<PAGE>
Exhibit 4.1
EXECUTION COPY
MERRILL LYNCH MORTGAGE INVESTORS, INC.,
Depositor
WILSHIRE CREDIT CORPORATION,
Servicer
and
U.S. BANK NATIONAL ASSOCIATION,
Trustee
----------
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2007
----------
SPECIALTY UNDERWRITING AND RESIDENTIAL FINANCE TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2007-AB1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S>
<C>
ARTICLE I
DEFINITIONS....................................................
12
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES.. 61
SECTION 2.01.
Conveyance of Mortgage
Loans........................... 61
SECTION 2.02.
Acceptance by Trustee
of the Mortgage Loans............ 64
SECTION 2.03.
Representations,
Warranties and Covenants of the
Depositor..............................................
65
SECTION 2.04.
Representations and
Warranties of the Servicer......... 68
SECTION 2.05.
Substitutions and
Repurchases of Mortgage Loans Which
Are Not "Qualified Mortgages"..........................
70
SECTION 2.06.
Authentication and
Delivery of Certificates............ 70
SECTION 2.07.
REMIC
Elections........................................ 70
SECTION 2.08.
Covenants of the
Servicer.............................. 75
SECTION 2.09.
[RESERVED].............................................
75
SECTION 2.10.
[RESERVED].............................................
75
SECTION 2.11. Permitted Activities of the
Issuing Entity............. 75
SECTION 2.12.
Qualification of
Special Purpose Entity................ 76
SECTION 2.13.
Depositor Notification
of NIM Notes.................... 76
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS............... 76
SECTION 3.01.
Servicer to Service
Mortgage Loans..................... 76
SECTION 3.02.
Servicing and
Subservicing; Enforcement of the
Obligations of Servicer................................
78
SECTION 3.03.
Rights of the
Depositor and the Trustee in Respect of
the Servicer...........................................
78
SECTION 3.04.
Trustee to Act as
Servicer............................. 79
SECTION 3.05.
Collection of Mortgage
Loan Payments; Collection
Account; Certificate Account...........................
79
SECTION 3.06.
Collection of Taxes,
Assessments and Similar Items;
Escrow Accounts........................................
83
SECTION 3.07.
Access to Certain
Documentation and Information
Regarding the Mortgage Loans...........................
83
SECTION 3.08.
Permitted Withdrawals
from the Collection Account and
Certificate Account....................................
83
SECTION 3.09.
[RESERVED].............................................
85
SECTION 3.10.
Maintenance of Hazard
Insurance........................ 85
SECTION 3.11.
Enforcement of
Due-On-Sale Clauses; Assumption
Agreements.............................................
86
</TABLE>
i
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
----
<S>
<C>
SECTION 3.12.
Realization Upon
Defaulted Mortgage Loans;
Determination of Excess Proceeds.......................
87
SECTION 3.13.
Trustee to Cooperate;
Release of Mortgage Files........ 91
SECTION 3.14.
Documents Records and
Funds in Possession of Servicer
to be Held for the Trustee.............................
93
SECTION 3.15.
Servicing
Compensation................................. 93
SECTION 3.16.
Access to Certain
Documentation........................ 93
SECTION 3.17.
Annual Statement as to
Compliance...................... 94
SECTION 3.18.
Assessment of
Compliance; Accountant's Attestation..... 94
SECTION 3.19. Subordination
Liens.................................... 96
SECTION 3.20.
Periodic
Filings....................................... 97
SECTION 3.21.
Indemnification by
Trustee............................. 101
SECTION 3.22.
Indemnification by
Servicer............................ 101
SECTION 3.23.
Prepayment Charge
Reporting Requirements............... 102
SECTION 3.24.
Statements to
Trustee.................................. 102
SECTION 3.25.
Further
Indemnification by the Servicer................ 102
SECTION 3.26.
Solicitation...........................................
103
SECTION 3.27.
Existing Servicing
Agreement........................... 103
SECTION 3.28.
High Cost Mortgage
Loans............................... 103
SECTION 3.29.
[RESERVED].............................................
103
ARTICLE IV
DISTRIBUTIONS.................................................
103
SECTION 4.01.
Advances...............................................
103
SECTION 4.02.
Reduction of Servicing
Compensation in Connection with
Prepayment Interest Shortfalls.........................
103
SECTION 4.03.
Distributions on the
REMIC Interests................... 104
SECTION 4.04.
Distributions..........................................
104
SECTION 4.05.
Monthly Statements to
Certificateholders............... 104
ARTICLE V THE
CERTIFICATES...............................................
118
SECTION 5.01.
The
Certificates....................................... 118
SECTION 5.02.
Certificate Register;
Registration of Transfer and
Exchange of Certificates...............................
119
SECTION 5.03.
Mutilated, Destroyed,
Lost or Stolen Certificates...... 123
SECTION 5.04.
Persons Deemed
Owners.................................. 123
</TABLE>
ii
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
----
<S>
<C>
SECTION 5.05.
Access to List of
Certificateholders' Names and
Addresses..............................................
123
SECTION 5.06.
Book-Entry
Certificates................................ 124
SECTION 5.07.
Notices to
Depository.................................. 125
SECTION 5.08.
Definitive
Certificates................................ 125
SECTION 5.09.
Maintenance of Office
or Agency........................ 125
SECTION 5.10.
Authenticating
Agent................................... 125
ARTICLE VI THE DEPOSITOR AND THE
SERVICER................................ 126
SECTION 6.01.
Respective Liabilities
of the Depositor and the
Servicer...............................................
126
SECTION 6.02.
Merger or
Consolidation of the Depositor or the
Servicer...............................................
126
SECTION 6.03.
Limitation on
Liability of the Depositor, the Servicer
and Others.............................................
127
SECTION 6.04.
Limitation on
Resignation of Servicer.................. 127
SECTION 6.05.
Errors and Omissions
Insurance; Fidelity Bonds......... 128
ARTICLE VII DEFAULT; TERMINATION OF
SERVICER............................. 128
SECTION 7.01.
Events of
Default...................................... 128
SECTION 7.02.
[RESERVED].............................................
130
SECTION 7.03.
Trustee to Act;
Appointment of Successor............... 130
SECTION 7.04.
Notification to
Certificateholders..................... 131
ARTICLE VIII CONCERNING THE
TRUSTEE...................................... 131
SECTION 8.01.
Duties of
Trustee...................................... 131
SECTION 8.02.
Certain Matters
Affecting the Trustee.................. 132
SECTION 8.03.
Trustee Not Liable for
Mortgage Loans.................. 134
SECTION 8.04.
Trustee May Own
Certificates........................... 134
SECTION 8.05.
Trustee's
Fees......................................... 134
SECTION 8.06.
Indemnification of
Trustee; Expenses................... 134
SECTION 8.07.
Eligibility
Requirements for Trustee................... 135
SECTION 8.08.
Resignation and
Removal of Trustee..................... 135
SECTION 8.09.
Successor
Trustee...................................... 136
SECTION 8.10.
Merger or
Consolidation of Trustee..................... 137
SECTION 8.11.
Appointment of
Co-Trustee or Separate Trustee.......... 137
SECTION 8.12.
Tax
Matters............................................ 138
ARTICLE IX
TERMINATION...................................................
140
SECTION 9.01.
Termination upon
Liquidation or Repurchase of all
Mortgage Loans.........................................
140
SECTION 9.02.
Final Distribution on
the Certificates................. 142
</TABLE>
iii
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
----
<S>
<C>
SECTION 9.03.
Additional Termination Requirements.....................
143
ARTICLE X MISCELLANEOUS
PROVISIONS....................................... 144
SECTION 10.01.
Amendment..............................................
144
SECTION 10.02.
Counterparts...........................................
146
SECTION 10.03.
Governing Law..........................................
146
SECTION 10.04.
Intention of Parties...................................
146
SECTION 10.05.
Notices................................................
147
SECTION 10.06.
Severability of Provisions.............................
148
SECTION 10.07.
Assignment.............................................
148
SECTION 10.08.
Limitation on Rights of Certificateholders.............
148
SECTION 10.09.
Inspection and Audit Rights............................
149
SECTION 10.10.
Certificates Nonassessable and Fully Paid..............
149
SECTION 10.11.
[RESERVED].............................................
149
SECTION 10.12.
[RESERVED].............................................
149
SECTION 10.13.
Third Party Rights.....................................
149
SECTION 10.14.
Assignment; Sales; Advance Facilities..................
149
</TABLE>
iv
<PAGE>
EXHIBIT A FORMS
OF OFFERED CERTIFICATES
EXHIBIT B
MORTGAGE LOAN SCHEDULE - MORTGAGE POOL
EXHIBIT C-1 [RESERVED]
EXHIBIT C-2 [RESERVED]
EXHIBIT D FORM
OF TRUSTEE CERTIFICATION
EXHIBIT E-1 FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
EXHIBIT E-2 FORM OF TRANSFEROR'S AFFIDAVIT
EXHIBIT F FORM
OF TRANSFEROR CERTIFICATE FOR CLASS P AND CLASS C CERTIFICATES
EXHIBIT G FORM
OF INVESTMENT LETTER
EXHIBIT H FORM
OF RULE 144A INVESTMENT LETTER
EXHIBIT I
REQUEST FOR RELEASE OF DOCUMENTS
EXHIBIT J FORM
OF POWER OF ATTORNEY
EXHIBIT K FORM
OF OFFICER'S CERTIFICATE OF TRUSTEE
EXHIBIT L FORM
OF OFFICER'S CERTIFICATE OF SERVICER
EXHIBIT M
[RESERVED]
EXHIBIT N FORM
OF AUCTION PROCEDURES
EXHIBIT O-1 FORM OF CLASS A-1 CORRIDOR CONTRACT
EXHIBIT O-2 FORM OF CLASS A-2 CORRIDOR CONTRACT
EXHIBIT O-3 FORM OF SUBORDINATE CERTIFICATE CORRIDOR CONTRACT
EXHIBIT O-4 FORM OF CREDIT SUPPORT ANNEX FOR CORRIDOR CONTRACTS
EXHIBIT P
[RESERVED]
EXHIBIT Q FORM
OF ASSESSMENT OF COMPLIANCE
EXHIBIT R
SERVICING CRITERIA TO BE ADDRESSED
EXHIBIT S FORM
OF SARBANES-OXLEY CERTIFICATION
EXHIBIT T FORM
OF ITEM 1123 CERTIFICATION OF SERVICER
EXHIBIT U-1 FORM OF SWAP AGREEMENT
EXHIBIT U-2 FORM OF CREDIT SUPPORT ANNEX FOR THE SWAP AGREEMENT
SCHEDULE V ITEMS FOR
FORM 8-K
SCHEDULE W ITEMS FOR
FORM 10-D
SCHEDULE X ITEMS FOR
FORM 10-K
<PAGE>
POOLING AND SERVICING AGREEMENT, dated as of March 1, 2007 (the
"Agreement"), among MERRILL LYNCH MORTGAGE INVESTORS, INC., a
Delaware
corporation, as depositor (the "Depositor"), WILSHIRE CREDIT
CORPORATION, a
Nevada corporation, as servicer (the "Servicer"), and U.S. BANK
NATIONAL
ASSOCIATION, a national banking association, as trustee (the
"Trustee").
The
Depositor is the owner of the Trust Fund that is hereby conveyed to
the
Trustee in return for the Certificates. The Trust Fund for federal
income tax
purposes will consist of (i) three real estate mortgage investment
conduits in a
tiered structure, (ii) the right to receive the payments
distributable to the
Class P Certificates pursuant to Section 4.04(b)(i) hereof, (iii)
each Corridor
Contract and the Corridor Contract Account, (iv) the grantor trusts
described in
Section 2.07 hereof and (v) the Supplemental Interest Trust, which
in turn will
hold the Swap Agreement. The SWAP REMIC will consist of all of the
assets
constituting the Trust Fund (other than the assets described in
clauses (ii),
(iii), (iv) and (v) above, other than the SWAP REMIC Regular
Interests and other
than the Lower Tier REMIC Regular Interests) and will be evidenced
by the SWAP
REMIC Regular Interests (which will be uncertificated and will
represent the
"regular interests" in the SWAP REMIC) and the Class SWR Interest
as the single
"residual interest" in the SWAP REMIC. The Lower Tier REMIC will
consist of SWAP
REMIC Regular Interests and will be evidenced by the Lower Tier
REMIC Regular
Interests (which will be uncertificated and will represent the
"regular
interests" in the Lower Tier REMIC) and the Class LTR Interest as
the single
"residual interest" in the Lower Tier REMIC. The Trustee will hold
the Lower
Tier REMIC Regular Interests. The Upper Tier REMIC will consist of
the Lower
Tier REMIC Regular Interests and will be evidenced by the REMIC
Regular
Interests (which will represent the "regular interests" in the
Upper Tier REMIC)
and the Residual Interest as the single "residual interest" in the
Upper Tier
REMIC. The Class R Certificate will represent beneficial ownership
of the Class
SWR Interest, the Class LTR Interest and the Residual Interest. The
"latest
possible maturity date" for federal income tax purposes of all
interests created
hereby will be the Latest Possible Maturity Date.
All
covenants and agreements made by the Sponsor in the Sale Agreement
and
by the Depositor and the Trustee herein with respect to the
Mortgage Loans and
the other property constituting the Trust Fund are for the benefit
of the
Holders from time to time of the Certificates.
THE SWAP REMIC
The following table sets forth the designations, initial principal
balances and
interest rates for each interest in the SWAP REMIC:
<TABLE>
<CAPTION>
Class Initial
Principal Balance Interest Rate
-----
------------------------- -------------
<S>
<C>
<C>
1-SW1
$15,282,896.055
(1)
1-SW1A
$ 1,628,501.456
(2)
1-SW1B
$ 1,628,501.456
(3)
1-SW2A
$ 1,887,123.945
(2)
1-SW2B
$ 1,887,123.945
(3)
1-SW3A
$ 2,200,962.416
(2)
1-SW3B
$ 2,200,962.416
(3)
1-SW4A
$ 2,238,394.397
(2)
1-SW4B
$ 2,238,394.397
(3)
1-SW5A
$ 2,072,386.347
(2)
1-SW5B
$ 2,072,386.347
(3)
1-SW6A
$ 1,867,418.198
(2)
1-SW6B
$ 1,867,418.198
(3)
</TABLE>
1
<PAGE>
<TABLE>
<S>
<C>
<C>
1-SW7A
$ 1,720,959.668
(2)
1-SW7B
$ 1,720,959.668
(3)
1-SW8A
$ 1,591,723.059
(2)
1-SW8B
$ 1,591,723.059
(3)
1-SW9A
$ 1,496,146.200
(2)
1-SW9B
$ 1,496,146.200
(3)
1-SW10A
$ 1,414,120.442
(2)
1-SW10B
$ 1,414,120.442
(3)
1-SW11A
$ 1,347,664.303
(2)
1-SW11B
$ 1,347,664.303
(3)
1-SW12A
$ 1,299,841.191
(2)
1-SW12B
$ 1,299,841.191
(3)
1-SW13A
$ 1,383,473.078
(2)
1-SW13B
$ 1,383,473.078
(3)
1-SW14A
$ 2,108,641.456
(2)
1-SW14B
$ 2,108,641.456
(3)
1-SW15A
$ 3,110,781.148
(2)
1-SW15B
$ 3,110,781.148
(3)
1-SW16A
$ 2,602,802.927
(2)
1-SW16B
$ 2,602,802.927
(3)
1-SW17A
$ 2,005,925.149
(2)
1-SW17B
$ 2,005,925.149
(3)
1-SW18A
$ 1,638,696.512
(2)
1-SW18B
$ 1,638,696.512
(3)
1-SW19A
$ 1,397,846.218
(2)
1-SW19B
$ 1,397,846.218
(3)
1-SW20A
$ 1,230,272.731
(2)
1-SW20B
$ 1,230,272.731
(3)
1-SW21A
$ 1,140,830.278
(2)
1-SW21B
$ 1,140,830.278
(3)
1-SW22A
$ 1,071,540.118
(2)
1-SW22B
$ 1,071,540.118
(3)
1-SW23A
$ 1,003,345.448
(2)
1-SW23B
$ 1,003,345.448
(3)
1-SW24A
$ 939,517.135
(2)
1-SW24B
$ 939,517.135
(3)
1-SW25A
$ 969,015.879
(2)
1-SW25B
$ 969,015.879
(3)
1-SW26A
$ 1,252,693.590
(2)
1-SW26B
$ 1,252,693.590
(3)
1-SW27A
$ 2,308,337.086
(2)
1-SW27B $
2,308,337.086
(3)
1-SW28A
$ 2,186,574.518
(2)
1-SW28B
$ 2,186,574.518
(3)
1-SW29A
$ 1,775,394.513
(2)
1-SW29B
$ 1,775,394.513
(3)
1-SW30A
$ 1,070,563.327
(2)
1-SW30B
$ 1,070,563.327
(3)
</TABLE>
2
<PAGE>
<TABLE>
<S>
<C>
<C>
1-SW31A
$
75,102.413
(2)
1-SW31B
$
75,102.413
(3)
1-SW32A
$ 706,844.855
(2)
1-SW32B
$ 706,844.855
(3)
1-SW33A
$ 657,555.819
(2)
1-SW33B
$ 657,555.819
(3)
1-SW34A
$ 602,842.674
(2)
1-SW34B
$ 602,842.674
(3)
1-SW35A
$ 550,141.512
(2)
1-SW35B
$ 550,141.512
(3)
1-SW36A
$ 505,658.001
(2)
1-SW36B
$ 505,658.001
(3)
1-SW37A
$ 473,524.051
(2)
1-SW37B
$ 473,524.051
(3)
1-SW38A
$ 453,494.885
(2)
1-SW38B
$ 453,494.885
(3)
1-SW39A
$ 436,661.320
(2)
1-SW39B
$ 436,661.320
(3)
1-SW40A
$ 417,001.324
(2)
1-SW40B
$ 417,001.324
(3)
1-SW41A
$ 393,525.244
(2)
1-SW41B
$ 393,525.244
(3)
1-SW42A
$ 366,242.780
(2)
1-SW42B
$ 366,242.780
(3)
1-SW43A
$ 341,386.585
(2)
1-SW43B
$ 341,386.585
(3)
1-SW44A
$ 322,296.893
(2)
1-SW44B
$ 322,296.893
(3)
1-SW45A
$ 309,522.713
(2)
1-SW45B
$ 309,522.713
(3)
1-SW46A
$ 288,485.975
(2)
1-SW46B
$ 288,485.975
(3)
1-SW47A
$ 282,852.930
(2)
1-SW47B
$ 282,852.930
(3)
1-SW48A
$ 268,898.716
(2)
1-SW48B
$ 268,898.716
(3)
1-SW49A
$ 259,216.828
(2)
1-SW49B
$ 259,216.828
(3)
1-SW50A
$ 250,238.070
(2)
1-SW50B
$ 250,238.070
(3)
1-SW51A
$ 298,064.555
(2)
1-SW51B
$ 298,064.555
(3)
1-SW52A
$ 274,706.542
(2)
1-SW52B
$ 274,706.542
(3)
1-SW53A
$ 254,434.496
(2)
1-SW53B
$ 254,434.496
(3)
1-SW54A
$ 7,400,131.739
(2)
1-SW54B
$ 7,400,131.739
(3)
</TABLE>
3
<PAGE>
<TABLE>
<S>
<C>
<C>
2-SW2
$20,961,128.195
(4)
2-SW1A
$ 2,233,557.544
(5)
2-SW1B
$ 2,233,557.544
(6)
2-SW2A
$ 2,588,269.055
(5)
2-SW2B
$ 2,588,269.055
(6)
2-SW3A
$ 3,018,711.584
(5)
2-SW3B
$ 3,018,711.584
(6)
2-SW4A
$ 3,070,051.103
(5)
2-SW4B
$ 3,070,051.103
(6)
2-SW5A
$ 2,842,364.153
(5)
2-SW5B
$ 2,842,364.153
(6)
2-SW6A
$ 2,561,241.802
(5)
2-SW6B
$ 2,561,241.802
(6)
2-SW7A
$ 2,360,367.832
(5)
2-SW7B
$ 2,360,367.832
(6)
2-SW8A
$ 2,183,114.441
(5)
2-SW8B
$ 2,183,114.441
(6)
2-SW9A
$ 2,052,026.800
(5)
2-SW9B
$ 2,052,026.800
(6)
2-SW10A
$ 1,939,525.058
(5)
2-SW10B
$ 1,939,525.058
(6)
2-SW11A
$ 1,848,377.697
(5)
2-SW11B $
1,848,377.697
(6)
2-SW12A
$ 1,782,786.309
(5)
2-SW12B
$ 1,782,786.309
(6)
2-SW13A
$ 1,897,490.922
(5)
2-SW13B
$ 1,897,490.922
(6)
2-SW14A
$ 2,892,089.544
(5)
2-SW14B
$ 2,892,089.544
(6)
2-SW15A
$ 4,266,565.852
(5)
2-SW15B
$ 4,266,565.852
(6)
2-SW16A
$ 3,569,852.573
(5)
2-SW16B
$ 3,569,852.573
(6)
2-SW17A
$ 2,751,209.851
(5)
2-SW17B
$ 2,751,209.851
(6)
2-SW18A
$ 2,247,540.488
(5)
2-SW18B
$ 2,247,540.488
(6)
2-SW19A
$ 1,917,204.282
(5)
2-SW19B
$ 1,917,204.282
(6)
2-SW20A
$ 1,687,370.269
(5)
2-SW20B
$ 1,687,370.269
(6)
2-SW21A
$ 1,564,696.222
(5)
2-SW21B
$ 1,564,696.222
(6)
2-SW22A
$ 1,469,661.882
(5)
2-SW22B
$ 1,469,661.882
(6)
2-SW23A
$ 1,376,130.052
(5)
2-SW23B
$ 1,376,130.052
(6)
2-SW24A
$ 1,288,586.865
(5)
</TABLE>
4
<PAGE>
<TABLE>
<S>
<C>
<C>
2-SW24B
$ 1,288,586.865
(6)
2-SW25A
$ 1,329,045.621
(5)
2-SW25B
$ 1,329,045.621
(6)
2-SW26A
$ 1,718,121.410
(5)
2-SW26B
$ 1,718,121.410
(6)
2-SW27A
$ 3,165,980.414
(5)
2-SW27B
$ 3,165,980.414
(6)
2-SW28A
$ 2,998,977.982
(5)
2-SW28B
$ 2,998,977.982
(6)
2-SW29A
$ 2,435,027.487
(5)
2-SW29B
$ 2,435,027.487
(6)
2-SW30A
$ 1,468,322.173
(5)
2-SW30B
$ 1,468,322.173
(6)
2-SW31A
$ 103,006.087
(5)
2-SW31B
$ 103,006.087
(6)
2-SW32A
$ 969,467.145
(5)
2-SW32B
$ 969,467.145
(6)
2-SW33A
$ 901,865.181
(5)
2-SW33B
$ 901,865.181
(6)
2-SW34A
$ 826,823.826
(5)
2-SW34B
$ 826,823.826
(6)
2-SW35A
$ 754,541.988
(5)
2-SW35B
$ 754,541.988
(6)
2-SW36A
$ 693,530.999
(5)
2-SW36B
$ 693,530.999
(6)
2-SW37A
$ 649,457.949
(5)
2-SW37B
$ 649,457.949
(6)
2-SW38A
$ 621,987.115
(5)
2-SW38B
$ 621,987.115
(6)
2-SW39A
$ 598,899.180
(5)
2-SW39B
$ 598,899.180
(6)
2-SW40A
$ 571,934.676
(5)
2-SW40B
$ 571,934.676
(6)
2-SW41A
$ 539,736.256
(5)
2-SW41B
$ 539,736.256
(6)
2-SW42A
$ 502,317.220
(5)
2-SW42B
$ 502,317.220
(6)
2-SW43A $
468,225.915
(5)
2-SW43B
$ 468,225.915
(6)
2-SW44A
$ 442,043.607
(5)
2-SW44B
$ 442,043.607
(6)
2-SW45A
$ 424,523.287
(5)
2-SW45B
$ 424,523.287
(6)
2-SW46A
$ 395,670.525
(5)
2-SW46B
$ 395,670.525
(6)
2-SW47A
$ 387,944.570
(5)
2-SW47B
$ 387,944.570
(6)
2-SW48A
$ 368,805.784
(5)
</TABLE>
5
<PAGE>
<TABLE>
<S>
<C>
<C>
2-SW48B
$ 368,805.784
(6)
2-SW49A
$ 355,526.672
(5)
2-SW49B
$ 355,526.672
(6)
2-SW50A
$ 343,211.930
(5)
2-SW50B
$ 343,211.930
(6)
2-SW51A
$ 408,807.945
(5)
2-SW51B
$ 408,807.945
(6)
2-SW52A
$ 376,771.458
(5)
2-SW52B
$ 376,771.458
(6)
2-SW53A
$ 348,967.504
(5)
2-SW53B
$ 348,967.504
(6)
2-SW54A
$10,149,588.761
(5)
2-SW54B
$10,149,588.761
(6)
SWR
(7)
(7)
</TABLE>
(1) The interest rate
on the Class 1-SW1 Interest shall be a per annum rate
equal to the Group One Net WAC.
(2) For any
Distribution Date, the interest rate on each SWAP REMIC Regular
Interest beginning with the designation "1" and ending with the
designation
"A"
shall be a per annum rate equal to 2 times the Group One Net
WAC,
subject to a maximum rate of 2 times the REMIC Swap Rate for
such
Distribution Date.
(3) For any
Distribution Date, the interest rate on each SWAP REMIC Regular
Interest beginning with the designation "1" and ending with the
designation
"B"
shall be a per annum rate equal to the greater of (x) the excess,
if
any,
of (i) 2 times the Group One Net WAC over (ii) 2 times the REMIC
Swap
Rate for such
Distribution Date and (y) 0.00%.
(4) The interest rate
on the Class 2-SW2 Interest shall be a per annum rate
equal to the Group Two Net WAC.
(5) For any
Distribution Date, the interest rate on each SWAP REMIC Regular
Interest beginning with the designation "2" and ending with the
designation
"A"
shall be a per annum rate equal to 2 times the Group Two Net
WAC,
subject to a maximum rate of 2 times the REMIC Swap Rate for
such
Distribution Date.
(6) For any
Distribution Date, the interest rate on each SWAP REMIC Regular
Interest beginning with the designation "2" and ending with the
designation
"B"
shall be a per annum rate equal to the greater of (x) the excess,
if
any,
of (i) 2 times the Group Two Net WAC over (ii) 2 times the REMIC
Swap
Rate
for such Distribution Date and (y) 0.00%.
(7) The Class SWR
Interest shall have no principal amount and shall bear no
interest.
