<PAGE>
EXHIBIT 4.1
EXECUTION COPY
MERRILL LYNCH MORTGAGE INVESTORS, INC.,
Depositor
WILSHIRE CREDIT CORPORATION,
Servicer
and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
Trustee
--------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of May 1, 2005
--------------------------------------
SPECIALTY UNDERWRITING AND RESIDENTIAL FINANCE TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2005-BC2
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS.................................................
1
ARTICLE II CONVEYANCE OF
MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES. ..............................................
43
SECTION
2.01. Conveyance of
Mortgage Loans....................... 43
SECTION
2.02. Acceptance by
Trustee of the Mortgage Loans........ 46
SECTION
2.03. Representations,
Warranties and Covenants of the
Depositor ....................................... 47
SECTION
2.04. Representations
and Warranties of the Servicer..... 50
SECTION
2.05. Substitutions
and Repurchases of Mortgage Loans
Which Are Not "Qualified Mortgages" ............. 51
SECTION
2.06. Authentication
and Delivery of Certificates........ 51
SECTION
2.07. REMIC
Elections.................................... 52
SECTION 2.08.
Covenants of the Servicer.......................... 56
SECTION
2.09.
[RESERVED]......................................... 56
SECTION
2.10.
[RESERVED]......................................... 56
SECTION
2.11. Permitted
Activities of the Trust Fund............. 56
SECTION
2.12. Qualification of
Special Purpose Entity............ 56
ARTICLE III ADMINISTRATION AND
SERVICING OF MORTGAGE LOANS.............. 56
SECTION
3.01. Servicer to
Service Mortgage Loans................. 56
SECTION
3.02. Servicing and
Subservicing; Enforcement of the
Obligations of Servicer ......................... 58
SECTION
3.03. Rights of the
Depositor and the Trustee in
Respect of the Servicer ......................... 59
SECTION
3.04. Trustee to Act
as Servicer......................... 59
SECTION
3.05. Collection of
Mortgage Loan Payments;
Collection Account; Certificate Account ......... 60
SECTION
3.06. Collection of
Taxes, Assessments and Similar
Items; Escrow Accounts .......................... 63
SECTION
3.07. Access to
Certain Documentation and Information
Regarding the Mortgage Loans .................... 63
SECTION
3.08. Permitted
Withdrawals from the Collection Account
and Certificate Account ......................... 63
SECTION
3.09.
[RESERVED]......................................... 66
SECTION
3.10. Maintenance of
Hazard Insurance.................... 66
SECTION
3.11. Enforcement of
Due-On-Sale Clauses; Assumption
Agreements ...................................... 67
SECTION
3.12. Realization Upon
Defaulted Mortgage Loans;
Determination of Excess Proceeds ................ 68
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SECTION
3.13. Trustee to
Cooperate; Release of Mortgage Files.... 70
SECTION
3.14. Documents
Records and Funds in Possession of
Servicer to be Held for the Trustee ............. 71
SECTION
3.15. Servicing
Compensation............................. 71
SECTION
3.16. Access to
Certain Documentation.................... 71
SECTION
3.17. Annual Statement
as to Compliance.................. 72
SECTION
3.18. Annual
Independent Public Accountants' Servicing
Statement; Financial Statements ................. 72
SECTION
3.19. Rights of the
NIM Insurer.......................... 72
SECTION
3.20. Periodic
Filings................................... 72
SECTION
3.21. Annual
Certificate by Trustee...................... 73
SECTION
3.22. Annual
Certificate by Servicer..................... 74
SECTION
3.23. Prepayment
Charge Reporting Requirements........... 74
SECTION
3.24. Statements to
Trustee.............................. 75
SECTION
3.25.
Indemnification.................................... 75
SECTION
3.26.
Nonsolicitation.................................... 75
SECTION
3.27. Existing
Servicing Agreement....................... 76
SECTION
3.28. High Cost
Mortgage Loans........................... 76
ARTICLE IV
DISTRIBUTIONS...............................................
76
SECTION
4.01.
Advances........................................... 76
SECTION
4.02. Reduction of
Servicing Compensation in Connection
with Prepayment Interest Shortfalls ............. 77
SECTION
4.03. Distributions on
the REMIC Interests............... 77
SECTION
4.04.
Distributions...................................... 77
SECTION
4.05. Monthly
Statements to Certificateholders........... 83
ARTICLE V THE
CERTIFICATES............................................
85
SECTION
5.01. The
Certificates................................... 85
SECTION
5.02. Certificate
Register; Registration of Transfer
and Exchange of Certificates .................... 86
SECTION
5.03. Mutilated,
Destroyed, Lost or Stolen Certificates.. 91
SECTION
5.04. Persons Deemed
Owners.............................. 91
SECTION
5.05. Access to List
of Certificateholders' Names and
Addresses ....................................... 91
SECTION 5.06.
Book-Entry Certificates............................ 91
SECTION
5.07. Notices to
Depository.............................. 92
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SECTION
5.08. Definitive
Certificates............................ 92
SECTION
5.09. Maintenance of
Office or Agency.................... 92
ARTICLE VI THE DEPOSITOR
AND THE SERVICER.............................. 93
SECTION
6.01. Respective
Liabilities of the Depositor and the
Servicer ........................................ 93
SECTION
6.02. Merger or
Consolidation of the Depositor or the
Servicer ........................................ 93
SECTION
6.03. Limitation on
Liability of the Depositor, the
Servicer and Others ............................. 93
SECTION
6.04. Limitation on
Resignation of Servicer.............. 94
SECTION
6.05. Errors and
Omissions Insurance; Fidelity Bonds..... 94
ARTICLE VII DEFAULT; TERMINATION
OF SERVICER............................ 95
SECTION
7.01. Events of
Default.................................. 95
SECTION
7.02.
[RESERVED]......................................... 96
SECTION
7.03. Trustee to Act;
Appointment of Successor........... 96
SECTION
7.04. Notification to
Certificateholders................. 97
ARTICLE VIII CONCERNING THE
TRUSTEE...................................... 97
SECTION
8.01. Duties of
Trustee.................................. 97
SECTION
8.02. Certain Matters
Affecting the Trustee.............. 99
SECTION
8.03. Trustee Not
Liable for Mortgage Loans.............. 100
SECTION
8.04. Trustee May Own
Certificates....................... 100
SECTION
8.05. Trustee's
Fees..................................... 100
SECTION
8.06. Indemnification
of Trustee; Expenses............... 100
SECTION
8.07. Eligibility
Requirements for Trustee............... 101
SECTION
8.08. Resignation and
Removal of Trustee................. 102
SECTION
8.09. Successor
Trustee.................................. 102
SECTION
8.10. Merger or
Consolidation of Trustee................. 102
SECTION
8.11. Appointment of
Co-Trustee or Separate Trustee...... 102
SECTION
8.12. Tax
Matters........................................ 104
ARTICLE IX
TERMINATION.................................................
106
SECTION
9.01. Termination upon
Liquidation or Repurchase of
all Mortgage Loans .............................. 106
SECTION
9.02. Final
Distribution on the Certificates............. 108
SECTION
9.03. Additional
Termination Requirements................ 109
ARTICLE X
MISCELLANEOUS PROVISIONS....................................
110
SECTION
10.01.
Amendment.......................................... 110
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SECTION
10.02.
Counterparts....................................... 112
SECTION
10.03.
Governing Law...................................... 112
SECTION
10.04.
Intention of Parties............................... 112
SECTION
10.05.
Notices............................................ 112
SECTION
10.06.
Severability of Provisions......................... 113
SECTION
10.07.
Assignment......................................... 113
SECTION
10.08.
Limitation on Rights of Certificateholders......... 114
SECTION
10.09.
Inspection and Audit Rights........................ 114
SECTION
10.10.
Certificates Nonassessable and Fully Paid.......... 114
SECTION
10.11.
Third Party Rights................................. 115
SECTION
10.12.
Additional Rights of the NIM Insurer............... 115
SECTION
10.13.
[RESERVED]......................................... 115
SECTION
10.14.
