BEAR STEARNS ASSET BACKED SECURITIES
I LLC,
Depositor,
OCWEN MORTGAGE ASSET TRUST I
ELLINGTON ACQUISITION TRUST 2005-1
ELLINGTON ACQUISITION TRUST
2005-2,
Sellers,
OCWEN LOAN SERVICING,
LLC,
Servicer,
LASALLE BANK NATIONAL
ASSOCIATION,
Master Servicer and Securities
Administrator,
WELLS FARGO BANK, NATIONAL
ASSOCIATION,
Custodian,
RISK MANAGEMENT GROUP,
Risk Manager
and
CITIBANK, N.A.,
Trustee
____________________
POOLING AND SERVICING
AGREEMENT
Dated as of October 1,
2005
________________________________________
BEAR STEARNS ASSET BACKED SECURITIES
I TRUST 2005-CL1
ASSET-BACKED CERTIFICATES, SERIES
2005-CL1
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
|
Section 1.01.
|
Defined Terms
|
6
|
|
Section 1.02.
|
Allocation of Certain Interest
Shortfalls
|
52
|
ARTICLE II
CONVEYANCE OF TRUST FUND
REPRESENTATIONS AND WARRANTIES
|
Section 2.01.
|
Conveyance of Trust Fund
|
53
|
|
Section 2.02.
|
Acceptance of the Mortgage Loans
|
55
|
|
Section 2.03.
|
Representations, Warranties and Covenants of the
Servicer, the Master Servicer and the Sellers, and Certain Matters
Relating to a Breach of a Representation, Warranty or Covenants by
a Seller
|
57
|
|
Section 2.04.
|
Representations and Warranties of the
Depositor
|
62
|
|
Section 2.05.
|
Certain REMIC Conditions in Connection with
Substitutions and Repurchases
|
63
|
|
Section 2.06.
|
Countersignature and Delivery of
Certificates
|
63
|
|
Section 2.07.
|
Conveyance of the Subsequent Mortgage
Loans
|
64
|
|
Section 2.08.
|
Additional Representation
|
66
|
ARTICLE III
ADMINISTRATION AND SERVICING OF THE
MORTGAGE LOANS
|
Section 3.01.
|
The Servicer to act as Servicer
|
66
|
|
Section 3.02.
|
Due-on-Sale Clauses; Assumption
Agreements
|
68
|
|
Section 3.03.
|
Subservicers
|
69
|
|
Section 3.04.
|
Documents, Records and Funds in Possession of
the Servicer To Be Held for Trustee
|
70
|
|
Section 3.05.
|
Maintenance of Fire Insurance; Errors and
Omissions and Fidelity Coverage
|
70
|
|
Section 3.06.
|
Presentment of Claims and Collection of
Proceeds
|
72
|
|
Section 3.07.
|
Maintenance of the Primary Mortgage Insurance
Policies; Collections Thereunder
|
72
|
|
Section 3.08.
|
Reserved
|
73
|
|
Section 3.09.
|
Realization Upon Defaulted Mortgage Loans;
Determination of Excess Liquidation Proceeds and Realized Losses;
Repurchases of Certain Mortgage Loans
|
73
|
|
Section 3.10.
|
Servicing Compensation
|
76
|
|
Section 3.11.
|
REO Property
|
77
|
|
Section 3.12.
|
Liquidation Reports
|
77
|
|
Section 3.13.
|
Annual Certificate as to Compliance and
Sarbanes-Oxley Back-up Certificate
|
77
|
|
Section 3.14.
|
Annual Independent Certified Public
Accountants’ Servicing Report
|
78
|
|
Section 3.15.
|
Books and Records
|
78
|
|
Section 3.16.
|
Reserved
|
79
|
|
Section 3.17.
|
Reserved
|
79
|
|
Section 3.18.
|
Optional Purchase of Certain Mortgage Loans;
Charge-offs
|
79
|
TABLE OF CONTENTS
(continued)
Page
|
Section 3.19.
|
Obligations of the Servicer in Respect of
Mortgage Rates and Scheduled Payments
|
80
|
|
Section 3.20.
|
Advancing Facility
|
80
|
ARTICLE IV
|
Section 4.01.
|
The Master Servicer to act as Master
Servicer
|
83
|
|
Section 4.02.
|
Reserved
|
84
|
|
Section 4.03.
|
Monitoring of the Servicer
|
84
|
|
Section 4.04.
|
Fidelity Bond
|
85
|
|
Section 4.05.
|
Power to Act; Procedure
|
85
|
|
Section 4.06.
|
Due-on-Sale Clauses; Assumption
Agreements
|
86
|
|
Section 4.07.
|
Release of Mortgage Files
|
86
|
|
Section 4.08.
|
Documents, Records and Funds in Possession of
Master Servicer and Servicer To Be Held for Trustee
|
87
|
|
Section 4.09.
|
Standard Hazard Insurance and Flood Insurance
Policies
|
88
|
|
Section 4.10.
|
Presentment of Claims and Collection of
Proceeds
|
88
|
|
Section 4.11.
|
Maintenance of the Primary Mortgage Insurance
Policies
|
89
|
|
Section 4.12.
|
Trustee to Retain Possession of Certain
Insurance Policies and Documents
|
89
|
|
Section 4.13.
|
Realization Upon Defaulted Mortgage
Loans
|
89
|
|
Section 4.14.
|
Compensation for the Master Servicer
|
90
|
|
Section 4.15.
|
REO Property
|
90
|
|
Section 4.16.
|
Annual Officer’s Certificate as to
Compliance
|
90
|
|
Section 4.17.
|
Annual Independent Accountant’s Servicing
Report
|
91
|
|
Section 4.18.
|
Reports Filed with Securities and Exchange
Commission
|
91
|
|
Section 4.19.
|
UCC
|
92
|
ARTICLE V
ACCOUNTS
|
Section 5.01.
|
Collection of Mortgage Loan Payments; Protected
Account
|
92
|
|
Section 5.02.
|
Permitted Withdrawals From the Protected
Account
|
95
|
|
Section 5.03.
|
Collection of Taxes; Assessments and Similar
Items; Escrow Accounts
|
96
|
|
Section 5.04.
|
Reserved
|
97
|
|
Section 5.05.
|
Master Servicer Collection Account
|
97
|
|
Section 5.06.
|
Permitted Withdrawals and Transfers From the
Master Servicer Collection Account
|
98
|
|
Section 5.07.
|
Reports to the Master Servicer
|
99
|
|
Section 5.08.
|
Distribution Account
|
99
|
|
Section 5.09.
|
Permitted Withdrawals and Transfers from the
Distribution Account
|
100
|
|
Section 5.10.
|
Pre-Funding Accounts and Pre-Funding Reserve
Accounts.
|
102
|
|
Section 5.11.
|
Reserve Fund
|
104
|
|
Section 5.12.
|
Interest Coverage Account
|
105
|
ARTICLE VI
DISTRIBUTIONS AND
ADVANCES
TABLE OF CONTENTS
(continued)
Page
|
Section 6.01.
|
Advances
|
106
|
|
Section 6.02.
|
Compensating Interest Payments
|
108
|
|
Section 6.03.
|
REMIC Distributions
|
108
|
|
Section 6.04.
|
Distributions
|
108
|
|
Section 6.04A.
|
Allocation of Realized Losses
|
112
|
|
Section 6.05.
|
Monthly Statements to
Certificateholders
|
113
|
|
Section 6.06.
|
REMIC Designations and REMIC
Distributions
|
116
|
ARTICLE VII
THE CERTIFICATES
|
Section 7.01.
|
The Certificates
|
118
|
|
Section 7.02.
|
Certificate Register; Registration of Transfer
and Exchange of Certificates
|
119
|
|
Section 7.03.
|
Mutilated, Destroyed, Lost or Stolen
Certificates
|
125
|
|
Section 7.04.
|
Persons Deemed Owners
|
126
|
|
Section 7.05.
|
Access to List of Certificateholders’
Names and Addresses
|
126
|
|
Section 7.06.
|
Book-Entry Certificates
|
126
|
|
Section 7.07.
|
Notices to Depository
|
127
|
|
Section 7.08.
|
Definitive Certificates
|
128
|
|
Section 7.09.
|
Maintenance of Office or Agency
|
128
|
ARTICLE VIII
THE DEPOSITOR, THE SERVICER AND THE
MASTER SERVICER
|
Section 8.01.
|
Liabilities of the Depositor, the Servicer and
the Master Servicer
|
129
|
|
Section 8.02.
|
Merger or Consolidation of the Depositor, the
Servicer or the Master Servicer
|
129
|
|
Section 8.03.
|
Indemnification of the Trustee, the Securities
Administrator, the Servicer and the Master Servicer
|
129
|
|
Section 8.04.
|
Limitations on Liability of the Depositor, the
Servicer, the Master Servicer and Others
|
130
|
|
Section 8.05.
|
Master Servicer and Servicer Not to
Resign
|
131
|
|
Section 8.06.
|
Successor Master Servicer
|
132
|
|
Section 8.07.
|
Sale and Assignment of Master
Servicing
|
132
|
ARTICLE IX
DEFAULT; TERMINATION OF THE MASTER
SERVICER OR THE SERVICER
|
Section 9.01.
|
Master Servicer Events of Default
|
133
|
|
Section 9.02.
|
Trustee to Act; Appointment of
Successor
|
135
|
|
Section 9.03.
|
Notification to Certificateholders
|
136
|
|
Section 9.04.
|
Waiver of Master Servicer Defaults
|
137
|
|
Section 9.05.
|
Servicer Events of Default
|
137
|
|
Section 9.06.
|
Waiver of Servicer Defaults
|
139
|
ARTICLE X
CONCERNING THE TRUSTEE, THE
SECURITIES ADMINISTRATOR AND THE RISK MANAGER
TABLE OF CONTENTS
(continued)
Page
|
Section 10.01.
|
Duties of Trustee
|
139
|
|
Section 10.02.
|
Certain Matters Affecting the Trustee and the
Securities Administrator
|
141
|
|
Section 10.03.
|
Trustee and Securities Administrator Not Liable
for Certificates or Mortgage Loans
|
143
|
|
Section 10.04.
|
Trustee and Securities Administrator May Own
Certificates
|
144
|
|
Section 10.05.
|
Trustee’s and Securities Administrator's
Fees and Expenses
|
144
|
|
Section 10.06.
|
Eligibility Requirements for Trustee and the
Securities Administrator
|
144
|
|
Section 10.07.
|
Insurance
|
145
|
|
Section 10.08.
|
Resignation and Removal of Trustee and
Securities Administrator
|
145
|
|
Section 10.09.
|
Successor Trustee or Securities
Administrator
|
146
|
|
Section 10.10.
|
Merger or Consolidation of Trustee or the
Securities Administrator
|
147
|
|
Section 10.11.
|
Appointment of Co-Trustee or Separate
Trustee
|
147
|
|
Section 10.12.
|
Federal Information Returns and Reports to
Certificateholders; REMIC Administration
|
148
|
|
Section 10.13.
|
Duties of Risk Manager
|
151
|
|
Section 10.14.
|
Limitation Upon Liability of the Risk
Manager
|
153
|
|
Section 10.15.
|
Removal of the Risk Manager
|
153
|
|
Section 10.16.
|
REMIC-Related Covenants
|
154
|
ARTICLE XI
TERMINATION
|
Section 11.01.
|
Termination Upon Liquidation or Repurchase of
all Mortgage Loans
|
155
|
|
Section 11.02.
|
Final Distribution on the
Certificates
|
155
|
|
Section 11.03.
|
Additional Termination Requirements
|
157
|
ARTICLE XII
MISCELLANEOUS PROVISIONS
|
Section 12.01.
|
Amendment
|
159
|
|
Section 12.02.
|
Recordation of Agreement;
Counterparts
|
160
|
|
Section 12.03.
|
Governing Law
|
160
|
|
Section 12.04.
|
Intention of Parties
|
161
|
|
Section 12.05.
|
Notices
|
161
|
|
Section 12.06.
|
Severability of Provisions
|
162
|
|
Section 12.07.
|
Assignment
|
162
|
|
Section 12.08.
|
Limitation on Rights of
Certificateholders
|
163
|
|
Section 12.09.
|
Inspection and Audit Rights
|
163
|
|
Section 12.10.
|
Certificates Nonassessable and Fully
Paid
|
164
|
|
Section 12.11
|
Jurisdiction; Waiver of Jury
|
164
|
TABLE OF CONTENTS
(continued)
Page
Exhibits
|
Exhibit A-1
|
Form of Class A Certificates
|
|
Exhibit A-2
|
Form of Class M Certificates
|
|
Exhibit A-3
|
Form of Residual Certificates
|
|
Exhibit A-4
|
Form of Class B-IO Certificates
|
|
Exhibit B
|
Mortgage Loan Schedule
|
|
Exhibit C
|
Katrina Loan Schedule
|
|
Exhibit D
|
Form of Transfer Affidavit
|
|
Exhibit E
|
Form of Transferor Certificate
|
|
Exhibit F
|
Form of Investment Letter (Non-Rule
144A)
|
|
Exhibit G
|
Form of Rule 144A and Related Matters
Certificate
|
|
Exhibit H
|
Form of Request for Release
|
|
Exhibit I
|
DTC Letter of Representations
|
|
Exhibit J
|
Schedule of Mortgage Loans with Lost
Notes
|
|
Exhibit K
|
Form of Custodial Agreement
|
|
Exhibit L
|
Form of Back-Up Certification
|
|
Exhibit M-1
|
Form of Ellington 2005-1 Mortgage Loan Purchase
Agreement
|
|
Exhibit M-2
|
Form of Ellington 2005-2 Mortgage Loan Purchase
Agreement
|
|
Exhibit M-3
|
Form of Ocwen Mortgage Loan Purchase
Agreement
|
|
Exhibit N
|
List of Foreclosure Restricted Loans
|
|
Exhibit O
|
Risk Manager Certification
|
|
Exhibit P
|
Servicer Certificate
|
|
Exhibit Q
|
Subsequent Mortgage Loan Purchase
Agreement
|
|
Exhibit R
|
Subsequent Transfer Instrument
|
POOLING AND SERVICING AGREEMENT,
dated as of October 1, 2005, among BEAR STEARNS ASSET BACKED
SECURITIES I LLC, a Delaware limited liability company, as
depositor (the “Depositor”), OCWEN LOAN SERVICING, LLC,
a Delaware limited liability company, as Servicer (in such
capacity, the “Servicer”), OCWEN MORTGAGE ASSET TRUST
I, as a Seller (“Ocwen Trust”), ELLINGTON MORTGAGE
ACQUISITION TRUST 2005-1, as a Seller ("Ellington 2005-1"),
ELLINGTON ACQUISITION TRUST 2005-2, as a Seller ("Ellington 2005-2"
and, together with Ocwen Trust and Ellington 2005-1, the
"Sellers"), LASALLE BANK NATIONAL ASSOCIATION, a national banking
association, as Master Servicer (in such capacity, the
“Master Servicer”) and as Securities Administrator (in
such capacity, the "Securities Administrator"), WELLS FARGO BANK,
NATIONAL ASSOCIATION, a national banking association, as custodian
(the “Custodian”), Risk Management Group, LLC, a
limited liability company, as Risk Manager (the "Risk Manager), and
Citibank, N.A., a national banking association, not in its
individual capacity, but solely as trustee (the
“Trustee”).
PRELIMINARY STATEMENT
The Depositor is the owner of the
Trust Fund that is hereby conveyed to the Trustee in return for the
Certificates.
REMIC I
As provided herein, the Trustee will
elect to treat the segregated pool of assets consisting of the
Initial Mortgage Loans, any Subsequent Mortgage Loans, and certain
other related assets subject to this Agreement (other than the
Reserve Fund) as a REMIC for federal income tax purposes, and such
segregated pool of assets will be designated as “REMIC
I”. The Class R-1 Certificates will represent ownership of
the sole class of “residual interests” in REMIC I for
purposes of the REMIC Provisions (as defined herein). The following
table irrevocably sets forth the designation, the Uncertificated
REMIC I Pass-Through Rate, the initial Uncertificated Principal
Balance and, solely 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 will be
certificated.
|
|
Uncertificated
REMIC I
Pass-Through Rate
|
Initial Uncertificated Principal
Balance
|
Latest Possible Maturity Date
(1)
|
|
LT1
|
Variable (2)
|
$279,008,635.52
|
September 2034
|
|
LT2
|
Variable (2)
|
$11,431.10
|
September 2034
|
|
LT3
|
0.00%
|
$16,474.20
|
September 2034
|
|
LT4
|
Variable (2)
|
$16,474.10
|
September 2034
|
___________________
|
(1)
|
Solely for purposes of Section
1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution
Date in the month following the maturity date for the Mortgage Loan
with the latest maturity date has been designated as the
“latest possible maturity date” for each REMIC I
Regular Interest.
|
|
(2)
|
Calculated in accordance with the definition of
“Uncertificated REMIC I Pass-Through Rate”
herein.
|
REMIC II
As provided herein, the Trustee will
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 will be designated as
“REMIC II”. The Class R-2 Certificates will represent
ownership of the sole class of “residual interests” in
REMIC II for purposes of the REMIC Provisions (as defined herein).
The following table irrevocably sets forth the designation, the
Uncertificated REMIC II Pass-Through Rate, the initial
Uncertificated Principal Balance and, solely for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the
“latest possible maturity date” for each of the REMIC
II Regular Interests (as defined herein). None of the REMIC II
Regular Interests will be certificated.
|
|
Uncertificated
REMIC II
Pass-Through Rate
|
Initial Uncertificated Principal
Balance
|
Latest Possible Maturity Date
(1)
|
|
MT1
|
Variable (2)
|
$246,082,745.34
|
September 2034
|
|
MT2
|
Variable (2)
|
$6,970.34
|
September 2034
|
|
MT3
|
Variable (2)
|
$17,642.16
|
September 2034
|
|
MT4
|
Variable (2)
|
$17,642.16
|
September 2034
|
|
M-1-M
|
Variable (2)
|
$9,348,000.00
|
September 2034
|
|
M-2-M
|
Variable (2)
|
$4,883,000.00
|
September 2034
|
|
M-3-M
|
Variable (2)
|
$3,209,000.00
|
September 2034
|
|
M-4-M
|
Variable (2)
|
$3,349,000.00
|
September 2034
|
|
M-5-M
|
Variable (2)
|
$1,675,000.00
|
September 2034
|
|
M-6-M
|
Variable (2)
|
$1,395,000.00
|
September 2034
|
|
M-7-M
|
Variable (2)
|
$1,395,000.00
|
September 2034
|
|
M-8-M
|
Variable (2)
|
$1,395,000.00
|
September 2034
|
|
M-9-M
|
Variable (2)
|
$1,395,000.00
|
September 2034
|
|
M-10-M
|
Variable (2)
|
$2,791,000.00
|
September 2034
|
|
B-IO-I-M
|
Variable (2)
|
N/A
|
September 2034
|
|
B-IO-P-M
|
Variable (2)
|
$2,093,015.02
|
September 2034
|
|
R-M
|
N/A
|
N/A
|
September 2034
|
___________________
|
(1)
|
Solely for purposes of Section
1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution
Date in the month following the maturity date for the Mortgage Loan
with the latest maturity date has been designated as the
“latest possible maturity date” for each REMIC II
Regular Interest.
|
|
(2)
|
Calculated in accordance with the definition of
“Uncertificated REMIC II Pass-Through Rate”
herein.
|
REMIC III
As provided herein, the Trustee
shall make an election to treat the segregated pool of assets
consisting of the REMIC II Regular Interests as a REMIC for federal
income tax purposes, and such segregated pool of assets will be
designated as “REMIC III.” The Class R-3
2
Certificates will represent
ownership of the sole class of “residual interests” in
REMIC III for purposes of the REMIC Provisions.