THE LOWER TIER REMIC
The
following table sets forth the designations, initial principal
balances, interest rates, Corresponding Classes of Certificates and
related
Mortgage Group for each interest in the Lower Tier REMIC:
<TABLE>
<CAPTION>
Class(es) of
Corresponding
Certificates or Related
Class
Initial Principal Balance Interest Rate
Mortgage Group
-----
------------------------- ------------- -----------------------
<S> <C>
<C>
<C>
LTA-1
(1)
(8)
A-1, R
LTA-2A
(1)
(8)
A-2A
LTA-2B
(1)
(8)
A-2B
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
<C>
<C>
LTA-2C
(1)
(8)
A-2C
LTA-2D
(1)
(8)
A-2D
LTM-1
(1)
(8)
M-1
LTM-2
(1)
(8)
M-2
LTM-3
(1)
(8)
M-3
LTM-4
(1)
(8)
M-4
LTM-5
(1)
(8)
M-5
LTM-6
(1)
(8)
M-6
LTB-1
(1)
(8)
B-1
LTB-2
(1)
(8)
B-2
LTB-3
(1)
(8)
B-3
LTIX
(2)
(8)
N/A
LTII1A
(3)
(8)
Group One
LTII1B
(4)
(9)
Group One
LTII2A
(5)
(8)
Group Two
LTII2B
(6)
(10)
Group Two
LTIIX
(7)
(8)
N/A
LT-IO
(11)
(11)
N/A
LTR
(12)
(12)
N/A
</TABLE>
(1) The initial
principal balance of each of these Lower Tier REMIC Regular
Interests shall equal 1/4 of the initial Certificate Principal
Balance of
its
Corresponding Certificates.
(2) The initial
principal balance of the Class LTIX Interest shall equal the
excess of (i) 50% of the aggregate Cut-off Date Principal Balance
of the
Mortgage Loans over (ii) the initial principal balance of the Lower
Tier
REMIC I Marker Interests.
(3) The initial
principal balance of the Class LTII1A Interest shall equal
0.05% of the excess of (i) the aggregate Cut-off Date Principal
Balance of
the
Group One Mortgage Loans over (ii) the aggregate of the initial
Certificate Principal Balances of Certificate Group One.
(4) The initial
principal balance of the Class LTII1B Interest shall equal
0.05% of the aggregate Cut-off Date Principal Balance of the Group
One
Mortgage Loans.
(5) The initial
principal balance of the Class LTII2A Interest shall equal
0.05% of the excess of (i) the aggregate Cut-off Date Principal
Balance of
the
Group Two Mortgage Loans over (ii) the aggregate of the initial
Certificate Principal Balances of Certificate Group Two.
(6) The initial
principal balance of the Class LTII2B Interest shall equal
0.05% of the aggregate Cut-off Date Principal Balance of the Group
Two
Mortgage Loans.
(7) The initial
principal balance of the Class LTIIX Interest shall equal the
excess of (i) 50% of the aggregate Cut-off Date Principal Balance
of the
Mortgage Loans over (ii) the initial principal balance of the Lower
Tier
REMIC II Marker Interests.
(8) For each
Distribution Date, the interest rate for each of the Lower Tier
REMIC Regular Interests (other than the Class LTII1B, the Class
LTII2B and
the
Class LT-IO Interests) shall be a per annum rate (but not less
than
zero) equal to the product of (i) the weighted average of the
interest
rates on the SWAP REMIC Regular Interests for such Distribution
Date and
(ii)
a fraction the numerator of which is 30 and the denominator of
which
is
the actual number of days in the Accrual Period for the LIBOR
Certificates, provided however, that for any Distribution Date on
which the
Class LT-IO Interest is entitled to a portion of interest accruals
on a
SWAP
REMIC Regular Interest ending with a designation "A" as described
in
footnote 11 below, such weighted average shall be computed by
first
7
<PAGE>
subjecting the rate on such SWAP REMIC Regular Interest to a cap
equal to
Swap
LIBOR for such Distribution Date.
(9) For each
Distribution Date, the interest rate for the Class LTII1B
Interest
shall be a per annum rate equal to the product of (i) the weighted
average
of
the interest rates on the SWAP REMIC Regular Interests beginning
with
the
designation "1" for such Distribution Date and (ii) a fraction
the
numerator of which is 30 and the denominator of which is the actual
number
of
days in the Accrual Period for the LIBOR Certificates,
provided,
however, that for any Distribution Date on which the Class LT-IO
Interest
is
entitled to a portion of interest accruals on a SWAP REMIC
Regular
Interest ending with a designation "A" as described in footnote 11
below,
such
weighted average shall be computed by first subjecting the rate
on
such
SWAP REMIC Regular Interest to a cap equal to Swap LIBOR for
such
Distribution Date.
(10) For each Distribution Date, the interest rate for the Class
LTII2B Interest
shall be a per annum rate equal to the product of (i) the weighted
average
of
the interest rates on the SWAP REMIC Regular Interests beginning
with
the
designation "2" for such Distribution Date and (ii) a fraction
the
numerator of which is 30 and the denominator of which is the actual
number
of
days in the Accrual Period for the LIBOR Certificates,
provided,
however, that for any Distribution Date on which the Class LT-IO
Interest
is
entitled to a portion of interest accruals on a SWAP REMIC
Regular
Interest ending with a designation "A" as described in footnote 11
below,
such
weighted average shall be computed by first subjecting the rate
on
such
SWAP REMIC Regular Interest to a cap equal to Swap LIBOR for
such
Distribution Date.
(11) The Class LT-IO Interest is an interest-only class that does
not have a
principal balance. For only those Distribution Dates listed in the
first
column of the table below, the Class LT-IO Interest shall be
entitled to
interest accrued on the SWAP REMIC Regular Interest listed in the
second
column below at a per annum rate equal to the excess, if any, of
(i) the
interest rate for such SWAP REMIC Regular Interest for such
Distribution
Date
over (ii) Swap LIBOR for such Distribution Date.
<TABLE>
<CAPTION>
Distribution Date SWAP REMIC Regular
Interest
-----------------
---------------------------
<S>
<C>
7
Class 1-SW1A
Class 2-SW1A
7-8
Class 1-SW2A
Class 2-SW2A
7-9
Class 1-SW3A
Class 2-SW3A
7-10
Class 1-SW4A
Class 2-SW4A
7-11
Class 1-SW5A
Class 2-SW5A
7-12
Class 1-SW6A
Class 2-SW6A
7-13
Class 1-SW7A
Class 2-SW7A
7-14
Class 1-SW8A
Class 2-SW8A
7-15
Class 1-SW9A
Class 2-SW9A
7-16
Class 1-SW10A
Class 2-SW10A
7-17
Class 1-SW11A
Class 2-SW11A
7-18
Class 1-SW12A
Class 2-SW12A
7-19
Class 1-SW13A
Class 2-SW13A
7-20
Class 1-SW14A
</TABLE>
8
<PAGE>
<TABLE>
<S>
<C>
Class 2-SW14A
7-21
Class 1-SW15A
Class 2-SW15A
7-22
Class 1-SW16A
Class 2-SW16A
7-23
Class 1-SW17A
Class 2-SW17A
7-24
Class 1-SW18A
Class 2-SW18A
7-25
Class 1-SW19A
Class 2-SW19A
7-26
Class 1-SW20A
Class 2-SW20A
7-27
Class 1-SW21A
Class 2-SW21A
7-28
Class 1-SW22A
Class 2-SW22A
7-29
Class 1-SW23A
Class 2-SW23A
7-30
Class 1-SW24A
Class 2-SW24A
7-31
Class 1-SW25A
Class 2-SW25A
7-32
Class 1-SW26A
Class 2-SW26A
7-33
Class 1-SW27A
Class 2-SW27A
7-34
Class 1-SW28A
Class 2-SW28A
7-35
Class 1-SW29A
Class 2-SW29A
7-36
Class 1-SW30A
Class 2-SW30A
7-37
Class 1-SW31A
Class 2-SW31A
7-38
Class 1-SW32A
Class 2-SW32A
7-39
Class 1-SW33A
Class 2-SW33A
7-40
Class 1-SW34A
Class 2-SW34A
7-41
Class 1-SW35A
Class 2-SW35A
7-42
Class 1-SW36A
Class 2-SW36A
7-43
Class 1-SW37A
Class 2-SW37A
7-44
Class 1-SW38A
Class 2-SW38A
7-45
Class 1-SW39A
Class 2-SW39A
7-46
Class 1-SW40A
Class 2-SW40A
7-47
Class 1-SW41A
Class 2-SW41A
7-48
Class 1-SW42A
</TABLE>
9
<PAGE>
<TABLE>
<S>
<C>
Class 2-SW42A
7-49
Class 1-SW43A
Class 2-SW43A
7-50
Class 1-SW44A
Class 2-SW44A
7-51
Class 1-SW45A
Class 2-SW45A
7-52
Class 1-SW46A
Class 2-SW46A
7-53
Class 1-SW47A
Class 2-SW47A
7-54
Class 1-SW48A
Class 2-SW48A
7-55
Class 1-SW49A
Class 2-SW49A
7-56
Class 1-SW50A
Class 2-SW50A
7-57
Class 1-SW51A
Class 2-SW51A
7-58
Class 1-SW52A
Class 2-SW52A
7-59
Class 1-SW53A
Class 2-SW53A
7-60
Class 1-SW54A
Class 2-SW54A
</TABLE>
(12) The Class LTR Interest shall have no principal amount and
shall bear no
interest.
UPPER TIER REMIC
The following table sets forth the designation, the initial
principal balances,
the interest rates and Classes of Related Certificates for each of
the interests
in the Upper Tier REMIC.
<TABLE>
<CAPTION>
Initial
Principal
Class of Related
Class
Balance
Rate
Certificates
-----
--------- ----
----------------
<S>
<C>
<C>
<C>
UTA-1
(1) (2)
A-1
UTA-2A
(1) (2)
A-2A
UTA-2B
(1) (2)
A-2B
UTA-2C
(1) (2)
A-2C
UTA-2D
(1) (2)
A-2D
UTM-1
(1) (2)
M-1
UTM-2
(1) (2)
M-2
UTM-3
(1) (2)
M-3
UTM-4
(1) (2)
M-4
UTM-5
(1) (2)
M-5
UTM-6
(1) (2)
M-6
UTB-1
(1)
(2)
B-1
UTB-2
(1) (2)
B-2
UTB-3
(1) (2)
B-3
Uncertificated Class C Interest (3)
(3)
N/A
UT-IO
(4) (4)
N/A
Residual Interest
(1) (2)
R
</TABLE>
10
<PAGE>
(1) The initial
principal balance of each of these REMIC Regular Interests
shall equal the initial principal balance of its Class of
Related
Certificates.
(2) The interest rates
on each of these REMIC Regular Interests shall be an
annual rate equal to the Pass-Through Rate for the Class of
Related
Certificates, provided that in lieu of the applicable Available
Funds Caps
set
forth in the definition of an applicable Pass-Through Rate, the
applicable Upper Tier REMIC Net WAC Cap shall be used.
(3) The Uncertificated
Class C Interest shall have an initial principal balance
equal to the initial Overcollateralization Amount. The
Uncertificated Class
C
Interest shall accrue interest on a notional balance set forth in
the
definition of Class C Current Interest at a rate equal to the Class
C
Distributable Interest Rate. The Uncertificated Class C Interest
shall be
represented by the Class C Certificates.
(4) The Class UT-IO
Interest shall have no principal amount and will not have
an
interest rate, but will be entitled to 100% of the interest accrued
with
respect to the Class LT-IO Interest. The Class UT-IO Interest shall
be
represented by the Class C Certificates.
THE CERTIFICATES
The following table sets forth the Class designation, interest rate
and initial
Class principal amount for each Class of Certificates comprising
interests in
the Trust Fund.
<TABLE>
<CAPTION>
Initial Class
Class Principal
Amount Interest
Rate
-----
----------------
-------------
<S> <C>
<C>
A-1
(1)
(2)
A-2A
(1)
(2)
A-2B
(1)
(2)
A-2C
(1)
(2)
A-2D
(1)
(2)
M-1
(1)
(2)
M-2
(1)
(2)
M-3
(1)
(2)
M-4
(1)
(2)
M-5
(1)
(2)
M-6
(1)
(2)
B-1
(1)
(2)
B-2
(1)
(2)
B-3
(1)
(2)
C
(3)
(3)
P
(4)
(4)
R
(1)
(2)(5)
</TABLE>
(1) Each of these
Classes of Certificates shall have initial principal balances
as
set forth in Section 5.01 hereof.
(2) Each of these
Classes of Certificates shall bear interest at a per annum
rate
equal to the Pass-Through Rate for such Certificates set forth in
the
definitions herein.
(3) For federal income
tax purposes, the Class C Certificate shall represent
(i)
the right to receive all distributions with respect to the
REMIC
Regular Interests represented by the Uncertificated Class C
Interest and
the
11
<PAGE>
Class UT-IO Interest and (ii) certain rights and obligations with
respect
to
notional principal contracts as described in Section 2.07.
(4) The Class P
Certificates shall be entitled to the amounts distributable
pursuant to Section 4.04(b) hereof and shall not represent a REMIC
regular
interest.
(5) The Class R
Interest represents ownership of the Class SWR Interest, the
Class LTR Interest and the Residual Interest.
In
consideration of the mutual agreements herein contained, the
Depositor,
the Servicer and the Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless
the context otherwise requires, shall have the following
meanings:
Accepted Servicing Practices: The Servicer's normal servicing
practices,
which will conform to the mortgage servicing practices of prudent
mortgage
lending institutions that service for their own account mortgage
loans of the
same type as the Mortgage Loans in the jurisdictions in which the
related
Mortgaged Properties are located.
Accountant's Attestation: As defined in Section 3.18(b) hereof.
Accrual Period: With respect to each Class of the LIBOR
Certificates, their
Corresponding REMIC Regular Interests and the Lower Tier REMIC
Interests and any
Distribution Date, the period commencing on the immediately
preceding
Distribution Date (or, in the case of the first Distribution Date,
the Closing
Date) and ending on the day immediately preceding such Distribution
Date, and
with respect to the SWAP REMIC Regular Interests and any
Distribution Date, the
calendar month immediately preceding the month in which such
Distribution Date
occurs. All calculations of interest on each Class of the LIBOR
Certificates,
their Corresponding REMIC Regular Interests and the Lower Tier
REMIC Interests
will be made on the basis of the actual number of days elapsed in
the related
Accrual Period and a 360 day year, and all calculations of interest
on the SWAP
REMIC Regular Interests will be made on the basis of a 360-day year
consisting
of twelve 30-day months.
Additional Form 10-D Disclosure: As defined in Section 3.20
hereof.
Adjustable Rate Mortgage Loan: A Mortgage Loan identified in the
Mortgage
Loan Schedule as having a Mortgage Rate that is adjustable.
Adjustment Date: As to each Adjustable Rate Mortgage Loan, each
date on
which the related Mortgage Rate is subject to adjustment, as
provided in the
related Mortgage Note.
Advance: The aggregate of the advances required to be made by the
Servicer
with respect to any Distribution Date pursuant to Section 4.01, the
amount of
any such advances being equal to the sum of the aggregate amount of
all payments
of principal and interest (or, with respect to the interest-only
Mortgage Loans,
payments of scheduled interest) (net of the Servicing Fee) on the
related
Mortgage Loans that were due during the applicable Due Period and
not received
as of the close of business on the related Determination Date,
except as
provided in Section 4.01 hereof, less the aggregate amount of any
such
Delinquent payments that the Servicer has determined would
constitute a
Non-Recoverable Advance
12
<PAGE>
were an advance to be made with respect thereto; provided, however,
that with
respect to (i) any Mortgage Loan that is 150 days delinquent or
more (whether or
not the Mortgage Loan has been converted to an REO Property), (ii)
shortfalls
due to bankruptcy proceedings or the application of the Relief Act
or similar
law and (iii) the principal portion of any amount paid on a Balloon
Loan, there
will be no obligation to make advances and, provided further,
however, that with
respect to any Mortgage Loan that has been converted to an REO
Property which is
less than 150 days delinquent, the obligation to make Advances
shall only be to
payments of interest (subject to the exceptions described above and
net of the
related Servicing Fees), to be calculated after taking into account
any rental
income.
Advance Facility: A financing or other facility as described in
Section
10.14(b).
Advance Facility Notice: As defined in Section 10.14(b).
Advance Financing Person: As defined in Section 10.14(a).
Advance Reimbursement Amounts: As defined in Section 10.14(a).
Affiliate: With respect to any specified Person, any other
Person
controlling, controlled by or under common control with such
Person. For the
purposes of this definition, "control" means the power to direct
the management
and policies of a Person, directly or indirectly, whether through
ownership of
voting securities, by contract or otherwise; and the terms
"controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Certificate Principal Balance: For any date of
determination, the
sum of the Class A-1 Certificate Principal Balance, the Class A-2A
Certificate
Principal Balance, the Class A-2B Certificate Principal Balance,
the Class A-2C
Certificate Principal Balance, the Class A-2D Certificate Principal
Balance, the
Class R Certificate Principal Balance, the Class M-1 Certificate
Principal
Balance, the Class M-2 Certificate Principal Balance, the Class M-3
Certificate
Principal Balance, the Class M-4 Certificate Principal Balance, the
Class M-5
Certificate Principal Balance, the Class M-6 Certificate Principal
Balance, the
Class B-1 Certificate Principal Balance, the Class B-2 Certificate
Principal
Balance, and the Class B-3 Certificate Principal Balance, in each
case as of
such date of determination.
Agreement: This Pooling and Servicing Agreement and any and all
amendments
or supplements hereto made in accordance with the terms herein.
Applied Realized Loss Amount: With respect to any Distribution
Date, the
amount, if any, by which, the sum of (i) the Aggregate Certificate
Principal
Balance and (ii) the Class C Certificate Principal Balance after
distributions
of principal on such Distribution Date exceeds the aggregate Stated
Principal
Balance of the Mortgage Loans as of such Distribution Date.
Appraised Value: With respect to a Mortgage Loan the proceeds of
which were
used to purchase the related Mortgaged Property, the "Appraised
Value" of a
Mortgaged Property is the lesser of (1) the appraised value based
on an
appraisal made for the Sponsor by an independent fee appraiser at
the time of
the origination of the related Mortgage Loan, and (2) the sales
price of such
Mortgaged Property at such time of origination. With respect to a
Mortgage Loan
the proceeds of which were used to refinance an existing mortgage
loan, the
"Appraised Value" is the appraised value of the Mortgaged Property
based upon
the appraisal obtained at the time of refinancing.
Assessment of Compliance: As defined in Section 3.18(a) hereof.
13
<PAGE>
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer
or equivalent instrument, in recordable form, sufficient under the
laws of the
jurisdiction where the related Mortgaged Property is located to
reflect of
record the sale and assignment of the Mortgage Loan to the Trustee,
which
assignment, notice of transfer or equivalent instrument may, if
permitted by
law, be in the form of one or more blanket assignments covering
Mortgages
secured by Mortgaged Properties located in the same county.
Auction Termination: The termination of the Trust Fund hereunder
pursuant
to Section 9.01(a)(i) hereof.
Auction Termination Amount: The purchase price received by the
Trustee in
connection with any purchase of all of the Mortgage Loans pursuant
to Section
9.01(a)(i).
Auction Termination Date: The first Distribution Date on which
the
aggregate Stated Principal Balance of the Mortgage Loans (or if
such Mortgage
Loan is an REO Property, the fair market value of such REO
Property) is equal to
or less than 10% of the aggregate Stated Principal Balance of the
Mortgage Loans
as of the Cut-off Date.
Auction Termination Price: In the case of an Auction Termination,
as of the
initial Distribution Date on or after the Auction Termination Date,
an amount
equal to the sum of (a) the aggregate Stated Principal Balance of
each Mortgage
Loan (other than any Mortgage Loan that has become an REO
Property), plus
accrued interest thereon at the applicable Mortgage Rate through
the Due Date
preceding distribution of the proceeds, (b) the fair market value
of any REO
Property, plus accrued interest thereon at the applicable Mortgage
Rate, (c) any
unreimbursed fees, indemnification amounts, out-of-pocket costs and
expenses
owed to the Trustee or the Servicer (including any costs and
expenses incurred
in connection with the Auction Termination) and any unreimbursed
Servicing Fees,
Advances and Servicing Advances, (d) all interest accrued on, as
well as amounts
necessary to retire, the principal balance of any NIM Notes, (e)
any costs and
damages incurred by the Issuing Entity (or the Trustee on behalf of
the Issuing
Entity) in connection with any violation of any anti-predatory or
anti-abusive
lending laws and (f) any Swap Termination Payment, other than a
Defaulted Swap
Termination Payment, owed to the Swap Counterparty; such Swap
Termination
Payment shall include any payment resulting from the termination of
the Swap
Agreement after the Auction Termination Date but prior to the final
distribution
to the Certificates.
Authenticating Agent: As defined in Section 5.10.
Available Funds Cap: Any of the Class A-1 Available Funds Cap, the
Class
A-2 Available Funds Cap, or the Subordinate Certificate Available
Funds Cap.
Balloon Loan: A Mortgage Loan having an original term to stated
maturity of
approximately 15 or 30 years which provides for level monthly
payments of
principal and interest based on a 30-, 40-, 45- or 50-year
amortization
schedule, with a balloon payment of the remaining outstanding
principal balance
due on such Mortgage Loan at its stated maturity.
Book-Entry Certificates: Any of the Certificates that shall be
registered
in the name of the Depository or its nominee, the ownership of
which is
reflected on the books of the Depository or on the books of a
Person maintaining
an account with the Depository (directly, as a "Depository
Participant", or
indirectly, as an indirect participant in accordance with the rules
of the
Depository and as described in Section 5.06). As of the Closing
Date, each of
the Class A, Class M and Class B Certificates constitute a Class of
Book-Entry
Certificates.
14
<PAGE>
Business Day: Any day other than (1) a Saturday or a Sunday, or (2)
a day
on which banking institutions in the State of Oregon or Minnesota
or in the City
of New York, New York are authorized or obligated by law or
executive order to
be closed.
Cap
Contract Counterparty: The Bank of New York, and any successor
thereto.
Cap
Posted Collateral Account: The segregated Eligible Account that may
be
created and maintained by the Trustee pursuant to Section
4.04(j)(iv) in the
name of the Trustee for the benefit of the Issuing Entity and
designated "U.S.
Bank National Association, as trustee, in trust for registered
holders of
Specialty Underwriting and Residential Finance Trust, Mortgage Loan
Asset-Backed
Certificates, Series 2007-AB1." Funds in the Posted Collateral
Account shall be
held in trust for the Issuing Entity for the uses and purposes set
forth in this
Agreement.
Certificate: Any one of the certificates of any Class executed by
the
Trustee and authenticated by the Authenticating Agent in
substantially the forms
attached hereto as Exhibit A.
Certificate Account: The separate Eligible Account created and
maintained
by the Trustee pursuant to Section 3.05(f) in the name of the
Trustee for the
benefit of the Certificateholders and designated "U.S. Bank
National
Association, as trustee, in trust for registered holders of
Specialty
Underwriting and Residential Finance Trust, Mortgage Loan
Asset-Backed
Certificates, Series 2007-AB1." Funds in the Certificate Account
shall be held
in trust for the Certificateholders for the uses and purposes set
forth in this
Agreement.
Certificate Group: Either of Certificate Group One or Certificate
Group
Two.
Certificate Group One: The Class A-1 and Class R Certificates. For
purposes
of Section 2.07 hereof, Certificate Group One shall be related to
Group One.
Certificate Group Two: The Class A-2 Certificates. For purposes of
Section
2.07 hereof, Certificate Group Two shall be related to Group
Two.
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 and as of
any
Distribution Date, the Initial Certificate Principal Balance of
such Certificate
less the sum of (1) all amounts distributed with respect to such
Certificate in
reduction of the Certificate Principal Balance thereof on previous
Distribution
Dates pursuant to Section 4.04, and (2) any Applied Realized Loss
Amounts
allocated to such Certificate on previous Distribution Dates
pursuant to Section
4.04(h). On each Distribution Date, after all distributions of
principal on such
Distribution Date, a portion of the Class C Interest Carry Forward
Amount in an
amount equal to the excess of the Overcollateralization Amount on
such
Distribution Date over the Overcollateralization Amount as of the
preceding
Distribution Date (or, in the case of the first Distribution Date,
the initial
Overcollateralization Amount (based on the Stated Principal Balance
of the
Mortgage Loans as of the Cut-off Date)) will be added to the
aggregate
Certificate Principal Balance of the Class C Certificates (on a pro
rata basis).
Notwithstanding the immediately preceding sentence, however, to the
extent any
excess referred to in the immediately preceding sentence is
attributable to
distributions of proceeds of the Swap Agreement, such sentence
shall be applied
by substituting the "Class C Unpaid Realized Loss Amount" for the
"Class C
Interest Carry Forward Amount". Notwithstanding the foregoing on
any
Distribution Date relating to a Due Period in which a Subsequent
Recovery has
been received by the Servicer, the Certificate Principal Balance of
any Class of
Certificates then outstanding for which any Applied Realized Loss
Amount has
been allocated will be increased, in
15
<PAGE>
order of seniority, by an amount equal to the lesser of (i) the
Unpaid Realized
Loss Amount for such Class of Certificates and (ii) the total of
any Subsequent
Recovery distributed on such date to the Certificateholders
(reduced by the
amount of the increase in the Certificate Principal Balance of any
more senior
Class of Certificates pursuant to this sentence on such
Distribution Date).
Certificate Register: The register maintained pursuant to Section
5.02
hereof.
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 Class of Regular Certificates or
the Class R
Certificate, except that solely for the purpose of giving any
consent pursuant
to this Agreement, any Certificate registered in the name of the
Depositor or
any Affiliate of the Depositor shall be deemed not to be
Outstanding and the
Percentage Interest evidenced thereby shall not be taken into
account in
determining whether the requisite amount of Percentage Interests
necessary to
effect such consent has been obtained; provided, however, that if
any such
Person (including the Depositor) owns 100% of the Percentage
Interests evidenced
by a Class of Certificates, such Certificates shall be deemed to be
Outstanding
for purposes of any provision hereof that requires the consent of
the Holders of
Certificates of a particular Class as a condition to the taking of
any action
hereunder. The Trustee is entitled to rely conclusively on a
certification of
the Depositor or any Affiliate of the Depositor in determining
which
Certificates are registered in the name of an Affiliate of the
Depositor.
Class: All Certificates bearing the same Class designation as set
forth in
Section 5.01 hereof.
Class A Certificate Principal Balance: As of any date of
determination, the
sum of the Class A-1 Certificate Principal Balance, the Class A-2A
Certificate
Principal Balance, the Class A-2B Certificate Principal Balance,
the Class A-2C
Certificate Principal Balance and the Class A-2D Certificate
Principal Balance.
Class A Certificates: Any of the Class A-1, Class A-2A, Class A-2B,
Class
A-2C and Class A-2D Certificates.
Class A Principal Distribution Amount: With respect to any
Distribution
Date (1) prior to the related Stepdown Date or any Distribution
Date on which a
Stepdown Trigger Event exists, 100% of the Principal Distribution
Amount for
such Distribution Date and (2) on or after the Stepdown Date where
a Stepdown
Trigger Event does not exist, the excess of (A) the Certificate
Principal
Balance of the Class A and Class R Certificates immediately prior
to such
Distribution Date over (B) the lesser of (1) 73.40% of the
aggregate Stated
Principal Balance of the Mortgage Loans and (2) the excess of the
aggregate
Stated Principal Balance of the Mortgage Loans over the Minimum
Required
Overcollateralization Amount; provided, however, that in no event
will the Class
A Principal Distribution Amount with respect to any Distribution
Date exceed the
aggregate Certificate Principal Balance of the Class A and Class R
Certificates.
