<PAGE>
Exhibit 4.1
MERRILL LYNCH MORTGAGE INVESTORS, INC.
Depositor
LASALLE BANK NATIONAL ASSOCIATION
Master Servicer and Securities Administrator
NATIONAL CITY HOME LOAN SERVICES, INC.,
Servicer
WILSHIRE CREDIT CORPORATION,
Special Servicer
and
CITIBANK, N.A.,
Trustee
----------
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 2005
----------
FIRST FRANKLIN MORTGAGE LOAN TRUST,
MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2005-FF12
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S>
<C>
ARTICLE I
DEFINITIONS.......................................................
1
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES......
53
SECTION 2.01.
Conveyance of Mortgage Loans...................... 53
SECTION 2.02.
Acceptance by the Trustee of the Mortgage Loans... 56
SECTION 2.03.
Representations, Warranties and Covenants of the
Depositor......................................... 58
SECTION 2.04.
Representations and Warranties of the Master
Servicer;
Representations and Warranties of the Servicer;
Representations and Warranties of the Securities
Administrator..................................... 62
SECTION 2.05.
Substitutions and Repurchases of Mortgage Loans
that are not "Qualified Mortgages."............... 65
SECTION 2.06.
Authentication and Delivery of Certificates....... 65
SECTION 2.07.
REMIC Elections................................... 65
SECTION 2.08.
[RESERVED]........................................ 69
SECTION 2.09.
Covenants of the Servicer......................... 69
SECTION 2.10.
[RESERVED]........................................ 70
SECTION 2.11.
Permitted Activities of the Trust................. 70
SECTION 2.12.
Qualifying Special Purpose Entity................. 70
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS....................
70
SECTION 3.01.
Servicer to Service Mortgage Loans................ 70
SECTION 3.02.
Servicing and Subservicing; Enforcement of the
Obligations of Servicer........................... 72
SECTION 3.03.
Rights of the Depositor, the Securities
Administrator and the Trustee in Respect of the
Servicer.......................................... 73
SECTION 3.04.
Master Servicer to Act as Servicer................ 73
SECTION 3.05.
Collection of Mortgage Loan Payments; Collection
Account; Certificate Account...................... 74
SECTION 3.06.
Collection of Taxes, Assessments and Similar
Items; Escrow Accounts............................ 77
SECTION 3.07.
Access to Certain Documentation and Information
Regarding the Mortgage Loans...................... 78
SECTION 3.08.
Permitted Withdrawals from the Collection Account
and Certificate Account........................... 78
SECTION 3.09.
[RESERVED]........................................ 80
SECTION 3.10.
Maintenance of Hazard Insurance................... 80
SECTION 3.11.
Enforcement of Due-On-Sale Clauses; Assumption
Agreements........................................ 81
SECTION 3.12.
Realization Upon Defaulted Mortgage Loans;
Determination of Excess Proceeds.................. 82
SECTION 3.13.
Trustee to Cooperate; Release of Mortgage Files... 86
SECTION 3.14.
Documents, Records and Funds in Possession of
Servicer to be Held for the Trustee............... 87
SECTION 3.15.
Servicing Compensation............................ 87
SECTION 3.16.
Access to Certain Documentation................... 88
</TABLE>
i
<PAGE>
<TABLE>
<S>
<C>
SECTION 3.17.
Annual Statement as to Compliance................. 88
SECTION 3.18.
Annual Independent Public Accountants' Servicing
Statement; Financial Statements................... 88
SECTION 3.19.
Rights of the NIMs Insurer........................ 89
SECTION 3.20.
[RESERVED]........................................ 89
SECTION 3.21.
Annual Certificate by Securities Administrator.... 89
SECTION 3.22.
Annual Certificate by Servicer.................... 89
SECTION 3.23.
Prepayment Charge Reporting Requirements.......... 90
SECTION 3.24.
Statements to Securities Administrator............ 90
SECTION 3.25.
Indemnification................................... 90
SECTION 3.26.
Nonsolicitation................................... 92
SECTION 3.27.
Transfer of Servicing to the Special Servicer..... 92
SECTION 3.28.
Special Servicer's Annual Statement as to
Compliance........................................ 92
SECTION 3.29.
Special Servicer's Annual Independent Public
Accountants' Servicing Statement; Financial
Statements........................................ 93
SECTION 3.30.
Annual Certificate by Special Servicer............ 93
SECTION 3.31.
High Cost Mortgage Loans.......................... 93
ARTICLE IV
DISTRIBUTIONS.....................................................
92
SECTION 4.01.
Advances.......................................... 92
SECTION 4.02.
Reduction of Servicing Compensation in Connection
with Prepayment Interest Shortfalls............... 93
SECTION 4.03.
Distributions on the REMIC Interests.............. 94
SECTION 4.04.
Distributions..................................... 94
SECTION 4.05.
Monthly Statements to Certificateholders.......... 100
ARTICLE V THE
CERTIFICATES..................................................
104
SECTION 5.01.
The Certificates.................................. 104
SECTION 5.02.
Certificate Register; Registration of Transfer and
Exchange of Certificates.......................... 105
SECTION 5.03.
Mutilated, Destroyed, Lost or Stolen
Certificates...................................... 113
SECTION 5.04.
Persons Deemed Owners............................. 113
SECTION 5.05.
Access to List of Certificateholders' Names and
Addresses......................................... 113
SECTION 5.06.
Book-Entry Certificates........................... 113
SECTION 5.07.
Notices to Depository............................. 114
SECTION 5.08.
Definitive Certificates........................... 114
SECTION 5.09.
Maintenance of Office or Agency................... 115
ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICER, THE SERVICER AND THE
SECURITIES ADMINISTRATOR..........................................
115
SECTION 6.01.
Respective Liabilities of the Depositor, the
Master Servicer, the Servicer and the Securities
Administrator..................................... 115
SECTION 6.02.
Merger or Consolidation of the Depositor, the
Master Servicer, the Servicer or the Securities
Administrator..................................... 116
SECTION 6.03.
Limitation on Liability of the Depositor, the
Securities Administrator, the Master Servicer, the
Servicer and Others............................... 116
SECTION 6.04.
Limitation on Resignation of Servicer............. 117
SECTION 6.05.
Errors and Omissions Insurance; Fidelity Bonds.... 118
</TABLE>
ii
<PAGE>
<TABLE>
<S>
<C>
SECTION 6.06.
Limitation on Resignation of the Master Servicer.. 118
SECTION 6.07.
Assignment of Master Servicing.................... 118
ARTICLE VII
DEFAULT; TERMINATION OF SERVICER..................................
119
SECTION 7.01.
Events of Default................................. 119
SECTION 7.02.
Servicer Trigger Event............................ 120
SECTION 7.03.
Master Servicer to Act; Appointment of Successor.. 121
SECTION 7.04.
Notification to Certificateholders................ 123
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR...........
123
SECTION 8.01.
Duties of the Trustee and the Securities
Administrator..................................... 123
SECTION 8.02.
Certain Matters Affecting the Trustee and the
Securities Administrator.......................... 124
SECTION 8.03.
Trustee and Securities Administrator Not Liable
for Certificates or Mortgage Loans................ 126
SECTION 8.04.
Trustee and Securities Administrator May Own
Certificates...................................... 126
SECTION 8.05.
Trustee's and Securities Administrator's Fees and
Expenses.......................................... 126
SECTION 8.06.
Indemnification and Expenses of Trustee........... 126
SECTION
8.07.
Eligibility Requirements for Trustee.............. 127
SECTION 8.08.
Resignation and Removal of Trustee................ 128
SECTION 8.09.
Successor Trustee................................. 128
SECTION 8.10.
Merger or Consolidation of Trustee................ 129
SECTION 8.11.
Appointment of Co-Trustee or Separate Trustee..... 129
SECTION 8.12.
Tax Matters....................................... 130
ARTICLE IX
TERMINATION.......................................................
132
SECTION 9.01.
Termination upon Liquidation or Auction of all
Mortgage Loans.................................... 132
SECTION 9.02.
Final Distribution on the Certificates............ 133
SECTION 9.03.
Additional Termination Requirements............... 134
ARTICLE X MISCELLANEOUS
PROVISIONS.......................................... 135
SECTION 10.01.
Amendment......................................... 135
SECTION 10.02.
Counterparts...................................... 136
SECTION 10.03.
Governing Law..................................... 136
SECTION 10.04.
Intention of Parties.............................. 137
SECTION 10.05.
Notices........................................... 137
SECTION 10.06.
Severability of Provisions........................ 138
SECTION 10.07.
Assignment........................................ 138
SECTION 10.08.
Limitation on Rights of Certificateholders........ 138
SECTION 10.09.
Inspection and Audit Rights....................... 139
SECTION 10.10.
Certificates Nonassessable and Fully Paid......... 139
SECTION 10.11. Third
Party Rights................................ 139
SECTION 10.12.
Additional Rights of the NIMs Insurer............. 139
SECTION 10.13.
Assignment; Sales; Advance Facilities............. 140
ARTICLE XI
ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE LOANS.........
142
SECTION 11.01. Master
Servicer................................... 142
</TABLE>
iii
<PAGE>
<TABLE>
<S>
<C>
SECTION 11.02.
Monitoring of Servicer............................ 143
SECTION 11.03.
Fidelity Bond..................................... 144
SECTION 11.04. Power
to Act; Procedures.......................... 144
SECTION 11.05.
Documents, Records and Funds in Possession of
Master Servicer to Be Held for Trustee............ 145
SECTION 11.06. Trustee
to Retain Possession of Certain Insurance
Policies and Documents............................ 145
SECTION 11.07.
Compensation for the Master Servicer and the
Securities Administrator.......................... 146
SECTION 11.08. Annual
Statement as to Compliance................. 146
SECTION 11.09.
Periodic Filings.................................. 146
SECTION 11.10.
Obligation of the Master Servicer in Respect of
Prepayment Interest Shortfalls.................... 147
</TABLE>
iv
<PAGE>
EXHIBIT A FORMS OF
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 INITIAL
CERTIFICATION
EXHIBIT E-1 FORM
OF CLASS R TRANSFEREE'S LETTER AND AFFIDAVIT
EXHIBIT E-2 FORM
OF CLASS R TRANSFEROR'S AFFIDAVIT
EXHIBIT F FORM OF
TRANSFEROR CERTIFICATE
EXHIBIT G FORM OF
INVESTMENT LETTER (ACCREDITED INVESTOR)
EXHIBIT H FORM OF RULE
144A LETTER (QUALIFIED INSTITUTIONAL BUYER)
EXHIBIT I FORM OF REQUEST
FOR RELEASE
EXHIBIT J [RESERVED]
EXHIBIT K FORM OF
OFFICER'S CERTIFICATE OF SECURITIES ADMINISTRATOR
EXHIBIT L-1 FORM
OF OFFICER'S CERTIFICATE OF SERVICER
EXHIBIT L-2 FORM
OF OFFICER'S CERTIFICATE OF SPECIAL SERVICER
EXHIBIT M-1 FORM
OF DELINQUENCY REPORT
EXHIBIT M-2 FORM
OF MONTHLY REMITTANCE ADVICE
EXHIBIT M-3 FORM
OF REALIZED LOSS REPORT
EXHIBIT N-1 FORM
OF CLASS A-1 CAP CONTRACT
EXHIBIT N-2 FORM
OF CLASS A-2 CAP CONTRACT
EXHIBIT N-3 FORM
OF SUBORDINATED CERTIFICATE CAP CONTRACT
EXHIBIT O-1
ONE-MONTH LIBOR CAP TABLE - CLASS A-1 CAP CONTRACT
EXHIBIT O-2 ONE
MONTH LIBOR CAP TABLE - CLASS A-2 CAP CONTRACT
EXHIBIT O-3 ONE
MONTH LIBOR CAP TABLE - SUBORDINATED CERTIFICATE CAP CONTRACT
v
<PAGE>
POOLING AND SERVICING AGREEMENT (the "Agreement"), dated as of
December 1,
2005, among MERRILL LYNCH MORTGAGE INVESTORS, INC., a Delaware
corporation, as
depositor (the "Depositor"), LASALLE BANK NATIONAL ASSOCIATION, a
national
banking association, as master servicer (the "Master Servicer") and
securities
administrator (the "Securities Administrator"), NATIONAL CITY HOME
LOAN
SERVICES, INC., a Delaware corporation, as servicer (the
"Servicer"), WILSHIRE
CREDIT CORPORATION, a Nevada corporation, as special servicer (the
"Special
Servicer") and CITIBANK, 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 payments distributable
to the Class
P Certificates pursuant to Section 4.04(b)(i) hereof, (iii) each
Cap Contract
and the Cap Contract Account and (iv) the grantor trusts described
in Section
2.07 hereof. 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 NIMs Insurer.
In
consideration of the mutual agreements herein contained, the
Depositor,
the Master Servicer, the Securities Administrator, 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 Master Servicing Practices: With respect to any Mortgage
Loan, as
applicable, either (x) those customary mortgage master servicing
practices of
prudent master servicing institutions that master service mortgage
loans of the
same type and quality as such Mortgage Loan in the jurisdiction
where the
related Mortgaged Property is located, to the extent applicable to
the Master
Servicer (except in its capacity as successor to the Servicer), or
(y) as
provided in Section 11.01 hereof, but in no event below the
standard set forth
in clause (x) of this definition.
Accepted Servicing Practices: The Servicer's normal servicing
practices,
which will conform to the mortgage servicing practices of prudent
mortgage
lending institutions that service for their own account mortgage
loans of the
same type as the Mortgages Loans in the jurisdictions in which the
related
Mortgaged Properties (or Underlying Mortgaged Properties in the
case of Co-op
Loans) are located.
<PAGE>
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 that is adjustable.
Adjustment Date: As to each Adjustable Rate Mortgage Loan, each
date on
which the related Mortgage Rate is subject to adjustment, as
provided in the
related Mortgage Note.
Advance: The aggregate of the advances required to be made by the
Servicer
or the Special Servicer, as applicable, with respect to any
Distribution Date
pursuant to Section 4.01, the amount of any such advances being
equal to the sum
of the aggregate amount of all payments of principal and interest
(net of the
Servicing Fee) 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 (other than the principal portion of any Balloon Amount), 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
that has been converted to an REO Property, the obligation to make
advances
shall be limited to payments of interest.
Advance Facility: A financing or other facility as described in
Section
10.13.
Advance Facility Notice: As defined in Section 10.13(b).
Advance Financing Person: As defined in Section 10.13(a).
Advance Reimbursement Amount: As defined in Section 10.13(b).
Affiliate: With respect to any specified Person, any other
Person
controlling, controlled by or under common control with such
Person. For the
purposes of this definition, "control" means the power to direct
the management
and policies of a Person, directly or indirectly, whether through
ownership of
voting securities, by contract or otherwise; and the terms
"controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Certificate Principal Balance: For any date of
determination, the
sum of the Class A-1 Certificate Principal Balance, the Class A-2A
Certificate
Principal Balance, the Class A-2B Certificate Principal Balance,
the Class A-2C
Certificate Principal Balance, the Class R Certificate Principal
Balance, the
Class M-1 Certificate Principal Balance, the Class M-2 Certificate
Principal
Balance, the Class M-3 Certificate Principal Balance, the Class M-4
Certificate
Principal Balance, the Class M-5 Certificate Principal Balance, the
Class M-6
Certificate Principal Balance, the Class B-1 Certificate Principal
Balance, the
Class B-2 Certificate Principal Balance and the Class B-3
Certificate Principal
Balance, in each case as of such date of determination.
Agreement: This Pooling and Servicing Agreement and any and all
amendments
or supplements hereto made in accordance with the terms herein.
Applied Realized Loss Amount: With respect to any Distribution
Date, the
amount, if any, by which, the sum of (i) the Aggregate Certificate
Principal
Balance and (ii) the Class C Certificate Principal
-2-
<PAGE>
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 (or the related
residential
dwelling unit in the Underlying Mortgaged Property in the case of a
Co-op Loan),
the "Appraised Value" of a Mortgaged Property (or the related
residential
dwelling unit in the Underlying Mortgaged Property in the case of a
Co-op Loan)
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 (or
the related residential dwelling unit in the Underlying Mortgaged
Property in
the case of a Co-op Loan) 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 (or
the related residential dwelling unit in the Underlying Mortgaged
Property in
the case of a Co-op Loan) based upon the appraisal obtained at the
time of
refinancing.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer
(or UCC-3 assignment (or equivalent instrument) with respect to
each Co-op Loan)
or equivalent instrument, in recordable form (except in the case of
a Co-op
Loan) (except for the name of the assignee if such Mortgage Loan is
endorsed in
blank), sufficient under the laws of the jurisdiction where the
related
Mortgaged Property (or Underlying Mortgaged Property, in the case
of a Co-op
Loan) 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.
