loans, the
Maximum Mortgage Rate;
(18) with respect to the Adjustable-Rate Mortgage Loans, the
Minimum Mortgage Rate;
(19) the Mortgage Rate at origination;
(20) with respect to the Adjustable-Rate Mortgage Loans, the
Periodic Rate Cap and the maximum first Adjustment Date Mortgage
Rate
adjustment;
(21) a code indicating the documentation program (i.e., Full
Documentation, Limited Documentation or Stated Income);
(22) with respect to the Adjustable-Rate Mortgage Loans, the
first Adjustment Date immediately following the Cut-off Date;
(23) the risk grade;
(24) the Value of the Mortgaged Property;
(25) the sale price of the Mortgaged Property, if applicable;
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<PAGE>
(26) the FICO score of the primary Mortgagor; and
(27) whether the Mortgage Loan is covered by Primary Mortgage
Insurance.
The Mortgage Loan Schedule shall set forth the following
information with respect to the Mortgage
Loans by Loan Group and in the
aggregate as of the Cut-off Date: (1) the
number of Mortgage Loans; (2) the
current Stated Principal Balance of the
Mortgage Loans; (3) the weighted average
Mortgage 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 Depositor in accordance with
the provisions of this Agreement. With
respect to any Qualified Substitute
Mortgage Loan, the 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 the indebtedness of a Mortgagor under a
Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on
Schedule 1 from time to time, and any REO
Properties acquired in respect
thereof.
"Mortgage 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) with
respect to each Fixed-Rate Mortgage Loan
shall remain constant at the rate set
forth in the Mortgage Loan Schedule as the
Mortgage Rate in effect immediately
following the Cut-off Date and (ii) with
respect to 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 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 equal to
the sum, rounded to the nearest
0.125% as provided in the Mortgage Note, of
the Index, as most recently
available as of a date prior to the
Adjustment Date as set forth in the related
Mortgage Note, plus the related Gross
Margin; provided that the Mortgage Rate on
such Adjustable-Rate Mortgage Loan on any
Adjustment Date shall never be more
than the lesser of (i) the sum of the
Mortgage Rate in effect immediately prior
to the Adjustment Date plus the related
Periodic Rate Cap, if any, and (ii) the
related Maximum Mortgage Rate, and shall
never be less than the greater of (i)
the Mortgage Rate in effect immediately
prior to the Adjustment Date less the
Periodic Rate Cap, if any, and (ii) the
related Minimum Mortgage Rate. 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.
"Mortgaged Property": The underlying property identified in
the related Mortgage as securing a Mortgage
Loan, including any REO Property,
consisting of an Estate in Real Property
improved by a Residential Dwelling
(excluding for purposes of construing the
representations or warranties made in
the Mortgage Loan Purchase Agreement, any
improvements thereupon not considered
by the appraiser in determining the Value
of such Mortgaged Property).
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"Mortgagor": The
obligor on a Mortgage Note.
"Net Monthly Excess Cashflow": With respect to any
Distribution Date, the sum of (i) any
Overcollateralization Reduction Amount for
such Distribution Date and (ii) the excess
of (x) the Available Funds for such
Distribution Date over (y) the sum for such
Distribution Date of (A) the Senior
Interest Distribution Amount, (B) the
Interest Distribution Amounts payable to
the Mezzanine Certificates and (C) the
Principal Remittance Amount.
"Net Mortgage Rate": With respect to any Mortgage Loan (or the
related REO Property) as of any date of
determination, a per annum rate of
interest equal to the then applicable
Mortgage Rate for such Mortgage Loan minus
the Servicing Fee Rate.
"Net WAC Pass-Through Rate": For any Distribution Date with
respect to the Group I Certificates, a per
annum rate equal to the product of
(x) the weighted average of the Expense
Adjusted Net Mortgage Rates of the Group
I Mortgage Loans, weighted on the basis of
the outstanding Stated Principal
Balances of the Group I Mortgage Loans as
of the first day of the month
preceding the month of such Distribution
Date (after giving effect to scheduled
payments of principal due during the
related Due Period, to the extent received
or advanced, and unscheduled collections of
principal received during the
related Prepayment Period) and (y) a
fraction, the numerator of which is 30 and
the denominator of which is the actual
number of days elapsed in the related
Interest Accrual Period. For federal income
tax purposes, the economic
equivalent of such rate shall be expressed
as the weighted average of the REMIC
I Remittance Rate on REMIC I Regular
Interest I-LT1GRP, weighted on the basis of
the Uncertificated Balance of such REMIC I
Regular Interest.
For any Distribution Date with respect to the Group II
Certificates, a per annum rate equal to the
product of (x) the weighted average
of the Expense Adjusted Net Mortgage Rates
of the Group II Mortgage Loans,
weighted on the basis of the outstanding
Stated Principal Balances of the Group
II Mortgage Loans as of the first day of
the month preceding the month of such
Distribution Date (after giving effect to
scheduled payments of principal due
during the related Due Period, to the
extent received or advanced, and
unscheduled collections of principal
received during the related Prepayment
Period) and (y) a fraction, the numerator
of which is 30 and the denominator of
which is the actual number of days elapsed
in the related Interest Accrual
Period. For federal income tax purposes,
the economic equivalent of such rate
shall be expressed as the weighted average
of the REMIC I Remittance Rate on
REMIC I Regular Interest I-LT2GRP, weighted
on the basis of the Uncertificated
Balance of such REMIC I Regular
Interest.
For any Distribution Date with respect to the Group III
Certificates, a per annum rate equal to the
product of (x) the weighted average
of the Expense Adjusted Net Mortgage Rates
of the Group III Mortgage Loans,
weighted on the basis of the outstanding
Stated Principal Balances of the Group
III Mortgage Loans as of the first day of
the month preceding the month of such
Distribution Date (after giving effect to
scheduled payments of principal due
during the related Due Period, to the
extent received or advanced, and
unscheduled collections of principal
received during the related Prepayment
Period) and (y) a fraction, the numerator
of which is 30 and the denominator of
which is the actual number of days elapsed
in the related Interest Accrual
Period. For federal income tax purposes,
the economic equivalent of such rate
shall be expressed
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as the weighted average of the REMIC I
Remittance Rate on REMIC I Regular
Interest I-LT3GRP, weighted on the basis of
the Uncertificated Balance of such
REMIC I Regular Interest.
For any Distribution Date with respect to the Mezzanine
Certificates, a per annum rate equal to the
product of (x) the weighted average
(weighted on the basis of the results of
subtracting from the aggregate Stated
Principal Balance of the applicable Loan
Group, the Certificate Principal
Balance of the related Class A
Certificates) of (i) the weighted average of the
Expense Adjusted Net Mortgage Rates of the
Group I Mortgage Loans as of the
first day of the month preceding the month
of such Distribution Date (after
giving effect to scheduled payments of
principal due during the related Due
Period, to the extent received or advanced,
and unscheduled collections of
principal received during the related
Prepayment Period), (ii) the weighted
average of the Expense Adjusted Net
Mortgage Rates of the Group II Mortgage
Loans as of the first day of the month
preceding the month of such Distribution
Date (after giving effect to scheduled
payments of principal due during the
related Due Period, to the extent received
or advanced, and unscheduled
collections of principal received during
the related Prepayment Period and (iii)
the weighted average of the Expense
Adjusted Net Mortgage Rates of the Group III
Mortgage Loans as of the first day of the
month preceding the month of such
Distribution Date (after giving effect to
scheduled payments of principal due
during the related Due Period, to the
extent received or advanced, and
unscheduled collections of principal
received during the related Prepayment
Period) and (y) a fraction, the numerator
of which is 30 and the denominator of
which is the actual number of days elapsed
in the related Interest Accrual
Period. For federal income tax purposes,
the economic equivalent of such rate
shall be expressed as the weighted average
of the REMIC I Remittance Rates on
(a) REMIC I Regular Interest I-LT1SUB,
subject to a cap and a floor equal to the
weighted average of the Expense Adjusted
Net Mortgage Rates of the Group I
Mortgage Loans, (b) REMIC I Regular
Interest I-LT2SUB, subject to a cap and a
floor equal to the weighted average of the
Expense Adjusted Net Mortgage Rates
of the Group II Mortgage Loans and (c)
REMIC I Regular Interest I-LT3SUB,
subject to a cap and a floor equal to the
weigthed average of the Expense
Adjusted Net Mortgage Rates of the Group
III Mortgage Loans, weighted on the
basis of the Uncertificated Balance of each
such REMIC I Regular Interest.
"Net WAC Rate Carryover Amount": With respect to any Class of
Class A Certificates and the Mezzanine
Certificates and any Distribution Date,
the sum of (A) the excess, if any, of (i)
the amount of interest such
Certificates would have accrued for such
Distribution Date had the applicable
Pass-Through Rate been calculated at the
related Formula Rate, over (ii) the
amount of interest accrued on such
Certificates at the related Net WAC
Pass-Through Rate for such Distribution
Date and (B) the related Net WAC Rate
Carryover Amount for the previous
Distribution Date not previously paid,
together with interest thereon at a rate
equal to the related Formula Rate
applicable for such Class in each case for
the Interest Accrual Period for the
current Distribution Date.
"Net WAC Rate Carryover Reserve Account": The Net WAC Rate
Carryover Reserve Account established and
maintained pursuant to Section 4.11.
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<PAGE>
"New Lease": Any lease of REO Property entered into on behalf
of REMIC I, including any lease renewed or
extended on behalf of REMIC I, if
REMIC I has the right to renegotiate the
terms of such lease.
"NIMS Insurer": Any insurer that is guaranteeing certain
payments under notes secured by collateral
which includes, among other things,
all or a portion of the Class CE
Certificates, the Class P Certificates and/or
the Residual Certificates.
"Nonrecoverable Advance": Any 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 Master
Servicer, will not or, in the case of
a proposed Advance, would not be ultimately
recoverable from related Late
Collections, Insurance Proceeds or
Liquidation Proceeds on such Mortgage Loan or
REO Property as provided herein.
"Nonrecoverable Servicing Advance": Any 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 Master Servicer, shall
not or, in the case of a proposed Servicing
Advance, would not be ultimately
recoverable from related Late Collections,
Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO
Property as provided herein.
"Non-United States Person": Any Person other than a United
States Person.
"Notional Amount": With respect to the Class CE Certificates
and any Distribution Date, the aggregate
Uncertificated Balance of the REMIC I
Regular Interests (other than REMIC I
Regular Interest I-LTP), immediately prior
to such Distribution Date.
"Offered Certificate": Any one of the Class A Certificates and
the Mezzanine Certificates (other than the
Class M-10 Certificates) issued under
this Agreement.
"Officers' Certificate": With respect to the Depositor, a
certificate signed by the Chairman of the
Board, the Vice Chairman of the Board,
the President or a vice president (however
denominated), and by the Treasurer,
the Secretary, or one of the assistant
treasurers or assistant secretaries. With
respect to the Master Servicer, any officer
who is authorized to act for the
Master Servicer in matters relating to this
Agreement, and whose action is
binding upon the Master Servicer, initially
including those individuals whose
names appear on the list of authorized
officers delivered at the closing.