The following table sets forth (or
describes) the Class designation, Pass-Through Rate and aggregate
Initial Certificate Principal Balance or Initial Certificate
Notional Balance for each indicated Class of Certificates that
represents ownership of a “regular interest” in REMIC
III created hereunder (each a “REMIC III Regular
Interest”), and, solely for purposes of satisfying Treasury
regulation Section 1.860G-1(a)(4)(iii), the “latest possible
maturity date” for each of the REMIC III Regular Interests
and the Certificates:
|
|
|
Aggregate Initial Certificate
Principal Balance
|
Latest Possible
Maturity Date
(*)
|
|
|
|
|
|
|
A-1
|
(1)
|
$221,512,000.00
|
September 2034
|
|
A-2
|
(2)
|
$24,613,000.00
|
September 2034
|
|
A-3
|
(3)
|
$246,125,000.00
(4)
|
September 2034
|
|
M-1
|
(5)
|
$9,348,000.00
|
September 2034
|
|
M-2
|
(6)
|
$4,883,000.00
|
September 2034
|
|
M-3
|
(7)
|
$3,209,000.00
|
September 2034
|
|
M-4
|
(8)
|
$3,349,000.00
|
September 2034
|
|
M-5
|
(9)
|
$1,675,000.00
|
September 2034
|
|
M-6
|
(10)
|
$1,395,000.00
|
September 2034
|
|
M-7
|
(11)
|
$1,395,000.00
|
September 2034
|
|
M-8
|
(12)
|
$1,395,000.00
|
September 2034
|
|
M-9
|
(13)
|
$1,395,000.00
|
September 2034
|
|
M-10
|
(14)
|
$2,791,000.00
|
September 2034
|
|
B-IO
|
Variable (15)
|
$2,093,015.02
(16)
|
September 2034
|
_______________
|
*
|
Solely 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 the REMIC III
Regular Interests and the Certificates.
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(1)
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The Pass-Through Rate per annum for the Class
A-1 Certificates will be equal to the lesser of (i) One-Month LIBOR
plus 0.500% per annum, (ii) 8.00% per annum and (iii) the Net Rate
Cap. The Class A-1 Certificates will have a minimum rate of 0.50%
per annum. The REMIC III Regular Interest, the ownership of which
is represented by this Certificate, is entitled to interest at the
foregoing rate but is not entitled to any payments of Basis Risk
Shortfall Carryforward Amounts to which this Certificate may be
entitled. For federal income tax purposes the Pass-Through Rate for
such REMIC III Regular Interest will be the related Marker
Rate.
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(2)
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The Pass-Through Rate per annum for the Class
A-2 Certificates will be equal to the lesser of (i) One-Month LIBOR
plus 0.500% per annum, (ii) 8.00% per annum and (iii) the Net Rate
Cap. The Class A-2 Certificates will have a minimum rate of 0.50%
per annum.. The REMIC III Regular Interest, the ownership of which
is represented by this Certificate, is entitled to interest at the
foregoing rate but is not entitled to any payments of Basis Risk
Shortfall Carryforward Amounts to which this Certificate may be
entitled. For federal income tax purposes the Pass-Through Rate for
such REMIC III Regular Interest will be the related Marker
Rate.
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(3)
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The Pass-Through Rate per annum for the Class
A-3 Certificates will be equal to the lesser of (i) 7.500% per
annum minus One-Month LIBOR, (ii) 7.500% per annum and (iii) the
Net Rate Cap. The Class A-3 Certificates will have a minimum rate
of 0.000% per annum. The REMIC III Regular Interest, the ownership
of which is represented by this Certificate, is entitled to
interest at the foregoing rate but is not entitled to any payments
of Basis Risk Shortfall Carryforward Amounts to which this
Certificate may be entitled.
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(4)
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The Class A-3 Certificates do not have an
initial Certificate Principal Balance. The Class A-3 Certificates
have an Initial Certificate Notional Balance of $246,125,000.00 and
for any subsequent Distribution Date, the Class A-3 Certificates
will have a Certificate Notional Balance equal to the aggregate
Certificate Principal Balance of the Class A-1 Certificates and
Class A-2 Certificates as of such Distribution Date. For federal
income tax purposes, the Class A-3 Certificates will have a
Certificate Notional Balance equal to the aggregate Uncertificated
Principal Balance of REMIC II Regular Interests MT1, MT2, MT3 and
MT4..
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(5)
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The Pass-Through Rate per annum for the Class
M-1 Certificates will be equal to the lesser of (i) the related
One-Month LIBOR Pass-Through Rate and (ii) the Net Rate Cap. The
REMIC III Regular Interest, the ownership of which is represented
by this Certificate, is entitled to interest at the foregoing rate
but is not entitled to any payments of Basis Risk Shortfall
Carryforward Amounts to which this Certificate may be
entitled.
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(6)
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The Pass-Through Rate per annum for the Class
M-2 Certificates will be equal to the lesser of (i) the related
One-Month LIBOR Pass-Through Rate and (ii) the Net Rate Cap. The
REMIC III Regular Interest, the ownership of which is represented
by this Certificate, is entitled to interest at the foregoing rate
but is not entitled to any payments of Basis Risk Shortfall
Carryforward Amounts to which this Certificate may be
entitled.
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(7)
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The Pass-Through Rate per annum for the Class
M-3 Certificates will be equal to the lesser of (i) the related
One-Month LIBOR Pass-Through Rate and (ii) the Net Rate Cap. The
REMIC III Regular Interest, the ownership of which is represented
by this Certificate, is entitled to interest at the foregoing rate
but is not entitled to any payments of Basis Risk Shortfall
Carryforward Amounts to which this Certificate may be
entitled.
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(8)
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The Pass-Through Rate per annum for the Class
M-4 Certificates will be equal to the lesser of (i) the related
One-Month LIBOR Pass-Through Rate and (ii) the Net Rate Cap. The
REMIC III Regular Interest, the ownership of which is represented
by this Certificate, is entitled to interest at the foregoing rate
but is not entitled to any payments of Basis Risk Shortfall
Carryforward Amounts to which this Certificate may be
entitled.
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(9)
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The Pass-Through Rate per annum for the Class
M-5 Certificates will be equal to the lesser of (i) the related
One-Month LIBOR Pass-Through Rate and (ii) the Net Rate Cap. The
REMIC III Regular Interest, the ownership of which is represented
by this Certificate, is entitled to interest at the foregoing rate
but is not entitled to any payments of Basis Risk Shortfall
Carryforward Amounts to which this Certificate may be
entitled.
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(10)
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The Pass-Through Rate per annum for the Class
M-6 Certificates will be equal to the lesser of (i) the related
One-Month LIBOR Pass-Through Rate and (ii) the Net Rate Cap. The
REMIC III Regular Interest, the ownership of which is represented
by this Certificate, is entitled to interest at the foregoing rate
but is not entitled to any payments of Basis Risk Shortfall
Carryforward Amounts to which this Certificate may be
entitled.
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(11)
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The Pass-Through Rate per annum for the Class
M-7 Certificates will be equal to the lesser of (i) the related
One-Month LIBOR Pass-Through Rate and (ii) the Net Rate Cap. The
REMIC III Regular Interest, the ownership of which is represented
by this Certificate, is entitled to interest at the foregoing rate
but is not entitled to any payments of Basis Risk Shortfall
Carryforward Amounts to which this Certificate may be
entitled.
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(12)
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The Pass-Through Rate per annum for the Class
M-8 Certificates will be equal to the lesser of (i) the related
One-Month LIBOR Pass-Through Rate and (ii) the Net Rate Cap. The
REMIC III Regular Interest, the ownership of which is represented
by this Certificate, is entitled to interest at the foregoing rate
but is not entitled to any payments of Basis Risk Shortfall
Carryforward Amounts to which this Certificate may be
entitled.
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(13)
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The Pass-Through Rate per annum for the Class
M-9 Certificates will be equal to the lesser of (i) the related
One-Month LIBOR Pass-Through Rate and (ii) the Net Rate Cap. The
REMIC III Regular Interest, the ownership of which is represented
by this Certificate, is entitled to interest at the foregoing rate
but is not entitled to any payments of Basis Risk Shortfall
Carryforward Amounts to which this Certificate may be
entitled.
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(14)
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The Pass-Through Rate per annum for the Class
M-10 Certificates will be equal to the lesser of (i) the related
One-Month LIBOR Pass-Through Rate and (ii) the Net Rate Cap. The
REMIC III Regular Interest, the ownership of which
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4
is represented by this Certificate,
is entitled to interest at the foregoing rate but is not entitled
to any payments of Basis Risk Shortfall Carryforward Amounts to
which this Certificate may be entitled.
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(15)
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The Class B-IO Certificates will bear interest
at a per annum rate equal to its Pass-Through Rate on its
Certificate Notional Balance. The Class B-IO Certificates will be
comprised of two REMIC III Regular Interests, a principal only
regular interest designated B-IO-P, which has a principal balance
equal to the Uncertificated Principal Balance of REMIC II Regular
Interest B-IO-P-M, and an interest only regular interest designated
B-IO-I, which will be entitled to distributions as set forth
herein.
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(16)
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The Class B-IO Certificates have a Certificate
Principal Balance equal to the principal balance of REMIC III
Regular Interest B-IO-P. The Class B-IO Certificates have a
Certificate Notional Balance equal to the aggregate Uncertificated
Principal Balance of the REMIC I Regular Interests.
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The Trust Fund shall be named, and
may be referred to as, the “Bear Stearns Asset Backed
Securities I LLC, Asset-Backed Certificates, Bear Stearns Asset
Backed Securities Trust 2005-CL1.” The Certificates issued
hereunder may be referred to as “Asset-Backed Certificates,
Series 2005-CL1” (including for purposes of any endorsement
or assignment of a Mortgage Note or Mortgage).
In consideration of the mutual
agreements herein contained, the Depositor, the Sellers, the
Securities Administrator, the Servicer, the Master Servicer, the
Custodian, the Risk Manager and the Trustee agree as
follows:
5
ARTICLE I
DEFINITIONS
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Section 1.01.
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Defined Terms
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In addition to those terms defined
in Section 1.02, whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, shall
have the following meanings:
Accepted Master Servicing
Practices : With respect
to each Mortgage Loan, those customary mortgage master servicing
practices of prudent mortgage master servicing institutions that
master service loans to the extent applicable to the Master
Servicer (except in its capacity as successor to the
Servicer).
Accepted Servicing
Practices : With respect
to each Mortgage Loan, those mortgage servicing practices
(including collection procedures) that are in accordance with all
applicable statutes, regulations and prudent mortgage banking
practices for similar mortgage loans of the same type and quality
as such Mortgage Loan in the jurisdiction where the related
Mortgaged Property is located.
Account : The Distribution Account, the Pre-Funding
Account, the Pre-Funding Reserve Account, the Interest Coverage
Account, the Master Servicing Collection Account and the Protected
Account.
Accrual Period
: With respect to the Certificates
(other than the Class B-IO Certificates and the Residual
Certificates) and any Distribution Date, the period from and
including the immediately preceding Distribution Date (or with
respect to the first Accrual Period, the Closing Date) to and
including the day prior to such Distribution Date. With respect to
the Class B-IO Certificates and the Residual Certificates and any
Distribution Date, the calendar month immediately preceding such
Distribution Date. All calculations of interest on the Class A
Certificates and the Class B-IO Certificates will be made on the
basis of a 360-day year consisting of twelve 30-day months and
calculations of interest on all other Certificates will be made on
the basis of the actual number of days elapsed in the related
Accrual Period.
Actuarial Loans
: The Mortgage Loans which provide
for allocation of principal and interest according to the customary
method, on which 30 days of interest is owed each month
irrespective of the day on which the payment was
received.
Advance : An advance of delinquent payments of interest
in respect of a Mortgage Loan required to be made by the Servicer
or the Master Servicer as provided in Section 6.01 and Section 6.02
hereof.
Agreement : This Pooling and Servicing Agreement and any
and all amendments or supplements hereto made in accordance with
the terms herein.
6
Adjustable Rate Mortgage
Loan : Each of the
Mortgage Loans identified in 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 an Adjustable Rate Mortgage Loan changes pursuant
to the related Mortgage Note. The first Adjustment Date following
the applicable Cut-off Date as to each Adjustable Rate Mortgage
Loan is set forth in the Mortgage Loan Schedule.
Amount Held for Future
Distribution : As to any
Distribution Date, the aggregate amount held in the Protected
Account at the close of business on the immediately preceding
Determination Date on account of (i) all Scheduled Payments or
portions thereof received in respect of the Mortgage Loans due
after the related Due Period, (ii) Principal Prepayments, received
in respect of such Mortgage Loans after the last day of the related
Prepayment Period, subject to Section 5.02 and (iii) Liquidation
Proceeds, Subsequent Recoveries and Insurance Proceeds received in
respect of such Mortgage Loans after the last day of the prior
calendar month, subject to Section 5.02.
Applicable State Law
: For purposes of Section 10.12(d),
the Applicable State Law shall be (a) the law of the State of
New York and (b) such other state law whose applicability shall
have been brought to the attention of the Securities Administrator
and the Trustee by either (i) an Opinion of Counsel reasonably
acceptable to the Securities Administrator and the Trustee
delivered to it by the Master Servicer or the Depositor, or (ii)
written notice from the appropriate taxing authority as to the
applicability of such state law.
Applied Realized Loss
Amount : With respect to
any Distribution Date and a Class of Class A-1 Certificates, Class
A-2 Certificates and Class M Certificates, the sum of the Realized
Losses with respect to the Mortgage Loans which have been applied
in reduction of the Certificate Principal Balance of that Class of
Certificates pursuant to Section 6.04A of this Agreement reduced by
any Subsequent Recoveries applied to such Applied Realized Loss
Amount.
Appraised Value
: With respect to any Mortgage Loan
originated in connection with a refinancing, the appraised value of
the Mortgaged Property based upon the appraisal made or considered
in the underwriting decision at the time of such refinancing or,
with respect to any other Mortgage Loan, the lesser of (x) the
appraised value of the Mortgaged Property based upon the appraisal
made by a fee appraiser at the time of the origination of the
related Mortgage Loan, and (y) the sales price of the Mortgaged
Property at the time of such origination.
Basis Risk Shortfall Carry
Forward Amount : With
respect to any Distribution Date and any Class of Class A
Certificates and Class M Certificates and any Distribution Date for
which the Pass-Through Rate for such Certificates is equal to the
Net Rate Cap, the sum of (A) the excess, if any, of (a) the amount
of Current Interest that such Class would have been entitled to
receive on such Distribution Date had the Pass-Though Rate
applicable to such Class not have been reduced by the related Net
Rate Cap, over (b) the amount of Current Interest that such Class
was entitled to receive on such Distribution Date at a per annum
rate equal to the Net Rate Cap and (B) the amount in clause (A) for
all previous Distribution Dates not previously paid, together with
interest thereon at a rate equal to the related Pass-Through Rate
for such Distribution Date.
7
Bankruptcy Code
: Title 11 of the United States
Code.
Book-Entry
Certificates : Any of the
Certificates that shall be registered in the name of the Depository
or its nominee, the ownership of which is reflected on the books of
the Depository or on the books of a person maintaining an account
with the Depository (directly, as a “Depository
Participant”, or indirectly, as an indirect participant in
accordance with the rules of the Depository and as described in
Section 7.06). As of the Closing Date, each Class of Regular
Certificates (other than the Class B-IO Certificates) constitutes a
Class of Book-Entry Certificates.
BPO : A broker purchase opinion of value obtained
pursuant to Section 2.07.
Business Day
: Any day other than (i) a Saturday
or a Sunday, or (ii) a day on which banking institutions in The
City of New York, New York, Chicago, Illinois, the State of Florida
or any city in which the Corporate Trust Office of the Trustee or
Securities Administrator is located are authorized or obligated by
law or executive order to be closed.
Calendar Quarter
: January 1 to March 31, April 1 to
June 30, July 1 to September 30, or October 1 to December 31, as
applicable.
Certificate
: Any one of the certificates of any
Class executed and authenticated by the Securities Administrator in
substantially the forms attached hereto as Exhibits A-1 through
A-4.
Certificate Margin
: With respect to the Class A-1
Certificates and any Distribution Date, 0.500%.
With respect to the Class A-2
Certificates and any Distribution Date, 0.500%.
With respect to the Class A-3
Certificates and any Distribution Date, 7.50%.
With respect to the Class M-1
Certificates, 0.630% in the case of each Distribution Date through
and including the first possible Optional Termination Date and
0.945% in the case of each Distribution Date thereafter.
With respect to the Class M-2
Certificates, 0.650% in the case of each Distribution Date through
and including the first possible Optional Termination Date and
0.975% in the case of each Distribution Date thereafter.
With respect to the Class M-3
Certificates, 0.750% in the case of each Distribution Date through
and including the first possible Optional Termination Date and
1.125% in the case of each Distribution Date thereafter.
With respect to the Class M-4
Certificates, 1.350% in the case of each Distribution Date through
and including the first possible Optional Termination Date and
20.25% in the case of each Distribution Date thereafter.
8
With respect to the Class M-5
Certificates, 1.750% in the case of each Distribution Date through
and including the first possible Optional Termination Date and
2.625% in the case of each Distribution Date thereafter.
With respect to the Class M-6
Certificates, 2.500% in the case of each Distribution Date through
and including the first possible Optional Termination Date and
3.750% in the case of each Distribution Date thereafter.
With respect to the Class M-7
Certificates, 3.500% in the case of each Distribution Date through
and including the first possible Optional Termination Date and
5.250% in the case of each Distribution Date thereafter.
With respect to the Class M-8
Certificates, 3.500% in the case of each Distribution Date through
and including the first possible Optional Termination Date and
5.250% in the case of each Distribution Date thereafter.
With respect to the Class M-9
Certificates, 3.500% in the case of each Distribution Date through
and including the first possible Optional Termination Date and
5.250% in the case of each Distribution Date thereafter.
With respect to the Class M-10
Certificates, 3.500% in the case of each Distribution Date through
and including the first possible Optional Termination Date and
5.250% in the case of each Distribution Date thereafter.
Certificate Notional
Balance : With respect to
the Class A-3 Certificates and any Distribution Date, the aggregate
Certificate Principal Balance of the Class A-1 Certificates and the
Class A-2 Certificates. For federal income tax purposes, the Class
A-3 Certificates will have a Certificate Notional Balance equal to
the aggregate Uncertificated Principal Balance of REMIC II Regular
Interests MT1, MT2, MT3 AND MT4. With respect to the Class B-IO
Certificates and any Distribution Date, the aggregate
Uncertificated Principal Balance of the REMIC I Regular Interests
for such Distribution Date.
Certificate Owner
: With respect to a Book-Entry
Certificate, the Person that is the beneficial owner of such
Book-Entry Certificate.
Certificate Principal
Balance : As to any
Certificate (other than any Class A-3 Certificate or Residual
Certificate) and as of any Distribution Date, the Initial
Certificate Principal Balance of such Certificate plus, in the case
of a Class A-1 Certificate, Class A-2 Certificate and Class M
Certificate, any Subsequent Recoveries added to the Certificate
Principal Balance of such Certificate pursuant to Section 6.04(b),
less the sum of (i) all amounts distributed with respect to such
Certificate in reduction of the Certificate Principal Balance
thereof on previous Distribution Dates pursuant to Section 6.04,
and (ii) any Applied Realized Loss Amounts allocated to such
Certificate on previous Distribution Dates.
