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<PAGE>
EXHIBIT 4.1
EXECUTION COPY
MERRILL LYNCH MORTGAGE INVESTORS, INC.
Depositor
WELLS FARGO BANK, N.A.
Trustee
and
WILSHIRE CREDIT CORPORATION,
Servicer
--------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2005
--------------------------------------
MERRILL LYNCH MORTGAGE INVESTORS TRUST,
MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2005-HE1
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS...................................................................
1
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES................. 46
SECTION 2.01. Conveyance of Mortgage
Loans.................................. 46
Section 2.02. Acceptance by the Trustee of the Mortgage
Loans............... 50
Section 2.03. Representations, Warranties and Covenants of the
Depositor ... 51
Section 2.04. Representations and Warranties of the
Servicer................ 55
Section 2.05. Substitutions and Repurchases of Mortgage Loans
which are
not "Qualified Mortgages." ...................................
56
Section 2.06. Authentication and Delivery of
Certificates................... 57
Section 2.07. REMIC
Elections............................................... 57
Section 2.08.
[RESERVED]....................................................
61
Section 2.09. Covenants of the
Servicer..................................... 61
Section 2.10.
[RESERVED]....................................................
61
Section 2.11. Permitted Activities of the
Trust............................. 61
Section 2.12. Qualifying Special Purpose
Entity............................. 61
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS............................... 61
Section 3.01. Servicer to Service Mortgage
Loans............................ 61
Section 3.02. Servicing and Subservicing; Enforcement of the
Obligations
of Servicer ..................................................
63
Section 3.03. Rights of the Depositor and the Trustee in Respect
of the
Servicer .....................................................
64
Section 3.04. Trustee to Act as
Servicer.................................... 64
Section 3.05. Collection of Mortgage Loan Payments; Collection
Account;
Certificate Account ..........................................
65
Section 3.06. Collection of Taxes, Assessments and Similar
Items; Escrow
Accounts .....................................................
68
Section 3.07. Access to Certain Documentation and
Information
Regarding the Mortgage Loans .................................
69
Section 3.08. Permitted Withdrawals from the Collection Account
and
Certificate Account ..........................................
69
Section 3.09.
[RESERVED]....................................................
71
Section 3.10. Maintenance of Hazard
Insurance............................... 71
Section 3.11. Enforcement of Due-On-Sale Clauses; Assumption
Agreements .... 72
Section 3.12. Realization Upon Defaulted Mortgage Loans;
Determination
of Excess Proceeds ...........................................
73
Section 3.13. Trustee to Cooperate; Release of Mortgage
Files............... 76
Section 3.14. Documents, Records and Funds in Possession of
Servicer to
be Held for the Trustee ......................................
77
Section 3.15. Servicing
Compensation........................................ 78
Section 3.16. Access to Certain
Documentation............................... 78
Section 3.17. Annual Statement as to
Compliance............................. 78
Section 3.18. Annual Independent Public Accountants'
Servicing
Statement; Financial Statements ..............................
79
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Section 3.19. Rights of the NIMs
Insurer.................................... 79
Section 3.20. Periodic
Filings.............................................. 79
Section 3.21. Annual Certificate by
Trustee................................. 80
Section 3.22. Annual Certificate by
Servicer................................ 80
Section 3.23. Prepayment Charge Reporting
Requirements...................... 81
Section 3.24. Statements to
Trustee......................................... 81
Section 3.25.
Indemnification...............................................
82
Section 3.26.
Nonsolicitation...............................................
82
Section 3.27. MI Policies; Claims Under the MI
Policies..................... 82
Section 3.28. High Cost Mortgage
Loans...................................... 83
ARTICLE IV
DISTRIBUTIONS................................................................
83
SECTION 4.01.
Advances......................................................
83
Section 4.02. Reduction of Servicing Compensation in Connection
with
Prepayment Interest Shortfalls ...............................
84
Section 4.03. Distributions on the REMIC
Interests.......................... 84
Section 4.04.
Distributions.................................................
85
Section 4.05. Monthly Statements to
Certificateholders...................... 90
ARTICLE V THE
CERTIFICATES.............................................................
94
Section 5.01. The
Certificates.............................................. 94
Section 5.02. Certificate Register; Registration of Transfer and
Exchange
of Certificates ..............................................
94
Section 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates............. 98
Section 5.04. Persons Deemed
Owners......................................... 98
Section 5.05. Access to List of Certificateholders' Names and
Addresses .... 99
Section 5.06. Book-Entry
Certificates....................................... 99
Section 5.07. Notices to
Depository........................................ 100
Section 5.08. Definitive
Certificates...................................... 100
Section 5.09. Maintenance of Office or
Agency.............................. 100
ARTICLE VI THE DEPOSITOR AND THE
SERVICER.............................................. 101
Section 6.01. Respective Liabilities of the Depositor and the
Servicer .... 101
Section 6.02. Merger or Consolidation of the Depositor or the
Servicer .... 101
Section 6.03. Limitation on Liability of the Depositor, the
Servicer and
Others ......................................................
101
Section 6.04. Limitation on Resignation of
Servicer........................ 102
Section 6.05. Errors and Omissions Insurance; Fidelity
Bonds............... 102
ARTICLE VII DEFAULT; TERMINATION OF
SERVICER............................................ 102
Section 7.01. Events of
Default............................................ 102
Section 7.02. Trustee to Act; Appointment of
Successor..................... 104
Section 7.03. Notification to
Certificateholders........................... 104
ARTICLE VIII...........CONCERNING THE TRUSTEE and the securities
administrator ......... 105
Section 8.01. Duties of the
Trustee........................................ 105
Section 8.02. Certain Matters Affecting the
Trustee........................ 106
Section 8.03. Trustee Not Liable for Mortgage
Loans........................ 107
Section 8.04. Trustee May Own
Certificates................................. 107
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Section 8.05. Trustee's Fees and
Expenses.................................. 107
Section 8.06. Indemnification of
Trustee................................... 108
Section 8.07. Eligibility Requirements for
Trustee......................... 109
Section 8.08. Resignation and Removal of
Trustee........................... 109
Section 8.09. Successor
Trustee............................................ 110
Section 8.10. Merger or Consolidation of
Trustee........................... 110
Section 8.11. Appointment of Co-Trustee or Separate
Trustee................ 110
Section 8.12. Tax
Matters.................................................. 111
ARTICLE IX
TERMINATION.................................................................
114
Section 9.01. Termination upon Liquidation or Repurchase of
all
Mortgage Loans ..............................................
114
Section 9.02. Final Distribution on the
Certificates....................... 115
Section 9.03. Additional Termination
Requirements.......................... 116
ARTICLE X MISCELLANEOUS
PROVISIONS....................................................
117
Section 10.01.
Amendment....................................................
117
Section 10.02.
Counterparts.................................................
119
Section 10.03. Governing
Law................................................ 119
Section 10.04. Intention of
Parties......................................... 119
SECTION 10.05.
Notices......................................................
119
Section 10.06. Severability of
Provisions................................... 120
Section 10.07.
Assignment...................................................
120
Section 10.08. Limitation on Rights of
Certificateholders................... 121
Section 10.09. Inspection and Audit
Rights.................................. 122
Section 10.10. Certificates Nonassessable and Fully
Paid.................... 122
Section 10.11. Third Party
Rights........................................... 123
Section 10.12. Additional Rights of the NIMs
Insurer........................ 123
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TABLE OF CONTENTS
(continued)
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 B-4 MORTGAGE LOAN SCHEDULE - MI MORTGAGE LOANS
EXHIBIT C [RESERVED]
EXHIBIT D FORM OF TRUSTEE CERTIFICATION
EXHIBIT E-1 FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
EXHIBIT E-2 FORM OF TRANSFEROR'S AFFIDAVIT
EXHIBIT F FORM OF TRANSFEROR CERTIFICATE
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 LIST OF TRANSFER AGREEMENTS AND BRING DOWN LETTERS
EXHIBIT K FORM OF OFFICER'S CERTIFICATE OF TRUSTEE
EXHIBIT L FORM OF OFFICER'S CERTIFICATE OF SERVICER
EXHIBIT M MORTGAGE LOAN MODIFICATIONS
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
EXHIBIT P [RESERVED]
EXHIBIT Q-1. MI POLICY- PMI MORTGAGE INSURANCE CO.
EXHIBIT Q-2. MI POLICY- MORTGAGE GUARANTY INSURANCE
CORPORATION
iv
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POOLING AND SERVICING AGREEMENT (the "Agreement"), dated as of
March 1,
2005, among MERRILL LYNCH MORTGAGE INVESTORS, INC., a Delaware
corporation, as
depositor (the "Depositor"), WELLS FARGO BANK, N.A, a national
banking
association, as trustee (the "Trustee") and WILSHIRE CREDIT
CORPORATION, a
Nevada corporation, as servicer (the "Servicer").
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,
(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 Transferors in the
Transfer
Agreements, 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 Servicer and the Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and
phrases, unless
the context otherwise requires, shall have the following
meanings:
Accepted Servicing Practices: The Servicer's normal servicing
practices,
which will conform to the mortgage servicing practices of
prudent mortgage
lending institutions that service for their own account mortgage
loans of the
same type as the Mortgages Loans in the jurisdictions in which
the related
Mortgaged Properties (or Underlying Mortgaged Properties in the
case of Co-op
Loans) are located.
Accrual Period: With respect to each Class of Certificates and
the Lower
Tier REMIC Interests and any Distribution Date, the period
commencing on the
immediately preceding Distribution Date (or, in the case of the
first
Distribution Date, the Closing Date) and ending on the day
immediately preceding
such Distribution Date. All calculations of interest on each
Class of
Certificates and the Lower Tier REMIC Interests will be made on
the basis of the
actual number of days elapsed in the related Accrual Period and
a 360 day year.
Adjustable Rate Mortgage Loan: A Mortgage Loan identified in the
Mortgage
Loan Schedule as having a Mortgage Rate which is adjustable.
<PAGE>
Adjustment Date: As to each Adjustable Rate Mortgage Loan, each
date on
which the related Mortgage Rate is subject to adjustment, as
provided in the
related Mortgage Note.
Advance: The aggregate of the advances required to be made by
the Servicer
with respect to any Distribution Date pursuant to Section 4.01,
the amount of
any such advances being equal to the sum of the aggregate 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 which is not a first lien Mortgage Loan
that is 150 days
delinquent or more (whether or not the Mortgage Loan has been
converted to an
REO Property), there will be no obligation to make advances and,
provided
further, however, that with respect to any Mortgage Loan that
has been converted
to an REO Property which is less than 150 days delinquent, the
obligation to
make Advances shall only be to payments of interest.
Advance Facility: A financing or other facility as described in
Section
10.07.
Advancing Person: The Person to whom the Servicer's rights under
this
Agreement to be reimbursed for any Advances or Servicing
Advances have been
assigned pursuant to Section 10.07.
Affiliate: With respect to any specified Person, any other
Person
controlling, controlled by or under common control with such
Person. For the
purposes of this definition, "control" means the power to direct
the management
and policies of a Person, directly or indirectly, whether
through ownership of
voting securities, by contract or otherwise; and the terms
"controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Certificate Principal Balance: For any date of
determination,
the sum of the Class A-1A Certificate Principal Balance, the
Class A-1B
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 B-1 Certificate
Principal Balance, the
Class B-2 Certificate Principal Balance, the Class B-3
Certificate Principal
Balance, the Class B-4 Certificate Principal Balance and the
Class B-5
Certificate Principal Balance, in each case as of such date of
determination.
Agreement: This Pooling and Servicing Agreement and any and all
amendments
or supplements hereto made in accordance with the terms
herein.