"One-Month LIBOR": With respect to the Adjustable-Rate
Certificates, REMIC I Regular Interest
I-LTA1A, REMIC I Regular Interest
I-LTA1B, REMIC I Regular Interest I-LTA2A,
REMIC I Regular Interest I-LTA2B,
REMIC I Regular Interest I-LTA3A, REMIC I
Regular Interest I-LTA3B, REMIC I
Regular Interest I-LTA3C, REMIC I Regular
Interest I-LTA3D, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest I-LTM4,
REMIC I Regular Interest I-LTM5, REMIC
I Regular Interest I-LTM6, REMIC I Regular
Interest I-LTM7, REMIC I Regular
Interest I-LTM8, REMIC I Regular Interest
I-LTM9 and REMIC I Regular Interest
I-LTM10 and any Interest Accrual Period
therefor, the rate determined by the
Trustee on the
37
<PAGE>
related Interest Determination Date on the
basis of the offered rate for
one-month U.S. dollar deposits, as such
rate appears on Telerate Page 3750 as of
11:00 a.m. (London time) on such Interest
Determination Date; provided that if
such rate does not appear on Telerate Page
3750, the rate for such date shall be
determined on the basis of the offered
rates of the Reference Banks for
one-month U.S. dollar deposits, as of 11:00
a.m. (London time) on such Interest
Determination Date. In such event, the
Trustee shall request the principal
London office of each of the Reference
Banks to provide a quotation of its rate.
If on such Interest Determination Date, two
or more Reference Banks provide such
offered quotations, One-Month LIBOR for the
related Interest Accrual Period
shall be the arithmetic mean of such
offered quotations (rounded upwards, if
necessary, to the nearest whole multiple of
1/16%). If on such Interest
Determination Date, fewer than two
Reference Banks provide such offered
quotations, One-Month LIBOR for the related
Interest Accrual Period shall be the
higher of (i) LIBOR as determined on the
previous Interest Determination Date
and (ii) the Reserve Interest Rate.
Notwithstanding the foregoing, if, under the
priorities described above, LIBOR for an
Interest Determination Date would be
based on LIBOR for the previous Interest
Determination Date for the third
consecutive Interest Determination Date,
the Trustee shall select, after
consultation with the Depositor and the
NIMS Insurer, an alternative comparable
index (over which the Trustee has no
control), used for determining one-month
Eurodollar lending rates that is calculated
and published (or otherwise made
available) by an independent party.
"Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be salaried counsel for
the Depositor or the Master Servicer
acceptable to the Trustee, if such opinion
is delivered to the Trustee,
acceptable to the NIMs Insurer, if such
opinion is delivered to the NIMs
Insurer, except that any opinion of counsel
relating to (a) the qualification of
any Trust 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 aggregate Stated Principal
Balance of the Mortgage Loans (and
properties acquired in respect thereof)
remaining in the Trust Fund is reduced
to an amount less than 10% of the aggregate
Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date.
"Originators": Collectively, Ameriquest Mortgage Company and
Town & Country Credit Corporation.
"Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the excess, if any, of
(a) the Overcollateralization Target
Amount applicable to such Distribution Date
over (b) the Overcollateralized
Amount applicable to such Distribution Date
(calculated for this purpose only,
after assuming that 100% of the Principal
Remittance Amount on such Distribution
Date has been distributed).
"Overcollateralization Increase Amount": With respect to any
Distribution Date, the lesser of (a) the
Overcollateralization Deficiency Amount
as of such Distribution Date and (b) the
Net Monthly Excess Cashflow for such
Distribution Date.
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<PAGE>
"Overcollateralization Reduction Amount": With respect to any
Distribution Date, an amount equal to the
lesser of (a) the Excess
Overcollateralized Amount and (b) the
Principal Remittance Amount.
"Overcollateralization Target Amount": With respect to any
Distribution Date (i) prior to the Stepdown
Date, 1.00% of the aggregate Stated
Principal Balance of the Mortgage Loans as
of the Cut-off Date, (ii) on or after
the Stepdown Date provided a Trigger Event
is not in effect, the greater of (x)
2.00% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the
last day of the related Due Period (after
giving effect to scheduled payments of
principal due during the related Due
Period, to the extent received or advanced
and unscheduled collections of principal
received during the related Prepayment
Period) and (y) $7,500,003.15, or (iii) on
or after the Stepdown Date and if a
Trigger Event is in effect, the
Overcollateralization Target 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
Certificates and the Mezzanine Certificates to
zero, the Overcollateralization Target
Amount shall be zero.
"Overcollateralized Amount": With respect to any Distribution
Date, the excess, if any, of (a) the
aggregate Stated Principal Balances of the
Mortgage Loans and REO Properties
immediately following such Distribution Date
(after giving effect to scheduled payments
of principal due during the related
Due Period, to the extent received or
advanced, and unscheduled collections of
principal received during the related
Prepayment Period), over (b) the sum of
the aggregate Certificate Principal
Balances of the Class A Certificates, the
Mezzanine Certificates and the Class P
Certificates as of such Distribution Date
(after giving effect to distributions to be
made on such Distribution Date).
"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": With respect to any Class of
Adjustable-Rate Certificates and any
Distribution Date, the lesser of (x) the
related Formula Rate for such Distribution
Date and (y) the related Net WAC
Pass-Through Rate for such Distribution
Date. For federal income tax purposes,
the Pass-Through Rate for the
Adjustable-Rate Certificates shall be calculated
without respect to any Cap Contract Excess,
which such amounts, if any, shall
have been paid in respect of Net WAC Rate
Carryover Amounts and paid outside of
any REMIC created herein.
With respect to the Class CE Certificates and any Distribution
Date, a rate per annum equal to the
percentage equivalent of a fraction, the
numerator of which is the sum of the
amounts calculated pursuant to clauses (A)
through (U) below, and the denominator of
which is the aggregate Uncertificated
Balance of REMIC I Regular Interests
I-LTAA, I-LTA1A, I-LTA1B, I-LTA2A, I-LTA2B,
I-LTA3A, I-LTA3B, I-LTA3C, I-LTA3D, I-LTM1,
I-LTM2, I-LTM3, I-LTM4, I-LTM5,
I-LTM6, I-LTM7, I-LTM8, I-LTM9, I-LTM10 and
I-LTZZ. For purposes of calculating
the Pass-Through Rate for the Class CE
Certificates, the numerator is equal to
the sum of the following components:
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<PAGE>
(A) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTAA minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTAA;
(B) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTA1A minus the Marker Rate, applied to an amount equal to
the
Uncertificated Balance of REMIC I Regular Interest I-LTA1A;
(C) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTA1B minus the Marker Rate, applied to an amount equal to
the
Uncertificated Balance of REMIC I Regular Interest I-LTA1B;
(D) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTA2A minus the Marker Rate, applied to an amount equal to
the
Uncertificated Balance of REMIC I Regular Interest I-LTA2A;
(E) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTA2B minus the Marker Rate, applied to an amount equal to
the
Uncertificated Balance of REMIC I Regular Interest I-LTA2B;
(F) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTA3A minus the Marker Rate, applied to an amount equal to
the
Uncertificated Balance of REMIC I Regular Interest I-LTA3A;
(G) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTA3B minus the Marker Rate, applied to an amount equal to
the
Uncertificated Balance of REMIC I Regular Interest I-LTA3B;
(H) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTA3C minus the Marker Rate, applied to an amount equal to
the
Uncertificated Balance of REMIC I Regular Interest I-LTA3C;
(I) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTA3D minus the Marker Rate, applied to an amount equal to
the
Uncertificated Balance of REMIC I Regular Interest I-LTA3D;
(J) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM1;
(K) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM2;
(L) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM3;
40
<PAGE>
(M) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM4;
(N) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM5 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM5;
(O) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM6 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM6;
(P) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM7 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM7;
(Q) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM8 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM8;
(R) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM9 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM9;
(S) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM10 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Balance of REMIC I Regular Interest I-LTM10;
(T) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTZZ minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTZZ; and
(U) 100% of the interest on REMIC I Regular Interest I-LTP.
"Percentage Interest": With respect to any Class of
Certificates (other than the Residual
Certificates), the undivided percentage
ownership in such Class evidenced by such
Certificate, expressed as a
percentage, the numerator of which is the
initial Certificate Principal Balance
or Notional Amount represented by such
Certificate and the denominator of which
is the aggregate initial Certificate
Principal Balance or Notional Amount of all
of the Certificates of such Class. The
Class A Certificates and the Mezzanine
Certificates (other than the Class M-10
Certificates) are issuable only in
minimum Percentage Interests corresponding
to minimum initial Certificate
Principal Balances of $25,000 and integral
multiples of $1.00 in excess thereof.
The Class M-10 Certificates are issuable
only in minimum Percentage Interests
corresponding to minimum initial
Certificate Principal Balances of $50,000 and
integral multiples of $1.00 in excess
thereof. The Class P Certificates are
issuable only in minimum Percentage
Interests corresponding to minimum initial
Certificate Principal Balances of $20 and
integral multiples thereof. The Class
CE Certificates are issuable only in
minimum Percentage Interests
41
<PAGE>
corresponding to minimum initial Notional
Amount of $10,000 and integral
multiples of $1.00 in excess thereof;
provided, however, that a single
Certificate of such Class of Certificates
may be issued having a Percentage
Interest corresponding to the remainder of
the aggregate initial Certificate
Principal Balance or Notional Amount of
such Class or to an otherwise authorized
denomination for such Class plus such
remainder. With respect to any Residual
Certificate, the undivided percentage
ownership in such Class evidenced by such
Certificate, as set forth on the face of
such Certificate. The Residual
Certificates are issuable in Percentage
Interests of 20% and multiples thereof.
"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
Rate for such Mortgage Loan may increase or
decrease (without regard to the
Maximum Mortgage Rate or the Minimum
Mortgage Rate) on such Adjustment Date from
the Mortgage 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 by the
Depositor, the Master Servicer, the NIMS
Insurer, the Trustee or any of their
respective Affiliates:
(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) demand and time deposits in, certificates of deposit of,
or bankers' acceptances (which shall each have an original maturity
of
not more than 90 days and, in the case of bankers' acceptances,
shall
in no event have an original maturity of more than 365 days or
a
remaining maturity of more than 30 days) denominated in United
States
dollars and issued by, any Depository Institution;
(iii) repurchase obligations with respect to any security
described in clause (i) above entered into with a Depository
Institution (acting as principal);
(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 that rates such securities 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 that
rates
such securities in its highest short-term unsecured debt rating
available at the time of such investment;
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<PAGE>
(vi) units of money market funds, including money market funds
advised by the Trustee or an Affiliate thereof, that have been
rated
"Aaa" by
Moody's, "AAA" by Fitch and "AAAm" by S&P; and
(vii) if previously confirmed in writing to the Trustee and
consented to by the NIMS Insurer, any other demand, money market
or
time deposit, or any other obligation, security or investment, as
may
be acceptable to the Rating Agencies as a permitted investment of
funds
backing securities having ratings equivalent to its highest
initial
rating of the Class A Certificates;
provided, however, that no instrument
described hereunder shall evidence either
the right to receive (a) only interest with
respect to the obligations
underlying such instrument or (b) both
principal and interest payments derived
from obligations underlying such instrument
and the interest and principal
payments with respect to such instrument
provide a yield to maturity at par
greater than 120% of the yield to maturity
at par of the underlying obligations.