Certificate Register
: The register maintained pursuant
to Section 7.02 hereof.
9
Certificateholder or
Holder : The person in
whose name a Certificate is registered in the Certificate Register
(initially, Cede & Co., as nominee for the Depository, in the
case of any Book-Entry Certificates).
Class : All Certificates bearing the same Class
designation as set forth in Section 7.01 hereof.
Class A Certificates
: The Class A-1, Class A-2 and Class
A-3 Certificates.
Class A Maximum Rate
: With respect to any Distribution
Date, 8.00% per annum.
Class A Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (x) the
Principal Distribution Amount for such Distribution Date and (y)
the excess, if any, of (i) the aggregate Certificate Principal
Balance of the Class A-1 Certificates and Class A-2 Certificates
immediately prior to such Distribution Date, over (ii) the lesser
of (a) the product of (1) 76.40% and (2) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date,
and (b) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date minus $1,395,265.
Class A-1 Certificate
: Any Certificate designated as a
“Class A-1 Certificate” on the face thereof, in the
form of Exhibit A-1 hereto, representing the right to the
Percentage Interest of distributions provided for the Class A-1
Certificates as set forth herein and evidencing ownership of a
Regular Interest in REMIC III.
Class A-2 Certificate
: Any Certificate designated as a
“Class A-2 Certificate” on the face thereof, in the
form of Exhibit A-1 hereto, representing the right to the
Percentage Interest of distributions provided for the Class A-2
Certificates as set forth herein and evidencing ownership of a
Regular Interest in REMIC III.
Class A-3 Certificate
: Any Certificate designated as a
“Class A-3 Certificate” on the face thereof, in the
form of Exhibit A-1 hereto, representing the right to the
Percentage Interest of distributions provided for the Class A-3
Certificates as set forth herein and evidencing ownership of a
Regular Interest in REMIC III.
Class B-IO Certificate
: Any Certificate designated as a
“Class B-IO Certificate” on the face thereof, in the
form of Exhibit A-4 hereto, representing the right to its
Percentage Interest of distributions provided for the Class B-IO
Certificates herein and evidencing ownership of REMIC III Regular
Interests B-IO-I and B-IO-P.
Class B-IO Distribution
Amount : With respect to
any Distribution Date, the sum of (i) the Current Interest for the
Class B-IO Certificates for such Distribution Date (which shall be
deemed distributable to the REMIC III Regular Interest B-IO-I) and
(ii) any Overcollateralization Release Amount for such Distribution
Date (which shall be deemed distributable to the REMIC III Regular
Interest B-IO-I); provided, however that on any Distribution Date
after the Distribution Date on which the Certificate Principal
Balances of the Class A-1 Certificates, Class A-2 Certificates and
Class M Certificates have been reduced to zero, the Class B-IO
Distribution Amount shall include the Overcollateralization Amount
(which shall be deemed distributable, first, to the REMIC III
Regular Interest B-IO-I in respect of
10
accrued and unpaid interest thereon
until such accrued and unpaid interest shall have been reduced to
zero and, thereafter, to the REMIC III Regular Interest B-IO-P in
respect of the principal balance thereof).
Class M Certificates
: The Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class
M-9 and Class M-10 Certificates.
Class M-1 Certificate
: Any Certificate designated as a
“Class M-1 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its
Percentage Interest of distributions provided for the Class M-1
Certificates as set forth herein and evidencing ownership of a
Regular Interest in REMIC III.
Class M-1 Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (x) the
remaining Principal Distribution Amount for such Distribution Date
after distribution of the Class A Principal Distribution Amount and
(y) the excess, if any, of (a) the sum of (1) the Certificate
Principal Balance of the Class A-1 Certificates and Class A-2
Certificates (after taking into account the distribution of the
Class A Principal Distribution Amount on such Distribution Date and
(2) the Certificate Principal Balance of the Class M-1 Certificates
immediately prior to such Distribution Date, over (b) the lesser of
(1) the product of (x) 83.10% and (y) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date,
and (2) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date minus $1,395,265.
Class M-2 Certificate
: Any Certificate designated as a
“Class M-2 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its
Percentage Interest of distributions provided for the Class M-2
Certificates as set forth herein and evidencing ownership of a
Regular Interest in REMIC III.
Class M-2 Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (x) the
remaining Principal Distribution Amount for such Distribution Date
after distribution of the Class A Principal Distribution Amount and
the Class M-1 Principal Distribution Amount and (y) the excess, if
any, of (a) the sum of (1) the Certificate Principal Balance of the
Class A-1 Certificates and Class A-2 Certificates (after taking
into account the distribution of the Class A Principal Distribution
Amount on such Distribution Date), (2) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account
the distribution of the Class M-1 Principal Distribution Amount on
such Distribution Date) and (3) the Certificate Principal Balance
of the Class M-2 Certificates immediately prior to such
Distribution Date, over (b) the lesser of (1) the product of (x)
86.60% and (y) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date, and (2) the aggregate
Stated Principal Balance of the Mortgage Loans for such
Distribution Date minus $1,395,265.
Class M-3 Certificate
: Any Certificate designated as a
“Class M-3 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its
Percentage Interest of distributions provided for the Class M-3
Certificates as set forth herein and evidencing ownership of a
Regular Interest in REMIC III.
11
Class M-3 Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (x) the
remaining Principal Distribution Amount for such Distribution Date
after distribution of the Class A Principal Distribution Amount,
the Class M-1 Principal Distribution Amount and the Class M-2
Principal Distribution Amount and (y) the excess, if any, of (a)
the sum of (1) the Certificate Principal Balance of the Class A-1
Certificates and Class A-2 Certificates (after taking into account
the distribution of the Class A Principal Distribution Amount on
such Distribution Date), (2) the Certificate Principal Balance of
the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such
Distribution Date), (3) the Certificate Principal Balance of the
Class M-2 Certificates (after taking into account the distribution
of the Class M-2 Principal Distribution Amount on such Distribution
Date) and (4) the Certificate Principal Balance of the Class M-3
Certificates immediately prior to such Distribution Date, over (b)
the lesser of (1) the product of (x) 88.90% and (y) the aggregate
Stated Principal Balance of the Mortgage Loans for such
Distribution Date, and (2) the aggregate Stated Principal Balance
of the Mortgage Loans for such Distribution Date minus
$1,395,265.
Class M-4 Certificate
: Any Certificate designated as a
“Class M-4 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its
Percentage Interest of distributions provided for the Class M-4
Certificates as set forth herein and evidencing ownership of a
Regular Interest in REMIC III.
Class M-4 Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (x) the
remaining Principal Distribution Amount for such Distribution Date
after distribution of the Class A Principal Distribution Amount,
the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount and the Class M-3 Principal
Distribution Amount and (y) the excess, if any, of (a) the sum of
(1) the Certificate Principal Balance of the Class A-1 Certificates
and Class A-2 Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such
Distribution Date), (2) the Certificate Principal Balance of the
Class M-1 Certificates (after taking into account the distribution
of the Class M-1 Principal Distribution Amount on such Distribution
Date), (3) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the distribution of the
Class M-2 Principal Distribution Amount on such Distribution Date),
(4) the Certificate Principal Balance of the Class M-3 Certificates
(after taking into account the distribution of the Class M-3
Principal Distribution Amount on such Distribution Date) and (5)
the Certificate Principal Balance of the Class M-4 Certificates
immediately prior to such Distribution Date, over (b) the lesser of
(1) the product of (x) 91.30% and (y) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date,
and (2) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date minus $1,395,265.
Class M-5 Certificate
: Any Certificate designated as a
“Class M-5 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its
Percentage Interest of distributions provided for the Class M-5
Certificates as set forth herein and evidencing ownership of a
Regular Interest in REMIC III.
Class M-5 Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (x) the
remaining Principal Distribution Amount for such Distribution Date
after distribution of the Class A Principal Distribution Amount,
the Class M-1 Principal Distribution
12
Amount, the Class M-2 Principal
Distribution Amount, the Class M-3 Principal Distribution Amount
and the Class M-4 Principal Distribution Amount and (y) the excess,
if any, of (a) the sum of (1) the Certificate Principal Balance of
the Class A-1 Certificates and Class A-2 Certificates (after taking
into account the distribution of the Class A Principal Distribution
Amount on such Distribution Date), (2) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account
the distribution of the Class M-1 Principal Distribution Amount on
such Distribution Date), (3) the Certificate Principal Balance of
the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date), (4) the Certificate Principal Balance of the
Class M-3 Certificates (after taking into account the distribution
of the Class M-3 Principal Distribution Amount on such Distribution
Date), (5) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account the distribution of the
Class M-4 Principal Distribution Amount on such Distribution Date)
and (6) the Certificate Principal Balance of the Class M-5
Certificates immediately prior to such Distribution Date, over (b)
the lesser of (1) the product of (x) 92.50% and (y) the aggregate
Stated Principal Balance of the Mortgage Loans for such
Distribution Date, and (2) the aggregate Stated Principal Balance
of the Mortgage Loans for such Distribution Date minus
$1,395,265.
Class M-6 Certificate
: Any Certificate designated as a
“Class M-6 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its
Percentage Interest of distributions provided for the Class M-6
Certificates as set forth herein and evidencing ownership of a
Regular Interest in REMIC III.
Class M-6 Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (x) the
remaining Principal Distribution Amount for such Distribution Date
after distribution of the Class A Principal Distribution Amount,
the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution
Amount, the Class M-4 Principal Distribution Amount and the Class
M-5 Principal Distribution Amount and (y) the excess, if any, of
(a) the sum of (1) the Certificate Principal Balance of the Class
A-1 Certificates and Class A-2 Certificates (after taking into
account the distribution of the Class A Principal Distribution
Amount on such Distribution Date), (2) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account
the distribution of the Class M-1 Principal Distribution Amount on
such Distribution Date), (3) the Certificate Principal Balance of
the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date), (4) the Certificate Principal Balance of the
Class M-3 Certificates (after taking into account the distribution
of the Class M-3 Principal Distribution Amount on such Distribution
Date), (5) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account the distribution of the
Class M-4 Principal Distribution Amount on such Distribution Date),
(6) the Certificate Principal Balance of the Class M-5 Certificates
(after taking into account the distribution of the Class M-5
Principal Distribution Amount on such Distribution Date) and (7)
the Certificate Principal Balance of the Class M-6 Certificates
immediately prior to such Distribution Date, over (b) the lesser of
(1) the product of (x) 93.50% and (y) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date,
and (2) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date minus $1,395,265.
13
Class M-7 Certificate
: Any Certificate designated as a
“Class M-7 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its
Percentage Interest of distributions provided for the Class M-7
Certificates as set forth herein and evidencing ownership of a
Regular Interest in REMIC III.
Class M-7 Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (x) the
remaining Principal Distribution Amount for such Distribution Date
after distribution of the Class A Principal Distribution Amount,
the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution
Amount, the Class M-4 Principal Distribution Amount, the Class M-5
Principal Distribution Amount and the Class M-6 Principal
Distribution Amount and (y) the excess, if any, of (a) the sum of
(1) the Certificate Principal Balance of the Class A-1 Certificates
and Class A-2 Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such
Distribution Date), (2) the Certificate Principal Balance of the
Class M-1 Certificates (after taking into account the distribution
of the Class M-1 Principal Distribution Amount on such Distribution
Date), (3) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the distribution of the
Class M-2 Principal Distribution Amount on such Distribution Date),
(4) the Certificate Principal Balance of the Class M-3 Certificates
(after taking into account the distribution of the Class M-3
Principal Distribution Amount on such Distribution Date), (5) the
Certificate Principal Balance of the Class M-4 Certificates (after
taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date), (6) the Certificate
Principal Balance of the Class M-5 Certificates (after taking into
account the distribution of the Class M-5 Principal Distribution
Amount on such Distribution Date), (7) the Certificate Principal
Balance of the Class M-6 Certificates (after taking into account
the distribution of the Class M-6 Principal Distribution Amount on
such Distribution Date) and (8) the Certificate Principal Balance
of the Class M-7 Certificates immediately prior to such
Distribution Date, over (b) the lesser of (1) the product of (x)
94.50% and (y) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date, and (2) the aggregate
Stated Principal Balance of the Mortgage Loans for such
Distribution Date minus $1,395,265.
Class M-8 Certificate
: Any Certificate designated as a
“Class M-8 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its
Percentage Interest of distributions provided for the Class M-8
Certificates as set forth herein and evidencing ownership of a
Regular Interest in REMIC III.
Class M-8 Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (x) the
remaining Principal Distribution Amount for such Distribution Date
after distribution of the Class A Principal Distribution Amount,
the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution
Amount, the Class M-4 Principal Distribution Amount, the Class M-5
Principal Distribution Amount, the Class M-6 Principal Distribution
Amount and the Class M-7 Principal Distribution Amount and (y) the
excess, if any, of (a) the sum of (1) the Certificate Principal
Balance of the Class A-1 Certificates and Class A-2 Certificates
(after taking into account the distribution of the Class A
Principal Distribution Amount on such Distribution Date), (2) the
Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution Amount on such Distribution Date), (3) the Certificate
Principal Balance
14
of the Class M-2 Certificates (after
taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (4) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into
account the distribution of the Class M-3 Principal Distribution
Amount on such Distribution Date), (5) the Certificate Principal
Balance of the Class M-4 Certificates (after taking into account
the distribution of the Class M-4 Principal Distribution Amount on
such Distribution Date), (6) the Certificate Principal Balance of
the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such
Distribution Date), (7) the Certificate Principal Balance of the
Class M-6 Certificates (after taking into account the distribution
of the Class M-6 Principal Distribution Amount on such Distribution
Date), (8) the Certificate Principal Balance of the Class M-7
Certificates (after taking into account the distribution of the
Class M-7 Principal Distribution Amount on such Distribution Date)
and (9) the Certificate Principal Balance of the Class M-8
Certificates immediately prior to such Distribution Date, over (b)
the lesser of (1) the product of (x) 95.50% and (y) the aggregate
Stated Principal Balance of the Mortgage Loans for such
Distribution Date, and (2) the aggregate Stated Principal Balance
of the Mortgage Loans for such Distribution Date minus
$1,395,265.
Class M-9 Certificate
: Any Certificate designated as a
“Class M-9 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its
Percentage Interest of distributions provided for the Class M-9
Certificates as set forth herein and evidencing ownership of a
Regular Interest in REMIC III.
Class M-9 Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (x) the
remaining Principal Distribution Amount for such Distribution Date
after distribution of the Class A Principal Distribution Amount,
the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution
Amount, the Class M-4 Principal Distribution Amount, the Class M-5
Principal Distribution Amount, the Class M-6 Principal Distribution
Amount, the Class M-7 Principal Distribution Amount and the Class
M-8 Principal Distribution Amount and (y) the excess, if any, of
(a) the sum of (1) the Certificate Principal Balance of the Class
A-1 Certificates and Class A-2 Certificates (after taking into
account the distribution of the Class A Principal Distribution
Amount on such Distribution Date), (2) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account
the distribution of the Class M-1 Principal Distribution Amount on
such Distribution Date), (3) the Certificate Principal Balance of
the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date), (4) the Certificate Principal Balance of the
Class M-3 Certificates (after taking into account the distribution
of the Class M-3 Principal Distribution Amount on such Distribution
Date), (5) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account the distribution of the
Class M-4 Principal Distribution Amount on such Distribution Date),
(6) the Certificate Principal Balance of the Class M-5 Certificates
(after taking into account the distribution of the Class M-5
Principal Distribution Amount on such Distribution Date), (7) the
Certificate Principal Balance of the Class M-6 Certificates (after
taking into account the distribution of the Class M-6 Principal
Distribution Amount on such Distribution Date), (8) the Certificate
Principal Balance of the Class M-7 Certificates (after taking into
account the distribution of the Class M-7 Principal Distribution
Amount on such Distribution Date), (9) the Certificate Principal
Balance of the Class M-8 Certificates (after taking into account
the distribution of the Class M-8 Principal Distribution
15
Amount on such Distribution Date)
and (10) the Certificate Principal Balance of the Class M-9
Certificates immediately prior to such Distribution Date, over (b)
the lesser of (1) the product of (x) 96.50% and (y) the aggregate
Stated Principal Balance of the Mortgage Loans for such
Distribution Date, and (2) the aggregate Stated Principal Balance
of the Mortgage Loans for such Distribution Date minus
$1,395,265.
Class M-10 Certificate
: Any Certificate designated as a
“Class M-10 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its
Percentage Interest of distributions provided for the Class M-10
Certificates as set forth herein and evidencing ownership of a
Regular Interest in REMIC III.
Class M-10 Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (x) the
remaining Principal Distribution Amount for such Distribution Date
after distribution of the Class A Principal Distribution Amount,
the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution
Amount, the Class M-4 Principal Distribution Amount, the Class M-5
Principal Distribution Amount, the Class M-6 Principal Distribution
Amount, the Class M-7 Principal Distribution Amount, the Class M-8
Principal Distribution Amount and the Class M-9 Principal
Distribution Amount and (y) the excess, if any, of (a) the sum of
(1) the Certificate Principal Balance of the Class A-1 Certificates
and Class A-2 Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such
Distribution Date), (2) the Certificate Principal Balance of the
Class M-1 Certificates (after taking into account the distribution
of the Class M-1 Principal Distribution Amount on such Distribution
Date), (3) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the distribution of the
Class M-2 Principal Distribution Amount on such Distribution Date),
(4) the Certificate Principal Balance of the Class M-3 Certificates
(after taking into account the distribution of the Class M-3
Principal Distribution Amount on such Distribution Date), (5) the
Certificate Principal Balance of the Class M-4 Certificates (after
taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date), (6) the Certificate
Principal Balance of the Class M-5 Certificates (after taking into
account the distribution of the Class M-5 Principal Distribution
Amount on such Distribution Date), (7) the Certificate Principal
Balance of the Class M-6 Certificates (after taking into account
the distribution of the Class M-6 Principal Distribution Amount on
such Distribution Date), (8) the Certificate Principal Balance of
the Class M-7 Certificates (after taking into account the
distribution of the Class M-7 Principal Distribution Amount on such
Distribution Date), (9) the Certificate Principal Balance of the
Class M-8 Certificates (after taking into account the distribution
of the Class M-8 Principal Distribution Amount on such Distribution
Date), (10) the Certificate Principal Balance of the Class M-9
Certificates (after taking into account the distribution of the
Class M-9 Principal Distribution Amount on such Distribution Date)
and (11) the Certificate Principal Balance of the Class M-10
Certificates immediately prior to such Distribution Date, over (b)
the lesser of (1) the product of (x) 98.50% and (y) the aggregate
Stated Principal Balance of the Mortgage Loans for such
Distribution Date, and (2) the aggregate Stated Principal Balance
of the Mortgage Loans for such Distribution Date minus
$1,395,265.
Class R-1 Certificate
: Any Certificate designated a
“Class R-1 Certificate” on the face thereof, in
substantially the form set forth in Exhibit A-3 hereto, evidencing
the Residual Interest
16
in REMIC I and representing the
right to the Percentage Interest of distributions provided for the
Class R-1 Certificates as set forth herein.
Class R-2 Certificate
: Any Certificate designated a
“Class R-2 Certificate” on the face thereof, in
substantially the form set forth in Exhibit A-3 hereto, evidencing
the Residual Interest in REMIC II and representing the right to the
Percentage Interest of distributions provided for the Class R-2
Certificates as set forth herein.