Applied Realized Loss Amount: With respect to any Distribution
Date, the
amount, if any, by which, the sum of (i) the Aggregate
Certificate Principal
Balance and (ii) the Class C Certificate Principal Balance after
distributions
of principal on such Distribution Date exceeds the aggregate
Stated Principal
Balance of the Mortgage Loans as of such Distribution Date.
Appraised Value: With respect to a Mortgage Loan the proceeds of
which
were used to purchase the related Mortgaged Property (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
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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.
Auction: The one-time auction conducted by the Trustee, as
described in
Section 9.01(b) hereof.
Auction Date: The date on which the Auction occurs.
Available Funds Cap: Any of the Class A-1 Available Funds Cap,
the Class
A-2 Available Funds Cap or the Subordinated Certificate
Available Funds Cap.
Balloon Loan: A Mortgage Loan having an original term to stated
maturity
of approximately 15 years which provides for level monthly
payments of principal
and interest based on a 30-year amortization schedule, with a
balloon payment of
the remaining outstanding principal balance due on such Mortgage
Loan at its
stated maturity.
Book-Entry Certificates: Any of the Certificates that shall be
registered
in the name of the Depository or its nominee, the ownership of
which is
reflected on the books of the Depository or on the books of a
Person maintaining
an account with the Depository (directly, as a "Depository
Participant," or
indirectly, as an indirect participant in accordance with the
rules of the
Depository and as described in Section 5.06). As of the Closing
Date, each of
the Class A (other than the Class R Certificate), Class M and
Class B
Certificates constitutes a Class of Book-Entry Certificates.
Bring Down Letters: Those certain letter agreements, dated as of
April 21,
2005 between the Seller and each Transferor set out on Exhibit J
hereto.
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 Maryland,
State of Minnesota, 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 Trustee pursuant to Section 4.04(k)(i) in the name of the
Trustee for the
benefit of the Trust Fund and designated "Wells Fargo Bank,
N.A., as Trustee, as
trustee, in trust for registered holders of Merrill Lynch
Mortgage Investors
Trust, Mortgage Loan Asset-Backed Certificates, Series
2005-HE1." 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 Bank of New York.
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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
Trustee and authenticated by the Trustee in substantially the
forms attached
hereto as Exhibits A.
Certificate Account: The separate Eligible Account created and
maintained
by the Trustee pursuant to Section 3.05(e) in the name of the
Trustee for the
benefit of the Certificateholders and designated "Wells Fargo
Bank, N.A., as
trustee, in trust for registered holders of Merrill Lynch
Mortgage Investors
Trust, Mortgage Loan Asset-Backed Certificates, Series
2005-HE1." Funds in the
Certificate Account shall be held in trust for the
Certificateholders for the
uses and purposes set forth in this Agreement.
Certificate Group: Either of Certificate Group One or
Certificate Group
Two.
Certificate Group One: The Class A-1A, Class A-1B 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 (based on the Stated Principal
Balance of the
Mortgage Loans as of the Cut-off Date)) will be added to the
aggregate
Certificate Principal Balance of the Class C Certificates (on a
pro rata basis).
Notwithstanding the foregoing on any Distribution Date relating
to a Due Period
in which a Subsequent Recovery has been received by the
Servicer, the
Certificate Principal Balance of any Class of Certificates then
outstanding for
which any Applied Realized Loss Amount has been allocated will
be increased, in
order of seniority, by an amount equal to the lesser of (i) the
Unpaid Realized
Loss Amount for such Class of Certificates and (ii) the total of
any Subsequent
Recovery distributed on such date to the Certificateholders
(reduced by the
amount of the increase in the Certificate Principal Balance of
any more senior
Class of Certificates pursuant to this sentence on such
Distribution Date).
Certificate Register: The register maintained pursuant to
Section 5.02
hereof.
Certificateholder or Holder: The Person in whose name a
Certificate is
registered in the Certificate Register (initially, Cede &
Co., as nominee for
the Depository) in the case of any Class of Regular Certificates
or the Class R
Certificate, except that solely for the purpose of giving any
consent
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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 NIMs Insurer 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: For any date of
determination, the
sum of the Class A-1A Certificate Principal Balance, the Class
A-1B 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 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)
73.90% of the Stated Principal Balance of the Mortgage Loans as
of the end of
the immediately preceding Due Period and (ii) the excess of the
Stated Principal
Balance of the Mortgage Loans as of the end of the immediately
preceding Due
Period over the Minimum Required Overcollateralization Amount;
provided,
however, that in no event will the Class A Principal
Distribution Amount with
respect to any Distribution Date exceed the aggregate
Certificate Principal
Balance of the Class A 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 amended confirmation and agreement
and any
related confirmation thereto, between the Trust Fund or Trustee
and the Cap
Contract Counterparty (in the form of Exhibit 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 day after the
Distribution
Date in April 2008.
Class A-1 Certificates: Any of the Class A-1A and Class A-1B
Certificates.
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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 Required Loss Percentage: For any Distribution Date,
the
applicable percentage for such Distribution Date set forth in
the following
table:
Distribution Date Occurring In Class A-1 Required Loss
Percentage
April 2005 - March 2008 1.50%
April 2008 - March 2009 1.50% with respect to April 2008, plus
an
additional 1/12th of 0.50% for each month
thereafter
April 2009 - March 2010 2.00% with respect to April 2009, plus
an
additional 1/12th of 0.75% for each month
thereafter
April 2010 - March 2011 2.75% with respect to April 2010, plus
an
additional 1/12th of 0.25% for each month
thereafter
April 2011 and thereafter 3.00%
Class A-1 Trigger Event: The situation that exists with respect
to any
Distribution Date on or after April 2005, if (a) the quotient of
(1) the
aggregate Stated Principal Balance of all Group One Mortgage
Loans 60 or more
days delinquent, measured on a rolling three-month basis
(including Mortgage
Loans in foreclosure, REO Properties and Mortgage Loans with
respect to which
the applicable mortgagor is in bankruptcy) and (2) the Stated
Principal Balance
of all the Group One Mortgage Loans as of the preceding Servicer
Remittance
Date, equals or exceeds the product of (i) 40.00% and (ii) the
Required
Percentage or (b) the quotient (expressed as a percentage) of
(1) the aggregate
Realized Losses incurred from the Cut-off Date through the last
day of the
calendar month preceding such Distribution Date and (2) the
aggregate principal
balance of the Group One Mortgage Loans as of the Cut-off Date
exceeds the Class
A-1 Required Loss Percentage
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 9.280% per annum.
Class A-1A Certificate: Any Certificate designated as a "Class
A-1A
Certificate" on the face thereof, in the form of Exhibit A
hereto, representing
the right to distributions as set forth herein.
Class A-1A Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class A-1A
Certificates.
Class A-1A Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class A-1A
Pass-Through Rate on
the Class A-1A Certificate Principal Balance as of such
Distribution Date plus
the portion of any previous distributions on such Class in
respect of Current
Interest or a Class A-1A Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-1A
Certificates.
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<PAGE>
Class A-1A Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class A-1A Current Interest
with respect to
prior Distribution Dates over (B) the amount actually
distributed to the Class
A-1A Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by
applicable law) at the
Class A-1A Pass-Through Rate for the related Accrual Period.
Class A-1A Margin: As of any Distribution Date up to and
including the
Initial Optional Termination Date, 0.210% per annum and, as of
any Distribution
Date after the Optional Termination Date, 0.420% per annum.
Class A-1A Pass-Through Rate: For the first Distribution Date,
3.210% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class A-1A Margin and (2) the Class A-1 Available Funds
Cap for such
Distribution Date.
Class A-1B Certificate: Any Certificate designated as a "Class
A-1B
Certificate" on the face thereof, in the form of Exhibit A
hereto, representing
the right to distributions as set forth herein.
Class A-1B Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class A-1B
Certificates.
Class A-1B Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class A-1B
Pass-Through Rate on
the Class A-1B 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-1B 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-1B
Certificates.
Class A-1B Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class A-1B Current Interest
with respect to
prior Distribution Dates over (B) the amount actually
distributed to the Class
A-1B 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-1B Pass-Through Rate for the related Accrual Period.
Class A-1B Margin: As of any Distribution Date up to and
including the
Initial Optional Termination Date for the Certificates, 0.260%
per annum and, as
of any Distribution Date after the Optional Termination Date,
0.520% per annum.
Class A-1B Pass-Through Rate: For the first Distribution Date,
3.260% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class A-1B Margin and (2) the Class A-1 Available Funds
Cap for such
Distribution Date.
Class A-2 Available Funds Cap: With respect to a Distribution
Date, the
per annum rate equal to the product of (i) 12, (ii) the quotient
of (x) the
total scheduled interest on the Mortgage Loans in Group Two
based on the Net
Mortgage Rates in effect on the related Due Date divided by (y)
the aggregate
Stated Principal Balance of the Mortgage Loans in Group Two as
of the first day
of the related Accrual Period (or, in the case of the first
Distribution Date,
as of the Cut-off Date) and (iii) a fraction, the numerator of
which is 30, and
the denominator of which is the actual number of days in the
related Accrual
Period.
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<PAGE>
Class A-2 Cap Contract: The amended confirmation and agreement
and any
related confirmation thereto, between the Trust Fund or Trustee
and the Cap
Contract Counterparty (in the form of Exhibit 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.
Class A-2 Cap Contract Termination Date: The day after the
Distribution
Date in May 2011.
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 9.300% 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.
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 for the Certificates, 0.100%
per annum and, as
of any Distribution Date after the Initial Optional Termination
Date, 0.200% per
annum.
Class A-2A Pass-Through Rate: For the first Distribution Date,
3.100% per
annum. As of any Distribution Date thereafter, the least 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.
- 8 -
<PAGE>
Class A-2B Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class A-2B
Certificates.
Class A-2B Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class A-2B
Pass-Through Rate on
the Class A-2B Certificate Principal Balance as of such
Distribution Date plus
the portion of any previous distributions on such Class in
respect of Current
Interest or a Class A-2B Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2B
Certificates.
Class A-2B Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class A-2B Current Interest
with respect to
prior Distribution Dates over (B) the amount actually
distributed to the Class
A-2B Certificates with respect to 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 for the Certificates, 0.200%
per annum and, as
of any Distribution Date after the Initial Optional Termination
Date, 0.400% per
annum.
Class A-2B Pass-Through Rate: For the first Distribution Date,
3.200% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class A-2B Margin and (2) the Class A-2 Available Funds
Cap for such
Distribution Date.
Class A-2C Certificate: Any Certificate designated as a "Class
A-2C
Certificate" on the face thereof, in the form of Exhibit A
hereto, representing
the right to distributions as set forth herein.
Class A-2C Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class A-2C
Certificates.
Class A-2C Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class A-2C
Pass-Through Rate on
the Class A-2C Certificate Principal Balance as of such
Distribution Date plus
the portion of any previous distributions on such Class in
respect of Class A-2C
Current Interest or a Class A-2C Interest Carry Forward Amount
that is recovered
as a voidable preference by a trustee in bankruptcy, less any
Non-Supported
Interest Shortfall allocated on such Distribution Date to the
Class A-2C
Certificates.
Class A-2C Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class A-2C Current Interest
with respect to
prior Distribution Dates over (B) the amount actually
distributed to the Class
A-2C Certificates with respect to 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 for the Certificates, 0.310%
per annum and, as
of any Distribution Date after the Initial Optional Termination
Date, 0.620% per
annum.
Class A-2C Pass-Through Rate: For the first Distribution Date,
3.310% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class A-2C Margin and (2) the Class A-2 Available Funds
Cap for such
Distribution Date.