Class A-1 Available Funds Cap: With respect to a Distribution Date,
the per
annum rate equal to the product of (i) 12, (ii) the quotient of (x)
the total
scheduled interest on the Mortgage Loans in Group One based on the
Net Mortgage
Rates in effect on the related Due Date, less the pro rata portion
(calculated
based on the ratio of the Stated Principal Balance of the Mortgage
Loans in
Group One to the Stated Principal Balance of the total pool of
Mortgage Loans)
allocable to the Mortgage Loans in Group One of any Net Swap
Payments or Swap
Termination Payments (other than Defaulted Swap Termination
Payments) owed to
the Swap Counterparty for such Distribution Date, and (y) the
aggregate Stated
Principal Balance of the Mortgage Loans in Group One as of the
first day of the
related Accrual Period (or, in the case of the first Distribution
Date, as of
the Cut-off Date) and (iii) a fraction, the numerator of which is
30, and the
denominator of which is the actual number of days in the related
Accrual Period.
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<PAGE>
The Class A-1 Available Funds Cap shall be related to the Class A-1
Certificates
and the Class R Certificate.
Class A-1 Certificate: Any Certificate designated as a "Class
A-1
Certificate" on the face thereof, executed by the Trustee and
authenticated by
the Authenticating Agent in substantially the form set forth in
Exhibit A,
representing the right to distributions as set forth herein.
Class A-1 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class A-1
Certificates.
Class A-1 Corridor Contract: The confirmation and agreement
(together with
the schedule thereto) and any related credit support annex
(attached as Exhibit
O-4 hereto), between the Trustee, on behalf of the Issuing Entity,
and the Cap
Contract Counterparty (attached as Exhibit O-1 hereto), with
respect to the
Class A-1 Certificates.
Class A-1 Corridor Contract Notional Balance: With respect to
any
Distribution Date, the Class A-1 Corridor Contract Notional Balance
set forth
for such Distribution Date in the Class A-1 Corridor Contract
(attached as
Exhibit O-1 hereto).
Class A-1 Corridor Contract Termination Date: The Distribution Date
after
the Distribution Date in September 2007.
Class A-1 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class A-1
Pass-Through Rate on
the Class A-1 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Class A-1
Current Interest or a Class A-1 Interest Carry Forward Amount that
is recovered
as a voidable preference by a trustee in bankruptcy, less any
Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class
A-1
Certificates.
Class A-1 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class A-1 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
A-1 Certificates with respect to Current Interest or Interest Carry
Forward
Amounts on such prior Distribution Dates and (2) interest on such
excess (to the
extent permitted by applicable law) at the Class A-1 Pass-Through
Rate for the
related Accrual Period.
Class A-1 Margin: As of any Distribution Date up to and including
the
Auction Termination Date, 0.2400% per annum and, as of any
Distribution Date
after the Auction Termination Date, 0.4800% per annum.
Class A-1 Maximum Rate Cap: With respect to a Distribution Date,
the per
annum rate equal to the product of (i) 12, (ii) the quotient of (x)
the total
scheduled interest that would have been due on the Group One
Mortgage Loans had
the Adjustable Rate Mortgage Loans provided for interest at their
maximum
lifetime Net Mortgage Rates and the Fixed Rate Mortgage Loans
provided for
interest at their Net Mortgage Rates less the pro rata portion
(calculated based
on the ratio of the Stated Principal Balance of the Group One
Mortgage Loans to
the Stated Principal Balance of the total pool of Mortgage Loans)
allocable to
the Group One Mortgage Loans of any Net Swap Payments or Swap
Termination
Payments owed to the Swap Counterparty for such Distribution Date
(other than
Defaulted Swap Termination Payments), and (y) the aggregate Stated
Principal
Balance of the Group One Mortgage Loans as of the first day of the
related
Accrual Period (or, in the case of the first Distribution Date, as
of the
Cut-off Date) and (iii) a fraction, the numerator of which is 30
and the
denominator of which is the
17
<PAGE>
actual number of days in the related Accrual Period. The Class A-1
Maximum Rate
Cap shall be related to the Class A-1 Certificates and Class R
Certificate.
Class A-1 Pass-Through Rate: For the first Distribution Date, 5.56%
per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class A-1 Margin, (2) the Class A-1 Available Funds Cap,
and (3) the
Class A-1 Maximum Rate Cap for such Distribution Date.
Class A-1 Upper Collar: With respect to each Distribution Date with
respect
to which payments are received on the Class A-1 Corridor Contract,
a rate equal
to the lesser of One-Month LIBOR and 10.760% per annum.
Class A-2 Available Funds Cap: With respect to a Distribution Date,
the per
annum rate equal to the product of (i) 12, (ii) the quotient of (x)
the total
scheduled interest on the Mortgage Loans in Group Two based on the
Net Mortgage
Rates in effect on the related Due Date, less the pro rata portion
(calculated
based on the ratio of the Stated Principal Balance of the Mortgage
Loans in
Group Two to the Stated Principal Balance of the total pool of
Mortgage Loans)
allocable to the Mortgage Loans in Group Two of any Net Swap
Payments or Swap
Termination Payments (other than Defaulted Swap Termination
Payments) owed to
the Swap Counterparty for such Distribution Date, and (y) the
aggregate Stated
Principal Balance of the Mortgage Loans in Group Two as of the
first day of the
related Accrual Period (or, in the case of the first Distribution
Date, as of
the Cut-off Date) and, (iii) a fraction, the numerator of which is
30, and the
denominator of which is the actual number of days in the related
Accrual Period.
The Class A-2 Available Funds Cap shall be related to the Class
A-2
Certificates.
Class A-2 Certificates: The Class A-2A, Class A-2B, Class A-2C and
Class
A-2D Certificates.
Class A-2 Corridor Contract: The confirmation and agreement
(together with
the schedule thereto) and any related credit support annex
(attached as Exhibit
O-4 hereto), between the Trustee, on behalf of the Issuing Entity,
and the Cap
Contract Counterparty (attached as Exhibit O-2 hereto), with
respect to the
Class A-2 Certificates.
Class A-2 Corridor Contract Notional Balance: With respect to
any
Distribution Date, the Class A-2 Corridor Contract Notional Balance
set forth
for such Distribution Date in the Class A-2 Corridor Contract
(attached as
Exhibit O-2 hereto).
Class A-2 Corridor Contract Termination Date: The Distribution Date
after
the Distribution Date in September 2007.
Class A-2 Maximum Rate Cap: With respect to a Distribution Date,
the per
annum rate equal to the product of (i) 12 and (ii) the quotient of
(x) the total
scheduled interest that would have been due on the Group Two
Mortgage Loans had
the Adjustable Rate Mortgage Loans provided for interest at their
maximum
lifetime Net Mortgage Rates and the Fixed Rate Mortgage Loans
provided for
interest at their Net Mortgage Rates less the pro rata portion
(calculated based
on the ratio of the Stated Principal Balance of the Group Two
Mortgage Loans to
the total pool of Stated Principal Balance of the Mortgage Loans)
allocable to
the Group Two Mortgage Loans of any Net Swap Payments or Swap
Termination
Payments owed to the Swap Counterparty for such Distribution Date
(other than
Defaulted Swap Termination Payments), and (y) the aggregate Stated
Principal
Balance of the Group Two Mortgage Loans as of the first day of the
related
Accrual Period (or, in the case of the first Distribution Date, as
of the
Cut-off Date) and (iii) a fraction, the numerator of which is 30
and the
denominator of which is the actual number of days in the related
Accrual Period.
The Class A-2 Maximum Rate Cap shall be related to the Class A-2
Certificates.
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<PAGE>
Class A-2 Upper Collar: With respect to each Distribution Date with
respect
to which payments are received on the Class A-2 Corridor Contract,
a rate equal
to the lesser of One-Month LIBOR and 10.000% per annum.
Class A-2A Certificate: Any Certificate designated as a "Class
A-2A
Certificate" on the face thereof, executed by the Trustee and
authenticated by
the Authenticating Agent in substantially the form set forth in
Exhibit A,
representing the right to distributions as set forth herein.
Class A-2A Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class A-2A
Certificates.
Class A-2A Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class A-2A
Pass-Through Rate on
the Class A-2A Certificate Principal Balance as of such
Distribution Date plus
the portion of any previous distributions on such Class in respect
of Class A-2A
Current Interest or a Class A-2A Interest Carry Forward Amount that
is recovered
as a voidable preference by a trustee in bankruptcy, less any
Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class
A-2A
Certificates.
Class A-2A Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class A-2A Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
A-2A Certificates with respect to Current Interest or Interest
Carry Forward
Amounts on such prior Distribution Dates and (2) interest on such
excess (to the
extent permitted by applicable law) at the Class A-2A Pass-Through
Rate for the
related Accrual Period.
Class A-2A Margin: As of any Distribution Date up to and including
the
Auction Termination Date, 0.1200% per annum and, as of any
Distribution Date
after the Auction Termination Date, 0.2400% per annum.
Class A-2A Pass-Through Rate: For the first Distribution Date,
5.44% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class A-2A Margin, (2) the Class A-2 Available Funds Cap
and (3) the
Class A-2 Maximum Rate Cap for such Distribution Date.
Class A-2B Certificate: Any Certificate designated as a "Class
A-2B
Certificate" on the face thereof, executed by the Trustee and
authenticated by
the Authenticating Agent in substantially the form set forth in
Exhibit A,
representing the right to distributions as set forth herein.
Class A-2B Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class A-2B
Certificates.
Class A-2B Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class A-2B
Pass-Through Rate on
the Class A-2B Certificate Principal Balance as of such
Distribution Date plus
the portion of any previous distributions on such Class in respect
of Class A-2B
Current Interest or a Class A-2B Interest Carry Forward Amount that
is recovered
as a voidable preference by a trustee in bankruptcy, less any
Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class
A-2B
Certificates.
Class A-2B Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class A-2B Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
A-2B Certificates with respect to Current Interest or Interest
Carry Forward
Amounts on such prior Distribution Dates and (2) interest on such
excess (to the
extent permitted by applicable law) at the Class A-2B Pass-Through
Rate for the
related Accrual Period.
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<PAGE>
Class A-2B Margin: As of any Distribution Date up to and including
the
Auction Termination Date, 0.1900% per annum and, as of any
Distribution Date
after the Auction Termination Date, 0.3800% per annum.
Class A-2B Pass-Through Rate: For the first Distribution Date,
5.51% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class A-2B Margin, (2) the Class A-2 Available Funds Cap
and (3) the
Class A-2 Maximum Rate Cap for such Distribution Date.
Class A-2C Certificate: Any Certificate designated as a "Class
A-2C
Certificate" on the face thereof, executed by the Trustee and
authenticated by
the Authenticating Agent in substantially the form set forth in
Exhibit A,
representing the right to distributions as set forth herein.
Class A-2C Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class A-2C
Certificates.
Class A-2C Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class A-2C
Pass-Through Rate on
the Class A-2C Certificate Principal Balance as of such
Distribution Date plus
the portion of any previous distributions on such Class in respect
of Class A-2C
Current Interest or a Class A-2C Interest Carry Forward Amount that
is recovered
as a voidable preference by a trustee in bankruptcy, less any
Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class
A-2C
Certificates.
Class A-2C Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class A-2C Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
A-2C Certificates with respect to Current Interest or Interest
Carry Forward
Amounts on such prior Distribution Dates and (2) interest on such
excess (to the
extent permitted by applicable law) at the Class A-2C Pass-Through
Rate for the
related Accrual Period.
Class A-2C Margin: As of any Distribution Date up to and including
the
Auction Termination Date, 0.2500% per annum and, as of any
Distribution Date
after the Auction Termination Date, 0.5000% per annum.
Class A-2C Pass-Through Rate: For the first Distribution Date,
5.57% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class A-2C Margin, (2) the Class A-2 Available Funds Cap
and (3) the
Class A-2 Maximum Rate Cap for such Distribution Date.
Class A-2D Certificate: Any Certificate designated as a "Class
A-2D
Certificate" on the face thereof, executed by the Trustee and
authenticated by
the Authenticating Agent in substantially the form set forth in
Exhibit A,
representing the right to distributions as set forth herein.
Class A-2D Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class A-2D
Certificates.
Class A-2D Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class A-2D
Pass-Through Rate on
the Class A-2D Certificate Principal Balance as of such
Distribution Date plus
the portion of any previous distributions on such Class in respect
of Class A-2D
Current Interest or a Class A-2D Interest Carry Forward Amount that
is recovered
as a voidable preference by a trustee in bankruptcy, less any
Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class
A-2D
Certificates.
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<PAGE>
Class A-2D Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class A-2D Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
A-2D Certificates with respect to Current Interest or Interest
Carry Forward
Amounts on such prior Distribution Dates and (2) interest on such
excess (to the
extent permitted by applicable law) at the Class A-2D Pass-Through
Rate for the
related Accrual Period.
Class A-2D Margin: As of any Distribution Date up to and including
the
Auction Termination Date, 0.3500% per annum and, as of any
Distribution Date
after the Auction Termination Date, 0.7000% per annum.
Class A-2D Pass-Through Rate: For the first Distribution Date,
5.67% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class A-2D Margin, (2) the Class A-2 Available Funds Cap
and (3) the
Class A-2 Maximum Rate Cap for such Distribution Date.
Class B Certificates: The Class B-1 Certificates, Class B-2
Certificates,
and the Class B-3 Certificates.
Class B-1 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class B-1 Certificates.
Class B-1 Certificate: Any Certificate designated as a "Class
B-1
Certificate" on the face thereof, executed by the Trustee and
authenticated by
the Authenticating Agent in substantially the form set forth in
Exhibit A,
representing the right to distributions as set forth herein.
Class B-1 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class B-1
Certificates.
Class B-1 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class B-1
Pass-Through Rate on
the Class B-1 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Class B-1
Current Interest or a Class B-1 Interest Carry Forward Amount that
is recovered
as a voidable preference by a trustee in bankruptcy, less any
Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class
B-1
Certificates.
Class B-1 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class B-1 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
B-1 Certificates with respect to Current Interest or Interest Carry
Forward
Amounts on such prior Distribution Dates and (2) interest on such
excess (to the
extent permitted by applicable law) at the Class B-1 Pass-Through
Rate for the
related Accrual Period.
Class B-1 Margin: As of any Distribution Date up to and including
the
Auction Termination Date, 1.4000% per annum and, as of any
Distribution Date
after the Auction Termination Date, 2.1000% per annum.
Class B-1 Pass-Through Rate: For the first Distribution Date, 6.72%
per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class B-1 Margin, (2) the Subordinate Certificate
Available Funds Cap
and (3) the Subordinate Certificate Maximum Rate Cap for such
Distribution Date.
Class B-1 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount if
the aggregate Certificate Principal Balance
21
<PAGE>
of the Class A, Class R and Class M Certificates has been reduced
to zero and a
Stepdown Trigger Event exists, or, as long as a Stepdown Trigger
Event does not
exist, the excess of (1) the sum of (A) the Certificate Principal
Balance of the
Class A and Class R Certificates (after taking into account
distributions of the
Class A Principal Distribution Amount to the Class A Certificates
for such
Distribution Date), (B) the Certificate Principal Balance of the
Class M-1
Certificates, Class M-2 Certificates and Class M-3 Certificates
(after taking
into account distributions of the Class M-1/M-2/M-3 Principal
Distribution
Amount to the Class M-1 Certificates, Class M-2 Certificates and
Class M-3
Certificates for such Distribution Date), (C) the Certificate
Principal Balance
of the Class M-4 Certificates (after taking into account
distributions of the
Class M-4 Principal Distribution Amount to the Class M-4
Certificates for such
Distribution Date), (D) the Certificate Principal Balance of the
Class M-5
Certificates (after taking into account distributions of the Class
M-5 Principal
Distribution Amount to the Class M-5 Certificates for such
Distribution Date),
(E) the Certificate Principal Balance of the Class M-6 Certificates
(after
taking into account distributions of the Class M-6 Principal
Distribution Amount
to the Class M-6 Certificates for such Distribution Date) and (F)
the
Certificate Principal Balance of the Class B-1 Certificates
immediately prior to
such Distribution Date over (2) the lesser of (A) approximately
93.00% of the
aggregate Stated Principal Balance of the Mortgage Loans and (B)
the excess of
the aggregate Stated Principal Balance of the Mortgage Loans over
the Minimum
Required Overcollateralization Amount. Notwithstanding the above,
(I) on any
Distribution Date prior to the Stepdown Date on which the aggregate
Certificate
Principal Balance of the Class A, Class R and Class M Certificates
has been
reduced to zero, the Class B-1 Principal Distribution Amount will
equal the
lesser of (x) the outstanding Certificate Principal Balance of the
Class B-1
Certificates and (y) 100% of the Principal Distribution Amount
remaining after
any distributions on the Class A, Class R and Class M Certificates
and (II) in
no event will the Class B-1 Principal Distribution Amount with
respect to any
Distribution Date exceed the Certificate Principal Balance of the
Class B-1
Certificates.
Class B-1 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class B-1 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class B-1 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class B-1 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class B-2 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class B-2 Certificates.
Class B-2 Certificate: Any Certificate designated as a "Class
B-2
Certificate" on the face thereof, executed by the Trustee and
authenticated by
the Administrative Agent in substantially the form set forth in
Exhibit A,
representing the right to distributions as set forth herein.
Class B-2 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class B-2
Certificates.
Class B-2 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class B-2
Pass-Through Rate on
the Class B-2 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Class B-2
Current Interest or a Class B-2 Interest Carry Forward Amount that
is recovered
as a voidable preference by a trustee in bankruptcy, less any
Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class
B-2
Certificates.
Class B-2 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class B-2 Current Interest with
respect to
prior Distribution Dates over (B) the amount
22
<PAGE>
actually distributed to the Class B-2 Certificates with respect to
Current
Interest or Interest Carry Forward Amounts on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class B-2 Pass-Through Rate for the related Accrual Period.
Class B-2 Margin: As of any Distribution Date up to and including
the
Auction Termination Date, 1.4000% per annum and, as of any
Distribution Date
after the Auction Termination Date, 2.100% per annum.
Class B-2 Pass-Through Rate: For the first Distribution Date, 6.72%
per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class B-2 Margin, (2) the Subordinate Certificate
Available Funds Cap
and (3) the Subordinate Certificate Maximum Rate Cap for such
Distribution Date.
Class B-2 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount if
the aggregate Certificate Principal Balance of the Class A, Class
R, Class M and
Class B-1 Certificates has been reduced to zero and a Stepdown
Trigger Event
exists, or, as long as a Stepdown Trigger Event does not exist, the
excess of
(1) the sum of (A) the Certificate Principal Balance of the Class A
and Class R
Certificates (after taking into account distributions of the Class
A Principal
Distribution Amount to the Class A Certificates for such
Distribution Date), (B)
the Certificate Principal Balance of the Class M-1 Certificates,
Class M-2
Certificates and Class M-3 Certificates (after taking into account
distributions
of the Class M-1/M-2/M-3 Principal Distribution Amount to the Class
M-1
Certificates, Class M-2 Certificates and Class M-3 Certificates for
such
Distribution Date), (C) the Certificate Principal Balance of the
Class M-4
Certificates (after taking into account distributions of the Class
M-4 Principal
Distribution Amount to the Class M-4 Certificates for such
Distribution Date),
(D) the Certificate Principal Balance of the Class M-5 Certificates
(after
taking into account distributions of the Class M-5 Principal
Distribution Amount
to the Class M-5 Certificates for such Distribution Date), (E) the
Certificate
Principal Balance of the Class M-6 Certificates (after taking into
account
distributions of the Class M-6 Principal Distribution Amount to the
Class M-6
Certificates for such Distribution Date), (F) the Certificate
Principal Balance
of the Class B-1 Certificates (after taking into account
distributions of the
Class B-1 Principal Distribution Amount to the Class B-1
Certificates for such
Distribution Date) and (G) the Certificate Principal Balance of the
Class B-2
Certificates immediately prior to such Distribution Date over (2)
the lesser of
(A) approximately 94.40% of the aggregate Stated Principal Balance
of the
Mortgage Loans and (B) the excess of the aggregate Stated Principal
Balance of
the Mortgage Loans over the Minimum Required Overcollateralization
Amount.
Notwithstanding the above, (I) on any Distribution Date prior to
the Stepdown
Date on which the aggregate Certificate Principal Balance of the
Class A, Class
R, Class M and Class B-1 Certificates has been reduced to zero, the
Class B-2
Principal Distribution Amount will equal the lesser of (x) the
outstanding
Certificate Principal Balance of the Class B-2 Certificates and (y)
100% of the
Principal Distribution Amount remaining after any distributions on
the Class A,
Class R, Class M and Class B-1 Certificates and (II) in no event
will the Class
B-2 Principal Distribution Amount with respect to any Distribution
Date exceed
the Certificate Principal Balance of the Class B-2
Certificates.
Class B-2 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class B-2 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class B-2 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class B-2 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class B-3 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class B-3 Certificates.
23
<PAGE>
Class B-3 Certificate: Any Certificate designated as a "Class
B-3
Certificate" on the face thereof, executed by the Trustee and
authenticated by
the Administrative Agent in substantially the form set forth in
Exhibit A,
representing the right to distributions as set forth herein.
Class B-3 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class B-3
Certificates.
Class B-3 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class B-3
Pass-Through Rate on
the Class B-3 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Class B-3
Current Interest or a Class B-3 Interest Carry Forward Amount that
is recovered
as a voidable preference by a trustee in bankruptcy, less any
Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class
B-3
Certificates.
Class B-3 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class B-3 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
B-3 Certificates with respect to Current Interest or Interest Carry
Forward
Amounts on such prior Distribution Dates and (2) interest on such
excess (to the
extent permitted by applicable law) at the Class B-3 Pass-Through
Rate for the
related Accrual Period.
Class B-3 Margin: As of any Distribution Date up to and including
the
Auction Termination Date, 1.4000% per annum and, as of any
Distribution Date
after the Auction Termination Date, 2.100% per annum.
Class B-3 Pass-Through Rate: For the first Distribution Date, 6.72%
per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class B-3 Margin, (2) the Subordinate Certificate
Available Funds Cap
and (3) the Subordinate Certificate Maximum Rate Cap for such
Distribution Date.
Class B-3 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount if
the aggregate Certificate Principal Balance of the Class A, Class
R, Class M,
Class B-1 and Class B-2 Certificates has been reduced to zero and a
Stepdown
Trigger Event exists, or, as long as a Stepdown Trigger Event does
not exist,
the excess of (1) the sum of (A) the Certificate Principal Balance
of the Class
A and Class R Certificates (after taking into account distributions
of the Class
A Principal Distribution Amount to the Class A Certificates for
such
Distribution Date), (B) the Certificate Principal Balance of the
Class M-1
Certificates, Class M-2 Certificates and Class M-3 Certificates
(after taking
into account distributions of the Class M-1/M-2/M-3 Principal
Distribution
Amount to the Class M-1 Certificates, Class M-2 Certificates and
Class M-3
Certificates for such Distribution Date), (C) the Certificate
Principal Balance
of the Class M-4 Certificates (after taking into account
distributions of the
Class M-4 Principal Distribution Amount to the Class M-4
Certificates for such
Distribution Date), (D) the Certificate Principal Balance of the
Class M-5
Certificates (after taking into account distributions of the Class
M-5 Principal
Distribution Amount to the Class M-5 Certificates for such
Distribution Date),
(E) the Certificate Principal Balance of the Class M-6 Certificates
(after
taking into account distributions of the Class M-6 Principal
Distribution Amount
to the Class M-6 Certificates for such Distribution Date), (F) the
Certificate
Principal Balance of the Class B-1 Certificates (after taking into
account
distributions of the Class B-1 Principal Distribution Amount to the
Class B-1
Certificates for such Distribution Date), (G) the Certificate
Principal Balance
of the Class B-2 Certificates (after taking into account
distributions of the
Class B-2 Principal Distribution Amount to the Class B-2
Certificates for such
Distribution Date) and (H) the Certificate Principal Balance of the
Class B-3
Certificates immediately prior to such Distribution Date over (2)
the lesser of
(A) approximately 96.40% of the aggregate Stated Principal Balance
of the
Mortgage Loans and (B) the excess of the
24
<PAGE>
aggregate Stated Principal Balance of the Mortgage Loans over the
Minimum
Required Overcollateralization Amount. Notwithstanding the above,
(I) on any
Distribution Date prior to the Stepdown Date on which the aggregate
Certificate
Principal Balance of the Class A, Class R, Class M, Class B-1 and
Class B-2
Certificates has been reduced to zero, the Class B-3 Principal
Distribution
Amount will equal the lesser of (x) the outstanding Certificate
Principal
Balance of the Class B-3 Certificates and (y) 100% of the Principal
Distribution
Amount remaining after any distributions on the Class A, Class R,
Class M, Class
B-1 and Class B-2 Certificates and (II) in no event will the Class
B-3 Principal
Distribution Amount with respect to any Distribution Date exceed
the Certificate
Principal Balance of the Class B-3 Certificates.
Class B-3 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class B-3 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class B-3 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class B-3 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class C Applied Realized Loss Amount: As of any Distribution Date,
the sum
of all Applied Realized Loss Amounts with respect to the Mortgage
Loans which
have been applied to the reduction of the Certificate Principal
Balance of the
Class C Certificates.
Class C Certificate: Any Certificate designated as a "Class C
Certificate"
on the face thereof, executed by the Trustee and authenticated by
the
Administrative Agent in substantially the form set forth in Exhibit
A,
representing the right to distributions as set forth herein.
Class C Certificate Principal Balance: As of any date of
determination, the
aggregate Certificate Principal Balance of the Class C
Certificates.
Class C Current Interest: As of any Distribution Date, the interest
accrued
during the related Accrual Period at the Class C Distributable
Interest Rate on
a notional amount equal to the aggregate principal balance of the
Lower Tier
REMIC Regular Interests immediately prior to such Distribution Date
plus the
interest portion of any previous distributions on such Class that
is recovered
as a voidable preference by a trustee in bankruptcy, less any
Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class
C
Certificates.
Class C Distributable Interest Rate: The excess, if any, of (a)
the
weighted average of the interest rates on the Lower Tier REMIC
Regular Interests
(other than the Class LT-IO Interest) over (b) two times the
weighted average of
the interest rates on the Lower Tier REMIC I Marker Interests and
the Class LTIX
Interest (treating for purposes of this clause (b) the interest
rate on each of
the Lower Tier REMIC I Marker Interests as being subject to a cap
and a floor
equal to the interest rate of the Corresponding REMIC Regular
Interest of the
Corresponding Certificates (as adjusted, if necessary, for the
length of the
Accrual Period for the LIBOR Certificates) and treating the Class
LTIX Interest
as being capped at zero). The averages described in the preceding
sentence shall
be weighted on the basis of the respective principal balances of
the Lower Tier
REMIC Regular Interests immediately prior to any date of
determination.