Class R-3 Certificate
: Any Certificate designated a
“Class R-3 Certificate” on the face thereof, in
substantially the form set forth in Exhibit A-3 hereto, evidencing
the Residual Interest in REMIC III and representing the right to
the Percentage Interest of distributions provided for the Class R-3
Certificates as set forth herein.
Closing Date
: October 24, 2005.
Code : The Internal Revenue Code of 1986, including
any successor or amendatory provisions.
Compensating Interest
: An amount for any Distribution
Date, not to exceed the Servicing Fee (or the portion of the Master
Servicing Fee payable to the Master Servicer if such amount is to
be paid by the Master Servicer as provided herein), to be applied
by the Servicer (or the Master Servicer, as applicable) to the
payment of any Prepayment Interest Shortfalls on the Mortgage Loans
during the related Prepayment Periods.
Conveyed Assets
: As defined in each of the Mortgage
Loan Purchase Agreements and any Subsequent Mortgage Loan Purchase
Agreement.
Corporate Trust Office
: The corporate trust office of the
Trustee or the Securities Administrator, as applicable, where at
any particular time its corporate trust business in connection with
this Agreement shall be administered, with respect to the
Securities Administrator, is located at 135 South LaSalle Street,
Suite 1625, Chicago, Illinois, 60603, Attention: Global Securities
and Trust Services Group – Bear Stearns Asset Backed
Securities I Trust 2005-CL1, or at such other address as the
Securities Administrator may designate from time to time, and with
respect to the Trustee, is located at 388 Greenwich Street, 14th
Floor, New York, New York 10013, Attention: Structured Finance
Agency and Trust BSABS I Trust 2005-CL1, or at such other address
as the Trustee may designate from time to time.
Corresponding REMIC III Regular
Interest : With respect
to any Certificate (other than any Class B-IO Certificate), the
REMIC III Regular Interest with the corresponding designation. With
respect to any Class B-IO Certificate, REMIC III Regular Interests
B-IO-I and B-IO-P.
Current Interest
: As of any Distribution Date, with
respect to Certificates of each Class (other than the Residual
Certificates), (i) the interest accrued on the Certificate
Principal Balance or Certificate Notional Balance, as applicable,
during the related Accrual Period at the applicable Pass-Through
Rate plus any amount previously distributed with respect to
interest for such Certificate that has been recovered as a voidable
preference by a trustee in bankruptcy minus (ii) the sum of (a) any
Prepayment Interest Shortfall for such Distribution Date, to the
extent not covered by Compensating Interest and (b) any Relief Act
Interest Shortfalls during the related
17
Due Period, provided, however
, that for purposes of calculating Current Interest for any such
Class, amounts specified in clause (ii) hereof for any such
Distribution Date shall be allocated first to the Class B-IO
Certificates and Residual Certificates in reduction of amounts
otherwise distributable to such Certificates on such Distribution
Date and then any excess shall be allocated to each Class of Class
A Certificates and Class M Certificates, pro rata, based on the
respective amounts of interest accrued pursuant to clause (i)
hereof for each such Class on such Distribution Date.
Current Specified Enhancement
Percentage : With respect
to any Distribution Date, the percentage obtained by dividing (x)
the sum of (i) the aggregate Certificate Principal Balance of the
Class M Certificates and (ii) the Overcollateralization Amount, in
each case prior to the distribution of the Principal Distribution
Amount on such Distribution Date, by (y) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date,
prior to the distribution of the Principal Distribution Amount on
such Distribution Date.
Custodial Agreement
: An agreement, dated as of October
24, 2005, among the Depositor, the Master Servicer, the Servicer,
the Trustee and the Custodian in substantially the form of Exhibit
K hereto.
Custodian : Wells Fargo Bank, National Association, or any
successor custodian appointed pursuant to the provisions hereof and
the Custodial Agreement.
Cut-off Date
: With respect to any Initial
Mortgage Loan, the close of business on October 1, 2005; with
respect to any Subsequent Mortgage Loan, the applicable Subsequent
Cut-off Date.
Cut-off Date Principal
Balance : As to any
Mortgage Loan, the unpaid principal balance thereof as of the close
of business on the applicable Cut-off Date after application of all
Principal Prepayments and scheduled payments of interest received
prior to the applicable Cut-off Date. The aggregate Cut-off Date
Principal Balance of the Mortgage Loans is $279,053,015.
Debt Service Reduction
: With respect to any Mortgage Loan,
a reduction by a court of competent jurisdiction in a proceeding
under the Bankruptcy Code in the Scheduled Payment for such
Mortgage Loan that became final and non-appealable, except such a
reduction resulting from a Deficient Valuation or any other
reduction that results in a permanent forgiveness of
principal.
Deficient Valuation
: With respect to any Mortgage Loan,
a valuation by a court of competent jurisdiction of the Mortgaged
Property in an amount less than the then outstanding indebtedness
under such Mortgage Loan, or any reduction in the amount of
principal to be paid in connection with any Scheduled Payment that
results in a permanent forgiveness of principal, which valuation or
reduction results from an order of such court that is final and
non-appealable in a proceeding under the Bankruptcy
Code.
Definitive
Certificates : As defined
in Section 7.06.
Deleted Mortgage Loan
: A Mortgage Loan replaced or to be
replaced by a Replacement Mortgage Loan.
18
Delinquency Event
: A Delinquency Event shall have
occurred and be continuing if at any time, (x) the percent
equivalent of a fraction, the numerator of which is the aggregate
Stated Principal Balance of the Mortgage Loans that are 60 days or
more Delinquent (including for this purpose any such Mortgage Loans
in bankruptcy or foreclosure and Mortgage Loans with respect to
which the related Mortgaged Property is REO Property), and the
denominator of which is the aggregate Stated Principal Balance of
all of the Mortgage Loans for such Distribution Date exceeds (y)
50% of the Current Specified Enhancement Percentage.
Delinquent
: A Mortgage Loan is
“delinquent” if any payment due thereon is not made
pursuant to the terms of such Mortgage Loan by the close of
business on the day such payment is scheduled to be due. An
Actuarial Loan is considered to be “31 days delinquent”
when a payment due on any due date remains unpaid as of the close
of business on the last business day immediately prior to the next
following monthly due date. A Simple Interest Loan is “31
days delinquent” if such payment has not been received by the
close of business on the corresponding day of the month immediately
succeeding the month in which such payment was due, or, if there is
no such corresponding day (e.g., as when a 30-day month follows a
31-day month in which a payment was due on the 31st day of such
month), then on the last day of such immediately succeeding month.
Similarly for “61 days delinquent,” “91 days
delinquent” and so on.
Denomination
: With respect to each Certificate,
the amount set forth on the face thereof as the “Initial
Certificate Principal Balance or Initial Certificate Notional
Balance of this Certificate”.
Depositor : Bear Stearns Asset Backed Securities I LLC, a
Delaware limited liability company, or its successor in
interest.
Depository
: The initial Depository shall be
The Depository Trust Company (“DTC”), the nominee of
which is Cede & Co., or any other organization registered as a
“clearing agency” pursuant to Section 17A of the
Securities Exchange Act of 1934, as amended. The Depository shall
initially be the registered Holder of the Book-Entry Certificates.
The Depository shall at all times be a “clearing
corporation” as defined in Section 8-102(a)(5) of the Uniform
Commercial Code of the State of New York.
Depository Agreement
: With respect to the Class of
Book-Entry Certificates, the agreement among the Depositor, the
Securities Administrator and the initial Depository, dated as of
the Closing Date, substantially in the form of Exhibit
I.
Depository Participant
: A broker, dealer, bank or other
financial institution or other Person for whom from time to time a
Depository effects book-entry transfers and pledges of securities
deposited with the Depository.
Determination Date
: With respect to any Distribution
Date, the 15th day of the month of such Distribution Date or, if
such 15th day is not a Business Day, the immediately preceding
Business Day.
Distribution Account
: The separate Eligible Account
created and maintained by the Securities Administrator pursuant to
Section 5.08 in the name of the Trustee for the benefit of the
Certificateholders designated “Citibank, N.A., in trust for
registered holders of Bear Stearns
19
Asset Backed Securities I LLC,
Asset-Backed Certificates, Series 2005-CL1”. Funds in the
Distribution Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this
Agreement.
Distribution Account Deposit
Date : The Business Day
prior to each Distribution Date.
Distribution Date
: The 25th day of each calendar
month after the initial issuance of the Certificates, or if such
25th day is not a Business Day, the next succeeding Business Day,
commencing in November 2005.
Due Date : As to any Mortgage Loan, the date in each
month on which the related Scheduled Payment is due, as set forth
in the related Mortgage Note.
Due Period
: With respect to any Distribution
Date, the second day of the calendar month preceding the calendar
month in which such Distribution Date occurs through close of
business on the first day of the calendar month in which such
Distribution Date occurs.
Eligible Account
: Any of (i) an account or accounts
maintained with a federal or state chartered depository institution
or trust company, the long-term unsecured debt obligations and
short-term unsecured debt obligations of which (or, in the case of
a depository institution or trust company that is the principal
subsidiary of a holding company, the debt obligations of such
holding company, so long as Moody’s is not a Rating Agency)
are rated by each Rating Agency in one of its two highest long-term
and its highest short-term rating categories, respectively, at the
time any amounts are held on deposit therein, or (ii) an account or
accounts in a depository institution or trust company in which such
accounts are insured by the FDIC (to the limits established by the
FDIC) and the uninsured deposits in which accounts are otherwise
secured such that, as evidenced by an Opinion of Counsel delivered
to the Trustee and to each Rating Agency by the Servicer, the
Master Servicer or Securities Administrator, as applicable, the
Certificateholders have a claim with respect to the funds in such
account or a perfected first priority security interest against any
collateral (which shall be limited to Permitted Investments)
securing such funds that is superior to claims of any other
depositors or creditors of the depository institution or trust
company in which such account is maintained, or (iii) a trust
account or accounts maintained with the corporate trust department
of a federal or state chartered depository institution or trust
company having capital and surplus of not less than $50,000,000,
acting in its fiduciary capacity or (iv) any other account
acceptable to the Rating Agencies, as evidenced in writing.
Eligible Accounts may bear interest, and may include, if otherwise
qualified under this definition, accounts maintained with the
Securities Administrator and Master Servicer.
Ellington : Each of Ellington 2005-1 and Ellington 2005-2,
and any successor thereto.
Ellington 2005-1
: Ellington Acquisition Trust
2005-1, and any successor thereto.
Ellington 2005-2
: Ellington Acquisition Trust
2005-2, and any successor thereto.
Ellington Guarantor
: Ellington Credit Fund, Ltd., a
Cayman Islands corporation, or any successor thereto.
20
ERISA : The Employee Retirement Income Security Act of
1974, as amended.
ERISA Restricted
Certificate : Each of the
Class B-IO Certificates and the Residual Certificates.
Event of Default
: As defined in Section 9.01
hereof.
Excess Cashflow
: With respect to any Distribution
Date, an amount, if any, equal to the sum of (a) the Remaining
Excess Spread for such Distribution Date and (b) the
Overcollateralization Release Amount for such Distribution
Date.
Excess Liquidation
Proceeds : To the extent
not required by law to be paid to the related Mortgagor, the
excess, if any, of any Liquidation Proceeds with respect to a
Mortgage Loan over the Stated Principal Balance of such Mortgage
Loan and accrued and unpaid interest at the related Mortgage Rate
through the last day of the month in which the Mortgage Loan has
been liquidated.
Excess Spread
: With respect to any Distribution
Date, the excess, if any, of (i) the Interest Funds for such
Distribution Date over (ii) the sum of Current Interest on the
Class A Certificates and Class M Certificates and Interest Carry
Forward Amounts on the Class A Certificates (other than Interest
Carry Forward Amounts paid pursuant to Section 6.04(a)(3)(A)), in
each case for such Distribution Date.
Exemption : Prohibited Transaction Exemption 90-30, as
amended from time to time.
Extra Principal Distribution
Amount : With respect to
any Distribution Date, the lesser of (i) the excess, if any, of the
Overcollateralization Target Amount for such Distribution Date over
the Overcollateralization Amount for such Distribution Date (after
giving effect to distributions of principal on the Certificates
other than any Extra Principal Distribution Amount) and (ii) the
Excess Spread for such Distribution Date.
Fannie Mae
: Fannie Mae (formerly, Federal
National Mortgage Association), or any successor
thereto.
FDIC : The Federal Deposit Insurance Corporation, or
any successor thereto.
Final Certification
: The certification substantially in
the form of Exhibit Three to the Custodial Agreement.
FIRREA : The Financial Institutions Reform, Recovery,
and Enforcement Act of 1989.
Final Recovery
Determination : With
respect to any defaulted Mortgage Loan or any REO Property (other
than a Mortgage Loan or REO Property purchased pursuant to or as
contemplated by Section 2.03(c) or Section 11.01), a determination
made by the Servicer that all Insurance Proceeds, Liquidation
Proceeds and other payments or recoveries which the Servicer, in
its reasonable good faith judgment, expects to be finally
recoverable in respect thereof have been so recovered. The Servicer
shall maintain records of each Final Recovery Determination made
thereby.
21
Fitch : Fitch, Inc., and any successor
thereto.
Foreclosure Restricted
Loan : Any Mortgage Loan
that was 60 days or more delinquent as of the Cut-Off Date, as
indicated on the schedule attached hereto as Exhibit N.
Freddie Mac
: Federal Home Loan Mortgage
Corporation, or any successor thereto.
Global Certificate
: Any Private Certificate registered
in the name of the Depository or its nominee, beneficial interests
in which are reflected on the books of the Depository or on the
books of a Person maintaining an account with such Depository
(directly or as an indirect participant in accordance with the
rules of such depository).
Gross Margin
: With respect to each Adjustable
Rate Mortgage Loan, the fixed percentage set forth in the related
Mortgage Note that is added to the Index on each Adjustment Date in
accordance with the terms of the related Mortgage Note used to
determine the Mortgage Rate for such Mortgage Loan.
Guarantor : Each of the Ellington Guarantor and the Ocwen
Guarantor.
Indemnified Persons
: The Trustee, the Servicer, the
Master Servicer, the Securities Administrator, the Trust Fund and
their officers, directors, agents and employees and, with respect
to the Trustee, any separate co-trustee and its officers,
directors, agents and employees, as applicable.
Index : With respect to each Adjustable Rate Mortgage
Loan and with respect to each related Adjustment Date, the index as
specified in the related Mortgage Note.
Individual Certificate
: Any Private Certificate registered
in the name of the Holder other than the Depository or its
nominee.
Initial Certification
: The certification substantially in
the form of Exhibit One to the Custodial Agreement.
Initial Certificate Notional
Balance : With respect to
any Class A-3 Certificate or Class B-IO Certificate, the
Certificate Notional Balance of such Certificate or any predecessor
Certificate on the Closing Date.
Initial Certificate Principal
Balance : With respect to
any Certificate (other than any Class A-3 Certificate or Residual
Certificate), the Certificate Principal Balance of such Certificate
or any predecessor Certificate on the Closing Date.
Initial Mortgage Loan
: A mortgage loan transferred and
assigned to the Trustee on the Closing Date pursuant to Section
2.01 and held as a part of the Trust, as identified in the
applicable Mortgage Loan Schedule.
Institutional Accredited
Investor : Any Person
meeting the requirements of Rule 501(a)(l), (2), (3) or (7) of
Regulation D under the Securities Act or any entity all of the
equity holders in which come within such paragraphs.
22
Insurance Proceeds
: Proceeds paid in respect of the
Mortgage Loans pursuant to any Insurance Policy and any other
insurance policy covering a Mortgage Loan, to the extent such
proceeds are payable to the mortgagee under the Mortgage, the
Servicer or the trustee under the deed of trust and are not applied
to the restoration of the related Mortgaged Property or released to
the Mortgagor in accordance with the procedures that the Servicer
would follow in servicing mortgage loans held for its own account,
in each case other than any amount included in such Insurance
Proceeds in respect of Insured Expenses.
Insured Expenses
: Expenses covered by any insurance
policy with respect to the Mortgage Loans.
Interest Carry Forward
Amount : As of any
Distribution Date and with respect to each Class of Certificates
(other than the Class B-IO Certificates and the Residual
Certificates), the sum of (i) the excess of (a) the Current
Interest for such Class with respect to such Distribution Date and
any prior Distribution Dates over (b) the amount actually
distributed to such Class of Certificates with respect to interest
on such Distribution Dates and (ii) interest thereon (to the extent
permitted by applicable law) at the applicable Pass-Through Rate
for such Class for the related Accrual Period including the Accrual
Period relating to such Distribution Date.
Interest Coverage
Account : The account or
sub-account established and maintained pursuant to Section 5.12(a)
and which shall be an Eligible Account or a sub-account of an
Eligible Account.
Interest Coverage
Amount : The amount to be
paid by the Depositor to the Paying Agent for deposit in the
Interest Coverage Account on the Closing Date pursuant to Section
5.12, which amount is $87,450.56.
Interest Determination
Date : Shall mean the
second LIBOR Business Day preceding the commencement of each
Accrual Period.
Interest Funds
: With respect to any Distribution
Date (i) the sum, without duplication, of (a) all interest
collected in respect of the related Due Period and received by the
Servicer on or prior to the related Determination Date with respect
to the related Mortgage Loans less the Servicing Fee, the Master
Servicing Fee and the Risk Manager Fee, (b) all Advances relating
to interest with respect to the related Mortgage Loans made on or
prior to the related Distribution Account Deposit Date, (c) all
Compensating Interest with respect to the related Mortgage Loans
and required to be remitted by the Servicer or the Master Servicer,
as applicable, pursuant to this Agreement with respect to such
Distribution Date, (d) Liquidation Proceeds and Subsequent
Recoveries with respect to the related Mortgage Loans collected
during the prior calendar month (to the extent such Liquidation
Proceeds and Subsequent Recoveries relate to interest), (e) all
amounts relating to interest with respect to each Mortgage Loan
repurchased by the Seller pursuant to Sections 2.02 and 2.03 and by
the Majority B-IO Holder pursuant to Section 3.18, in each case to
the extent remitted by the Servicer to the Distribution Account
pursuant to this Agreement, (f) all amounts in respect of interest
in respect of the Mortgage Loans paid by the Servicer pursuant to
Section 11.01, in each case to the extent remitted by the Servicer,
as applicable, to the Distribution Account pursuant to this
Agreement, and (g) any amount withdrawn from the Pre-Funding
Reserve Account pursuant to Section 5.10 minus (ii) all
23
amounts required to be reimbursed
pursuant to Sections 5.02, 5.03, 5.05, 5.06, 5.09, 8.04, 9.05 and
10.05 and as otherwise set forth in this Agreement.
Interim Certification
: The certification substantially in
the form of Exhibit Two to the Custodial Agreement.
Katrina Loan
: Any Mortgage Loan listed on
Exhibit C (1) which is secured by real property located in
Louisiana, Alabama or Mississippi, (2) which is secured by real
property located in a FEMA designated county as eligible for
“individual assistance” and (3) which was originated
prior to August 29, 2005.
Last Scheduled Distribution
Date : Solely for
purposes of the face of the Certificates, the Distribution Date in
September 2034.
Latest Possible Maturity
Date : The Distribution
Date in the month following the final scheduled maturity date of
the Mortgage Loan in the Trust Fund having the latest scheduled
maturity date as of the applicable Cut-off Date. For purposes of
the Treasury Regulations under Code section 860A through 860G, the
latest possible maturity date of each regular interest issued by
REMIC I, REMIC II and REMIC III shall be the Latest Possible
Maturity Date.
LIBOR Business Day
: Shall mean a day on which banks
are open for dealing in foreign currency and exchange in London and
New York City.