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<PAGE>
Class B Certificates: Any of the Class B-1, Class B-2, Class
B-3, Class
B-4 or Class B-5 Certificates.
Class B-1 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class B-1 Certificates.
Class B-1 Certificate: Any Certificate designated as a "Class
B-1
Certificate" on the face thereof, in the form of Exhibit A
hereto, representing
the right to distributions as set forth herein.
Class B-1 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class B-1
Certificates.
Class B-1 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class B-1
Pass-Through Rate on
the Class B-1 Certificate Principal Balance as of such
Distribution Date plus
the portion of any previous distributions on such Class in
respect of 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 for the Certificates, 1.200%
per annum and, as
of any Distribution Date after the Initial Optional Termination
Date, 1.800% per
annum.
Class B-1 Pass-Through Rate: For the first Distribution Date,
4.200% per
annum. As of any Distribution Date thereafter, the least 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) and (E)
the Class B-1
Certificate Principal Balance immediately prior to such
Distribution Date over
(2) the lesser of (A) 94.50% of the Stated Principal Balance of
the Mortgage
Loans as of the end of the immediately preceding Due Period and
(B) the excess
of the Stated Principal Balance of the Mortgage Loans as of the
end of the
immediately preceding Due Period over the Minimum Required
Overcollateralization
Amount. Notwithstanding the foregoing, (I) on any Distribution
Date prior to the
Stepdown Date on which the Certificate Principal Balance of each
Class of Class
A Certificates and Class M Certificates has been reduced to
zero, the Class B-1
Principal Distribution
- 10 -
<PAGE>
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
Certificates and Class
M Certificates and (II) in no event will the Class B-1 Principal
Distribution
Amount with respect to any Distribution Date exceed the Class
B-1 Certificate
Principal Balance.
Class B-1 Unpaid Realized Loss Amount: As of any Distribution
Date, the
excess of (1) the Class B-1 Applied Realized Loss Amount over
(2) the sum of (x)
all distributions in reduction of the Class B-1 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class B-1 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class B-2 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class B-2 Certificates.
Class B-2 Certificate: Any Certificate designated as a "Class
B-2
Certificate" on the face thereof, in the form of Exhibit A
hereto, representing
the right to distributions as set forth herein.
Class B-2 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class B-2
Certificates.
Class B-2 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class B-2
Pass-Through Rate on
the Class B-2 Certificate Principal Balance as of such
Distribution Date plus
the portion of any previous distributions on such Class in
respect of Current
Interest or a Class B-2 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-2
Certificates.
Class B-2 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class B-2 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually
distributed to the Class
B-2 Certificates with respect to 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 for the Certificates, 1.300%
per annum and, as
of any Distribution Date after the Initial Optional Termination
Date, 1.950% per
annum.
Class B-2 Pass-Through Rate: For the first Distribution Date,
4.300% per
annum. As of any Distribution Date thereafter, the least 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 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
- 11 -
<PAGE>
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 B-1 Certificate
Principal
Balance (after taking into account distributions of the Class
B-1 Principal
Distribution Amount on such Distribution Date) and (F) the Class
B-2 Certificate
Principal Balance immediately prior to such Distribution Date
over (2) the
lesser of (A) 95.50% of the Stated Principal Balance of the
Mortgage Loans as of
the end of the immediately preceding Due Period and (B) the
excess of the Stated
Principal Balance of the Mortgage Loans as of the end of the
immediately
preceding Due Period over the Minimum Required
Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any Distribution Date
prior to the
Stepdown Date on which the Certificate Principal Balance of each
Class of Class
A, 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 such Class B-2 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class B-3 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class B-3 Certificates.
Class B-3 Certificate: Any Certificate designated as a "Class
B-3
Certificate" on the face thereof, in the form of Exhibit A
hereto, representing
the right to distributions as set forth herein.
Class B-3 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class B-3
Certificates.
Class B-3 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class B-3
Pass-Through Rate on
the Class B-3 Certificate Principal Balance as of such
Distribution Date plus
the portion of any previous distributions on such Class in
respect of Current
Interest or a Class B-3 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-3
Certificates.
Class B-3 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class B-3 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually
distributed to the Class
B-3 Certificates with respect to 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 for the Certificates, 1.750%
per annum and, as
of any Distribution Date after the Initial Optional Termination
Date, 2.625% per
annum.
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<PAGE>
Class B-3 Pass-Through Rate: For the first Distribution Date,
4.750% per
annum. As of any Distribution Date thereafter, the least 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 B-1 Certificate Principal
Balance (after
taking into account distributions of the Class B-1 Principal
Distribution Amount
on such Distribution Date), (F) 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 (G) the Class B-3
Certificate Principal
Balance immediately prior to such Distribution Date over (2) the
lesser of (A)
96.50% of the Stated Principal Balance of the Mortgage Loans as
of the end of
the immediately preceding Due Period and (B) the excess of the
Stated Principal
Balance of the Mortgage Loans as of the end of the immediately
preceding Due
Period over the Minimum Required Overcollateralization Amount.
Notwithstanding
the foregoing, (I) on any Distribution Date prior to the
Stepdown Date on which
the Certificate Principal Balance of each Class of Class A,
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 such Class B-3 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance"
Class B-4 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class B-4 Certificates.
Class B-4 Certificate: Any Certificate designated as a "Class
B-4
Certificate" on the face thereof, in the form of Exhibit A
hereto, representing
the right to distributions as set forth herein.
Class B-4 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class B-4
Certificates.
Class B-4 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class B-4
Pass-Through Rate on
the Class B-4 Certificate Principal Balance as of such
Distribution Date plus
the portion of any previous distributions on such Class in
respect of Current
Interest or a Class B-4 Interest Carry Forward Amount that is
recovered as a
voidable preference by a
- 13 -
<PAGE>
trustee in bankruptcy, less any Non-Supported Interest Shortfall
allocated on
such Distribution Date to the Class B-4 Certificates.
Class B-4 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class B-4 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually
distributed to the Class
B-4 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by
applicable law) at the
Class B-4 Pass-Through Rate for the related Accrual Period.
Class B-4 Margin: As of any Distribution Date up to and
including the
Optional Termination Date for the Certificates, 3.250% per
annum, and, as of any
Distribution Date after the Optional Termination Date, 4.875%
per annum.
Class B-4 Pass-Through Rate: For the first Distribution Date,
6.250% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class B-4 Margin and (2) the Subordinated Certificate
Available Funds
Cap for such Distribution Date.
Class B-4 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance, the
Class M 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 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
B-1 Certificate
Principal Balance (after taking into account distributions of
the Class B-1
Principal Distribution Amount on such Distribution Date), (F)
the Class B-2
Certificate Principal Balance (after taking into account
distributions of the
Class B-2 Principal Distribution Amount on such Distribution
Date), (G) the
Class B-3 Certificate Principal Balance (after taking into
account distributions
of the Class B-3 Principal Distribution Amount on such
Distribution Date) and
(H) the Class B-4 Certificate Principal Balance immediately
prior to such
Distribution Date over (2) the lesser of (A) 97.50% of the
Stated Principal
Balance of the Mortgage Loans as of the end of the immediately
preceding Due
Period and (B) the excess of the Stated Principal Balance of the
Mortgage Loans
as of the end of the immediately preceding Due Period over the
Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, (I)
on any
Distribution Date prior to the Stepdown Date on which the
Certificate Principal
Balance of each Class of Class A, Class M, Class B-1, Class B-2
and Class B-3
Certificates has been reduced to zero, the Class B-4 Principal
Distribution
Amount will equal the lesser of (x) the outstanding Certificate
Principal
Balance of the Class B-4 Certificates and (y) 100% of the
Principal Distribution
Amount remaining after any distributions on such Class A, Class
M, Class B-1,
Class B-2 and Class B-3 Certificates and (II) in no event will
the Class B-4
Principal Distribution Amount with respect to any Distribution
Date exceed the
Class B-4 Certificate Principal Balance.
Class B-4 Unpaid Realized Loss Amount: As of any Distribution
Date, the
excess of (1) the Class B-4 Applied Realized Loss Amount over
(2) the sum of (x)
all distributions in reduction of the Class B-4 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class B-4 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
- 14 -
<PAGE>
Class B-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 B-5 Certificates.
Class B-5 Certificate: Any Certificate designated as a "Class
B-5
Certificate" on the face thereof, in the form of Exhibit A
hereto, representing
the right to distributions as set forth herein.
Class B-5 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class B-5
Certificates.
Class B-5 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class B-5
Pass-Through Rate on
the Class B-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 a Class B-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 B-5
Certificates.
Class B-5 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class B-5 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually
distributed to the Class
B-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 B-5 Pass-Through Rate for the related Accrual Period.
Class B-5 Margin: As of any Distribution Date up to and
including the
Initial Optional Termination Date for the Certificates, 3.250%
per annum, and,
as of any Distribution Date after the Initial Optional
Termination Date, 4.875%
per annum.
Class B-5 Pass-Through Rate: For the first Distribution Date
6.250% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class B-5 Margin and (2) the Subordinated Certificate
Available Funds
Cap for such Distribution Date.
Class B-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, the
Class M Certificate Principal Balance, the Class B-1 Certificate
Principal
Balance, the Class B-2 Certificate Principal Balance, the Class
B-3 Certificate
Principal Balance and the Class B-4 Certificate Principal
Balance 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 B-1 Certificate Principal
Balance (after
taking into account distributions of the Class B-1 Principal
Distribution Amount
on such Distribution Date), (F) the Class B-2 Certificate
Principal Balance
(after taking into account distributions of the Class B-2
Principal Distribution
Amount on such Distribution Date), (G) the Class B-3 Certificate
Principal
Balance (after taking into account distributions of the Class
B-3 Principal
Distribution Amount on such Distribution Date), (H) the Class
B-4 Certificate
Principal Balance (after taking into account distributions of
the Class B-4
Principal Distribution Amount on such Distribution Date) and (I)
the Class B-5
Certificate Principal Balance immediately prior to such
Distribution Date over
(2) the lesser of (A) 99.00% of the Stated Principal Balance of
the Mortgage
Loans
- 15 -
<PAGE>
as of the end of the immediately preceding Due Period and (B)
the excess of the
Stated Principal Balance of the Mortgage Loans as of the end of
the immediately
preceding Due Period over the Minimum Required
Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any Distribution Date
prior to the
Stepdown Date on which the Certificate Principal Balance of each
Class of Class
A, Class M, Class B-1, Class B-2, Class B-3 and Class B-4
Certificates has been
reduced to zero, the Class B-5 Principal Distribution Amount
will equal the
lesser of (x) the outstanding Certificate Principal Balance of
the Class B-5
Certificates and (y) 100% of the Principal Distribution Amount
remaining after
any distributions on such Class A, Class M, Class B-1, Class
B-2, Class B-3 and
Class B-4 Certificates and (II) in no event will the Class B-5
Principal
Distribution Amount with respect to any Distribution Date exceed
the Class B-5
Certificate Principal Balance.
Class B-5 Unpaid Realized Loss Amount: As of any Distribution
Date, the
excess of (1) the Class B-5 Applied Realized Loss Amount over
(2) the sum of (x)
all distributions in reduction of the Class B-5 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class B-5 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class C Applied Realized Loss Amount: As of any Distribution
Date, the sum
of all Applied Realized Loss Amounts with respect to the
Mortgage Loans which
have been applied to the reduction of the Certificate Principal
Balance of the
Class C Certificates.
Class C Certificate: Any Certificate designated as a "Class C
Certificate"
on the face thereof, in the form of Exhibit A hereto,
representing the right to
distributions as set forth herein.