Assignment; Sales; Advance Facilities.............. 115
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EXHIBIT A FORMS OF
OFFERED CERTIFICATES AND CLASS B-4 CERTIFICATES
EXHIBIT B-1 MORTGAGE LOAN SCHEDULE
- MORTGAGE POOL
EXHIBIT B-2 MORTGAGE LOAN SCHEDULE
- GROUP ONE MORTGAGE LOANS
EXHIBIT B-3 MORTGAGE LOAN SCHEDULE
- GROUP TWO MORTGAGE LOANS
EXHIBIT C
[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, CLASS C AND
CLASS B-4 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 FORM OF
TRANSFEREE'S LETTER
EXHIBIT N FORM OF
AUCTION PROCEDURES
EXHIBIT O-1 FORM OF CLASS A-1 CAP
CONTRACT
EXHIBIT O-2 FORM OF CLASS A-2 CAP
CONTRACT
EXHIBIT O-3 FORM OF SUBORDINATED
CERTIFICATE CONTRACT
EXHIBIT P-1 ONE MONTH LIBOR CAP
TABLE - CAP A-1 CONTRACT
EXHIBIT P-2 ONE MONTH LIBOR CAP
TABLE - CAP A-2 CONTRACT
EXHIBIT P-3 ONE MONTH LIBOR CAP
TABLE - SUBORDINATED CERTIFICATE CAP CONTRACT
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v
<PAGE>
POOLING AND
SERVICING AGREEMENT, dated as of May 1, 2005, among MERRILL
LYNCH MORTGAGE INVESTORS, INC., a Delaware
corporation, as depositor (the
"Depositor"), WILSHIRE CREDIT CORPORATION,
a Nevada corporation, as servicer
(the "Servicer") and JPMORGAN CHASE BANK,
N.A., 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) two 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) the grantor
trusts described in Section 2.07 hereof and
(iv) each Cap Contract and the Cap
Contract Account. The Lower Tier REMIC will
consist of all of the assets
constituting the Trust Fund (other than the
assets described in clauses (ii),
(iii) and (iv) above and the Lower Tier
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
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 Seller 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 and, to the extent provided
herein, the NIM Insurer.
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 which service for
their own account mortgage loans of the
same type as the Mortgages Loans in the
jurisdictions in which the related
Mortgaged Properties are located.
Accrual
Period: With respect to each Class of Certificates 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. All calculations of
interest on each Class of
Certificates 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.
Adjustable
Rate Mortgage Loan: A Mortgage Loan identified in the Mortgage
Loan Schedule as having a Mortgage Rate
which is adjustable.
1
<PAGE>
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 of payments of
principal and interest (net of the
Servicing Fee Rate) on the Mortgage Loans
that were due during the applicable Due
Period and not received as of the close
of business on the related Determination
Date, less the aggregate amount of any
such Delinquent payments that the Servicer
has determined would constitute a
Non-Recoverable Advance were an advance to
be made with respect thereto;
provided, however, that with respect to any
Mortgage Loan which is not a first
lien Mortgage Loan that is 150 days
delinquent or more (whether or not the
Mortgage Loan has been converted to an REO
Property), there will be no
obligation to make advances.
Advance
Facility: A financing or other facility as described in Section
10.14(a).
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-1A 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 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
B-1 Certificate Principal Balance, the
Class B-2 Certificate Principal Balance,
the Class B-3 Certificate Principal
Balance and the Class B-4 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 Seller 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.
2
<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 Distribution Date on which the aggregate
Stated Principal Balance of the Mortgage
Loans 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, the fair market value of any REO
Property, plus accrued interest thereon,
(B) any unreimbursed 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, (C) all interest
accrued on, as well as amounts necessary to
retire the principal balance of, the
notes guaranteed by the NIM Insurer, (D)
any and all amounts then owed to the
NIM Insurer and (E) any costs and damages
incurred by the Trust Fund (or the
Trustee on behalf of the Trust Fund) in
connection with any violation of any
anti-predatory or anti-abusive lending
laws.
Available
Funds Cap: Any of the Class A-1 Available Funds Cap, the Class
A-2 Available Funds Cap or the Subordinated
Certificate Available Funds Cap.
Balloon
Loan: A Mortgage Loan having an original term to stated
maturity
of approximately 15 years which provides
for level monthly payments of principal
and interest based on a 30-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-1A, Class A-2A, Class A-2B,
Class A-2C, Class M-1, Class M-2, Class
M-3, Class M-4, Class B-1, Class B-2, Class
B-3 and Class B-4 Certificates
constitutes a Class of Book-Entry
Certificates.
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 in the City of New York,
New York are authorized or obligated by law
or executive order to be closed.
3
<PAGE>
Cap
Contract: Any of the Class A-1 Cap Contract, the Class A-2 Cap
Contract or the Subordinated Certificate
Cap Contract.
Cap
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 Trust Fund and designated
"JPMorgan Chase Bank, N.A., as trustee,
in trust for registered holders of
Specialty Underwriting and Residential
Finance Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-BC2." Funds
in the Cap Contract Account shall be held
in trust for the Trust Fund for the
uses and purposes set forth in this
Agreement.
Cap
Contract Counterparty: Credit Suisse First Boston
International.
Cap
Contract Notional Balance: Any of the Class A-1 Cap Contract
Notional
Balance, the Class A-2 Cap Contract
Notional Balance or the Subordinated
Certificate Cap Contract Notional
Balance.
Cap
Contract Termination Date: Any of the Class A-1 Contract
Termination
Date, the Class A-2 Cap Contract
Termination Date or the Subordinated
Certificate Cap Contract Termination
Date.
Certificate: Any one of the certificates of any Class executed by
the
Trustee and authenticated by the Trustee 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 "JPMorgan Chase Bank, N.A., as
trustee, in trust for registered holders of
Specialty Underwriting and
Residential Finance Trust, Mortgage Loan
Asset-Backed Certificates, Series
2005-BC2." 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-1A 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-2A, Class A-2B and Class
A-2C
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 foregoing on any
Distribution Date relating to a Due Period
in which a Subsequent Recovery has been
received by the Servicer, the
4
<PAGE>
Certificate Principal Balance of any Class
of Certificates then outstanding for
which any Applied Realized Loss Amount has
been allocated will be increased, in
order of seniority, by an amount equal to
the lesser of (i) the Unpaid Realized
Loss Amount for such Class of Certificates
and (ii) the 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 and the NIM Insurer
are 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: For any date of determination,
the
sum of the Class A-1A Certificate Principal
Balance, the Class A-2A Certificate
Principal Balance, the Class A-2B
Certificate Principal Balance and the Class
A-2C Certificate Principal Balance.
Class A
Certificates: Any of the Class R, Class A-1A, Class A-2A, Class
A-2B and Class A-2C Certificates.
Class A
Principal Distribution Amount: With respect to any Distribution
Date (1) prior to the 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) 54.50% of the
Stated Principal Balances of the
Mortgage Loans as of the end of the
immediately preceding Due Period, and (2)
the excess of the Stated Principal Balances
of the Mortgage Loans as of the end
of the immediately preceding Due Period
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 divided by (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.
5
<PAGE>
Class A-1
Cap Contract: The amended confirmation and agreement and any
related confirmation thereto, between the
Trust Fund or Trustee and the Cap
Contract Counterparty (in the form of
Exhibit O-1 hereto).
Class A-1
Cap Contract Notional Balance: With respect to any Distribution
Date, the Class A-1 Cap Contract Notional
Balance set forth for such
Distribution Date in the Class A-1 One
Month LIBOR Cap Table attached hereto as
Exhibit P-1.
Class A-1
Cap Contract Termination Date: The day after the Distribution
Date in January 2008.
Class A-1
Maximum Rate Cap: With respect to a Distribution Date, the per
annum rate, adjusted to reflect the length
of the related Accrual Period, equal
to the weighted average of the maximum
lifetime Net Mortgage Rates on the
Adjustable Rate Mortgage Loans in Group One
and the Net Mortgage Rates on the
Fixed Rate Mortgage Loans in Group One. The
Class A-1 Maximum Rate Cap shall
relate to the Class A-1 and Class R
Certificates.