Liquidated Loan
: With respect to any Distribution
Date, a defaulted Mortgage Loan that has been liquidated through
deed-in-lieu of foreclosure, foreclosure sale, trustee’s sale
or other realization as provided by applicable law governing the
real property subject to the related Mortgage and any security
agreements and as to which the Servicer has made a Final Recovery
Determination with respect thereto.
Liquidation Proceeds
: Amounts, other than Insurance
Proceeds, received in connection with the partial or complete
liquidation of a Mortgage Loan, whether through trustee’s
sale, foreclosure sale or otherwise, or in connection with any
condemnation or partial release of a Mortgaged Property and any
other proceeds received with respect to an REO Property, less the
sum of related unreimbursed Advances, Servicing Fees, Master
Servicing Fees, Risk Manager Fees and Servicing Advances and all
expenses of liquidation, including property protection expenses and
foreclosure and sale costs, including court and reasonable
attorneys fees.
Loan-to-Value Ratio
: The fraction, expressed as a
percentage, the numerator of which is the original principal
balance of the related Mortgage Loan and the denominator of which
is the Appraised Value of the related Mortgaged
Property.
Majority B-IO Holder
: The holder of the greatest
Percentage Interests of the Class B-IO Certificates.
Marker Rate
: With respect to the Class B-IO
Certificates, REMIC II Regular Interest B-IO-I or REMIC III Regular
Interest B-IO-I and any Distribution Date, in relation to the
REMIC I Regular Interests, a per annum rate equal to two (2)
times the weighted average of the Uncertificated REMIC I
Pass-Through Rates for REMIC I Regular Interests LT2 and
LT3.
With respect to the Class A1
Certificates, the Class A2 Certificates or A3 Certificates and any
Distribution Date, in relation to the REMIC II Regular Interests, a
per annum rate equal to two (2) times the weighted average of the
Uncertificated REMIC II Pass-Through Rates for REMIC II Regular
Interests MT2 and MT3.
24
Master Servicer
: As of the Closing Date, LaSalle
Bank National Association and, thereafter, its respective
successors in interest who meet the qualifications of this
Agreement.
Master Servicer
Certification : A written
certification signed by a Master Servicing Officer that complies
with (i) the Sarbanes-Oxley Act of 2002, as amended from time to
time, and (ii) the February 21, 2003 Statement by the Staff of the
Division of Corporation Finance of the Securities and Exchange
Commission Regarding Compliance by Asset-Backed Issuers with
Exchange Act Rules 13a-14 and 15d-14, as in effect from time to
time; provided that if, after the Closing Date (a) the
Sarbanes-Oxley Act of 2002 is amended, (b) the Statement referred
to in clause (ii) is modified or superseded by any subsequent
statement, rule or regulation of the Securities and Exchange
Commission or any statement of a division thereof, or (c) any
future releases, rules and regulations are published by the
Securities and Exchange Commission from time to time pursuant to
the Sarbanes-Oxley Act of 2002, which in any such case affects the
form or substance of the required certification and results in the
required certification being, in the reasonable judgment of the
Master Servicer, materially more onerous than the form of the
required certification as of the Closing Date, the Master Servicer
Certification shall be as agreed to by the Master Servicer and the
Depositor following a negotiation in good faith to determine how to
comply with any such new requirements.
Master Servicer Collection
Account : The separate
Eligible Account established and maintained by the Master Servicer
with respect to the Mortgage Loans and REO Property in accordance
with Section 5.05 hereof.
Master Servicing Fee
: As to each Mortgage Loan and any
Distribution Date, an amount equal to 1/12th of the Master
Servicing Fee Rate multiplied by the Stated Principal Balance of
such Mortgage Loan as of the first day of the related Due Period
or, in the event of any payment of interest that accompanies a
Principal Prepayment in full during the related Due Period made by
the Mortgagor immediately prior to such prepayment, interest at the
Master Servicing Fee Rate on the Stated Principal Balance of such
Mortgage Loan for the period covered by such payment of
interest.
Master Servicing Fee
Rate : 0.03% per
annum.
Master Servicing
Officer : Any officer of
the Master Servicer involved in or responsible for overseeing or
monitoring the servicing of the Mortgage Loans.
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.
MERS : Mortgage Electronic Registration Systems,
Inc., a corporation organized and existing under the laws of the
State of Delaware, or any successor thereto.
MERS® System
: The system of recording transfers
of Mortgages electronically maintained by MERS.
MIN : The Mortgage Identification Number for
Mortgage Loans registered with MERS on the MERS®
System.
25
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.
MOM Loan : With respect to any Mortgage Loan, MERS acting
as the mortgagee of such Mortgage Loan, solely as nominee for the
originator of such Mortgage Loan and its successors and assigns, at
the origination thereof.
Monthly Statement
: The statement delivered to the
Certificateholders pursuant to Section 6.05.
Moody’s
: Moody’s Investors Service,
Inc., and any successor thereto.
Mortgage : The mortgage, deed of trust or other
instrument creating a first or more junior lien on or first or more
junior priority ownership interest in an estate in fee simple in
real property securing a Mortgage Note.
Mortgage File
: The mortgage documents listed in
Section 2.01 hereof pertaining to a particular Mortgage Loan and
any additional documents delivered to the Custodian to be added to
the Mortgage File pursuant to this Agreement and the Custodial
Agreement.
Mortgage Loans
: Such of the Initial Mortgage Loans
and Subsequent Mortgage Loans transferred and assigned to the
Trustee pursuant to the provisions hereof and any Subsequent
Transfer Instrument, as from time to time are held as a part of the
Trust Fund (including any REO Property), the mortgage loans so held
being identified in the Mortgage Loan Schedule, notwithstanding
foreclosure or other acquisition of title of the related Mortgaged
Property.
Mortgage Loan Purchase
Agreement : Each of (a)
the Mortgage Loan Purchase Agreement, dated as of October 24, 2005,
among Ellington 2005-1, as seller, Ellington Guarantor, as
guarantor, and the Depositor, as purchaser, in the form attached
hereto as Exhibit M-1, (b) the Mortgage Loan Purchase Agreement,
dated as of October 24, 2005, among Ellington 2005-2, as seller,
Ellington Guarantor, as guarantor, and the Depositor, as purchaser,
in the form attached hereto as Exhibit M-2, and (c) the Mortgage
Loan Purchase Agreement, dated as of October 24, 2005, among Ocwen
Trust, as seller, Ocwen Guarantor, as guarantor, and the Depositor,
as purchaser, in the form attached hereto as Exhibit
M-3.
Mortgage Loan Purchase
Price : The price,
calculated as set forth in Section 11.01, to be paid in connection
with the repurchase of the Mortgage Loans pursuant to Section
11.01.
Mortgage Loan Schedule
: The list of Initial Mortgage Loans
(as from time to time amended by the Sellers, the Servicer or the
Master Servicer to reflect the deletion of Deleted Mortgage Loans
and the addition of Replacement Mortgage Loans or a Subsequent
Mortgage Loan pursuant to the provisions of this Agreement)
transferred to the Trustee as part of the Trust Fund and from time
to time subject to this Agreement, the initial Mortgage Loan
Schedule being attached hereto as Exhibit B, setting forth the
following information with respect to each Mortgage
Loan:
26
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(ii)
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the Mortgage Rate in effect as of
the applicable Cut-off Date;
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(iii)
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the Servicing Fee Rate;
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(iv)
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the Master Servicing Fee
Rate;
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(v)
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the Risk Manager Fee
Rate;
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(vi)
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the Net Mortgage Rate in effect as
of the applicable Cut-off Date;
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(vii)
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the maturity date;
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(viii)
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the original principal
balance;
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(ix)
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the applicable Cut-off Date
Principal Balance;
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(x)
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the original term;
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(xi)
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the remaining term;
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(xii)
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the property type;
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(xiii)
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the MIN with respect to each MOM
Loan;
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(xiv) with
respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage
Rate;
(xv) with
respect to each Adjustable Rate Mortgage Loan, the Maximum Mortgage
Rate;
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(xvi)
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with respect to each Adjustable Rate
Mortgage Loan, the Gross Margin;
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(xvii)
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with respect to each Adjustable Rate
Mortgage Loan, the Index Type;
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(xviii) with
respect to each Adjustable Rate Mortgage Loan, the next Adjustment
Date;
(xix) with
respect to each Adjustable Rate Mortgage Loan, the Interest Rate
and adjustment frequency;
(xx) with
respect to each Adjustable Rate Mortgage Loan, the Periodic Rate
Cap;
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(xxi)
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the amount of any Seller Arrearages,
if any;
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(xxii) a
code indicating whether such Mortgage Loan is an Actuarial Loan or
Simple Interest Loan;
27
(xxiii) a
code indicating whether such Mortgage Loan is a first lien or a
second lien Mortgage Loan;
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(xxiv)
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loan type (fixed, Balloon,
ARM);
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(xxv)
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the paid to date;
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(xxvi)
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a bankruptcy flag;
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(xxvii)
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the Mortgage Loan
purpose;
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(xxviii)
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occupancy status;
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(xxix)
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FICO score;
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(xxx)
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first payment date;
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(xxxi)
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the appraisal value at
origination;
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(xxxii)
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the state, zip code and
city,
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(xxxiii)
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a Delinquency counter;
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(xxxiv)
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the original Mortgage
Rate;
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(xxxv)
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the current Scheduled Payment;
and
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(xxxvi)
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and any delinquent tax and corporate
Advance.
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Such schedule shall also set forth
the aggregate Cut-off Date Principal Balance for all of the
Mortgage Loans.
Mortgage Note
: The original executed note or
other evidence of indebtedness of a Mortgagor under a Mortgage
Loan.
Mortgage Rate
: With respect to each fixed rate
Mortgage Loan, the rate set forth in the related Mortgage Note.
With respect to each Adjustable Rate 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 is the rate as adjusted on the most recent Adjustment Date,
to equal the sum, rounded to the next highest or nearest 0.125% (as
provided in the Mortgage Note), of the Index, determined as set
forth in the related Mortgage Note, plus the related Gross Margin
subject to the limitations set forth in the related Mortgage Note.
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 securing a
Mortgage Loan.
Mortgagor : The obligors on a Mortgage Note.
28
Net Mortgage Rate
: As to each Mortgage Loan, and at
any time, the per annum rate equal to the Mortgage Rate less the
sum of (i) the Servicing Fee Rate, (ii) the Master Servicing Fee
Rate and (iii) the Risk Manager Fee Rate.
Net Rate Cap
: With respect to any Distribution
Date and (i) the Class A Certificates is equal to the product of
(a) the Pass-Through Rate that would be applicable to the Class A-1
Certificates, Class A-2 Certificates and the Class A-3
Certificates, as applicable, for such Distribution Date prior to
taking into account the Net Rate Cap and (b) a fraction, (1) the
numerator of which is the weighted average of the Net Mortgage
Rates and (2) the denominator of which is the Class A Maximum Rate
for such Distribution Date; and (ii) the Class M Certificates is
equal to the weighted average of the Net Mortgage Rates during the
related Due Periods on the then Outstanding Mortgage Loans. For
federal income tax purposes, however, such rate shall be equal to
the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interests LT1 and LT2.
Non-Book-Entry
Certificate : Any
Certificate other than a Book-Entry Certificate.
Nonrecoverable Advance
: Any portion of an Advance or
Servicing Advance previously made or proposed to be made by the
Servicer or the Master Servicer pursuant to this Agreement that, in
the good faith judgment of the Master Servicer or the Servicer, as
applicable, will not or, in the case of a proposed Advance or
Servicing Advance, would not, be ultimately recoverable by it from
the related Mortgagor, related Liquidation Proceeds, Insurance
Proceeds or otherwise.
Ocwen Guarantor
: Ocwen Financial Corporation, a
Florida Corporation, or any successor thereto.
Ocwen Trust
: Ocwen Mortgage Asset Trust I, or
any successor thereto.
Offered Certificates
: The Class A-1, Class A-2, Class
A-3, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class
M-6, Class M-7, Class M-8 and Class M-9 Certificates.
Officer’s
Certificate : A
certificate (i) signed by the Chairman of the Board, the Vice
Chairman of the Board, the President, a Vice President (however
denominated), an Assistant Vice President, the Treasurer, the
Secretary, or one of the assistant treasurers or assistant
secretaries of the Depositor, the Servicer or the Master Servicer
(or any other officer customarily performing functions similar to
those performed by any of the above designated officers and also to
whom, with respect to a particular matter, such matter is referred
because of such officer’s knowledge of and familiarity with a
particular subject) or (ii), if provided for in this Agreement,
signed by a Servicing Officer, as the case may be, and delivered to
the Depositor, the Seller, the Securities Administrator, the Master
Servicer and/or the Trustee, as the case may be, as required by
this Agreement.
One-Month LIBOR
: With respect to any Interest
Accrual Period, the rate determined by the Securities Administrator
on the related LIBOR Determination Date on the basis of the rate
for U.S. dollar deposits for one month that appears on Telerate
Screen Page 3750 as of 11:00 a.m. (London time) on such LIBOR
Determination Date; provided that the parties hereto
29
acknowledge that One-Month LIBOR for
the first Interest Accrual Period shall be the rate determined by
the Securities Administrator two Business Days prior to the Closing
Date. If such rate does not appear on such page (or such other page
as may replace that page on that service, or if such service is no
longer offered, such other service for displaying One-Month LIBOR
or comparable rates as may be reasonably selected by the Securities
Administrator), One-Month LIBOR for the applicable Interest Accrual
Period will be the Reference Bank Rate. If no such quotations can
be obtained by the Securities Administrator and no Reference Bank
Rate is available, One-Month LIBOR will be One-Month LIBOR
applicable to the preceding Interest Accrual Period. The
establishment of One-Month LIBOR on each Interest Determination
Date by the Securities Administrator and the Securities
Administrator’s calculation of the rate of interest
applicable to the Class A Certificates and Class M Certificates for
the related Accrual Period shall, in the absence of manifest error,
be final and binding.
One-Month LIBOR Pass-Through
Rate : With respect to
each Class of Certificates other than the Class A Certificates, a
per annum rate equal to One-Month LIBOR plus the related
Certificate Margin.
Opinion of Counsel
: A written opinion of counsel, who
may be counsel for the Master Servicer, any Seller, the Depositor
or the Servicer, reasonably acceptable to each addressee of such
opinion; provided that with respect to Sections 8.05, 8.07,
10.12(d) (and the definition of Applicable State Law), 12.01, or
the interpretation or application of the REMIC Provisions, such
counsel must (i) in fact be independent of the Master Servicer,
Depositor, each Seller and the Servicer, (ii) not have any direct
financial interest in the Master Servicer, any Seller, the
Depositor or the Servicer or in any affiliate of either, and (iii)
not be connected with the Master Servicer, any Seller, the
Depositor or the Servicer as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing
similar functions.
Optional Termination
: The termination of the Trust Fund
created hereunder as a result of the purchase of all of the
Mortgage Loans and any REO Property pursuant to the last sentence
of Section 11.01 hereof.
Optional Termination
Date : The Distribution
Date on which the Stated Principal Balance of all of the Mortgage
Loans is equal to or less than 10% of the sum of (A) the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date
(other than the Subsequent Mortgage Loans) and (B) the Pre-Funded
Amount as of the Closing Date.
OTS : The Office of Thrift Supervision.
Outstanding
: With respect to the Certificates
as of any date of determination, all Certificates theretofore
executed and authenticated under this Agreement except:
(a) Certificates
theretofore canceled by the Securities Administrator or delivered
to the Securities Administrator for cancellation; and
(b) Certificates
in exchange for which or in lieu of which other Certificates have
been executed and delivered by the Securities Administrator
pursuant to this Agreement.
30
Outstanding Mortgage
Loan : As of any date of
determination, a Mortgage Loan with a Stated Principal Balance
greater than zero that was not the subject of a Principal
Prepayment in full, that did not become a Liquidated Loan, and that
was not charged-off pursuant to Sections 3.09 or 3.18(b) prior to
the end of the related Prepayment Period, in the case of a
Principal Prepayment in full, or the prior calendar month, in the
case of a Liquidated Loan or a charged-off Mortgage
Loan.
Overcollateralization
Amount : With respect to
any Distribution Date, the excess, if any, of the aggregate Stated
Principal Balances of the Mortgage Loans (including the Subsequent
Mortgage Loans) for such Distribution Date (including any reduction
due to Realized Losses) over the Certificate Principal Balances of
the Class A-1, the Class A-2 and the Class M Certificates on such
Distribution Date (after taking into account the payment of
principal other than any Extra Principal Distribution Amount on
such Certificates).
Overcollateralization Release
Amount : With respect to
any Distribution Date, the lesser of (x) the Principal Remittance
Amount for such Distribution Date and (y) the excess, if any, of
(i) the Overcollateralization Amount for such Distribution Date
(assuming that 100% of the Principal Remittance Amount is applied
as a principal payment on such Distribution Date) over (ii) the
Overcollateralization Target Amount for such Distribution Date
(with the amount pursuant to clause (y) deemed to be $0 if the
Overcollateralization Amount is less than or equal to the
Overcollateralization Target Amount on that Distribution
Date).
Overcollateralization Target
Amount : With respect to
any Distribution Date, (a) prior to the Stepdown Date, 0.75% of the
aggregate Stated Principal Balance of the Mortgage Loans (including
the Subsequent Mortgage Loans) as of the applicable Cut-off Date,
(b) on or after the Stepdown Date and if a Trigger Event is not in
effect, the greater of (i) 1.50% of the then current aggregate
Stated Principal Balance of the Mortgage Loans (including the
Subsequent Mortgage Loans) for such Distribution Date and (ii)
$1,395,265 or (c) on or after the Stepdown Date and if a Trigger
Event is in effect, the Overcollateralization Target Amount for the
immediately preceding Distribution Date.
Ownership Interest
: As to any Certificate, any
ownership 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.
Pass-Through Rate
: With respect to any Distribution
Date and (i) the Class A-1 Certificates and the Class A-2
Certificates, a rate per annum equal to the lesser of (a) One-Month
LIBOR plus 0.500%, (b) 8.00% per annum and (c) the Net Rate Cap,
which for federal income tax purposes is equal to the related
Marker Rate and (ii) the Class M Certificates, a rate per annum
equal to the lesser of (A) the related One-Month LIBOR Pass-Through
Rate for such Distribution Date and (B) the Net Rate Cap for such
Distribution Date, as adjusted to reflect the accrual of interest
on the Class M Certificates on an actual/360-day year basis and the
accrual of interest on the Mortgage Loans on an actual/365-day
basis or a 30/360 basis, as applicable.
With respect to the Class B-IO
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
31
amounts calculated pursuant to
clauses (a) through (c) below, and the denominator of which is the
aggregate Uncertificated Principal Balances of the REMIC I Regular
Interests. For purposes of calculating the Pass-Through Rate for
the Class B-IO Certificates, the numerator is equal to the sum of
the following components:
(a) the
Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LT1 minus the related Marker Rate, applied to a notional
amount equal to the Uncertificated Principal Balance of REMIC I
Regular Interest LT1;
(b) the
Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LT2 minus the related Marker Rate, applied to a notional
amount equal to the Uncertificated Principal Balance of REMIC I
Regular Interest LT2; and
(c) the
Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LT4 minus twice the related Marker Rate, applied to a
notional amount equal to the Uncertificated Principal Balance of
REMIC I Regular Interest LT4.