"Permitted Transferee": Any Transferee of a Residual
Certificate other than a Disqualified
Organization or Non-United States Person.
"Person": Any individual, corporation, partnership, joint
venture, association, joint-stock company,
trust, unincorporated organization or
government or any agency or political
subdivision thereof.
"Plan": Any employee benefit plan or certain other retirement
plans and arrangements, including
individual retirement accounts and annuities,
Keogh plans and bank collective investment
funds and insurance company general
or separate accounts in which such plans,
accounts or arrangements are invested,
that are subject to ERISA and Section 4975
of the Code.
"Prepayment Assumption": As defined in the Prospectus
Supplement.
"Prepayment Charge": With respect to any Prepayment Period,
any prepayment premium, fee or charge
payable by a Mortgagor in connection with
any Principal Prepayment pursuant to the
terms of the related Mortgage Note as
from time to time held as a part of the
Trust Fund, the Prepayment Charges so
held being identified in the Prepayment
Charge Schedule (other than any Master
Servicer Prepayment Charge Payment
Amount).
"Prepayment Charge Schedule": As of any date, the list of
Prepayment Charges included in the Trust
Fund on such date, attached hereto as
Schedule 2 (including the prepayment charge
summary attached thereto). The
Prepayment Charge Schedule shall set forth
the following information with
respect to each Prepayment Charge:
(i) the Master Servicer's Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
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(iii) the date on which the first Monthly Payment was due on
the related Mortgage Loan;
(iv) the term of the related Prepayment Charge;
(v) the original Stated Principal Balance of the related
Mortgage Loan; and
(vi) the Stated Principal Balance of the related Mortgage Loan
as of the Cut-off Date.
The Prepayment Charge Schedule shall be amended from time to
time by the Master Servicer in accordance
with the provisions of this Agreement
and a copy of such amended Prepayment
Charge Schedule shall be furnished by the
Master Servicer to the NIMS Insurer, if
any.
"Prepayment Interest Excess": With respect to any Distribution
Date, for each Mortgage Loan that was the
subject of a Principal Prepayment in
full during the portion of the related
Prepayment Period occurring between the
first day of the calendar month in which
such Distribution Date occurs and the
Determination Date of the calendar month in
which such Distribution Date occurs,
an amount equal to interest (to the extent
received) at the applicable Net
Mortgage Rate on the amount of such
Principal Prepayment for the number of days
commencing on the first day of the calendar
month in which such Distribution
Date occurs and ending on the last date
through which interest is collected from
the related Mortgagor. The Master Servicer
may withdraw such Prepayment Interest
Excess from the Collection Account in
accordance with Section 3.05(a)(iv).
"Prepayment Interest Shortfall": With respect to any
Distribution Date, for each Mortgage Loan
that was the subject of a Principal
Prepayment in full during the portion of
the related Prepayment Period occurring
between the first day of the related
Prepayment Period and the last day of the
calendar month preceding the month in which
such Distribution Date occurs, an
amount equal to interest at the applicable
Net Mortgage Rate on the amount of
such Principal Prepayment for the number of
days commencing on the day after the
last date on which interest is collected
from the related Mortgagor and ending
on the last day of the calendar month
preceding such Distribution Date. The
obligations of the Master Servicer in
respect of any Prepayment Interest
Shortfall are set forth in Section
4.03(e).
"Prepayment Period": With respect to any Distribution Date,
the period commencing on the day after the
Determination Date in the calendar
month preceding the calendar month in which
such Distribution Date occurs (or,
in the case of the first Distribution Date,
commencing on February 1, 2005) and
ending on the Determination Date of the
calendar month in which such
Distribution Date occurs.
"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.
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"Principal Remittance Amount": With respect to any
Distribution Date, the sum of the (i) the
Group I Principal Remittance Amount,
(ii) the Group II Principal Remittance
Amount and (iii) the Group III Principal
Remittance Amount.
"Prospectus Supplement": The Prospectus Supplement, dated
February 1, 2005, relating to the public
offering of the Offered Certificates.
"PTCE": A Prohibited
Transaction Class Exemption.
"Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as
contemplated by Section 2.03, Section
3.16(a) or Section 9.01, and as confirmed
by an Officers' Certificate from the
Master Servicer to the Trustee, an amount
equal to the sum of (i) 100% of the
Stated Principal Balance thereof as of the
date of purchase (or such other price
as provided in Section 9.01), (ii) in the
case of (x) a Mortgage Loan, accrued
interest on such Stated Principal Balance
at the applicable Net Mortgage 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 Master 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, the
sum of (1) accrued interest on such
Stated Principal Balance at the applicable
Net Mortgage 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 Master
Servicer through the end of the
calendar month immediately preceding the
calendar month in which such REO
Property was acquired plus (2) REO Imputed
Interest for such REO Property for
each calendar month commencing with the
calendar month in which such REO
Property was acquired and ending with the
calendar month in which such purchase
is to be effected, net of the total of all
net rental income, Insurance
Proceeds, Liquidation Proceeds and Advances
that as of the date of purchase had
been distributed as or to cover REO Imputed
Interest pursuant to Section 4.01,
(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 Sections
3.05(a)(v) and 3.16(a) and (v) in the
case of a Mortgage Loan required to be
purchased pursuant to Section 2.03,
expenses reasonably incurred or to be
incurred by the Master Servicer, the NIMS
Insurer or the Trustee in respect of the
breach or defect giving rise to the
purchase obligation, as well as any costs
and damages incurred by the Trust Fund
in connection with any violation by such
loan of any predatory or abusive
lending law.
"Qualified Substitute Mortgage Loan": A mortgage loan
substituted for a Deleted Mortgage Loan
pursuant to the terms of this Agreement
which must, on the date of such
substitution, (i) have an outstanding Stated
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 the
Scheduled Principal Balance of the Deleted
Mortgage Loan as of the Due Date in
the calendar month during which the
substitution occurs, (ii) have a Mortgage
Rate not less than (and not more than one
percentage point in excess of) the
Mortgage Rate of the Deleted Mortgage Loan,
(iii) with respect to any
Adjustable-Rate Mortgage Loan, have a
Maximum Mortgage Rate not less than the
Maximum Mortgage Rate on the Deleted
Mortgage Loan, (iv) with respect to any
Adjustable-Rate Mortgage Loan, have a
Minimum Mortgage Rate not less
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than the Minimum Mortgage Rate of the
Deleted Mortgage Loan, (v) with respect to
Adjustable-Rate Mortgage Loan, have a Gross
Margin equal to the Gross Margin of
the Deleted Mortgage Loan, (vi) with
respect to any Adjustable-Rate Mortgage
Loan, have a next Adjustment Date not more
than two months later than the next
Adjustment Date on the Deleted Mortgage
Loan, (vii) have a remaining term to
maturity not greater than (and not more
than one year less than) that of the
Deleted Mortgage Loan, (viii) have the same
Due Date as the Due Date on the
Deleted Mortgage Loan, (ix) have a
Loan-to-Value Ratio as of the date of
substitution equal to or lower than the
Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, (x) have a
risk grading determined by the Seller
at least equal to the risk grading assigned
on the Deleted Mortgage Loan, (xi)
have been underwritten or reunderwritten by
the Seller or an Affiliate of the
Seller in accordance with the same
underwriting criteria and guidelines as the
Deleted Mortgage Loan, (xii) have a
Prepayment Charge provision at least equal
to the Prepayment Charge provision of the
Deleted Mortgage Loan, (xiii) not be
more than 59 or more days delinquent or any
additional days delinquent than the
Deleted Mortgage Loan and (xiv) conform to
each representation and warranty set
forth in Section 6 of the Mortgage Loan
Purchase Agreement applicable to the
Deleted Mortgage Loan. In the event that
one or more mortgage loans are
substituted for one or more Deleted
Mortgage Loans, the amounts described in
clause (i) hereof shall be determined on
the basis of aggregate Stated Principal
Balances, the Mortgage Rates described in
clause (ii) hereof shall be determined
on the basis of weighted average Mortgage
Rates, the terms described in clause
(vii) hereof shall be determined on the
basis of weighted average remaining
terms to maturity, the Loan-to-Value Ratios
described in clause (ix) hereof
shall be satisfied as to each such mortgage
loan, the risk gradings 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
Qualified Substitute Mortgage Loan or in
the aggregate, as the case may be.
"Rating Agency" or "Rating Agencies": Moody's, Fitch and
S&P
or their successors. If such agencies or
their successors are no longer in
existence, "Rating Agencies" shall be such
nationally recognized statistical
rating agencies, or other comparable
Persons, designated by the Depositor,
notice of which designation shall be given
to the Trustee and the Master
Servicer.
"Realized Loss": With respect to each Mortgage Loan as to
which a Final Recovery Determination has
been made, an amount (not less than
zero) equal to (i) the unpaid Stated
Principal Balance of such Mortgage Loan as
of the commencement of the calendar month
in which the Final Recovery
Determination was made, plus (ii) accrued
interest from the Due Date as to which
interest was last paid by the Mortgagor
through the end of the calendar month in
which such Final Recovery Determination was
made, calculated in the case of each
calendar month during such period (A) at an
annual rate equal to the annual rate
at which interest was then accruing on such
Mortgage Loan and (B) on a principal
amount equal to the Stated Principal
Balance of such Mortgage Loan as of the
close of business on the Distribution Date
during such calendar month, plus
(iii) any amounts previously withdrawn from
the Collection Account in respect of
such Mortgage Loan pursuant to Section
3.05(a)(v) and Section 3.12(c), minus
(iv) the proceeds, if any, received in
respect of such Mortgage Loan during the
calendar month in which such Final Recovery
Determination was made, net of
amounts that are payable therefrom to the
Master Servicer with respect to such
Mortgage Loan pursuant to Section
3.05(a)(ii). If the
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Master Servicer receives Subsequent
Recoveries with respect to any Mortgage
Loan, the amount of Realized Losses with
respect to that Mortgage Loan shall be
reduced to the extent such recoveries are
applied to principal distributions on
any Distribution Date.
With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not
less than zero) equal to (i) the
unpaid Stated Principal Balance of the
related Mortgage Loan as of the date of
acquisition of such REO Property on behalf
of REMIC I, plus (ii) accrued
interest from the Due Date as to which
interest was last paid by the Mortgagor
in respect of the related Mortgage Loan
through the end of the calendar month
immediately preceding the calendar month in
which such REO Property was
acquired, calculated in the case of each
calendar month during such period (A)
at an annual rate equal to the annual rate
at which interest was then accruing
on the related Mortgage Loan and (B) on a
principal amount equal to the Stated
Principal Balance of the related Mortgage
Loan as of the close of business on
the Distribution Date during such calendar
month, plus (iii) REO Imputed
Interest for such REO Property for each
calendar month commencing with the
calendar month in which such REO Property
was acquired and ending with the
calendar month in which such Final Recovery
Determination was made, plus (iv)
any amounts previously withdrawn from the
Collection Account in respect of the
related Mortgage Loan pursuant to Section
3.05(a)(v) and Section 3.12(c), minus
(v) the aggregate of all Advances made by
the Master Servicer in respect of such
REO Property or the related Mortgage Loan
for which the Master Servicer has been
or, in connection with such Final Recovery
Determination, shall be reimbursed
pursuant to Section 3.13 out of rental
income, Insurance Proceeds and
Liquidation Proceeds received in respect of
such REO Property, minus (vi) the
total of all net rental income, Insurance
Proceeds and Liquidation Proceeds
received in respect of such REO Property
that has been, or in connection with
such Final Recovery Determination, shall be
transferred to the Distribution
Account pursuant to Section 3.13.