Class C Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class C
Certificates.
Class C Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class C
Distributable Interest
Rate on a notional amount equal to 99.95% of the aggregate
principal balance of
the Lower Tier REMIC Regular Interests immediately prior to such
Distribution
Date (such amount of interest representing a "specified portion"
(within the
meaning of Treasury Regulations Section 1.860G-1(a)(2)(i)(C)) of
interest
payments on the Lower Tier REMIC Regular Interests (other than
the Class LTII1B
Interest and the Class LTII2B Interest)), plus the interest
portion of any
previous distributions on such Class that is recovered as a
voidable preference
by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated
on such Distribution Date to the Class C Certificates.
Class C Distributable Interest Rate: The excess, if any, of (a)
the
weighted average of the interest rates on the Lower Tier REMIC
Regular Interests
over (b) two times the weighted average of the interest rates on
the Lower Tier
REMIC I Marker Interests and the Class LTIX Interest (treating
for purposes of
this clause (b) the interest rate on each of the Lower Tier
REMIC I Marker
Interests as being subject to a cap and a floor equal to the
interest rate of
the Corresponding Certificates and treating the Class LTIX
Interest as being
capped at zero). The averages described in the preceding
sentence shall be
weighted on the basis of the respective principal balances of
the Lower Tier
REMIC Regular Interests immediately prior to any date of
determination.
Class C Interest Carry Forward Amount: As of any Distribution
Date, the
excess of (A) the Class C Current Interest with respect to prior
Distribution
Dates over (B) the amount actually distributed to the Class C
Certificates with
respect to interest on such prior Distribution Dates or added to
the aggregate
Certificate Principal Balance of the Class C Certificates.
- 16 -
<PAGE>
Class C Unpaid Realized Loss Amount: As of any Distribution
Date, the
excess of (1) the Class C Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class C Unpaid Realized
Loss 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-1A Interest: An uncertificated regular interest in the
Lower
Tier REMIC with an initial principal balance equal to 1/4 of the
initial
principal balance of its Corresponding Certificates and an
interest rate equal
to the Net Rate.
Class LTA-1B 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-2A Interest: An uncertificated regular interest in the
Lower
Tier REMIC with an initial principal balance equal to 1/4 of the
initial
principal balance of its Corresponding Certificate and an
interest rate equal to
the Net Rate.
Class LTA-2B Interest: An uncertificated regular interest in the
Lower
Tier REMIC with an initial principal balance equal to 1/4 of the
initial
principal balance of its Corresponding Certificate and an
interest rate equal to
the Net Rate.
Class LTA-2C Interest: An uncertificated regular interest in the
Lower
Tier REMIC with an initial principal balance equal to 1/4 of the
initial
principal balance of its Corresponding Certificate and an
interest rate equal to
the Net Rate.
Class LTB-1 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the
initial principal
balance of its Corresponding Certificate and an interest rate
equal to the Net
Rate.
Class LTB-2 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the
initial principal
balance of its Corresponding Certificate and an interest rate
equal to the Net
Rate.
Class LTB-3 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the
initial principal
balance of its Corresponding Certificate and an interest rate
equal to the Net
Rate.
Class LTB-4 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the
initial principal
balance of its Corresponding Certificate and an interest rate
equal to the Net
Rate.
Class LTB-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 LTIX Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial prinicipal 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.
- 17 -
<PAGE>
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% of
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.
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 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 and Class
M-3
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 and the Class M-3 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.
- 18 -
<PAGE>
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.
Class M-1 Margin: As of any Distribution Date up to and
including the
Initial Optional Termination Date for the Certificates, 0.430%
per annum and, as
of any Distribution Date after the Initial Optional Termination
Date, 0.645% per
annum.
Class M-1 Pass-Through Rate: For the first Distribution Date,
3.430% per
annum. As of any Distribution Date thereafter, the least 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) 84.40% of the Stated Principal
Balances of the
Mortgage Loans as of the end of the immediately preceding Due
Period and (B) the
excess of the Stated Principal Balances for the Mortgage Loans
as of the end of
the immediately preceding Due Period over the Minimum
Required
Overcollateralization Amount. Notwithstanding the foregoing, (I)
on any
Distribution Date prior to the Stepdown Date on which the
Certificate Principal
Balance of each Class of 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.
- 19 -
<PAGE>
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 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 for the Certificates, 0.630%
per annum and, as
of any Distribution Date after the Initial Optional Termination
Date, 0.945% per
annum.
Class M-2 Pass-Through Rate: For the first Distribution Date,
3.630%
per annum. As of any Distribution Date thereafter, the least 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) 92.10% of the
Stated Principal
Balances of the Mortgage Loans as of the end of the immediately
preceding Due
Period and (B) the excess of the Stated Principal Balances of
the Mortgage Loans
as of the end of the immediately preceding Due Period over the
Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, (I)
on any
Distribution Date prior to the Stepdown Date on which the
Certificate Principal
Balance of each Class of Class A Certificates 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 Certificates 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
- 20 -
<PAGE>
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 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 for the Certificates, 0.690%
per annum and, as
of any Distribution Date after the Initial Optional Termination
Date, 1.035% per
annum.
Class M-3 Pass-Through Rate: For the first Distribution Date,
3.690%
per annum. As of any Distribution Date thereafter, the least 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)
93.30% of the Stated Principal Balances of the Mortgage Loans as
of the end of
the immediately preceding Due Period and (B) the excess of the
Stated Principal
Balances for the Mortgage Loans as of the end of the immediately
preceding Due
Period over the Minimum Required Overcollateralization Amount.
Notwithstanding
the foregoing, (I) on any Distribution Date prior to the
Stepdown Date on which
the Certificate Principal Balance of each Class of 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
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<PAGE>
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 P Certificate: Any Certificate designated as a "Class
P
Certificate" on the face thereof, in the form of Exhibit A
hereto, representing
the right to distributions as set forth herein.
Class R Certificate: Any Certificate designated as a "Class
R
Certificate" on the face thereof, in the form of Exhibit A
hereto, representing
the right to distributions as set forth herein.
Class R Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class R
Certificate.
Class R Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class R
Pass-Through Rate on
the Class R Certificate Principal Balance as of such
Distribution Date plus the
portion of any previous distributions on such Class in respect
of Current
Interest or a Class R Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class R
Certificate.
Class R Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class R Current Interest with
respect to prior
Distribution Dates over (B) the amount actually distributed to
the Class R
Certificate with respect to interest on such prior Distribution
Dates and (2)
interest on such excess (to the extent permitted by applicable
law) at the Class
R Pass-Through Rate for the related Accrual Period.
Class R Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date for the Certificates, 0.210%
per annum and, as
of any Distribution Date after the Initial Optional Termination
Date, 0.420% per
annum.
Class R Pass-Through Rate: For the first Distribution Date,
3.210% per
annum. As of any Distribution Date thereafter, the least 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: April 21, 2005.
Code: The Internal Revenue Code of 1986, including any successor
or
amendatory provisions.
Collection Account: The separate Eligible Account created and
initially
maintained by the Servicer pursuant to Section 3.05(d) in the
name of the
Trustee for the benefit of the Certificateholders and designated
"Wilshire
Credit Corporation, as servicer for Wells Fargo Bank, N.A., as
Trustee, in trust
for registered holders of Merrill Lynch Mortgage Investors
Trust, Mortgage Loan
Asset-Backed Certificates, Series 2005-HE1." Funds in the
Collection Account
shall be held in trust for the Certificateholders for the uses
and purposes set
forth in this Agreement.
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<PAGE>
Combined Loan-to-Value Ratio: For any Mortgage Loan in a second
lien
position, the fraction, expressed as a percentage, the numerator
of which is the
sum of (1) the original principal balance of the related
Mortgage Loan and (2)
any outstanding principal balances of Mortgage Loans the liens
on which are
senior to the lien on such related Mortgage Loan (such sum
calculated at the
date of origination of such related Mortgage Loan) and the
denominator of which
is the lesser of (A) the Appraised Value of the related
Mortgaged Property (or
applicable dwelling unit, in the case of a Co-op Loan) and (B)
the sales price
of the related Mortgaged Property (or applicable dwelling unit,
in the case of a
Co-op Loan) at time of origination.
Compensating Interest: With respect to any Mortgage Loan and
any
Distribution Date, an amount equal to the portion of any
Prepayment Interest
Shortfalls required to be deposited in the Collection Account by
the Servicer
pursuant to Section 4.02 hereof.
Condemnation Proceeds: All awards or settlements in respect of
a
Mortgaged Property (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-1A
Interest,
the Class A-1A and Class R Certificates. With respect to the
Class LTA-1B
Interest, the Class A-1B 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 LTB-1 Interest, the
Class B-1
Certificates. With respect to the Class LTB-2 Interest, the
Class B-2
Certificates. With respect to the Class LTB-3 Interest, the
Class B-3
Certificates. With respect to the Class LTB-4 Interest, the
Class B-4
Certificates. With respect to the Class LTB-5 Interest, the
Class B-5
Certificates.
Current Interest: Any of the Class A-1A Current Interest, the
Class
A-1B Current Interest, the Class A-2A Current Interest, the
Class A-2B Current
Interest, the Class A-2C Current Interest, the Class R Current
Interest, the
Class M-1 Current Interest, the Class M-2 Current Interest, the
Class M-3
Current Interest, the Class B-1 Current Interest, the Class B-2
Current
Interest, the Class B-3 Current Interest, the Class B-4 Current
Interest, the
Class B-5 Current Interest and the Class C Current Interest.
Cut-off Date: March 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.
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<PAGE>
Definitive Certificates: As defined in Section 5.06.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be
replaced by a
Replacement Mortgage Loan.
Delinquent: A Mortgage Loan is "delinquent" if any payment due
thereon
is not made pursuant to the terms of such Mortgage Loan by the
close of business
on the day such payment is scheduled to be due. A Mortgage Loan
is "30 days
delinquent" if such payment has not been received by the close
of business on
the corresponding day of the month immediately succeeding the
month in which
such payment was due, or, if there is no such corresponding day
(e.g., as when a
30-day month follows a 31-day month in which a payment was due
on the 31st day
of such month), then on the last day of such immediately
succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so
on.
Denomination: With respect to each Certificate, the amount set
forth on
the face thereof as the "Initial Principal Balance of this
Certificate."
Depositor: Merrill Lynch Mortgage Investors, Inc., a
Delaware
corporation, or any successor in interest.
Depository: The initial Depository shall be The Depository
Trust
Company ("DTC"), the nominee of which is Cede & Co., or any
other organization
registered as a "clearing agency" pursuant to Section 17A of the
Securities
Exchange Act of 1934, as amended. The Depository shall initially
be the
registered Holder of the Book-Entry Certificates. The Depository
shall at all
times be a "clearing corporation" as defined in Section 8-102(3)
of the Uniform
Commercial Code of the State of New York.
Depository Agreement: With respect to Classes of Book-Entry
Certificates, the agreement between the Trustee and the initial
Depository.
Depository Participant: A broker, dealer, bank or other
financial
institution or other Person for whom from time to time a
Depository effects
book-entry transfers and pledges of securities deposited with
the Depository.
Designated Transaction: A transaction in which the assets
underlying
the Certificates consist of single-family residential,
multi-family residential,
home equity, manufactured housing and/or commercial mortgage
obligations that
are secured by single-family residential, multi-family
residential, commercial
real property or leasehold interests therein.
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 April
2005.
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<PAGE>
Due Date: With respect to any Distribution Date and any Mortgage
Loan,
the day during the related Due Period on which a Scheduled
Payment is due.