Class A-1
Upper Collar: With respect to each Distribution Date with
respect to which payments are received on
the Class A-1 Cap Contract, a rate
equal to the lesser of One-Month LIBOR and
9.780% per annum.
Class A-1A
Certificate: Any Certificate designated as a "Class A-1A
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class A-1A
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class A-1A Certificates.
Class A-1A
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class A-1A Pass-Through Rate on
the Class A-1A Certificate Principal
Balance as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Class A-1A
Current Interest or a Class A-1A 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-1A
Certificates.
Class A-1A
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-1A
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
A-1A 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-1A Pass-Through Rate for the
related Accrual Period.
Class A-1A
Margin: As of any Distribution Date up to and including the
Auction Termination Date for the
Certificates, 0.220% per annum and, as of any
Distribution Date after the Auction
Termination Date, 0.440% per annum.
Class A-1A
Pass-Through Rate: For the first Distribution Date, 3.310% per
annum. As of any Distribution Date
thereafter, the lesser of (1) One-Month LIBOR
plus the Class A-1A Margin and (2) the
Class A-1 Available Funds Cap for such
Distribution Date.
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 divided by (y) the aggregate
Stated Principal Balance of the Mortgage
Loans in Group Two as of the first day
of the related Accrual
6
<PAGE>
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.
Class A-2
Cap Contract: The amended confirmation and agreement and any
related confirmation thereto, between the
Trust Fund or Trustee and the Cap
Contract Counterparty (in the form of
Exhibit O-2 hereto).
Class A-2
Cap Contract Notional Balance: With respect to any Distribution
Date, the Class A-2 Cap Contract Notional
Balance set forth for such
Distribution Date in the Class A-2 One
Month LIBOR Cap Table attached hereto as
Exhibit P-2.
Class A-2
Cap Contract Termination Date: The day after the Distribution
Date in January 2008.
Class A-2
Certificates: The Class A-2A, Class A-2B and Class A-2C
Certificates.
Class A-2
Maximum Rate Cap: With respect to a Distribution Date, the per
annum rate, adjusted to reflect the length
of the related Accrual Period, equal
to the weighted average of the maximum
lifetime Net Mortgage Rates on the
Adjustable Rate Mortgage Loans in Group Two
and the Net Mortgage Rates on the
Fixed Rate Mortgage Loans in Group Two. The
Class A-2 Maximum Rate Cap shall
relate to the Class A-2 Certificates.
Class A-2
Upper Collar: With respect to each Distribution Date with
respect to which payments are received on
the Class A-2 Cap Contract, a rate
equal to the lesser of One-Month LIBOR and
9.320% per annum.
Class A-2A
Certificate: Any Certificate designated as a "Class A-2A
Certificate" on the face thereof, in the
form of Exhibit A hereto, 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 for the
Certificates, 0.100% per annum and, as of any
Distribution Date after the Auction
Termination Date, 0.200% per annum.
7
<PAGE>
Class A-2A
Pass-Through Rate: For the first Distribution Date, 3.190% per
annum. As of any Distribution Date
thereafter, the lesser of (1) One-Month LIBOR
plus the Class A-2A Margin and (2) the
Class A-2 Available Funds Cap for such
Distribution Date.
Class A-2B
Certificate: Any Certificate designated as a "Class A-2B
Certificate" on the face thereof, in the
form of Exhibit A hereto, 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.
Class A-2B
Margin: As of any Distribution Date up to and including the
Auction Termination Date for the
Certificates, 0.220% per annum and, as of any
Distribution Date after the Auction
Termination Date, 0.440% per annum.
Class A-2B
Pass-Through Rate: For the first Distribution Date, 3.310% per
annum. As of any Distribution Date
thereafter, the lesser of (1) One-Month LIBOR
plus the Class A-2B Margin and (2) the
Class A-2 Available Funds Cap for such
Distribution Date.
Class A-2C
Certificate: Any Certificate designated as a "Class A-2C
Certificate" on the face thereof, in the
form of Exhibit A hereto, 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.
8
<PAGE>
Class A-2C
Margin: As of any Distribution Date up to and including the
Auction Termination Date for the
Certificates, 0.330% per annum and, as of any
Distribution Date after the Auction
Termination Date, 0.660% per annum.
Class A-2C
Pass-Through Rate: For the first Distribution Date, 3.420% per
annum. As of any Distribution Date
thereafter, the lesser of (1) One-Month LIBOR
plus the Class A-2C Margin and (2) the
Class A-2 Available Funds Cap for such
Distribution Date.
Class B
Certificates: Any of the Class B-1, Class B-2, Class B-3 or
Class
B-4 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, in the
form of Exhibit A hereto, 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 for the
Certificates, 1.200% per annum and, as of any
Distribution Date after the Auction
Termination Date, 1.800% per annum.
Class B-1
Pass-Through Rate: For the first Distribution Date, 4.290% per
annum. As of any Distribution Date
thereafter, the lesser of (1) One-Month LIBOR
plus the Class B-1 Margin and (2) the
Subordinated Certificate Available Funds
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
for such Distribution Date if the
Certificate Principal Balances of the Class A,
Class R and Class M 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 sum of 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
(after taking into account distributions
of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C)
the Class M-2 Certificate Principal Balance
(after taking into account
distributions of the Class M-2 Principal
Distribution Amount on such
Distribution Date), (D) the Class M-3
Certificate Principal Balance (after
taking into account distributions
9
<PAGE>
of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E)
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 (F) the Class B-1
Certificate Principal Balance
immediately prior to such Distribution Date
over (2) the lesser of (A) 89.00% of
the Stated Principal Balances of the
Mortgage Loans as of the end of the
immediately preceding Due Period and (B)
the excess of the Stated Principal
Balances of the Mortgage Loans as of the
end of the immediately preceding Due
Period 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,
Class R Certificate 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 such 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
Class B-1 Certificate Principal
Balance.
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, in the
form of Exhibit A hereto, 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 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 for the
Certificates, 1.300% per annum and, as of any
Distribution Date after the Auction
Termination Date, 1.950% per annum.
Class B-2
Pass-Through Rate: For the first Distribution Date, 4.390% per
annum. As of any Distribution Date
thereafter, the lesser of (1) One-Month LIBOR
plus the Class B-2 Margin and (2) the
Subordinated Certificate Available Funds
Cap for such Distribution Date.
10
<PAGE>
Class B-2
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 and Class B-1 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
sum of 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 (after taking into
account distributions of the Class M-1
Principal Distribution Amount on such
Distribution Date), (C) the Class M-2
Certificate Principal Balance (after
taking into account distributions of the
Class M-2 Principal Distribution Amount
on such Distribution Date), (D) the Class
M-3 Certificate Principal Balance
(after taking into account distributions of
the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the
Class M-4 Certificate Principal
Balance (after taking into account
distributions of the Class M-4 Principal
Distribution Amount on such Distribution
Date), (F) the Class B-1 Certificate
Principal Balance (after taking into
account distributions of the Class B-1
Principal Distribution Amount on such
Distribution Date) and (G) the Class B-2
Certificate Principal Balance immediately
prior to such Distribution Date over
(2) the lesser of (A) 91.30% of the Stated
Principal Balances of the Mortgage
Loans as of the end of the immediately
preceding Due Period and (B) the excess
of the Stated Principal Balances of the
Mortgage Loans as of the end of the
immediately preceding Due Period 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, Class R Certificate,
Class M Certificates 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
such 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 Class B-2
Certificate Principal Balance.
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.
Class B-3
Certificate: Any Certificate designated as a "Class B-3
Certificate" on the face thereof, in the
form of Exhibit A hereto, 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.
11
<PAGE>
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 for the
Certificates, 1.700% per annum and, as of any
Distribution Date after the Auction
Termination Date, 2.550% per annum.