With respect to each Mortgage Loan which has become the
subject of a Deficient Valuation, the
difference between the Stated Principal
Balance of the Mortgage Loan outstanding
immediately prior to such Deficient
Valuation and the Stated Principal Balance
of the Mortgage Loan as reduced by
the Deficient Valuation.
With respect to each Mortgage Loan which has become the
subject of a Debt Service Reduction, the
portion, if any, of the reduction in
each affected Monthly Payment attributable
to a reduction in the Mortgage Rate
imposed by a court of competent
jurisdiction. Each such Realized Loss shall be
deemed to have been incurred on the Due
Date for each affected Monthly Payment.
If the Master Servicer receives Subsequent Recoveries with
respect to any Mortgage Loan, the amount of
the Realized Loss with respect to
that Mortgage Loan shall be reduced to the
extent such recoveries are applied to
principal distributions on any Distribution
Date.
"Record Date": With respect to each Distribution Date and any
Adjustable-Rate Certificate that is a
Book-Entry Certificate, the Business Day
immediately preceding such Distribution
Date. With respect to each Distribution
Date and any other Class of
Certificates,
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including any Definitive Certificates, the
last Business Day of the month
immediately preceding the month in which
such Distribution Date occurs.
"Reference Banks": Deutsche Bank, Barclays Bank PLC, The Tokyo
Mitsubishi Bank and National Westminster
Bank PLC and their successors in
interest; provided, however, that if any of
the foregoing banks are not suitable
to serve as a Reference Bank, then any
leading banks selected by the Trustee
(after consultation with the Depositor and
the NIMS Insurer, if any) which are
engaged in transactions in Eurodollar
deposits in the international Eurocurrency
market (i) with an established place of
business in London, (ii) not
controlling, under the control of or under
common control with the Depositor or
any Affiliate thereof and (iii) which have
been designated as such by the
Trustee.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of
which were not used to purchase the related
Mortgaged Property.
"Regular Certificate": Any Class A Certificate, Mezzanine
Certificate, Class P Certificate or Class
CE Certificate.
"Regular Interest": A "regular interest" in a REMIC within the
meaning of Section 860G(a)(1) of the
Code.
"Relief Act": The Servicemembers Civil Relief Act or any
applicable state law providing similar
relief.
"Relief Act Interest Shortfall": With respect to any
Distribution Date and any Mortgage Loan,
any reduction in the amount of interest
collectible on such Mortgage Loan for the
most recently ended calendar month as
a result of the application of the Relief
Act.
"REMIC": A "real estate mortgage investment conduit" within
the meaning of Section 860D of the
Code.
"REMIC I": The segregated pool of assets subject hereto,
constituting the primary trust created
hereby and to be administered hereunder,
with respect to which a REMIC election is
to be made, consisting of: (i) such
Mortgage Loans and Prepayment Charges 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) to the
extent conveyed pursuant to Section
2.01 and (v) the Collection Account (other
than any amounts representing any
Master Servicer Prepayment Charge Payment
Amounts), the Distribution Account
(other than any amounts representing any
Master Servicer Prepayment Charge
Payment Amounts) 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.
Notwithstanding the foregoing,
however, REMIC I specifically excludes any
Master
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Servicer Prepayment Charge Payment Amounts,
the Net WAC Rate Carryover Reserve
Account, the Cap Contracts, all payments
and other collections of principal and
interest due on the Mortgage Loans on or
before the Cut-off Date and all
Prepayment Charges payable in connection
with Principal Prepayments made before
the Cut-off Date.
"REMIC I Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount (subject to
adjustment based on the actual number
of days elapsed in the respective Interest
Accrual Periods for the indicated
Regular Interests for such Distribution
Date) equal to (a) the product of (i)
50% of the aggregate Stated Principal
Balance of the Mortgage Loans and REO
Properties then outstanding and (ii) the
REMIC I Remittance Rate for REMIC I
Regular Interest I-LTAA minus the Marker
Rate, divided by (b) 12.
"REMIC I Marker Allocation Percentage": 50% of any amount
payable or loss attributable from the
Mortgage Loans, which shall be allocated
to REMIC I Regular Interest I-LTAA, REMIC I
Regular Interest I-LTA1A, REMIC I
Regular Interest I-LTA1B, REMIC I Regular
Interest I-LTA2A, REMIC I Regular
Interest I-LTA2B, REMIC I Regular Interest
I-LTA3A, REMIC I Regular Interest
I-LTA3B, REMIC I Regular Interest I-LTA3C,
REMIC I Regular Interest I-LTA3D,
REMIC I Regular Interest I-LTM1, REMIC I
Regular Interest I-LTM2, REMIC I
Regular Interest I-LTM3, REMIC I Regular
Interest I-LTM4, REMIC I Regular
Interest I-LTM5, REMIC I Regular Interest
I-LTM6, REMIC I Regular Interest
I-LTM7, REMIC I Regular Interest I-LTM8,
REMIC I Regular Interest I-LTM9, REMIC
I Regular Interest I-LTM10, REMIC I Regular
Interest I-LTZZ and REMIC I Regular
Interest I-LTP.
"REMIC I Overcollateralization Target Amount": 0.50% of the
Overcollateralization Target Amount.
"REMIC I Overcollateralized Amount": With respect to any date
of determination, (i) 0.50% of the
aggregate Uncertificated Balances of the
REMIC I Regular Interests minus (ii) the
aggregate of the Uncertificated Balance
of REMIC I Regular Interest I-LTA1A, REMIC
I Regular Interest I-LTA1B, REMIC I
Regular Interest I-LTA2A, REMIC I Regular
Interest I-LTA2B, REMIC I Regular
Interest I-LTA3A, REMIC I Regular Interest
I-LTA3B, REMIC I Regular Interest
I-LTA3C, REMIC I Regular Interest I-LTA3D,
REMIC I Regular Interest I-LTM1,
REMIC I Regular Interest I-LTM2, REMIC I
Regular Interest I-LTM3, REMIC I
Regular Interest I-LTM4, REMIC I Regular
Interest I-LTM5, REMIC I Regular
Interest I-LTM6, REMIC I Regular Interest
I-LTM7, REMIC I Regular Interest
I-LTM8, REMIC I Regular Interest I-LTM9,
REMIC I Regular Interest I-LTM10 and
REMIC I Regular Interest I-LTP, in each
case as of such date of determination.
"REMIC I Principal Loss Allocation Amount": With respect to
any Distribution Date, an amount equal to
the product of (i) 50% of the
aggregate Stated Principal Balance of the
Mortgage Loans and REO Properties then
outstanding and (ii) one minus a fraction,
the numerator of which is two times
the aggregate Uncertificated Balance of
REMIC I Regular Interest I-LTA1A, REMIC
I Regular Interest I-LTA1B, REMIC I Regular
Interest I-LTA2A, REMIC I Regular
Interest I-LTA2B, REMIC I Regular Interest
I-LTA3A, REMIC I Regular Interest
I-LTA3B, REMIC I Regular Interest I-LTA3C,
REMIC I Regular Interest I-LTA3D,
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REMIC I Regular Interest I-LTM1, REMIC I
Regular Interest I-LTM2, REMIC I
Regular Interest I-LTM3, REMIC I Regular
Interest I-LTM4, REMIC I Regular
Interest I-LTM5, REMIC I Regular Interest
I-LTM6, REMIC I Regular Interest
I-LTM7, REMIC I Regular Interest I-LTM8,
REMIC I Regular Interest I-LTM9 and
REMIC I Regular Interest I-LTM10 and the
denominator of which is the aggregate
Uncertificated Balance of REMIC I Regular
Interest I-LTA1A, REMIC I Regular
Interest I-LTA1B, REMIC I Regular Interest
I-LTA2A, REMIC I Regular Interest
I-LTA2B, REMIC I Regular Interest I-LTA3A,
REMIC I Regular Interest I-LTA3B,
REMIC I Regular Interest I-LTA3C, REMIC I
Regular Interest I-LTA3D, REMIC I
Regular Interest I-LTM1, REMIC I Regular
Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular Interest
I-LTM4, REMIC I Regular Interest
I-LTM5, REMIC I Regular Interest I-LTM6,
REMIC I Regular Interest I-LTM7, REMIC
I Regular Interest I-LTM8, REMIC I Regular
Interest I-LTM9, REMIC I Regular
Interest I-LTM10 and REMIC I Regular
Interest I-LTZZ.
"REMIC I Regular Interest": Any of the separate
non-certificated beneficial ownership
interests in REMIC I issued hereunder and
designated as a "regular interest" in REMIC
I. Each REMIC I Regular Interest
shall accrue interest at the related REMIC
I Remittance Rate in effect from time
to time, and shall be entitled to
distributions of principal, subject to the
terms and conditions hereof, in an
aggregate amount equal to its initial
Uncertificated Balance as set forth in the
Preliminary Statement hereto. The
following is a list of the REMIC I Regular
Interests: REMIC I Regular Interest
I-LTAA, REMIC I Regular Interest I-LTA1A,
REMIC I Regular Interest I-LTA1B,
REMIC I Regular Interest I-LTA2A, REMIC I
Regular Interest I-LTA2B, REMIC I
Regular Interest I-LTA3A, REMIC I Regular
Interest I-LTA3B, REMIC I Regular
Interest I-LTA3C, REMIC I Regular Interest
I-LTA3D, REMIC I Regular Interest
I-LTM1, REMIC I Regular Interest I-LTM2,
REMIC I Regular Interest I-LTM3, REMIC
I Regular Interest I-LTM4, REMIC I Regular
Interest I-LTM5, REMIC I Regular
Interest I-LTM6, REMIC I Regular Interest
I-LTM7, REMIC I Regular Interest
I-LTM8, REMIC I Regular Interest I-LTM9,
REMIC I Regular Interest I-LTM10, REMIC
I Regular Interest I-LTXX, REMIC I Regular
Interest I-LTZZ, REMIC I Regular
Interest I-LTP, REMIC I Regular Interest
I-LT1GRP, REMIC I Regular Interest
I-LT1SUB, REMIC I Regular Interest
I-LT2GRP, REMIC I Regular Interest I-LT2SUB,
REMIC I Regular Interest I-LT3GRP and REMIC
I Regular Interest I-LT3SUB.