Class C Interest Carry Forward Amount: As of any Distribution Date,
the
excess of (A) the Class C Current Interest with respect to prior
Distribution
Dates over (B) the amount actually distributed to the Class C
Certificates with
respect to interest on such prior Distribution Dates or added to
the aggregate
Certificate Principal Balance of the Class C Certificates (other
than amounts so
added attributable to Subsequent Recoveries or proceeds of the Swap
Agreement).
25
<PAGE>
Class C Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class C Applied Realized Loss Amount over (2) the
sum of (x)
all distributions in reduction of the Class C Unpaid Realized Loss
Amount on all
previous Distribution Dates and (y) all increases in the
Certificate Principal
Balance of such Class C Certificates (A) pursuant to the last
sentence of the
definition of "Certificate Principal Balance" or (B) attributable
to
distributions of proceeds of the Swap Agreement.
Class LTA-1 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificates and an interest rate
equal to the Net
Rate.
Class LTA-2A Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTA-2B Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTA-2C Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTA-2D Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTB-1 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTB-2 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTB-3 Interest: An
uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LT-IO Interest: An uncertificated regular interest in the
Lower Tier
REMIC with the characteristics set forth in the description of the
Lower Tier
REMIC in the Preliminary Statement.
Class LTII1A Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 0.05% of the
excess of (i) the
aggregate Cut-off Date Principal Balance of the Group One Mortgage
Loans over
(ii) the aggregate of the initial Certificate Principal Balances of
Certificate
Group One, and with an interest rate equal to the Net Rate.
Class LTII1B Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 0.05% of the
aggregate Cut-off
Date Principal Balance of the Group One Mortgage Loans, and with an
interest
rate equal to the rate set forth in footnote 9 to the description
of the Lower
Tier REMIC in the Preliminary Statement.
26
<PAGE>
Class LTII2A Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 0.05% of the
excess of (i) the
aggregate Cut-off Date Principal Balance of the Group Two Mortgage
Loans over
(ii) the aggregate of the initial Certificate Principal Balances of
Certificate
Group Two, and with an interest rate equal to the Net Rate.
Class LTII2B Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 0.05% of the
aggregate Cut-off
Date Principal Balance of the Group Two Mortgage Loans, and with an
interest
rate equal to the rate set forth in footnote 10 to the description
of the Lower
Tier REMIC in the Preliminary Statement.
Class LTIX Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to the excess of (i)
50% of the
aggregate Cut-off Date Principal Balance of the Mortgage Loans over
(ii) the
initial principal balance of the Lower Tier REMIC I Marker
Interests, and with
an interest rate equal to the Net Rate.
Class LTIIX Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to the excess of (i)
50% of the
aggregate Cut-off Date Principal Balance of the Mortgage Loans over
(ii) the
initial principal balance of the Lower Tier REMIC II Marker
Interests, and with
an interest rate equal to the Net Rate.
Class LTM-1 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTM-2 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTM-3 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTM-4 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTM-5 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTM-6 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTR Interest: The sole class of "residual interest" in the
Lower Tier
REMIC.
Class M Certificates: Any of the Class M-1, Class M-2, Class M-3,
Class
M-4, Class M-5 and Class M-6 Certificates.
27
<PAGE>
Class M-1 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class M-1 Certificates.
Class M-1 Certificate: Any Certificate designated as a "Class
M-1
Certificate" on the face thereof, executed by the Trustee and
authenticated by
the Administrative Agent in substantially the form set forth in
Exhibit A,
representing the right to distributions as set forth herein.
Class M-1 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class M-1
Certificates.
Class M-1 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class M-1
Pass-Through Rate on
the Class M-1 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Class M-1
Current Interest or a Class M-1 Interest Carry Forward Amount that
is recovered
as a voidable preference by a trustee in bankruptcy, less any
Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class
M-1
Certificates.
Class M-1 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-1 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-1 Certificates with respect to Current Interest or Interest Carry
Forward
Amounts on such prior Distribution Dates and (2) interest on such
excess (to the
extent permitted by applicable law) at the Class M-1 Pass-Through
Rate for the
related Accrual Period.
Class M-1 Margin: As of any Distribution Date up to and including
the
Auction Termination Date, 0.4000% per annum and, as of any
Distribution Date
after the Auction Termination Date, 0.6000% per annum.
Class M-1 Pass-Through Rate: For the first Distribution Date, 5.72%
per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class M-1 Margin and (2) the Subordinate Certificate
Available Funds
Cap and (3) the Subordinate Certificate Maximum Rate Cap for such
Distribution
Date.
Class M-1/M-2/M-3 Principal Distribution Amount: With respect to
any
Distribution Date on or after the Stepdown Date, 100% of the
Principal
Distribution Amount for such Distribution Date if the Certificate
Principal
Balances of the Class A and Class R Certificates have been reduced
to zero and a
Stepdown Trigger Event exists, or as long as a Stepdown Trigger
Event does not
exist, the excess of (1) the sum of (A) the Certificate Principal
Balances of
the Class A and Class R Certificates (after taking into account
distributions of
the Class A Principal Distribution Amount to the Class A
Certificates for such
Distribution Date) and (B) the Class M-1 Certificate Principal
Balance, the
Class M-2 Certificate Principal Balance and the Class M-3
Certificate Principal
Balance immediately prior to such Distribution Date over (2) the
lesser of (A)
84.80% of the Stated Principal Balances of the Mortgage Loans and
(B) the excess
of the Stated Principal Balances for the Mortgage Loans over the
Minimum
Required Overcollateralization Amount. Notwithstanding the
foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the
Certificate Principal
Balance of each Class of the Class A Certificate and Class R
Certificate has
been reduced to zero, the Class M-1/M-2/M-3 Principal Distribution
Amount will
equal the lesser of (x) the outstanding Certificate Principal
Balance of the
Class M-1, Class M-2 and Class M-3 Certificates and (y) 100% of the
Principal
Distribution Amount remaining after any distributions on such Class
A
Certificates and Class R Certificate and (II) in no event will the
Class
M-1/M-2/M-3 Principal Distribution Amount with respect to any
Distribution Date
exceed the Class M-1, Class M-2 and Class M-3 Certificate Principal
Balance.
28
<PAGE>
Class M-1 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class M-1 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class M-1 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-1 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class M-2 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class M-2 Certificates.
Class M-2 Certificate: Any Certificate designated as a "Class
M-2
Certificate" on the face thereof, executed by the Trustee and
authenticated by
the Administrative Agent in substantially the form set forth in
Exhibit A,
representing the right to distributions as set forth herein.
Class M-2 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class M-2
Certificates.
Class M-2 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class M-2
Pass-Through Rate on
the Class M-2 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Class M-2
Current Interest or a Class M-2 Interest Carry Forward Amount that
is recovered
as a voidable preference by a trustee in bankruptcy, less any
Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class
M-2
Certificates.
Class M-2 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-2 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-2 Certificates with respect to Current Interest or Interest Carry
Forward
Amounts on such prior Distribution Dates and (2) interest on such
excess (to the
extent permitted by applicable law) at the Class M-2 Pass-Through
Rate for the
related Accrual Period.
Class M-2 Margin: As of any Distribution Date up to and including
the
Auction Termination Date, 0.5500% per annum and, as of any
Distribution Date
after the Auction Termination Date, 0.8250% per annum.
Class M-2 Pass-Through Rate: For the first Distribution Date, 5.87%
per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class M-2 Margin, (2) the Subordinate Certificate
Available Funds Cap
and (3) the Subordinate Certificate Maximum Rate Cap for such
Distribution Date.
Class M-2 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class M-2 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class M-2 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-2 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class M-3 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class M-3 Certificates.
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<PAGE>
Class M-3 Certificate: Any Certificate designated as a "Class
M-3
Certificate" on the face thereof, executed by the Trustee and
authenticated by
the Administrative Agent in substantially the form set forth in
Exhibit A,
representing the right to distributions as set forth herein.
Class M-3 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class M-3
Certificates.
Class M-3 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class M-3
Pass-Through Rate on
the Class M-3 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Class M-3
Current Interest or a Class M-3 Interest Carry Forward Amount that
is recovered
as a voidable preference by a trustee in bankruptcy, less any
Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class
M-3
Certificates.
Class M-3 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-3 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-3 Certificates with respect to Current Interest or Interest Carry
Forward
Amounts on such prior Distribution Dates and (2) interest on such
excess (to the
extent permitted by applicable law) at the Class M-3 Pass-Through
Rate for the
related Accrual Period.
Class M-3 Margin: As of any Distribution Date up to and including
the
Auction Termination Date, 0.7500% per annum and, as of any
Distribution Date
after the Auction Termination Date, 1.1250% per annum.
Class M-3 Pass-Through Rate: For the first Distribution Date, 6.07%
per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class M-3 Margin, (2) the Subordinate Certificate
Available Funds Cap
and (3) the Subordinate Certificate Maximum Rate Cap for such
Distribution Date.
Class M-3 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class M-3 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class M-3 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-3 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class M-4 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class M-4 Certificates.
Class M-4 Certificate: Any Certificate designated as a "Class
M-4
Certificate" on the face thereof, executed by the Trustee and
authenticated by
the Administrative Agent in substantially the form set forth in
Exhibit A,
representing the right to distributions as set forth herein.
Class M-4 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class M-4
Certificates.
Class M-4 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class M-4
Pass-Through Rate on
the Class M-4 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Class M-4
Current Interest or a Class M-4 Interest Carry Forward Amount that
is recovered
as a voidable
30
<PAGE>
preference by a trustee in bankruptcy, less any Non-Supported
Interest Shortfall
allocated on such Distribution Date to the Class M-4
Certificates.
Class M-4 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-4 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-4 Certificates with respect to Current Interest or Interest Carry
Forward
Amounts on such prior Distribution Dates and (2) interest on such
excess (to the
extent permitted by applicable law) at the Class M-4 Pass-Through
Rate for the
related Accrual Period.
Class M-4 Margin: As of any Distribution Date up to and including
the
Auction Termination Date, 1.0000% per annum and, as of any
Distribution Date
after the Auction Termination Date, 1.5000% per annum.
Class M-4 Pass-Through Rate: For the first Distribution Date, 6.32%
per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class M-4 Margin, (2) the Subordinate Certificate
Available Funds Cap
and (3) the Subordinate Certificate Maximum Rate Cap for such
Distribution Date.
Class M-4 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Certificate Principal Balances of
the Class A,
Class R, Class M-1, Class M-2 and Class M-3 Certificates have been
reduced to
zero and a Stepdown Trigger Event exists, or as long as a Stepdown
Trigger Event
does not exist, the excess of (1) the sum of (A) the Certificate
Principal
Balances of the Class A and Class R Certificates (after taking into
account
distributions of the Class A Principal Distribution Amount on such
Distribution
Date), (B) the Class M-1 Certificate Principal Balance, the Class
M-2
Certificate Principal Balance and the Class M-3 Certificate
Principal Balance
(after taking into account distributions of the Class M-1/M-2/M-3
Principal
Distribution Amount on such Distribution Date) and (C) the Class
M-4 Certificate
Principal Balance immediately prior to such Distribution Date over
(2) the
lesser of (A) 87.20% of the Stated Principal Balances of the
Mortgage Loans and
(B) the excess of the Stated Principal Balances for the Mortgage
Loans over the
Minimum Required Overcollateralization Amount. Notwithstanding the
foregoing,
(I) on any Distribution Date prior to the Stepdown Date on which
the Certificate
Principal Balance of each Class of the Class A Certificates, the
Class R
Certificate, the Class M-1 Certificates, the Class M-2 and the
Class M-3
Certificates has been reduced to zero, the Class M-4 Principal
Distribution
Amount will equal the lesser of (x) the outstanding Certificate
Principal
Balance of the Class M-3 Certificates and (y) 100% of the Principal
Distribution
Amount remaining after any distributions on such Class A, Class R,
Class M-1,
Class M-2 and Class M-3 Certificates and (II) in no event will the
Class M-4
Principal Distribution Amount with respect to any Distribution Date
exceed the
Class M-4 Certificate Principal Balance.
Class M-4 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class M-4 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class M-4 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-4 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class M-5 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class M-5 Certificates.
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<PAGE>
Class M-5 Certificate: Any Certificate designated as a "Class
M-5
Certificate" on the face thereof, executed by the Trustee and
authenticated by
the Administrative Agent in substantially the form set forth in
Exhibit A,
representing the right to distributions as set forth herein.
Class M-5 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class M-5
Certificates.
Class M-5 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class M-5
Pass-Through Rate on
the Class M-5 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Class M-5
Current Interest or a Class M-5 Interest Carry Forward Amount that
is recovered
as a voidable preference by a trustee in bankruptcy, less any
Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class
M-5
Certificates.
Class M-5 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-5 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-5 Certificates with respect to Current Interest or Interest Carry
Forward
Amounts on such prior Distribution Dates and (2) interest on such
excess (to the
extent permitted by applicable law) at the Class M-5 Pass-Through
Rate for the
related Accrual Period.
Class M-5 Margin: As of any Distribution Date up to and including
the
Auction Termination Date, 1.3000% per annum and, as of any
Distribution Date
after the Auction Termination Date, 1.9500% per annum.
Class M-5 Pass-Through Rate: For the first Distribution Date, 6.62%
per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class M-5 Margin, (2) the Subordinate Certificate
Available Funds Cap
and (3) the Subordinate Certificate Maximum Rate Cap for such
Distribution Date.
Class M-5 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Certificate Principal Balances of
the Class A,
Class R, Class M-1, Class M-2, Class M-3 and Class M-4 Certificates
have been
reduced to zero and a Stepdown Trigger Event exists, or as long as
a Stepdown
Trigger Event does not exist, the excess of (1) the sum of (A) the
Certificate
Principal Balances of the Class A and Class R Certificates (after
taking into
account distributions of the Class A Principal Distribution Amount
on such
Distribution Date), (B) the Class M-1 Certificate Principal
Balance, the Class
M-2 Certificate Principal Balance and the Class M-3 Certificate
Principal
Balance (after taking into account distributions of the Class
M-1/M-2/M-3
Principal Distribution Amount on such Distribution Date), (C) the
Class M-4
Certificate Principal Balance (after taking into account
distributions of the
Class M-4 Principal Distribution Amount on such Distribution Date)
and (D) the
Class M-5 Certificate Principal Balance immediately prior to such
Distribution
Date over (2) the lesser of (A) 89.20% of the Stated Principal
Balances of the
Mortgage Loans and (B) the excess of the Stated Principal Balances
for the
Mortgage Loans over the Minimum Required Overcollateralization
Amount.
Notwithstanding the foregoing, (I) on any Distribution Date prior
to the
Stepdown Date on which the Certificate Principal Balance of each
Class of the
Class A Certificates, the Class R Certificate, the Class M-1
Certificates, the
Class M-2, the Class M-3 and the Class M-4 Certificates has been
reduced to
zero, the Class M-5 Principal Distribution Amount will equal the
lesser of (x)
the outstanding Certificate Principal Balance of the Class M-5
Certificates and
(y) 100% of the Principal Distribution Amount remaining after any
distributions
on such Class A, Class R, Class M-1, Class M-2, Class M-3 and Class
M-4
Certificates and (II) in no event will the Class M-5 Principal
Distribution
Amount with respect to any Distribution Date exceed the Class M-5
Certificate
Principal Balance.
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<PAGE>
Class M-5 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class M-5 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class M-5 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-5 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class M-6 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class M-6 Certificates.
Class M-6 Certificate: Any Certificate designated as a "Class
M-6
Certificate" on the face thereof, executed by the Trustee and
authenticated by
the Administrative Agent in substantially the form set forth in
Exhibit A,
representing the right to distributions as set forth herein.
Class M-6 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class M-6
Certificates.
Class M-6 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class M-6
Pass-Through Rate on
the Class M-6 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Class M-6
Current Interest or a Class M-6 Interest Carry Forward Amount that
is recovered
as a voidable preference by a trustee in bankruptcy, less any
Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class
M-6
Certificates.
Class M-6 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-6 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-6 Certificates with respect to Current Interest or Interest Carry
Forward
Amounts on such prior Distribution Dates and (2) interest on such
excess (to the
extent permitted by applicable law) at the Class M-6 Pass-Through
Rate for the
related Accrual Period.
Class M-6 Margin: As of any Distribution Date up to and including
the
Auction Termination Date, 1.4000% per annum and, as of any
Distribution Date
after the Auction Termination Date, 2.1000% per annum.
Class M-6 Pass-Through Rate: For the first Distribution Date, 6.72%
per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class M-6 Margin, (2) the Subordinate Certificate
Available Funds Cap
and (3) the Subordinate Certificate Maximum Rate Cap for such
Distribution Date.
Class M-6 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Certificate Principal Balances of
the Class A,
Class R, Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5
Certificates
have been reduced to zero and a Stepdown Trigger Event exists, or
as long as a
Stepdown Trigger Event does not exist, the excess of (1) the sum of
(A) the
Certificate Principal Balances of the Class A and Class R
Certificates (after
taking into account distributions of the Class A Principal
Distribution Amount
on such Distribution Date), (B) the Class M-1 Certificate Principal
Balance, the
Class M-2 Certificate Principal Balance and the Class M-3
Certificate Principal
Balance (after taking into account distributions of the Class
M-1/M-2/M-3
Principal Distribution Amount on such Distribution Date), (C) the
Class M-4
Certificate Principal Balance (after taking into account
distributions of the
Class M-4 Principal Distribution Amount on such Distribution Date),
(D) the
Class M-5 Certificate Principal Balance (after taking into account
distributions
of the Class M-5 Principal Distribution Amount on such
33
<PAGE>
Distribution Date) and (E) the Class M-6 Certificate Principal
Balance
immediately prior to such Distribution Date over (2) the lesser of
(A) 91.20% of
the Stated Principal Balances of the Mortgage Loans and (B) the
excess of the
Stated Principal Balances for the Mortgage Loans over the Minimum
Required
Overcollateralization Amount. Notwithstanding the foregoing, (I) on
any
Distribution Date prior to the Stepdown Date on which the
Certificate Principal
Balance of each Class of the Class A Certificates, the Class R
Certificate, the
Class M-1 Certificates, the Class M-2, the Class M-3, the Class M-4
and the
Class M-5 Certificates has been reduced to zero, the Class M-6
Principal
Distribution Amount will equal the lesser of (x) the outstanding
Certificate
Principal Balance of the Class M-6 Certificates and (y) 100% of the
Principal
Distribution Amount remaining after any distributions on such Class
A, Class R,
Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5
Certificates and (II)
in no event will the Class M-6 Principal Distribution Amount with
respect to any
Distribution Date exceed the Class M-6 Certificate Principal
Balance.
Class M-6 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class M-6 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class M-6 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-6 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class P Certificate: Any Certificate designated as a "Class P
Certificate"
on the face thereof, executed by the Trustee and authenticated by
the
Administrative Agent in substantially the form set forth in Exhibit
A,
representing the right to distributions as set forth herein.
Class R Certificate:
Any Certificate designated as a "Class R Certificate"
on the face thereof, executed by the Trustee and authenticated by
the
Administrative Agent in substantially the form set forth in Exhibit
A,
representing the right to distributions as set forth herein.
Class R Certificate Principal Balance: As of any date of
determination, the
aggregate Certificate Principal Balance of the Class R
Certificate.
Class R Current Interest: As of any Distribution Date, the interest
accrued
during the related Accrual Period at the Class R Pass-Through Rate
on the Class
R Certificate Principal Balance as of such Distribution Date plus
the portion of
any previous distributions on such Class in respect of Class R
Current Interest
or a Class R Interest Carry Forward Amount that is recovered as a
voidable
preference by a trustee in bankruptcy, less any Non-Supported
Interest Shortfall
allocated on such Distribution Date to the Class R Certificate.
Class R Interest Carry Forward Amount: As of any Distribution Date,
the sum
of (1) the excess of (A) the Class R Current Interest with respect
to prior
Distribution Dates over (B) the amount actually distributed to the
Class R
Certificate with respect to Current Interest or Interest Carry
Forward Amounts
on such prior Distribution Dates and (2) interest on such excess
(to the extent
permitted by applicable law) at the Class R Pass-Through Rate for
the related
Accrual Period.
Class R Margin: As of any Distribution Date up to and including the
Auction
Termination Date, 0.240% per annum and, as of any Distribution Date
after the
Auction Termination Date, 0.480% per annum.
Class R Pass-Through Rate: For the first Distribution Date, 5.56%
per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class R Margin, (2) the Class A-1 Available Funds Cap for
such
Distribution Date and (3) the Class A-1 Maximum Rate Cap.
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<PAGE>
Class SWR Interest: The sole class of "residual interest" in the
SWAP
REMIC.
Clean Up Call: The termination of the Trust Fund hereunder pursuant
to
Section 9.01(a)(ii).
Clean Up Call Date: The second Distribution Date immediately
following the
Auction Termination Date.
Clean Up Call Price: An amount equal to the sum of (a) the
aggregate Stated
Principal Balance of each Mortgage Loan (other than any Mortgage
Loan that is an
REO Property), plus accrued interest thereon at the applicable
Mortgage Rate
through the Due Date preceding distribution of the proceeds, (b)
the fair market
value of any REO Property, plus accrued interest thereon, (c) any
unreimbursed
fees, out-of-pocket expenses owed to the Trustee or the Servicer
(including the
costs and expenses of conducting the auction described in Section
9.01(a)) and
any unreimbursed Servicing Fees, Advances or Servicing Advances,
(d) all
interest accrued on, as well as amounts necessary to retire, the
principal
balance of the NIM Notes, (e) any costs and damages incurred by the
Issuing
Entity (or the Trustee on behalf of the Issuing Entity) in
connection with any
violation by the affected Mortgage Loan of any anti-predatory or
anti-abusive
lending laws and (f) any Swap Termination Payment, other than a
Defaulted Swap
Termination Payment, owed to the Swap Counterparty; such Swap
Termination
Payment shall include any payment resulting from the termination of
the Swap
Agreement after the Clean Up Call Date but prior to the final
distribution to
the Certificates.
Closing Date: March 26, 2007.
Code: The Internal Revenue Code of 1986, including any successor
or
amendatory provisions.
Collection Account: The separate Eligible Accounts created and
initially
maintained by the Servicer pursuant to Section 3.05(d) in the name
of the
Trustee for the benefit of the Certificateholders and designated
"Wilshire
Credit Corporation, in trust for registered holders of Specialty
Underwriting
and Residential Finance Trust, Mortgage Loan Asset-Backed
Certificates, Series
2007-AB1". Funds in the Collection Account shall be held in trust
for the
Certificateholders for the uses and purposes set forth in this
Agreement.
Combined Loan-to-Value Ratio: For any Mortgage Loan in a second
lien
position, the fraction, expressed as a percentage, the numerator of
which is the
sum of (1) the original principal balance of the related Mortgage
Loan and (2)
any outstanding principal balances of Mortgage Loans the liens on
which are
senior to the lien on such related Mortgage Loan (such sum
calculated at the
date of origination of such related Mortgage Loan) and the
denominator of which
is the lesser of (A) the Appraised Value of the related Mortgaged
Property and
(B) the sales price of the related Mortgaged Property at time of
origination.
Commission: The Securities and Exchange Commission.
Compensating Interest: For any Distribution Date and all
Principal
Prepayments in full in respect of a Mortgage Loan that are received
during the
period from the first day of the related Prepayment Period through
the last day
of the calendar month preceding such Distribution Date, a payment
made by the
Servicer in an amount not to exceed the product of (a) one-twelfth
of 0.25% and
(b) the aggregate Stated Principal Balance of the Mortgage Loans
for such
Distribution Date, equal to the amount of interest at the Net
Mortgage Rate for
that Mortgage Loan from the date of prepayment through the last day
of such
preceding calendar month.
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<PAGE>
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged
Property, whether permanent or temporary, partial or entire, by
exercise of the
power of eminent domain or condemnation, to the extent not required
to be
released either to a Mortgagor in accordance with the terms of the
related
mortgage loan documents or to the holder of a senior lien on the
Mortgaged
Property.
Corresponding Certificates: With respect to the Class LTA-1
Interest, the
Class A-1 and Class R Certificates. With respect to the Class
LTA-2A Interest,
the Class A-2A Certificates. With respect to the Class LTA-2B
Interest, the
Class A-2B Certificates. With respect to the Class LTA-2C Interest,
the Class
A-2C Certificates. With respect to the Class LTA-2D Interest, the
Class A-2D
Certificates. With respect to the Class LTM-1 Interest, the Class
M-1
Certificates. With respect to the Class LTM-2 Interest, the Class
M-2
Certificates. With respect to the Class LTM-3 Interest, the Class
M-3
Certificates. With respect to the Class LTM-4 Interest, the Class
M-4
Certificates. With respect to the Class LTM-5 Interest, the Class
M-5
Certificates. With respect to the Class LTM-6 Interest, the Class
M-6
Certificates. With respect to the Class LTB-1 Interest, the Class
B-1
Certificates. With respect to the Class LTB-2 Interest, the Class
B-2
Certificates. With respect to the Class LTB-3 Interest, the Class
B-3
Certificates.
Corresponding REMIC Regular Interest: For each Class of
Certificates, the
interest in the Upper Tier REMIC listed on the same row in the
table entitled
"Upper Tier REMIC" in the Preliminary Statement.
Corridor Contract: Any of the Class A-1 Corridor Contract, the
Class A-2
Corridor Contract or the Subordinate Certificate Corridor
Contract.
Corridor Contract Account: The separate Eligible Account created
and
maintained by the Trustee pursuant to Section 4.04(j) in the name
of the Trustee
for the benefit of the Issuing Entity and designated "U.S. Bank
National
Association, as trustee, in trust for registered holders of
Specialty
Underwriting and Residential Finance Trust, Mortgage Loan
Asset-Backed
Certificates, Series 2007-AB1." Funds in the Corridor Contract
Account shall be
held in trust for the Issuing Entity for the uses and purposes set
forth in this
Agreement.
Corridor Contract Notional Balance: Any of the Class A-1 Corridor
Contract
Notional Balance, the Class A-2 Corridor Contract Notional Balance
or the
Subordinate Certificate Corridor Contract Notional Balance.
Corridor Contract Termination Date: Any of the Class A-1 Corridor
Contract
Termination Date, the Class A-2 Corridor Contract Termination Date
or the
Subordinate Certificate Corridor Contract Termination Date.
Corridor Posted Collateral Account: The segregated Eligible Account
that
may be created and maintained by the Trustee pursuant to Section
4.04(j)(iv) in
the name of the Trustee for the benefit of the Issuing Entity and
designated
"U.S. Bank National Association, as trustee, in trust for
registered holders of
Specialty Underwriting and Residential Finance Trust, Mortgage Loan
Asset-Backed
Certificates, Series 2007-AB1." Funds in the Corridor Posted
Collateral Account
shall be held in trust for the Issuing Entity for the uses and
purposes set
forth in the Corridor Contracts.