With respect to the Class A 3
Certificates and any Distribution Date, a rate per annum equal to
the lesser of (a) 7.500% minus One-Month LIBOR, (b) 7.500% per
annum and (c) the Net Rate Cap, which for federal income tax
purposes is equal to 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 (d) through (f) below, and
the denominator of which is the aggregate Uncertificated Principal
Balances of REMIC II Regular Interests MT1, MT2, MT3 and MT4. For
purposes of calculating the Pass-Through Rate for the Class A 3
Certificates, the numerator is equal to the sum of the following
components:
(d) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular
Interest MT1 minus the related Marker Rate, applied to a notional
amount equal to the Uncertificated Principal Balance of REMIC II
Regular Interest MT1;
(e) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular
Interest MT2 minus the related Marker Rate, applied to a notional
amount equal to the Uncertificated Principal Balance of REMIC II
Regular Interest MT2; and
(f) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular
Interest MT4 minus twice the related Marker Rate, applied to a
notional amount equal to the Uncertificated Principal Balance of
REMIC II Regular Interest MT4.
Percentage Interest
: With respect to any Certificate of
a specified Class, the Percentage Interest set forth on the face
thereof or the percentage obtained by dividing the Denomination of
such Certificate by the aggregate of the Denominations of all
Certificates of the such Class.
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
: At any time, any one or more of
the following obligations and securities:
(i) obligations
of the United States or any agency thereof, provided such
obligations are backed by the full faith and credit of the United
States;
(ii) general
obligations of or obligations guaranteed by any state of the United
States or the District of Columbia receiving the highest long-term
debt rating of each Rating Agency, or such lower rating as will not
result in the downgrading or withdrawal of the ratings then
assigned to the Certificates by each Rating Agency, as evidenced in
writing;
(iv) commercial
or finance company paper which is then receiving the highest
commercial or finance company paper rating of each Rating Agency
rating such paper, or such lower rating as will not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by each Rating Agency rating such paper, as evidenced
in writing;
32
(v) certificates
of deposit, demand or time deposits, or bankers’ acceptances
issued by any depository institution or trust company incorporated
under the laws of the United States or of any state thereof and
subject to supervision and examination by federal and/or state
banking authorities (including the Trustee, the Securities
Administrator or the Master Servicer in its commercial banking
capacity), provided that the commercial paper and/or long term
unsecured debt obligations of such depository institution or trust
company are then rated one of the two highest long-term and the
highest short-term ratings of each such Rating Agency for such
securities, or such lower ratings as will not result in the
downgrading or withdrawal of the rating then assigned to the
Certificates by any Rating Agency, as evidenced in
writing;
(vi) guaranteed
reinvestment agreements issued by any bank, insurance company or
other corporation containing, at the time of the issuance of such
agreements, such terms and conditions as will not result in the
downgrading or withdrawal of the rating then assigned to the
Certificates by any such Rating Agency, as evidenced in
writing;
(vii) repurchase
obligations with respect to any security described in clauses (i)
and (ii) above, in either case entered into with a depository
institution or trust company (acting as principal) described in
clause (v) above;
(viii) securities
(other than stripped bonds, stripped coupons or instruments sold at
a purchase price in excess of 115% of the face amount thereof)
bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States or any state
thereof which, at the time of such investment, have one of the two
highest short term ratings of each Rating Agency (except if the
Rating Agency is Moody’s, such rating shall be the highest
commercial paper rating of Moody’s for any such securities),
or such lower rating as will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by any
Rating Agency, as evidenced by a signed writing delivered by each
Rating Agency;
(ix) interests
in any money market fund (including any such fund managed by the
Securities Administrator or the Master Servicer, or any affiliate
thereof) which at the date of acquisition of the interests in such
fund and throughout the time such interests are held in such fund
has the highest applicable short term rating by each Rating Agency
or such lower rating as will not result in the downgrading or
withdrawal of the ratings then assigned to the Certificates by each
Rating Agency, as evidenced in writing;
(x) short
term investment funds sponsored by any trust company or banking
association incorporated under the laws of the United States or any
state thereof (including any such fund managed by the Securities
Administrator or the Master Servicer, or the Servicer or any
affiliate thereof) which on the date of acquisition has been rated
by each Rating Agency in their respective highest applicable rating
category or such lower rating as will not result in the downgrading
or withdrawal of the ratings then assigned to the Certificates by
each Rating Agency, as evidenced in writing; and
(xi) such
other investments having a specified stated maturity and bearing
interest or sold at a discount acceptable to each Rating Agency and
as will not result in the
33
downgrading or withdrawal of the
rating then assigned to the Certificates by any Rating Agency, as
evidenced by a signed writing delivered by each Rating
Agency;
provided, that no such instrument
shall be a Permitted Investment if such instrument (i) evidences
the right to receive interest only payments with respect to the
obligations underlying such instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep discount; provided further
that no such instrument shall be a Permitted Investment (A) if such
instrument evidences principal and interest payments derived from
obligations underlying such instrument and the interest payments
with respect to such instrument provide a yield to maturity of
greater than 120% of the yield to maturity at par of such
underlying obligations, or (B) if it may be redeemed at a price
below the purchase price (the foregoing clause (B) not to apply to
investments in units of money market funds pursuant to clause (vii)
above); provided further that no amount beneficially owned by any
REMIC may be invested in investments (other than money market
funds) treated as equity interests for federal income tax purposes,
unless the Master Servicer and the Securities Administrator, shall
receive an Opinion of Counsel, at the expense of the Person
directing such investment, to the effect that such investment will
not adversely affect the status of any such REMIC as a REMIC under
the Code or result in the imposition of a tax on any such REMIC.
Permitted Investments that are subject to prepayment or call may
not be purchased at a price in excess of par.
Permitted Transferee
: Any person other than (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, (ii) a foreign government, International
Organization or any agency or instrumentality of either of the
foregoing, (iii) an organization (except certain farmers’
cooperatives described in section 521 of the Code) that is exempt
from tax imposed by Chapter 1 of the Code (including the tax
imposed by section 511 of the Code on unrelated business taxable
income) on any excess inclusions (as defined in section 860E(c)(1)
of the Code) with respect to any Residual Certificate, (iv) rural
electric and telephone cooperatives described in section
1381(a)(2)(C) of the Code, (v) a Person that is not a citizen or
resident of the United States, a corporation, partnership (other
than a partnership that has any direct or indirect foreign
partners) or other entity (treated as a corporation or a
partnership for federal income tax purposes), created or organized
in or under the laws of the United States, any state thereof or the
District of Columbia, an estate whose income from sources without
the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the
conduct of a trade or business within the United States, 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 authority to control all substantial
decisions of the trustor and (vi) any other Person so designated by
the Securities Administrator based upon an Opinion of Counsel
addressed to the Trustee and the Securities Administrator (which
shall not be an expense of the Trustee or the Securities
Administrator) that states that the Transfer of an Ownership
Interest in a Residual Certificate to such Person may cause REMIC
I, REMIC II or REMIC III to fail to qualify as a REMIC at any time
that any Certificates are Outstanding. The terms “United
States,” “State” and “International
Organization” shall have the meanings set forth in section
7701 of the Code or successor provisions. A corporation will not be
treated as an instrumentality of the United States or of any State
or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of Freddie
Mac, a majority of its board of directors is not selected by such
government unit.
34
Person : Any individual, corporation, partnership,
joint venture, association, joint- stock company, limited liability
company, trust, unincorporated organization or government, or any
agency or political subdivision thereof.
Pre-Funded Amount
: The amount remitted by the
Depositor to the Securities Administrator for deposit in the
Pre-Funding Account on the Closing Date with respect to the
Mortgage Loans, which shall equal approximately
$3,777,154.
Pre-Funding Account
: The account or sub-account
established and maintained pursuant to Section 5.10(a) and which
shall be an Eligible Account or a sub-account of an Eligible
Account.
Pre-Funding Period
: The period from the Closing Date
up to and including January 17, 2006.
Pre-Funding Reserve
Account : The account or
sub-account established and maintained pursuant to Section 5.10(d)
and which shall be an Eligible Account or a sub-account of an
Eligible Account.
Prepayment Assumption
: The applicable rate of prepayment,
as described in the Prospectus Supplement relating to each Class of
Offered Certificates.
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 13th day of
the calendar month in which such Distribution Date occurs by the
Mortgagor, the amount, if any, by which (i) the amount of interest
paid or collected in connection with such Principal Prepayment
proceeds less the sum of (a) the Master Servicing Fee, (b) the
Servicing Fee and (c) the Risk Manager Fee exceeds (ii) one
month’s interest at the applicable Net Mortgage Rate on the
Stated Principal Balance of such Mortgage Loan immediately prior to
such prepayment or in the case of a partial Principal Prepayment on
the amount of such prepayment.
Prepayment Interest
Shortfall : With respect
to any Distribution Date, for each Mortgage Loan that was the
subject of a partial Principal Prepayment or 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 by the Mortgagor, the amount, if any,
by which (i) one month’s interest at the applicable Net
Mortgage Rate on the Stated Principal Balance of such Mortgage Loan
immediately prior to such prepayment or in the case of a partial
Principal Prepayment on the amount of such prepayment exceeds (ii)
the amount of interest paid or collected in connection with such
Principal Prepayment proceeds less the sum of (a) the Master
Servicing Fee, (b) the Servicing Fee and (c) the Risk Manager
Fee.
Prepayment Period
: With respect to any prepayments in
full and any Distribution Date, the period from the 14th day of the
calendar month preceding the calendar month in which such
Distribution Date occurs through the close of business on the 13th
day of the calendar month in which such Distribution Date occurs.
With respect to any partial prepayments and any
35
Distribution Date is the immediately
preceding calendar month in which such Distribution Date
occurs.
Primary Mortgage Insurance
Policy : Any primary
mortgage guaranty insurance policy issued in connection with a
Mortgage Loan which provides compensation to a Mortgage Note holder
in the event of default by the obligor under such Mortgage Note or
the related security instrument, if any or any replacement policy
therefor through the related Accrual Period for such Class relating
to a Distribution Date.
Principal Distribution
Amount : With respect to
each Distribution Date, an amount equal to (x) the Principal Funds
for such Distribution Date plus (y) any Extra Principal
Distribution Amount for such Distribution Date, less (z) any
Overcollateralization Release Amount for such Distribution
Date.
Principal Funds
: With respect to any Distribution
Date, (i) the sum, without duplication, of (a) all scheduled
principal collected in respect of the related Due Period and
received by the Servicer on or prior to the related Determination
Date, (b) Principal Prepayments collected during the related
Prepayment Period and not included in Principal Funds for any prior
Distribution Date, (c) the Stated Principal Balance of each
Mortgage Loan that was repurchased pursuant to Sections 2.02 and
2.03 or by the Majority B-IO Holder pursuant to Section 3.18, (d)
the aggregate of all Substitution Adjustment Amounts for the
related Determination Date in connection with the substitution of
Mortgage Loans pursuant to Section 2.03(c), (e) any amount
withdrawn from the Pre-Funding Account pursuant to Section
5.10(e)(ii) and included in Principal Funds, and (f) all
Liquidation Proceeds and Subsequent Recoveries (net of any Recovery
Fee) collected during the prior calendar month (to the extent such
Liquidation Proceeds and Subsequent Recoveries relate to
principal), in each case to the extent remitted by the Master
Servicer to the Distribution Account pursuant to this Agreement,
less (ii) all amounts required to be reimbursed pursuant to
Sections 5.02, 5.03, 5.05, 5.06, 5.09, 9.05 and 10.05 or as
otherwise set forth in this Agreement and not applied to reduce
Interest Funds on that Distribution Date.
Principal Prepayment
: Any Mortgagor payment or other
recovery of (or proceeds with respect to) principal on a Mortgage
Loan (including loans purchased or repurchased under Sections 2.02,
2.03, 3.18 and 11.01 hereof) that is received in advance of its
scheduled Due Date and is not accompanied by an amount as to
interest representing scheduled interest due on any date or dates
in any month or months subsequent to the month of prepayment.
Partial Principal Prepayments shall be applied by the Servicer, as
appropriate, in accordance with the terms of the related Mortgage
Note.
Principal Remittance
Amount : With respect to
each Distribution Date, the sum of the amounts listed in clauses
(a) through (e) of the definition of Principal Funds.
Private Certificates
: Each of the Class B-IO
Certificates and Residual Certificates.
Prospectus Supplement
: The Prospectus Supplement dated
October 21, 2005 relating to the public offering of the Class A-1,
Class A-2, Class A-3, Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9
Certificates.
36
Protected Account
: The separate Eligible Account
established and maintained by the Servicer with respect to the
Mortgage Loans and REO Property in accordance with Section 5.01
hereof.
PUD : A Planned Unit Development.
Purchase Price
: With respect to any Mortgage Loan
(x) required to be repurchased pursuant to Section 2.02 or 2.03
hereof or (y) that the Majority B-IO Holder has a right to purchase
pursuant to Section 3.18 hereof, an amount equal to the sum of,
without duplication (i) 100% of the outstanding principal balance
of the Mortgage Loan as of the date of such purchase (or if the
related Mortgaged Property was acquired with respect thereto, 100%
of the Outstanding Principal Balance at the date of the
acquisition), (ii) accrued interest thereon at the applicable
Mortgage Rate through the last day of the related Due Period ending
in the month in which the Purchase Price is to be distributed to
Certificateholders, (iii) unreimbursed Servicing Advances and
Advances made with respect to the related Mortgage Loan, if any,
and (iv) any costs and damages (if any) incurred by the Trust in
connection with any violation of such Mortgage Loan of any
anti-predatory lending laws.
Rating Agency
: Each of Fitch and S&P. If any
such organization or its successor is no longer in existence,
“Rating Agency” shall be a nationally recognized
statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be
given to the Trustee. References herein to a given rating category
of a Rating Agency shall mean such rating category without giving
effect to any modifiers.
Realized Loss
: With respect to each Mortgage Loan
as to which a Final Recovery Determination has been made, an amount
(not less than zero), as reported by the Master Servicer to the
Securities Administrator, equal to (i) the Stated Principal Balance
of such Mortgage Loan as of the date on 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 last day of the Due Period in which such Final Recovery
Determination was made, calculated (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 such date, minus (v)
the proceeds, if any, received in respect of such Mortgage Loan
during such Due Period, net of amounts that are payable therefrom
to the Servicer pursuant to this Agreement. In addition, to the
extent the Servicer receives Subsequent Recoveries with respect to
any Mortgage Loan, the amount of the Realized Loss with respect to
that Mortgage Loan will be reduced to the extent such recoveries
are applied to reduce the Certificate Principal Balance of any
Class of Certificates 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 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 last day of the
related Due Period 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
37
related Mortgage Loan as of the last
day of the related Due Period, plus (iii) REO Imputed Interest for
such REO Property for the related Due Period in which such REO
Property was acquired and ending with the calendar month in which
such Final Recovery Determination was made, minus (iv) the
aggregate of all unreimbursed Advances and Servicing
Advances.
With respect to each Mortgage Loan
which has become the subject of a Deficient Valuation, the
difference between the principal balance of the Mortgage Loan
outstanding immediately prior to such Deficient Valuation and the
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 Scheduled
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
Scheduled Payment.
Record Date
: With respect to any Distribution
Date and the Offered Certificates, so long as such Classes of
Certificates are Book-Entry Certificates, the Business Day
preceding such Distribution Date, and otherwise, the close of
business on the last Business Day of the month preceding the month
in which such Distribution Date occurs. With respect to the Class
B-IO Certificates and Residual Certificates and (a) the first
Distribution Date, the Closing Date and (b) with respect to any
other Distribution Date, the close of business on the last Business
Day of the month preceding the month in which such Distribution
Date occurs.
Recovery Fee
: A fee to be paid to the Servicer
in an amount equal to 40% of all Subsequent Recoveries on any
non-first lien Mortgage Loan which is at least 120 days Delinquent
after the date on which such Mortgage Loan has been charged-off
pursuant to Section 3.18.
Reference Banks
: Shall mean leading banks selected
by the Securities Administrator and engaged in transactions in
Eurodollar deposits in the international Eurocurrency market (i)
with an established place of business in London, (ii) which have
been designated as such by the Securities Administrator and (iii)
which are not controlling, controlled by, or under common control
with, the Depositor, the Master Servicer, the Servicer or the
Trustee.
Reference Bank Rate
: With respect to any Accrual Period
shall mean the arithmetic mean, rounded upwards, if necessary, to
the nearest whole multiple of 0.03125%, of the offered rates for
United States dollar deposits for one month that are quoted by the
Reference Banks as of 11:00 a.m., New York City time, on the
related Interest Determination Date to prime banks in the London
interbank market for a period of one month in an amount
approximately equal to the aggregate Certificate Principal Balance
of the Class A-1, Class A-2 and Class M Certificates for such
Accrual Period, provided that at least two such Reference Banks
provide such rate. If fewer than two offered rates appear, the
Reference Bank Rate will be the arithmetic mean, rounded upwards,
if necessary, to the nearest whole multiple of 0.03125%, of the
rates quoted by one or more major banks in New York City, selected
by the Securities Administrator, as of 11:00 a.m., New York City
time, on such date for loans in United States dollars to leading
European banks
38
for a period of one month in amounts
approximately equal to the aggregate Certificate Principal Balance
of the Class A-1, Class A-2 and Class M Certificates for such
Accrual Period.
Regular Certificate
: Any Certificate other than a
Residual Certificate.
Regular Interest
: A “regular interest”
in a REMIC within the meaning of Section 860G(a)(1) of the
Code.
Related Class
: The Classes of Certificates (other
than the Class R-1, Class R-2 and Class B-IO Certificates) and the
REMIC II Regular Interests shall be treated as “Related
Classes” as set forth in the following chart.
|
REMIC II Regular Interest
|
Related Certificate(s)
|
|
MT1, MT2, MT3, MT4
|
A-1, A-2, A-3
|
|
M-1-M
|
M-1
|
|
M-2-M
|
M-2
|
|
M-3-M
|
M-3
|
|
M-4-M
|
M-4
|
|
M-5-M
|
M-5
|
|
M-6-M
|
M-6
|
|
M-7-M
|
M-7
|
|
M-8-M
|
M-8
|
|
M-9-M
|
M-9
|
|
M-10-M
|
M-10
|
|
B-IO-I-M
|
B-IO
|
|
B-IO-P-M
|
B-IO
|
|
R-M
|
R-3
|
Relief Act
: The Servicemembers Civil Relief
Act, as amended, or similar state law.
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 Due Period as a result of the application of
the Relief Act.
Remaining Excess
Spread : With respect to
any Distribution Date, the Excess Spread less any Extra Principal
Distribution Amount, in each case for such Distribution
Date.
Remaining Pre-Funded
Amount : An amount equal
to the Pre-Funded Amount minus the amount equal to 100% of the
aggregate Stated Principal Balance of the Subsequent Mortgage Loans
transferred to the Trust Fund during the Pre-Funding Period
pursuant to Section 2.07.
REMIC : A “real estate mortgage investment
conduit” within the meaning of section 860D of the
Code.
REMIC I : The segregated pool of assets described in
Section 6.06(a).
39
REMIC I Available Distribution
Amount : For any
Distribution Date, the sum of the Principal Funds and Interest
Funds.