"REMIC I Remittance Rate": With respect to REMIC I Regular
Interest I-LTAA, REMIC I Regular Interest
I-LTA1A, REMIC I Regular Interest
I-LTA1B, REMIC I Regular Interest I-LTA2A,
REMIC I Regular Interest I-LTA2B,
REMIC I Regular Interest I-LTA3A, REMIC I
Regular Interest I-LTA3B, REMIC I
Regular Interest I-LTA3C, REMIC I Regular
Interest I-LTA3D, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest I-LTM4,
REMIC I Regular Interest I-LTM5, REMIC
I Regular Interest I-LTM6, REMIC I Regular
Interest I-LTM7, REMIC I Regular
Interest I-LTM8, REMIC I Regular Interest
I-LTM9, REMIC I Regular Interest
I-LTM10, REMIC I Regular Interest I-LTZZ,
REMIC I Regular Interest I-LTP, REMIC
I Regular Interest I-LT1SUB, REMIC I
Regular Interest I-LT2SUB, REMIC I Regular
Interest I-LT3SUB and REMIC I Regular
Interest I-LTXX, the weighted average of
the Expense Adjusted Net Mortgage Rates of
the Mortgage Loans. With respect to
REMIC I Regular Interest I-LT1GRP, the
weighted average of the Expense Adjusted
Net Mortgage Rates of the Group I
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Mortgage Loans, with respect REMIC I
Regular Interest I-LT2GRP, the weighted
average of the Expense Adjusted Net
Mortgage Rates of the Group II Mortgage
Loans and with respect to REMIC Regular
Interst I-LT3GRP, the weighted average
of the Expense Adjusted Net Mortgage Rates
of the Group III Mortgage Loans.
"REMIC I Sub WAC Allocation Percentage": 50% of any amount
payable from or loss attributable to the
Mortgage Loans, which shall be
allocated to REMIC I Regular Interest
I-LT1SUB, REMIC I Regular Interest
I-LT1GRP, REMIC I Regular Interest
I-LT2SUB, REMIC I Regular Interest I-LT2GRP,
REMIC I Regular Interest I-LT3SUB, REMIC I
Regular Interest I-LT3GRP and REMIC I
Regular Interest I-LTXX.
"REMIC I Subordinated Balance Ratio": The ratio between the
Uncertificated Balances of each REMIC I
Regular Interest ending with the
designation "SUB,", equal to the ratio
between, with respect to each such REMIC
I Regular Interest, the excess of (x) the
aggregate Stated Principal Balance of
the Mortgage Loans in the related Loan
Group over (y) the current Certificate
Principal Balance of Class A Certificates
in the related Loan Group.
"REMIC II": The segregated pool of assets consisting of all of
the REMIC I Regular Interests conveyed in
trust to the Trustee, for the benefit
of the Holders of the Regular Certificates
and the Class R Certificate (in
respect of the Class R-II Interest),
pursuant to Article II hereunder, and all
amounts deposited therein, with respect to
which a separate REMIC election is to
be made.
"REMIC II Certificate": Any Regular Certificate or Class R
Certificate.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment
conduits, which appear at Section
860A through 860G of the Code and related
provisions, and proposed, temporary
and final regulations and published
rulings, notices and announcements
promulgated thereunder, as the foregoing
may be in effect from time to time.
"REMIC Regular Interest": Any REMIC I Regular Interest.
"REMIC Remittance Rate": The REMIC I Remittance Rate.
"Remittance Report": A report in form and substance that is
acceptable to the Trustee and the NIMS
Insurer on a magnetic disk or tape
prepared by the Master Servicer pursuant to
Section 4.03 with such additions,
deletions and modifications as agreed to by
the Trustee and the Master Servicer.
"Rents from Real Property": With respect to any REO Property,
gross income of the character described in
Section 856(d) of the Code as being
included in the term "rents from real
property."
"REO Account": Each of the accounts maintained by the Master
Servicer in respect of an REO Property
pursuant to Section 3.13, which account
may be the Collection Account subject to
Section 3.13.
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"REO Disposition": The sale or other disposition of an REO
Property on behalf of REMIC I.
"REO Imputed Interest": As to any REO Property, for any
calendar month during which such REO
Property was at any time part of REMIC I,
one month's interest at the applicable Net
Mortgage Rate on the Stated Principal
Balance of such REO Property (or, in the
case of the first such calendar month,
of the related Mortgage Loan, if
appropriate) as of the close of business on the
Distribution Date in such calendar
month.
"REO Principal Amortization": With respect to any REO
Property, for any calendar month, the
excess, if any, of (a) 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
9.01 that is allocable to such REO
Property) or otherwise, net of any portion of
such amounts (i) payable pursuant to
Section 3.13(c) in respect of the proper
operation, management and maintenance of
such REO Property or (ii) payable or
reimbursable to the Master Servicer
pursuant to Section 3.13(d) 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, over (b) the REO Imputed
Interest in respect of such REO Property
for such calendar month.
"REO Property": A Mortgaged Property acquired by the Master
Servicer on behalf of REMIC I through
foreclosure or deed-in-lieu of
foreclosure, as described in Section
3.13.
"Representative": Citigroup Global Markets Inc.
"Request for Release": A release signed by a Servicing
Officer, in the form of Exhibit E attached
hereto.
"Reserve Interest Rate": With respect to any Interest
Determination Date, the rate per annum that
the Trustee determines to be either
(i) the arithmetic mean (rounded upwards if
necessary to the nearest whole
multiple of 1/16%) of the one-month U.S.
dollar lending rates which New York
City banks selected by the Trustee are
quoting on the relevant Interest
Determination Date to the principal London
offices of leading banks in the
London interbank market or (ii) in the
event that the Trustee can determine no
such arithmetic mean, the lowest one-month
U.S. dollar lending rate which New
York City banks selected by the Trustee are
quoting on such Interest
Determination Date to leading European
banks.
"Residential Dwelling": Any one of the following: (i) an
attached or detached one-family dwelling,
(ii) a detached two- to four-family
dwelling, (iii) a one-family dwelling unit
in a condominium project or (iv) a
detached or attached one-family dwelling in
a planned unit development, none of
which is a co-operative, mobile or
manufactured home (unless such mobile or
manufactured home is defined as real
property under applicable state law).
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<PAGE>
"Residual Certificate": Any one of the Class R Certificates.
"Residual Interest": The sole class of "residual interests" in
a REMIC within the meaning of Section
860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee,
any director, any vice president, any
assistant vice president, any associate,
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, with respect to a
particular matter, to whom such
matter is referred because of such
officer's knowledge of and familiarity with
the particular subject.
"Scheduled Principal
Balance": With respect to any Mortgage
Loan: (a) as of the Cut-off Date, the
outstanding Stated Principal Balance of
such Mortgage Loan as of such date, net of
the principal portion of all unpaid
Monthly Payments, if any, due on or before
such date; (b) as of any Due Date
subsequent to the Cut-off Date up to and
including the Due Date in the calendar
month in which a Liquidation Event occurs
with respect to such Mortgage Loan,
the Scheduled Principal Balance of such
Mortgage Loan as of the Cut-off Date,
minus the sum of (i) the principal portion
of each Monthly Payment due on or
before such Due Date but subsequent to the
Cut-off Date, whether or not
received, (ii) all Principal Prepayments
received before such Due Date but after
the Cut-off Date, (iii) the principal
portion of all Liquidation Proceeds and
Insurance Proceeds received before such Due
Date but after the Cut-off Date, net
of any portion thereof that represents
principal due (without regard to any
acceleration of payments under the related
Mortgage and Mortgage Note) on a Due
Date occurring on or before the date on
which such proceeds were received and
(iv) any Realized Loss incurred with
respect thereto as a result of a Deficient
Valuation occurring before such Due Date,
but only to the extent such Realized
Loss represents a reduction in the portion
of principal of such Mortgage Loan
not yet due (without regard to any
acceleration of payments under the related
Mortgage and Mortgage Note) as of the date
of such Deficient Valuation; and (c)
as of any Due Date subsequent to the
occurrence of a Liquidation Event with
respect to such Mortgage Loan, zero. With
respect to any REO Property: (a) as of
any Due Date subsequent to the date of its
acquisition on behalf of the Trust
Fund up to and including the Due Date in
the calendar month in which a
Liquidation Event occurs with respect to
such REO Property, an amount (not less
than zero) equal to the Scheduled Principal
Balance of the related Mortgage Loan
as of the Due Date in the calendar month in
which such REO Property was
acquired, minus the aggregate amount of REO
Principal Amortization, if any, in
respect of such REO Property for all
previously ended calendar months; and (b)
as of any Due Date subsequent to the
occurrence of a Liquidation Event with
respect to such REO Property, zero.
"Seller": Ameriquest Mortgage Company, or its successor in
interest, in its capacity as seller under
the Mortgage Loan Purchase Agreement.
"Senior Group I Principal Distribution Amount" With respect to
any Distribution Date, an amount, not less
than zero, equal to the excess of (x)
the aggregate Certificate Principal Balance
of the Group I Certificates
immediately prior to such Distribution Date
over (y) the lesser of (A) the
product of (i) 63.00% and (ii) the
aggregate Stated Principal Balance of the
53
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Group I Mortgage Loans as of the last day
of the related Due Period (after
giving effect to scheduled payments of
principal due during the related Due
Period, to the extent received or advanced,
and unscheduled collections of
principal received during the related
Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Group I
Mortgage Loans as of the last day of the
related Due Period (after giving effect to
scheduled payments of principal due
during the related Due Period, to the
extent received or advanced, and
unscheduled collections of principal
received during the related Prepayment
Period) minus $2,194,623.09.
"Senior Group II Principal Distribution Amount" With respect
to any Distribution Date, an amount, not
less than zero, equal to the excess of
(x) the aggregate Certificate Principal
Balance of the Group II Certificates
immediately prior to such Distribution Date
over (y) the lesser of (A) the
product of (i) 63.00% and (ii) the
aggregate Stated Principal Balance of the
Group II Mortgage Loans as of the last day
of the related Due Period (after
giving effect to scheduled payments of
principal due during the related Due
Period, to the extent received or advanced,
and unscheduled collections of
principal received during the related
Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Group II
Mortgage Loans as of the last day of
the related Due Period (after giving effect
to scheduled payments of principal
due during the related Due Period, to the
extent received or advanced, and
unscheduled collections of principal
received during the related Prepayment
Period) minus $2,494,033.29.
"Senior Group III Principal Distribution Amount" With respect
to any Distribution Date, an amount, not
less than zero, equal to the excess of
(x) the aggregate Certificate Principal
Balance of the Group III Certificates
immediately prior to such Distribution Date
over (y) the lesser of (A) the
product of (i) 63.00% and (ii) the
aggregate Stated Principal Balance of the
Group II Mortgage Loans as of the last day
of the related Due Period (after
giving effect to scheduled payments of
principal due during the related Due
Period, to the extent received or advanced,
and unscheduled collections of
principal received during the related
Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Group III
Mortgage Loans as of the last day of
the related Due Period (after giving effect
to scheduled payments of principal
due during the related Due Period, to the
extent received or advanced, and
unscheduled collections of principal
received during the related Prepayment
Period) minus $2,811,346.77.
"Senior Interest Distribution Amount": With respect to any
Distribution Date and any Class A
Certificate, an amount equal to the sum of (i)
the Interest Distribution Amount for such
Distribution Date for such Class A
Certificate and (ii) the Interest Carry
Forward Amount, if any, for such Class A
Certificate.
"Sequential Trigger Event": A Sequential Trigger Event will be
in effect if, with respect to any
Distribution Date before the 37th Distribution
Date, the aggregate amount of Realized
Losses incurred since the Cut-off Date
through the last day of the related Due
Period (reduced by Subsequent Recoveries
received through the last day of such Due
Period) divided by the aggregate
Stated Principal Balance of the Mortgage
Loans as of the Cut-off Date exceeds
2.50%, or if, on or after the 37th
Distribution Date, a Trigger Event is in
effect.