Class B-3
Pass-Through Rate: For the first Distribution Date, 4.790% per
annum. As of any Distribution Date
thereafter, the lesser of (1) One-Month LIBOR
plus the Class B-3 Margin and (2) the
Subordinated Certificate Available Funds
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
for such Distribution Date if the
Certificate Principal Balances of the Class A,
Class R, Class M, Class B-1 and Class B-2
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 sum of 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 (after taking into
account distributions of the Class M-1
Principal Distribution Amount on such
Distribution Date), (C) the Class M-2
Certificate Principal Balance (after
taking into account distributions of the
Class M-2 Principal Distribution Amount
on such Distribution Date), (D) the Class
M-3 Certificate Principal Balance
(after taking into account distributions of
the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the
Class M-4 Certificate Principal
Balance (after taking into account
distributions of the Class M-4 Principal
Distribution Amount on such Distribution
Date), (F) the Class B-1 Certificate
Principal Balance (after taking into
account distributions of the Class B-1
Principal Distribution Amount on such
Distribution Date), (G) the Class B-2
Certificate Principal Balance (after taking
into account distributions of the
Class B-2 Principal Distribution Amount on
such Distribution Date) and (H) the
Class B-3 Certificate Principal Balance
immediately prior to such Distribution
Date over (2) the lesser of (A) 93.30% of
the Stated Principal Balances of the
Mortgage Loans as of the end of the
immediately preceding Due Period and (B) the
excess of the Stated Principal Balances of
the Mortgage Loans as of the end of
the immediately preceding Due Period 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, Class R Certificate, Class M
Certificates, 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
such 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 Class B-3
Certificate Principal Balance.
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."
12
<PAGE>
Class B-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 B-4 Certificates.
Class B-4
Certificate: Any Certificate designated as a "Class B-4
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class
B-4-Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance
of the Class B-4 Certificates.
Class B-4
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class B-4 Pass-Through Rate on
the Class B-4 Certificate Principal Balance
as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Class B-4
Current Interest or a Class B-4 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-4
Certificates.
Class B-4
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-4
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
B-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 B-4 Pass-Through Rate for the
related Accrual Period.
Class B-4
Margin: As of any Distribution Date up to and including the
Auction Termination Date for the
Certificates, 3.500% per annum and, as of any
Distribution Date after the Auction
Termination Date, 5.250% per annum.
Class B-4
Pass-Through Rate: For the first Distribution Date, 6.590% per
annum. As of any Distribution Date
thereafter, the lesser of (1) One-Month LIBOR
plus the Class B-4 Margin and (2) the
Subordinated Certificate Available Funds
Cap for such Distribution Date.
Class B-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, Class B-1, Class B-2 and
Class B-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 sum of 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
(after taking into account distributions of
the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal
Balance (after taking into account
distributions of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (D) the Class M-3 Certificate
Principal Balance (after taking into
account distributions of the Class M-3
Principal Distribution Amount on such
Distribution Date), (E) the Class M-4
Certificate Principal Balance (after taking
into account distributions of the
Class M-4 Principal Distribution Amount on
such Distribution Date), (F) the
Class B-1 Certificate Principal Balance
(after taking into account distributions
of the Class B-1 Principal Distribution
Amount on such Distribution Date), (G)
the Class B-2 Certificate Principal Balance
(after taking into account
distributions of the Class B-2 Principal
Distribution Amount on such
Distribution Date), (H) the Class B-3
Certificate Principal Balance (after
taking into account distributions of the
Class B-3 Principal Distribution Amount
on such Distribution Date) and (I) the
Class B-4 Certificate Principal Balance
immediately prior to such Distribution Date
over (2) the lesser of (A) 95.30% of
the Stated Principal Balances of the
Mortgage Loans as of the end of the
immediately preceding Due Period and (B)
the excess of the Stated Principal
13
<PAGE>
Balances of the Mortgage Loans as of the
end of the immediately preceding Due
Period over the Minimum Required
Overcollateralization Amount. Notwithstanding
the foregoing, (J) on any Distribution Date
prior to the Stepdown Date on which
the Certificate Principal Balance of each
Class of the Class A Certificates,
Class R Certificate, Class M Certificates,
Class B-1, Class B-2 and Class B-3
Certificates has been reduced to zero, the
Class B-4 Principal Distribution
Amount will equal the lesser of (x) the
outstanding Certificate Principal
Balance of the Class B-4 Certificates and
(y) 100% of the Principal Distribution
Amount remaining after any distributions on
such Class A, Class R, Class M,
Class B-1, Class B-2 and Class B-3
Certificates and (II) in no event will the
Class B-4 Principal Distribution Amount
with respect to any Distribution Date
exceed the Class B-4 Certificate Principal
Balance.
Class B-4
Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-4 Applied
Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class
B-4 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all
increases in the Certificate
Principal Balance of such Class B-4
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, in the form of Exhibit
A hereto, 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 99.95%
of the aggregate principal balance of
the Lower Tier REMIC Regular Interests
immediately prior to such Distribution
Date (such amount of interest representing
a "specified portion" (within the
meaning of Treasury Regulations Section
1.860G-1(a)(2)(i)(C)) of interest
payments on the Lower Tier REMIC Regular
Interests (other than the Class LTII1B
Interest and the Class LTII2B Interest)),
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
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 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.
14
<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
pursuant to the last sentence of the
definition of "Certificate Principal
Balance."
Class
LTA-1A 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
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
LTB-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
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 excess of (i)
the aggregate Cut-off Date Principal
Balance of the Group One Mortgage Loans,
and with an interest rate equal to the
Class A-1 Available Funds Cap.
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.
15
<PAGE>
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 Class A-2
Available Funds Cap.
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 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 and
Class
M-4 Certificates.
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, in the
form of Exhibit A hereto, 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.
16
<PAGE>
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 for the
Certificates, 0.420% per annum and, as of any
Distribution Date after the Auction
Termination Date, 0.630% per annum.
Class M-1
Pass-Through Rate: For the first Distribution Date, 3.510% per
annum. As of any Distribution Date
thereafter, the lesser of (1) One-Month LIBOR
plus the Class M-1 Margin and (2) the
Subordinated Certificate Available Funds
Cap for such Distribution Date.
Class M-1
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 sum of 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) and (B) the Class M-1
Certificate Principal Balance immediately
prior to such Distribution Date over
(2) the lesser of (A) 63.90% of the Stated
Principal Balances of the Mortgage
Loans as of the end of the immediately
preceding Due Period and (B) the excess
of the Stated Principal Balances for the
Mortgage Loans as of the end of the
immediately preceding Due Period 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 and Class R
Certificate has been reduced to zero, the Class
M-1 Principal Distribution Amount will
equal the lesser of (x) the outstanding
Certificate Principal Balance of the Class
M-1 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
Principal Distribution Amount with respect
to any Distribution Date exceed the
Class M-1 Certificate Principal
Balance.
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, in the
form of Exhibit A hereto, 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-
17
<PAGE>
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 for the
Certificates, 0.440% per annum and, as of any
Distribution Date after the Auction
Termination Date, 0.660% per annum.
Class M-2
Pass-Through Rate: For the first Distribution Date, 3.530% per
annum. As of any Distribution Date
thereafter, the lesser of (1) One-Month LIBOR
plus the Class M-2 Margin and (2) the
Subordinated Certificate Available Funds
Cap for such Distribution Date.
Class M-2
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 and Class M-1 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 sum of 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
(after taking into account distributions
of the Class M-1 Principal Distribution
Amount on such Distribution Date) and
(C) the Class M-2 Certificate Principal
Balance immediately prior to such
Distribution Date over (2) the lesser of
(A) 70.80% of the Stated Principal
Balances of the Mortgage Loans as of the
end of the immediately preceding Due
Period and (B) the excess of the Stated
Principal Balances of the Mortgage Loans
as of the end of the immediately preceding
Due Period 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 Class A
Certificates, Class R Certificate and the Class
M-1 Certificates has been reduced to zero,
the Class M-2 Principal Distribution
Amount will equal the lesser of (x) the
outstanding Certificate Principal
Balance of the Class M-2 Certificates and
(y) 100% of the Principal Distribution
Amount remaining after any distributions on
such Class A, Class R and Class M-1
Certificates and (II) in no event will the
Class M-2 Principal Distribution
Amount with respect to any Distribution
Date exceed the Class M-2 Certificate
Principal Balance.