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 10 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 (other than the Class R Certificate), Class M and Class
B
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 California, State of
Illinois,
State of Oregon and in the City of New York, New York are
authorized or
obligated by law or executive order to be closed.
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 Securities Administrator pursuant to Section 4.04(k)(i) in
the name of
the Trustee for the benefit of the Trust Fund and designated
"LaSalle Bank
National Association, as securities administrator for Citibank,
N.A., as
trustee, in trust for registered holders of First Franklin Mortgage
Loan Trust,
Mortgage Loan Asset-
-3-
<PAGE>
Backed Certificates, Series 2005-FF12." 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: The Royal Bank of Scotland plc.
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 Cap 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
Securities Administrator and authenticated by the Securities
Administrator in
substantially the forms attached hereto as Exhibit A.
Certificate Account: The separate Eligible Account or Accounts
created and
maintained by the Securities Administrator pursuant to Section
3.05(e) in the
name of the Trustee for the benefit of the Certificateholders and
designated
"LaSalle Bank National Association, as securities administrator for
Citibank,
N.A., as trustee, in trust for registered holders of First Franklin
Mortgage
Loan Trust, Mortgage Loan Asset-Backed Certificates, Series
2005-FF12." Funds in
the Certificate Account shall be held in trust for the
Certificateholders for
the uses and purposes set forth in this Agreement.
Certificate Group: Either of Certificate Group One or Certificate
Group
Two.
Certificate Group One: The Class A-1 and Class R Certificates. For
purposes
of Section 2.07 hereof, Certificate Group One shall be related to
Group One.
Certificate Group Two: The Class A-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(i). 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) 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
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.
-4-
<PAGE>
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 Securities Administrator and the Trustee 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: As of any date of
determination, the
sum of the Class A-1 Certificate Principal Balance, the Class A-2A
Certificate
Principal Balance, the Class A-2B Certificate Principal Balance,
the Class A-2C
Certificate Principal Balance and the Class R Certificate Principal
Balance.
Class A Certificates: Any of the Class A-1 Certificates, the Class
A-2
Certificates and the Class R Certificates.
Class A Principal Distribution Amount: With respect to any
Distribution
Date (1) prior to the related Stepdown Date or any Distribution
Date on which a
Stepdown Trigger Event exists, 100% of the Principal Distribution
Amount for
such Distribution Date and (2) on or after the Stepdown Date where
a Stepdown
Trigger Event does not exist, the excess of (A) the Class A
Certificate
Principal Balance immediately prior to such Distribution Date over
(B) the
lesser of (i) 55.90% of the aggregate Stated Principal Balance of
the Mortgage
Loans as of such Distribution Date and (ii) the excess of the
aggregate Stated
Principal Balance of the Mortgage Loans as of such Distribution
Date 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 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.
Class A-1 Cap Contract: The confirmation and agreement between the
Trust
Fund or the Securities Administrator and the Cap Contract
Counterparty (in the
form of Exhibit N-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 O-1.
Class A-1 Cap Contract Termination Date: The Distribution Date in
October
2008.
-5-
<PAGE>
Class A-1 Certificates: Any Certificate designated as a "Class
A-1
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class A-1 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class A-1
Certificates.
Class A-1 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class A-1
Pass-Through Rate on
the Class A-1 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or a Class A-1 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-1
Certificates.
Class A-1 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class A-1 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
A-1 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class A-1 Pass-Through Rate for the related Accrual Period.
Class A-1 Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.240% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.480% per
annum.
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 Pass-Through Rate: For the first Distribution Date,
4.6203% per
annum. As of any Distribution Date thereafter, the lesser of (1)
One-Month LIBOR
plus the Class A-1 Margin and (2) the Class A-1 Available Funds Cap
for such
Distribution Date.
Class A-1 Upper Collar: With respect to each Distribution Date with
respect
to which payments are received on the Class A-1 Cap Contract, a
rate equal to
the lesser of One-Month LIBOR and 9.260% per annum.
Class A-2 Available
Funds Cap: With respect to a Distribution Date, the per
annum rate equal to the product of (i) 12, (ii) the quotient of (x)
the total
scheduled interest on the Mortgage Loans in Group Two based on the
Net Mortgage
Rates in effect on the related Due Date divided by (y) the
aggregate Stated
Principal Balance of the Mortgage Loans in Group Two as of the
first day of the
related Accrual Period (or, in the case of the first Distribution
Date, as of
the Cut-off Date) and (iii) a fraction, the numerator of which is
30, and the
denominator of which is the actual number of days in the related
Accrual Period.
Class A-2 Cap Contract: The confirmation and agreement between the
Trust
Fund or the Securities Administrator and the Cap Contract
Counterparty (in the
form of Exhibit N-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 O-2.
-6-
<PAGE>
Class A-2 Cap Contract Termination Date: The Distribution Date in
October
2008.
Class A-2 Certificates: Any of 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 9.920% 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 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.
For purposes of calculating interest, principal distributions on a
Distribution
Date will be deemed to have been made on the first day of the
Accrual Period in
which such Distribution Date occurs.
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 interest 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
Initial Optional Termination Date, 0.090% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.180% per
annum.
Class A-2A Pass-Through Rate: For the first Distribution Date,
4.4703% 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
-7-
<PAGE>
of such Distribution Date plus the portion of any previous
distributions on such
Class in respect of 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. For purposes of calculating interest,
principal
distributions on a Distribution Date will be deemed to have been
made on the
first day of the Accrual Period in which such Distribution Date
occurs.
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 interest 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
Initial Optional Termination Date, 0.260% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.520% per
annum.
Class A-2B Pass-Through Rate: For the first Distribution Date,
4.6403% 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 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.
For purposes of calculating interest, principal distributions on a
Distribution
Date will be deemed to have been made on the first day of the
Accrual Period in
which such Distribution Date occurs.
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 interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class A-2C Pass-Through Rate for the related Accrual Period.
Class A-2C Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.330% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.660% per
annum.
Class A-2C Pass-Through Rate: For the first Distribution Date,
4.7103% 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 and Class
B-3
Certificates.
-8-
<PAGE>
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 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 interest 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
Initial Optional Termination Date, 1.650% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 2.475% per
annum.
Class B-1 Pass-Through Rate: For the first Distribution Date,
6.0303% 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 Class A Certificate Principal
Balance and the
Class M Certificate Principal Balance, 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 Class A Certificate Principal
Balance (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
M-5 Certificate Principal Balance (after taking into account
distributions of
the Class M-5 Principal Distribution Amount on such Distribution
Date, (G) the
Class M-6 Certificate Principal Balance (after taking into account
distributions
of the Class M-6 Principal Distribution Amount on such Distribution
Date and (H)
the Class B-1 Certificate Principal Balance immediately prior to
such
Distribution Date over (2) the lesser of (A) 86.60% of the Stated
Principal
Balance of the Mortgage Loans as of such Distribution Date and (B)
the excess of
the Stated Principal Balance of the Mortgage Loans as of such
Distribution Date
over the Minimum Required Overcollateralization Amount.
Notwithstanding the
foregoing, (I) on any Distribution Date prior to the Stepdown Date
on which the
Certificate Principal
-9-
<PAGE>
Balance of each Class of Class A Certificates 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 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 the 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 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. For
purposes of calculating interest, principal distributions on a
Distribution Date
will be deemed to have been made on the first day of the Accrual
Period in which
such Distribution Date occurs.
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 interest 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
Initial Optional Termination Date, 1.750% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 2.625% per
annum.
Class B-2 Pass-Through Rate: For the first Distribution Date,
6.1303% 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.
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 Class A Certificate Principal
Balance, the
Class M Certificate Principal Balance and the Class B-1 Certificate
Principal
Balance 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 Class A Certificate Principal
-10-
<PAGE>
Balance (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 M-5 Certificate Principal Balance
(after
taking into account distributions of the Class M-5 Principal
Distribution Amount
on such Distribution Date), (G) the Class M-6 Certificate Principal
Balance
(after taking into account distributions of the Class M-6 Principal
Distribution
Amount on such Distribution Date), (H) 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 (I) the Class
B-2 Certificate
Principal Balance immediately prior to such Distribution Date over
(2) the
lesser of (A) 88.80% of the Stated Principal Balance of the
Mortgage Loans as of
such Distribution Date and (B) the excess of the Stated Principal
Balance of the
Mortgage Loans as of such Distribution Date 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, Class M and Class B-1
Certificates has been
reduced to zero, the Class B-2 Principal Distribution Amount will
equal the
lesser of (x) the outstanding Certificate Principal Balance of the
Class B-2
Certificates and (y) 100% of the Principal Distribution Amount
remaining after
any distributions on such Class A, 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 the 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 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. For
purposes of calculating interest, principal distributions on a
Distribution Date
will be deemed to have been made on the first day of the Accrual
Period in which
such Distribution Date occurs.
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
-11-
<PAGE>
distributed to the Class B-3 Certificates with respect to interest
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
Initial Optional Termination Date, 1.750% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 2.625% per
annum.
Class B-3 Pass-Through Rate: For the first Distribution Date,
6.1303% 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 Class A Certificate Principal
Balance, the
Class M Certificate Principal Balance, the Class B-1 Certificate
Principal
Balance and the Class B-2 Certificate Principal Balance 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 Class A
Certificate
Principal Balance (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 M-5 Certificate Principal
Balance
(after taking into account distributions of the Class M-5 Principal
Distribution
Amount on such Distribution Date), (G) the Class M-6 Certificate
Principal
Balance (after taking into account distributions of the Class M-6
Principal
Distribution Amount on such Distribution Date), (H) the Class B-1
Certificate
Principal Balance (after taking into account distributions of the
Class B-1
Principal Distribution Amount on such Distribution Date), (I) 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 (J) the
Class B-3 Certificate Principal Balance immediately prior to such
Distribution
Date over (2) the lesser of (A) 90.80% of the Stated Principal
Balance of the
Mortgage Loans as of such Distribution Date and (B) the excess of
the Stated
Principal Balance of the Mortgage Loans as of such Distribution
Date 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, Class M, Class B-1 and
Class B-2
Certificates has been reduced to zero, the Class B-3 Principal
Distribution
Amount will equal the lesser of (x) the outstanding Certificate
Principal
Balance of the Class B-3 Certificates and (y) 100% of the Principal
Distribution
Amount remaining after any distributions on such Class A, 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 the Class B-3 Certificates pursuant to the
last sentence of
the definition of "Certificate Principal Balance".
-12-
<PAGE>
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 the aggregate principal balance of the
Lower Tier
REMIC Regular Interests immediately prior to such Distribution
Date, plus the
interest portion of any previous distributions on such Class that
is recovered
as a voidable preference by a trustee in bankruptcy, less any
Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class
C
Certificates.
Class C Distributable Interest Rate: The excess, if any, of (a)
the
weighted average of the interest rates on the Lower Tier REMIC
Regular Interests
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 on such
prior
Distribution Dates in accordance with the definition of
"Certificate Principal
Balance".
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
Amounts 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-1 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificates and an interest rate
equal to the Net
Rate.
Class LTA-2A Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTA-2B Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
-13-
<PAGE>
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 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 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% 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.
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 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.
-14-
<PAGE>
Class LTM-3 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTM-4 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTM-5 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTM-6 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTR Interest: The sole class of "residual interest" in the
Lower Tier
REMIC.
Class M Certificates: Any of the Class M-1, Class M-2, Class M-3,
Class
M-4, Class M-5 or Class M-6 Certificates.
Class M Certificate Principal Balance: For any date of
determination, the
sum of the Class M-1 Certificate Principal Balance, Class M-2
Certificate
Principal Balance, Class M-3 Certificate Principal Balance, Class
M-4
Certificate Principal Balance, Class M-5 Certificate Principal
Balance and Class
M-6 Certificate Principal Balance.
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 Current
Interest or Class M-1 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-1
Certificates.
Class M-1 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-1 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-1 Certificates with respect to interest 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.
-15-
<PAGE>
Class M-1 Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.450% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.675% per
annum.
Class M-1 Pass-Through Rate: For the first Distribution Date,
4.8303% 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 Class A Certificate Principal
Balance has been
reduced to zero and a Stepdown Trigger Event exists, or as long as
a Stepdown
Trigger Event does not exist, the excess of (1) the sum of (A) the
Class A
Certificate Principal Balance (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) 63.20% of the Stated Principal
Balances of the
Mortgage Loans as of such Distribution Date and (B) the excess of
the Stated
Principal Balances for the Mortgage Loans as of such Distribution
Date 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 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 (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 Current
Interest or 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 interest on such prior
Distribution Dates
-16-
<PAGE>
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
Initial Optional Termination Date, 0.470% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.705% per
annum.
Class M-2 Pass-Through Rate: For the first Distribution Date,
4.8503% 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 Class A Certificate Principal
Balance and the
Class M-1 Certificate Principal Balance 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 Class A Certificate Principal
Balance (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)
69.80% of the Stated Principal Balances of the Mortgage Loans as of
such
Distribution Date and (B) the excess of the Stated Principal
Balances of the
Mortgage Loans as of such Distribution Date 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 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 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.
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 Current
Interest or Class M-3 Interest Carry Forward Amount that is
recovered as a
voidable preference by a
-17-
<PAGE>
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 interest 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
Initial Optional Termination Date, 0.500% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.750% per
annum.
Class M-3 Pass-Through Rate: For the first Distribution Date,
4.8803% 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 Class A Certificate Principal
Balance, Class
M-1 Certificate Principal Balance and Class M-2 Certificate
Principal Balance
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
Class A Certificate Principal Balance (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) 74.20% of
the Stated Principal Balances of the Mortgage Loans as of such
Distribution Date
and (B) the excess of the Stated Principal Balances for the
Mortgage Loans as of
such Distribution Date 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, 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 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."
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.
-18-
<PAGE>
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 Current
Interest or 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 interest 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
Initial Optional Termination Date, 0.630% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.945% per
annum.
Class M-4 Pass-Through Rate: For the first Distribution Date,
5.0103% 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 Class A Certificate Principal
Balance, Class
M-1 Certificate Principal Balance, Class M-2 Certificate Principal
Balance and
Class M-3 Certificate Principal Balance 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 Class A Certificate Principal
Balance (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), (C) 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 (D)
the Class M-4
Certificate Principal Balance immediately prior to such
Distribution Date over
(2) the lesser of (A) 77.50% of the Stated Principal Balances of
the Mortgage
Loans as of such Distribution Date and (B) the excess of the Stated
Principal
Balances for the Mortgage Loans as of such Distribution Date 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, the Class M-1
Certificates, the
Class M-2 Certificates 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-4
Certificates and (y)
100% of the Principal Distribution Amount remaining after any
distributions on
such Class A, 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
-19-
<PAGE>
Certificate Principal Balance of such Class M-4 Certificates
pursuant to the
last sentence of the definition of "Certificate Principal
Balance."
Class M-5 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class M-5 Certificates.
Class M-5 Certificate: Any Certificate designated as a "Class
M-5
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class M-5 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class M-5
Certificates.
Class M-5 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class M-5
Pass-Through Rate on
the Class M-5 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or Class M-5 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-5
Certificates.
Class M-5 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-5 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-5 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class M-5 Pass-Through Rate for the related Accrual Period.
Class M-5 Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.670% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 1.005% per
annum.
Class M-5 Pass-Through Rate: For the first Distribution Date,
5.0503% per
annum. As of any Distribution Date thereafter, the lesser of (1)
One-Month LIBOR
plus the Class M-5 Margin and (2) the Subordinated Certificate
Available Funds
Cap for such Distribution Date.
Class M-5 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance, Class
M-1 Certificate Principal Balance, Class M-2 Certificate Principal
Balance,
Class M-3 Certificate Principal Balance and Class M-4 Certificate
Principal
Balance 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 Class A Certificate Principal Balance (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) and (F) the Class
M-5 Certificate
Principal Balance immediately prior to such Distribution Date over
(2) the
lesser of (A) 80.80% of the Stated Principal Balances of the
Mortgage Loans as
of such Distribution Date and (B) the excess of the Stated
Principal Balances
for the Mortgage Loans as of such Distribution Date over the
Minimum Required
Overcollateralization Amount.
-20-
<PAGE>
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, the Class M-1 Certificates, the Class M-2
Certificates, the
Class M-3 Certificates an the Class M-4 Certificates has been
reduced to zero,
the Class M-5 Principal Distribution Amount will equal the lesser
of (x) the
outstanding Certificate Principal Balance of the Class M-5
Certificates and (y)
100% of the Principal Distribution Amount remaining after any
distributions on
such Class A, Class M-1, Class M-2, Class M-3 and Class M-4
Certificates and
(II) in no event will the Class M-5 Principal Distribution Amount
with respect
to any Distribution Date exceed the Class M-5 Certificate Principal
Balance.
Class M-5 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class M-5 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class M-5 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-5 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class M-6 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class M-6 Certificates.
Class M-6 Certificate: Any Certificate designated as a "Class
M-6
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class M-6 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class M-6
Certificates.