"Servicing Advances": The reasonable "out-of-pocket" costs and
expenses incurred by the Master Servicer in
connection with a default,
delinquency or other unanticipated
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<PAGE>
event by the Master Servicer in the
performance of its servicing obligations,
including, but not limited to, the cost of
(i) the preservation, restoration and
protection of a Mortgaged Property, (ii)
any enforcement or judicial
proceedings, including foreclosures, in
respect of a particular Mortgage Loan,
(iii) the management (including reasonable
fees in connection therewith) and
liquidation of any REO Property and (iv)
the performance of its obligations
under Section 3.01, Section 3.04(d),
Section 3.08, Section 3.12 and Section
3.13. The Master Servicer shall not be
required to make any Servicing Advance in
respect of a Mortgage Loan or REO Property
that, in the good faith business
judgment of the Master Servicer, would not
be ultimately recoverable from
related Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO
Property as provided herein.
"Servicing Fee": With respect to each Mortgage Loan 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
applicable Servicing Fee Rate on the
same principal amount on which interest on
such Mortgage Loan accrues for such
calendar month. A portion of such Servicing
Fee may be retained by any
Sub-Servicer as its servicing
compensation.
"Servicing Fee Rate": 0.50% per annum.
"Servicing Officer": Any employee of the Master Servicer
involved in, or responsible for, the
administration and servicing of the
Mortgage Loans, whose name and specimen
signature appear on a list of Servicing
Officers furnished by the Master Servicer
to the Trustee and the Depositor on
the Closing Date, as such list may from
time to time be amended.
"Servicing
Standard": The standards set forth in the first
paragraph of Section 3.01.
"Single Certificate": With respect to any Class of
Certificates (other than the Class P
Certificates and the Residual
Certificates), a hypothetical Certificate
of such Class evidencing a Percentage
Interest for such Class corresponding to an
initial Certificate Principal
Balance or Notional Amount of $1,000. With
respect to the Class P Certificates
and the Residual Certificates, a
hypothetical Certificate of such Class
evidencing a 20% Percentage Interest in
such Class.
"S&P": Standard & Poor's Ratings Services, a division of
The
McGraw-Hill Companies, Inc., or its
successor in interest.
"Startup Day": With respect to each Trust REMIC, the day
designated as such pursuant to Section
10.01(b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan:
(a) as of any date of determination up to
but not including the Distribution
Date on which the proceeds, if any, of a
Liquidation Event with respect to such
Mortgage Loan would be distributed, the
outstanding principal balance of such
Mortgage Loan as of the Cut-off Date, as
shown in the Mortgage Loan
55
<PAGE>
Schedule, minus the sum of (i) the
principal portion of each Monthly Payment due
on a Due Date subsequent to the Cut-off
Date, to the extent received from the
Mortgagor or advanced by the Master
Servicer and distributed pursuant to Section
4.01 on or before such date of
determination, (ii) all Principal Prepayments
received after the Cut-off Date, to the
extent distributed pursuant to Section
4.01 on or before such date of
determination, (iii) all Liquidation Proceeds and
Insurance Proceeds applied by the Master
Servicer as recoveries of principal in
accordance with the provisions of Section
3.12, to the extent distributed
pursuant to Section 4.01 on or before such
date of determination and (iv) any
Realized Loss incurred with respect thereto
as a result of a Deficient Valuation
made during or prior to the Prepayment
Period for the most recent Distribution
Date coinciding with or preceding such date
of determination; and (b) as of any
date of determination coinciding with or
subsequent to the Distribution Date on
which the proceeds, if any, of a
Liquidation Event with respect to such Mortgage
Loan would be distributed, zero. With
respect to any REO Property: (a) as of any
date of determination up to but not
including the Distribution Date on which the
proceeds, if any, of a Liquidation Event
with respect to such REO Property would
be distributed, an amount (not less than
zero) equal to the Stated Principal
Balance of the related Mortgage Loan as of
the date on which such REO Property
was acquired on behalf of REMIC I, minus
the sum of (i) if such REO Property was
acquired before the Distribution Date in
any calendar month, the principal
portion of the Monthly Payment due on the
Due Date in the calendar month of
acquisition, to the extent advanced by the
Master Servicer and distributed
pursuant to Section 4.01 on or before such
date of determination, and (ii) the
aggregate amount of REO Principal
Amortization in respect of such REO Property
for all previously ended calendar months,
to the extent distributed pursuant to
Section 4.01 on or before such date of
determination; and (b) as of any date of
determination coinciding with or subsequent
to the Distribution Date on which
the proceeds, if any, of a Liquidation
Event with respect to such REO Property
would be distributed, zero.
"Stayed Funds": If the Master Servicer is the subject of a
proceeding under the Bankruptcy Code and
the making of a Remittance (as defined
in Section 7.02(b)) is prohibited by
Section 362 of the Bankruptcy Code, funds
that are in the custody of the Master
Servicer, a trustee in bankruptcy or a
federal bankruptcy court and should have
been the subject of such Remittance
absent such prohibition.
"Stepdown Date": The earlier to occur of (i) the first
Distribution Date on which the aggregate
Certificate Principal Balance of the
Class A Certificates has been reduced to
zero and (ii) the later to occur of (a)
the Distribution Date occurring in March
2008 and (b) the first Distribution
Date on which the Credit Enhancement
Percentage for the Class A Certificates
(calculated for this purpose only after
taking into account distributions of
principal on the Mortgage Loans but prior
to any distribution of the Group I
Principal Distribution Amount, the Group II
Principal Distribution Amount and
the Group III Principal Distribution Amount
to the Certificates then entitled to
distributions of principal on such
Distribution Date) is equal to or greater
than 37.00%.
"Sub-Servicer": Any Person with which the Master Servicer has
entered into a Sub-Servicing Agreement and
which meets the qualifications of a
Sub-Servicer pursuant to Section 6.06.
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"Sub-Servicing Account": An account established by a
Sub-Servicer which meets the requirements
set forth in Section 6.11 and is
otherwise acceptable to the Master
Servicer.
"Sub-Servicing Agreement": The written contract between the
Master Servicer and a Sub-Servicer relating
to servicing and administration of
certain Mortgage Loans as provided in
Section 6.06.
"Subsequent Recoveries": As of any Distribution Date,
unexpected amounts received by the Master
Servicer (net of any related expenses
permitted to be reimbursed pursuant to
Section 3.04) specifically related to a
Mortgage Loan that was the subject of a
liquidation or an REO Disposition prior
to the related Prepayment Period that
resulted in a Realized Loss.
"Substitution Shortfall Amount": As defined in Section
2.03(d).
"Tax Returns": The federal income tax return 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 REMIC Taxable Income or Net Loss
Allocation, or any successor forms,
to be filed on behalf of each REMIC in the
Trust Fund due to its classification
as a REMIC 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 designated as page "3750" on
the Moneyline Telerate (or such other page
as may replace page 3750 on that
report for the purpose of displaying London
interbank offered rates of major
banks).
"Termination Price":
As defined in Section 9.01.
"Terminator": As
defined in Section 9.01.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment
of any Ownership Interest in a
Certificate.
"Transferee": Any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer of any
Ownership Interest in a Certificate.
"Trigger Event": A Trigger Event is in effect with respect to
a Distribution Date on and after the
Stepdown Date if:
(a) the Delinquency Percentage for the Mortgage Loans exceeds
the applicable percentages of the Credit
Enhancement Percentage for the prior
Distribution Date as set forth below for
the most senior Class of Certificates
then outstanding:
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CLASS
PERCENTAGE
--------------
--------------------
A
42.00%
M-1
59.10%
M-2
66.70%
M-3
83.10%
M-4
100.26%
M-5
115.11%
M-6
149.42%
M-7
150.70%
M-8
250.64%
M-9
443.99%
M-10
776.98%
or
(b) the Cumulative Loss Percentage exceeds the applicable
percentages set forth below with respect to
such Distribution Date:
DISTRIBUTION DATE OCCURRING IN
PERCENTAGE
------------------------------------- -----------------------
March 2008 through February 2009
2.50%
March 2009
through February 2010
3.75%
March 2010 through February 2011
5.00%
March 2011 and thereafter
5.50%
"Trust Fund": Collectively, all of the assets of each Trust
REMIC, any Master Servicer Prepayment
Charge Payment Amounts and the Net WAC
Rate Carryover Reserve Account (including
any payments made under the Cap
Contracts deposited therein).
"Trust REMIC": Each of REMIC I and REMIC II.
"Trustee": Deutsche Bank National Trust Company, a national
banking association, or its successor in
interest, or any successor Trustee
appointed as herein provided.
"Trustee Fee": The amount payable to the Trustee on each
Distribution Date pursuant to Section 8.05
as compensation for all services
rendered by it and in the exercise and
performance of any of the powers and
duties of the Trustee hereunder, which
amount shall equal the Trustee Fee Rate
accrued for one month multiplied by the
aggregate Scheduled Principal Balance of
the Mortgage Loans and any REO Properties
as of the Due Date in the prior month
(or, in the case of the initial
Distribution Date, as of the Cut-off Date),
calculated on the basis of a 360-day year
consisting of twelve 30-day months.
"Trustee Fee Rate": 0.0014% per annum.
"Uncertificated Balance": The amount of any REMIC Regular
Interest outstanding as of any date of
determination. As of the Closing Date,
the Uncertificated Balance of each REMIC
Regular Interest shall equal the amount
set forth in the Preliminary Statement
hereto as its initial uncertificated
balance. On each Distribution Date, the
Uncertificated Balance of each REMIC
Regular Interest shall be reduced by all
distributions of principal made on such
REMIC Regular Interest on such Distribution
Date pursuant to Section 4.01 and,
if and to the
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extent necessary and appropriate, shall be
further reduced on such Distribution
Date by Realized Losses as provided in
Section 4.04. The Uncertificated Balance
of REMIC I Regular Interest I-LTZZ shall be
increased by interest deferrals as
provided in Section 4.01(a)(1). The
Uncertificated Balance of each REMIC Regular
Interest shall never be less than zero.
"Uncertificated Interest": With respect to any REMIC Regular
Interest for any Distribution Date, one
month's interest at the REMIC Remittance
Rate applicable to such REMIC Regular
Interest for such Distribution Date,
accrued on the Uncertificated Balance
thereof immediately prior to such
Distribution Date. Uncertificated Interest
in respect of any REMIC Regular
Interest shall accrue on the basis of a
360-day year consisting of twelve 30-day
months. Uncertificated Interest with
respect to each Distribution Date, as to
any REMIC Regular Interest, shall be
reduced by an amount equal to the sum of
(a) the aggregate Prepayment Interest
Shortfall, if any, for such Distribution
Date to the extent not covered by payments
pursuant to Section 4.03(e) and (b)
the aggregate amount of any Relief Act
Interest Shortfall, if any allocated, in
each case, to such REMIC Regular Interest
pursuant to Section 1.02. In addition,
Uncertificated Interest with respect to
each Distribution Date, as to any REMIC
Regular Interest shall be reduced by
Realized Losses, if any, allocated to such
REMIC Regular Interest pursuant to Section
1.02 and Section 4.04.