Due Period: With respect to any Distribution Date, the period
beginning
on the second day of the calendar month preceding the calendar
month in which
such Distribution Date occurs and ending on the first day of the
month in which
such Distribution Date occurs.
Eligible Account: An account that is (i) maintained with a
depository
institution the long-term unsecured debt obligations of which
are rated by each
Rating Agency in one of its two highest rating categories, or
(ii) maintained
with the corporate trust department of a bank which (A) has a
rating of at least
Baa3 or P-3 by Moody's and (B) is either the Depositor or the
corporate trust
department of a national bank or banking corporation which has a
rating of at
least A-1 by S&P or F1 by Fitch, or (iii) an account or
accounts the deposits in
which are fully insured by the FDIC, or (iv) an account or
accounts, acceptable
to each Rating Agency without reduction or withdrawal of the
rating of any Class
of Certificates, as evidenced in writing, by a depository
institution in which
such accounts are insured by the FDIC (to the limit established
by the FDIC),
the uninsured deposits in which accounts are otherwise secured
such that, as
evidenced by an Opinion of Counsel delivered to and acceptable
to the Trustee,
the NIMs Insurer and each Rating Agency, the Certificateholders
have a claim
with respect to the funds in such account and a perfected first
security
interest against any collateral (which shall be limited to
Permitted
Investments) securing such funds that is superior to claims of
any other
depositors or creditors of the depository institution with which
such account is
maintained, or (v) maintained at an eligible institution whose
commercial paper,
short-term debt or other short-term deposits are rated at least
A-1+ by S&P and
F-1+ by Fitch, or (vi) maintained with a federal or state
chartered depository
institution the deposits in which are insured by the FDIC to the
applicable
limits and the short-term unsecured debt obligations of which
(or, in the case
of a depository institution that is a subsidiary of a holding
company, the
short-term unsecured debt obligations of such holding company)
are rated A-1 by
S&P or Prime-1 by Moody's at the time any deposits are held
on deposit therein,
(vii) a segregated trust account or accounts maintained with a
federal or state
chartered depository institution or trust company acting in its
fiduciary
capacity, that is acceptable to the Rating Agencies or (viii)
otherwise
acceptable to each Rating Agency, as evidenced by a letter from
each Rating
Agency to the Trustee and the NIMs Insurer.
ERISA: The Employee Retirement Income Security Act of 1974,
including
any successor or amendatory provisions.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that would satisfy the
requirements of
Prohibited Transaction Exemption 90-29, Exemption Application
No. D-8012, 55
Fed. Reg. 21459 (1990), as amended, granted to the Underwriter
by the United
States Department of Labor (or any other applicable
underwriter's exemption
granted by the United States Department of Labor), except, in
relevant part, for
the requirement that the certificates have received a rating at
the time of
acquisition that is in one of the three (or four, in the case of
a "designated
transaction") highest generic rating categories by at least one
of the Rating
Agencies.
ERISA Restricted Certificates: The Class C, Class P and Class
R
Certificates and any other Certificate, unless the acquisition
and holding of
such other Certificate is covered by and exempt under 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 at its Pass-Through Rate over (2) the amount of interest
such Class of
- 25 -
<PAGE>
Certificates would have been entitled to receive on such
Distribution Date had
the Pass-Through Rate for such Class been the REMIC Pass-Through
Rate.
Excess Proceeds: With respect to any Liquidated Loan, any
Liquidation
Proceeds that are in excess of the sum of (1) the unpaid
principal balance of
such Liquidated Loan as of the date of such liquidation plus (2)
interest at the
Mortgage Rate from the Due Date as to which interest was last
paid or advanced
to Certificateholders (and not reimbursed to the Servicer) up to
the Due Date in
the month in which such Liquidation Proceeds are required to be
distributed on
the unpaid principal balance of such Liquidated Loan outstanding
during each Due
Period as to which such interest was not paid or advanced.
Exchange Act: The Securities Exchange Act of 1934, as
amended.
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) $2,086,678 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) 1.00% 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.
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
- 26 -
<PAGE>
effect to the applicable Available Funds Cap) and (ii) any
amount previously
distributed with respect to Floating Rate Certificate Carryover
for such class
that is recovered as a voidable preference by a trustee in
bankruptcy.
Freddie Mac: A corporate instrumentality of the United States
created
and existing under Title III of the Emergency Home Finance Act
of 1970, as
amended, or any successor thereto.
Grantor Trusts: The grantor trusts described in Section 2.07
hereof.
Gross Margin: The percentage set forth in the related Mortgage
Note for
each of the Adjustable Rate Mortgage Loans which is to be added
to the
applicable index for use in determining the Mortgage Rate on
each Adjustment
Date, and which is set forth in the Mortgage Loan Schedule for
each Adjustable
Rate Mortgage Loan.
Group One: The portion of the Mortgage Pool identified as "Group
One"
in the Prospectus Supplement.
Group One Mortgage Loan: Any Mortgage Loan at any time
identified in
the Group One Mortgage Loan Schedule attached hereto as Exhibit
B-2.
Group One Principal Distribution Amount: As of any Distribution
Date,
the amount equal to the lesser of (i) the aggregate Certificate
Principal
Balance of the Class A-1 and Class R Certificates and (ii) the
product of (x)
the Group One Principal Distribution Percentage and (y) the
Class A Principal
Distribution Amount; provided, however, that with respect to any
Distribution
Date on which the Class A-1 and Class R Certificates are
outstanding and the
Certificate Principal Balance of the Class A-2 Certificates has
been reduced to
zero, the Group One Principal Distribution Amount will equal the
Class A
Principal Distribution Amount.
Group One Principal Distribution Percentage: With respect to
any
Distribution Date, a fraction expressed as a percentage, the
numerator of which
is the amount of Principal Funds received with respect to
Mortgage Loans in
Group One and the denominator of which is the amount of
Principal Funds received
from all of the Mortgage Loans in the mortgage pool.
Group Two: The portion of the Mortgage Pool identified as "Group
Two"
in the Prospectus Supplement.
Group Two Mortgage Loan: Any Mortgage Loan at any time
identified in
the Group Two Mortgage Loan Schedule attached hereto as Exhibit
B-3.
Group Two Principal Distribution Amount: As of any Distribution
Date,
the amount equal to the lesser of (i) the aggregate Certificate
Principal
Balance of the Class A-2 Certificates and (ii) the product 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.
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<PAGE>
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 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, including, without limitation, the MI 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).
Interest Carry Forward Amount: Any of the Class A-1A Interest
Carry
Forward Amount, the Class A-1B 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 B-1
Interest Carry Forward Amount, the Class B-2 Interest Carry
Forward Amount, the
Class B-3 Interest Carry Forward Amount, the Class B-4 Interest
Carry Forward
Amount, the Class B-5 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, April 19, 2005.
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<PAGE>
Interest Funds: With respect to any Distribution Date, the sum,
without
duplication, of (1) all scheduled interest due during the
related Due Period and
received before the related Servicer Remittance Date or advanced
on or before
the related Servicer Remittance Date less the Servicing Fee, (2)
all Advances
relating to interest with respect to the Mortgage Loans 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, (6) all
Prepayment Charges
received with respect to the Mortgage Loans during the related
Prepayment Period
and (7) refunds, if any, of amounts paid to either of the MI
Insurers as MI
Insurer Fees, less (A) all Non-Recoverable Advances relating to
interest and (B)
other amounts reimbursable to the Servicer 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
Trustee that it does not believe that there is a reasonable
likelihood that any
further net proceeds will be received or recovered with respect
to such Mortgage
Loan.
Liquidation Proceeds: Amounts, including 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.
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-1A Interest,
the
Class LTA-1B Interest, the Class LTA-2A Interest, the Class
LTA-2B Interest, the
Class LTA-2C Interest, the Class LTM-1 Interest,
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the Class LTM-2 Interest, the Class LTM-3 Interest, the Class
LTB-1 Interest,
the Class LTB-2 Interest, the Class LTB-3 Interest, the Class
LTB-4 Interest,
the Class LTB-5 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.
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.
MGIC: Mortgage Guaranty Insurance Corporation, a Wisconsin
insurance
corporation, or its successor in interest.
MI Insurer Fee: The amount payable to the related MI Insurer on
each
Distribution Date, which amount shall equal one-twelfth of the
product of (i)
the related MI Insurer Fee Rate and (ii) the Stated Principal
Balance of the
applicable MI Mortgage Loan (or the related REO Property) as of
the first day of
the related Due Period.
MI Insurer Fee Rate: With respect to each MI Mortgage Loan, the
rate
specified for such Mortgage Loan on the schedule attached to the
related MI
Policy, plus a rate computed so that the related MI Insurer Fee
would make the
related MI Insurer whole for any taxes imposed on such MI
Insurer by the States
of [Kentucky or West Virginia] with respect to MI Mortgage Loans
located in such
States, which rate shall be provided to the Trustee by the
applicable MI
Insurer.
MI Insurers: PMI and MGIC.
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MI Mortgage Loans: The list of Mortgage Loans insured by the
MI
Insurers attached hereto as Exhibit B-4.
MI Policies: (A) The PMI Bulk Primary MI Policy # 22510-0003-0
and all
endorsements thereto, with an effective date of March 1, 2005,
with respect to
the MI Mortgage Loans insured by PMI, which is attached hereto
as Exhibit Q-1
and (B) the MGIC Mortgage Guaranty Master Policy for Multiple
Loan Transactions
# 22-400-4-3203 and the related Terms Letter and all
endorsements thereto, with
an effective date of March 1, 2005, with respect to the MI
Mortgage Loans
insured by MGIC, which is attached hereto as Exhibit Q-2.
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 Excess Interest Amount: With respect to each
Distribution Date,
the amount, if any, by which the Interest Funds for such
Distribution Date
exceeds the aggregate amount distributed on such Distribution
Date pursuant to
Section 4.04(b) (other than the last clause thereof).
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 or second lien or a first or second 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 lists of Mortgage Loans (as from
time to
time amended by the Trustee to reflect the deletion of Deleted
Mortgage Loans
and the addition of Replacement Mortgage
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<PAGE>
Loans pursuant to the provisions of this Agreement) transferred
to the Trustee
as part of the Trust Fund and from time to time subject to this
Agreement,
attached hereto as Exhibits B-1, B-2, B-3 and B-4, setting forth
the following
information with respect to each Mortgage Loan:
(i) the loan number;
(ii) the 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;
(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, or the Combined Loan-to-Value Ratio with
respect to a second 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;
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<PAGE>
(xv) the Credit Score and date obtained;
(xvi) the MIN;
(xvii) a code indicating whether such loan is an MI Mortgage
Loan;
(xviii) each MI Insurer Fee Rate; and
(xix) the coverage percentage under the applicable MI
Policy.
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.
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 sum
of (1) the
Servicing Fee Rate and (2) the MI Insurer Fee Rate, if
applicable.
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.
Net WAC: With respect to any Distribution Date and any Mortgage
Group,
a per annum rate equal to 12 times the quotient obtained by
dividing (x) the
total scheduled interest on the Mortgage Loans in such Mortgage
Group based on
the Net Mortgage Rates in effect on the related Due Date by (y)
the aggregate
Stated Principal Balance of the Mortgage Loans in such Mortgage
Group as of the
preceding Distribution Date (or, in the case of the first
Distribution Date, as
of the Cut-off Date).
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.
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<PAGE>
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-1, Class A-2, Class M, Class
B-1,
Class B-2, Class B-3 and Class R Certificates.