Class M-6 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class M-6
Pass-Through Rate on
the Class M-6 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or Class M-6 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-6
Certificates.
Class M-6 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-6 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-6 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class M-6 Pass-Through Rate for the related Accrual Period.
Class M-6 Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.740% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 1.110% per
annum.
Class M-6 Pass-Through Rate: For the first Distribution Date,
5.1203% per
annum. As of any Distribution Date thereafter, the lesser of (1)
One-Month LIBOR
plus the Class M-6 Margin and (2) the Subordinated Certificate
Available Funds
Cap for such Distribution Date.
Class M-6 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance, Class
M-1 Certificate Principal Balance, Class M-2 Certificate Principal
Balance,
Class M-3 Certificate Principal Balance, Class M-4 Certificate
Principal Balance
and Class M-5 Certificate Principal Balance have been reduced to
zero and a
Stepdown Trigger Event exists, or as long
-21-
<PAGE>
as a Stepdown Trigger Event does not exist, the excess of (1) the
sum of (A) the
Class A Certificate Principal Balance (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 M-5 Certificate
Principal
Balance (after taking into account distributions of the Class M-5
Principal
Distribution Amount on such Distribution Date), and (G) the Class
M-6
Certificate Principal Balance immediately prior to such
Distribution Date over
(2) the lesser of (A) 83.60% of the Stated Principal Balances of
the Mortgage
Loans as of such Distribution Date and (B) the excess of the Stated
Principal
Balances for the Mortgage Loans as of such Distribution Date 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, the Class M-1
Certificates, the
Class M-2 Certificates, the Class M-3 Certificates, the Class M-4
Certificates
and the Class M-5 Certificates has been reduced to zero, the Class
M-6 Principal
Distribution Amount will equal the lesser of (x) the outstanding
Certificate
Principal Balance of the Class M-6 Certificates and (y) 100% of the
Principal
Distribution Amount remaining after any distributions on such Class
A, Class
M-1, Class M-2, Class M-3, Class M-4 and Class M-5 Certificates and
(II) in no
event will the Class M-6 Principal Distribution Amount with respect
to any
Distribution Date exceed the Class M-6 Certificate Principal
Balance.
Class M-6 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class M-6 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class M-6 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-6 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class P Certificate: Any Certificate designated as a Class P
Certificate on
the face thereof, executed by the Securities Administrator and
authenticated by
the Securities Administrator 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
Securities
Administrator and authenticated by the Securities Administrator 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 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. For purposes
of
calculating interest, principal distributions on a Distribution
Date will be
deemed to have been made on the first day of the Accrual Period in
which such
Distribution Date occurs.
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 interest on such prior Distribution
Dates and
-22-
<PAGE>
(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
Initial
Optional Termination Date for the Certificates, 0.240% per annum
and, as of any
Distribution Date after the Initial Optional Termination Date,
0.480% per annum.
Class R Pass-Through Rate: For the first Distribution Date, 4.6203%
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.
Closing Date: December 28, 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
"National City
Home Loan Services, Inc., as servicer for Citibank, N.A., as
trustee, in trust
for registered holders of First Franklin Mortgage Loan Trust,
Mortgage Loan
Asset-Backed Certificates, Series 2005-FF12." Funds in the
Collection Account
shall be held in trust for the Certificateholders for the uses and
purposes set
forth in this Agreement.
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 (or Underlying Mortgaged Property, in the case of a Co-op
Loan),
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 (or
Underlying Mortgaged Property, in the case of a Co-op Loan).
Co-op Lease: With respect to a Co-op Loan, the lease with respect
to a
dwelling unit occupied by the Mortgagor and relating to the stock
allocated to
the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock
allocated to a
dwelling unit in a residential cooperative housing corporation and
a collateral
assignment of the related Co-op Lease.
Corresponding Certificates: With respect to the Class LTA-1
Interest, the
Class A-1 and Class R Certificates. With respect to the Class
LTA-2A Interest,
the Class A-2A Certificates. With respect to the Class LTA-2B
Interest, the
Class A-2B Certificates. With respect to the Class LTA-2C Interest,
the Class
A-2C Certificates. With respect to the Class LTM-1 Interest, the
Class M-1
Certificates. With respect to the Class LTM-2 Interest, the Class
M-2
Certificates. With respect to the Class LTM-3 Interest, the Class
M-3
Certificates. With respect to the Class LTM-4 Interest, the Class
M-4
Certificates. With respect to the Class LTM-5 Interest, the Class
M-5
Certificates. With respect to the Class LTM-6 Interest, the Class
M-6
Certificates. With respect to the Class LTB-1 Interest, the Class
B-1
Certificates. With respect to the Class LTB-2 Interest, the Class
B-2
Certificates. With respect to the Class LTB-3 Interest, the Class
B-3
Certificates.
-23-
<PAGE>
Current Interest: Any of the Class A-1 Current Interest, the Class
A-2A
Current Interest, the Class A-2B Current Interest, the Class A-C
Current
Interest, the Class R Current Interest, the Class M-1 Current
Interest, the
Class M-2 Current Interest, the Class M-3 Current Interest, the
Class M-4
Current Interest, the Class M-5 Current Interest, the Class M-6
Current
Interest, the Class B-1 Current Interest, the Class B-2 Current
Interest, the
Class B-3 Current Interest and the Class C Current Interest.
Custodian: LaSalle Bank National Association.
Cut-off Date: December 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 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 any successor in interest.
Depository: The initial Depository shall be The Depository Trust
Company
("DTC"), the nominee of which is Cede & Co., or any other
organization
registered as a "clearing agency" pursuant to Section 17A of the
Securities
Exchange Act of 1934, as amended. The Depository shall initially be
the
registered Holder of the Book-Entry Certificates. The Depository
shall at all
times be a "clearing corporation" as defined in Section 8-102(3) of
the Uniform
Commercial Code of the State of New York.
Depository Agreement: With respect to Classes of Book-Entry
Certificates,
the agreement between the Securities Administrator 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
-24-
<PAGE>
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 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, or if such
25th day
is not a Business Day, the next succeeding Business Day, commencing
in January
2006.
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 Securities
Administrator, the Trustee and each Rating Agency, the
Certificateholders have a
claim with respect to the funds in such account and a perfected
first security
interest against any collateral (which shall be limited to
Permitted
Investments) securing such funds that is superior to claims of any
other
depositors or creditors of the depository institution with which
such account is
maintained, or (v) maintained at an eligible institution whose
commercial paper,
short-term debt or other short-term deposits are rated at least
A-1+ by S&P and
F-1+ by Fitch, or (vi) maintained with a federal or state chartered
depository
institution the deposits in which are insured by the FDIC to the
applicable
limits and the short-term unsecured debt obligations of 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) otherwise acceptable to each Rating Agency, as evidenced
by a letter
from each Rating Agency to the Securities Administrator and the
Trustee.
ERISA: The Employee Retirement Income Security Act of 1974,
including any
successor or amendatory provisions.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that would satisfy the
requirements of
Prohibited Transaction Exemption 90-29, Exemption
-25-
<PAGE>
Application No. D-8012, 55 Fed. Reg. 21459 (1990), as amended,
granted to the
Underwriter by the United States Department of Labor (or any other
applicable
underwriter's exemption granted by the United States Department of
Labor),
except, in relevant part, for the requirement that the certificates
have
received a rating at the time of acquisition that is in one of the
three (or
four, in the case of a "designated transaction") highest generic
rating
categories by at least one of the Rating Agencies.
ERISA Restricted Certificates: The Class C and Class P Certificates
and any
other Certificate, as long as the acquisition and holding of such
Certificate is
not covered by and exempt under the Underwriter's exemption.
Event of Default: As defined in Section 7.01 hereof.
Excess Interest: On any Distribution Date, for each Class of the
Class A,
Class M and Class B Certificates, the excess, if any, of (1) the
amount of
interest such Class of Certificates is entitled to receive on such
Distribution
Date over (2) the amount of interest such Class of Certificates
would have been
entitled to receive on such Distribution Date at an interest rate
equal to the
REMIC Pass-Through Rate.
Excess Proceeds: With respect to any Liquidated Loan, any
Liquidation
Proceeds that are in excess of the sum of (1) the unpaid principal
balance of
such Liquidated Loan as of the date of such liquidation plus (2)
interest at the
Mortgage Rate from the Due Date as to which interest was last paid
or advanced
to Certificateholders (and not reimbursed to the Servicer) up to
the Due Date in
the month in which such Liquidation Proceeds are required to be
distributed on
the unpaid principal balance of such Liquidated Loan outstanding
during each Due
Period as to which such interest was not paid or advanced.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Extra Principal Distribution Amount: With respect to any
Distribution Date,
(1) prior to the Stepdown Date, the excess of (A) the sum of (i)
the Aggregate
Certificate Principal Balance immediately preceding such
Distribution Date
reduced by the Principal Funds with respect to such Distribution
Date and (ii)
$90,397,250 over (B) the aggregate Stated Principal Balance of the
Mortgage
Loans as of such Distribution Date and (2) on and after the
Stepdown Date, (A)
the sum of (x) the Aggregate Certificate Principal Balance
immediately preceding
such Distribution Date, reduced by the Principal Funds with respect
to such
Distribution Date and (y) the greater of (a) 9.20% of the aggregate
Stated
Principal Balance of the Mortgage Loans and (b) the Minimum
Required
Overcollateralization Amount less (B) the aggregate 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 aggregate Stated Principal Balance of the Mortgage
Loans (and will
remain fixed at the applicable percentage of the aggregate Stated
Principal
Balance of the Mortgage Loans as of the Due Date immediately prior
to the
Stepdown Trigger Event) until the next Distribution Date on which
the Stepdown
Trigger Event is not in effect.
Fannie Mae: A federally chartered and privately owned corporation
organized
and existing under the Federal National Mortgage Association
Charter Act, or any
successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Fitch: Fitch, Inc., or any successor in interest.
Fixed Rate Mortgage Loan: A Mortgage Loan identified in the
Mortgage Loan
Schedule as having a Mortgage Rate which is fixed.
-26-
<PAGE>
Floating Rate Certificate Carryover: With respect to a Distribution
Date,
in the event that the Pass-Through Rate for a class of Class A,
Class M or Class
B Certificates is based upon the related 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 360 and the denominator 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 with
respect to such Distribution Date by (II) the aggregate Certificate
Principal
Balance of each of the Classes 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
related 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.
-27-
<PAGE>
Group Two Principal Distribution Amount: As of any Distribution
Date, the
amount equal to the lesser of (i) the aggregate Certificate
Principal Balance of
the Class A-2 Certificates and (ii) the product of (x) the Group
Two Principal
Distribution Percentage and (y) the Class A Principal Distribution
Amount;
provided, however, that 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
NIMs 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, 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.
Initial Optional Termination Date: The first Distribution Date on
which the
aggregate Stated Principal Balance of the Mortgage Loans (or if
such Mortgage
Loan is an REO Property, the fair market value of such REO
Property) is equal to
or less than 10% of the aggregate Stated Principal Balance of the
Mortgage Loans
as of the Cut-off Date.
Insurance Policy: With respect to any Mortgage Loan or the
related
Mortgaged Property (or the related Underlying Mortgaged Property,
in the case of
a Co-op Loan) included in the Trust Fund, any insurance policy,
including all
riders and endorsements thereto in effect with respect to such
Mortgage Loan or
Mortgaged Property (or related Underlying Mortgage Property, in the
case of a
Co-op Loan), including any replacement policy or policies for any
insurance
policies.
Insurance Proceeds: Proceeds paid in respect of a Mortgage Loan or
the
related Mortgaged Property (or the related Underlying Mortgaged
Property, in the
case of a Co-op Loan) pursuant to any Insurance Policy or any other
insurance
policy covering such Mortgage Loan or Mortgaged Property (or
Underlying
Mortgaged Property, in the case of a Co-op 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 the related Underlying Mortgaged Property,
in the case of
a Co-op Loan) or released either to the Mortgagor or to the holder
of a senior
lien on the related Mortgaged Property (or the related Underlying
Mortgaged
Property in the case of a Co-op Loan) 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 a Mortgage Loan or the related
Mortgaged
Property (or the related Underlying Mortgaged Property, in the case
of a Co-op
Loan).
-28-
<PAGE>
Interest Carry Forward Amount: Any of the Class A-1 Interest Carry
Forward
Amount, the Class A-2A Interest Carry Forward Amount, the Class
A-2B Interest
Carry Forward Amount, the Class A-2C Interest Carry Forward Amount,
the Class R
Interest Carry Forward Amount, the Class M-1 Interest Carry Forward
Amount, the
Class M-2 Interest Carry Forward Amount, the Class M-3 Interest
Carry Forward
Amount, the Class M-4 Interest Carry Forward Amount, the Class M-5
Interest
Carry Forward Amount, the Class M-6 Interest Carry Forward Amount,
the Class B-1
Interest Carry Forward Amount, the Class B-2 Interest Carry Forward
Amount, the
Class B-3 Interest Carry Forward Amount or the Class C Interest
Carry Forward
Amount, as the case may be.
Interest Determination Date: With respect to the Certificates, (i)
for any
Accrual Period other than the first Accrual Period, the second
LIBOR Business
Day preceding the commencement of such Accrual Period and (ii) for
the first
Accrual Period, December 27, 2005.
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 and such
Distribution
Date, (3) all Compensating Interest with respect to the Mortgage
Loans and such
Distribution Date, (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) all proceeds of any purchase
pursuant to
Section 2.02 or 2.03 during the related Prepayment Period or
pursuant to Section
9.01 not later than the related Determination Date (to the extent
that such
proceeds relate to interest) less the Servicing Fee and (6) all
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, the Master
Servicer, the
Securities Administrator and the Trustee pursuant to this
Agreement.
Latest Possible Maturity Date: The latest maturity date for any
Mortgage
Loan in the Trust Fund plus one year.
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
Master Servicer 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 Condemnation Proceeds,
Insurance
Proceeds, received in connection with the partial or complete
liquidation of a
Mortgage Loan, 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 the final sale of a
related REO
Property, less the sum of related unreimbursed Advances, Servicing
Fees,
Servicing Advances and any other expenses related to such Mortgage
Loan.
-29-
<PAGE>
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 (or
applicable
dwelling unit, in the case of a Co-op Loan) and (Y) the sales price
of the
related Mortgaged Property (or applicable dwelling unit, in the
case of a Co-op
Loan) at the time of origination.
Losses: Any losses, claims, damages, liabilities or expenses
collectively.
Lower Tier REMIC: As described in the Preliminary Statement and
Section
2.07.
Lower Tier REMIC Interests: Each of the Class LTA-1 Interest, the
Class
LTA-2A Interest, the Class LTA-2B Interest, the Class LTA-2C
Interest, the Class
LTM-1 Interest, the Class LTM-2 Interest, the Class LTM-3 Interest,
the Class
LTM-4 Interest, the Class LTM-5 Interest, the Class LTM-6 Interest,
the Class
LTB-1 Interest, the Class LTB-2 Interest, the Class LTB-3 Interest,
the Class
LTIX Interest, the Class LTIIX Interest, the Class LTII1A Interest,
the Class
LTII1B Interest, the Class LTII2A Interest, the Class LTII2B
Interest and the
Class LTR Interest.
Lower Tier REMIC I Marker Interests: Each of the classes of Lower
Tier
REMIC Regular Interests other than the Class LTIX Interest, the
Class LTIIX
Interest, the Class LTII1A Interest, the Class LTII1B Interest, the
Class LTII2A
Interest, the Class LTII2B Interest.
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 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.
Master Servicer: LaSalle Bank National Association, a national
banking
association, or any successor in interest.
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.
-30-
<PAGE>
MIN:
The loan number for any MERS Loan.
Minimum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan,
the minimum rate of interest set forth as such in the related
Mortgage Note.
Minimum Required Overcollateralization Amount: An amount equal to
the
product of (x) 0.50% and (y) the Stated Principal Balance of the
Mortgage Loans
as of the Cut-off Date.
MOM
Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely
as nominee for the originator of such Mortgage Loan and its
successors and
assigns.
Monthly Statement: The statement delivered to the
Certificateholders
pursuant to Section 4.05.
Moody's: Moody's Investors Service, Inc. or any successor in
interest.
Mortgage: With respect to a Mortgage Loan that is not a Co-op Loan,
the
mortgage, deed of trust or other instrument with all riders
attached thereto
creating a first lien or a first priority ownership interest in an
estate in fee
simple in real property securing a Mortgage Note. With respect to a
Co-op Loan,
the security agreement with all riders attached thereto creating a
security
interest in the stock allocated to a dwelling unit in a residential
cooperative
housing corporation and pledged to secure such Co-op Loan and the
related Co-op
Lease.
Mortgage File: The mortgage documents listed in Section 2.01
hereof
pertaining to a particular Mortgage Loan and any additional
documents delivered
to the Trustee to be added to the Mortgage File pursuant to this
Agreement.