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.
Class M-3
Certificate: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
18
<PAGE>
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 for the
Certificates, 0.650% per annum and, as of any
Distribution Date after the Auction
Termination Date, 0.975% per annum.
Class M-3
Pass-Through Rate: For the first Distribution Date, 3.740% per
annum. As of any Distribution Date
thereafter, the lesser of (1) One-Month LIBOR
plus the Class M-3 Margin and (2) the
Subordinated Certificate Available Funds
Cap for such Distribution Date.
Class 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,
Class R, Class M-1 and Class M-2
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
sum of 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 (after taking into
account distributions of the Class M-1
Principal Distribution Amount on such
Distribution Date), (C) the Class M-2
Certificate Principal Balance (after
taking into account distributions of the
Class M-2 Principal Distribution Amount
on such Distribution Date) and (D) the
Class M-3 Certificate Principal Balance
immediately prior to such Distribution Date
over (2) the lesser of (A) 82.70% of
the Stated Principal Balances of the
Mortgage Loans as of the end of the
immediately preceding Due Period and (B)
the excess of the Stated Principal
Balances for the Mortgage Loans as of the
end of the immediately preceding Due
Period 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 and the Class M-2 Certificates
has been reduced to zero, the Class M-3
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 and Class M-2 Certificates
and (II) in no event will the Class M-3
Principal Distribution Amount with
respect to any Distribution Date exceed the
Class M-3 Certificate Principal
Balance.
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."
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<PAGE>
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, in the
form of Exhibit A hereto, 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 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 for the
Certificates, 0.710% per annum and, as of any
Distribution Date after the Auction
Termination Date, 1.065% per annum.
Class M-4
Pass-Through Rate: For the first Distribution Date, 3.800% per
annum. As of any Distribution Date
thereafter, the lesser of (1) One-Month LIBOR
plus the Class M-4 Margin and (2) the
Subordinated Certificate Available Funds
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 sum of 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 (after
taking into account distributions of the
Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Class
M-2 Certificate Principal Balance
(after taking into account distributions of
the Class M-2 Principal Distribution
Amount on such Distribution Date), (D) the
Class M-3 Certificate Principal
Balance (after taking into account
distributions of the Class M-3 Principal
Distribution Amount on such Distribution
Date) and (E) the Class M-4 Certificate
Principal Balance immediately prior to such
Distribution Date over (2) the
lesser of (A) 86.00% of the Stated
Principal Balances of the Mortgage Loans as
of the end of the immediately preceding Due
Period and (B) the excess of the
Stated Principal Balances for the Mortgage
Loans as of the end of the
immediately preceding Due Period 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
20
<PAGE>
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 P
Certificate: Any Certificate designated as a Class P
Certificate
on the face thereof, executed by the
Trustee and authenticated by the Trustee in
substantially the form set forth in Exhibit
A, representing the right to
distributions as set forth herein.
Class R
Certificate: The Class R Certificate executed by the Trustee
and
authenticated by the Trustee in
substantially the form set forth in Exhibit A.
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 for the
Certificates, 0.220% per annum and, as of any
Distribution Date after the Auction
Termination Date, 0.440% per annum.
Class R
Pass-Through Rate: For the first Distribution Date, 3.310% per
annum. As of any Distribution Date
thereafter, the lesser of (1) One-Month LIBOR
plus the Class R Margin and (2) the Class
A-1 Available Funds Cap for such
Distribution Date.
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, the
fair market value of any REO Property, plus
accrued interest thereon, (b) any
unreimbursed out-of-pocket expenses owed to
the Trustee or the Servicer
(including the costs and expenses of
conducting the auction
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described in Section 9.01(a)) and any
unreimbursed Servicing Fees, Advances or
Servicing Advances, (c) all interest
accrued on, as well as amounts necessary to
retire the principal balance of the notes
guaranteed by the NIM Insurer, (d) any
amounts owed to the NIM Insurer at the time
the Clean Up Call is exercised and
(e) any costs and damages incurred by the
Trust Fund (or the Trustee on behalf
of the Trust Fund) in connection with any
violation by the affected Mortgage
Loan of any anti-predatory or anti-abusive
lending laws.
Closing
Date: May 19, 2005.
Code: The
Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection
Account: The separate Eligible Account 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
2005-BC2". 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.
Compensating Interest: With respect to any Mortgage Loan and
any
Distribution Date, an amount equal to the
portion of any Prepayment Interest
Shortfalls required to be deposited in the
Collection Account by the Servicer
pursuant to Section 4.02 hereof.
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-1A
Interest, the
Class A-1A 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 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
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. With respect to the Class
LTB-4 Interest, the Class B-4
Certificates.
Current
Interest: Any of the Class A-1A Current Interest, the Class
A-2A
Current Interest, the Class A-2B Current
Interest, the Class A-2C 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 B-1 Current
Interest, the Class B-2 Current
Interest, the Class B-3 Current Interest,
the Class B-4 Current Interest and the
Class C Current Interest.
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Cut-off
Date: May 1, 2005.
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 on and
after the Cut-off Date.
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 its successor in
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.
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
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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
June 2005.
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 bank 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,
the NIM Insurer 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 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, that is acceptable to the Rating
Agencies, or (viii) otherwise
acceptable to each Rating Agency, as
evidenced by a letter from each Rating
Agency to the Trustee and the NIM
Insurer.
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 any
applicable underwriter's exemption granted
by the United States Department of
Labor, except, in relevant part, for the
requirement that the certificates have
received a rating at the time of
acquisition that is in one of the three (or
four, in the case of a "designated
transaction") highest generic rating
categories by at least one of the Rating
Agencies.
ERISA
Restricted Certificate: The Class B-4, Class C, Class P and Class
R
Certificates and any other Certificate,
unless the acquisition and holding of
such other Certificate is covered by and
exempt under any applicable
underwriter's exemption granted by the
United States Department of Labor.
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<PAGE>
Event of
Default: As defined in Section 7.01 hereof.
Excess
Interest: On any Distribution Date, for the Class A-1A
Certificates, Class A-2A Certificates,
Class A-2B Certificates, Class A-2C
Certificates, Class R Certificate, Class
M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class
M-4 Certificates, Class B-1
Certificates, Class B-2 Certificates, Class
B-3 Certificates and Class B-4
Certificates, the excess, if any, of (1)
the amount of interest such Class of
Certificates is entitled to receive on such
Distribution Date at its
Pass-Through Rate over (2) the amount of
interest such Class of Certificates
would have been entitled to receive on such
Distribution Date had the
Pass-Through Rate for such Class been 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: 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)
$19,740,013 over (B) the Pool Stated
Principal Balance of the Mortgage Loans as
of such Distribution Date and (2) on
and after the Stepdown Date, (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) 4.70% of the Pool Stated Principal
Balances 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 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.
FIFO: As
defined in Section 10.14(e).
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 Offered Certificates or
Class B-4 Certificates is based upon the
related
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<PAGE>
Available Funds Cap, 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, up to but not
exceeding greater of (x) the related Maximum
Rate Cap or (y) the sum of (i) the related
Available Funds Cap and (ii) the
product of (A) a fraction, the numerator of
which is the actual number of days
in the related Accrual Period and (B) the
quotient obtained by dividing (I) an
amount equal to the proceeds, if any,
payable under the related Cap Contract by
the aggregate Certificate Balance of each
Class of Certificates to which such
Cap Contract relates for such 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, together
with (i) 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 applicable Available
Funds Cap) and (ii) 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.
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 in the
Group One Mortgage Loan Schedule attached
hereto as Exhibit B-2.
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 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 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 in the
Group Two Mortgage Loan Schedule attached
hereto as Exhibit B-3.
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
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<PAGE>
of (x) the Group Two Principal Distribution
Percentage and (y) the Class A
Principal Distribution Amount; provided,
however, that 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 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 notes guaranteed by
the NIM Insurer.
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-1A 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 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 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 B-4 Interest Carry Forward
Amount, as the case may be.