"Underwriters": Each of the Representative, BNP Paribas
Securities Corp., Bear, Stearns & Co.
Inc., Goldman, Sachs & Co. and Morgan
Stanley & Co. Incorporated.
"Underwriters' Exemption": As defined in the Prospectus
Supplement.
"Uninsured Cause": Any cause of damage to a Mortgaged Property
such that the complete restoration of such
property is not fully reimbursable by
the hazard insurance policies required to
be maintained pursuant to Section
3.08.
"United States Person": A citizen or resident of the United
States, a corporation, partnership or other
entity created or organized in, or
under the laws of, the United States, any
state thereof or the District of
Columbia (except, in the case of a
partnership, to the extent provided in
regulations); provided that, solely for
purposes of the restrictions on the
transfer of Residual Certificates, no
partnership or other entity treated as a
partnership for United States federal
income tax purposes shall be treated as a
United States Person unless all persons
that own an interest in such partnership
either directly or through any entity that
is not a corporation for United
States federal income tax purposes are
required by the applicable operative
agreement to be United States Persons, or
an estate whose income is subject to
United States federal income tax regardless
of its source, or a trust if a court
within the United States is able to
exercise primary supervision over the
administration of the trust and one or more
United States persons have the
authority to control all substantial
decisions of the trust. To the extent
prescribed in regulations by the Secretary
of the Treasury, which have not yet
been issued, a trust which was in existence
on August 20, 1996 (other than a
trust treated as owned by the grantor under
subpart E of part I of subchapter J
of chapter 1 of the Code), and which was
treated as a United States person on
August 20, 1996 may elect to continue to be
treated as a United States person
notwithstanding the previous sentence. The
term "United States" shall have the
meaning set forth in Section 7701 of the
Code.
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<PAGE>
"Value": With respect to any Mortgaged Property, the lesser of
(i) the value thereof as determined by an
appraisal made for the originator of
the Mortgage Loan at the time of
origination of the Mortgage Loan by an
appraiser who met the minimum requirements
of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, and
(ii) the purchase price paid for the
related Mortgaged Property by the Mortgagor
with the proceeds of the Mortgage
Loan, provided, however, in the case of a
Refinanced Mortgage Loan, such value
of the Mortgaged Property is based solely
upon the value determined by an
appraisal made for the originator of such
Refinanced Mortgage Loan at the time
of origination of such Refinanced Mortgage
Loan by an appraiser who met the
minimum requirements of the Financial
Institutions Reform, Recovery and
Enforcement Act of 1989 or, subject to the
applicable Originator's underwriting
guidelines, an insured automated valuation
model.
"Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any
Certificate. With respect to any date
of determination, 98% of all Voting Rights
shall be allocated among the Holders
of the Class A Certificates, the Mezzanine
Certificates and the Class CE
Certificates in proportion to the then
outstanding Certificate Principal
Balances of their respective Certificates,
1% of all Voting Rights shall be
allocated to the Holders of the Class P
Certificates and 1% of all Voting Rights
shall be allocated among the Holders of the
Residual Certificates. The Voting
Rights allocated to each Class of
Certificate shall be allocated among Holders
of each such Class in accordance with their
respective Percentage Interests as
of the most recent Record Date.
SECTION 1.02. Allocation of Certain Interest Shortfalls.
For purposes of calculating the amount of Accrued Certificate
Interest and the amount of the Interest
Distribution Amount for the Class A
Certificates, the Mezzanine Certificates
and the Class CE Certificates for any
Distribution Date, the aggregate amount of
any Prepayment Interest Shortfalls
(to the extent not covered by payments by
the Master Servicer pursuant to
Section 4.03(e)) and any Relief Act
Interest Shortfalls incurred in respect of
the Mortgage Loans for any Distribution
Date shall be allocated first, to reduce
the interest accrued on the Class CE
Certificates to the extent of one month's
interest at the applicable Pass-Through
Rate on the Notional Amount of such
Certificate and thereafter, among the Class
A Certificates and the Mezzanine
Certificates on a pro rata basis based on,
and to the extent of, one month's
interest at the then applicable respective
Pass-Through Rate on the respective
Certificate Principal Balance of each such
Certificate.
For purposes of calculating the amount of Uncertificated
Interest for the REMIC I Regular Interests
for any Distribution Date:
(I) (A) The REMIC I Marker Allocation Percentage of the
aggregate amount of any Prepayment Interest Shortfalls (to the
extent
not covered by payments by the Master Servicer pursuant to
Section
4.03(e)) and the REMIC I Marker Allocation Percentage of any Relief
Act
Interest Shortfalls incurred in respect of the Mortgage Loans for
any
Distribution Date shall be allocated among REMIC Regular
Interest
I-LTAA, REMIC I Regular Interest I-LTA1A, REMIC I Regular
Interest
I-LTA1B, REMIC I Regular Interest I-LTA2A, REMIC I Regular
Interest
I-LTA2B, REMIC I
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Regular Interest I-LTA3A, REMIC I Regular Interest I-LTA3B, REMIC
I
Regular Interest I-LTA3C, REMIC I Regular Interest I-LTA3D, REMIC
I
Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC
I
Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC
I
Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC
I
Regular Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC
I
Regular Interest I-LTM9, REMIC I Regular Interest I-LTM10 and REMIC
I
Regular Interest I-LTZZ, on a pro rata basis based on, and to
the
extent of, one month's interest at the then applicable respective
REMIC
I Remittance Rate on the respective Uncertificated Balance of each
such
REMIC I Regular Interest; and
(II) (B) The REMIC I Sub WAC Allocation Percentage of the
aggregate amount of any Prepayment Interest Shortfalls (to the
extent
not covered by payments by the Master Servicer pursuant to
Section
4.03(e)) and the REMIC I Sub WAC Allocation Percentage of any
Relief
Act Interest Shortfalls incurred in respect of the Mortgage Loans
for
any Distribution Date shall be allocated to Uncertificated
Interest
payable to REMIC I Regular Interest I-LT1SUB, REMIC I Regular
Interest
I-LT1GRP, REMIC I Regular Interest I-LT2SUB, REMIC I Regular
Interest
I-LT2GRP, Regular Interest I-LT3SUB, REMIC I Regular Interest
I-LT3GRP
and REMIC I Regular Interest I-LTXX, on a pro rata basis based on,
and
to the extent of, one month's interest at the then applicable
respective REMIC I Remittance Rate on the respective
Uncertificated
Balance of each such REMIC I Regular Interest.
SECTION 1.03. Rights of the NIMS Insurer.
Each of the rights of the NIMS Insurer set forth in this
Agreement shall exist so long as (i) the
NIMS Insurer has undertaken to
guarantee certain payments of notes issued
pursuant to an Indenture and (ii) any
series of notes issued pursuant to one or
more Indentures remain outstanding or
the NIMS Insurer is owed amounts in respect
of its guarantee of payment on such
notes; provided, however, the NIMS Insurer
shall not have any rights hereunder
(except pursuant to Section 11.01 in the
case of clause (ii) below) during the
period of time, if any, that (i) the NIMS
Insurer has not undertaken to
guarantee certain payments of notes issued
pursuant to the Indenture or (ii) any
default has occurred and is continuing
under the insurance policy issued by the
NIMS Insurer with respect to such
notes.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set
over and otherwise convey to the
Trustee 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 the Mortgage Loans
identified on the Mortgage Loan Schedule,
the rights of the Depositor under the
Mortgage Loan Purchase
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Agreement, all other assets included or to
be included in REMIC I (including any
payments made under the Cap Contracts).
Such assignment includes all interest
and principal received by the Depositor or
the Master Servicer on or with
respect to the Mortgage Loans (other than
payments of principal and interest due
on such Mortgage Loans on or before the
Cut-off Date). The Depositor herewith
delivers to the Trustee an executed copy of
the Mortgage Loan Purchase Agreement
and the Trustee, on behalf of the
Certificateholders, acknowledges receipt of
the same.
In connection with such transfer and assignment, the Depositor
does hereby deliver to, and deposit with,
the Trustee the following documents or
instruments with respect to each Mortgage
Loan so transferred and assigned (a
"Mortgage File"):
(i) the original Mortgage Note, endorsed in blank, without
recourse, or in the following form: "Pay to the order of Deutsche
Bank
National Trust Company, as Trustee under the applicable
agreement,
without recourse," with all prior and intervening endorsements
showing
a complete chain of endorsement from the originator to the Person
so
endorsing to the Trustee, or with respect to any lost Mortgage
Note, an
original Lost Note Affidavit; provided however, that such
substitutions
of Lost Note Affidavits for original Mortgage Notes may occur only
with
respect to Mortgage Loans, the aggregate Cut-off Date Principal
Balance
of which is less than or equal to 2.00% of the Pool Balance as of
the
Cut-off Date;
(ii) the original Mortgage, with evidence of recording
thereon, and a copy, certified by the appropriate recording office,
of
the recorded power of attorney, if the Mortgage was executed
pursuant
to a power of attorney, with evidence of recording thereon;
(iii) an original
Assignment assigned in blank, without
recourse;
(iv) the original recorded intervening Assignment or
Assignments showing a complete chain of assignment from the
originator
to the Person assigning the Mortgage to the Trustee as contemplated
by
the immediately preceding clause (iii) or the original
unrecorded
intervening Assignments;
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the original lender's title insurance policy or an
attorney's opinion of title or similar guarantee of title
acceptable to
mortgage lenders generally in the jurisdiction where the
Mortgaged
Property is located, together with all endorsements or riders
which
were issued with or subsequent to the issuance of such policy, or
in
the event such original title policy is unavailable, a written
commitment or uniform binder or preliminary report of title issued
by
the title insurance or escrow company.
If any of the documents referred to in Sections 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
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applicable public recording office or (y)
has been lost or such public recording
office has retained the original of such
document, the obligations of the
Depositor to deliver such documents shall
be deemed to be satisfied upon (1)
delivery to the Trustee, or to the
appropriate Custodian on behalf of the
Trustee, of a copy of each such document
certified by the applicable Originator
in the case of (x) above or the applicable
public recording office in the case
of (y) above to be a true and complete copy
of the original that was submitted
for recording and (2) if such copy is
certified by the applicable Originator,
delivery to the Trustee, or to the
appropriate Custodian on behalf of the
Trustee, promptly upon receipt thereof of
either the original or a copy of such
document certified by the applicable public
recording office to be a true and
complete copy of the original. If the
original lender's title insurance policy
was not delivered pursuant to Section
2.01(vi) above, the Depositor shall
deliver or cause to be delivered to the
Trustee, or to the appropriate Custodian
on behalf of the Trustee, promptly after
receipt thereof, the original lender's
title insurance policy. The Depositor shall
deliver or cause to be delivered to
the Trustee, or to the appropriate
Custodian on behalf of the Trustee, promptly
upon receipt thereof any other original
documents constituting a part of a
Mortgage File received with respect to any
Mortgage Loan, including, but not
limited to, any original documents
evidencing an assumption or modification of
any Mortgage Loan.