Mortgage Group: Either of Group One or Group Two.
Mortgage 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 Properties), 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 list of Mortgage Loans (as from time to
time
amended by the Custodian on behalf of the Trustee 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 and B-3, setting forth the following information
with respect
to each Mortgage Loan:
(i) the loan number;
(ii) the borrower name and address;
(iii) the unpaid principal balance of the Mortgage Loans;
(iv) the Initial Mortgage Rate;
(v) the original maturity date and the months remaining before
maturity date;
-31-
<PAGE>
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the first payment due date of the Mortgage Loan;
(ix) the Loan-to-Value Ratio at origination with respect to a
first
lien
Mortgage Loan;
(x) a code indicating whether the residential dwelling at the time
of
origination was represented to be owner-occupied;
(xi) a code indicating the property type;
(xii) 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;
(H) the lifetime rate
cap;
(xiii) location of the related Mortgaged Property (or
Underlying
Mortgaged Property, in the case of a Co-op Loan);
(xiv) a code indicating whether a Prepayment Charge is applicable
and,
if
so, the term of such Prepayment Charge;
(xv) the Credit Score and date obtained; and
(xvi) the MIN.
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 with all riders
attached
thereto.
Mortgage Pool: The aggregate of the Mortgage Loans identified in
the
Mortgage Loan Schedule.
Mortgaged Property: The underlying property securing a Mortgage
Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note
from
time to time.
Mortgagor: The obligor on a Mortgage Note.
-32-
<PAGE>
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 respective Net Mortgage Rates and the Stated Principal Balances
of such
Mortgage Loans as of the preceding Distribution Date (or, in the
case of the
first Distribution Date, as of the Cut-off Date) 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.
NIMs
Insurer: Any of the one or more insurers, if any, that is
guaranteeing
certain payments under any NIM Notes; provided, that upon the
payment in full of
the NIM Notes, all rights of the NIMs Insurer hereunder shall
terminate.
NIMs
Insurer Default: As defined in Section 10.12.
Non-Recoverable Advance: Any portion of an Advance previously made
or
proposed to be made by the Servicer that, in the good faith
judgment of the
Servicer, will not or, in the case of a current delinquency, would
not, be
ultimately recoverable by the Servicer from the related Mortgagor,
related
Liquidation Proceeds or otherwise with respect to the related
Mortgage Loan.
Non-Recoverable Servicing Advance: Any portion of a Servicing
Advance
previously made or proposed to be made by the Servicer that, in the
good faith
judgment of the Servicer, will not or, in the case of a current
Servicing
Advance, would not, be ultimately recoverable by the Servicer from
the related
Mortgagor, related Liquidation Proceeds or otherwise with respect
to the related
Mortgage Loan.
Non-Supported Interest Shortfall: As defined in Section 4.02.
Offered Certificates: The Class A, Class M, Class B 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
Master Servicer, the Servicer or the Securities Administrator (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 Master Servicer, the Servicer, the Securities
Administrator
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 Securities Administrator 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 Securities Administrator as follows:
-33-
<PAGE>
(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, the Master Servicer, the Servicer, the Trustee or
the Securities
Administrator, 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, the Master Servicer, the
Servicer or the
Securities Administrator, (2) not have any direct financial
interest in the
Depositor, the Master Servicer, the Servicer, the Trustee or the
Securities
Administrator or in any affiliate of any such party and (3) not be
connected
with the Depositor, the Master Servicer, the Servicer, the Trustee
or the
Securities Administrator as an officer, employee, promoter,
underwriter,
trustee, partner, director or person performing similar
functions.
Optional Termination: The termination of the Trust Fund hereunder
pursuant
to clause (b) of Section 9.01 hereof.
Optional Termination Amount: The amount received by the
Securities
Administrator in connection with any purchase of all of the
Mortgage Loans and
REO Properties pursuant to Section 9.01(b).
Optional Termination Price: On any date after the Initial
Optional
Termination Date an amount equal to the sum of (i) the then
aggregate
outstanding Stated Principal Balance of the Mortgage Loans (or, if
such Mortgage
Loan is an REO Property, the fair market value of such REO
Property) plus
accrued interest thereon at the applicable Mortgage Rate through
the Due Date in
the month in which the Optional Termination Price is to be
distributed to the
Certificateholders; (ii) any unreimbursed out-of-pocket costs and
expenses owed
to the Trustee, the Master Servicer, the Securities Administrator
or the
Servicer, any unpaid or unreimbursed Servicing Fees, Securities
Administrator
Fees and all unreimbursed Advances and Servicing Advances, in each
case incurred
by such party in the performance of its obligations and (iii) any
unreimbursed
costs, penalties and/or damages incurred by the Trust Fund in
connection with
any violation relating to any of the Mortgage Loans of any
predatory or abusive
lending law.
OTS:
The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and
authenticated under
this Agreement except: (1) Certificates theretofore canceled by the
Securities
Administrator or delivered to the Securities Administrator for
cancellation; and
(2) Certificates in exchange for which or in lieu of which other
Certificates
have been executed by the Securities Administrator and delivered by
the
Securities Administrator 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.
-34-
<PAGE>
Overcollateralization Amount: As of any date of determination, the
excess
of (1) the sum of (x) 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 Fund
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
(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;
-35-
<PAGE>
(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 Securities
Administrator
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
Securities
Administrator 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 Securities Administrator 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 offered
by
the
Securities Administrator, the Trustee or their respective
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 Rating Agency rating such fund;
and
(x) short
term investment funds sponsored by any trust company or
national banking association incorporated under the laws of the
United
States or any state thereof, other than the Securities
Administrator 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
-36-
<PAGE>
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 shall receive an Opinion of Counsel,
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) each 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 and the Securities
Administrator with a duly
completed Internal Revenue Service Form W-8ECI or applicable
successor form. The
terms "United States," "State" and "International Organization"
shall have the
meanings set forth in Section 7701 of the Code. A corporation will
not be
treated as an instrumentality of the United States or of any State
thereof for
these purposes if all of its activities are subject to tax and,
with the
exception of the Federal Home Loan Mortgage Corporation, a majority
of its board
of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, limited
liability
company, joint venture, association, joint-stock company, trust,
unincorporated
organization or government, or any agency or political subdivision
thereof.
Pool
Stated Principal Balance: As to any Distribution Date, the
aggregate
of the Stated Principal Balances, as of such Distribution Date, of
the Mortgage
Loans that were Outstanding Mortgage Loans as of such date.
Preference Claim: The meaning set forth in Section 4.04(j)
hereof.
Prepayment Assumption:
A rate or rates of prepayment, as described in the
Prospectus Supplement in the definition of "Modeling Assumptions,"
relating to
the Offered Certificates.
Prepayment Charges: Any prepayment fees, premiums or charges to be
paid by
a Mortgagor on a Mortgage Loan in connection with any Principal
Prepayment
pursuant to the terms of the related Mortgage Note or Mortgage, as
applicable,
as identified on the Mortgage Loan Schedule.
-37-
<PAGE>
Prepayment Interest Excesses: With respect to any Servicer
Remittance Date,
for each Mortgage Loan that was the subject of a partial Principal
Prepayment or
a Principal Prepayment in full during the portion of the related
Prepayment
Period occurring between the first day of the 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), 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 or
in the case of a partial Principal Prepayment, on the amount of
such prepayment,
exceeds (ii) the amount of interest paid or collected in connection
with such
Principal Prepayment.
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 (i) the Principal Funds for such Distribution Date and (ii)
any Extra
Principal Distribution Amount for such Distribution Date.
Principal Funds: With respect to the Mortgage Loans and any
Distribution
Date, the sum, without duplication, of (1) all 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)
Principal
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 any 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) all 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, the
Master Servicer,
the Securities Administrator and the Trustee pursuant to this
Agreement and
allocable to principal.
Principal Prepayment: Any Mortgagor payment or other recovery of
(or
proceeds with respect to) principal on a Mortgage Loan (including
Mortgage Loans
purchased or repurchased under Sections 2.02, 2.03, 3.12 and 9.01
hereof) that
is received or recovered 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.
-38-
<PAGE>
Prospectus Supplement: The Prospectus Supplement dated December 22,
2005
relating to the public offering of the Offered Certificates.
PUD:
A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan required to
be
repurchased by the Seller pursuant to Section 2.02 or 2.03 hereof
or purchased
by the Servicer pursuant to Section 3.12(c) hereof, an amount equal
to the sum
of (i) 100% of the unpaid principal balance of the Mortgage Loan as
of the date
of such purchase together with any unreimbursed Servicing Advances,
(ii) accrued
interest on such unpaid principal balance 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 unreimbursed costs, penalties
and/or damages
incurred by the Trust Fund (or the Securities Administrator, the
Master Servicer
or the Trustee on behalf of the Trust Fund) in connection with any
violation
relating to such Mortgage Loan of any predatory or abusive lending
law. With
respect to any REO Property purchased by the Servicer pursuant to
Section
3.12(c) hereof, an amount equal to the fair market value of such
REO Property,
as determined in good faith by the Servicer
Rating Agency: Either S&P or Moody's. 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) a Mortgage Loan
which is not
a Liquidated Loan, any amount of principal that the Mortgagor is no
longer
legally required to pay (except for the extinguishment of debt that
results from
the exercise of remedies due to default by the Mortgagor).
Record Date: With respect to any Distribution Date, the close of
business
on the last Business Day of the month preceding the month in which
the
applicable Distribution Date occurs (or, in the case of the first
Distribution
Date, the Closing Date).
Reference Banks: Barclays Bank PLC, JPMorgan Chase Bank, N.A.,
Citibank,
N.A., Wells Fargo Bank, 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 Securities Administrator which are engaged in
transactions
in Eurodollar deposits in the international Eurocurrency market (i)
with an
established place of business in London, England, (ii) whose
quotations appear
on the Reuters Screen LIBO Page on the relevant Interest
Determination Date and
(iii) which have been designated as such by the Securities
Administrator.
Regular Certificate: Any one of the Class A, Class M and Class
B
Certificates.
Regulation S: Regulation S promulgated under the Securities Act or
any
successor provision thereto, in each case as the same may be
amended from time
to time; and all references to any rule, section or subsection of,
or definition
or term contained in, Regulation S means such rule, section,
subsection,
definition or term, as the case may be, or any successor thereto,
in each case
as the same may be amended from time to time.
-39-
<PAGE>
Regulation S Book-Entry Certificates: Certificates sold in
offshore
transactions in reliance on Regulation S in the form of one or more
permanent
global Certificates in definitive, fully registered form without
interest
coupons, which shall be deposited on behalf of the subscribers for
such
Certificates represented thereby with the Securities Administrator,
as custodian
for DTC and registered in the name of a nominee of DTC.
Relief Act: The Servicemembers Civil Relief Act or any similar
state or
local law.
Relief Act Shortfall: With respect to any Distribution Date and
any
Mortgage Loan, any reduction in the amount of interest or principal
collectible
on such Mortgage Loan for the most recently ended calendar month as
a result of
the application of the Relief Act.
REMIC: A "real estate mortgage investment conduit" within the
meaning of
section 860D of the Code. References herein to "the REMICs" or "a
REMIC" shall
mean either 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: As defined in Section 4.04(j) 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
Seller 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
-40-
<PAGE>
score or credit grade than that of the Deleted Mortgage Loan; (4)
have a
Loan-to-Value Ratio 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 (or its custodian), substantially in the
form of Exhibit
I hereto.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance
policy that is required to be maintained from time to time under
this Agreement.
Required Percentage: As of any Distribution Date following the
Stepdown
Date, the quotient of (1) the excess of (A) the Stated Principal
Balances 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 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 Securities Administrator 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 Securities Administrator 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
Securities
Administrator can determine no such arithmetic mean, the lowest
one-month United
States dollar lending rate which New York City banks selected by
the Securities
Administrator are quoting on such Interest Determination Date to
leading
European banks.
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 distributions in respect of the Class LTR Interest and
distributions on the
Class R Certificate in respect of Excess Interest.
Responsible Officer: When used with respect to the Securities
Administrator, the Master Servicer or the Servicer, any officer of
the
Securities Administrator, the Master Servicer or the Servicer with
direct
responsibility for the administration of this Agreement and 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. When
used with respect to the Trustee, any officer of the Trustee 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, a division of The McGraw-Hill
Companies, Inc., or
any successor in interest.
Sale
Agreement: The Mortgage Loan Sale and Assignment Agreement dated as
of
December 1, 2005 between the Depositor and the Seller.
-41-
<PAGE>
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.
Securities Administrator: LaSalle Bank National Association, a
national
banking association, or any successor in interest.
Securities Administrator Fee: The Securities Administrator is
entitled to
the investment income earned on amounts on deposit in the
Certificate Account as
set forth in Section 3.05(g) hereof.
Seller: Merrill Lynch Mortgage Lending, Inc., a Delaware
corporation, or
its successor in interest.
Servicer: National City Home Loan Services, Inc., a Delaware
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 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 Trigger Event: As defined in Section 7.02 hereof.
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 of the Servicer's
servicing
obligations hereunder, including, but not limited to, the cost of
(1) the
preservation, inspection, restoration and protection of a Mortgaged
Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan),
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, substitutions of trustees on trust
deeds, deeds of
reconveyance or Assignments of Mortgage to the extent not otherwise
recovered
from the related Mortgagors or payable under this Agreement, (5)
correcting
errors of prior servicers; costs and expenses charged to the
Servicer by the
Trustee or Securities Administrator; tax tracking; title research;
flood
certifications; 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;
provided that
such amounts are required to be advanced only to the extent such
advances
constitute "unanticipated expenses" within the meaning of Treasury
Regulation
Section 1.860G-1(b)(3)(ii).
Servicing Fee: As to each Mortgage Loan and any Distribution Date,
an
amount equal to the product of (x) one-twelfth of the Servicing Fee
Rate and (y)
the Stated Principal Balance of such Mortgage Loan as of the
preceding
Distribution Date or, in the event of any payment of interest that
accompanies a
Principal Prepayment in full made by the Mortgagor, interest at the
Servicing
Fee Rate on
-42-
<PAGE>
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: 0.50% per annum.
Servicing Officer: Any officer of the Servicer or the Special
Servicer, as
applicable, involved in, or responsible for, the administration and
servicing of
the Mortgage Loans whose name appears on a list of servicing
officers furnished
to the Master Servicer, the Securities Administrator and the
Trustee by the
Servicer on the Closing Date or by the Special Servicer upon a
servicing
transfer of any Mortgage Loans 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 (other than rights with respect to
Advances and
Servicing Advances herein), including JPMorgan Chase Bank, N.A., as
the
representative of certain lenders.
Servicing Transfer Costs: In the event that the Servicer does not
reimburse
the Master Servicer under 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 manipulation, completion or correction of such
servicing data as
may be required by the Master Servicer or any successor servicer to
correct any
errors or insufficiencies in the servicing data or otherwise to
enable the
Master Servicer or successor servicer to service the Mortgage Loans
properly and
effectively.
SFAS
140: Statement of Financial Accounting Standard No. 140,
Accounting
for Transfers and Servicing of Financial Assets and Extinguishments
of
Liabilities dated September 2000, published by the Financial
Accounting
Standards Board of the Financial Accounting Foundation.
Special Servicer: Wilshire Credit Corporation, a Nevada
corporation, or its
successor in interest.
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
January
2009 or (2) the first Distribution Date on which (A) the Class A
Certificate
Principal Balance (reduced by the Principal Funds with respect to
such
Distribution Date) is less than or equal to (B) 55.90% of the
Stated Principal
Balances of the Mortgage Loans as of such Distribution Date.
-43-
<PAGE>
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>
January 2009 -- December 2009 2.85% with respect to
January 2009, plus an
additional 1/12th of 1.40% for each month
thereafter
January 2010 -- December 2010 4.25% with respect to
January 2010, plus an
additional 1/12th of 0.50% for each month
thereafter
January 2011 -- December 2011 4.75% with respect to
January 2011, plus an
additional 1/12th of 0.25% for each month
thereafter
January 2012 and thereafter 5.00%
</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 and REO
Properties
and Mortgage Loans with respect to which the applicable Mortgagor
is in
bankruptcy) and (B) the Stated Principal Balance of the Mortgage
Loans as of the
preceding Servicer Remittance Date, equals or exceeds the product
of (i) 35.00%
and (ii) the Required Percentage or (2) the quotient (expressed as
a percentage)
of (A) the aggregate Realized Losses incurred from the Cut-off Date
through the
last day of the calendar month preceding such Distribution Date and
(B) the
aggregate principal balance of the Mortgage Loans as of the Cut-off
Date exceeds
the Stepdown Required Loss Percentage.
Subordinated Certificates: Each Class of the Class M and Class
B
Certificates.