Officer's Certificate: A certificate (1) signed by the Chairman
of the
Board, the Vice Chairman of the Board, the President, a vice
president (however
denominated), an Assistant Vice President, the Treasurer, the
Secretary, or one
of the assistant treasurers or assistant secretaries of the
Depositor or the
Servicer (or any other officer customarily performing functions
similar to those
performed by any of the above designated officers and also to
whom, with respect
to a particular matter, such matter is referred because of such
officer's
knowledge of and familiarity with a particular subject) or (2),
if provided for
in this Agreement, signed by a Servicing Officer, as the case
may be, and
delivered to the Depositor, the Servicer or the Trustee, as the
case may be, as
required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period, the
rate
determined by the Trustee on the related Interest Determination
Date on the
basis of (a) the offered rates for one-month United States
dollar deposits, as
such rates appear on Telerate page 3750, as of 11:00 a.m.
(London time) on such
Interest Determination Date or (b) if such rate does not appear
on Telerate Page
3750 as of 11:00 a.m. (London time), the offered rates of the
Reference Banks
for one-month United States dollar deposits, as such rates
appear on the Reuters
Screen LIBO Page, as of 11:00 a.m. (London time) on such
Interest Determination
Date. If One-Month LIBOR is determined pursuant to clause (b)
above, on each
Interest Determination Date, One-Month LIBOR for the related
Accrual Period will
be established by the Trustee as follows:
(i) If on such Interest Determination Date two or more
Reference Banks provide such offered quotations,
One-Month LIBOR for the related Accrual Period shall
be the arithmetic mean of such offered quotations
(rounded upwards if necessary to the nearest whole
multiple of 0.03125%).
(ii) If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations,
One-Month LIBOR for the related Accrual Period shall
be the higher of (i) One-Month LIBOR as determined on
the previous Interest Determination Date and (ii) the
Reserve Interest Rate.
Opinion of Counsel: A written opinion of counsel, who may be
counsel
for the Depositor or the Servicer, reasonably acceptable to each
addressee of
such opinion; provided, however, that with respect to Section
6.04 or 10.01, or
the interpretation or application of the REMIC Provisions, such
counsel must (1)
in fact be independent of the Depositor and the Servicer, (2)
not have any
direct financial interest in the Depositor or the Servicer or in
any affiliate
of any such party and (3) not be connected with the Depositor or
the Servicer as
an officer, employee, promoter, underwriter, trustee, partner,
director or
person performing similar functions.
Optional Termination: The termination of the Trust Fund
hereunder
pursuant to Section 9.01(a) hereof.
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Optional Termination Amount: The amount received by the Trustee
in
connection with any purchase of all of the Mortgage Loans and
REO Properties
pursuant to Section 9.01(b) hereof.
Optional Termination Price: On any date after the Initial
Optional
Termination Date, an amount equal to the sum of (A) the
aggregate Stated
Principal Balance of each Mortgage Loan (other than any Mortgage
Loan that has
become an REO Property) as of the Distribution Date on which the
proceeds of the
Optional Termination are distributed to the Certificateholders,
plus accrued
interest thereon at the applicable Mortgage Rate as of the Due
Date preceding
the Distribution Date on which the proceeds of the Optional
Termination are
distributed to Certificateholders and the fair market value of
any REO Property,
plus accrued interest thereon as of the Distribution Date on
which the proceeds
of the Optional Termination are distributed to
Certificateholders, (B) any
unreimbursed out-of-pocket costs and expenses owed to the
Trustee (including any
reasonable fees and expenses incurred by the Trustee in
connection with
conducting the Auction) or the Servicer and any unpaid or
unreimbursed Servicing
Fees, Advances and Servicing Advances and (C) 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 Trustee or
delivered to the Trustee for cancellation; and (2) Certificates
in exchange for
which or in lieu of which other Certificates have been executed
by the Trustee
and delivered by the Trustee pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a
Mortgage Loan
with a Stated Principal Balance greater than zero that was not
the subject of a
Principal Prepayment in full, and that did not become a
Liquidated Loan, prior
to the end of the related Due Period.
Overcollateralization Amount: As of any date of determination,
the
excess of (1) the Stated Principal Balance of the Mortgage Loans
over (2) the
Certificate Principal Balance of the Certificates (other than
the Class P
Certificates and the Class C Certificates).
Ownership Interest: As to any Certificate, any ownership
interest in
such Certificate including any interest in such Certificate as
the Holder
thereof and any other interest therein, whether direct or
indirect, legal or
beneficial.
Pass-Through Rate: With respect to any Class of Certificates,
the
corresponding Pass-Through Rate for such Class of
Certificates.
Percentage Interest: With respect to:
(i) any Class, the percentage interest in the undivided
beneficial ownership interest evidenced by such Class
which shall be equal to the Certificate Principal
Balance of such Class divided by the aggregate
Certificate Principal Balance of all Classes; and
(ii) any Certificate, the Percentage Interest evidenced
thereby of the related Class shall equal the
percentage obtained by dividing the Denomination of
such Certificate by the aggregate of the
Denominations of all Certificates of such
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<PAGE>
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;
(ii) general obligations of or obligations guaranteed by
any state of the United States or the District of
Columbia receiving the highest long-term debt rating
of each Rating Agency rating the Certificates;
(iii) commercial or finance company paper, other than
commercial or finance company paper issued by the
Depositor, the Trustee or any of its Affiliates,
which is then receiving the highest commercial or
finance company paper rating of each such Rating
Agency;
(iv) certificates of deposit, demand or time deposits, or
bankers' acceptances (other than bankers' acceptances
issued by the Trustee or any of its Affiliates)
issued by any depository institution or trust company
incorporated under the laws of the United States or
of any state thereof and subject to supervision and
examination by federal and/or state banking
authorities, provided that the commercial paper
and/or long term unsecured debt obligations of such
depository institution or trust company are then
rated one of the two highest long-term and the
highest short-term ratings of each such Rating Agency
for such securities;
(v) demand or time deposits or certificates of deposit
issued by any bank or trust company or savings
institution to the extent that such deposits are
fully insured by the FDIC;
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<PAGE>
(vi) guaranteed reinvestment agreements issued by any
bank, insurance company or other corporation rated in
the two highest long-term or the highest short-term
ratings of each Rating Agency containing, at the time
of the issuance of such agreements, such terms and
conditions as will not result in the downgrading or
withdrawal of the rating then assigned to the
Certificates by any such Rating Agency as evidenced
by a letter from each Rating Agency;
(vii) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either
case entered into with a depository institution or
trust company (acting as principal) described in
clause (v) above;
(viii) securities (other than stripped bonds, stripped
coupons or instruments sold at a purchase price in
excess of 115% of the face amount thereof) bearing
interest or sold at a discount issued by any
corporation, other than the Trustee or any of its
Affiliates, incorporated under the laws of the United
States or any state thereof which, at the time of
such investment, have one of the two highest long
term ratings of each Rating Agency;
(ix) interests in any money market fund (including those
managed or advised by the Trustee or its affiliates)
which at the date of acquisition of the interests in
such fund and throughout the time such interests are
held in such fund has the highest applicable long
term rating by each 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 Trustee or any of its
Affiliates, which on the date of acquisition has been
rated by each such Rating Agency in their respective
highest applicable rating category;
provided, that no such instrument shall be a Permitted
Investment if such
instrument (i) evidences the right to receive interest only
payments with
respect to the obligations underlying such instrument, (ii) is
purchased at a
premium or above par or (iii) is purchased at a deep discount;
provided,
further, that no such instrument shall be a Permitted Investment
(A) if such
instrument evidences principal and interest payments derived
from obligations
underlying such instrument and the interest payments with
respect to such
instrument provide a yield to maturity of greater than 120% of
the yield to
maturity at par of such underlying obligations, or (B) if it may
be redeemed at
a price below the purchase price (the foregoing clause (B) not
to apply to
investments in units of money market funds pursuant to clause
(ix) above); and
provided, further, (I) that no amount beneficially owned by any
REMIC
(including, without limitation, any amounts collected by the
Servicer but not
yet deposited in the Collection Account) may be invested in
investments (other
than money market funds) treated as equity interests for Federal
income tax
purposes, unless the Servicer and/or the Trustee shall receive
an Opinion of
Counsel acceptable to the Servicer and/or the Trustee, at the
expense of the
party requesting that such investment be made, to the effect
that such
investment will not adversely affect the status of the any REMIC
provided for
herein as a REMIC under the Code or result in imposition of a
tax on the Trust
Fund or any REMIC provided for herein and (II) 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
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<PAGE>
organization (except certain farmers' cooperatives described in
Section 521 of
the Code) that is exempt from tax imposed by Chapter 1 of the
Code (including
the tax imposed by Section 511 of the Code on unrelated business
taxable income)
on any excess inclusions (as defined in Section 860E(c)(1) of
the Code) with
respect to the Class R Certificate, (iv) rural electric and
telephone
cooperatives described in Section 1381(a)(2)(C) of the Code, and
(v) a Person
that is not a citizen or resident of the United States, a
corporation or
partnership (or other entity treated as a corporation or
partnership for United
States federal income tax purposes) created or organized in or
under the laws of
the United States or any State thereof or the District of
Columbia or an estate
whose income from sources without the United States is
includable in gross
income for United States federal income tax purposes regardless
of its
connection with the conduct of a trade or business within the
United States, or
a trust if a court within the United States is able to exercise
primary
supervision over the administration of the trust and one or more
United States
persons have authority to control all substantial decisions of
the trust,
unless, in the case of this clause (v), such Person has
furnished the transferor
and the Trustee with a duly completed Internal Revenue Service
Form W-8ECI or
applicable successor form. The terms "United States," "State"
and "International
Organization" shall have the meanings set forth in Section 7701
of the Code. A
corporation will not be treated as an instrumentality of the
United States or of
any State thereof for these purposes if all of its activities
are subject to tax
and, with the exception of the Federal Home Loan Mortgage
Corporation, a
majority of its board of directors is not selected by such
government unit.
Person: Any individual, corporation, partnership, limited
liability
company, joint venture, association, joint-stock company, trust,
unincorporated
organization or government, or any agency or political
subdivision thereof.
PMI: PMI Mortgage Insurance Co., an Arizona insurance
corporation, or
its successor in interest.
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 premium, fee or charge
payable by a
Mortgagor in connection with any Principal Prepayment on a
Mortgage Loan
pursuant to the terms of the related Mortgage Note or Mortgage,
as applicable,
as identified on the Mortgage Loan Schedule.
Prepayment Interest Excess: 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
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<PAGE>
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) all 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) all other amounts reimbursable to
the Servicer and
the Trustee pursuant to this Agreement and allocable to
principal.
Principal Prepayment: Any Mortgagor payment or other recovery of
(or
proceeds with respect to) principal on a Mortgage Loan
(including Mortgage Loans
purchased or repurchased under Sections 2.02, 2.03 and 9.01
hereof) that is
received 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.
Prospectus Supplement: The Prospectus Supplement dated April 19,
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 or the applicable Transferor pursuant
to Section 2.02
or 2.03 hereof, an amount equal to the sum of (i) 100% of the
unpaid principal
balance of the Mortgage Loan as of the date of such purchase
together with any
related unreimbursed Servicing Advances, (ii) accrued interest
thereon at the
applicable Mortgage Rate from (a) the date through which
interest was last paid
by the Mortgagor to (b) the Due Date in the month in which the
Purchase Price is
to be distributed to Certificateholders and (iii) any
unreimbursed costs,
penalties and/or damages incurred by the Trust Fund (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.
- 39 -
<PAGE>
Rating Agency: Any of Fitch, 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 Trustee with the consent of the
NIMs Insurer which
are engaged in transactions in Eurodollar deposits in the
international
Eurocurrency market (i) with an established place of business in
London, England
and (ii) whose quotations appear on the Reuters Screen LIBO Page
on the relevant
Interest Determination Date and (iii) which have been designated
as such by the
Servicer.