Interest
Determination Date: With respect to the Offered Certificates
and
the Class B-4 Certificates, for any Accrual
Period, the second LIBOR Business
Day preceding the commencement of such
Accrual Period.
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<PAGE>
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.
Last
Scheduled Distribution Date: With respect to any Class of
Certificates, the Distribution Date in
December 2035.
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.
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.
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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
LTII1B Interest, the Class LTII2A
Interest and the Class LTII2B 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-1A Interest, the Class
LTA-2A Interest, the Class LTA-2B Interest,
the Class LTA-2C Interest, the Class
LTM-1 Interest, the Class LTM-2 Interest,
the Class LTM-3 Interest, the Class
LTM-4 Interest, the Class LTB-1 Interest,
the Class LTB-2 Interest, the Class
LTB-3 Interest, the Class LTB-4 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 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 Subordinated 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 Subordinated
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: The product of (x) 0.50%
and (y) the Stated Principal Balance of the
Mortgage Loans as of the Cut-off
Date.
Monthly
Excess Interest Amount: With respect to each Distribution Date,
the amount, if any, by which the Interest
Funds for such Distribution Date
exceeds the aggregate amount distributed on
such Distribution Date pursuant to
Section 4.04(b) (other than the last clause
thereof).
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Monthly
Statement: The statement delivered to the Certificateholders
pursuant to Section 4.05.
Moody's:
Moody's Investors Service, Inc. or its successor in interest.
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.
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.
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: Any of Group One or Group Two.
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
Loan Schedule: The lists of Mortgage Loans (as from time to
time
amended by the Seller 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 Exhibits B-1, B-2, B-3 and
B-4, 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;
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(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;
(xiii)
the location of the
related Mortgaged Property; and
(xiv)
a code indicating
whether a prepayment charge is applicable and, if
so, the term of such prepayment charge.
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:
With respect to any Distribution Date, the product of (x) the
weighted average Net Mortgage Rate for the
Mortgage Loans calculated based on
the Net Mortgage Rates and the Stated
Principal Balances of the Mortgage Loans
as of the preceding Distribution Date, (or,
in the case of the first
Distribution Date, as of the Cut-off Date)
and (y) a fraction, the numerator of
which is 30 and the denominator of which is
the actual number of days in the
related Accrual Period.
NIM Notes:
The notes to be issued pursuant to the Indenture.
NIM
Insurer: Any of the one or more insurers that is guaranteeing
certain
payments under any NIM Notes.
NIM
Insurer Default: A default by each of the NIM Insurers as such
default
is defined in the 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
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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-1A, Class A-2A, Class A-2B, Class
A-2C,
Class M-1, Class M-2, Class M-3, Class M-4,
Class B-1, Class B-2, Class B-3 and
Class R Certificates.
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 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.
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.
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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).
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
(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 trust created
pursuant
to this Agreement which shall be:
(i) holding
Mortgage Loans transferred from the Depositor and
other assets of the Trust Fund, including the Cap Contracts
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
Trust Fund;
(iii) receiving collections on the Mortgage Loans and the Cap
Contracts and making payments on such Certificates and
interests in accordance with the terms of this Agreement; and
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<PAGE>
(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 Trust Fund 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 its 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;
(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
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<PAGE>
(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, other than 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 Trust
Fund 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.
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, 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, 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.
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<PAGE>
Pool
Stated Principal Balance: As to any Distribution Date, the
aggregate
of the Stated Principal Balance, as of such
Distribution Date, of the Mortgage
Loans that were Outstanding Mortgage Loans
as of such date.
Preference
Claim: The meaning set out in Section 4.04(l) hereof.
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.
Prepayment
Period: As to any Distribution Date, the period beginning with
the opening of business on the 15th day of
the calendar month preceding the
month in which such Distribution Date
occurs (or in the case of the first
Distribution Date, beginning with the
opening of business on the Cut-off Date)
and ending on the close of business on the
14th day of the month in which such
Distribution Date occurs.
Principal
Distribution Amount: With respect to each Distribution Date,
the
sum of (1) 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 advanced on or before the related
Servicer Remittance Date, (2) prepayments
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 Seller 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 related
to principal), (6) Subsequent Recoveries
received during the related Due Period
and (7) all other collections and
recoveries in respect of principal during the
related Prepayment 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.
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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 May 17, 2005
relating to the public offering of the
Class A-1A, Class A-2A, Class A-2B, Class
A-2C, Class R, Class M-1, Class M-2, Class
M-3, Class M-4, Class B-1, Class B-2
and Class B-3 Certificates.
PUD: A
Planned Unit Development.
Purchase Price: With
respect to any Mortgage Loan required to be
repurchased by the Seller pursuant to
Section 2.02 or 2.03 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 Trust Fund
(or the Trustee on behalf of the Trust
Fund) in connection with any violation by
the affected Mortgage Loan of any
anti-predatory or anti-abusive lending laws.
Rating
Agency: Any of Fitch, 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.
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.
Reference
Banks: Barclays Bank PLC, JPMorgan Chase Bank, N.A., 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 with the consent of the NIM Insurer
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-1A, Class A-2A, Class A-2B,
Class A-2C, Class M-1, Class M-2, Class
M-3, Class M-4, Class B-1, Class B-2,
Class B-3 and Class B-4 Certificates.
Relief
Act: The Servicemembers Civil Relief Act or any similar state
laws.
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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 of or, as the context requires,
both of the Lower Tier REMIC and the
Upper Tier REMIC.
REMIC
Pass-Through Rate: The Class A-1 Available Funds Cap (in the case
of
a Class included in Certificate Group One),
the Class A-2 Available Funds Cap
(in the case of a Class included in
Certificate Group Two) or the Subordinated
Certificate Available Funds Cap (in the
case of the Subordinated Certificates).
REMIC
Provisions: Provisions of the federal income tax law relating
to
real estate mortgage investment conduits,
which appear at sections 860A through
860G of Subchapter M of Chapter 1 of the
Code, and related provisions, and
proposed, temporary and final regulations
and published rulings, notices and
announcements promulgated thereunder, as
the foregoing may be in effect from
time to time as well as provisions of
applicable state laws.
REMIC
Regular Interests: (i) any of the rights under any of the
Certificates (other than the Class P
Certificates, the Class R Certificate and
the Class C Certificates) other than the
rights in interest rate cap contracts
described in Section 2.07 and (ii) the
Uncertificated Class C Interest.
Remittance
Report: The meaning specified 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, 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.
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<PAGE>
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
Distribution Date and (2) the aggregate Stated
Principal Balance of the Mortgage Loans as
of such Distribution Date.
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
Excess Interest Amount: With respect to any Distribution Date,
the excess of (x) 0.05% of the Monthly
Excess Interest Amount for such
Distribution Date and all prior
Distribution Dates over (y) all payments
previously made to the Class R Certificate
in respect of the Residual Excess
Interest Amount.
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 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 May 1, 2005 between the Depositor and
the Seller.
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.
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<PAGE>
Seller:
Merrill Lynch Mortgage Lending, Inc., a Delaware corporation,
or
its successor in interest.
Servicer:
Wilshire Credit Corporation, a Nevada corporation, or its
successor in interest.
Servicer
Advance Date: As to any Distribution Date, the related Servicer
Remittance Date.
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) 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
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 or assignments of mortgage to
the extent not otherwise recovered from the
related Mortgages 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
Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to one month's interest at the
Servicing Fee Rate on 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.
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.
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<PAGE>
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.
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 Advance Date prior to
such Distribution Date and (B) all
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 Due Period.
Notwithstanding the foregoing, the
Stated Principal Balance of a Liquidated
Loan shall be deemed to be zero.
Stepdown Date: The later to occur of (1) the Distribution Date in
June
2008 or (2) the first Distribution Date on
which (A) the Class A Certificate
Principal Balance and Class R Certificate
Principal Balance (reduced by the
Principal Funds with respect to such
Distribution Date) are less than or equal
to (B) 54.50% of the aggregate Stated
Principal Balance of the Mortgage Loans as
of such Distribution Date.