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 Class A-1 and Class R Certificates, in the case of
Group One, or
the Class A-2 Certificates, in the case of Group Two, 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 confirmation and
agreement
between the Trust Fund or the Securities Administrator and the Cap
Contract
Counterparty (in the form of Exhibit N-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 O-3.
Subordinated Certificate Cap Contract Termination Date: The
Distribution
Date in October 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
-44-
<PAGE>
Certificate Principal Balance of the Class A-1 and Class R
Certificates, in the
case of Group One, or the Class A-2 Certificates, in the case of
Group Two) 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
8.730% per
annum.
Subsequent Recovery: Any amount received on a Mortgage Loan (net of
amounts
reimbursed to the Servicer related to such Mortgage Loan)
subsequent to such
Mortgage Loan being determined to be a Liquidated 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.
Transferor: First Franklin Financial Corporation.
Trust Fund: The corpus of the trust (the "First Franklin Mortgage
Loan
Trust, Series 2005-FF12") created hereunder consisting of (i) the
Mortgage Loans
and all interest and principal received on or with respect thereto
on and after
the Cut-off Date to the extent not applied in computing the Cut-off
Date
Principal Balance thereof, exclusive of interest not required to be
deposited in
the Collection Account; (ii) the Collection Account, 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; (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
Cap Contract
Account.
Trustee: Citibank, N.A., a national banking association, not in
its
individual capacity, but solely in its capacity as trustee for the
benefit of
the Certificateholders under this Agreement, and any successor
thereto, and any
corporation or national banking association resulting from or
surviving any
consolidation or merger to which it or its successors may be a
party and any
successor trustee as may from time to time be serving as successor
trustee
hereunder.
Uncertificated Class C Interest: An uncertificated interest with an
initial
principal amount equal to the initial Overcollateralization Amount
and 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).
Underlying Mortgaged Property: With respect to each Co-op Loan,
the
underlying real property owned by the related residential
cooperative housing
corporation.
-45-
<PAGE>
Unpaid Realized Loss Amount: The Class M-1 Unpaid Realized Loss
Amount,
Class M-2 Unpaid Realized Loss Amount, Class M-3 Unpaid Realized
Loss Amount,
Class M-4 Unpaid Realized Loss Amount, Class M-5 Unpaid Realized
Loss Amount,
Class M-6 Unpaid Realized Loss Amount, Class B-1 Unpaid Realized
Loss Amount,
Class B-2 Unpaid Realized Loss Amount, Class B-3 Unpaid Realized
Loss Amount and
Class C Unpaid Realized Loss Amount, collectively.
Upper Collar: Any of the Class A-1 Upper Collar, the Class A-2
Upper Collar
or the 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 as follows: (1) 98% to the Class A, Class M and
Class B
Certificates, with the allocation among such Certificates to be in
proportion to
the Certificate Principal Balance of each Class relative to the
Certificate
Principal Balance of all other Classes and (2) each Class of the
Class C and
Class P will be allocated 1% of the Voting Rights. Voting Rights
will be
allocated among the Certificates of each such Class in accordance
with their
respective Percentage Interests.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01.
Conveyance of Mortgage Loans.
The
Depositor, concurrently with the execution and delivery hereof,
does
hereby sell, transfer, assign, set over and convey to the Trustee
without
recourse all the right, title and interest of the Depositor in and
to the assets
of the Trust Fund. Such assignment includes all interest and
principal received
on or with respect to the Mortgage Loans, on or after the Cut-off
Date (other
than Scheduled Payments due on the Mortgage Loans on or before the
Cut-off
Date).
It
is agreed and understood by the Depositor, the Master Servicer,
the
Servicer, the Special Servicer, the Securities Administrator and
the Trustee
that it is not intended that any Mortgage Loan be included in the
Trust that is,
without limitation, a "High-Cost Home Loan" as defined by the Home
Ownership and
Equity Protection Act of 1994 or any other applicable
anti-predatory lending
laws, including but not limited to (i) a "High-Cost Home Loan" as
defined in the
New Jersey Home Ownership Act effective November 27, 2003; (ii) a
"High-Cost
Home Loan" as defined in the New Mexico Home Loan Protection Act
effective
January 1, 2004; or (iii) a "High-Cost Home Loan" as defined in
the
Massachusetts Predatory Home Loan Practices Act effective November
7, 2004; (iv)
a "High-Cost Home Loan" as defined by the Indiana High Cost Home
Loan Law
effective January 1, 2005 or (v) a "High-Cost Home Loan" as defined
by the
Illinois High-Risk Home Loan Act effective January 1, 2004.
(i)
In connection with such assignment, the Depositor does hereby
deliver
to, and deposit with, the Trustee or the Custodian on its behalf,
the following
documents or instruments with respect to each Mortgage Loan so
assigned that is
not a Co-op Loan:
-46-
<PAGE>
(A) The original Mortgage Note endorsed in blank or, "Pay to the
order
of
Citibank, N.A., as trustee, without recourse" together with all
riders
thereto. The Mortgage Note shall include all intervening
endorsements
showing a complete chain of the title from the Transferor to
[____________________];
(B) Except as provided below and for each Mortgage Loan that is not
a
MERS
Loan, the original recorded Mortgage with together 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
Transferor to be
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 endorsed either in blank or,
to
"Citibank, N.A., as trustee;"
(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; and
(F) Originals of all assumption and modification agreements, if
any.
(ii)
In connection with such assignment, the Depositor does hereby
deliver
to, and deposit with, the Trustee or the Custodian on its behalf,
the following
documents or instruments with respect to each Mortgage Loan so
assigned that is
a Co-op Loan:
(A) (i) The original Mortgage Note (or a lost note affidavit
(including a copy of the original Mortgage Note)) or (ii)
original
consolidation, extension and modification agreement (or a lost
note
affidavit (including a copy of the original consolidation,
extension and
modification agreement)), in either case endorsed either in blank
or, "Pay
to
the order of Citibank, N.A., as trustee, without recourse;"
(B) The original Mortgage entered into by the Mortgagor with
respect
to
such Co-Op Loan;
(C) The original Assignment of Mortgage endorsed either in blank or
to
"Citibank, N.A., as trustee;"
(D) Original assignments of Mortgage showing a complete chain
of
assignment from the originator of the related Co-Op Loan to the
last
endorsee on the Mortgage Note;
-47-
<PAGE>
(E) Original Form UCC-1 and any continuation statements with
evidence
of
filing thereon entered into by the Mortgagor with respect to such
Co-Op
Loan
(or a recorded copy thereof);
(F) Form UCC-3 (or copy thereof) by the Transferor or its agent
assigning the security interest covered by such Form UCC-1 to
"Citibank,
N.A., as trustee," together with all Forms UCC-3 (or copies
thereof)
showing a complete chain of assignment from the originator of the
related
Co-op Loan to the Transferor, with evidence of recording
thereon;
(G) Original stock certificate representing the stock allocated to
the
related dwelling unit in the related residential cooperative
housing
corporation and pledged by the related Mortgagor to the originator
of such
Co-op Loan with a stock power in blank attached;
(H) Original proprietary lease;
(I) Original assignment of proprietary lease or a copy thereof, to
the
Trustee or in blank, and all intervening assignments thereof;
(J) Original recognition agreement or a copy thereof of the
interests
of
the mortgagee with respect to the Co-op Loan by the residential
cooperative housing corporation, the stock of which was pledged by
the
related Mortgagor to the originator of such Co-op Loan; and
(K) Originals of any assumption, consolidation or modification
agreements relating to any of the items specified in (A) through
(F) above
with
respect to such Co-op Loan.
If
in connection with any Mortgage Loan that is not a Co-op 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 or the Custodian on its behalf 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 that is not a Co-op Loan, none of
the
Depositor, the Master Servicer, the Servicer, the Special Servicer,
the
Securities Administrator or the Trustee shall be obligated to cause
to be
recorded the Assignment of Mortgage referred to in this Section
2.01. With
respect to any Co-op Loan, none of the Depositor, the Servicer, the
Master
Servicer, the Securities Administrator or the Trustee shall be
obligated to
cause to be filed the Form UCC-3 referred to in this Section 2.01.
In the event
that any Assignment of Mortgage referred to in this Section 2.01 is
not recorded
or is improperly recorded, the Servicer, the Master Servicer, the
Securities
Administrator and the Trustee shall have no liability for any
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 on behalf of the
Certificateholders. None of the Depositor, the Master Servicer, the
Servicer or
the Securities Administrator shall take any action inconsistent
with such
-48-
<PAGE>
ownership and shall not claim any ownership interest therein. The
Depositor, the
Master Servicer, the Servicer and Securities Administrator 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 except as
specifically set
forth herein.
SECTION 2.02. Acceptance by the 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 or the Custodian on its behalf in
trust for the
use and benefit of all present and future Certificateholders.
The
-49-
<PAGE>
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 within 45 Business Days of the Closing Date.
The Securities Administrator acknowledges receipt of the three
Cap
Contracts (forms of which are attached hereto as Exhibits N-1, N-2
and N-3) and
the Sale Agreement.
The Trustee or the Custodian on its behalf agrees, for the benefit
of
Certificateholders and the NIMs 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 NIMs Insurer, the Depositor,
the Master
Servicer 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 or the
Custodian on its behalf 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 or the
Custodian on its
behalf shall promptly (and in any event within no more than five
Business Days)
after such finding so notify the NIMs Insurer, the Servicer, the
Special
Servicer, the Master Servicer, the Seller and the Depositor. In
addition, the
Trustee or the Custodian on its behalf shall also notify the NIMs
Insurer, the
Master Servicer, the Servicer, the Special Servicer, the Seller and
the
Depositor 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 or the
Custodian on its
behalf written notice stating that such Mortgage has been delivered
to the
appropriate public recording office for recordation and thereafter
the Depositor
shall deliver or cause to be delivered such Mortgage with evidence
of recording
thereon upon receipt thereof from the public recording office. The
Trustee shall
request that the Seller correct or cure such omission, defect or
other
irregularity, or substitute a Mortgage Loan pursuant to the
provisions of
Section 2.03, 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 or the
Custodian on its
behalf 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 Certificate Account or Collection
Account, as
appropriate, promptly upon receipt, and, upon receipt by the
Trustee of written
notification of such deposit signed by a Servicing Officer, the
Trustee or the
Custodian on its behalf, 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, as
shall be requested by the Seller and 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 NIMs Insurer. The preceding sentence
shall not,
however, limit any remedies available to the Certificateholders,
the NIMs
Insurer, the Depositor or the Trustee pursuant to the Sale
Agreement. Neither
the Trustee nor the Custodian on its behalf shall be under any 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 Servicer, the Special Servicer, the Master Servicer, the
Securities
Administrator and the Trustee shall keep confidential the name of
each Mortgagor
except as required by this Agreement and the Servicer, the Special
Servicer, the
Master Servicer, the Securities Administrator and the Trustee shall
not solicit
any such Mortgagor for the purpose of refinancing the related
Mortgage Loan;
notwithstanding anything herein to the contrary, the foregoing
shall not be
construed to prohibit (i) disclosure of any and all
-50-
<PAGE>
information that is or becomes publicly known, or information
obtained by the
Trustee, the Servicer, the Special Servicer, the Master Servicer or
the
Securities Administrator from sources other than the other parties
hereto, (ii)
disclosure of any and all information (A) if required by any
applicable law,
rule or regulation, (B) to any government agency or regulatory body
having or
claiming authority to regulate or oversee any aspects of the
Trustee's business
or that of its affiliates, (C) pursuant to any subpoena, civil
investigation
demand or similar demand or request of any court, regulatory
authority,
arbitrator or arbitration to which Trustee or any affiliate or an
officer,
director, employer or shareholder thereof is a party or (D) to any
affiliate,
independent or internal auditor, agent, employee or attorney of the
Trustee, the
Servicer, the Special Servicer, the Master Servicer or the
Securities
Administrator having a need to know the same, provided that the
Trustee, the
Servicer, the Special Servicer, the Master Servicer or the
Securities
Administrator, as applicable, advises such recipient of the
confidential nature
of the information being disclosed, or (iii) any other disclosure
authorized by
the Depositor. 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 (or the custodian
on its
behalf) shall deliver to the NIMs Insurer, the Depositor, the
Master Servicer
and the Servicer the Initial 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
Special Servicer, the Master Servicer, the Securities
Administrator, the NIMs
Insurer and the Trustee as follows, as of the date hereof:
(i) The Depositor is duly organized and is validly existing as
a
corporation in good standing under the laws of the State of
Delaware and
has
full power and authority (corporate and other) necessary to own or
hold
its
properties and to conduct its business as now conducted by it and
to
enter into and perform its obligations under this Agreement and the
Sale
Agreement.
(ii) The Depositor has the full corporate power and authority
to
execute, deliver and perform, and to enter into and consummate
the
transactions contemplated by, this Agreement and the Sale Agreement
and has
duly
authorized, by all necessary corporate action on its part, the
execution, delivery and performance of this Agreement and the
Sale
Agreement; and this Agreement and the Sale Agreement, assuming the
due
authorization, execution and delivery 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,
-51-
<PAGE>
regulatory body, administrative agency or governmental body
having
jurisdiction over the Depositor; and the Depositor is not in breach
or
violation of any material indenture or other material agreement
or
instrument, or in violation of any statute, order or regulation of
any
court, regulatory body, administrative agency or governmental body
having
jurisdiction over it which breach or violation may materially
impair the
Depositor's ability to perform or meet any of its obligations under
this
Agreement.
(iv) No litigation is pending, or, to the best of the
Depositor's
knowledge, threatened, against the Depositor that would materially
and
adversely affect the execution, delivery or enforceability of
this
Agreement and the Sale Agreement or the ability of the Depositor to
perform
its
obligations under this Agreement and the Sale Agreement in
accordance
with
the terms hereof.
(v) No consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution, delivery
and
performance by the Depositor of, or compliance by the Depositor
with, this
Agreement and the Sale Agreement or the consummation of the
transactions
contemplated hereby, or if any such consent, approval,
authorization or
order is required, the Depositor has obtained the same. The
Depositor
hereby represents and warrants to the Trustee with respect to each
Mortgage
Loan as of the Closing
Date and following the transfer of the Mortgage
Loans to it by the 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) The representations and warranties of the Seller with respect
to
the Mortgage Loans contained in the Sale Agreement were made as of
the Closing
Date.
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
NIMs Insurer or
of any Certificateholder shall be the Trustee's right to enforce
the obligations
of the Seller under such 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 Master Servicer,
the
Securities Administrator, the Servicer, the Special Servicer, the
NIMs Insurer
or the Trustee of a breach of any of such representations and
warranties 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 such breach of any
representation or
warranty, 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, the Trustee shall
enforce its rights
under the Sale Agreement for the benefit of Certificateholders and
the NIMs
Insurer. If a breach of the representations and warranties set
forth in the Sale
Agreement exists solely due to the unenforceability of a Prepayment
Charge, the
Trustee shall notify the NIMs Insurer thereof and not seek to
enforce the
repurchase remedy provided for herein unless directed in writing to
do so by the
NIMs Insurer. In the event of a breach of the representations and
warranties
with respect to the Mortgage Loans set forth in the Sale Agreement,
the Trustee
shall, at the request of the NIMs Insurer, enforce the right of the
Trust Fund
and the NIMs Insurer to be indemnified for such breach of
representation and
warranty. In the event that such breach
-52-
<PAGE>
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). 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 in the Sale Agreement 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 or the Custodian on its
behalf of a
Request for Release substantially in the form of Exhibit I and
shall not be
effected unless it is within two years of the Startup Day. As
provided in the
Sale Agreement, the Seller indemnifies and holds the Trust Fund,
the Trustee,
the Depositor, the NIMs Insurer, the Master Servicer, the
Securities
Administrator, 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 NIMs Insurer, the
Master Servicer,
the Securities Administrator, 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. In furtherance of the foregoing, if the Seller is not
a member of
MERS and repurchases a Mortgage Loan which is registered on the
MERS System, the
Seller, at its own expense and without any right of reimbursement,
shall cause
MERS to execute and deliver an assignment of the Mortgage in
recordable form to
transfer the Mortgage from MERS to the Seller and shall cause such
Mortgage to
be removed from registration on the MERS System in accordance with
MERS' rules
and regulations.
With
respect to any Mortgage Loan repurchased by the Depositor pursuant
to
this Agreement, 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 Collection Account pursuant to Section 3.05
and the
Servicer shall notify the Securities Administrator of its receipt
of the same.
The Trustee or the Custodian on its behalf, upon receipt of notice
from the
Servicer of its 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
(or the custodian on its behalf), and neither the Trustee, the
Custodian on its
behalf nor the Securities Administrator shall 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 (or the custodian on its behalf) 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 (or the custodian on its
behalf) 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
Section 2.01; and (ii) the Depositor will be deemed to have made,
with
-53-
<PAGE>
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 (or the custodian on its behalf) shall review the Mortgage
File with
respect to each Replacement Mortgage Loan and certify to the NIMs
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") plus an amount equal to any
unreimbursed
costs, penalties and/or damages incurred by the Trust Fund in
connection with
any violation relating to such Deleted Mortgage Loan of any
predatory or abusive
lending law shall be remitted 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.