REMIC I Distribution
Amount : For any
Distribution Date, the REMIC I Available Distribution Amount shall
be distributed by REMIC I to REMIC II on account of the REMIC I
Regular Interests and to Holders of the Class R-1 Certificates in
the following amounts and priority:
(1) to
the REMIC I Regular Interests pro rata, in an amount equal to (A)
their Uncertificated Accrued Interest for such Distribution Date,
plus (B) any amounts in respect thereof remaining unpaid from
previous Distribution Dates; and
(2) to
the REMIC I Regular Interests, to the extent of the REMIC I
Available Distribution Amount remaining after the distributions
made pursuant to clause (1) above, the following amounts allocated
as follows (except as provided below):
(A) in
respect of REMIC I Regular Interests LT2, LT3 and LT4, their
respective Principal Distribution Amounts;
(B) in
respect of REMIC I Regular Interest LT1 any remainder until the
Uncertificated Principal Balance thereof is reduced to zero;
and
(C) any
remainder in respect of REMIC I Regular Interests LT2, LT3 and LT4,
pro rata according to their respective Uncertificated Principal
Balances as reduced by the distributions deemed made pursuant to
(A) above, until their respective Uncertificated Principal Balances
are reduced to zero; and
(3) any
remaining amounts of the REMIC I Available Distribution Amount to
the Class R-1 Certificates.
REMIC I Principal Reduction
Amounts : For any
Distribution Date, the amounts by which the Uncertificated
Principal Balances of the REMIC I Regular Interests will be
reduced on such Distribution Date by the allocation of Realized
Losses and the distribution of principal, determined as
follows:
For purposes of the succeeding
formulas the following symbols shall have the meanings set forth
below:
Y 1
= the principal balance of
REMIC I Regular Interest LT1 after distributions on the prior
Distribution Date.
Y 2
= the principal balance of
REMIC I Regular Interest LT2 after distributions on the prior
Distribution Date.
Y 3
= the principal balance of
REMIC I Regular Interest LT3 after distributions on the prior
Distribution Date.
40
Y 4
= the principal balance of
REMIC I Regular Interest LT4 after distributions on the prior
Distribution Date (note: Y 3 = Y 4
).
|
|
ΔY 1 =
|
the REMIC I Regular Interest
LT1 Principal Reduction Amount.
|
|
|
ΔY 2 =
|
the REMIC I Regular Interest
LT2 Principal Reduction Amount.
|
|
|
ΔY 3 =
|
the REMIC I Regular Interest
LT3 Principal Reduction Amount.
|
|
|
ΔY 4 =
|
the REMIC I Regular Interest
LT4 Principal Reduction Amount.
|
P 0
= the aggregate principal
balance of the REMIC I Regular Interests after distributions and
the allocation of Realized Losses on the prior Distribution
Date.
P 1
= the aggregate principal
balance of the REMIC I Regular Interests after distributions and
the allocation of Realized Losses to be made on such Distribution
Date.
|
|
ΔP =
|
P 0 - P 1 =
the aggregate of the REMIC I Principal Reduction
Amounts.
|
= the
aggregate of the principal portions of Realized Losses to be
allocated to, and the principal distributions to be made with
respect to the Mortgage Loans, on such Distribution Date (including
distributions of accrued and unpaid interest on the Class B-IO
Certificates for prior Distributions Dates).
R 0
= the Net Rate Cap for the
Class M Certificates (stated as a monthly rate) after giving effect
to amounts distributed and Realized Losses allocated on the prior
Distribution Date.
R 1
= the Net Rate Cap for the
Class M Certificates (stated as a monthly rate) after giving effect
to amounts to be distributed and Realized Losses to be allocated on
such Distribution Date.
α
= (Y
2 + Y 3 )/P 0 . The initial value
of a on the Closing Date for use on the first Distribution Date
shall be 0.0001.
γ 0
= the lesser of (A)
the sum of (x) the sum for all Classes of Certificates, other than
the Class B-IO Certificates, of the product for each Class of (i)
the monthly interest rate (as limited by the Net Rate Cap, if
applicable) for such Class applicable for distributions to be made
on such Distribution Date and (ii) the aggregate Certificate
Principal Balance or Certificate Notional Balance for such Class
after distributions and the allocation of Realized Losses on the
prior Distribution Date and (B) R 0 *P 0
.
γ 1
= the lesser of (A) the sum for
all Classes of Certificates, other than the Class B-IO
Certificates, of the product for each Class of (i) the monthly
interest rate (as limited by the Net Rate Cap, if applicable) for
such Class applicable for distributions to be made on the next
succeeding Distribution Date and (ii) the aggregate Certificate
Principal Balance or Certificate Notional Balance for such Class
after distributions and the allocation of Realized Losses to be
made on such Distribution Date and (B) R 1 *P
1 .
41
Then, based on the foregoing
definitions:
|
|
ΔY 1 =
|
ΔP - ΔY 2 -
ΔY 3 - ΔY 4 ;
|
|
|
ΔY 2 =
|
(α/2){( γ 0 R
1 - γ 1 R 0 )/R 0
R 1 };
|
|
|
ΔY 3 =
|
αΔP - ΔY 2
; and
|
|
|
ΔY 4 =
|
ΔY 3 .
|
if both ΔY 2 and
ΔY 3 , as so determined, are non-negative numbers.
Otherwise:
|
|
(1)
|
If ΔY 2 , as so
determined, is negative, then
|
ΔY 2 = 0;
ΔY 3 = α{γ
1 R 0 P 0 - γ 0 R
1 P 1 }/{γ 1 R 0
};
ΔY 4 = ΔY
3 ; and
ΔY 1 = ΔP -
ΔY 2 - ΔY 3 - ΔY 4
.
|
|
(2)
|
If ΔY 3 , as so
determined, is negative, then
|
ΔY 3 = 0;
ΔY 2 = α{γ
1 R 0 P 0 - γ 0 R
1 P 1 }/{2R 1 R 0 P
1 - γ 1 R 0 };
ΔY 4 = ΔY
3 ; and
ΔY 1 = ΔP -
ΔY 2 - ΔY 3 - ΔY 4
.
REMIC I Realized
Losses : For any
Distribution Date, Realized Losses on the Mortgage Loans shall be
allocated to the REMIC I Regular Interests as follows: the interest
portion of such Realized Losses, if any, shall be allocated among
the REMIC I Regular Interests pro rata according to the amount of
Uncertificated Accrued Interest remaining unpaid thereon, in
reduction thereof. Any interest portion of such Realized Losses in
excess of the amount allocated pursuant to the preceding sentence
shall be treated as a principal portion of Realized Losses not
attributable to any specific Mortgage Loan and allocated pursuant
to the succeeding sentences. The principal portion of such Realized
Losses shall be allocated to the REMIC I Regular Interests as
follows: first, to REMIC I Regular Interests LT2, LT3 and LT4 pro
rata according to their respective REMIC I Principal Reduction
Amounts to the extent thereof in reduction of the Uncertificated
Principal Balance thereof and, second, the remainder, if any, of
such principal portion of such Realized Losses shall be allocated
to REMIC I Regular Interest LT1 in reduction of the Uncertificated
Principal Balance thereof.
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
and held as an asset of REMIC II. Each REMIC I Regular Interest
shall accrue interest at the related
42
Uncertificated REMIC I Pass-Through
Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated
Principal Balance as set forth in the Preliminary Statement hereto.
The designations for the respective REMIC I Regular Interests are
set forth in the Preliminary Statement hereto.
REMIC I Regular Interest
LT1 : One of the separate
non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a Regular Interest in REMIC I and held
as an asset of REMIC II. REMIC I Regular Interest LT1 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set forth in the Preliminary Statement
hereto.
REMIC I Regular Interest LT1
Principal Distribution Amount : For any Distribution Date, the excess, if any,
of the REMIC I Regular Interest LT1 Principal Reduction Amount
for such Distribution Date over the Realized Losses allocated to
REMIC I Regular Interest LT1 on such Distribution
Date.
REMIC I Regular Interest
LT2 : One of the separate
non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a Regular Interest in REMIC I and held
as an asset of REMIC II. REMIC I Regular Interest LT2 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set forth in the Preliminary Statement
hereto.
REMIC I Regular Interest LT2
Principal Distribution Amount : For any Distribution Date, the excess, if any,
of the REMIC I Regular Interest LT2 Principal Reduction Amount
for such Distribution Date over the Realized Losses allocated to
REMIC I Regular Interest LT2 on such Distribution
Date.
REMIC I Regular Interest
LT3 : One of the separate
non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a Regular Interest in REMIC I and held
as an asset of REMIC II. REMIC I Regular Interest LT3 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set forth in the Preliminary Statement
hereto.
REMIC I Regular Interest LT3
Principal Distribution Amount : For any Distribution Date, the excess, if any,
of the REMIC I Regular Interest LT3 Principal Reduction Amount
for such Distribution Date over the Realized Losses allocated to
REMIC I Regular Interest LT3 on such Distribution
Date.
REMIC I Regular Interest
LT4 : One of the separate
non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a Regular Interest in REMIC I and
held
43
as an asset of REMIC II. REMIC I
Regular Interest LT4 shall accrue interest at the related
Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject
to the terms and conditions hereof, in an aggregate amount equal to
its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC I Regular Interest LT4
Principal Distribution Amount : For any Distribution Date, the excess, if any,
of the REMIC I Regular Interest LT4 Principal Reduction Amount
for such Distribution Date over the Realized Losses allocated to
REMIC I Regular Interest LT4 on such Distribution
Date.
REMIC II : The segregated pool of assets consisting of
the REMIC I Regular Interests conveyed in trust to the Trustee, for
the benefit of the Holders of the REMIC II Regular Interests and
the Class R-2 Certificates, with respect to which a separate REMIC
election is to be made.
REMIC II Distribution
Amount: For any
Distribution Date, the amount deemed received by REMIC II in
respect of distributions on the REMIC I Regular Interests shall be
distributed to the REMIC II Regular Interests and the Class R-2
Certificates in the following amounts and priority:
(a) Uncertificated
Accrued Interest on the REMIC II Regular Interests for such
Distribution Date, plus any Uncertificated Accrued Interest thereon
remaining unpaid from any previous Distribution Date, as
follows:
(1) the
sum of the amounts distributable on such Distribution Date as
interest other than Basis Risk Shortfall Carryforward Amounts to
the Class A Certificates pursuant to Section 6.04, to REMIC II
Regular Interests MT1, MT2, MT3 and MT4 pro-rata according to the
Uncertificated Accrued Interest thereon, including any such
interest remaining unpaid from any previous Distribution Date;
and
(2) to
REMIC II Regular Interests M-1-M, M-2-M, M-3-M, M-4-M, M-5-M,
M-6-M, M-7-M, M-8-M, M-9-M, M-10-M and B-IO-I-M, the amount
distributable as interest on such Distribution Date to the Related
Class of Certificates pursuant to Section 6.04; and; and
(b) In
accordance with the priority set forth in subsection (c) of this
definition, an amount equal to the sum of the amounts in respect of
principal distributable on each Class of Certificates (other than
the Class R-1 Certificates) under Section 6.04, as allocated
thereto pursuant to Section 6.04.
(c) The
amount described in subsection (b) of this definition shall be
deemed distributed with respect to the REMIC II Regular Interests
in accordance with the priority assigned to each Related Class of
Certificates under Section 6.04 until the Uncertificated Principal
Balance of each such interest is reduced to zero and to the Class
R-2 Certificates in accordance with the priority assigned to such
Certificates under Section 6.04. The amount attributed to REMIC II
Regular Interests MT1, MT2, MT3 and MT4 pursuant to the preceding
sentence shall be allocated among such REMIC II Regular Interests
as follows:
(1) in
respect of REMIC II Regular Interests MT2, MT3 and MT4, their
respective Principal Distribution Amounts;
(2) in
respect of REMIC II Regular Interest MT1 any remainder until the
Uncertificated Principal Balance thereof is reduced to zero;
and
(3) any
remainder in respect of REMIC II Regular Interests MT2, MT3 and
MT4, pro rata according to their respective Uncertificated
Principal Balances as reduced by the distributions deemed made
pursuant to (1) above, until their respective Uncertificated
Principal Balances are reduced to zero.
REMIC II Principal Reduction
Amounts: For any Distribution Date, the amounts by which the
Uncertificated Principal Balances of the REMIC II Regular Interests
will be reduced on such Distribution Date by the allocation of
Realized Losses and the distribution of principal, determined as
follows:
For purposes of the succeeding
formulas the following symbols shall have the meanings set forth
below:
X 1 = the principal
balance of REMIC II Regular Interest MT1 after distributions on the
prior Distribution Date.
X 2 = the principal
balance of REMIC II Regular Interest MT2 after distributions on the
prior Distribution Date.
X 3 = the principal
balance of REMIC II Regular Interest MT3 after distributions on the
prior Distribution Date.
X 4 = the principal
balance of REMIC II Regular Interest MT4 after distributions on the
prior Distribution Date (note: X3 = X4).
ΔX1 = the REMIC II Regular
Interest MT1 Principal Reduction Amount.
ΔX2 = the REMIC II Regular
Interest MT2 Principal Reduction Amount.
ΔX3 = the REMIC II Regular
Interest MT3 Principal Reduction Amount.
ΔX4 =
the REMIC II Regular Interest MT4
Principal Reduction Amount.
Q 0 =
the aggregate principal balance of
the REMIC II Regular Interests MT1, MT2, MT3 and MT4 after
distributions and the allocation of Realized Losses on the prior
Distribution Date.
Q 1
= the aggregate principal balance of
the REMIC II Regular Interests MT1, MT2, MT3 and MT4 after
distributions and the allocation of Realized Losses to be made on
such Distribution Date.
ΔQ =
Q 0
Q 1 = the aggregate of the
REMIC II Principal Reduction Amounts.
= the
aggregate of the principal portions of Realized Losses to be
allocated to, and the principal distributions to be made with
respect to the Class A Certificates.
S 0 = the lesser of the
Net Rate Cap for the Class M Certificates and the Class A Maximum
Rate (such lesser rate being restated as a monthly rate) after
giving effect to amounts distributed and Realized Losses allocated
on the prior Distribution Date.
S 1 = the lesser of the
Net Rate Cap for the Class M Certificates and the Class A Maximum
Rate (such lesser rate being restated as a monthly rate) after
giving effect to amounts to be distributed and Realized Losses to
be allocated on such Distribution Date.
Β = (X 2 + X
3 )/Q0. The initial value of Β on the Closing Date
for use on the first Distribution Date shall be 0.0001.
Γ 0 = the lesser of
(A) the sum for the Class A-1 and Class A-2 Certificates of the
product for each Class of (i) the monthly interest rate (as limited
by the Net Rate Cap, if applicable) for such Class applicable for
distributions to be made on such Distribution Date and (ii) the
aggregate Certificate Principal Balance for such Class after
distributions and the allocation of Realized Losses on the prior
Distribution Date and (B) S0*Q0.
Γ 1 = the lesser of
(A) the sum for the Class A-1 and Class A-2 Certificates of the
product for each Class of (i) the monthly interest rate (as limited
by the Net Rate Cap, if applicable) for such Class applicable for
distributions to be made on the next succeeding Distribution Date
and (ii) the aggregate Certificate Principal Balance for such Class
after distributions and the allocation of Realized Losses to be
made on such Distribution Date and (B) S1*Q1.
Then, based on the foregoing
definitions:
ΔX1 = ΔQ - ΔX2 -
ΔX3 - ΔX4;
ΔX2 = (Β/2){( Γ0S1 -
Γ1S0)/S0S1};
ΔX3 = ΒΔQ - ΔX2;
and
ΔX4 = ΔX3.
if both ΔX2 and ΔX3, as so
determined, are non-negative numbers. Otherwise:
(1) If
ΔX2, as so determined, is negative, then
ΔX2 = 0;
ΔX3 = Β{Γ1S0Q0 -
Γ0S1Q1}/{Γ1S0};
ΔX4 = ΔX3; and
ΔX1 = ΔQ - ΔX2 -
ΔX3 - ΔX4.
(2) If
ΔX3, as so determined, is negative, then
ΔX3 = 0;
ΔX2 = Β{Γ1S0Q0 -
Γ0S1Q1}/{2S1S0Q1 - Γ1S0};
ΔX4 = ΔX3; and
ΔX1 = ΔQ - ΔX2 -
ΔX3 - ΔX4.
REMIC II Regular
Interest : Any of the
separate non-certificated beneficial ownership interests in REMIC
II issued hereunder and designated as a Regular Interest in REMIC
II and held as an asset of REMIC III. Each REMIC II Regular
Interest shall accrue interest at the related Uncertificated REMIC
II Pass-Through Rate in effect from time to time, and shall be
entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto. The designations for the respective REMIC II
Regular Interests are set forth in the Preliminary Statement
hereto.
REMIC II Regular Interest MT1
Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the REMIC II Regular Interest MT1 Principal
Reduction Amount for such Distribution Date over the Realized
Losses allocated to REMIC II Regular Interest MT1 on such
Distribution Date.
REMIC II Regular Interest MT2
Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the REMIC II Regular Interest MT2 Principal
Reduction Amount for such Distribution Date over the Realized
Losses allocated to REMIC II Regular Interest MT2 on such
Distribution Date.
REMIC II Regular Interest MT3
Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the REMIC II Regular Interest MT3 Principal
Reduction Amount for such Distribution Date over the Realized
Losses allocated to REMIC II Regular Interest MT3 on such
Distribution Date.
REMIC II Regular Interest MT4
Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the REMIC II Regular Interest MT4 Principal
Reduction Amount for such Distribution Date over the Realized
Losses allocated to REMIC II Regular Interest MT4 on such
Distribution Date.
REMIC II Realized
Losses : Realized Losses
allocated to the Certificates (other than the Class R-1 and Class
R-2 Certificates) and the REMIC III Regular Interests (other than
REMIC III Regular Interests B-IO-I and B-IO-P) in reduction of the
interest or principal attributes thereof
44
shall be deemed allocated to the
Uncertificated REMIC II Regular Interests (other than REMIC II
Regular Interests B-IO-I-M and B-IO-P-M) in accordance with the
priority assigned to each Related Class of Certificates,
respectively, under Section 6.04A. Realized Losses allocated to
REMIC III Regular Interests B-IO-I and B-IO-P in reduction of the
interest or principal attributes thereof shall be deemed allocated
to REMIC II Regular Interests B-IO-I-M and B-IO-P-M, respectively.
Realized Losses allocated to REMIC II Regular Interests MT1, MT2,
MT3 and MT4 pursuant to the preceding provisions of this definition
shall be allocated among such REMIC II Regular Interests as
follows: Any Realized Losses allocated to interest shall be
allocated in reduction of Uncertificated Accrued Interest on such
REMIC II Regular Interests pro-rata according to the accrued and
unpaid Uncertificate Accrued Interest thereon. Any Realized Losses
allocated to principal shall be allocated, first, to REMIC II
Regular Interests MT2, MT3 and MT4 pro rata according to their
respective REMIC II Principal Reduction Amounts to the extent
thereof in reduction of the Uncertificated Principal Balance
thereof and, second, the remainder, if any, of such principal
portion of such Realized Losses shall be allocated to REMIC II
Regular Interest MT1 in reduction of the Uncertificated Principal
Balance thereof.
REMIC III : The segregated pool of assets consisting of
the REMIC II Regular Interests conveyed in trust to the Trustee,
for the benefit of the Holders of the REMIC III Certificates, with
respect to which a separate REMIC election is to be
made.
REMIC III Regular
Interest : As defined in
the Preliminary Statement hereto under “REMIC
III.”
REMIC III Certificate
: Any Class A Certificate, Class M
Certificate, Class B-IO Certificate or Class R-3
Certificate.
REMIC III Realized
Losses : Realized Losses
allocated to and in reduction of the Overcollateralization Amount
shall be deemed to first reduce the principal balance of REMIC III
Regular Interest B-IO-P until such balance shall have been reduced
to zero and thereafter to reduce the accrued and unpaid interest on
REMIC III Regular Interest B-IO-I. Realized Losses allocated to any
Certificate (other than any Class R Certificate) in reduction of
the interest or principal attributes thereof shall be deemed
allocated to its Corresponding REMIC III Regular Interest in
reduction of the corresponding attributes thereof.