Current Interest: Any of the Class A-1 Current Interest, the Class
A-2A
Current Interest, the Class A-2B Current Interest, the Class A-2C
Current
Interest, the Class A-2D Current Interest, the Class R Current
Interest, the
Class M-1 Current Interest, the Class M-2 Current Interest, the
Class M-3
Current Interest, the Class M-4 Current Interest, the Class M-5
Current
Interest, the Class M-6 Current Interest, the Class B-1 Current
Interest, the
Class B-2 Current Interest, the Class B-3 Current Interest and the
Class C
Current Interest.
36
<PAGE>
Cut-off Date: March 1, 2007.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
unpaid
principal balance thereof as of the close of business on the
calendar day
immediately preceding the Cut-off Date after application of all
payments of
principal due on or prior to the Cut-off Date, whether or not
received, and all
Principal Prepayments received prior to the Cut-off Date, but
without giving
effect to any installments of principal received in respect of Due
Dates after
the Cut-off Date.
Defaulted Swap Termination Payment: Any payment required to be made
by the
Supplemental Interest Trust to the Swap Counterparty pursuant to
the Swap
Agreement as a result of an event of default under the Swap
Agreement with
respect to which the Swap Counterparty is the defaulting party or a
termination
event (including a Downgrade Termination Event) under that
agreement (other than
illegality or a tax event) with respect to which the Swap
Counterparty is the
sole Affected Party (as defined in the Swap Agreement).
Definitive Certificates: As defined in Section 5.06.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced
by a
Replacement Mortgage Loan.
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. A Mortgage Loan is "30
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 "60 days delinquent," "90 days delinquent" and so
on.
Denomination: With respect to each Certificate, the amount set
forth on the
face thereof as the "Initial Principal Balance of this
Certificate."
Depositor: Merrill Lynch Mortgage Investors, Inc., a Delaware
corporation,
or any 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(3) of
the Uniform
Commercial Code of the State of New York.
Depository Agreement: With respect to Classes of Book-Entry
Certificates,
the agreement between the Trustee and the initial Depository.
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.
Designated Transaction: A transaction in which the assets
underlying the
Certificates consist of single-family residential, multi-family
residential,
home equity, manufactured housing and/or commercial mortgage
obligations that
are secured by single family residential, multi-family residential,
commercial
real property or leasehold interests therein.
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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.
Disqualified Organization: (1) the United States, any state or
political
subdivision thereof, any foreign government, any international
organization, or
any agency or instrumentality of any of the foregoing, (2) any
organization
(other than a cooperative described in Section 521 of the Code)
which is exempt
from tax under Chapter 1 of Subtitle A of the Code unless such
organization is
subject to the tax imposed by Section 511 of the Code and (3) any
organization
described in Section 1381(a)(2)(C) of the Code.
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 April 2007.
Downgrade Termination Event: An event whereby (x) the Swap
Counterparty (or
its guarantor) ceases to have short term unsecured and/or long term
debt ratings
at least equal to the levels specified in the Swap Agreement, and
(y) at least
one of the following events has not occurred (except to the extent
otherwise
approved by the Rating Agencies): (i) the Swap Counterparty fails
to post
collateral securing its obligations under the Swap Agreement, (ii)
the Swap
Counterparty fails to post collateral securing its obligations
under the Swap
Agreement and/or fails to obtain a guarantor or a substitute swap
counterparty
acceptable to the Supplemental Interest Trust Trustee and the
Rating Agencies
(if required under the Swap Agreement) that will assume the
obligations of the
Swap Counterparty under the Swap Agreement or (iii) the Swap
Counterparty is
defaulting on certain obligations required as a result of the
ratings downgrade
and the Supplemental Interest Trust Trustee obtains a guarantor or
secures a
substitute swap counterparty acceptable to the Rating Agencies (if
required
under the Swap Agreement) that will assume the obligations of the
Swap
Counterparty under the Swap Agreement.
Due
Date: With respect to any Distribution Date and any Mortgage Loan,
the
day during the related Due Period on which a Scheduled Payment is
due.
Due
Period: With respect to any Distribution Date, the period beginning
on
the second day of the calendar month preceding the calendar month
in which such
Distribution Date occurs and ending on the first day of the month
in which such
Distribution Date occurs.
Eligible Account: An account that is (i) maintained with a
depository
institution the long-term unsecured debt obligations of which are
rated by each
Rating Agency in one of its two highest rating categories, or (ii)
maintained
with the corporate trust department of a bank which (A) has a
rating of at least
Baa3 or P-3 by Moody's and (B) is either the Depositor or the
corporate trust
department of a national banking association or banking corporation
which has a
rating of at least A-1 by S&P or F1 by Fitch, or (iii) an
account or accounts
the deposits in which are fully insured by the FDIC, or (iv) an
account or
accounts, acceptable to each Rating Agency without reduction or
withdrawal of
the rating of any Class of Certificates, as evidenced in writing,
by a
depository institution in which such accounts are insured by the
FDIC (to the
limit established by the FDIC), the uninsured deposits in which
accounts are
otherwise secured such that, as evidenced by an Opinion of Counsel
delivered to
and acceptable to the Trustee and each Rating Agency, the
Certificateholders
have a claim with respect to the funds in such account and a
perfected first
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 with which
such account is
maintained, or (v) maintained at an eligible institution whose
commercial paper,
short-term debt or other short-term deposits are rated at least
A-1+ by S&P and
F-1+ by Fitch, or (vi) maintained with a federal or state chartered
depository
institution the deposits in which are insured by the FDIC to the
applicable
limits and the short-term unsecured debt obligations of
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<PAGE>
which (or, in the case of a depository institution that is a
subsidiary of a
holding company, the short-term unsecured debt obligations of such
holding
company) are rated A-1 by S&P or Prime-1 by Moody's at the time
any deposits are
held on deposit therein, or (vii) a segregated trust account or
accounts
maintained with a federal or state chartered depository institution
or trust
company acting in its fiduciary capacity, or (viii) otherwise
acceptable to each
Rating Agency, as evidenced by a letter from each Rating Agency to
the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974,
including any
successor or amendatory provisions.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that would satisfy the
requirements of
Prohibited Transaction Exemption 90-29, Exemption Application No.
D-8012, 55
Fed. Reg. 21459 (1990), as amended, granted to the Underwriter by
the United
States Department of Labor (or any other applicable underwriter's
exemption
granted by the United States Department of Labor), except, in
relevant part, for
the requirement that the certificates have received a rating at the
time of
acquisition that is in one of the three (or four, in the case of a
"designated
transaction") highest generic rating categories by at least one of
the Rating
Agencies.
ERISA Restricted Certificates: The Class C and Class P Certificates
and any
other Certificate, as long as the acquisition and holding of such
other
Certificate is not covered by and exempt under any applicable
underwriter's
exemption granted by the United States Department of Labor.
Escrow Account: As defined in Section 3.06 hereof.
Event of Default: As defined in Section 7.01 hereof.
Exception Report: As defined in Section 2.02 hereof.
Excess Interest: On any Distribution Date, for any Class of the
Class A
Certificates, Class R Certificate, Class M Certificates and Class
B
Certificates, the excess, if any, of (1) the amount of interest
such Class of
Certificates is entitled to receive on such Distribution Date over
(2) the
amount of interest such Class of Certificates would have been
entitled to
receive on such Distribution Date at an interest rate equal to the
REMIC
Pass-Through Rate.
Excess Proceeds: With respect to any Liquidated Loan, any
Liquidation
Proceeds that are in excess of the sum of (1) the unpaid principal
balance of
such Liquidated Loan as of the date of such liquidation plus (2)
interest at the
Mortgage Rate from the Due Date as to which interest was last paid
or advanced
to Certificateholders (and not reimbursed to the Servicer) up to
the Due Date in
the month in which such Liquidation Proceeds are required to be
distributed on
the unpaid principal balance of such Liquidated Loan outstanding
during each Due
Period as to which such interest was not paid or advanced.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Existing Servicing Agreement: The Servicing Agreement between
Merrill Lynch
Mortgage Lending, Inc., as Owner, and Wilshire Credit Corporation,
as Servicer,
dated as of January 1, 2005, as at any time amended and in
effect.
Extra Principal Distribution Amount: With respect to any
Distribution Date,
(1) prior to the Stepdown Date, the excess of (A) the sum of (i)
the Aggregate
Certificate Principal Balance immediately preceding such
Distribution Date
reduced by the Principal Funds with respect to such Distribution
Date and (ii)
$6,300,000 over (B) the Pool Stated Principal Balance of the
Mortgage Loans as
of such
39
<PAGE>
Distribution Date and (2) on and after the Stepdown Date, the
excess, if any, of
(A) the sum of (i) the Aggregate Certificate Principal Balance
immediately
preceding such Distribution Date, reduced by the Principal Funds
with respect to
such Distribution Date and (ii) the greater of (a) 3.60% of the
Pool Stated
Principal Balance of the Mortgage Loans and (b) the Minimum
Required
Overcollateralization Amount less (B) the Pool Stated Principal
Balance of the
Mortgage Loans as of such Distribution Date; provided, however,
that if on any
Distribution Date a Stepdown Trigger Event is in effect, the Extra
Principal
Distribution Amount will not be reduced to the applicable
percentage of the
then-current Stated Principal Balance of the Mortgage Loans (and
will remain
fixed at the applicable percentage of the Stated Principal Balance
of the
Mortgage Loans as of the Due Date immediately prior to the Stepdown
Trigger
Event) until the next Distribution Date on which the Stepdown
Trigger Event is
not in effect.
Fannie Mae: A federally chartered and privately owned corporation
organized
and existing under the Federal National Mortgage Association
Charter Act, or any
successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A Mortgage Loan identified in the
Mortgage Loan
Schedule as having a Mortgage Rate which is fixed.
Floating Rate Certificate Carryover: With respect to a Distribution
Date,
in the event that the Pass-Through Rate for a Class of Class A,
Class R, Class M
or Class B Certificates is based upon the related Available Funds
Cap or the
related Maximum Rate Cap, the sum of (A) the excess of (1) the
amount of
interest that such Class would have been entitled to receive on
such
Distribution Date had the Pass-Through Rate for that Class not been
calculated
based on the related Available Funds Cap or the related Maximum
Rate Cap, up to
but not exceeding the greater of (a) the related Maximum Rate Cap
or (b) the sum
of (i) the related Available Funds Cap and (ii) the product of (AA)
a fraction,
the numerator of which is 360 and the denominator of which is the
actual number
of days in the related Accrual Period and (BB) the sum of (x) the
quotient of
(I) an amount equal to the proceeds, if any, payable under the
related Corridor
Contract and (II) the aggregate Certificate Principal Balance of
each Class of
Certificates to which such Corridor Contract relates for such
Distribution Date
and (y) the quotient obtained by dividing (I) an amount equal to
any Net Swap
Payments owed by the Swap Counterparty for such Distribution Date
by (II) the
aggregate Stated Principal Balance of the Mortgage Loans as of the
immediately
preceding Distribution Date over (2) the amount of interest such
Class was
entitled to receive on such Distribution Date based on the
applicable Available
Funds Cap; (B) the unpaid portion of any such excess from prior
Distribution
Dates (and interest accrued thereon at the then applicable
Pass-Through Rate,
without giving effect to the related Available Funds Cap) and (C)
any amount
previously distributed with respect to Floating Rate Certificate
Carryover for
such Class that is recovered as a voidable preference by a trustee
in
bankruptcy.
Freddie Mac: A corporate instrumentality of the United States
created and
existing under Title III of the Emergency Home Finance Act of 1970,
as amended,
or any successor thereto.
Grantor Trusts: The grantor trusts described in Section 2.07
hereof.
Gross Margin: The percentage set forth in the related Mortgage Note
for
each of the Adjustable Rate Mortgage Loans which is to be added to
the
applicable index for use in determining the Mortgage Rate on each
Adjustment
Date, and which is set forth in the Mortgage Loan Schedule for each
Adjustable
Rate Mortgage Loan.
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<PAGE>
Group One: The portion of the Mortgage Pool identified as "Group
One" in
the Prospectus Supplement.
Group One Mortgage Loan: Any Mortgage Loan at any time identified
as a
Mortgage Loan in Group One in the Mortgage Loan Schedule.
Group One Net WAC: The Net WAC of Group One.
Group One Principal Distribution Amount: As of any Distribution
Date, the
amount equal to the lesser of (i) the aggregate Certificate
Principal Balance of
the Class A-1 and Class R Certificates and (ii) the product of (x)
the Group One
Principal Distribution Percentage and (y) the Class A Principal
Distribution
Amount; provided, however, that (A) with respect to any
Distribution Date on
which the Class A-1 and Class R Certificates are outstanding and
the Certificate
Principal Balance of the Class A-2 Certificates has been reduced to
zero, the
Group Two Principal Distribution Amount in excess of the amount
necessary to
reduce the Certificate Principal Balance of the Class A-2
Certificates to zero
will be applied to increase the Group One Principal Distribution
Amount and (B)
with respect to any Distribution Date thereafter, the Group One
Principal
Distribution Amount will equal the Class A Principal Distribution
Amount.
Group One Principal Distribution Percentage: With respect to
any
Distribution Date, a fraction expressed as a percentage, the
numerator of which
is the amount of Principal Funds received with respect to Mortgage
Loans in
Group One and the denominator of which is the amount of Principal
Funds received
from all of the Mortgage Loans in the mortgage pool.
Group Two: The portion of the Mortgage Pool identified as "Group
Two" in
the Prospectus Supplement.
Group Two Mortgage Loan: Any Mortgage Loan at any time identified
as a
Mortgage Loan in Group Two in the Mortgage Loan Schedule.
Group Two Net WAC: The Net WAC of Group Two.
Group Two Principal Distribution Amount: As of any Distribution
Date, the
amount equal to the lesser of (i) the aggregate Certificate
Principal Balance of
the Class A-2 Certificates and (ii) the product of (x) the Group
Two Principal
Distribution Percentage and (y) the Class A Principal Distribution
Amount;
provided, however, that (A) with respect to any Distribution Date
on which the
Class A-2 Certificates are outstanding and the Certificate
Principal Balances of
the Class A-1 and Class R Certificates have been reduced to zero,
the Group One
Principal Distribution Amount in excess of the amount necessary to
reduce the
Certificate Principal Balance of the Class A-1 Certificates and
Class R
Certificate to zero will be applied to increase the Group Two
Principal
Distribution Amount and (B) with respect to any Distribution Date
thereafter,
the Group Two Principal Distribution Amount will equal the Class A
Principal
Distribution Amount.
Group Two Principal Distribution Percentage: With respect to
any
Distribution Date, a fraction expressed as a percentage, the
numerator of which
is the amount of Principal Funds received with respect to Mortgage
Loans in
Group Two and the denominator of which is the amount of Principal
Funds received
from all of the Mortgage Loans in the mortgage pool.
Indenture: An indenture relating to the issuance of NIM Notes.
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<PAGE>
Initial Adjustment Date: As to any Adjustable Rate Mortgage Loan,
the first
Adjustment Date following the origination of such Mortgage
Loan.
Initial Certificate Principal Balance: With respect to any
Certificate
(other than the Class P Certificates), the Certificate Principal
Balance of such
Certificate or any predecessor Certificate on the Closing Date as
set forth in
Section 5.01 hereof.
Initial Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate
in
effect prior to the Initial Adjustment Date.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust
Fund, any insurance policy, including all riders and endorsements
thereto in
effect with respect to such Mortgage Loan, including any
replacement policy or
policies for any insurance policies.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant
to any Insurance Policy or 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 either
the
Mortgagor or to the holder of a senior lien on the related Mortgage
Property 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 an Insurance Policy or any
other
insurance policy with respect to the Mortgage Loans.
Interest Carry Forward Amount: Any of the Class A-1 Interest Carry
Forward
Amount, the Class A-2A Interest Carry Forward Amount, the Class
A-2B Interest
Carry Forward Amount, the Class A-2C Interest Carry Forward Amount,
the Class
A-2D Interest Carry Forward Amount, the Class R Interest Carry
Forward Amount,
the Class M-1 Interest Carry Forward Amount, the Class M-2 Interest
Carry
Forward Amount, the Class M-3 Interest Carry Forward Amount, the
Class M-4
Interest Carry Forward Amount, the Class M-5 Interest Carry Forward
Amount, the
Class M-6 Interest Carry Forward Amount, the Class B-1 Interest
Carry Forward
Amount, the Class B-2 Interest Carry Forward Amount, the Class B-3
Interest
Carry Forward Amount or the Class C Interest Carry Forward Amount,
as the case
may be.
Interest Determination Date: With respect to the LIBOR
Certificates, for
any Accrual Period, the second LIBOR Business Day preceding the
commencement of
such Accrual Period.
Interest Funds: With respect to any Distribution Date, the sum,
without
duplication, of (1) all scheduled interest due during the related
Due Period and
received before the related Servicer Remittance Date or advanced on
or before
the related Servicer Remittance Date less the Servicing Fee, (2)
all Advances
relating to interest with respect to the Mortgage Loans, (3) all
Compensating
Interest with respect to the Mortgage Loans, (4) Liquidation
Proceeds with
respect to the Mortgage Loans (to the extent such Liquidation
Proceeds relate to
interest) collected during the related Prepayment Period, (5)
proceeds of any
purchase pursuant to Sections 2.02, 2.03 or 9.01 (to the extent
such proceeds
relate to interest) and (6) prepayment charges received with
respect to the
Mortgage Loans during the related Prepayment Period less (A) all
Non-Recoverable
Advances relating to interest and (B) other amounts reimbursable to
the Servicer
and the Trustee pursuant to this Agreement and allocable to
interest.
Issuing Entity: Specialty Underwriting and Residential Finance
Trust,
Series 2007-AB1.
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Last
Scheduled Distribution Date: With respect to any Class of
Certificates, the Distribution Date in March 2037.
Latest Possible Maturity Date: The first Distribution Date
following the
third anniversary of the scheduled maturity date of the Mortgage
Loan in the
Trust Fund having the latest scheduled maturity date as of the
Cut-off Date.
Lender: As defined in Section 10.14(a).
LIBOR Business Day: Any day on which banks in the City of London,
England
and New York City, U.S.A. are open and conducting transactions in
foreign
currency and exchange.
LIBOR Certificates: The Class A, Class M, Class B and Class R
Certificates.
Liquidated Loan: With respect to any Distribution Date, a
defaulted
Mortgage Loan that either (a) pursuant to Section 3.12 has been
realized upon or
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 certified (in accordance with Section 3.12) in the
related
Prepayment Period that it has received all amounts it expects to
receive in
connection with such liquidation or (b) as to which is not a first
lien Mortgage
Loan and is delinquent 180 days or longer, the Servicer has
certified in a
certificate of an officer of the Servicer delivered to the
Depositor and the
Trustee that it does not believe that there is a reasonable
likelihood that any
further net proceeds will be received or recovered with respect to
such Mortgage
Loan.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in
connection with the partial or complete liquidation of Mortgage
Loans, whether
through trustee's sale, foreclosure sale, sale by the Servicer
pursuant to this
Agreement or otherwise or amounts received in connection with any
condemnation
or partial release of a Mortgaged Property and any other proceeds
received in
connection with an REO Property, less the sum of related
unreimbursed Advances,
Servicing Fees, Servicing Advances and any other expenses related
to such
Mortgage Loan.
Loan-to-Value Ratio: With respect to any Mortgage Loan, 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 lesser
of (x) the Appraised Value of the related Mortgaged Property and
(y) the sales
price of the related Mortgaged Property at the time of
origination.
Losses: Any losses, claims, damages, liabilities or expenses
collectively.
Lower Tier REMIC: As described in the Preliminary Statement and
Section
2.07.
Lower Tier REMIC I Marker Interests: Each of the classes of Lower
Tier
REMIC Regular Interests other than the Class LTIX Interest, the
Class LTIIX
Interest, the Class LTII1A Interest, the Class LTII1B Interest, the
Class LTII2A
Interest, the Class LTII2B Interest and the Class LT-IO
Interest.
Lower Tier REMIC II Marker Interests: Each of the Class LTII1A
Interest,
the Class LTII1B Interest, the Class LTII2A Interest and the Class
LTII2B
Interest.
Lower Tier REMIC Interests: Each of the Class LTA-1 Interest, the
Class
LTA-2A Interest, the Class LTA-2B Interest, the Class LTA-2C
Interest, the Class
LTA-2D Interest, the Class LTM-1 Interest, the Class LTM-2
Interest, the Class
LTM-3 Interest, the Class LTM-4 Interest, the Class LTM-5
Interest,
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the Class LTM-6 Interest, the Class LTB-1 Interest, the Class LTB-2
Interest,
the Class LTB-3 Interest, the Class LTII1A Interest, the Class
LTII1B Interest,
the Class LTII2A Interest, the Class LTII2B Interest, the Class
LTIX Interest,
the Class LTIIX Interest, the Class LT-IO Interest and the Class
LTR Interest.
Lower Tier REMIC Regular Interests: Each of the Lower Tier REMIC
Interests
other than the Class LTR Interest.
Lower Tier REMIC Subordinate Balance Ratio: The ratio of (i) the
principal
balance of the Class LTII1A Interest to (ii) the principal balance
of the Class
LTII2A Interest that is equal to the ratio of (i) the excess of (A)
the
aggregate Stated Principal Balance of Group One over (B) the
current Certificate
Principal Balance of the Class A-1 and Class R Certificates to (ii)
the excess
of (A) the aggregate Stated Principal Balance of Group Two over (B)
the current
Certificate Principal Balance of the Class A-2 Certificates.
Maximum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan,
the maximum rate of interest set forth as such in the related
Mortgage Note and
with respect to each Fixed Rate Mortgage Loan, the rate of interest
set forth in
the related Mortgage Note.
Maximum Rate Cap: Any of the Class A-1 Maximum Rate Cap, the Class
A-2
Maximum Rate Cap, or the Subordinate Certificate Maximum Rate
Cap.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation
organized and existing under the laws of the State of Delaware, or
any successor
thereto.
MERS
Loan: Any Mortgage Loan registered with MERS on the MERS
System.
MERS
System: The system of recording transfers of mortgage
electronically
maintained by MERS.
MIN:
The loan number for any MERS Loan.
Minimum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan,
the minimum rate of interest set forth as such in the related
Mortgage Note.
Minimum Required Overcollateralization Amount: An amount equal to
the
product of (x) 0.50% and (y) the Stated Principal Balance of the
Mortgage Loans
as of the Cut-off Date.
MOM
Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely
as nominee for the originator of such Mortgage Loan and its
successors and
assigns.
Monthly Statement: The statement delivered to the
Certificateholders
pursuant to Section 4.05.
Moody's: Moody's Investors Service, Inc. or any successor in
interest.
Mortgage: With respect to a Mortgage Loan, the mortgage, deed of
trust or
other instrument creating a first or second lien or a first or
second priority
ownership interest in an estate in fee simple in real property
securing a
Mortgage Note.
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<PAGE>
Mortgage File: The mortgage documents listed in Section 2.01
hereof
pertaining to a particular Mortgage Loan and any additional
documents delivered
to the Trustee to be added to the Mortgage File pursuant to this
Agreement.
Mortgage Group: Either of Group One or Group Two.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to
time
amended by the Sponsor to reflect the deletion of Deleted Mortgage
Loans and the
addition of Replacement Mortgage Loans 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, attached hereto as Exhibit B,
setting forth the
following information with respect to each Mortgage Loan:
(i)
the loan number;
(ii)
the unpaid principal balance of the Mortgage Loans;
(iii) the Initial Mortgage Rate;
(iv)
the maturity date and the months remaining before maturity
date;
(v)
the original principal
balance;
(vi)
the Cut-off Date Principal Balance;
(vii) the first payment date of the Mortgage Loan;
(viii) the Loan-to-Value Ratio at origination with respect to a
first lien
Mortgage Loan or the Combined Loan-to-Value Ratio with respect to
a
second lien Mortgage Loan;
(ix)
a code indicating whether the residential dwelling at the time
of
origination was represented to be owner-occupied;
(x)
a code indicating the
property type;
(xi)
with respect to each Adjustable Rate Mortgage Loan:
(a) the frequency of
each Adjustment Date;
(b) the next
Adjustment Date;
(c) the Maximum
Mortgage Rate;
(d) the Minimum
Mortgage Rate;
(e) the Mortgage Rate
as of the Cut-off Date;
(f) the related
Periodic Rate Cap;
(g) the Gross Margin;
and
(h) the lifetime rate
cap;
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<PAGE>
(xii) the location of the related Mortgaged Property;
(xiii) a code indicating whether a prepayment charge is
applicable;
(a) the period during
which such prepayment charge is in effect;
(b) the amount of such
prepayment charge;
(c) any limitations or
other conditions on the enforceability of such
prepayment charge; and
(d) any other
information pertaining to the prepayment charge
specified in the related Mortgage Note;
(xiv) the Credit Score and date obtained; and
(xv)
the MIN.
Mortgage Loans: Such of the mortgage loans transferred and assigned
to the
Trustee pursuant to the provisions hereof 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. Any
mortgage loan
that was intended by the parties hereto to be transferred to the
Trust Fund as
indicated by such Mortgage Loan Schedule which is in fact not so
transferred for
any reason shall continue to be a Mortgage Loan hereunder until the
Purchase
Price with respect thereto has been paid to the Trust Fund.
Mortgage Note: The original executed note or other evidence of
indebtedness
evidencing the indebtedness of a Mortgagor under a Mortgage Loan
and all
amendments, modifications and attachments thereto.
Mortgage Pool: The aggregate of the Mortgage Loans identified in
the
Mortgage Loan Schedule.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note
from
time to time.
Mortgaged Property: The underlying property securing a Mortgage
Loan.
Mortgagor: The obligor on a Mortgage Note.
Net
Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum
rate equal to the then current Mortgage Rate less the Servicing Fee
Rate.
Net Rate: The per
annum rate set forth in footnote 8 to the description of
the Lower Tier REMIC in the Preliminary Statement hereto (such rate
being based
on the weighted average of the interest rates on the SWAP REMIC
Regular
Interests as adjusted and as set forth in such footnote).
Net
Swap Payment: With respect to any Distribution Date, any net
payment
(other than a Swap Termination Payment or Defaulted Swap
Termination Payment)
made by the Supplemental Interest Trust to the Swap Counterparty on
the related
Fixed Rate Payer Payment Date (as defined in the Swap Agreement) or
made by the
Swap Counterparty to the Supplemental Interest Trust on the related
Floating
Rate Payer Payment Date (as defined in the Swap Agreement). In each
case, the
Net Swap Payment shall not be less than zero.
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Net
WAC: With respect to any Distribution Date and for any Mortgage
Group,
the weighted average Net Mortgage Rate for the Mortgage Loans in
such Mortgage
Group calculated based on the respective Net Mortgage Rates and the
Stated
Principal Balances of such Mortgage Loans as of the preceding
Distribution Date
(or, in the case of the first Distribution Date, as of the Cut-off
Date).
NIM
Notes: Any net interest margin or excess cashflow securities to
be
issued pursuant to an Indenture.
Non-Recoverable Advance: Any portion of an Advance previously made
or
proposed to be made by the Servicer that, in the good faith
judgment of the
Servicer, will not or, in the case of a current delinquency, would
not, be
ultimately recoverable by the Servicer from the related Mortgagor,
related
Liquidation Proceeds or otherwise with respect to the related
Mortgage Loan.