Regular Certificate: Any one of the Class A, Class M, and Class
B
Certificates.
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 any of (or, as the context requires, all 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.
- 40 -
<PAGE>
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 score
or credit grade
than that of the Deleted Mortgage Loan; (4) have a Loan-to-Value
Ratio (or
Combined Loan-to-Value Ratio, in the case of the Mortgage Loans
in a second lien
position) no higher than that of the Deleted Mortgage Loan; (5)
have a remaining
term to maturity no greater than (and not more than one year
less than) that of
the Deleted Mortgage Loan; (6) provide for a Prepayment Charge
on terms
substantially similar to those of the Prepayment Charge, if any,
of the Deleted
Mortgage Loan; (7) have the same lien priority as the Deleted
Mortgage Loan; (8)
constitute the same occupancy type as the Deleted Mortgage Loan;
(9) be covered
by the applicable MI Policy if such Deleted Mortgage Loan was
covered by such MI
Policy; and (10) comply with each representation and warranty
set forth in
Section 2.03 hereof.
Request for Release: The Request for Release of Documents
submitted by
the Servicer to the Trustee, substantially in the form of
Exhibit I hereto.
Required Insurance Policy: With respect to any Mortgage Loan,
any
insurance policy that is required to be maintained from time to
time under this
Agreement including, without limitation, in case of any MI
Mortgage Loan, the
applicable MI Policy.
Required Percentage: As of any Distribution 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. As used
herein, on any Distribution Date when any of the Class A
Certificates are
outstanding, the Certificate Principal Balance of the most
senior Class of
Certificates will equal the aggregate Certificate Principal
Balance of the Class
A Certificates as of such date of calculation.
- 41 -
<PAGE>
Reserve Interest Rate: With respect to any Interest
Determination Date,
the rate per annum that the Trustee determines to be (1) the
arithmetic mean
(rounded upwards if necessary to the nearest whole multiple of
0.03125%) of the
one-month United States dollar lending rates which New York City
banks selected
by the Trustee are quoting on the relevant Interest
Determination Date to the
principal London offices of leading banks in the London
interbank market or (2)
in the event that the Trustee can determine no such arithmetic
mean, the lowest
one-month United States dollar lending rate which New York City
banks selected
by the Trustee are quoting on such Interest Determination Date
to leading
European banks.
Residual Excess Interest Amount: With respect to any
Distribution Date,
the excess of (x) 0.05% of the Monthly Excess Interest Amount
for such
Distribution Date and all prior Distribution Dates over (y) all
payments
previously made to the Class R Certificate in respect of the
Residual Excess
Interest Amount.
Residual Interest: An interest in the Upper Tier REMIC that is
entitled
to all distributions of principal and interest on the Class R
Certificate other
than 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 Trustee or
the
Servicer, any officer of the Trustee or the Servicer with direct
responsibility
for the administration of this Agreement and also means any
other officer to
whom, with respect to a particular matter, such matter is
referred because of
such officer's knowledge of and familiarity with the particular
subject.
Reuters Screen LIBO Page: The display designated as page "LIBO"
on the
Reuters Monitor Money Rates Service (or such other page as may
replace such LIBO
page on that service for the purpose of displaying London
interbank offered
rates of major banks.
S&P: Standard & Poor's, 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 March 1, 2005 between the Depositor and the Seller.
Scheduled Payment: The scheduled monthly payment on a Mortgage
Loan due
on any Due Date allocable to principal and/or interest on such
Mortgage Loan.
Section 302 Requirements: Any rules or regulations promulgated
pursuant
to the Sarbanes-Oxley Act of 2002 (as such may be amended from
time to time).
Securities Act: The Securities Act of 1933, as amended.
Seller: Merrill Lynch Mortgage Capital, Inc., a Delaware
corporation,
or its successors in interest.
Servicer: Wilshire Credit Corporation, a Nevada corporation, or
its
successor in interest.
Servicer Advance Date: As to any Distribution Date, the
related
Servicer Remittance Date.
Servicer Remittance Date: With respect to any Distribution Date,
the
later of two Business Days after the 15th day of the month in
which such
Distribution Date occurs and the 18th day (or if such day is not
a Business Day,
the next succeeding Business Day) of the month in which such
Distribution Date
occurs.
- 42 -
<PAGE>
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, deeds of reconveyance or
Assignments of
Mortgage to the extent not otherwise recovered from the related
Mortgages or
payable under this Agreement, (5) correcting errors of prior
servicers; costs
and expenses charged to the Servicer by the Trustee; 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 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 involved in,
or
responsible for, the administration and servicing of the
Mortgage Loans whose
name and facsimile signature appear on a list of servicing
officers furnished to
the Trustee by the Servicer on the Closing Date pursuant to this
Agreement, as
such lists may from time to time be amended.
Servicing Transfer Costs: All costs associated with the transfer
of
servicing from the predecessor Servicer, including, without
limitation, any
costs or expenses associated with the termination of the
predecessor Servicer,
the appointment of a successor servicer, the complete transfer
of all servicing
data and the completion, correction or manipulation of such
servicing data as
may be required by the Trustee or any successor servicer to
correct any errors
or insufficiencies in the servicing data or otherwise to enable
the Trustee or
successor servicer to service the Mortgage Loans properly and
effectively.
SFAS 140: Statement of Financial Accounting Standard No.
140,
Accounting for Transfers and Servicing of Financial Assets and
Extinguishments
of Liabilities dated September 2000, published by the Financial
Accounting
Standards Board of the Financial Accounting Foundation.
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
- 43 -
<PAGE>
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 April
2008 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) 73.90% of the
Stated Principal
Balances of the Mortgage Loans as of such Distribution Date.
Stepdown Required Loss Percentage: For any Distribution Date,
the
applicable percentage for such Distribution Date set forth in
the following
table:
<TABLE>
<CAPTION>
DISTRIBUTION DATE OCCURRING IN STEPDOWN REQUIRED LOSS
------------------------------ ----------------------
PERCENTAGE
----------
<S> <C>
April 2008 - March 2009 1.50% with respect to April 2008,
plus
an additional 1/12th of 0.50% for each
month thereafter
April 2009 - March 2010 2.00% with respect to April 2009,
plus
an additional 1/12th of 0.75% for each
month thereafter
April 2010 - March 2011 2.75% with respect to April 2010,
plus
an additional 1/12th of 0.25% for each
month thereafter
April 2011 and thereafter 3.00%
</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) 40.00%
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 Certificate Available Funds Cap: With respect to
a
Distribution Date, the per annum rate equal to the weighted
average (weighted in
proportion to the results of subtracting the current Certificate
Principal
Balance of the related Class A Certificates from the aggregate
Stated Principal
Balance of the Mortgage Loans in each Mortgage Group as of the
immediately
preceding Distribution Date (or, in the case of the first
Distribution Date, as
of the Cut-off Date) of the Class A-1 Available Funds Cap and
the Class A-2
Available Funds Cap.
Subordinated Certificate Cap Contract: The amended confirmation
and
agreement and any related confirmation thereto, between the
Trust Fund or
Trustee and the Cap Contract Counterparty (in the form of
Exhibit N-3 hereto).
- 44 -
<PAGE>
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 day
after
the Distribution Date in April 2011.
Subordinated Certificate Maximum Rate Cap: With respect to a
Distribution Date, the per annum rate equal to the weighted
average (weighted in
proportion to the results of subtracting from the aggregate
Stated Principal
Balance of the Mortgage Loans in each Mortgage Group as of the
immediately
preceding Distribution Date (or, in the case of the first
Distribution Date, as
of the Cut-off Date) the current Certificate Principal Balance
of the related
Class A Certificates) of the Class A-1 Maximum Rate Cap and the
Class A-2
Maximum Rate Cap.
Subordinated Certificate Upper Collar: With respect to each
Distribution Date with respect to which payments are received on
the
Subordinated Certificate Cap Contract, a rate equal to the
lesser of One-Month
LIBOR and 8.320% per annum.
Subordinated Certificates: Each Class of the Class M and Class
B
Certificates.
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.
Transfer Agreement: Each document set out on Exhibit J hereto
pursuant
to which the Seller acquired any Mortgage Loan from the
Transferor of such
Mortgage Loan.
Transferor: Any originator of a Mortgage Loan.
Trust Fund: The corpus of the trust (the "Merrill Lynch
Mortgage
Investors Trust, Series 2005-HE1") created hereunder consisting
of (i) the
Mortgage Loans and all interest and principal received on or
with respect
thereto on and after the Cut-off Date to the extent not applied
in computing the
Cut-off Date Principal Balance thereof, exclusive of interest
not required to be
deposited in the Collection Account; (ii) the Collection Account
and the
Certificate Account and all amounts deposited therein pursuant
to the applicable
provisions of this Agreement; (iii) property that secured a
Mortgage Loan and
has been acquired by foreclosure, deed in lieu of foreclosure or
otherwise; (iv)
the mortgagee's rights under the Insurance Policies with respect
to the Mortgage
Loans (including, without limitation, the MI Policies); (v) all
proceeds of the
conversion, voluntary or involuntary, of any of the foregoing
into cash or other
liquid property; and (vi) the Cap Contract and Cap Contract
Account.
- 45 -
<PAGE>
Trustee: Wells Fargo Bank, N.A., a national banking association,
not in
its individual capacity, but solely in its capacity as trustee
for the benefit
of the Certificateholders under this Agreement, and any
successor thereto, and
any corporation or national banking association resulting from
or surviving any
consolidation or merger to which it or its successors may be a
party and any
successor trustee as may from time to time be serving as
successor trustee
hereunder.
Uncertificated Class C Interest: An uncertificated interest
having (i)
the same rights to payments as the Class C Certificates, other
than the rights
to payments of amounts with respect to the Cap Contracts, and
(ii) the rights to
the payments treated as distributed to the Class C Certificates
under Section
2.07(d), provided, however, that such interest shall have no
obligation to make
any payments treated as paid by the Class C Certificates
pursuant to interest
rate cap agreements under Section 2.07(d).
Underlying Mortgaged Property: With respect to each Co-op Loan,
the
underlying real property owned by the related residential
cooperative housing
corporation.
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 B-1 Unpaid Realized Loss Amount, Class B-2 Unpaid Realized
Loss Amount,
Class B-3 Unpaid Realized Loss Amount, Class B-4 Unpaid Realized
Loss Amount,
Class B-5 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 2% 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).
- 46 -
<PAGE>
It is agreed and understood by the Depositor, the Servicer 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 or (iv) a "High-Cost Home Loan" as defined by
the Indiana High
Cost Home Loan Law effective January 1, 2005.
(i) In connection with such assignment, the Depositor does
hereby
deliver to, and deposit with, the Trustee, the following
documents or
instruments with respect to each Mortgage Loan:
(A) The original Mortgage Note endorsed in blank or, "Pay to
the
order of Wells Fargo Bank, 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 together with all
riders
thereto, with evidence of recording thereon, or, if the
original
Mortgage has not yet been returned from the recording office, a
copy of
the original Mortgage together with all riders thereto certified
by the
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
"Wells Fargo Bank, 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 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) the
original
consolidation, extension and modification agreement
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<PAGE>
(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 Wells Fargo
Bank,
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 "Wells Fargo Bank, N.A., as trustee";
(D) The 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;
(E) The 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
"Wells
Fargo Bank, 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) The 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) The original proprietary lease;
(I) The original assignment of proprietary lease or a copy
thereof,
to the Trustee or in blank, and all intervening assignments
thereof;
(J) The 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 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.