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>
June 2008 - May 2009
3.25% with respect to June 2008, plus an additional 1/12th of 2.00%
for
each month thereafter
June 2009 - May 2010
5.25% with respect to June 2009, plus an additional 1/12th of 1.25%
for
each month thereafter
June 2010 - May 2011
6.50% with respect to June 2010, plus an additional 1/12th of 1.00%
for
each month thereafter
June 2011 and thereafter
7.50%
</TABLE>
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 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 Advance Date, equals or exceeds
the product of (i) 34.50% and (ii)
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
41
<PAGE>
Distribution Date and (B) the aggregate
principal balance of the Mortgage Loans
as of the Cut-off Date exceeds the Stepdown
Required Loss Percentage.
Subordinated 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
the current Certificate Principal
Balance of the related Class A Certificates
from the aggregate Stated Principal
Balance of the Mortgage Loans in each
Mortgage Group as of the immediately
preceding Distribution Date (or, in the
case of the first Distribution Date, as
of the Cut-off Date)) of the Class A-1
Available Funds Cap and the Class A-2
Available Funds Cap.
Subordinated Certificate Cap Contract: The amended confirmation
and
agreement and any related confirmation
thereto, between the Trust Fund or
Trustee and the Cap Contract Counterparty
(in the form of Exhibit O-3 hereto).
Subordinated Certificate Cap Contract Notional Balance: With
respect to
any Distribution Date, the Subordinated
Certificate Cap Contract Notional
Balance set forth for such Distribution
Date in the Subordinated Certificate One
Month LIBOR Cap Table attached hereto as
Exhibit P-3.
Subordinated Certificate Cap Contract Termination Date: The day
after
the Distribution Date in January 2008.
Subordinated 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 the Mortgage Loans in each
Mortgage Group as of the immediately
preceding Distribution Date (or, in the
case of the first Distribution Date, as
of the Cut-off Date) the current
Certificate Principal Balance of the related
Class A Certificates) of the Class A-1
Maximum Rate Cap and the Class A-2
Maximum Rate Cap.
Subordinated Certificate Upper Collar: With respect to each
Distribution Date with respect to which
payments are received on the
Subordinated Certificate Cap Contract, a
rate equal to the lesser of One-Month
LIBOR and 8.820% per annum.
Subordinated Certificates: The Class M-1, Class M-2, Class M-3,
Class
M-4, Class B-1, Class B-2, Class B-3 and
Class B-4 Certificates.
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.
Subservicing Agreement: As defined in Section 3.02(a).
Substitution
Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03(c).
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 trust (the "Specialty Underwriting
and
Residential Finance Trust, Series
2005-BC2") 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
42
<PAGE>
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; and (vi) the Cap Contracts
and the Cap Contract Account.
Trustee: JPMorgan Chase Bank, N.A., a national banking association,
not
in its individual capacity, but solely in
its capacity as trustee for the
benefit of the Certificateholders under
this Agreement, and any successor
thereto, and any corporation or national
banking association resulting from or
surviving any consolidation or merger to
which it or its successors may be a
party and any successor trustee as may from
time to time be serving as successor
trustee hereunder.
Uncertificated Class C Interest: An uncertificated interest having
(i)
the same rights to payments as the Class C
Certificates, other than the rights
to payments of amounts with respect to the
Cap Contracts, and (ii) the rights to
the payments treated as distributed to the
Class C Certificates under Section
2.07(d), provided, however, that such
interest shall have no obligation to make
any payments treated as paid by the Class C
Certificates pursuant to interest
rate cap agreements under Section
2.07(d).
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 B-1 Unpaid Realized Loss Amount,
Class B-2 Unpaid Realized Loss Amount,
Class B-2 Unpaid Realized Loss Amount,
Class B-3 Unpaid Realized Loss Amount,
Class B-4 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 Subordinated Certificate
Upper Collar.
Upper Tier REMIC: As described in the Preliminary Statement and
Section
2.07.
USAP Report: A report in compliance with the Uniform Single
Attestation
Program for Mortgage Bankers delivered in
accordance with Section 3.18.
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 and the Class B-4
Certificates, 2% to the Class C and Class P
Certificates, with the allocation
among the Offered Certificates and the
Class B-4 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
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<PAGE>
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) The Original Mortgage Note, together with all riders
thereto,
endorsed, "Pay to the order of JPMorgan
Chase Bank, N.A., as trustee - SURF
2005-BC2, without recourse" together with
all riders thereto. The Mortgage Note
shall include all intervening endorsements
showing a complete chain of the title
from the originator to the Seller.
(B) Except as provided below and for each Mortgage Loan that is not
a
MERS Loan, the original recorded Mortgage
together with all riders thereto, with
evidence of recording thereon, or, if the
original Mortgage has not yet been
returned from the recording office, a copy
of the original Mortgage together
with all riders thereto certified by the
Seller to be a true copy of the
original of the Mortgage that has been
delivered for recording in the
appropriate recording office of the
jurisdiction in which the Mortgaged Property
is located and in the case of each MERS
Loan, the original Mortgage together
with all riders thereto, noting the
presence of the MIN of the Loan and either
language indicating that the Mortgage Loan
is a MOM Loan or if the Mortgage Loan
was not a MOM Loan at origination, the
original Mortgage and the assignment
thereof to MERS, with evidence of recording
indicated thereon, or a copy of the
Mortgage certified by the public recording
office in which such Mortgage has
been recorded.
(C) In the case of each Mortgage Loan that is not a MERS Loan,
the
original Assignment of each Mortgage, to
"JPMorgan Chase Bank, N.A., as trustee
- SURF 2005-BC2."
(D) The original policy of title insurance (or a preliminary
title
report, commitment or binder if the
original title insurance policy has not been
received from the title insurance
company).
(E) Originals of any intervening assignments of the Mortgage,
with
evidence of recording thereon or, if the
original intervening assignment has not
yet been returned from the recording
office, a copy of such assignment certified
to be a true copy of the original of the
assignment which has been sent for
recording in the appropriate jurisdiction
in which the Mortgaged Property is
located.
(F) Originals of all assumption and modification agreements, if
any.
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 such endorsement to be
made.
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
44
<PAGE>
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 Seller 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 Seller 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
Seller 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.
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 Seller 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 Seller, 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
45
<PAGE>
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 or
(iv) a "High-Cost Home Loan" as
defined by the Indiana High Cost Home Loan
Law effective January 1, 2005.
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 Seller 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 Trustee within
45 Business Days of the Closing Date.
The Trustee acknowledges receipt of the three Cap Contracts (forms
of
which are attached hereto as Exhibits O-1,
O-2 and O-3), the Transfer Agreement
and the Sale Agreement.
The Trustee agrees, for the benefit of Certificateholders and the
NIM
Insurer, to review each Mortgage File
delivered to it within 60 days after the
Closing Date to ascertain and to certify,
within 70 days of the Closing Date, to
the NIM Insurer, the Depositor and the
Servicer that all documents required by
Section 2.01 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
Seller, the Depositor and the NIM Insurer.
In addition, the Trustee shall also
notify the Servicer, the Seller, the
Depositor and the NIM Insurer, if the
original Mortgage with evidence of
recording thereon with respect to a Mortgage
Loan is not received within 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 officer 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 Seller correct or cure such
omission, defect or other irregularity, or
substitute a Mortgage Loan pursuant
to the provisions of Section 2.03(c),
within 90 days from the date the Seller
was notified of such omission or defect
and, if the Seller does not correct or
cure such omission or defect within such
period, that the Seller purchase such
Mortgage Loan from the Trust Fund within 90
days from the date the Trustee
notified the Seller 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 Seller 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
Seller 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 Seller 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 and the NIM Insurer.
The
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preceding sentence shall not, however,
limit any remedies available to the
Certificateholders, the Depositor, the
Trustee or the NIM Insurer 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 70 days of the Closing Date, the Trustee shall deliver to
the
Depositor, the Servicer and the NIM Insurer
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,
the
Trustee and the NIM Insurer 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 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.
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(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 Seller, 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.