Notwithstanding any other provision of this Agreement, the right
to
substitute Mortgage Loans pursuant to this Article II shall be
subject to the
additional limitations that no substitution of a Replacement
Mortgage Loan for a
Deleted Mortgage Loan shall be made unless the Trustee, the NIMs
Insurer and the
Securities Administrator shall each have received an Opinion of
Counsel (at the
expense of the party seeking to make the substitution) that, under
current law,
such substitution will not (A) affect adversely the status of any
REMIC
established hereunder as a REMIC, or of the related "regular
interests" as
"regular interests" in any such REMIC, or (B) cause any such REMIC
to engage in
a "prohibited transaction" or prohibited contribution pursuant to
the REMIC
Provisions.
The
Trustee or the Custodian on its behalf shall cause the Mortgage
Loan
Schedule to be amended in accordance with the terms of this
Agreement.
The
Seller shall give or cause to be given written notice to the
Certificateholders and the NIMs 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
Replacement Mortgage Loan or Replacement Mortgage Loans and shall
deliver a copy
of such amended Mortgage Loan Schedule to the NIMs Insurer, the
Servicer, the
Special Servicer, the Master Servicer, the Securities Administrator
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.
(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 or
the Custodian
on its behalf and shall continue throughout the term of this
Agreement.
(e) The Depositor shall deliver a copy of the Mortgage Loan
Schedule
to the Servicer on the Closing Date.
SECTION 2.04. Representations and Warranties of the Master
Servicer;
Representations and Warranties of the Servicer; Representations and
Warranties
of the Securities Administrator.
-54-
<PAGE>
(a) The Master Servicer hereby represents and warrants to the
Depositor, the Servicer, the Special Servicer and the Trustee as
follows, as of
the date hereof:
(i) The Master Servicer is duly organized and is validly
existing
as a national banking association and is duly authorized and
qualified to
transact any and all business contemplated by this Agreement to be
conducted by
the Master Servicer.
(ii) The Master Servicer has the power and authority to master
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 action on the part of the Master
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 Master
Servicer, enforceable against the Master 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
hereunder may be brought.
(iii) The execution and delivery of this Agreement by the
Master
Servicer, the master servicing of the Mortgage Loans under this
Agreement, the
consummation of any other of the transactions contemplated by this
Agreement,
and the fulfillment of or compliance with the terms hereof are in
the ordinary
course of business of the Master Servicer and will not (A) result
in a material
breach of any term or provision of the charter or by-laws of the
Master 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 Master 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 Master Servicer of any court,
regulatory
body, administrative agency or governmental body having
jurisdiction over the
Master Servicer; and the Master 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 Master Servicer's ability to
perform or meet
any of its obligations under this Agreement.
(iv) The Master Servicer, or an affiliate thereof, is an
approved
servicer of mortgage loans for Fannie Mae and for Freddie Mac.
(v) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened, against the Master Servicer that
would
materially and adversely affect the execution, delivery or
enforceability of
this Agreement or its performance of 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 Master Servicer of, or compliance by the Master
Servicer
with, this Agreement or the consummation of the transactions
contemplated
hereby, or if any such consent, approval, authorization or order is
required,
the Master Servicer has obtained the same.
(b) The Servicer hereby represents and warrants to the Depositor,
the
Master Servicer, the Special Servicer, the Securities Administrator
and the
Trustee as follows, as of the date hereof:
-55-
<PAGE>
(i) The Servicer is a corporation duly organized, validly
existing and in good standing under the laws of Delaware and is an
operating
subsidiary of National City Bank of Indiana. As a national bank
operating
subsidiary, it is regulated by the Office of the Comptroller of the
Currency and
is subject to applicable laws and regulations. The Servicer is
authorized to
carry on its business as now being conducted as an operating
subsidiary of a
national bank.
(ii) The Servicer has the full corporate power and authority to
execute and deliver this Agreement and to perform in accordance
herewith; the
execution, delivery and performance of this Agreement (including
all instruments
or transfer to be delivered pursuant to this Agreement) by the
Servicer and the
consummation of the transactions contemplated hereby have been duly
and validly
authorized; this Agreement evidences the valid, binding and
enforceable
obligation of the Servicer, regardless of whether such enforcement
is sought in
equity or at law; and all requisite corporate action has been taken
by the
Servicer to make this Agreement valid and binding upon the Servicer
in
accordance with its terms, subject to (1) bankruptcy,
reorganization,
insolvency, moratorium or other similar laws now or hereafter in
effect relating
to creditors' rights generally, including, without limitation, the
effect of
statutory or other laws regarding fraudulent conveyances or
preferential
transfers, and (2) general principles of equity upon the specific
enforceability
of any of the remedies, covenants or other provisions of the
Agreement and upon
the availability of injunctive relief or other equitable remedies
and the
application of principles of equity (regardless of whether such
enforceability
is considered in a proceeding in equity or at law) as such
principles relate to,
limit or affect the enforcement of creditors' rights generally and
the
discretion of the court before which any proceeding for such
enforcement may be
brought.
(iii) The execution and delivery of this Agreement by the
Servicer, the servicing of the Mortgage Loans under this Agreement,
the
consummation of any other of the transactions contemplated by this
Agreement,
and the fulfillment of or compliance with the terms hereof are in
the ordinary
course of business of the Servicer and will not (A) result in a
material breach
of any term or provision of the charter or by-laws of the Servicer
or (B)
materially conflict with, result in a material breach, violation or
acceleration
of, or result in a material default under, the terms of any other
material
agreement or instrument to which the Servicer is a party or by
which it may be
bound, or (C) constitute a material violation of any statute, order
or
regulation applicable to the Servicer of any court, regulatory
body,
administrative agency or governmental body having jurisdiction over
the
Servicer; and the Servicer is not in breach or violation of any
material
indenture or other material agreement or instrument, or in
violation of any
statute, order or regulation of any court, regulatory body,
administrative
agency or governmental body having jurisdiction over it which
breach or
violation may materially impair the Servicer's ability to perform
or meet any of
its obligations under this Agreement.
(iv) [Reserved].
(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.
-56-
<PAGE>
(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.
(viii) Notwithstanding any state or federal law to the
contrary,
the Servicer shall not impose or collect a Prepayment Charge in any
instance
when the mortgage debt is accelerated as the result of the
Mortgagor's default
in making the Mortgage Loan payments.
(c) The Securities Administrator hereby represents and warrants to
the
Depositor, the Master Servicer, the Servicer, the Special Servicer
and the
Trustee as of the date hereof:
(i) The Securities Administrator is duly organized and is
validly
existing as a national banking association and is duly authorized
and qualified
to transact any and all business contemplated by this Agreement to
be conducted
by the Securities Administrator.
(ii) The Securities Administrator 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 has duly
authorized by all
necessary corporate action on the part of the Securities
Administrator 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
Securities Administrator, enforceable against the Securities
Administrator 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 hereunder may be brought.
(iii) The execution and delivery of this Agreement by the
Securities Administrator, the consummation of any other of the
transactions
contemplated by this Agreement, and the fulfillment of or
compliance with the
terms hereof are in the ordinary course of business of the
Securities
Administrator and will not (A) result in a material breach of any
term or
provision of the charter or by-laws of the Securities Administrator
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 Securities Administrator 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 Securities Administrator of
any court,
regulatory body, administrative agency or governmental body having
jurisdiction
over the Securities Administrator; and the Securities Administrator
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
Securities
Administrator's ability to perform or meet any of its obligations
under this
Agreement.
(iv) No litigation is pending or, to the best of the Securities
Administrator's knowledge, threatened, against the Securities
Administrator that
would materially and adversely affect the execution, delivery or
enforceability
of this Agreement or the ability of the Securities Administrator to
perform any
of its other obligations under this 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 Securities Administrator of, or compliance by
the Securities
Administrator with, this Agreement or the
-57-
<PAGE>
consummation of the transactions contemplated hereby, or if any
such consent,
approval, authorization or order is required, the Securities
Administrator has
obtained the same.
(d) The Special Servicer hereby represents and warrants to the
Depositor, the Master Servicer, the Servicer, the Securities
Administrator and
the Trustee as of the date hereof:
(i) The Special Servicer is duly organized and is validly
existing as a corporation in good standing under the laws of the
State of Nevada
and is duly authorized and qualified to transact any and all
business
contemplated by this Agreement to be conducted by the Special
Servicer.
(ii) The
Special Servicer 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 has duly authorized
by all
necessary corporate action on the part of the Special 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 Special
Servicer,
enforceable against the Special 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 hereunder may
be brought.
(iii) The execution and delivery of this Agreement by the
Special
Servicer, the consummation of any other of the transactions
contemplated by this
Agreement, and the fulfillment of or compliance with the terms
hereof are in the
ordinary course of business of the Special Servicer and will not
(A) result in a
material breach of any term or provision of the charter or by-laws
of the
Special 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 Special
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 Special Servicer of
any court,
regulatory body, administrative agency or governmental body having
jurisdiction
over the Special Servicer; and the Special 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 Special
Servicer's ability
to perform or meet any of its obligations under this Agreement.
(iv) No litigation is pending or, to the best of the Special
Servicer's knowledge, threatened, against the Special Servicer that
would
materially and adversely affect the execution, delivery or
enforceability of
this Agreement or the ability of the Special Servicer to perform
any of its
other obligations under this 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 Special Servicer of, or compliance by the
Special Servicer
with, this Agreement or the consummation of the transactions
contemplated
hereby, or if any such consent, approval, authorization or order is
required,
the Special Servicer has obtained the same
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans that
are not
"Qualified Mortgages."
Upon
discovery by the Depositor, the Master Servicer, the Servicer,
the
Special Servicer, the Securities Administrator or the Trustee that
any Mortgage
Loan does not constitute a "qualified
-58-
<PAGE>
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, upon the written
request of the
Depositor, 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
Securities
Administrator has caused to be authenticated and delivered to or
upon the order
of the Depositor, in exchange for the Mortgage Loans, Certificates
duly
authenticated by the Securities Administrator 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 to
the best of
its abilities, to the end that the interests of the Holders may be
adequately
and effectively protected.
SECTION 2.07. REMIC Elections.
(a) The Depositor hereby instructs and authorizes the Trustee to
make
an appropriate election to treat each of the Upper Tier REMIC and
the Lower Tier
REMIC as a REMIC. The Trustee, upon written direction of the
Securities
Administrator, 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 Upper Tier REMIC and the
Lower 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" 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) amounts 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 Section 2.07 hereof and (iv)
each Cap
Contract 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, (i) the pass-through rate on the REMIC Regular
Interests
represented by the Class A-1 Certificates and on the sole class of
residual
interest in the Upper Tier REMIC shall be subject to a cap equal to
the Class
A-1 Available Funds Cap; (ii) the pass-through rate on the REMIC
Regular
-59-
<PAGE>
Interests represented by the Class A-2 Certificates shall be
subject to a cap
equal to the Class A-2 Available Funds Cap; and (iii) the
pass-through rate on
the REMIC Regular Interests represented by the Subordinated
Certificates shall
be subject to a cap equal to the Subordinated Certificate Available
Funds Cap.
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 the Lower Tier REMIC and
the Upper Tier 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
Securities Administrator 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 each Class of the Class A,
Class
M and Class B Certificates to receive payments in respect of Excess
Interest
shall be treated as a right in interest rate cap contracts written
by the Class
C Certificateholders in favor of the holders of each Class of the
Class A, Class
M and Class B Certificates and such shall be accounted for as
property held
separate and apart from the regular interests in the Upper Tier
REMIC held by
the holders of the Class A (other than the Class R Certificate),
Class M
Certificates, Class B Certificates and the residual interest in the
Upper Tier
REMIC held by the holder of the Class R Certificate. For
information reporting
requirements, the rights of the Class A, Class M and Class B
Certificates to
receive payments in respect of Excess Interest shall be assumed to
have zero or
a de minimis value. 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, Class M and Class B 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(g) 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 Contracts, the Cap
Contract
Account, 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, Class M and
Class B Certificates shall be treated as a "grantor trust" under
the Code, for
the benefit of the holders of the Class C Certificates, and the
provisions
hereof shall be interpreted consistently with this intention. In
furtherance of
such intention, the Securities Administrator 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, Class
M, Class B 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 amounts 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
-60-
<PAGE>
the provisions hereof shall be interpreted consistently with this
intention. In
furtherance of such intention, the Securities Administrator 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) [RESERVED]
(h) All payments of principal and interest at the Net Mortgage Rate
on
each of the Mortgage Loans (other than amounts distributable to the
Class P
Certificates pursuant to Section 4.04(b)(i) hereof) 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 the 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 and 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
least amount of principal shall be distributed to each Lower Tier
REMIC II
Marker Interest with "A" at the end of its designation such that
the Lower Tier
REMIC Subordinated Balance Ratio is maintained) and finally, any
remaining
distributions of principal to the Class LTIIX Interest and (y) such
losses shall
be allocated among the Lower Tier REMIC Regular Interests described
in clause
(iii) of the preceding sentence 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 least amount of losses shall be allocated to each
Lower REMIC
II Marker Interest with "A" at the end of its designation such that
the Lower
Tier REMIC Subordinated Balance Ratio is maintained) and finally,
any remaining
losses to the Class LTIIX Interest. Notwithstanding the preceding
two sentences,
however, losses not allocated to any Class of Certificates will not
be allocated
-61-
<PAGE>
to any Lower Tier REMIC Regular Interests. All computations with
respect to the
Lower Tier REMIC Regular Interests shall be taken out to ten
decimal places.
Any
available funds remaining in the Lower Tier REMIC on a
Distribution
Date after distributions to the Lower Tier REMIC Regular Interests
shall be
distributed to the Class R Certificates in respect of the Class LTR
Interest.
If
on any Distribution Date the Certificate Principal Balance of any
Class
of Certificates is increased pursuant to the last sentence of the
definition of
"Certificate Principal Balance", then there shall be an equivalent
increase in
the principal amounts of the Lower Tier REMIC Regular Interests,
with such
increase allocated (before the making of distributions and the
allocation of
losses on the Lower Tier REMIC Regular Interests on such
Distribution Date)
among the Lower Tier REMIC Regular Interests so that, to the
greatest extent
possible, (i) each of the Lower Tier REMIC I Marker Interests has 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 and (iii)
the aggregate principal amount of the Lower Tier REMIC II Marker
Interests and
the Class LTIIX Interest shall equal 50% of the remaining principal
balance of
the Mortgage Loans. Allocations in connection with clause (iii)
shall be made so
that, to the greatest extent possible, (a) the principal balance of
each Lower
Tier REMIC II Marker Interest with "B" at the end of its
designation equals
0.05% of the aggregate scheduled principal balance of the Mortgage
Loans in
related Mortgage Group, (b) the principal balance of each Lower
Tier REMIC II
Marker Interest with "A" at the end of its designation equals 0.05%
of the
excess of (x) the aggregate scheduled principal balance of the
Mortgage Loans in
related Mortgage Group over (y) 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 and (c) any remaining
allocations are made
to the Class LTIIX Interest.
For
purposes of this Section 2.07, (i) the Class LTII1A Interest and
Class
LTII1B Interest shall be related to Group One, and (ii) the Class
LTII2A
Interest and Class LTII2B Interest shall be related to Group
Two.
(i) In the event that any REMIC provided for herein fails to
qualify
as a REMIC, loses its status as a REMIC or incurs federal, state or
local taxes
as a result of a prohibited transaction or prohibited contribution
under the
REMIC Provisions due to the negligent performance by the Servicer
or the Special
Servicer, as applicable, of its duties and obligations set forth
herein, the
Servicer, or the Special Servicer (as the case may be), shall
indemnify the NIMs
Insurer, the Trustee, the Securities Administrator, the Master
Servicer and the
Trust Fund against any and all Losses resulting from such
negligence; provided,
however, that the Servicer, or the Special Servicer (as the case
may be), shall
not be liable for any such Losses attributable to the action or
inaction of the
Trustee, the Securities Administrator, the Master Servicer, the
Depositor or the
Holder of the residual interest in such REMIC, as applicable, nor
for any such
Losses resulting from misinformation provided by the Holder of the
residual
interest in such REMIC on which the Servicer has relied. The
foregoing shall not
be deemed to limit or restrict the rights and remedies of the
Holder of the
residual interest in such REMIC now or hereafter existing at law or
in equity.
Notwithstanding the foregoing, however, in no event shall the
Servicer, or the
Special Servicer (as the case may be), have any liability (1) for
any action or
omission that is taken in accordance with and in compliance with
the express
terms of, or which is expressly permitted by the terms of, this
Agreement, (2)
for any Losses other than those arising out of a negligent
performance by the
Servicer, or the Special Servicer (as the case may be), of its
duties and
obligations set forth herein, and (3) for any special or
consequential damages
to Certificateholders (in addition to payment of principal and
interest on the
Certificates).