REMIC Opinion
: Shall mean an Opinion of Counsel
to the effect that the proposed action will not cause any of REMIC
I, REMIC II or REMIC III to fail to qualify as a REMIC at any time
that any Certificates are outstanding.
REMIC Provisions
: Provisions of the federal income
tax law relating to real estate mortgage investment conduits, which
appear at sections 860A through 860G of Subchapter M of Chapter 1
of the Code, and related provisions, and proposed, temporary and
final regulations and published rulings, notices and announcements
promulgated thereunder, as the foregoing may be in effect from time
to time as well as provisions of applicable state laws.
Remittance Date
: The 17th day of each calendar
month after the initial issuance of the Certificates, or if such
17th day is not a Business Day, the next succeeding Business Day
commencing in November 2005.
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 Property
: A Mortgaged Property acquired by
the Servicer through foreclosure or deed-in-lieu of foreclosure in
connection with a defaulted Mortgage Loan.
45
Replacement Mortgage
Loan : A Mortgage Loan or
Mortgage Loans in the aggregate substituted by a Seller or a
Guarantor for a Deleted Mortgage Loan, which must, on the date of
such substitution, as confirmed in a Request for Release, (i) have
a Stated Principal Balance, after deduction of the principal
portion of the Scheduled Payment due in the month of substitution,
not in excess of, and not less than 90% of, the Stated Principal
Balance of the Deleted Mortgage Loan; (ii) if the Replacement
Mortgage Loan is a fixed rate Mortgage Loan, have a fixed Mortgage
Rate not less than or more than 1% per annum higher than the
Mortgage Rate of the Deleted Mortgage Loan; (iii) have the same or
higher credit quality characteristics than that of the Deleted
Mortgage Loan; (iv) have a Loan-to-Value Ratio no higher than that
of the Deleted Mortgage Loan; (v) have a remaining term to maturity
no greater than (and not more than one year less than) that of the
Deleted Mortgage Loan; (vi) not permit conversion of the Mortgage
Rate from a fixed rate to a variable rate; (vii) have the same lien
priority as the Deleted Mortgage Loan; (viii) constitute the same
occupancy type as the Deleted Mortgage Loan or be owner occupied;
(ix) if the Replacement Mortgage Loan is an Adjustable Rate
Mortgage Loan, have a Maximum Mortgage Rate not less than the
Maximum Mortgage Rate on the Deleted Mortgage Loan, (x) if the
Replacement Mortgage Loan is an Adjustable Rate Mortgage Loan, have
a Minimum Mortgage Rate not less than the Minimum Mortgage Rate of
the Deleted Mortgage Loan, (xi) if the Replacement Mortgage Loan is
an Adjustable Rate Mortgage Loan, have a Gross Margin equal to or
greater than the Gross Margin of the Deleted Mortgage Loan, (xii)
if the Replacement Mortgage Loan is an 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, (xiii)
comply with each representation and warranty set forth in Section 7
of the related Mortgage Loan Purchase Agreement for such Seller or
related Guarantor and the applicable section in any Subsequent
Mortgage Loan Purchase Agreement and (xiv) the Custodian has
delivered a Final Certification noting no defects or
exceptions.
Request for Release
: The Request for Release to be
submitted by the Servicer or the Master Servicer to the Custodian
substantially in the form of Exhibit H. Each Request for Release
furnished to the Custodian by the Servicer or the Master Servicer
shall be in duplicate and shall be executed by an officer of such
Person or a Servicing Officer (or, if furnished electronically to
the Custodian, shall be deemed to have been sent and executed by an
officer of such Person or a Servicing Officer) of the Servicer or
the Master Servicer.
Required Insurance
Policy : With respect to
any Mortgage Loan, any insurance policy that is required to be
maintained from time to time under this Agreement.
Reserve Fund
: Shall mean the separate trust
account created and maintained by the Securities Administrator
pursuant to Section 5.11 hereof.
Residual Certificates
: The Class R-1 Certificates, Class
R-2 Certificates and Class R-3 Certificates, each evidencing
ownership of the sole class of “residual interests”
(within the meaning of Section 860G(a)(2) of the Code) in the
related REMIC.
Residual Interest
: The sole class of “residual
interests” in a REMIC within the meaning of Section
860G(a)(2) of the Code.
46
Responsible Officer
: With respect to the Trustee, any
Vice President, any Assistant Vice President, the Secretary, any
Assistant Secretary, or any trust officer with specific
responsibility for the transactions contemplated hereby, any other
officer customarily performing functions similar to those performed
by any of the above designated officers or other officers of the
Trustee specified by the Trustee, as to whom, with respect to a
particular matter, such matter is referred because of such
officer’s knowledge of and familiarity with the particular
subject; with respect to the Securities Administrator, any Vice
President, any Assistant Vice President, the Secretary, any
Assistant Secretary, or any officer with specific responsibility
for the transactions contemplated hereby, any other officer
customarily performing functions similar to those performed by any
of the above designated officers or other officers of the
Securities Administrator specified by the Securities Administrator,
as to whom, with respect to a particular matter, such matter is
referred because of such officer’s knowledge of and
familiarity with the particular subject.
Risk Management
Agreement : The risk
management agreement dated as of the Closing Date, between the
Servicer and the Risk Manager.
Risk Manager
: Risk Management Group, LLC, a New
York limited liability company, and its successors and
assigns.
Risk Manager
Certification : The
certificate provided by the Risk Manager for the benefit of the
Depositor, the Trustee and the Securities Administrator pursuant to
Section 10.13(d), and substantially in the form of Exhibit
O.
Risk Manager Fee
: As to each Mortgage Loan and any
Distribution Date, an amount equal to 1/12th of the Risk Manager
Fee Rate multiplied by the Stated Principal Balance of such
Mortgage Loan as of the first day of the related Due Period or, in
the event of any payment of interest that accompanies a Principal
Prepayment in full during the related Due Period made by the
Mortgagor immediately prior to such prepayment, interest at the
Risk Manager Fee Rate on the Stated Principal Balance of such
Mortgage Loan for the period covered by such payment of
interest.
Risk Manager Fee Rate
: 0.01% per annum.
S&P : Standard & Poor’s, a division of The
McGraw-Hill Companies, Inc., and any successor thereto.
Scheduled Payment
: The scheduled monthly payment on a
Mortgage Loan due on any Due Date allocable to principal and/or
interest on such Mortgage Loan.
Securities Act
: The Securities Act of 1933, as
amended.
Securities
Administrator : LaSalle
Bank National Association, and any successor thereto, or any
successor securities administrator appointed as provided
herein.
Sellers : Each of Ellington 2005-1, Ellington 2005-2 and
Ocwen Trust, and their successors and assigns, each in its capacity
as seller of the related Mortgage Loans or Subsequent Mortgage
Loans, as applicable, to the Depositor.
47
Seller Arrearages
: Any accrued and unpaid interest
for any period prior to the Cut-off Date for any Mortgage Loan
which is Delinquent on the related Cut-off Date; such amount to be
paid first from late payments on the Mortgage Loans received by the
Servicer or Liquidation Proceeds from the related Mortgage Loan
and, if such amounts are not sufficient, then from amounts on
deposit in the Protected Account.
Servicer : Ocwen Loan Servicing, LLC, a Delaware limited
liability company, in its capacity as Servicer, and its successors
and assigns.
Servicer Event of
Default : As defined in
Section 9.05 hereof.
Servicing Advances
: All customary, reasonable and
necessary “out of pocket” costs and expenses (including
reasonable legal fees) incurred prior to or after the Cut-off Date
in the performance by the Servicer of its servicing obligations
hereunder, 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, and including any expenses incurred in relation to
any such proceedings that result from the Mortgage Loan being
registered in the MERS® System, (iii) the management and
liquidation of any REO Property (including, without limitation,
realtor’s commissions, (iv) compliance with any obligations
under Section 3.07 hereof to cause insurance to be maintained (v)
any advance necessary for the purposes of effecting the payment of
taxes and assessments on the Mortgaged Properties pursuant to
Section 3.01 and (vi) obtaining any legal documentation required to
be included in the Mortgage File and/or correcting any outstanding
title issues (i.e. any lien or encumbrance on the Mortgaged
Property that prevents the effective enforcement of the intended
lien position) reasonably necessary for the Servicer to perform its
obligations under this Agreement. Servicing Advances also include
any reasonable “out-of-pocket” cost and expenses
(including legal fees) incurred by the Servicer in connection with
executing and recording instruments of satisfaction, deeds of
reconveyance or Assignments of Mortgage to the extent not recovered
from the Mortgagor or otherwise payable under this
Agreement.
Servicing Fee
: As to each Mortgage Loan and any
Distribution Date, an amount equal to 1/12th of the Servicing Fee
Rate multiplied by the Stated Principal Balance of such Mortgage
Loan as of the first day of the related Due Period or, in the event
of any payment of interest that accompanies a Principal Prepayment
in full during the related Due Period made by the Mortgagor
immediately prior to such prepayment, interest at the Servicing Fee
Rate on the Stated Principal Balance of such Mortgage Loan for the
period covered by such payment of interest.
Servicing Fee Rate
: 0.635% per annum.
Servicing Modification
: With respect to any Mortgage Loan
that is in default or, in the reasonable judgment of the Servicer,
as to which default is reasonably foreseeable, any modification
which is effected by the Servicer in accordance with the terms of
this Agreement which results in any change in the outstanding
Stated Principal Balance, any change in the Mortgage Rate or any
extension of the term of such Mortgage Loan.
48
Servicing Officer
: Any officer of the Servicer
involved in, or responsible for, the administration and servicing
of the Mortgage Loans whose name and facsimile signature appear on
a list of servicing officers furnished to the Trustee and the
Master Servicer by the Servicer on the Closing Date pursuant to
this Agreement, as such list may from time to time be
amended.
Simple Interest Loans
: The Mortgage Loans that provide
for monthly payments to be allocated to principal and interest
according to the daily simple interest method.
Simple Interest Shortfall
Advance : Any Advance
made by the Servicer in connection with a Simple Interest Loan
resulting from any shortfall in the amount of any Scheduled Payment
applied to interest on the Simple Interest Loan due to the payment
by the related Mortgagor of the Scheduled Payment less than one
month after payment of the preceding Scheduled Payment.
Startup Day
: The Startup Day for each REMIC
formed hereunder shall be the Closing Date.
Stated Principal
Balance : With respect to
any Mortgage Loan or related REO Property and any Distribution
Date, the applicable Cut-off Date Principal Balance thereof minus
the sum of (i) the principal portion of the Scheduled Payments
received with respect to such Mortgage Loan prior to or during each
Due Period ending prior to such Distribution Date, (ii) all
Principal Prepayments with respect to such Mortgage Loan received
prior to or during the related Prepayment Period, and all
Liquidation Proceeds to the extent applied by the Servicer as
recoveries of principal in accordance with Section 3.09 with
respect to such Mortgage Loan that were received by the Servicer as
of the close of business on the last day of the prior calendar
month related to such Distribution Date and (iii) any Realized
Losses on such Mortgage Loan incurred during the prior calendar
month. The Stated Principal Balance of a Liquidated Loan equals
zero.
Stepdown Date
: The later to occur of (a) the
Distribution Date in November 2008 and (b) the first Distribution
Date on which the Current Specified Enhancement Percentage
(calculated for this purpose only, prior to distributions on the
Certificates but following distributions on the Mortgage Loans for
the related Due Period) is greater than or equal to
23.60%.
Subordinated
Certificates : The Class
M Certificates, Class B-IO Certificates and Residual
Certificates.
Subsequent Cut-off
Date : With respect to
the Subsequent Mortgage Loans sold to the Trust pursuant to a
Subsequent Transfer Instrument, the later of (i) the first day of
the month in which the related Subsequent Transfer Date occurs or
(ii) the date of origination of such Mortgage Loan.
Subsequent Mortgage
Loans : The Mortgage
Loans which were not acquired by the Trust on the Closing Date
(which may include Katrina Loans which satisfied certain criteria
set forth in the definition of Katrina Loans) and are acquired by
the Trust during the Pre-Funding Period pursuant to Section 2.07
with amounts on deposit in the Pre-Funding Account. Such Subsequent
Mortgage Loans will be held as part of the Trust Fund.
49
Subsequent Mortgage Loan Purchase
Agreement : The
agreements and all amendments thereof and supplements thereto,
regarding the transfer of the Subsequent Mortgage Loans to the
Depositor a form of which is attached as Exhibit Q.
Subsequent Recoveries
: As of any Distribution Date,
amounts received by the Servicer or the Master Servicer (net of any
related expenses permitted to be reimbursed pursuant to Section
4.02 or 5.02, as applicable, and any Recovery Fee) or surplus
amounts held by the Servicer or the Master Servicer to cover
estimated expenses (including, but not limited to, recoveries in
respect of the representations and warranties made by the Sellers
and/or related Guarantors pursuant to their related Mortgage Loan
Purchase Agreements or Subsequent Mortgage Loan Purchase Agreement)
specifically related to a Mortgage Loan that was the subject of a
liquidation or final disposition of any REO Property prior to the
preceding calendar month that resulted in a Realized
Loss.
Subsequent Transfer
Date : With respect to
each Subsequent Transfer Instrument, the date on which the related
Subsequent Mortgage Loans are sold to the Trust.
Subsequent Transfer
Instrument : Each
Subsequent Transfer Instrument, dated as of a Subsequent Transfer
Date, executed by the Trustee at the written direction of the
related Seller and substantially in the form attached hereto as
Exhibit R, by which Subsequent Mortgage Loans are transferred to
the Trust Fund.
Subservicing Agreement
: Any agreement entered into between
the Servicer and a subservicer with respect to the subservicing of
any Mortgage Loan hereunder by such subservicer.
Substitution Adjustment
Amount : The meaning
ascribed to such term pursuant to Section 2.03(c).
Successor Master
Servicer : The meaning
ascribed to such term pursuant to Section 9.01.
Tax Matters Person
: The person designated as
“tax matters person” in the manner provided under
Treasury Regulation § 1.860F-4(d) and temporary Treasury
Regulation § 301.6231(a)(7)-1T. The Holder of the greatest
Percentage Interest in a Class of Residual Certificates shall be
the Tax Matters Person for the related REMIC, as more particularly
set forth in Section 10.12 hereof. The Securities Administrator, or
any successor thereto or assignee thereof shall serve as tax
administrator hereunder and as agent for the related Tax Matters
Person.
Transfer : Any direct or indirect transfer or sale of any
Ownership Interest in a Certificate.
Transfer Affidavit
: As defined in Section
7.02(d).
Trigger Event
: With respect to any Distribution
Date, a Trigger Event exists if (i) a Delinquency Event shall have
occurred and be continuing or (ii) the aggregate amount of Realized
Losses on the Mortgage Loans since the applicable Cut-off Date as a
percentage of the initial aggregate Stated Principal Balance of the
Mortgage Loans as of the applicable Cut-off Date exceeds the
applicable percentages set forth below with respect to such
Distribution Date:
50
|
Distribution Date
|
Percentage
|
|
November 2008 to October 2009
|
1.75%
|
|
November 2009 to October 2010
|
2.25%
|
|
November 2010 to October 2011
|
2.50%
|
|
November 2011 and thereafter
|
2.75%
|
|
|
|
Trust Fund
: The corpus of the trust created
hereunder consisting of (i) the Mortgage Loans and all interest
accruing and principal due with respect thereto after the
applicable Cut-off Date to the extent not applied in computing the
applicable Cut-off Date Principal Balance thereof; (ii) the
Distribution Account, the Reserve Fund, the Pre-Funding Account,
the Pre-Funding Reserve Account, the Master Servicer Collection
Account and the Protected Account and all amounts deposited therein
pursuant to the applicable provisions of this Agreement; (iii)
property that secured a Mortgage Loan and has been acquired by the
Servicer on behalf of the Trust Fund by foreclosure, deed in lieu
of foreclosure or otherwise; (iv) the mortgagee’s rights
under the Insurance Policies with respect to the Mortgage Loans;
(v) the rights under each Mortgage Loan Purchase Agreement and any
Subsequent Mortgage Loan Purchase Agreements, if any; and (vi) all
proceeds of the foregoing, including proceeds of conversion,
voluntary or involuntary, of any of the foregoing into cash or
other liquid property.
Trustee : Citibank, N.A., a national banking
association, not in its individual capacity, but solely in its
capacity as trustee for the benefit of the Certificateholders under
this Agreement, and any successor thereto, and any corporation or
national banking association resulting from or surviving any
consolidation or merger to which it or its successors may be a
party and any successor trustee as may from time to time be serving
as successor trustee hereunder.
Uncertificated Accrued
Interest : With respect
to each REMIC I Regular Interest and REMIC II Regular Interest and
any Distribution Date, an amount equal to one month’s
interest at the related Uncertificated REMIC I Pass-Through Rate or
Uncertificated REMIC II Pass-Through Rate, as applicable, on the
Uncertificated Principal Balance of such Regular Interest.
Uncertificated Accrued Interest for such Regular Interests shall
accrue on the basis of a 360-day year consisting of twelve 30-day
months. For purposes of calculating the amount of Uncertificated
Accrued Interest for the REMIC I Regular Interests and the REMIC II
Regular Interests for any Distribution Date, any Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls (to the
extent not covered by Compensating Interest) relating to the
Mortgage Loans for any Distribution Date shall be allocated among
the REMIC I Regular Interests pro rata, based on, and to the extent
of, Uncertificated Accrued Interest, as calculated without
application of this sentence, and among the REMIC II Regular
Interests in the same amounts as such shortfalls are allocated to
the Related Classes of Certificates, with the amount of such
shortfalls allocated to REMIC II Regular Interests MT1, MT2, MT3
and MT4 allocated among such REMIC II Regular Interests pro-rata,
based on, and to the extent of, Uncertificated Accrued Interest, as
calculated without application of this sentence and the preceding
one.
Uncertificated Notional
Balance : With respect to
REMIC II Regular Interest B-IO-M and any Distribution Date, the
aggregate Uncertificated Principal Balance of the REMIC I Regular
Interests for such Distribution Date.
Uncertificated Principal
Balance : With respect to
each REMIC I Regular Interest and REMIC II Regular Interest, the
principal amount of such Regular Interest outstanding as of
any
51
date of determination. As of the
Closing Date, the Uncertificated Principal Balance of each REMIC I
Regular Interest and REMIC II Regular Interest shall equal the
amount set forth in the Preliminary Statement hereto. On each
Distribution Date, the Uncertificated Principal Balance of each
REMIC I Regular Interest and REMIC II Regular Interest shall be
reduced by all distributions of principal made on such Regular
Interest on such Distribution Date pursuant to Section 6.06(b) or
Section 6.06(c), as applicable, and, if and to the extent necessary
and appropriate, shall be further reduced on such Distribution Date
by Realized Losses as provided by the definitions of REMIC I
Realized Losses and REMIC II Realized Losses. The Uncertificated
Principal Balance of each REMIC I Regular Interest and REMIC II
Regular Interest shall never be less than zero.
Uncertificated REMIC I
Pass-Through Rate : With
respect to any Distribution Date and (i) REMIC I Regular Interests
LT1 and LT2, the Net Rate Cap for the Class M Certificates
(adjusted, as necessary, to state such rate as a rate that accrues
on a 30/360 basis), (ii) REMIC I Regular Interest LT3, zero
(0.00%), and (iii) REMIC I Regular Interest LT4, twice the Net Rate
Cap for the Class M Certificates (adjusted, as necessary, to state
such rate as a rate t