The Master Servicer (in its capacity as Seller) shall promptly
(and in no event later than thirty (30)
Business Days, subject to extension upon
a mutual agreement between the Master
Servicer and the Trustee, following the
later of (i) the Closing Date, (ii) the
date on which the Seller receives the
Assignment from the Custodian and (iii) the
date of receipt by the Master
Servicer of the recording information for a
Mortgage) submit or cause to be
submitted for recording, at no expense to
the Trust Fund or the Trustee, in the
appropriate public office for real property
records, each Assignment referred to
in Sections 2.01(iii) and (iv) above and
shall execute each original Assignment
referred to in section 2.01(iii) above in
the following form: "Deutsche Bank
National Trust Company, as Trustee under
the applicable agreement." In the event
that any such Assignment is lost or
returned unrecorded because of a defect
therein, the Master Servicer (in its
capacity as Seller) shall promptly prepare
or cause to be prepared a substitute
Assignment or cure or cause to be cured
such defect, as the case may be, and
thereafter cause each such Assignment to be
duly recorded.
Notwithstanding the foregoing, however, for administrative
convenience and facilitation of servicing
and to reduce closing costs, the
Assignments shall not be required to be
submitted for recording (except with
respect to any Mortgage Loan located in
Maryland) unless such failure to record
would result in a withdrawal or a
downgrading by any Rating Agency of the rating
on any Class of Certificates; provided
further, however, each Assignment shall
be submitted for recording by the Seller in
the manner described above, at no
expense to the Trust Fund or the Trustee,
upon the earliest to occur of: (i)
reasonable direction by Holders of
Certificates entitled to at least 25% of the
Voting Rights or the NIMS Insurer, (ii)
failure of the Master Servicer
Termination Test, (iii) the occurrence of a
bankruptcy or insolvency relating to
the Seller, (iv) the occurrence of a
servicing transfer as described in Section
7.02 hereof and (v) if the Seller is not
the Master Servicer and with respect to
any one Assignment or Mortgage, the
occurrence of a bankruptcy, insolvency or
foreclosure relating to the Mortgagor under
the related Mortgage.
Notwithstanding the foregoing, if the
Master Servicer is unable to pay the cost
of
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recording the Assignments, such expense
shall be paid by the Trustee and shall
be reimbursable to the Trustee as an
Extraordinary Trust Fund Expense.
All original documents relating to the Mortgage Loans that are
not delivered to the Trustee, or to the
appropriate Custodian on behalf of the
Trustee, are and shall be held by or on
behalf of the Seller, the Depositor or
the Master Servicer, as the case may be, in
trust for the benefit of the Trustee
on behalf of the Certificateholders. In the
event that any such original
document is required pursuant to the terms
of this Section to be a part of a
Mortgage File, such document shall be
delivered promptly to the Trustee, or to
the appropriate Custodian on behalf of the
Trustee. Any such original document
delivered to or held by the Depositor that
is not required pursuant to the terms
of this Section to be a part of a Mortgage
File, shall be delivered promptly to
the Master Servicer.
The parties hereto understand and agree that it is not
intended that any mortgage loan be included
in the Trust that is a "High-Cost
Home Loan" as defined by HOEPA or any other
applicable predatory or abusive
lending laws.
SECTION 2.02. Acceptance of REMIC I by the Trustee.
Subject to the provisions of Section 2.01 and subject to any
exceptions noted on the exception report
described in the next paragraph below,
the Trustee acknowledges receipt (or, with
respect to Mortgage Loans subject to
a Custodial Agreement, receipt by the
respective Custodian as the duly appointed
agent of the Trustee) of the documents
referred to in Section 2.01 (other than
such documents described in Section
2.01(v)) above and all interests and all
other assets included in the definition of
"REMIC I" under clauses (i), (iii),
(iv) and (v) (to the extent of amounts
deposited into the Distribution Account)
and declares that it, or such Custodian as
its agent, holds and shall hold such
documents and the other documents delivered
to it constituting a Mortgage File,
and that it holds or shall hold all such
assets and such other assets included
in the definition of "REMIC I" in trust for
the exclusive use and benefit of all
present and future Certificateholders.
On or prior to the Closing Date, the Trustee agrees, for the
benefit of the Certificateholders, to
execute and deliver (or cause the
Custodian to execute and deliver) to the
Depositor and the NIMS Insurer an
acknowledgment of receipt of the Mortgage
Note (with any exceptions noted),
substantially in the form attached as
Exhibit C-3 hereto.
The Trustee agrees, for the benefit of the Certificateholders,
to review (or cause a Custodian on its
behalf to review) each Mortgage Note
within 45 days of the Closing Date and to
certify in substantially the form
attached hereto as Exhibit C-1 (or cause
the Custodian to certify in the form of
the Initial Certification attached to the
Custodial Agreement) 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 constituting part of such
Mortgage File (other than such documents
described in Section 2.01(v)) required to
be delivered to it pursuant to this
Agreement are in its possession, (ii) such
documents have been reviewed by it or
such Custodian and are not mutilated, torn
or defaced unless initialed by the
related borrower and relate to such
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Mortgage Loan, (iii) based on its or the
Custodian's examination and only as to
the foregoing, the information set forth in
the Mortgage Loan Schedule that
corresponds to items (1) through (3), (6),
(9), (10), (13), (15) and (19) of the
definition of "Mortgage Loan Schedule"
accurately reflects information set forth
in the Mortgage File. It is herein
acknowledged that, in conducting such review,
the Trustee or such Custodian was under no
duty or obligation (i) to inspect,
review or examine any such documents,
instruments, certificates or other papers
to determine whether they are genuine,
enforceable, or appropriate for the
represented purpose or whether they have
actually been recorded or that they are
other than what they purport to be on their
face or (ii) to determine whether
any Mortgage File should include any of the
documents specified in clause (v) of
Section 2.01.
Prior to the first anniversary date of this Agreement the
Trustee shall deliver to the Depositor, the
Master Servicer and the NIMS Insurer
a final certification in the form annexed
hereto as Exhibit C-2 (or shall cause
the Custodian to deliver to the Trustee,
the Depositor, the Master Servicer and
the NIMS Insurer a final certification in
the form attached to the Custodial
Agreement) evidencing the completeness of
the Mortgage Files, with any
applicable exceptions noted thereon, with
respect to all of the Mortgage Loans.
Upon the request of the Master Servicer,
any exception report related to the
final certification shall be provided in an
electronic computer readable format
as mutually agreed upon by the Master
Servicer and the Trustee.
If in the process of reviewing the Mortgage Files and making
or preparing, as the case may be, the
certifications referred to above, the
Trustee or any Custodian finds any document
or documents constituting a part of
a Mortgage File to be missing, mutilated,
torn or defaced or does not conform to
the requirements identified above, at the
conclusion of its review the Trustee
(or a Custodian on behalf of the Trustee)
shall so notify the Depositor, the
NIMS Insurer and the Master Servicer. In
addition, upon the discovery by the
Depositor, the NIMS Insurer, the Master
Servicer or the Trustee of a breach of
any of the representations and warranties
made by the Seller in the Mortgage
Loan Purchase Agreement in respect of any
Mortgage Loan which materially
adversely affects such Mortgage Loan or the
interests of the related
Certificateholders in such Mortgage Loan,
the party discovering such breach
shall give prompt written notice to the
other parties.
The Trustee (or a Custodian on behalf of the Trustee) shall,
at the written request and expense of any
Certificateholder, Certificate Owner,
provide a written report to such
Certificateholder, Certificate Owner, of all
Mortgage Files released to the Master
Servicer for servicing purposes.
SECTION 2.03. Repurchase or
Substitution of Mortgage Loans
by the Seller or the Depositor; Payment of
Prepayment Charge Payment Amounts.
(a) Upon discovery or receipt of notice (including notice
under Section 2.02) of any materially
defective document in, or that a document
is missing from, the Mortgage File or of
the breach by the Seller of any
representation, warranty or covenant under
the Mortgage Loan Purchase Agreement
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
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shall promptly notify the Seller, the NIMS
Insurer and the Master Servicer of
such defect, missing document or breach and
request that the Seller deliver such
missing document or cure such defect or
breach within 90 days from the date the
Seller had knowledge or 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 Master Servicer (or, in
accordance with Section 6.06(b), the
Trustee) shall enforce the obligations of
the Seller under the Mortgage Loan Purchase
Agreement to repurchase such
Mortgage Loan from REMIC I at the Purchase
Price within 90 days after the date
on which the Seller was notified (subject
to Section 2.03(d)) of such missing
document, defect or breach, if and to the
extent that the Seller is obligated to
do so under the Mortgage Loan Purchase
Agreement. The Purchase Price for the
repurchased Mortgage Loan shall be
deposited in the Collection Account, and the
Trustee, upon receipt of written
certification from the Master Servicer of such
deposit, shall release to the Seller the
related Mortgage File and shall execute
and deliver such instruments of transfer or
assignment, in each case without
recourse, as the Seller shall furnish to it
and as shall be necessary to vest in
the Seller any Mortgage Loan released
pursuant hereto, and the Trustee shall not
have any further responsibility with regard
to such Mortgage File. In lieu of
repurchasing any such Mortgage Loan as
provided above, if so provided in the
Mortgage Loan Purchase Agreement, the
Seller may cause such Mortgage Loan to be
removed from REMIC I (in which case it
shall become a Deleted Mortgage Loan) and
substitute one or more Qualified Substitute
Mortgage Loans in the manner and
subject to the limitations set forth in
Section 2.03(c). It is understood and
agreed that the obligation of the Seller to
cure or to repurchase (or to
substitute for) any Mortgage Loan as to
which a document is missing, a material
defect in a document exists or as to which
such a breach has occurred and is
continuing shall constitute the sole remedy
respecting such omission, defect or
breach available to the Trustee on behalf
of the Certificateholders.
(b) (i) Promptly upon the earlier of discovery by the Master
Servicer or receipt of notice by the Master
Servicer of the breach of any
representation, warranty or covenant of the
Master Servicer set forth in Section
2.05, which materially and adversely
affects the interests of the
Certificateholders in any Mortgage Loan,
the Master Servicer shall cure such
breach in all material respects.
(ii) Notwithstanding the provisions of Section 2.03(b)(i)
above,
(A) on the
later of (x) the Master Servicer Remittance Date
next following the earlier of discovery by the Master Servicer
or
receipt of notice by the Master Servicer of the breach of the
representation made by the Master Servicer in Section 2.05(vii),
which
breach materially and adversely affects the interests of the
Holders of
the Class P Certificates to any Prepayment Charge and (y) the
Master
Servicer Remittance Date next following the Prepayment Period
relating
to such a breach, the Master Servicer shall deposit into the
Collection
Account the amount of the scheduled Prepayment Charge, less any
amount
collected and deposited by the Master Servicer into the
Collection
Account in respect of such Prepayment Charge; and
(B) on the later of (x) the Master Servicer Remittance Date
next following the earlier of discovery by the Master Servicer
or
receipt of notice by the Master Servicer of
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the breach of the covenant made by the Master Servicer in
Section
2.05(viii), which breach materially and adversely affects the
interests
of the Holders of the Class P Certificates to any Prepayment Charge
and
(y) the Master Servicer Remittance Date next following the
Prepayment
Period relating to such a breach, the Master Servicer shall
deposit
into the Collection Account, as a Master Servicer Prepayment
Charge
Payment Amount, the amount of the waived Prepayment Charge, but
only to
the extent required under Section 2.03(b)(iii) below.
(iii) If with respect to any Prepayment Period,<