-62-
<PAGE>
(j) In the event that any REMIC provided for herein fails to
qualify
as a REMIC, loses its status as a REMIC, or incurs federal, state
or local taxes
as a result of a prohibited transaction or prohibited contribution
under the
REMIC Provisions due to the negligent performance by the
Securities
Administrator of its duties and obligations set forth herein, the
Securities
Administrator shall indemnify the NIMs Insurer, the Trustee and the
Trust Fund
against any and all Losses resulting from such negligence;
provided, however,
that the Securities Administrator shall not be liable for any such
Losses
attributable to the action or inaction of the Servicer, the Special
Servicer,
the Master Servicer, the Depositor, the Trustee or the Holder of
the residual
interest in such REMIC, as applicable, nor for any such Losses
resulting from
misinformation provided by the Holder of the residual interest in
such REMIC on
which the Securities Administrator has relied. The foregoing shall
not be deemed
to limit or restrict the rights and remedies of the Holder of the
residual
interest in such REMIC now or hereafter existing at law or in
equity.
Notwithstanding the foregoing, however, in no event shall the
Securities
Administrator have any liability (1) for any action or omission
that is taken in
accordance with and in compliance with the express terms of, or
which is
expressly permitted by the terms of, this Agreement, (2) for any
Losses other
than those arising out of a negligent performance by the
Securities
Administrator of its duties and obligations set forth herein, and
(3) for any
special or consequential damages to Certificateholders (in addition
to payment
of principal and interest on the Certificates).
SECTION 2.08. [RESERVED]
SECTION 2.09. Covenants of the Servicer.
The
Servicer hereby covenants to each of the other parties to this
Agreement as follows:
(a) the Servicer shall comply in the performance of its
obligations
under this Agreement with all reasonable rules and requirements of
the insurer
under each Required Insurance Policy;
(b) no written information, certificate of an officer,
statement
furnished in writing or written report delivered to the Depositor,
the Master
Servicer, the Securities Administrator, the NIMs Insurer or the
Trustee, any
affiliate of the Depositor, the Master Servicer, the Securities
Administrator,
the NIMs Insurer or the Trustee and prepared by the Servicer
pursuant to this
Agreement is inaccurate in any material respect, provided, however,
that the
Servicer shall not be responsible for inaccurate information
provided to it by
third parties.
SECTION 2.10. [RESERVED]
SECTION 2.11. Permitted Activities of the Trust. The Trust is
created for
the object and purpose of engaging in the Permitted Activities. In
furtherance
of the foregoing, the Securities Administrator is hereby authorized
and directed
to execute and deliver on behalf of the Trust, and to perform the
duties and
obligations of the Trustee under, the Cap Contracts, an insurance
and indemnity
agreement with a NIMs Insurer and any other agreement or instrument
related
thereto, in each case in such form as the Depositor shall direct or
shall
approve, the execution and delivery of any such agreement by the
Depositor to be
conclusive evidence of its approval thereof.
SECTION 2.12. Qualifying Special Purpose Entity. For purposes of
SFAS 140,
the parties hereto intend that the Trust Fund shall be treated as a
"qualifying
special purpose entity" as such term is used in SFAS 140 and any
successor rule
thereto and its power and authority as stated in Section 2.11 of
this Agreement
shall be limited in accordance with paragraph 35 thereof.
-63-
<PAGE>
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01. Servicer to Service Mortgage Loans.
For
and on behalf of the Certificateholders, the Servicer shall service
and
administer the Mortgage Loans, including without limitation, any
powers of
attorney, in accordance with Accepted Servicing Practices. In
connection with
such servicing and administration, the Servicer shall have full
power and
authority, acting alone and/or through subservicers as provided in
Section 3.02
hereof, to do or cause to be done any and all things that it may
deem necessary
or desirable in connection with such servicing and administration,
including but
not limited to, the power and authority, subject to the terms
hereof (i) to
execute and deliver, on behalf of the Certificateholders and the
Trustee,
customary consents or waivers and other instruments and documents,
(ii) to
consent to transfers of any Mortgaged Property (or the stock
allocated to a
dwelling unit related to a Co-op Loan) and assumptions of the
Mortgage Notes and
related Mortgages (but only in the manner provided in this
Agreement), (iii) to
collect any Insurance Proceeds and other Liquidation Proceeds and
(iv) subject
to Section 3.12(a), to effectuate foreclosure or other conversion
of the
ownership of the Mortgaged Property (or the stock allocated to a
dwelling unit
related to a Co-op Loan) securing any Mortgage Loan; provided that,
subject to
Section 6.03, the Servicer shall not take any action that is
inconsistent with
or prejudices the interests of the Trust Fund or the
Certificateholders in any
Mortgage Loan serviced by it under this Agreement or the rights and
interests of
the other parties to this Agreement except as otherwise required by
this
Agreement or by law. The Servicer shall not make or permit any
modification,
waiver or amendment of any term of any Mortgage Loan which would
cause any of
the REMICs provided for herein to fail to qualify as a REMIC or
result in the
imposition of any tax under Section 860G(a) or 860G(d) of the Code.
The Servicer
shall represent and protect the interest of the Trust Fund in the
same manner as
it currently protects its own interest in mortgage loans in its own
portfolio in
any claim, proceeding or litigation regarding a Mortgage Loan, but
in any case
not in any manner that is a lesser standard than that provided in
the first
sentence of this Section 3.01. Without limiting the generality of
the foregoing,
the Servicer, in its own name or in the name of the Depositor and
the Trustee,
is hereby authorized and empowered by the Depositor and the
Trustee, when the
Servicer believes it appropriate in its reasonable judgment, to
execute and
deliver, on behalf of the Trustee, the Depositor, the
Certificateholders or any
of them, any and all instruments of satisfaction or cancellation,
or of partial
or full release or discharge, subordinations and all other
comparable
instruments, with respect to the Mortgage Loans, and with respect
to the
Mortgaged Properties held for the benefit of the
Certificateholders. The
Servicer shall prepare and deliver to the Depositor, the
Securities
Administrator and/or the Trustee such documents requiring execution
and delivery
by any or all of them as are necessary or appropriate to enable the
Servicer to
service and administer the Mortgage Loans, including without
limitation, any
powers of attorney. Upon receipt of such documents, the Depositor,
the
Securities Administrator and/or the Trustee shall execute such
documents and
deliver them to the Servicer. For purposes of this Section 3.01,
the Trustee
hereby grants to the Servicer a limited power of attorney to
execute and file
any and all documents necessary to fulfill the obligations of the
Servicer under
this Section 3.01.
The
Trustee shall deliver Powers of Attorney to the Servicer promptly
after
the Closing Date and additional Powers of Attorney promptly after
request
therefor by the Servicer.
In
accordance with the standards of the preceding paragraph, the
Servicer
shall advance or cause to be advanced funds as necessary for the
purpose of
effecting the payment of taxes and assessments on the Mortgaged
Properties if
making such advances is reasonably likely to increase net
collections for the
Trust after reimbursement of such advances, which advances shall be
reimbursable
in the first instance
-64-
<PAGE>
from related collections from the Mortgagors pursuant to Section
3.06, and
further as provided in Section 3.08. To the extent that a Mortgage
does not
provide for escrow payments, (i) the Servicer shall determine
whether any such
payments are made by the Mortgagor in a manner and at a time that
is necessary
to avoid the loss of the Mortgaged Property due to a tax sale or to
foreclosure
as a result of a tax lien and (ii) the Servicer shall ensure that
all insurance
required to be maintained on the Mortgaged Property pursuant to
this Agreement
is maintained. If any such payment has not been made and the
Servicer receives
notice of a tax lien being imposed with respect to the Mortgage
Loan, the
Servicer will, to the extent required to avoid loss of the
Mortgaged Property,
advance or cause to be advanced funds necessary to discharge such
lien on the
Mortgaged Property if making such advances is reasonably likely to
increase net
collections for the Trust after reimbursement of such advances.
All
costs incurred by the Servicer, if any, in effecting the timely
payments of taxes and assessments on the Mortgaged Properties and
related
insurance premiums shall not, for the purpose of calculating
monthly
distributions to the Certificateholders, be added to the Stated
Principal
Balance under the related Mortgage Loans, notwithstanding that the
terms of such
Mortgage Loans so permit.
In
the event that the Mortgage Loan Documents relating to any Mortgage
Loan
contain provisions requiring the related Mortgagor to submit to
binding
arbitration any disputes arising in connection with such Mortgage
Loan, the
Servicer shall be entitled to waive any such provisions on behalf
of the Trust
and to send written notice of such waiver to the related Mortgagor,
although the
Mortgagor may still require arbitration of such disputes at its
option.
The
Servicer shall not be required to make any Servicing Advance
with
respect to a Mortgage Loan that is 150 days or more delinquent.
The
Servicer shall have at least 30 days' notice of the appointment of
a
NIMs Insurer prior to being required to deliver any notices
pursuant to this
Agreement to such NIMs Insurer.
The
Servicer shall deliver a list of Servicing Officers to the
Master
Servicer and the Trustee by the Closing Date.
The
Servicer will transmit full-file credit reporting data for each
Mortgage Loan pursuant to Fannie Mae Guide Announcement 97-02 and
for each
Mortgage Loan, the Servicer agrees that it shall report one of the
following
statuses each month as follows: current, delinquent (30-, 60-,
90-days, etc.),
foreclosed or charged-off.
The
Servicer further is authorized and empowered by the Trustee, on
behalf
of the Certificateholders and the Trustee, in its own name or in
the name of the
Sub-Servicer, when the Servicer or the Sub-Servicer, as the case
may be,
believes it is appropriate in its best judgment to register any
Mortgage Loan on
the MERS System, or cause the removal from the registration of any
Mortgage Loan
on the MERS System, to execute and deliver, on behalf of the
Trustee and the
Certificateholders or any of them, any and all instruments of
assignment,
release and other comparable instruments with respect to such
assignment,
release or re-recording of a Mortgage in the name of MERS, solely
as nominee for
the Trustee and its successors and assigns. Any reasonable expenses
incurred in
connection with the actions described in the preceding sentence or
as a result
of MERS discontinuing or becoming unable to continue operations in
connection
with the MERS System, shall be subject to withdrawal by the
Servicer from the
Collection Account (provided that such expenses constitute
"unanticipated
expenses" within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii)).
-65-
<PAGE>
In
connection with any modification pursuant to this Section and to
the
extent there are any unreimbursed Advances or Servicing Advances,
the Servicer
shall reimburse itself for such amounts from the Collection
Account.
SECTION 3.02. Servicing and Subservicing; Enforcement of the
Obligations of
Servicer.
(a)
The Servicer may arrange for the subservicing of any Mortgage
Loan
by a subservicer, which may be an affiliate (each, a "subservicer")
pursuant to
a Subservicing Agreement (each, a "Subservicing Agreement");
provided, however,
that (i) such subservicing arrangement and the terms of the related
Subservicing
Agreement must provide for the servicing of such Mortgage Loans in
a manner
consistent with the servicing arrangements contemplated hereunder,
(ii) that
such agreement would not result in a withdrawal or downgrading by
any Rating
Agency of the ratings of any Certificates or any of the NIM Notes
evidenced by a
letter to that effect delivered by each Rating Agency to the
Depositor and the
NIMs Insurer and (iii) the NIMs Insurer shall have consented to
such
Subservicing Agreement, which consent shall not be unreasonably
withheld.
Notwithstanding the provisions of any Subservicing Agreement, any
of the
provisions of this Agreement relating to agreements or arrangements
between the
Servicer and a subservicer or reference to actions taken through a
subservicer
or otherwise, the Servicer shall remain obligated and liable to the
Depositor,
the Securities Administrator, the Master Servicer, the Trustee and
the
Certificateholders for the servicing and administration of the
Mortgage Loans in
accordance with the provisions of this Agreement without diminution
of such
obligation or liability by virtue of such Subservicing Agreements
or
arrangements or by virtue of indemnification from the subservicer
and to the
same extent and under the same terms and conditions as if the
Servicer alone
were servicing and administering the Mortgage Loans. Every
Subservicing
Agreement entered into by the Servicer shall contain a provision
giving any
successor servicer the option to terminate such agreement, with the
consent of
the NIMs Insurer (which consent shall not be unreasonably
withheld), in the
event a successor servicer is appointed. All actions of the each
subservicer
performed pursuant to the related Subservicing Agreement shall be
performed as
an agent of the Servicer with the same force and effect as if
performed directly
by the Servicer. The Servicer shall deliver to the NIMs Insurer and
the Master
Servicer copies of all Subservicing Agreements. The Trustee, the
Master Servicer
and the Securities Administrator shall have no obligations, duties
or
liabilities with respect to a subservicer, including, without
limitation, any
obligation, duty or liability to monitor such subservicer or to pay
a
subservicer's fees and expenses.
(b) For purposes of this Agreement, the Servicer shall be deemed
to
have received any collections, recoveries or payments with respect
to the
Mortgage Loans that are received by a subservicer regardless of
whether such
payments are remitted by the subservicer to the Servicer.
SECTION 3.03. Rights of the Depositor, the Securities
Administrator, the
Master Servicer and the Trustee in Respect of the Servicer.
None
of the Securities Administrator, the Master Servicer, the Trustee
or
the Depositor shall have any responsibility or liability for any
action or
failure to act by the Servicer or the Special Servicer, and none of
them is
obligated to supervise the performance of the Servicer or the
Special Servicer
hereunder or otherwise except, with respect to the Master Servicer,
as otherwise
expressly provided herein.
SECTION 3.04. Master Servicer to Act as Servicer.
Subject to Sections 6.04, 7.03 and 11.02, in the event that the
Servicer
shall, for any reason, no longer be the servicer hereunder
(including by reason
of an Event of Default), the Master Servicer or its designee shall,
within a
period of time not to exceed ninety (90) days from the date of
notice of
termination or resignation, thereupon assume all of the rights and
obligations
of the Servicer hereunder
-66-
<PAGE>
arising thereafter (except that the Master Servicer shall not be
(i)
liable for losses of the Servicer pursuant to Section 3.10 hereof
or any acts or
omissions of any predecessor servicer hereunder, (ii) obligated to
make Advances
if it is prohibited from doing so by applicable law, (iii)
obligated to
effectuate repurchases or substitutions of Mortgage Loans
hereunder, including
pursuant to Section 2.02 or 2.03 hereof, (iv) responsible for any
expenses of
the Servicer pursuant to Section 2.03 or (v) deemed to have made
any
representations and warranties hereunder, including pursuant to
Section 2.04 or
the first paragraph of Section 6.02 hereof; provided, however that
the Master
Servicer (subject to clause (ii) above) or its designee, in its
capacity as the
successor servicer, shall immediately assume the Servicer's
obligation to make
Advances and Servicing Advances). No such termination or
resignation shall
affect any obligation of the Servicer to pay amounts owed under
this Agreement
and to perform its duties under this Agreement until its successor
assumes all
of its rights and obligations hereunder. If the Servicer shall for
any reason no
longer be the servicer (including by reason of any Event of
Default), the Master
Servicer (or any other successor servicer) may, at its option,
succeed to any
rights and obligations of the Servicer under any subservicing
agreement in
accordance with the terms thereof; provided, however, that the
Master Servicer
(or any other successor servicer) shall not incur any liability or
have any
obligations in its capacity as servicer under a subservicing
agreement arising
prior to the date of such succession unless it expressly elects to
succeed to
the rights and obligations of the Servicer thereunder; and the
Servicer shall
not thereby be relieved of any liability or obligations under the
subservicing
agreement arising prior to the date of such succession. To the
extent any costs
or expenses, including without limitation Servicing Transfer Costs
incurred by
the Master Servicer in connection with this Section 3.04, Article
VII or
Section 11.02, are not paid by the Servicer or the Special
Servicer, as
applicable, pursuant to this Agreement within 30 days of the date
of the
Master Servicer's invoice thereof, such amounts shall be payable
out of the
Certificate Account; provided that the terminated servicer shall
reimburse the
Trust Fund for any such expense incurred by the Trust Fund upon
receipt of a
reasonably detailed invoice evidencing such expenses. If the Master
Servicer
is unwilling or unable to act as servicer, the Master Servicer
shall seek to
appoint a successor servicer that is eligible in accordance with
the criteria
specified in this Agreement and reasonably acceptable to the NIMs
Insurer.
The
Servicer shall, upon request of the Master Servicer, but at the
expense
of the Servicer, deliver to the assuming party all documents and
records
relating to each subservicing agreement and the Mortgage Loans then
being
serviced and otherwise use its best efforts to effect the orderly
and efficient
transfer of the subservicing agreement to the assuming party.