Non-Recoverable Servicing Advance: Any portion of a Servicing
Advance
previously made or proposed to be made by the Servicer that, in the
good faith
judgment of the Servicer, will not or, in the case of a current
Servicing
Advance, would not, be ultimately recoverable by the Servicer from
the related
Mortgagor, related Liquidation Proceeds or otherwise with respect
to the related
Mortgage Loan.
Non-Supported Interest Shortfall: As defined in Section 4.02.
Offered Certificates: The Class A Certificates, Class M
Certificates, Class
B Certificates and Class R Certificate.
Officer's Certificate: A certificate (1) 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 Trustee (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 (2),
if provided for in this Agreement, signed by a Servicing Officer,
as the case
may be, and delivered to the Depositor, the Servicer or the
Trustee, as the case
may be, as required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period, the rate
determined by
the Trustee on the related Interest Determination Date on the basis
of (a) the
offered rates for one-month United States dollar deposits, as such
rates appear
on Telerate page 3750, as of 11:00 a.m. (London time) on such
Interest
Determination Date or (b) if such rate does not appear on Telerate
Page 3750 as
of 11:00 a.m. (London time), the offered rates of the Reference
Banks for
one-month United States dollar deposits, as such rates appear on
the Reuters
Screen LIBO Page, as of 11:00 a.m. (London time) on such Interest
Determination
Date. If One-Month LIBOR is determined pursuant to clause (b)
above, on each
Interest Determination Date, One-Month LIBOR for the related
Accrual Period will
be established by the Trustee as follows:
(i) If on such
Interest Determination Date two or more Reference
Banks provide such offered quotations, One-Month LIBOR for
the related Accrual Period shall be the arithmetic mean of
such offered quotations (rounded upwards if necessary to the
nearest whole multiple of 0.03125%).
(ii) If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations, One-Month
LIBOR for the related Accrual Period shall be the higher of
(i)
One-Month LIBOR as determined on the previous Interest
Determination Date and (ii) the Reserve Interest Rate.
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Notwithstanding the foregoing, this definition of One-Month LIBOR
for the
purposes of the Corridor Contracts and Swap Agreement will be
determined in
accordance with such agreements.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for
the Depositor or the Servicer, reasonably acceptable to each
addressee of such
opinion; provided, however, that with respect to Section 6.04 or
10.01, or the
interpretation or application of the REMIC Provisions, such counsel
must (1) in
fact be independent of the Depositor and the Servicer, (2) not have
any direct
financial interest in the Depositor or the Servicer or in any
Affiliate of
either, and (3) not be connected with the Depositor or the Servicer
as an
officer, employee, promoter, underwriter, trustee, partner,
director or person
performing similar functions.
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: (1) Certificates theretofore canceled by the
Trustee or
delivered to the Trustee for cancellation; and (2) Certificates in
exchange for
which or in lieu of which other Certificates have been executed by
the Trustee
and delivered by the Trustee pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage
Loan
with a Stated Principal Balance greater than zero that was not the
subject of a
Principal Prepayment in full, and that did not become a Liquidated
Loan, prior
to the end of the related Due Period.
Overcollateralization Amount: As of any date of determination, the
excess
of (1) the Stated Principal Balance of the Mortgage Loans over (2)
the
Certificate Principal Balance of the Certificates (other than the
Class P
Certificates and the Class C Certificates).
Overcollateralization Deficiency Amount: As of any date of
determination,
if the Overcollateralization Amount is less than the Targeted
Overcollateralization Amount, then the amount equal to the
Targeted
Overcollateralization Amount over the Overcollateralization Amount;
otherwise,
zero.
Overcollateralization Release Amount: As of any date of
determination, if
the Overcollateralization Amount is greater than the Targeted
Overcollateralization Amount, then the amount equal to the
Overcollateralization
Amount over the Targeted Overcollateralization Amount; otherwise,
zero.
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 Class of Certificates,
the
corresponding Pass-Through Rate for such Class of Certificates.
Percentage Interest: With respect to:
(i) any Class, the
percentage interest in the undivided
beneficial ownership interest evidenced by such Class which
shall be equal to the Certificate Principal Balance of such
Class divided by the aggregate Certificate Principal Balance
of all Classes; and
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(ii) any Certificate, the Percentage Interest evidenced thereby
of the related Class shall equal the percentage obtained by
dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of such
Class; except that in the case of any Class P Certificates,
the Percentage Interest with respect to such Certificate
shown on the face of such Certificate.
Periodic Rate Cap: As to each Adjustable Rate Mortgage Loan and the
related
Mortgage Note, the provision therein that limits permissible
increases and
decreases in the Mortgage Rate on any Adjustment Date.
Permitted Activities: The primary activities of the Issuing Entity
created
pursuant to this Agreement which shall be:
(i) holding Mortgage
Loans transferred from the Depositor and other
assets of the Issuing Entity, including the Corridor Contracts
and the Supplemental Interest Trust subtrust, which in turn
holds
the Swap Agreement, and any credit enhancement and passive
derivative financial instruments that pertain to beneficial
interests issued or sold to parties other than the Depositor,
its
Affiliates, or its agents;
(ii) issuing Certificates and other interests in the assets of
the
Issuing Entity;
(iii) through the appropriate subtrust, as applicable,
receiving
collections on the Mortgage Loans and the Swap Agreement and
making payments on such Certificates and interests in
accordance
with the terms of this Agreement; and
(iv) engaging in other activities that are necessary or incidental
to
accomplish these limited purposes, which activities cannot be
contrary to the status of the Issuing Entity as a qualified
special purpose entity under existing accounting literature.
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 rating the
Certificates;
(iii) commercial or finance company paper, other than commercial
or
finance company paper issued by the Depositor, the Trustee or
any
of their Affiliates, which is then receiving the highest
commercial or finance company paper rating of each such Rating
Agency;
(iv) certificates of deposit, demand or time deposits, or
bankers'
acceptances (other than banker's acceptances issued by the
Trustee or any of its Affiliates) 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,
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;
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(v) demand or time
deposits or certificates of deposit issued by any
bank or trust company or savings institution to the extent that
such deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance
company or other corporation rated in the two highest long-term
or the
highest short-term ratings of each Rating Agency
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 by a letter from each Rating
Agency;
(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, other than the Trustee or any of its
Affiliates, 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 long term ratings of each Rating Agency;
(ix) interests in any money market fund (including those managed
or
advised by the Trustee or its Affiliates) 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
long term rating by each such Rating Agency; and
(x) short term
investment funds sponsored by any trust company or
national banking association incorporated under the laws of the
United States or any state thereof, including the Trustee or
any
of its Affiliates, which on the date of acquisition has been
rated by each such Rating Agency in their respective highest
applicable rating category;
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 above par 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 (ix)
above); and
provided, further, (I) that no amount beneficially owned by any
REMIC
(including, without limitation, any amounts collected by the
Servicer but not
yet deposited in the Collection Account) may be invested in
investments (other
than money market funds) treated as equity interests for Federal
income tax
purposes, unless the Servicer and/or the Trustee, shall receive an
Opinion of
Counsel acceptable to the Servicer and/or the Trustee, at the
expense of the
party requesting that such investment be made, to the effect that
such
investment will not adversely affect the status of the any REMIC
provided for
herein as a REMIC under the Code or result in imposition of a tax
on the Issuing
Entity or any REMIC provided for herein and (II) any such
investment must be a
"permitted investment" within the meaning of Section 860G(a)(5) of
the Code.
Permitted Investments that are subject to prepayment or call may
not be
purchased at a price in excess of par. Any Permitted Investment may
be held by
or through the Trustee or any of its Affiliates.
Permitted Transferee: Any Person other than (i) the United States,
any
State or political subdivision thereof, or any agency or
instrumentality of any
of the foregoing, (ii) a foreign government,
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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 the Class R Certificate, (iv) rural
electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the
Code, and (v) a
Person that is not a citizen or resident of the United States, a
corporation or
partnership (or other entity treated as a corporation or
partnership for United
States federal income tax purposes) created or organized in or
under the laws of
the United States or any State thereof or the District of Columbia
or an estate
whose income from sources without the United States is includable
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
trust,
unless, in the case of this clause (v), such Person has furnished
the transferor
and the Trustee with a duly completed Internal Revenue Service Form
W-8ECI or
applicable successor form. The terms "United States," "State" and
"International
Organization" shall have the meanings set forth in Section 7701 of
the Code. A
corporation will not be treated as an instrumentality of the United
States or of
any State thereof for these purposes if all of its activities are
subject to tax
and, with the exception of the Federal Home Loan Mortgage
Corporation, a
majority of its board of directors is not selected by such
government unit.
Person: Any individual, corporation, partnership, limited
liability
company, joint venture, association, joint-stock company, trust,
unincorporated
organization or government, or any agency or political subdivision
thereof.
Pool
Stated Principal Balance: As to any Distribution Date, the
aggregate
of the Stated Principal Balances, as of such Distribution Date, of
the Mortgage
Loans that were Outstanding Mortgage Loans as of such date.
Posted Collateral: As defined in the Swap Agreement or the
Corridor
Contracts, as applicable.
Prepayment Assumption: A rate of prepayment, as described in the
Prospectus
Supplement in the definition of "Modeling Assumptions," relating to
the
Certificates.
Prepayment Interest Excess: With respect to any Servicer Remittance
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 Servicer Remittance Date
occurs and the
last day of the related Prepayment Period, an amount equal to
interest (to the
extent received) at the applicable Net Mortgage Rate on the amount
of such
Principal Prepayment for the number of days commencing on the first
day of the
calendar month in which such Servicer Remittance Date occurs and
ending on the
date on which such Principal Prepayment is so applied.
Prepayment Interest Shortfall: With respect to any Distribution
Date, for
each Mortgage Loan that was the subject of a Principal Prepayment
in full (other
than a Principal Prepayment in full resulting from the purchase of
a Mortgage
Loan pursuant to Section 2.02, 2.03 or 9.01 hereof and other than a
Principal
Prepayment in full on a Mortgage Loan received during the period
from and
including the first day to and including the 14th day of the month
of such
Distribution Date), 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 as of the preceding Distribution Date exceeds (ii) the amount
of interest
paid or collected in connection with such Principal Prepayment.
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Prepayment Period: As to any Distribution Date, for prepayments
or
liquidations in full and any prepayment charges associated with
such payments in
full, the period from and including the 15th date of the calendar
month
preceding the month in which such Distribution Date occurs (or, in
the case of
the first Distribution Date, beginning on the Cut-off Date) and
including the
14th day of the calendar month in which such Distribution Date
occurs and for
partial prepayments or liquidations and any prepayment charges
associated with
such partial prepayments, the calendar month preceding the calendar
month in
which such Distribution Date occurs.
Principal Distribution Amount: With respect to each Distribution
Date, the
sum of (i) the Principal Funds for such Distribution Date and (ii)
any Extra
Principal Distribution Amount for such Distribution Date.
Principal Funds: With respect to the Mortgage Loans and any
Distribution
Date, the sum, without duplication, of (1) the scheduled principal
due during
the related Due Period and received before the related Servicer
Remittance Date
or required to be advanced by the Servicer on or before the related
Servicer
Remittance Date, (2) prepayments of principal in full collected in
the related
Prepayment Period, (3) the Stated Principal Balance of each
Mortgage Loan that
was purchased by the Depositor or the Servicer during the related
Prepayment
Period or, in the case of a purchase pursuant to Section 9.01, on
the Business
Day prior to such Distribution Date, (4) the amount, if any, by
which the
aggregate unpaid principal balance of any Replacement Mortgage Loan
is less than
the aggregate unpaid principal of the related Deleted Mortgage
Loans delivered
by the Sponsor in connection with a substitution of a Mortgage Loan
pursuant to
Section 2.03(c), (5) all Liquidation Proceeds collected during the
related
Prepayment Period (to the extent such Liquidation Proceeds relate
to principal
and represent payment in full), (6) Subsequent Recoveries received
during the
related Due Period and (7) all other collections and recoveries in
respect of
principal during the related Due Period, less (A) all
Non-Recoverable Advances
relating to principal with respect to the Mortgage Loans and (B)
other amounts
reimbursable to the Servicer and the Trustee pursuant to this
Agreement and
allocable to principal.
Principal Prepayment: Any Mortgagor payment or other recovery of
(or
proceeds with respect to) principal on a Mortgage Loan (including
Mortgage Loans
purchased or repurchased under Sections 2.02, 2.03 and 9.01 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 in accordance with the
terms of the
related Mortgage Note.
Prospectus Supplement: The Prospectus Supplement, dated March 22,
2007,
relating to the public offering of the Offered Certificates.
PUD:
A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan required to
be
repurchased by the Sponsor pursuant to Section 2.02 or 2.03 hereof,
or purchased
by the Servicer pursuant to Section 3.12(c) hereof, an amount equal
to the sum
of (i) 100% of the unpaid principal balance of the Mortgage Loan as
of the date
of such purchase together with any unreimbursed Servicing Advances,
(ii) accrued
interest thereon at the applicable Mortgage Rate from (a) the date
through which
interest was last paid by the Mortgagor to (b) the Due Date in the
month in
which the Purchase Price is to be distributed to Certificateholders
and (iii)
any costs and damages incurred by the Issuing Entity (or the
Trustee on behalf
of the Issuing Entity) in connection with any violation by the
affected Mortgage
Loan of any anti-predatory or anti-abusive lending laws. With
respect to any REO
Property purchased by the Servicer pursuant to Section 3.12(c)
hereof, an amount
equal to the fair market value of such REO Property, as determined
in good faith
by the Servicer.
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Rating Agency: Either of Moody's or 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.
Rating Agency Condition: As defined in the Swap Agreement.
Realized Loss: With respect to (1) a Liquidated Loan, the amount,
if any,
by which the Stated Principal Balance and accrued interest thereon
at the Net
Mortgage Rate exceeds the amount actually recovered by the Servicer
with respect
thereto (net of reimbursement of Advances and Servicing Advances)
at the time
such Mortgage Loan became a Liquidated Loan or (2) with respect to
a Mortgage
Loan which is not a Liquidated Loan, any amount of principal that
the Mortgagor
is no longer legally required to pay (except for the extinguishment
of debt that
results from the exercise of remedies due to default by the
Mortgagor).
Record Date: With respect to any Distribution Date, the close of
business
on the last Business Day of the month preceding the month in which
the
applicable Distribution Date occurs (or with respect to the first
Distribution
Date, the Closing Date).
Reference Banks: Barclays Bank PLC, U.S. Bank National
Association,
Citibank, N.A., and NatWest, N.A.; provided that if any of the
foregoing banks
are not suitable to serve as a Reference Bank, then any leading
banks selected
by the Trustee which are engaged in transactions in Eurodollar
deposits in the
international Eurocurrency market (i) with an established place of
business in
London, England and (ii) whose quotations appear on the Reuters
Screen LIBO Page
on the relevant Interest Determination Date.
Regular Certificate: Any one of the Class A, Class R, Class M and
Class B
Certificates.
Regulation AB: Subpart
229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. Sections 229.1100-229.1123, as such may be amended from
time to time,
and subject to such clarification and interpretation as have been
provided by
the Commission in the adopting release (Asset-Backed Securities,
Securities Act
Release No. 33-8518, 70 Fed Reg. 1,506, 1.531 (Jan. 7, 2005)) or by
the staff of
the Commission, or as may be provided by the Commission or its
staff from time
to time.
Related Certificates: For each interest in the Upper Tier REMIC,
the Class
of Certificates listed on the same row in the table entitled "Upper
Tier REMIC"
in the Preliminary Statement.
Relief Act: The Servicemembers Civil Relief Act or any similar
state laws
or regulations.
REMIC: A "real estate mortgage investment conduit" within the
meaning of
section 860D of the Code. References herein to "the REMICs" or "a
REMIC" shall
mean any (or, as the context requires, all) of the SWAP REMIC, the
Lower Tier
REMIC and the Upper Tier REMIC.
REMIC Pass-Through Rate: In the case of a Class of the Class A,
Class M and
Class B Certificates, the Upper Tier REMIC Net WAC Cap for the
Corresponding
REMIC Regular Interest.
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,
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notices and announcements promulgated thereunder, as the foregoing
may be in
effect from time to time as well as provisions of applicable state
laws.
REMIC Regular Interests: Each of the interests in the Upper Tier
REMIC as
set forth in the Preliminary Statement other than the Residual
Interest.
REMIC SWAP Rate: For each Distribution Date (and the related
Accrual
Period), a per annum rate equal to the Fixed Rate under the Swap
Agreement for
such Distribution Date, as set forth in the Prospectus
Supplement.
Remittance Report: As defined in Section 4.04(k) hereof.
REO
Property: A Mortgaged Property acquired by the Servicer, on behalf
of
the Trustee for the benefit of the Certificateholders, through
foreclosure or
deed-in-lieu of foreclosure in connection with a defaulted Mortgage
Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by the
Depositor for
a Deleted Mortgage Loan, which must, on the date of such
substitution, as
confirmed in a Request for Release, substantially in the form of
Exhibit I (1)
have a Stated Principal Balance (or in the case of a substitution
of more than
one Mortgage Loan for a Deleted Mortgage Loan, an aggregate 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; (2) with
respect to any
Fixed Rate Mortgage Loan, have a Mortgage Rate not less than or no
more than 1%
per annum higher than the Mortgage Rate of the Deleted Mortgage
Loan and, with
respect to any Adjustable Rate Mortgage Loan: (A) have a Maximum
Mortgage Rate
no more than 1% per annum higher or lower than the Maximum Mortgage
Rate of the
Deleted Mortgage Loan; (B) have a Minimum Mortgage Rate no more
than 1% per
annum higher or lower than the Minimum Mortgage Rate of the Deleted
Mortgage
Loan; (C) have the same index and Periodic Rate Cap as that of the
Deleted
Mortgage Loan and a Gross Margin not more than 1% per annum higher
or lower than
that of the Deleted Mortgage Loan; (D) not permit conversion of the
related
Mortgage Rate to a fixed Mortgage Rate and (F) currently be
accruing interest at
a rate not more than 1% per annum higher or lower than that of the
Deleted
Mortgage Loan; (3) have a similar or higher FICO score or credit
grade than that
of the Deleted Mortgage Loan; (4) have a Loan-to-Value Ratio (or a
Combined
Loan-to-Value Ratio, in the case of Mortgage Loans in a second lien
position) no
higher than that of the Deleted Mortgage Loan; (5) have a remaining
term to
maturity no greater than (and not more than one year less than)
that of the
Deleted Mortgage Loan; (6) provide for a prepayment charge on
terms
substantially similar to those of the prepayment charge, if any, of
the Deleted
Mortgage Loan; (7) have the same lien priority as the Deleted
Mortgage Loan; (8)
constitute the same occupancy type as the Deleted Mortgage Loan;
and (9) comply
with each representation and warranty set forth in Section 2.03
hereof.
Request for Release: The Request for Release of Documents submitted
by the
Servicer to the Trustee, substantially in the form of Exhibit I
hereto.
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.
Required Percentage: With respect to any Distribution Date
following a
Stepdown Date, the quotient of (1) the excess of (A) the aggregate
Stated
Principal Balance of the Mortgage Loans as of such Distribution
Date, over (B)
the Certificate Principal Balance of the most senior Class of
Certificates
outstanding as of such Distribution Date, prior to giving effect
to
distributions to be made on such
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Distribution Date and (2) the aggregate Stated Principal Balance of
the Mortgage
Loans as of such Distribution Date.
Requirements: Any rules or regulations promulgated pursuant to
the
Sarbanes-Oxley Act of 2002 (as such may be amended from time to
time).
Reserve Interest Rate: With respect to any Interest Determination
Date, the
rate per annum that the Trustee determines to be (1) the arithmetic
mean
(rounded upwards if necessary to the nearest whole multiple of
0.03125%) of the
one-month United States dollar lending rates which New York City
banks selected
by the Trustee are quoting on the relevant Interest Determination
Date to the
principal London offices of leading banks in the London interbank
market or (2)
in the event that the Trustee can determine no such arithmetic
mean, the lowest
one-month United States dollar lending rate which New York City
banks selected
by the Trustee are quoting on such Interest Determination Date to
leading
European banks.
Residual Certificate: The Class R Certificate.
Residual Interest: An interest in the Upper Tier REMIC that is
entitled to
all distributions of principal and interest on the Class R
Certificate other
than (i) distributions in respect of the Class SWR Interest and the
Class LTR
Interest, and (ii) distributions on the Class R Certificate in
respect of Excess
Interest.
Responsible Officer: When used with respect to the Trustee or
Servicer, any
officer of the Trustee or Servicer with direct responsibility for
the
administration of this Agreement and also means any other officer
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.
Reuters Screen LIBO Page: The display designated as page "LIBO" on
the
Reuters Monitor Money Rates Service (or such other page as may
replace such LIBO
page on that service for the purpose of displaying London interbank
offered
rates of major banks).
S&P: Standard & Poor's Ratings Services, a division of The
McGraw-Hill
Companies, Inc., or its successor in interest.
Sale
Agreement: The Mortgage Loan Sale and Assignment Agreement, dated
as
of March 1, 2007, between the Depositor and the Sponsor.
Sarbanes-Oxley
Certification: As defined in Section 3.20 hereof.
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.
Section 302 Requirements: Any rules or regulations promulgated
pursuant to
the Sarbanes-Oxley Act of 2002 (as such may be amended from time to
time).
Securities Act: The Securities Act of 1933, as amended.
Servicer: Wilshire Credit Corporation, a Nevada corporation, or
its
successor in interest.
Servicer Remittance Date: With respect to any Distribution Date,
the later
of (x) the date that is two Business Days after the 15th day of the
month in
which the related Distribution Date occurs and (y)
55
<PAGE>
the 18th day (or, if such day is not a Business Day, the next
succeeding
Business Day) of the month in which the related Distribution Date
occurs.
Servicer's Assignee: As defined in Section 10.14(a).
Servicing Advances: All customary, reasonable and necessary "out of
pocket"
costs and expenses incurred in the performance by the Servicer of
its servicing
obligations hereunder, including, but not limited to, the cost of
(1) the
preservation, restoration and protection of a Mortgaged Property,
including
without limitation advances in respect of prior liens, real estate
taxes and
assessments, (2) any collection, enforcement or judicial
proceedings, including
without limitation foreclosures, collections and liquidations, (3)
the
conservation, management, sale and liquidation of any REO Property
(4) executing
and recording instruments of satisfaction, deeds of reconveyance,
substitutions
of trustees on deeds of trust or assignments of mortgage to the
extent not
otherwise recovered from the related Mortgagor or payable under
this Agreement,
(5) correcting errors of prior servicers; tax tracking; title
research; flood
certification; and lender paid mortgage insurance, (6) obtaining or
correcting
any legal documentation required to be included in the Mortgage
Files and
reasonably necessary for the Servicer to perform its obligations
under this
Agreement and (7) compliance with the obligations under Sections
3.01 and 3.10.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of
Regulation AB, as such may be amended from time to time, and in
Exhibit R of
this Agreement.
Servicing Fee: As to each Mortgage Loan and any Distribution Date,
an
amount equal to the product of (x) one-twelfth of the Servicing Fee
Rate and (y)
the Stated Principal Balance of such Mortgage Loan as of the
preceding
Distribution Date or, in the event of any payment of interest that
accompanies a
Principal Prepayment in full made by the Mortgagor, interest at the
Servicing
Fee Rate on the Stated Principal Balance of such Mortgage Loan as
of the
preceding Distribution Date for the period covered by such payment
of interest.
Servicing Fee Rate: 0.500% per annum for each Mortgage Loan.
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 by the Servicer on the Closing Date pursuant to this
Agreement, as such
lists may from time to time be amended.
Servicing Rights Pledgee: One or more lenders, selected by the
Servicer, to
which the Servicer may pledge and assign all of its right, title
and interest
in, to and under this Agreement.
Servicing Transfer Costs: In the event that the Servicer does not
reimburse
the Trustee under the this Agreement, all costs associated with the
transfer of
servicing from the predecessor Servicer, including, without
limitation, any
costs or expenses associated with the termination of the
predecessor Servicer,
the appointment of a successor servicer, the complete transfer of
all servicing
data and the completion, correction or manipulation of such
servicing data as
may be required by the Trustee or any successor servicer to correct
any errors
or insufficiencies in the servicing data or otherwise to enable the
Trustee or
successor servicer to service the Mortgage Loans properly and
effectively.
SFAS
140: Statement of Financial Accounting Standard No. 140,
Accounting
for Transfers and Servicing of Financial Assets and Extinguishments
of
Liabilities dated September 2000, published by the Financial
Accounting
Standards Board of the Financial Accounting Foundation.
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<PAGE>
Significance Estimate: With respect to any Distribution Date, and
in
accordance with Item 1115 of Regulation AB, shall be an amount
determined based
on the reasonable good-faith estimate by the Depositor or its
affiliate of the
aggregate maximum probable exposure of the outstanding Certificates
to the Swap
Agreement.
Significance Percentage: With respect to any Distribution Date, and
in
accordance with Item 1115 of Regulation AB, shall be a percentage
equal to the
Significance Estimate divided by the aggregate outstanding Stated
Principal
Balance of the Mortgage Loans, prior to the distribution of the
Principal
Distribution Amount on such Distribution Date.
Sponsor: Merrill Lynch Mortgage Lending, Inc., a Delaware
corporation, or
its successor in interest.
SPV:
As defined in Section 10.14(a).
Startup Day: As defined in Section 2.07 hereof.
Stated Principal Balance: With respect to any Mortgage Loan or
related REO
Property (1) as of the Cut-off Date, the Cut-off Date Principal
Balance thereof,
and (2) as of any Distribution Date, such Cut-off Date Principal
Balance, minus
the sum of (A) the principal portion of the Scheduled Payments (x)
due with
respect to such Mortgage Loan during each Due Period ending prior
to such
Distribution Date and (y) that were received by the Servicer as of
the close of
business on the Determination Date related to such Distribution
Date or with
respect to which Advances were made on the Servicer Remittance Date
prior to
such Distribution Date and (B) all unscheduled Principal
Prepayments with
respect to such Mortgage Loan received on or prior to the last day
of the
related Prepayment Period, and all Liquidation Proceeds to the
extent applied by
the Servicer as recoveries of principal in accordance with Section
3.12 with
respect to such Mortgage Loan, that were received by the Servicer
as of the
close of business on the last day of the related Prepayment
Period.
Notwithstanding the foregoing, the Stated Principal Balance of a
Liquidated Loan
shall be deemed to be zero.
Stepdown Date: The earlier to occur of (1) the first Distribution
Date on
which the Class A Certificate Principal Balance and the Class R
Certificate
Principal Balance have been reduced to zero and (2) the later to
occur of (A)
the Distribution Date in April 2010 or (B) the first Distribution
Date on which
the Class A Certificate Principal Balance (after giving effect to
distributions
of the Principal Funds amount for such Distribution Date) is less
than or equal
to 73.40% of the aggregate Stated Principal Balance of the Mortgage
Loans as of
the end of the immediately preceding Due Period.