(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 Seller
under the Sale Agreement, the only right or
remedy of the Trustee, the NIM
Insurer or of any Certificateholder shall
be the Trustee's right to enforce the
obligations of the Seller 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, the
NIM
Insurer, or the Trustee of a breach of any
of representations and warranties set
forth in the Sale Agreement that adversely
and materially affects the 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 90 days
of the discovery of a breach of any
representation or warranty given to the
Trustee by the Depositor, the Seller and
assigned to the Trustee, the Depositor, or
the Seller 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 Seller or the
Depositor, the Trustee shall enforce its
rights under the Sale Agreement or
thereunder for the benefit of
Certificateholders and the NIM Insurer. If a
breach of the representations and
warranties set forth in the Sale Agreement
hereof exists solely due to the
unenforceability of a prepayment charge, the
Trustee shall notify the NIM Insurer
thereof and not seek to enforce the
repurchase remedy provided for herein
unless directed in writing to do so by the
NIM Insurer. 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
at the request of the NIM Insurer enforce
the right of the Trust Fund and the
NIM Insurer 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 Seller 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 Seller
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
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Day. As provided in the Sale Agreement, the
Seller indemnifies and holds the
Trust Fund, the Trustee, the Depositor, the
NIM Insurer, 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
Trust Fund, the Trustee, the Depositor,
the NIM Insurer, the Servicer and any
Certificateholder may sustain in
connection with any actions of the Seller
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 Trust Fund 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 Seller 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 Seller, 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
Seller, as applicable, must deliver to
the Trustee the Mortgage File for the
Replacement Mortgage Loan containing 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 NIM Insurer and the
Depositor that all documents required by
Section 2.01 have been executed and
received.
For any month in which the Seller substitutes one or more
Replacement
Mortgage Loans for one or more Deleted
Mortgage Loans, the Seller 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 Seller 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 Seller shall give or cause to be given written notice to
the
Certificateholders and the NIM Insurer 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
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Replacement Mortgage Loan or Replacement
Mortgage Loans and shall deliver a copy
of such amended Mortgage Loan Schedule to
the NIM Insurer and the Trustee. Upon
such substitution by the Seller, 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 Seller shall obtain at its own expense and deliver
to
the Trustee and the NIM Insurer an Opinion
of Counsel addressed to the Trustee
and the NIM Insurer to the effect that such
substitution will not (a) cause any
federal tax to be imposed on the Trust Fund
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 Seller
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 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
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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 has fully furnished and will fully furnish
(for the period it serviced 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.
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 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 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
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the order of the Depositor, in exchange for
the Mortgage Loans, Certificates
duly authenticated by the Trustee 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 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 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 Lower Tier REMIC shall consist of all of the assets of the
Trust
Fund (other than (i) the right to receive
the payments distributable to the
Class P Certificates pursuant to Section
4.04(b)(i) hereof, (ii) the interests
issued by the Lower Tier REMIC, (iii) the
grantor trusts described in this
Section 2.07 and (iv) the Cap Contracts and
the Cap Contract Account). 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 that 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.
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 on the sole class
of residual interest in the Upper Tier
REMIC shall be subject to a cap equal to
the Net Rate.
The beneficial ownership of the Class LTR Interest and the
Residual
Interest shall be represented by the Class
R Certificate. 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) It is intended that the rights of the Class A-1A
Certificates,
Class A-2A Certificates, Class A-2B
Certificates, Class A-2C Certificates, Class
R Certificate, Class M-1 Certificates,
Class M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates, Class
B-1 Certificates, Class B-2
Certificates,
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Class B-3 Certificates and Class B-4
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-1A Certificates, Class A-2A Certificates,
Class A-2B Certificates, Class A-2C
Certificates, Class R Certificate, Class
M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class
M-4 Certificates, Class B-1
Certificates, Class B-2 Certificates, Class
B-3 Certificates and Class B-4
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-1A Certificates, Class A-2A
Certificates, Class A-2B Certificates,
Class A-2C Certificates, Class M-1
Certificates, Class M-2 Certificates, Class
M-3 Certificates, Class M-4 Certificates,
Class B-1 Certificates, Class B-2
Certificates, Class B-3 Certificates and
Class B-4 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-1A Certificates, Class A-2A Certificates,
Class A-2B Certificates, Class A-2C
Certificates, Class R Certificate, Class
M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class
M-4 Certificates, Class B-1
Certificates, Class B-2 Certificates, Class
B-3 Certificates and Class B-4
Certificates receive payments in respect of
Excess Interest, such amounts, to
the extent not derived from payments on the
Cap Contracts, 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.
(e) The parties intend that the portion of the Trust Fund
consisting of
the Uncertificated Class C Interest, the
Cap Contract Account, the Cap Contracts
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-1A Certificates, Class
A-2A Certificates, Class A-2B Certificates,
Class A-2C Certificates, Class R
Certificate, Class M-1 Certificates, Class
M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates, Class
B-1 Certificates, Class B-2
Certificates, Class B-3 Certificates and
Class B-4 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-1A
Certificates, Class A-2A Certificates,
Class A-2B Certificates, Class A-2C
Certificates, Class R Certificate, Class
M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class
M-4 Certificates, Class B-1
Certificates, Class B-2 Certificates, Class
B-3 Certificates, Class B-4
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 the portion of the Trust Fund
consisting of
the Class R Certificate and the right of
the Class C Certificates to receive the
amounts described in Section 9.01(f) hereof
shall be treated as a "grantor
trust" under the Code, for the benefit of
the holder of the Class R Certificate
and
53
<PAGE>
the Class C Certificates, and the
provisions hereof shall be interpreted
consistent with this intention. In
furtherance of this intention, the Trustee
shall (i) furnish or cause to be furnished
to the holders of the Class R
Certificate and the Class C Certificates
information regarding their allocable
share 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 as may be applicable under
the Code.
(h) All payments of principal and interest at the Net Mortgage Rate
on
each of the Mortgage Loans (other than
payments distributable to the Class P
Certificates pursuant to Section 4.04(b)(i)
hereof) received from the Mortgage
Loans shall be paid to the Lower Tier 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 excess amounts shall be
distributed to the Class LTR Interest. On
each Distribution Date, payments and
losses shall be allocated among the Lower
Tier REMIC Regular Interests so that
(i) each of the Lower Tier REMIC I Marker
Interests shall have a principal
balance equal to 25% of the principal
balance of the Corresponding Certificates,
(ii) the Class LTIX Interest has a
principal balance equal to the excess of (x)
50% of the remaining principal balance of
the Mortgage Loans over (y) the
aggregate principal balance of the Lower
Tier REMIC I Marker Interests (if
necessary to reflect an increase in
overcollateralization, accrued and unpaid
interest on the Class LTIX interest may be
added to its principal amount to
achieve this result) and (iii) the
aggregate principal amount of the Class
LTII1A Interest, Class LTII1B Interest,
Class LTII2A Interest, Class LTII2B
Interest and Class LTIIX Interest shall
equal 50% of the remaining principal
balance of the Mortgage Loans.
Distributions and losses allocated to the Lower
Tier REMIC Regular Interests described in
clause (iii) of the preceding sentence
will be allocated among such Lower Tier
REMIC Regular Interests in the following
manner: (x) such distributions shall be
deemed made to such Lower Tier REMIC
Regular Interests first, so as to keep the
principal balance of the each such
Lower Tier REMIC Regular Interest with "B"
at the end of its designation equal
to 0.05% of the aggregate scheduled
principal balance of the Mortgage Loans in
the related Mortgage Group; second, to such
Lower Tier REMIC Regular Interests
with "A" at the end of its designation so
that the uncertificated principal
balance of each such Lower Tier REMIC
Regular Interest is equal to 0.05% of the
excess of (I) the aggregate scheduled
principal balance of the Mortgage Loans in
the related Mortgage Group over (II) the
aggregate principal balance of
Certificate Group One, in the case of the
Class LTII1A Interest, or Certificate
Group Two, in the case of the Class LTII2A
Interest (except that if 0.05% of any
such excess is greater than the principal
amount of the related Lower Tier REMIC
II Marker Interest with "A" at the end of
its designation, the