Notwithstanding anything to the contrary above, the Trustee and
the
Depositor hereby agree that within 10 Business Days of delivery to
the Master
Servicer by the Servicing Rights Pledgee of a letter signed by the
Servicer
whereby the Servicer shall resign as Servicer under this Agreement,
the
Servicing Rights Pledgee or its designee shall be appointed as
successor
servicer (provided that at the time of such appointment the
Servicing Rights
Pledgee or such designee meets the requirements of a successor
servicer set
forth in Section 7.03 of this Agreement and the other requirements
of Section
7.03 have been met) and the Servicing Rights Pledgee agrees to be
subject to the
terms of this Agreement.
SECTION 3.05. Collection of Mortgage Loan Payments; Collection
Account;
Certificate Account.
(a) The Servicer shall make reasonable efforts in accordance
with
Accepted Servicing Practices to collect all payments called for
under the terms
and provisions of the Mortgage Loans to the extent such procedures
shall be
consistent with this Agreement and the terms and provisions of any
related
Required Insurance Policy. Consistent with the foregoing and
subject to Section
3.01, the Servicer may in its discretion (i) waive any late payment
charge or,
if applicable, any default interest charge, or (ii) extend the due
dates for
payments due on a Mortgage Note for a period not greater than 180
days;
provided, however, that any extension pursuant to clause (ii) above
shall not
-67-
<PAGE>
affect the amortization schedule of any Mortgage Loan for purposes
of any
computation hereunder, except as provided below; provided, further,
that the
NIMs Insurer's prior written consent shall be required for any
modification,
waiver or amendment after the Cut-off Date if the aggregate number
of
outstanding Mortgage Loans which have been modified, waived or
amended exceeds
5% of the number of Mortgage Loans as of the Cut-Off Date. In the
event that
servicing of any Mortgage Loan has been transferred from the
Servicer to the
Special Servicer pursuant to Section 3.27(a), each of the Servicer
and the
Special Servicer will notify the other party with respect to the
aggregate
number of Mortgage Loans that have been modified, waived or amended
after the
Cut-off Date. In the event of any such arrangement pursuant to
clause (ii)
above, subject to Section 4.01, the Servicer shall make any
Advances on the
related Mortgage Loan during the scheduled period in accordance
with the
amortization schedule of such Mortgage Loan without modification
thereof by
reason of such arrangements. Notwithstanding the foregoing, in the
event that
any Mortgage Loan is in default or, in the judgment of the
Servicer, such
default is reasonably foreseeable, the Servicer, consistent with
the standards
set forth in Section 3.01, may also waive, modify or vary any term
of such
Mortgage Loan (including modifications that would change the
Mortgage Rate,
forgive the payment of principal or interest or extend the final
maturity date
of such Mortgage Loan), accept payment from the related Mortgagor
of an amount
less than the Stated Principal Balance in final satisfaction of
such Mortgage
Loan, or consent to the postponement of strict compliance with any
such term or
otherwise grant indulgence to any Mortgagor (any and all such
waivers,
modifications, variances, forgiveness of principal or interest,
postponements,
or indulgences collectively referred to herein as "forbearance"),
provided,
however, that in no event shall the Servicer grant any such
forbearance (other
than as permitted by the second sentence of this Section) with
respect to any
one Mortgage Loan more than once in any 12 month period or more
than three times
over the life of such Mortgage Loan, and provided, further, that in
determining
which course of action permitted by this sentence it shall pursue,
the Servicer
shall adhere to the standards of Section 3.01. In connection with
any
modification pursuant to this Section 3.05(a) and to the extent
there are any
unreimbursed Advances, the Servicer shall reimburse itself for such
amounts from
the Collection Account.
(b) The Servicer will not waive any Prepayment Charge or
portion
thereof unless, (i) the enforceability thereof shall have been
limited by
bankruptcy, insolvency, moratorium, receivership and other similar
laws relating
to creditors' rights generally or is otherwise prohibited by law,
or (ii) the
collectability thereof shall have been limited due to acceleration
in connection
with a foreclosure or other involuntary payment, or (iii) in the
Servicer's
reasonable judgment as described in Section 3.01 hereof, (x) such
waiver relates
to a default or a reasonably foreseeable default, (y) such waiver
would maximize
recovery of total proceeds taking into account the value of such
Prepayment
Charge and related Mortgage Loan and (z) doing so is standard and
customary in
servicing similar Mortgage Loans (including any waiver of a
Prepayment Charge in
connection with a refinancing of a Mortgage Loan that is related to
a default or
a reasonably foreseeable default), or (iv) sufficient information
is not made
available to enable it to collect the Prepayment Charge. Except as
provided in
the preceding sentence, in no event will the Servicer waive a
Prepayment Charge
in connection with a refinancing of a Mortgage Loan that is not
related to a
default or a reasonably foreseeable default. If the Servicer waives
or does not
collect all or a portion of a Prepayment Charge relating to a
Principal
Prepayment in full or in part due to any action or omission of the
Servicer,
other than as provided above, the Servicer shall deposit the amount
of such
Prepayment Charge (or such portion thereof as had been waived for
deposit) into
the Collection Account for distribution in accordance with the
terms of this
Agreement.
(c) The Servicer shall not be required to institute or join in
litigation with respect to collection of any payment (whether under
a Mortgage,
Mortgage Note or otherwise or against any public or governmental
authority with
respect to a taking or condemnation) if it reasonably believes that
enforcing
the provision of the Mortgage or other instrument pursuant to which
such payment
is required is prohibited by applicable law.
-68-
<PAGE>
(d) The Servicer shall establish and maintain so long as it is
acting
as servicer hereunder, on behalf of the Trustee for the benefit of
the
Certificateholders, the Collection Account. The Servicer shall
deposit into the
Collection Account, within two Business Days of receipt thereof, in
immediately
available funds, the following payments and collections received or
made by it
on and after the Cut-Off Date with respect to the Mortgage
Loans:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans, other than principal due on the
Mortgage
Loans on or prior to the Cut-off Date;
(ii) all payments on account of interest on the Mortgage Loans
net of the related Servicing Fee permitted under Section 3.15,
other than (x)
interest due on the Mortgage Loans on or prior to the Cut-off Date
and (y)
Prepayment Interest Excess;
(iii) all Liquidation Proceeds, other than proceeds to be
applied
to the restoration or repair of the Mortgaged Property (or
Underlying Mortgaged
Property, in the case of a Co-op Loan) or released to either the
Mortgagor or
the holder of a senior lien on the Mortgaged Property (or
Underlying Mortgaged
Property, in the case of a Co-op Loan) in accordance with the
Servicer's normal
servicing procedures;
(iv) all Subsequent Recoveries;
(v) all Compensating Interest;
(vi) any amount required to be deposited by the Servicer
pursuant
to Section 3.05(f) in connection with any losses on Permitted
Investments;
(vii) any amounts required to be deposited by the Servicer
pursuant to Section 3.10 hereof;
(viii) all Purchase Prices and Substitution Adjustment Amounts;
(ix) all Advances made by the Servicer pursuant to Section
4.01;
(x) all Prepayment Charges;
(xi) all net monthly rental income from REO Properties required
to be deposited by the Servicer pursuant to Section 3.12; and
(xii) any other amounts required to be deposited hereunder.
The
foregoing requirements for remittance by the Servicer into the
Collection Account shall be exclusive, it being understood and
agreed that,
without limiting the generality of the foregoing, all
servicing-related fees,
including all late payment charges, insufficient funds charges,
customary real
estate referral fees and payments in the nature of assumption fees
(i.e. fees
related to the assumption of a Mortgage Loan upon the purchase of
the related
Mortgaged Property or stock allocated to a dwelling unit in the
case of a Co-op
Loan), modification fees, extension fees and other similar
ancillary fees and
charges (other than Prepayment Charges) if collected, and any
Prepayment
Interest Excess need not be remitted by the Servicer. Rather, such
fees and
charges and similar amounts may be retained by the Servicer as
additional
servicing compensation. In the event that the Servicer shall remit
any amount
not required to be remitted and not otherwise subject to withdrawal
pursuant to
Section 3.08 hereof, it may at any time withdraw or direct the
Trustee, or such
other institution maintaining the Collection Account, to
-69-
<PAGE>
withdraw such amount from the Collection Account, any provision
herein to the
contrary notwithstanding. The Servicer shall maintain adequate
records with
respect to all withdrawals made pursuant to this Section. All funds
deposited in
the Collection Account shall be held in trust for the
Certificateholders until
withdrawn in accordance with Section 3.08. In no event shall the
Trustee, the
Securities Administrator or the Master Servicer incur liability for
withdrawals
from the Collection Account at the direction of the Servicer.
The
Servicer shall give notice to the NIMs Insurer, the Master
Servicer,
the Securities Administrator and the Trustee of the location of the
Collection
Account maintained by it when established and prior to any change
thereof. Upon
request, the Servicer shall forward to the NIMs Insurer, and upon
request, to
the Securities Administrator, the Master Servicer, the Trustee and
the Depositor
the most current available bank statement for the Collection
Account. Copies of
such statement shall be provided by the Securities Administrator to
any
Certificateholder and to any Person identified to the Securities
Administrator
as a prospective transferee of a Certificate, upon request at the
expense of the
requesting party, provided such statement is delivered by the
Servicer to the
Securities Administrator.
(e) The
Securities Administrator shall establish and maintain, on
behalf of the Certificateholders, the Certificate Account (which
may consist of
one or more sub-accounts). The Securities Administrator shall,
promptly upon
receipt, deposit or cause to be deposited in the Certificate
Account and retain
therein the following:
(i) the aggregate amount withdrawn by the Servicer from the
Collection Account and required to be deposited in the Certificate
Account;
(ii) any amount required to be deposited by the Securities
Administrator pursuant to Section 3.05(g) in connection with any
losses on
Permitted Investments; and
(iii) the Optional Termination Amount received by the
Securities
Administrator pursuant to Section 9.01.
Any
amounts received by the Securities Administrator prior to 1:00 p.m.
New
York City time (or such earlier deadline for investment in the
Permitted
Investments designated by the Securities Administrator) which are
required to be
deposited in the Certificate Account by the Servicer or Master
Servicer may be
invested in Permitted Investments on the Business Day on which they
were
received. The foregoing requirements for remittance by the Servicer
and Master
Servicer and deposit by the Servicer and Master Servicer into the
Certificate
Account shall be exclusive. In the event that the Servicer or the
Master
Servicer shall remit any amount not required to be remitted and not
otherwise
subject to withdrawal pursuant to Section 3.08 hereof, it may at
any time
withdraw such amount from the Certificate Account, any provision
herein to the
contrary notwithstanding. All funds deposited in the Certificate
Account shall
be held by the Securities Administrator in trust for the
Certificateholders
until disbursed in accordance with this Agreement or withdrawn in
accordance
with Section 3.08. In no event shall the Securities Administrator
incur
liability for withdrawals from the Certificate Account at the
direction of the
Servicer or the Master Servicer. The Securities Administrator shall
give notice
to the NIMs Insurer, the Master Servicer and the Servicer of the
location of the
Certificate Account maintained by it when established and prior to
any change
thereof.
(f) Each institution that maintains the Collection Account or
the
Certificate Account shall invest the funds in each such account as
directed by
the Servicer or the Securities Administrator, as applicable, in
writing, in
Permitted Investments, which shall mature not later than (i) in the
case of the
Collection Account the Business Day preceding the related Servicer
Remittance
Date (except that if such Permitted Investment is an obligation of
the
institution that maintains such
-70-
<PAGE>
Collection Account or is otherwise immediately available, then such
Permitted
Investment shall mature not later than the Servicer Remittance
Date) and (ii) in
the case of the Certificate Account, the Business Day immediately
preceding the
first Distribution Date that follows the date of such investment
(except that if
such Permitted Investment is an obligation of the institution that
maintains
such Certificate Account or is otherwise immediately available,
then such
Permitted Investment shall mature not later than such Distribution
Date) and, in
each case, shall not be sold or disposed of prior to its maturity.
All such
Permitted Investments shall be made in the name of the Servicer, or
the
Securities Administrator, as applicable, for the benefit of the
Certificateholders. All income and gain net of any losses realized
from amounts
on deposit in the Collection Account shall be for the benefit of
the Servicer as
servicing compensation and shall be remitted to it or withdrawn by
it monthly as
provided herein. The amount of any losses incurred in the
Collection Account in
respect of any such investments shall be deposited by the Servicer
in the
Collection Account out of the Servicer's own funds immediately as
realized.
(g) All income and gain net of any losses realized from amounts
on
deposit in the Certificate Account shall be for the benefit of the
Securities
Administrator. The amount of any losses incurred in the Certificate
Account in
respect of any such investments shall be deposited by the
Securities
Administrator in the Certificate Account out of the Securities
Administrator's
own funds immediately as realized.
SECTION 3.06. Collection of Taxes, Assessments and Similar Items;
Escrow
Accounts.
To
the extent required by the related first lien Mortgage Note,
the
Servicer shall establish and maintain one or more accounts (each,
an "Escrow
Account") and deposit and retain therein all collections from the
Mortgagors (or
advances by the Servicer) for the payment of taxes, assessments,
hazard
insurance premiums or comparable items for the account of the
Mortgagors.
Nothing herein shall require the Servicer to compel a Mortgagor to
establish an
Escrow Account in violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may be
made
only to effect timely payment of taxes, assessments, insurance
premiums,
condominium or PUD association dues, or comparable items, to
reimburse the
Servicer out of related collections for any payments made pursuant
to Sections
3.01 hereof (with respect to taxes, assessments, dues or comparable
items and
insurance premiums) and 3.10 hereof (with respect to hazard
insurance), to
refund to any Mortgagors any sums as may be determined to be
overages, to pay
interest, if required by law or the terms of the related Mortgage
or Mortgage
Note, to Mortgagors on balances in the Escrow Account to withdraw
funds
deposited in error or amounts previously deposited but returned as
unpaid due to
a "not sufficient funds" or other denial by the related Mortgagor's
banking
institution or to clear and terminate the Escrow Account at the
termination of
this Agreement in accordance with Section 9.01 hereof. The Escrow
Accounts shall
not be a part of the Trust Fund.
SECTION 3.07. Access to Certain Documentation and Information
Regarding the
Mortgage Loans.
Upon
reasonable advance notice in writing if required by federal
regulation, the Servicer will provide to each Certificateholder
that is a
savings and loan association, bank or insurance company certain
reports and
reasonable access to information and documentation regarding the
Mortgage Loans
sufficient to permit such Certificateholder to comply with
applicable
regulations of the OTS or other regulatory authorities with respect
to
investment in the Certificates; provided, that the Servicer shall
be entitled to
be reimbursed by each such Certificateholder for actual expenses
incurred by the
Servicer in providing such reports and access.
-71-
<PAGE>
The
Special Servicer may from time to time provide the Depositor, and
any
person designated by the Depositor, with reports and information
regarding the
Mortgage Loans, including without limitation, information requested
by the
Depositor or an originator of the Mortgage Loans for required
institutional risk
control.
SECTION 3.08. Permitted Withdrawals from the Collection Account
and
Certificate Account.
(a) The Servicer may from time to time, make withdrawals from
the
Collection Account for the following purposes (the order below not
constituting
an order of priority):
(i) to pay to the Servicer (to the extent not previously paid
to
or withheld by the Servicer), as servicing compensation in
accordance with
Section 3.15, that portion of any payment or recovery of interest
on a Mortgage
Loan that equals the Servicing Fee for the period with respect to
which such
interest payment or recovery was made or allocated, and, as
additional servicing
compensation, those other amounts set forth in Section 3.15;
(ii) to reimburse the Servicer for Advances made by it (or to
reimburse the Advance Financing Person for Advances made by it)
with respect to
the Mortgage Loans, such right of reimbursement pursuant to this
subclause (ii)
being limited to amounts received on particular Mortgage Loan(s)
(including, for
this purpose, Condemnation Proceeds, Insurance Proceeds,
Liquidation Proceeds)
that represent late recoveries of payments of principal and/or
interest on such
particular Mortgage Loan(s) in respect of which any such Advance
was made;
(iii) to reimburse the Servicer and the Master Servicer (in its
capacity as successor Servicer) for any Non-Recoverable Advance
previously made
and any Non-Recoverable Servicing Advances previously made to the
extent that,
in the case of Non-Recoverable Servicing Advances, reimbursement
therefor
constitutes "unanticipated expenses" within the meaning of Treasury
Regulation
Section 1.860G-1(b)(3)(ii);
(iv) to pay to the Servicer earnings on or investment income
with
respect to funds in or credited to the Collection Account;
(v) to reimburse the Servicer from Insurance Proceeds for
Insured
Expenses covered by the related Insurance Policy;
(vi) to pay the Servicer any unpaid Servicing Fees and to
reimburse it for any unreimbursed Servicing Advances (to the extent
that
reimbursement for Servicing Advances would constitute an
"unanticipated expense"
within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii)), the
Servicer's ri