Stepdown Required Loss Percentage: For any Distribution Date,
the
applicable percentage for such Distribution Date set forth in the
following
table:
<TABLE>
<CAPTION>
DISTRIBUTION DATE OCCURRING IN STEPDOWN REQUIRED LOSS
PERCENTAGE
------------------------------
---------------------------------
<S>
<C>
April 2009 - March 2010
0.95% with respect to April 2009, plus an
additional 1/12th of 1.15% for each month
thereafter
April 2010 -March 2011
2.10% with respect to April 2010, plus an
additional 1/12th of 1.20% for each month
thereafter
April 2011 -March 2012
3.30% with respect to April 2011, plus an
additional 1/12th of 0.95% for each month
thereafter
April 2012 - March 2013
4.25% with respect to April 2012, plus an
additional 1/12th of 0.55% for each month
thereafter
April 2013 and thereafter
4.80%
</TABLE>
57
<PAGE>
Stepdown Trigger Event: With respect to the Certificates on or
after the
Stepdown Date, a Distribution Date on which (1) the quotient of (A)
the
aggregate Stated Principal Balance of all Mortgage Loans which are
sixty (60) or
more days Delinquent measured on a rolling three month basis
(including, for the
purposes of this calculation, Mortgage Loans in foreclosure, REO
Properties and
Mortgage Loans with respect to which the applicable Mortgagor is in
bankruptcy)
and (B) the Stated Principal Balance of the Mortgage Loans as of
the preceding
Servicer Remittance Date, equals or exceeds the product of (i)
34.30% and (ii)
the Required Percentage or (2) the quotient (expressed as a
percentage) of (A)
the aggregate Realized Losses incurred from the Cut-off Date
through the last
day of the calendar month preceding such Distribution Date and (B)
the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date
exceeds the
Stepdown Required Loss Percentage.
Subcontractor: Any outsourcer that performs one or more discrete
functions
identified in Item 1122(d) of Regulation AB with respect to 5% or
more of the
Mortgage Loans under the direction or authority of a Servicer
(measured by
aggregate Stated Principal Balance of the Mortgage Loans, annually
at the
commencement of the calendar year prior to the year in which an
Assessment of
Compliance is required to be delivered, multiplied by a fraction,
the numerator
of which is the number of months during which such Subcontractor
performs such
discrete functions and the denominator of which is 12, or, in the
case of the
year in which the Closing Date occurs, the number of months elapsed
in such
calendar year).
Subordinate Certificate Available Funds Cap: With respect to a
Distribution
Date, the per annum rate equal to the weighted average (weighted in
proportion
to the results of subtracting from the aggregate Stated Principal
Balance of
each Mortgage Group, the current Certificate Principal Balance of
the Class A-1
and Class R Certificates, in the case of Group One, or the Class
A-2A, Class
A-2B, Class A-2C and Class A-2D Certificates, in the case of Group
Two) of the
Class A-1 Available Funds Cap and the Class A-2 Available Funds
Cap.
Subordinate Certificate Corridor Contract: The confirmation and
agreement
(together with the schedule thereto) and any related credit support
annex
(attached as Exhibit O-4 hereto), between the Trustee, on behalf of
the Issuing
Entity, and the Cap Contract Counterparty (attached as Exhibit O-3
hereto), with
respect to the Subordinate Certificates.
Subordinate Certificate Corridor Contract Notional Balance: With
respect to
any Distribution Date, the Subordinate Certificate Corridor
Contract Notional
Balance set forth for such Distribution Date in the Subordinate
Certificate
LIBOR Cap Table attached as Schedule I to Exhibit O-3.
Subordinate Certificate Corridor Contract Termination Date: The day
after
the Distribution Date in September 2007.
Subordinate Certificate Maximum Rate Cap: With respect to a
Distribution
Date, the per annum rate equal to the weighted average (weighted in
proportion
to the results of subtracting from the aggregate Stated Principal
Balance of
each Mortgage Group, the current Certificate Principal Balance of
the Class A-1
and Class R Certificates, in the case of Group One, or the Class
A-2A, Class
A-2B, Class A-2C and Class A-2D Certificates, in the case of Group
Two) of the
Class A-1 Maximum Rate Cap and the Class A-2 Maximum Rate Cap.
Subordinate Certificate Upper Collar: With respect to each
Distribution
Date with respect to which payments are received on the Subordinate
Certificate
Corridor Contract, a rate equal to the lesser of One-Month LIBOR
and 8.950% per
annum.
Subordinate Certificates: The Class M and Class B Certificates.
58
<PAGE>
Subsequent Recovery: The amount, if any, recovered by the Servicer
with
respect to a Liquidated Loan with respect to which a Realized Loss
has been
incurred after liquidation and disposition of such Mortgage
Loan.
Subservicer: Any Person that services Mortgage Loans on behalf of
the
Servicer pursuant to a subservicing agreement and is responsible
for the
performance of the material servicing functions required to be
performed by the
Servicer under this Agreement that are identified in Item 1122(d)
of Regulation
AB with respect to 10% or more of the Mortgage Loans under the
direction or
authority of the Servicer (measured by aggregate Stated Principal
Balance of the
Mortgage Loans, annually at the commencement of the calendar year
prior to the
year in which an Assessment of Compliance is required to be
delivered,
multiplied by a fraction, the numerator of which is the number of
months during
which such Subservicer services the related Mortgage Loans and the
denominator
of which is 12, or, in the case of the year in which the Closing
Date occurs,
the number of months elapsed in such calendar year). Any
subservicer shall meet
the qualifications set forth in Section 3.02.
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant
to Section 2.03(c).
Supplemental Interest Trust: The separate trust, established
pursuant to
Section 4.04(l) of this Agreement and held by the Trustee for the
benefit of the
holders of the Certificates as a segregated subtrust of the Trust
Fund, in which
the Swap Agreement will be held, out of which any Swap Termination
Payments or
Net Swap Payments owed to the Swap Counterparty will be paid,
certain
distributions to Certificateholders will be made, and into which
any Swap
Termination Payments or Net Swap Payments received from the Swap
Counterparty
will be deposited as set forth in Section 4.04 hereof.
Supplemental Interest Trust Trustee: U.S. Bank National
Association, a
national banking association, not in its individual capacity, but
solely in its
capacity as trustee of the Supplemental Interest Trust 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.
Swap
Account: The separate Eligible Account created and maintained by
the
Supplemental Interest Trust Trustee pursuant to Section 4.04(l) in
the name of
the Supplemental Interest Trust Trustee for the benefit of the
Supplemental
Interest Trust and designated "U.S. Bank National Association, as
trustee, in
trust for registered holders of Specialty Underwriting and
Residential Finance
Trust, Mortgage Loan Asset-Backed Certificates, Series 2007-AB1."
Funds in the
Swap Account shall be held in trust for the Supplemental Interest
Trust Trustee
for the uses and purposes set forth in this Agreement.
Swap
Agreement: The confirmation and agreement (together with the
schedule
thereto), and the related credit support annex (attached as Exhibit
U-2),
between the Swap Counterparty and the Supplemental Interest Trust
Trustee for
the benefit of the Issuing Entity (attached as Exhibit U-1).
Swap
Counterparty: The Bank of New York, or any successor counterparty
who
meets the requirements set forth in the Swap Agreement.
Swap
LIBOR: With respect to any Distribution Date (and the related
Accrual
Period) the product of (i) the Floating Rate Option (as defined in
the Swap
Agreement for the related Swap Payment Date),
59
<PAGE>
(ii) two and (iii) the quotient of (a) the actual number of days in
the Accrual
Period for the Lower Tier REMIC Interests divided by (b) 30.
Swap
Payment Date: For so long as the Swap Agreement is in effect or
amounts remain unpaid thereunder, two Business Days immediately
preceding each
Distribution Date.
Swap
Posted Collateral Account: The segregated Eligible Account that may
be
created and maintained by the Supplemental Interest Trust Trustee
pursuant to
Section 4.04(l) in the name of the Supplemental Interest Trust
Trustee for the
benefit of the Supplemental Interest Trust and designated "U.S.
Bank National
Association, as trustee, in trust for registered holders of
Specialty
Underwriting and Residential Finance Trust, Mortgage Loan
Asset-Backed
Certificates, Series 2007-AB1." Funds in the Swap Posted Collateral
Account
shall be held in trust for the Supplemental Interest Trust for the
uses and
purposes set forth in the Swap Agreement.
SWAP
REMIC: As described in the Preliminary Statement and Section
2.07.
SWAP
REMIC Interests: Each of the interests in the SWAP REMIC as set
forth
in the Preliminary Statement.
SWAP
REMIC Regular Interests: Each of the SWAP REMIC Interests other
than
the Class SWR Interest.
Swap
Termination Payment: Any payment payable by the Supplemental
Interest
Trust or the Swap Counterparty upon termination of the Swap
Agreement as a
result of termination of the Swap Agreement.
Targeted Overcollateralization Amount: As of any Determination
Date, (a)
prior to the Stepdown Date, 1.80% of the Cut-Off Date Principal
Balance of the
Mortgage Loans and (b) on or after the Stepdown Date, 3.60% of the
Stated
Principal Balance of the Mortgage Loans.
Tax
Matters Person: The Person designated as "tax matters person" in
the
manner provided under Treasury regulation Section 1.860F-4(d) and
Treasury
regulation Section 301.6231(a)(7)-1.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest
in a Certificate.
Trust Fund: The corpus of the Issuing Entity created hereunder
consisting
of (i) the Mortgage Loans and all interest and principal received
on or with
respect thereto on and after the Cut-off Date to the extent not
applied in
computing the Cut-off Date Principal Balance thereof, exclusive of
interest not
required to be deposited in the Collection Account; (ii) the
Collection Account
and the Certificate 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 foreclosure, deed in lieu of
foreclosure or
otherwise; (iv) the mortgagee's rights under the Insurance Policies
with respect
to the Mortgage Loans and/or the related Mortgaged Properties; (v)
all proceeds
of the conversion, voluntary or involuntary, of any of the
foregoing into cash
or other liquid property; (vi) the Corridor Contracts and the
Corridor Contract
Account; and (vii) the Supplemental Interest Trust that in turn
holds the Swap
Agreement.
Trustee: U.S. Bank National Association, 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.
60
<PAGE>
Uncertificated Class C Interest: An uncertificated REMIC Regular
Interest
having the characteristics described in the Preliminary
Statement.
Unpaid Realized Loss Amount: The Class M-1 Unpaid Realized Loss
Amount,
Class M-2 Unpaid Realized Loss Amount, Class M-3 Unpaid Realized
Loss Amount,
Class M-4 Unpaid Realized Loss Amount, Class M-5 Unpaid Realized
Loss Amount,
Class M-6 Unpaid Realized Loss Amount, Class B-1 Unpaid Realized
Loss Amount,
Class B-2 Unpaid Realized Loss Amount, Class B-3 Unpaid Realized
Loss Amount and
Class C Unpaid Realized Loss Amount, collectively.
Upper Collar: Any of the Class A-1 Upper Collar, the Class A-2
Upper Collar
or the Subordinate Certificate Upper Collar.
Upper Tier REMIC: As described in the Preliminary Statement and
Section
2.07.
Upper Tier REMIC Net WAC Cap: In the case of the Class UTA-1
Interest and
the Residual Interest, a per annum rate equal to the weighted
average of the
interest rate of the Class LTII1B Interest for such Distribution
Date. In the
case of the Class UTA-2A, Class UTA-2B, Class UTA-2C and Class
UTA-2D Interests,
a per annum rate equal to the weighted average of the interest rate
for the
Class LTII2B for such Distribution Date. In the case of the Class
UTM-1, Class
UTM-2, Class UTM-3, Class UTM-4, Class UTM-5, Class UTM-6, Class
UTB-1, Class
UTB-2 and Class UTB-3 Interests, a per annum rate equal to the
weighted average
of the interest rates of Class LTII1B and Class LTII2B Interests
for such
Distribution weighted, respectively, on the basis of the
uncertificated
principal balances of the Class LTII1A and the Class LTII2A
Interests. In the
case of any interest in the Upper Tier REMIC that accrues interest
on a "30/360"
basis, the per annum rates described in this definition shall be
adjusted to
reflect accruals on such basis.
Voting Rights: The portion of the voting rights of all the
Certificates
that is allocated to any of the Certificates for purposes of the
voting
provisions hereunder. Voting Rights allocated to each Class of
Certificates
shall be allocated 98% to the Offered Certificates, 2% to the Class
C and Class
P Certificates, with the allocation among the Offered Certificates
to be in
proportion to the Class Certificate Principal Balance of each Class
relative to
the Class Certificate Principal Balance of all other Classes.
Voting Rights will
be allocated among the Certificates of each such Class in
accordance with their
respective Percentage Interests.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage Loans.
The
Depositor, concurrently with the execution and delivery hereof,
does
hereby sell, transfer, assign, set over and convey to the Trustee
without
recourse all the right, title and interest of the Depositor in and
to the assets
of the Trust Fund. Such assignment includes all interest and
principal received
on or with respect to the Mortgage Loans on or after the Cut-off
Date (other
than Scheduled Payments due on the Mortgage Loans on or before the
Cut-off
Date).
In
connection with such assignment, the Depositor does hereby deliver
to,
and deposit with, the Trustee the following documents or
instruments with
respect to each Mortgage Loan so assigned:
(a)
all pages of the original Mortgage Note, signed by the borrower(s)
and
endorsed, "Pay to the order of blank, without recourse" and signed
in the name
of the prior holder by an authorized officer. Such signature on the
endorsement
shall be an original signature of such authorized officer and
have
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<PAGE>
printed the endorser's name, title and company name. To the extent
that there is
no room on the face of the Mortgage Note for endorsements, the
endorsement may
be contained on an allonge, if the law by which such Mortgage Note
is governed
so permits. The Mortgage Note shall include all intervening
endorsements showing
a complete chain of title from the originator to the Sponsor;
(b)
all original pages of any riders referred to in the Mortgage
Note;
(c)
for each Mortgage Loan that is not a MOM Mortgage Loan, the
original
recorded Mortgage, together with all riders referred to in the
Mortgage, and
legal description, with evidence of recording thereon or if the
original is not
available, a copy certified by the applicable public recording
office. If the
original Mortgage has not yet been returned from the recording
office, a copy of
the original Mortgage, together with all riders thereto, that has
been delivered
for recording in the appropriate recording office of the
jurisdiction in which
the Mortgaged Property is located;
(d)
for each Mortgage Loan that is not a MERS Mortgage Loan, the
original
Mortgage Assignment, executed in blank, in form and substance
acceptable for
recording and signed in the name of the last endorsee by an
authorized officer;
(e)
the policy of title insurance (or a preliminary title report if
the
original title insurance policy has not been received from the
title insurance
company);
(f)
for each Mortgage Loan that is not a MERS Mortgage Loan, originals
of
any intervening Mortgage Assignments, with evidence of recording
thereon, or if
the original is not available, a copy certified by the applicable
public
recording office. If the original intervening assignment has not
yet been
returned from the recording office, a copy of such assignment which
has been
sent for recording in the appropriate jurisdiction in which the
Mortgaged
Property is located, showing a complete chain of title from the
originator to
the Seller;
(g)
in the case of each MOM Loan, the original Mortgage, together with
all
riders thereto, with evidence of recording thereon, noting the
presence of the
MIN of the Mortgage Loan and language indicating that the Mortgage
Loan is a MOM
Loan or if the original Mortgage is not available, a copy certified
by the
applicable public recording office. If the original Mortgage has
not yet been
returned from the recording office, a copy of such Mortgage which
has been sent
for recording in the appropriate jurisdiction in which the
Mortgaged Property is
located;
(h)
in the case of each MERS Mortgage Loan that is not a MOM Loan,
the
original Mortgage Assignment or if the original Mortgage is not
available, a
copy certified by the applicable public recording office, with
evidence of
recording thereon, and all intervening Mortgage Assignments, with
evidence of
recording thereon, showing a complete chain of title from the
originator to
MERS;
(i)
all original pages of assumption, modification, consolidation
or
extension agreements, if any, with evidence of recording
thereon;
(j)
with respect to a Mortgage Loan that, according to the Mortgage
Loan
Schedule is covered by a primary mortgage insurance policy, the
original or a
copy of the policy of primary mortgage insurance; and
(k)
if the Mortgage Note or the Mortgage has been signed by any Person
on
behalf of the Mortgagor, the original power of attorney or other
instrument that
authorized and empowered such Person to sign, or a copy of such
power of
attorney that has been delivered for recording in the appropriate
recording
office of the jurisdiction in which the Mortgaged Property is
located.
62
<PAGE>
If
in connection with any Mortgage Loan, the Depositor cannot deliver
the
Mortgage, Assignments of Mortgage or assumption, consolidation or
modification,
as the case may be, with evidence of recording thereon, if
applicable,
concurrently with the execution and delivery of this Agreement
solely because of
a delay caused by the public recording office where such Mortgage,
Assignments
of Mortgage or assumption, consolidation or modification, as the
case may be,
has been delivered for recordation, the Depositor shall deliver or
cause to be
delivered to the Trustee written notice stating that such Mortgage
or
assumption, consolidation or modification, as the case may be, has
been
delivered to the appropriate public recording office for
recordation.
Thereafter, the Depositor shall deliver or cause to be delivered to
the Trustee
such Mortgage, Assignments of Mortgage or assumption, consolidation
or
modification, as the case may be, with evidence of recording
indicated thereon,
if applicable, upon receipt thereof from the public recording
office. To the
extent any required endorsement is not contained on a Mortgage Note
or an
Assignment of Mortgage, the Depositor shall make or cause to be
made such
endorsement.
With
respect to any Mortgage Loan, none of the Depositor, the Servicer
or
the Trustee shall be obligated to cause to be recorded the
Assignment of
Mortgage referred to in this Section 2.01. In the event that any
Assignment of
Mortgage is not recorded or is improperly recorded, the Servicer
shall have no
liability for its failure to receive or act on notices related to
such
Assignment of Mortgage.
The
ownership of each Mortgage Note, the Mortgage and the contents of
the
related Mortgage File is vested in the Trustee. Neither the
Depositor nor the
Servicer shall take any action inconsistent with such ownership and
shall not
claim any ownership interest therein. The Depositor and the
Servicer shall
respond to any third party inquiries with respect to ownership of
the Mortgage
Loans by stating that such ownership is held by the Trustee on
behalf of the
Certificateholders. Mortgage documents relating to the Mortgage
Loans not
delivered to the Trustee are and shall be held in trust by the
Servicer, for the
benefit of the Trustee as the owner thereof, and the Servicer's
possession of
the contents of each Mortgage File so retained is for the sole
purpose of
servicing the related Mortgage Loan, and such retention and
possession by the
Servicer is in a custodial capacity only. The Depositor agrees to
take no action
inconsistent with the Trustee's ownership of the Mortgage Loans, to
promptly
indicate to all inquiring parties that the Mortgage Loans have been
sold and to
claim no ownership interest in the Mortgage Loans.
It
is the intention of this Agreement that the conveyance of the
Depositor's right, title and interest in and to the Trust Fund
pursuant to this
Agreement shall constitute a purchase and sale and not a loan. If a
conveyance
of Mortgage Loans from the Sponsor to the Depositor is
characterized as a pledge
and not a sale, then the Depositor shall be deemed to have
transferred to the
Trustee all of the Depositor's right, title and interest in, to and
under the
obligations of the Sponsor deemed to be secured by said pledge; and
it is the
intention of this Agreement that the Depositor shall also be deemed
to have
granted to the Trustee a first priority security interest in all of
the
Depositor's right, title, and interest in, to and under the
obligations of the
Sponsor to the Depositor deemed to be secured by said pledge and
that the
Trustee shall be deemed to be an independent custodian for purposes
of
perfection of the security interest granted to the Depositor. If
the conveyance
of the Mortgage Loans from the Depositor to the Trustee is
characterized as a
pledge, it is the intention of this Agreement that this Agreement
shall
constitute a security agreement under applicable law, and that the
Depositor
shall be deemed to have granted to the Trustee a first priority
security
interest in all of the Depositor's right, title and interest in, to
and under
the Mortgage Loans, all payments of principal of or interest on
such Mortgage
Loans, all other rights relating to and payments made in respect of
the Trust
Fund, and all proceeds of any thereof. If the trust created by this
Agreement
terminates prior to the satisfaction of the claims of any Person in
any
Certificates, the security interest created hereby shall continue
in full force
and effect and the Trustee shall be deemed to be the collateral
agent for the
benefit of such Person.
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In
addition to the conveyance made in the first paragraph of this
Section
2.01, the Depositor does hereby convey, assign and set over to the
Trustee for
the benefit of the Certificateholders its rights and interests
under the Sale
Agreement, including the Depositor's right, title and interest in
the
representations and warranties contained in the Sale Agreement and
the benefit
of the repurchase obligations and the obligation of the Sponsor
contained in the
Sale Agreement to take, at the request of the Depositor or the
Trustee, all
action on its part which is reasonably necessary to ensure the
enforceability of
a Mortgage Loan. The Trustee hereby accepts such assignment, and
shall be
entitled to exercise all rights of the Depositor under the Sale
Agreement as if,
for such purpose, it were the Depositor. The foregoing sale,
transfer,
assignment, set-over, deposit and conveyance does not and is not
intended to
result in creation or assumption by the Trustee of any obligation
of the
Depositor, the Sponsor, or any other Person in connection with the
Mortgage
Loans or any other agreement or instrument relating thereto.
The
parties hereto agree and understand that it is not intended that
any
Mortgage Loan be included in the Trust that is, without limitation,
a "High-Cost
Home Loan" as defined by the Home Ownership and Equity Protection
Act of 1994 or
any other applicable anti-predatory lending laws, including but not
limited to
(i) a "High-Cost Home Loan" as defined in the New Jersey Home
Ownership Act
effective November 27, 2003; (ii) a "High-Cost Home Loan" as
defined in the New
Mexico Home Loan Protection Act effective January 1, 2004; (iii) a
"High-Cost
Home Loan" as defined in the Massachusetts Predatory Home Loan
Practices Act
effective November 7, 2004; (iv) a "High-Cost Home Loan" as defined
by the
Indiana High Cost Home Loan Law effective January 1, 2005 or (v) a
"High-Cost
Home Loan" as defined by the Illinois High Risk Home Loan Act
effective January
1, 2004.
SECTION 2.02. Acceptance by Trustee of the Mortgage Loans.
Except as set forth in the Exception Report delivered
contemporaneously
herewith (the "Exception Report"), the Trustee acknowledges receipt
of the
Mortgage Note for each Mortgage Loan and delivery of a Mortgage
File (but does
not acknowledge receipt of all documents required to be included in
such
Mortgage File) with respect to each Mortgage Loan and declares that
it holds and
will hold such documents and any other documents constituting a
part of the
Mortgage Files delivered to it in trust for the use and benefit of
all present
and future Certificateholders. The Depositor will cause the Sponsor
to
repurchase any Mortgage Loan to which a material exception was
taken in the
Exception Report unless such exception is cured to the satisfaction
of the
Depositor and the Trustee within forty-five (45) Business Days of
the Closing
Date.
The
Trustee acknowledges receipt of the three Corridor Contracts
(attached
hereto as Exhibits O-1, O-2 and O-3). The Trustee also acknowledges
receipt of
the Sale Agreement.
The
Trustee acknowledges receipt of the Swap Agreement that will be
held in
the Supplemental Interest Trust and is hereby instructed to enter
into the Swap
Agreement, not in its individual capacity, but solely as the
Supplemental
Interest Trust Trustee.
The
Trustee agrees, for the benefit of Certificateholders, to review
each
Mortgage File delivered to it within sixty (60) days after the
Closing Date to
ascertain and to certify, within seventy (70) days of the Closing
Date, to the
Depositor and the Servicer that all documents required by Section
2.01, except
those listed on the exception report attached thereto, have been
executed and
received, and that such documents relate to the Mortgage Loans
identified in
Exhibit B that have been conveyed to it. If the Trustee finds any
document or
documents constituting a part of a Mortgage File to be missing or
defective
(that is, mutilated, damaged, defaced or unexecuted) in any
material respect,
the Trustee shall promptly (and in any event within no more than
five Business
Days) after such finding so notify the Servicer, the Sponsor and
the Depositor.
In addition, the Trustee shall also notify the Servicer, the
Sponsor and the
Depositor if the original Mortgage with evidence of recording
thereon with
respect to a
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Mortgage Loan is not received within seventy (70) days of the
Closing Date; if
it has not been received because of a delay caused by the public
recording
office where such Mortgage has been delivered for recordation, the
Depositor
shall deliver or cause to be delivered to the Trustee written
notice stating
that such Mortgage has been delivered to the appropriate public
recording office
for recordation and thereafter the Depositor shall deliver or cause
to be
delivered such Mortgage with evidence of recording thereon upon
receipt thereof
from the public recording office. The Trustee shall request that
the Sponsor
correct or cure such omission, defect or other irregularity, or
substitute a
Mortgage Loan pursuant to the provisions of Section 2.03(c), within
ninety (90)
days from the date the Sponsor was notified of such omission or
defect and, if
the Sponsor does not correct or cure such omission or defect within
such period,
that the Sponsor purchase such Mortgage Loan from the Issuing
Entity within
ninety (90) days from the date the Trustee notified the Sponsor of
such
omission, defect or other irregularity at the Purchase Price of
such Mortgage
Loan. The Purchase Price for any Mortgage Loan purchased pursuant
to this
Section 2.02 shall be paid to the Servicer and deposited by the
Servicer in the
Collection Account promptly upon receipt, and, upon receipt by the
Trustee of
written notification of such deposit signed by a Servicing Officer,
the Trustee,
upon receipt of a Request for Release, shall promptly release to
the Sponsor the
related Mortgage File and the Trustee shall execute and deliver
such instruments
of transfer or assignment, without recourse, representation or
warranty, as
shall be necessary to vest in the Sponsor or its designee, as the
case may be,
any Mortgage Loan released pursuant hereto, and the Trustee shall
have no
further responsibility with regard to such Mortgage Loan. It is
understood and
agreed that the obligation of the Sponsor to purchase, cure or
substitute any
Mortgage Loan as to which a material defect in or omission of a
constituent
document exists shall constitute the sole remedy respecting such
defect or
omission available to the Trustee on behalf of Certificateholders.
The preceding
sentence shall not, however, limit any remedies available to
the
Certificateholders, the Depositor or the Trustee pursuant to the
Sale Agreement.
The Trustee shall be under no duty or obligation to inspect, review
and examine
such documents, instruments, certificates or other papers to
determine that they
are genuine, enforceable, recordable or appropriate to the
represented purpose,
or that they have actually been recorded, or that they are other
than what they
purport to be on their face. The Trustee shall keep confidential
the name of
each Mortgagor and the Trustee shall not solicit any such Mortgagor
for the
purpose of refinancing the related Mortgage Loan. It is understood
and agreed
that all rights and benefits relating to the solicitation of any
Mortgagors and
the attendant rights, title and interest in and to the list of
Mortgagors and
data relating to their Mortgages shall be retained by the
Servicer.
Within seventy (70) days of the Closing Date, the Trustee shall
deliver to
the Depositor and the Servicer the Trustee's Certification,
substantially in the
form of Exhibit D attached hereto, evidencing the completeness of
the Mortgage
Files, with any exceptions noted thereto.
SECTION 2.03. Representations, Warranties and Covenants of the
Depositor.
(a)
The Depositor hereby represents and warrants to the Servicer and
the
Trustee as follows, as of the date hereof
(i) The Depositor is duly organized and is validly existing as
a
corporation in good standing under the laws of the State of
Delaware and
has
full power and authority (corporate and other) necessary to own or
hold
its
properties and to conduct its business as now conducted by it and
to
enter into and perform its obligations under this Agreement and the
Sale
Agreement.
(ii) The Depositor has the full corporate power and authority
to
execute, deliver and perform, and to enter into and consummate
the
transactions contemplated by, this Agreement and the Sale Agreement
and has
duly
authorized, by all necessary corporate action on its part, the
execution, delivery and performance of this Agreement and the
Sale
Agreement; and this Agreement and the Sale Agreement, assuming the
due
authorization, execution and delivery
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hereof by the other parties
hereto, constitutes a legal, valid and binding
obligation of the Depositor, enforceable against the Depositor
in
accordance with its terms, subject, as to enforceability, to
(i)
bankruptcy, insolvency, reorganization, moratorium and other
similar laws
affecting creditors' rights generally and (ii) general principles
of
equity, regardless of whether enforcement is sought in a proceeding
in
equity or at law.
(iii) The execution and delivery of this Agreement and the Sale
Agreement by the Depositor, the consummation of the
transactions
contemplated by this Agreement and the Sale Agreement, and the
fulfillment
of
or compliance with the terms hereof are in the ordinary course
of
business of the Depositor and will not (A) result in a material
breach of
any
term or provision of the charter or by-laws of the Depositor or
(B)
materially conflict with, result in a violation or acceleration of,
or
result in a material default under, the terms of any other
material
agreement or instrument to which the Depositor is a party or by
which it
may
be bound or (C) constitute a material violation of any statute,
order
or
regulation applicable to the Depositor of any court, regulatory
body,
administrative agency or governmental body having jurisdiction over
the
Depositor; and the Depositor is not in breach or violation of any
material
indenture or other material agreement or instrument, or in
violation of any
statute, order or regulation of any court, regulatory body,
administrative
agency or governmental body having jurisdiction over it which
breach or
violation may materially impair the Depositor's ability to perform
or meet
any
of its obligations under this Agreement.
(iv) No litigation is pending or, to the best of the
Depositor's
knowledge, threatened, against the Depositor that would materially
and
adversely affect the execution, delivery or enforceability of
this
Agreement and the Sale Agreement or the ability of the Depositor to
perform
its
obligations under this Agreement and the Sale Agreement in
accordance
with
the terms hereof.
(v) No consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution, delivery
and
performance by the Depositor of, or compliance by the Depositor
with, this
Agreement and the Sale Agreement or the consummation of the
transactions
contemplated hereby, or if
any such consent, approval, authorization or
order is required, the Depositor has obtained the same. The
Depositor
hereby represents and warrants to the Trustee with respect to each
Mortgage
Loan
as of the Closing Date, and following the transfer of the
Mortgage
Loans to it by the Sponsor, the Depositor had good title to the
Mortgage
Loans and the Mortgage Notes were subject to no offsets, claims,
liens,
mortgage, pledge, charge, security interest, defenses or
counterclaims.
(vi) Each Mortgage Loan in Group One has a Stated Principal Balance
as
of
the Cut-off Date that complies with the loan limitations of Fannie
Mae
and
Freddie Mac as in effect on the Cut-off Date.
(b)
To the extent that any fact, condition or event with respect to
a
Mortgage Loan constitutes a breach of a representation or warranty
of the
Sponsor under the Sale Agreement, the only right or remedy of the
Trustee or of
any Certificateholder shall be the Trustee's right to enforce the
obligations of
the Sponsor under any applicable representation or warranty made by
it. The
Trustee acknowledges that the Depositor shall have no obligation or
liability
with respect to any breach of any representation or warranty with
respect to the
Mortgage Loans (except as set forth in Section 2.03(a)(v)) under
any
circumstances.
(c)
Upon discovery by any of the Depositor, the Servicer, or the
Trustee of
a breach of any of representations and warranties set forth in the
Sale
Agreement that adversely and materially affects the
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value of the related Mortgage Loan, prepayment charges or the
interests of the
Certificateholders, the party discovering such breach shall give
prompt written
notice to the other parties. Within ninety (90) days of the
discovery of a
breach of any representation or warranty given to the Trustee by
the Depositor,
the Sponsor and assigned by the Depositor to the Trustee, the
Depositor, or the
Sponsor shall either (a) cure such breach in all material respects,
(b)
repurchase such Mortgage Loan or any property acquired in respect
thereof from
the Trustee at the Purchase Price or (c) within the two year period
following
the Closing Date, substitute a Replacement Mortgage Loan for the
affected
Mortgage Loan. In the event of discovery of a breach of any
representation and
warranty of the Sponsor or the Depositor, the Trustee shall enforce
its rights
under the Sale Agreement or thereunder for the benefit of
Certificateholders. In
the event of a breach of the representations and warranties with
respect to the
Mortgage Loans set forth in a Sale Agreement, the Trustee shall
enforce the
right of the Issuing Entity to be indemnified for such breach of
representation
and warranty. In the event that such breach relates solely to
the
unenforceability of a prepayment charge, amounts received in
respect of such
indemnity up to the amount of such prepayment charge shall be
distributed
pursuant to Section 4.04(b)(i)(B). As provided in the Sale
Agreement, if the
Sponsor substitutes for a Mortgage Loan for which there is a breach
of any
representations and warranties which adversely and materially
affects the value
of such Mortgage Loan and such substitute mortgage loan is not a
Replacement
Mortgage Loan, under the terms of the Sale Agreement, the Sponsor
will, in
exchange for such substitute Mortgage Loan, (i) provide the
applicable Purchase
Price for the affected Mortgage Loan or (ii) within two years of
the Closing
Date, substitute such affected Mortgage Loan with a Replacement
Mortgage Loan.
Any such substitution shall not be effected prior to the additional
delivery to
the Trustee of a Request for Release substantially in the form of
Exhibit I and
shall not be effected unless it is within two years of the Startup
Day. As
provided in the Sale Agreement, the Sponsor indemnifies and holds
the Issuing
Entity, the Trustee, the Depositor, the Servicer and each
Certificateholder
harmless against any and all taxes, claims, losses, penalties,
fines,
forfeitures, reasonable legal fees and related costs, judgments,
and any other
costs, fees and expenses that the Issuing Entity, the Trustee, the
Depositor,
the Servicer and any Certificateholder may sustain in connection
with any
actions of the Sponsor relating to a repurchase of a Mortgage Loan
other than in
compliance with the terms of this Section 2.03 and the Sale
Agreement, to the
extent that any such action causes (i) any federal or state tax to
be imposed on
the Issuing Entity or any REMIC provided for herein, including
without
limitation, any federal tax imposed on "prohibited transactions"
under Section
860F(a)(1) of the Code or on "contributions after the startup day"
under Section
860G(d)(1) of the Code, or (ii) any REMIC created hereunder to fail
to qualify
as a REMIC at any time that any Certificate is outstanding.
With
respect to any Mortgage Loan repurchased by the Depositor pursuant
to
this Agreement or by the Sponsor pursuant to the Sale Agreement,
the principal
portion of the funds received by the Servicer in respect of such
repurchase of a
Mortgage Loan will be considered a Principal Prepayment and shall
be deposited
by the Servicer in the Certificate Account pursuant to Section
3.05. The
Trustee, upon receipt of the full amount of the Purchase Price for
a Deleted
Mortgage Loan, or upon receipt of the Mortgage File for a
Replacement Mortgage
Loan substituted for a Deleted Mortgage Loan, shall release or
cause to be
released and reassign to the Depositor or the Sponsor, as
applicable, the
related Mortgage File for the Deleted Mortgage Loan and shall
execute and
deliver such instruments of transfer or assignment, in each case
without
recourse, representation or warranty, as shall be necessary to vest
in such
party or its designee or assignee title to any Deleted Mortgage
Loan released
pursuant hereto, free and clear of all security interests, liens
and other
encumbrances created by this Agreement, which instruments shall be
prepared by
the Trustee, and the Trustee shall not have any further
responsibility with
respect to the Mortgage File relating to such Deleted Mortgage
Loan.
With
respect to each Replacement Mortgage Loan to be delivered to
the
Trustee pursuant to the terms of this Article II in exchange for a
Deleted
Mortgage Loan: (i) the Depositor or the Sponsor, as applicable,
must deliver to
the Trustee the Mortgage File for the Replacement Mortgage Loan
containing
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the documents set forth in Section 2.01 along with a written
certification
certifying as to the delivery of such Mortgage File and containing
the granting
language set forth in the first sentence of Section 2.01; and (ii)
the Depositor
will be deemed to have made, with respect to such Replacement
Mortgage Loan,
each of the representations and warranties made by it with respect
to the
related Deleted Mortgage Loan. The Trustee shall review the
Mortgage File with
respect to each Replacement Mortgage Loan and certify to the
Depositor that all
documents required by Section 2.01 have been executed and
received.
For
any month in which the Sponsor substitutes one or more
Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the Sponsor
will
determine the amount (if any) by which the aggregate principal
balance of all
such Replacement Mortgage Loans as of the date of substitution and
the aggregate
prepayment charges with respect to such Replacement Mortgage Loans
is less than
the aggregate Stated Principal Balance (after application of the
principal
portion of the Scheduled Payment due in the month of substitution)
and aggregate
prepayment charges of all such Deleted Mortgage Loans. An amount
equal to the
aggregate of the deficiencies described in the preceding sentence
(such amount,
the "Substitution Adjustment Amount") shall be delivered by the
Sponsor to the
Servicer for deposit into the Collection Account on the
Determination Date for
the Distribution Date relating to the Prepayment Period during
which the related
Mortgage Loan became required to be purchased or replaced
hereunder.
The
Sponsor shall give or cause to be given written notice to the
Certificateholders that such substitution has taken place, shall
amend the
Mortgage Loan Schedule to reflect the removal of such Deleted
Mortgage Loan from
the terms of this Agreement and the substitution of the Replacement
Mortgage
Loan or Replacement Mortgage Loans and shall deliver a copy of such
amended
Mortgage Loan Schedule to the Trustee. Upon such substitution by
the Sponsor,
such Replacement Mortgage Loan or Replacement Mortgage Loans shall
constitute
part of the Mortgage Pool and shall be subject in all respects to
the terms of
this Agreement and the Sale Agreement, including all applicable
representations
and warranties thereof included in the Sale Agreement as of the
date of
substitution.
In
addition, the Sponsor shall obtain at its own expense and deliver
to the
Trustee an Opinion of Counsel addressed to the Trustee to the
effect that such
substitution will not (a) cause any federal tax to be imposed on
the Issuing
Entity or any REMIC provided for herein, including without
limitation, any
federal tax imposed on "prohibited transactions" under Section
860F(a)(1) of the
Code or on "contributions after the startup day" under Section
860G(d)(1) of the
Code or (b) adversely affect the status of any REMIC provided for
herein as a
REMIC. If any such Opinion of Counsel can not be delivered, then
such
substitution may only be effected at such time as the required
Opinion of
Counsel can be given.
(d)
It is understood and agreed that the representations, warranties
and
indemnification (i) set forth in this Section 2.03 and (ii) of the
Sponsor and
the Depositor set forth in the Sale Agreement and assigned to the
Trustee by the
Depositor hereunder shall each survive delivery of the Mortgage
Files and the
Assignment of Mortgage of each Mortgage Loan to the Trustee and
shall continue
throughout the term of this Agreement.
SECTION 2.04. Representations and Warranties of the Servicer.
The Servicer hereby
represents and warrants to the Depositor and the
Trustee as follows, as of the date hereof
(i) The Servicer is a duly formed corporation and is validly
existing
and
in good standing under the laws of the state of its formation and
is
duly
authorized and qualified to transact any and all business
contemplated
by
this Agreement to be conducted by the Servicer in any state in
which a
Mortgaged Property is located or is otherwise not required under
applicable
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law
to effect such qualification and, in any event, is in compliance
with
the
doing business laws of any such state, to the extent necessary
to
ensure its ability to enforce each Mortgage Loan, to service the
Mortgage
Loans in accordance with the terms of this Agreement and to perform
any of
its
other obligations under this Agreement in accordance with the
terms
hereof.
(ii) The Servicer has the power and authority to service each
Mortgage
Loan, and to execute, deliver and perform, and to enter into and
consummate
the
transactions contemplated by this Agreement and has duly authorized
by
all
necessary corporate action on the part of the Servicer the
execution,
delivery and performance of this Agreement; and this Agreement,
assuming
the
due authorization, execution and delivery hereof by the other
parties
hereto, constitutes a legal, valid and binding obligation of the
Servicer,
enforceable against the Servicer in accordance with its terms,
except that
(a)
the enforceability hereof may be limited by bankruptcy,
insolvency,
moratorium, receivership and other similar laws relating to
creditors'
rights generally and (b) the remedy of specific performance and
injunctive
and
other forms of equitable relief may be subject to equitable
defenses
and
to the discretion of the court before which any proceeding therefor
may
be
brought.
(iii) The execution and delivery of this Agreement by the
Servicer,
the
servicing of the Mortgage Loans under this Agreement, the
consummation
of
any other of the transactions contemplated by this Agreement, and
the
fulfillment of or compliance with the terms hereof are in the
ordinary
course of business of the Servicer and will not (A) result in a
material
breach of any term or provision of the charter or by-laws of the
Servicer
or
(B) materially conflict with, result in a material breach,
violation or
acceleration of, or result in a material default under, the terms
of any
other material agreement or instrument to which the Servicer is a
party or
by
which it may be bound, or (C) constitute a material violation of
any
statute, order or regulation applicable to the Servicer of any
court,
regulatory body, administrative agency or governmental body
having
jurisdiction over the Servicer; and the Servicer is not in breach
or
violation of any material indenture or other material agreement
or
instrument, or in violation of any statute, order or regulation of
any
court, regulatory body, administrative agency or governmental body
having
jurisdiction over it which breach or violation may materially
impair the
Servicer's ability to perform or meet any of its obligations under
this
Agreement.
(iv) The Servicer is an approved servicer of mortgage loans for
Fannie
Mae
and is an approved servicer of mortgage loans for Freddie Mac.
(v)
No litigation is pending or, to the best of the Servicer's
knowledge, threatened, against the Servicer that would materially
and
adversely affect the execution, delivery or enforceability of
this
Agreement or the ability of the Servicer to service the Mortgage
Loans or
to
perform any of its other obligations under this Agreement in
accordance
with
the terms hereof.
(vi) No consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution, delivery
and
performance by the Servicer of, or compliance by the Servicer with,
this
Agreement or the consummation of the transactions contemplated
hereby, or
if
any such consent, approval, authorization or order is required,
the
Servicer has obtained the same.
(vii) The Servicer will fully furnish (for the period it services
the
Mortgage Loans), in accordance with the Fair Credit Reporting Act
and its
implementing regulations, accurate and complete information
(e.g.,
favorable and unfavorable) on its borrower credit files to
Equifax,
Experian and Trans Union Credit Information Company on a monthly
basis.
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SECTION 2.05. Substitutions and Repurchases of Mortgage Loans Which
Are Not
"Qualified Mortgages".
Upon
discovery by the Depositor, the Servicer or the Trustee that
any
Mortgage Loan does not constitute a "qualified mortgage" within the
meaning of
section 860G(a)(3) of the Code, the party discovering such fact
shall promptly
(and in any event within five (5) Business Days of discovery) give
written
notice thereof to the other parties. In connection therewith, the
Depositor
shall, at the Depositor's option, either (i) substitute, if the
conditions in
Section 2.03(c) with respect to substitutions are satisfied, a
Replacement
Mortgage Loan for the affected Mortgage Loan, or (ii) repurchase
the affected
Mortgage Loan within ninety (90) days of such discovery in the same
manner as it
would a Mortgage Loan for a breach of representation or warranty
contained in
Section 2.03. The Trustee shall reconvey to the Depositor the
Mortgage Loan to
be released pursuant hereto in the same manner, and on the same
terms and
conditions, as it would a Mortgage Loan repurchased for breach of
a
representation or warranty contained in Section 2.03.
SECTION 2.06. Authentication and Delivery of Certificates.
The
Trustee acknowledges the transfer and assignment to it of the
Trust
Fund and, concurrently with such transfer and assignment, the
Trustee has caused
to be authenticated and delivered to or upon the order of the
Depositor, in
exchange for the Mortgage Loans, Certificates duly authenticated by
the
Authenticating Agent in authorized denominations evidencing
ownership of the
entire Trust Fund. The Trustee agrees to hold the Trust Fund and
exercise the
rights referred to above for the benefit of all present and future
Holders of
the Certificates and to perform its duties set forth in this
Agreement in
accordance with the provisions hereof.
SECTION 2.07. REMIC Elections.
(a)
The Depositor hereby instructs and authorizes the Trustee to make
an
appropriate election to treat each of the SWAP REMIC, the Lower
Tier REMIC and
the Upper Tier REMIC as a REMIC. The Trustee shall sign the returns
providing
for such elections and such other tax or information returns which
are required
to be signed by the Trustee under applicable law. This Agreement
shall be
construed so as to carry out the intention of the parties that each
of the SWAP
REMIC, the Lower Tier REMIC and the Upper Tier REMIC be treated as
a REMIC at
all times prior to the date on which the Trust Fund is
terminated.
(b)
The Preliminary Statement sets forth the designations and
"latest
possible maturity date" for federal income tax purposes of all
interests created
hereby. The "Startup Day," as defined in Section 860G(a)(9) of the
Code, for
purposes of the REMIC Provisions shall be the Closing Date. Each
REMIC's fiscal
year shall be the calendar year.
The
SWAP REMIC shall consist of all of the assets of the Trust Fund,
other
than (i) amounts distributable to the Class P Certificates pursuant
to Section
4.04(b)(i) hereof, (ii) the interests issued by the SWAP REMIC and
the interests
issued by the Lower Tier REMIC, (iii) the grantor trusts described
in Section
2.07 hereof, (iv) each Corridor Contract and the Corridor Contract
Account and
(v) the Swap Agreement and the Supplemental Interest Trust. The
SWAP REMIC shall
issue the SWAP REMIC Regular Interests, which shall be designated
as regular
interests of such REMIC, and shall issue the Class SWR Interest,
which shall be
designated as the sole class of residual interest in the SWAP
REMIC. Each of the
SWAP REMIC Regular Interests shall have the characteristics set
forth in the
Preliminary Statement and this Section 2.07.
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The
Lower Tier REMIC shall consist of the SWAP REMIC Regular Interests.
The
Lower Tier REMIC shall issue the Lower Tier REMIC Regular
Interests, which shall
be designated as regular interests of such REMIC and shall issue
the Class LTR
Interest, which shall be designated as the sole class of residual
interest in
the Lower Tier REMIC. Each of the Lower Tier REMIC Regular
Interests shall have
the characteristics set forth in its definition and the Preliminary
Statement.
The
assets of the Upper Tier REMIC shall be the Lower Tier REMIC
Regular
Interests. The REMIC Regular Interests shall be designated as the
regular
interests in the Upper Tier REMIC and the Residual Interest shall
be designated
as the sole class of residual interest in the Upper Tier REMIC. For
federal
income tax purposes, the pass-through rate on each REMIC Regular
Interest (other
than the Uncertificated Class C Interest and the Class UT-IO
Interest) and on
the sole class of residual interest in the Upper Tier REMIC shall
be subject to
a cap equal to the Upper Tier REMIC Net WAC Cap.
The
beneficial ownership of the Class SWR Interest, the Class LTR
Interest
and the Residual Interest shall be represented by the Class R
Certificate. The
Class SWR Interest and the Class LTR Interest shall not have a
principal balance
or bear interest.
(c)
The "tax matters person" with respect to each REMIC for purposes of
the
REMIC Provisions shall be the beneficial owner of the Class R
Certificate;
provided, however, that the Holder of the Class R Certificate, by
its acceptance
thereof, irrevocably appoints the Trustee as its agent and
attorney-in-fact to
act as "tax matters person" with respect to each such REMIC for
purposes of the
REMIC Provisions. If there is more than one beneficial owner of the
Class R
Certificate, the "tax matters person" shall be the Person with the
greatest
percentage interest in the Class R Certificate and, if there is
more than one
such Person, shall be determined under Treasury regulation Section
1.860F-4(d)
and Treasury regulation Section 301.6231(a)(7)-1.
(d)
(i) It is intended that the rights of the Class A Certificates,
Class R
Certificate, Class M Certificates and Class B Certificates to
receive payments
in respect of Excess Interest shall be treated as a right in
interest rate cap
contracts written by the Class C Certificateholders in favor of the
holders of
the Class A Certificates, Class R Certificate, Class M Certificates
and Class B
Certificates, and such shall be accounted for as property held
separate and
apart from the regular interests in the Upper Tier REMIC held by
the holders of
the Class A Certificates, Class M Certificates and Class B
Certificates and the
residual interest in the Upper Tier REMIC held by the holder of the
Class R
Certificate. This provision is intended to satisfy the requirements
of Treasury
Regulations Section 1.860G-2(i) for the treatment of property
rights coupled
with REMIC interests to be separately respected and shall be
interpreted
consistently with such regulation. On each Distribution Date, to
the extent that
any of the Class A Certificates, Class R Certificate, Class M
Certificates and
Class B Certificates receive payments in respect of Excess
Interest, such
amounts, to the extent not derived from payments on the Corridor
Contracts or
the Swap Agreement, will be treated as distributed by the Upper
Tier REMIC to
the Class C Certificates pro rata in payment of the amounts
specified in Section
4.04(f) and then paid to the relevant Class of Certificates
pursuant to the
related interest rate cap agreement.
(ii) It is intended that the beneficial owners of the
Certificates
(other than the Class P and Class C Certificates) shall be treated
as having
entered into a notional principal contract with respect to the
beneficial owners
of the Class C Certificates. Pursuant to each such notional
principal contract,
all beneficial owners of each Class of Certificates (other than the
Class P and
Class C Certificates) shall be treated as having agreed to pay, on
each
Distribution Date, to the beneficial owners of the Class C
Certificates an
aggregate amount equal to the excess, if any, of (i) the amount
payable on such
Distribution Date on the Corresponding REMIC Regular Interest of
such Class of
Certificates over (ii) the amount payable on such Class of
Certificates on such
Distribution Date (such excess, a "Class Payment Shortfall"). A
Class Payment
Shortfall shall be allocated to each Class of Certificates to the
extent that
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interest accrued on such Class for the related Accrual Period at
the
Pass-Through Rate for a Class, computed by substituting "Upper Tier
REMIC Net
WAC Cap" for the Available Funds Cap set forth in the definition
thereof,
exceeds the amount of interest accrued on such Certificate at the
Pass-Through
Rate (without such substitution) for the related Accrual Period,
and a Class
Payment Shortfall payable from principal collections shall be
allocated to the
most subordinate Class of Certificates with an outstanding
principal balance to
the extent of such balance.
(e)
The parties intend that the portion of the Trust Fund consisting of
the
Uncertificated Class C Interest, the uncertificated Class UT-IO
Interest, the
rights to receive payments deemed made by the Class A, Class R,
Class M and
Class B Certificates in respect of notional principal contracts
described in
Section 2.07(d)(ii), the Corridor Contract Account, the Corridor
Contracts, the
Supplemental Interest Trust that holds the Swap Agreement and the
obligation of
the holders of the Class C Certificates to pay amounts in respect
of Excess
Interest to the holders of the Class A Certificates, Class R
Certificate, Class
M Certificates and Class B Certificates shall be treated as a
"grantor trust"
under the Code, for the benefit of the holders of the Class C
Certificates, and
the provisions hereof shall be interpreted consistently with this
intention. In
furtherance of such intention, the Trustee shall (i) furnish or
cause to be
furnished to the holders of the Class C Certificates information
regarding their
allocable share, if any, of the income with respect to such grantor
trust, (ii)
file or cause to be filed with the Internal Revenue Service Form
1041 (together
with any necessary attachments) and such other forms as may be
applicable and
(iii) comply with such information reporting obligations with
respect to
payments from such grantor trust to the holders of Class A
Certificates, Class R
Certificate, Class M Certificates, Class B Certificates and Class C
Certificates
as may be applicable under the Code.
(f)
The parties intend that the portion of the Trust Fund consisting of
the
right to receive the payments distributable to the Class P
Certificates pursuant
to Section 4.04(b)(i) hereof shall be treated as a "grantor trust"
under the
Code, for the benefit of the holders of the Class P Certificates,
and the
provisions hereof shall be interpreted consistently with this
intention. In
furtherance of such intention, the Trustee shall (i) furnish or
cause to be
furnished to the holders of the Class P Certificates information
regarding their
allocable share of the income with respect to such grantor trust
and (ii) file
or cause to be filed with the Internal Revenue Service Form 1041
(together with
any necessary attachments) and such other forms as may be
applicable.
(g)
The parties intend that amounts paid to the Swap Counterparty under
the
Swap Agreement shall be deemed for federal income tax purposes to
be paid by the
Class C Certificates first, out of funds deemed received in respect
of the Class
UT-IO Interest, second, out of funds deemed received in respect of
the
Uncertificated Class C Interest and third, out of funds deemed
received in
respect of notional principal contracts described in Section
2.07(d)(ii), and
the provisions hereof shall be interpreted consistently with this
intention. On
each Distribution Date, to the extent that amounts paid to the Swap
Counterparty
are deemed paid out of funds received in respect of the
Uncertificated Class C
Interest, such amounts will be treated as distributed by the Upper
Tier REMIC to
the Class C Certificates pro rata in payment of the amounts
specified in Section
4.04(f) and then paid to the Swap Counterparty pursuant to the Swap
Agreement.
The Supplemental Interest Trust shall be an "outside reserve fund"
for
federal income tax purposes and not an asset of any REMIC.
Furthermore, the
Holders of the Class C Certificates shall be the beneficial owners
of the
Supplemental Interest Trust for all federal income tax purposes,
and shall be
taxable on all income earned thereon.
(h)
All payments of principal and interest at the Net Mortgage Rate on
each
of the Mortgage Loans (other than amounts distributable to the
Class P
Certificates pursuant to Section 4.04(b)(i) hereof)
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received by the SWAP REMIC with respect to the Mortgage Loans shall
be paid to
the SWAP REMIC Regular Interests until the principal balance of all
such
interests have been reduced to zero and any losses allocated to
such interests
have been reimbursed. Any available funds remaining in the SWAP
REMIC on a
Distribution Date after distributions to the SWAP REMIC Regular
Interests shall
be distributed to the Class R Certificate on account of the Class
SWR Interest.
On each Distribution Date, the Trustee shall distribute the
aggregate Interest
Funds (net of expenses (other than any Net Swap Payment or Swap
Termination
Payment required to be made to the Swap Counterparty) and payments
to the Class
P Certificates) with respect to each of the SWAP REMIC Regular
Interests based
on the interest rates for each such SWAP REMIC Regular Interest. On
each
Distribution Date, the Trustee