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<PAGE>
With respect to any Mortgage Loan that is not a Co-op Loan, none
of the
Depositor, the Servicer or the Trustee shall be obligated to
cause to be
recorded the Assignment of Mortgage referred to in this Section
2.01. With
respect to any Co-op Loan, none of the Depositor, the Servicer
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 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. Neither the Depositor nor the Servicer shall
take any action
inconsistent with such ownership and shall not claim any
ownership interest
therein. The Depositor and the Servicer shall respond to any
third party
inquiries with respect to ownership of the Mortgage Loans by
stating that such
ownership is held by the Trustee on behalf of the
Certificateholders. Mortgage
documents relating to the Mortgage Loans not delivered to the
Trustee are and
shall be held in trust by the Servicer, for the benefit of the
Trustee as the
owner thereof, and the Servicer's possession of the contents of
each Mortgage
File so retained is for the sole purpose of servicing the
related Mortgage Loan,
and such retention and possession by the Servicer is in a
custodial capacity
only. The Depositor agrees to take no action inconsistent with
the Trustee's
ownership of the Mortgage Loans, to promptly indicate to all
inquiring parties
that the Mortgage Loans have been sold and to claim no ownership
interest in the
Mortgage Loans.
It is the intention of this Agreement that the conveyance of
the
Depositor's right, title and interest in and to the Trust Fund
pursuant to this
Agreement shall constitute a purchase and sale and not a loan.
If a conveyance
of Mortgage Loans from the Seller to the Depositor is
characterized as a pledge
and not a sale, then the Depositor shall be deemed to have
transferred to the
Trustee all of the Depositor's right, title and interest in, to
and under the
obligations of the Seller deemed to be secured by said pledge;
and it is the
intention of this Agreement that the Depositor shall also be
deemed to have
granted to the Trustee a first priority security interest in all
of the
Depositor's right, title, and interest in, to and under the
obligations of the
Seller to the Depositor deemed to be secured by said pledge and
that the Trustee
shall be deemed to be an independent custodian for purposes of
perfection of the
security interest granted to the Depositor. If the conveyance of
the Mortgage
Loans from the Depositor to the Trustee is characterized as a
pledge, it is the
intention of this Agreement that this Agreement shall constitute
a security
agreement under applicable law, and that the Depositor shall be
deemed to have
granted to the Trustee a first priority security interest in all
of the
Depositor's right, title and interest in, to and under the
Mortgage Loans, all
payments of principal of or interest on such Mortgage Loans, all
other rights
relating to and payments made in respect of the Trust Fund, and
all proceeds of
any thereof. If the trust created by this Agreement terminates
prior to the
satisfaction of the claims of any Person in any Certificates,
the security
interest created hereby shall continue in full force and effect
and the Trustee
shall be deemed to be the collateral agent for the benefit of
such Person.
In addition to the conveyance made in the first paragraph of
this
Section 2.01, the Depositor does hereby convey, assign and set
over to the
Trustee for the benefit of the Certificateholders its rights and
interests under
the Sale Agreement, including the Depositor's right, title and
interest in the
representations and warranties contained in the Sale Agreement,
the rights in
the Transfer Agreements described therein, 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
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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 in trust for the use and benefit
of all present
and future Certificateholders. The Depositor will cause the
Seller to repurchase
any Mortgage Loan to which a material exception was taken in the
Exception
Report unless such exception is cured to the satisfaction of the
Trustee within
45 Business Days of the Closing Date.
The Trustee acknowledges receipt of the three Cap Contracts
(forms of
which are attached hereto as Exhibits N-1, N-2 and N-3), the
Transfer
Agreements, the Bring Down Letters and the Sale Agreement.
The Trustee 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 and the Servicer that all
documents required by
Section 2.01 have been executed and received, and that such
documents relate to
the Mortgage Loans identified in Exhibit B that have been
conveyed to it. If the
Trustee finds any document or documents constituting a part of a
Mortgage File
to be missing or defective (that is, mutilated, damaged, defaced
or unexecuted)
in any material respect, the Trustee shall promptly (and in any
event within no
more than five Business Days) after such finding so notify the
NIMs Insurer, the
Servicer, the Seller and the Depositor. In addition, the Trustee
shall also
notify the NIMs Insurer, the 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 60 days of the Closing Date; if it
has not been
received because of a delay caused by the public recording
office where such
Mortgage has been delivered for recordation, the Depositor shall
deliver or
cause to be delivered to the Trustee written notice stating that
such Mortgage
has been delivered to the appropriate public recording office
for recordation
and thereafter the Depositor shall deliver or cause to be
delivered such
Mortgage with evidence of recording thereon upon receipt thereof
from the public
recording office. The Trustee shall request that the 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
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, 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
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<PAGE>
remedies available to the Certificateholders, the NIMs Insurer,
the Depositor or
the Trustee pursuant to the Sale Agreement, the Transfer
Agreements or any
Bring-Down Letter. The Trustee shall be under no duty or
obligation to inspect,
review and examine such documents, instruments, certificates or
other papers to
determine that they are genuine, enforceable, recordable or
appropriate to the
represented purpose, or that they have actually been recorded,
or that they are
other than what they purport to be on their face. The Servicer
and the Trustee
shall keep confidential the name of each Mortgagor except as
required for the
performance of this Agreement and the Servicer 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 information
that is or
becomes publicly known, or information obtained by the Trustee
or the Servicer
from sources other than the other parties hereto, (ii)
disclosure of any and all
information (A) if required to do so 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 pursuant to
any 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
having a need to
know the same, provided that the Trustee advises such recipient
of the
confidential nature of the information being disclosed, or (iii)
any other
disclosure authorized by the Depositor. The Servicer shall
provide to the
Depositor any information related to the Mortgage Loans
requested 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 shall deliver to
the
NIMs Insurer, the Depositor and the Servicer the Trustee's
Certification,
substantially in the form of Exhibit D attached hereto,
evidencing the
completeness of the Mortgage Files, with any exceptions noted
thereto.
Section 2.03. Representations, Warranties and Covenants of
the
Depositor.
(a) The Depositor hereby represents and warrants to the
Servicer, 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
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<PAGE>
of business of the Depositor and will not (A) result in a
material breach
of any term or provision of the charter or by-laws of the
Depositor or (B)
materially conflict with, result in a violation or acceleration
of, or
result in a material default under, the terms of any other
material
agreement or instrument to which the Depositor is a party or by
which it
may be bound or (C) constitute a material violation of any
statute, order
or regulation applicable to the Depositor of any court,
regulatory body,
administrative agency or governmental body having jurisdiction
over the
Depositor; and the Depositor is not in breach or violation of
any material
indenture or other material agreement or instrument, or in
violation of
any statute, order or regulation of any court, regulatory
body,
administrative agency or governmental body having jurisdiction
over it
which breach or violation may materially impair the Depositor's
ability to
perform or meet any of its obligations under this Agreement.
(iv) No litigation is pending, or, to the best of the
Depositor's
knowledge, threatened, against the Depositor that would
materially and
adversely affect the execution, delivery or enforceability of
this
Agreement and the Sale Agreement or the ability of the Depositor
to
perform its obligations under this Agreement and the Sale
Agreement in
accordance with the terms hereof.
(v) No consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution,
delivery and
performance by the Depositor of, or compliance by the Depositor
with, this
Agreement and the Sale Agreement or the consummation of the
transactions
contemplated hereby, or if any such consent, approval,
authorization or
order is required, the Depositor has obtained the same. The
Depositor
hereby represents and warrants to the Trustee with respect to
each
Mortgage Loan as of the Closing Date, and following the transfer
of the
Mortgage Loans to it by the 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 each Transferor with
respect
to the related Mortgage Loans in the applicable Transfer
Agreement, which have
been assigned to the Trustee hereunder, were made as of the date
specified in
the applicable Transfer Agreement and brought forward to the
Closing Date
pursuant to the related Bring Down Letter. The representations
and warranties of
each Transferor with respect to the Mortgage Loans contained in
the Bring Down
Letter were made as of the Closing Date. 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
both (i) a
representation or warranty of the applicable Transferor under
the applicable
Transfer Agreement and (ii) 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 applicable Transferor under any applicable representation or
warranty made
by it. Unless otherwise stated in the Sale Agreement, the
Trustee acknowledges
that the Seller shall have no obligation or liability with
respect to any breach
of a representation or warranty made by it with respect to the
Mortgage Loans if
the fact, condition or event constituting such breach also
constitutes a breach
of a representation or warranty made by the related Transferor
in the related
Transfer Agreement, without regard to whether the Transferors
fulfills its
contractual obligations in respect of such representation or
warranty. The
Trustee also acknowledges that the Seller shall have no
obligation or liability
with respect to any breach of a representation or warranty made
solely by the
Transferors with respect to the Mortgage Loans, without regard
to whether the
related Transferor fulfills its contractual obligations in
respect of such
representation or warranty. The Trustee further 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.
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<PAGE>
In addition to the representations and warranties of the
Transferors in
the Transfer Agreements that were brought forward to the Closing
Date pursuant
to the Bring Down Letters, with respect to each Mortgage Loan,
each Transferor
made certain additional covenants regarding such Mortgage Loan,
as set forth in
the related Transfer Agreement. With respect to any breach of
such additional
covenants that materially and adversely affects the interests of
the
Certificateholders in such Mortgage Loan, the Seller shall (1)
use reasonable
efforts to enforce such covenant against the related Transferor
and (2) if the
Seller successfully enforces any obligation of the related
Transferor to
repurchase such Mortgage Loan, the Seller shall repurchase such
Mortgage Loan in
accordance with this Section 2.03. If the Seller does not
successfully enforce
the obligation, if any, of the Transferor to repurchase a
Mortgage Loan with
respect to any breach of any such additional covenants, the
Seller shall have no
obligation or right to repurchase or cure such Mortgage
Loan.
(c) Upon discovery by any of the Depositor, the 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 applicable Transferor or the Seller, as
applicable, 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 any
Transferor or
the Seller, the Trustee shall enforce its rights under the
applicable Transfer
Agreement or the Sale Agreement for the benefit of
Certificateholders and the
NIMs Insurer. If a breach of the representations and warranties
set forth in a
Transfer 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 a
Transfer 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
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
Transferor substitutes for a Mortgage Loan for which there is a
breach of any
representations and warranties in the related Transfer 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 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 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
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
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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
or by any
Transferor pursuant to the applicable Transfer 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 Trustee of its receipt of the same.
The Trustee, upon
receipt of the full amount of the Purchase Price for a Deleted
Mortgage Loan, or
upon receipt of the Mortgage File for a Replacement Mortgage
Loan substituted
for a Deleted Mortgage Loan, shall release or cause to be
released and reassign
to the Depositor, the Seller or the applicable Transferor, as
applicable, the
related Mortgage File for the Deleted Mortgage Loan and shall
execute and
deliver such instruments of transfer or assignment, in each case
without
recourse, representation or warranty, as shall be necessary to
vest in such
party or its designee or assignee title to any Deleted Mortgage
Loan released
pursuant hereto, free and clear of all security interests, liens
and other
encumbrances created by this Agreement, which instruments shall
be prepared by
the Trustee, and the Trustee shall not have any further
responsibility with
respect to the Mortgage File relating to such Deleted Mortgage
Loan.
With respect to each Replacement Mortgage Loan to be delivered
to the
Trustee pursuant to the terms of this Article II in exchange for
a Deleted
Mortgage Loan: (i) the Depositor, the applicable Transferor or
the Seller, as
applicable, must deliver to the Trustee (or its custodian) 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
satisfaction by such
Mortgage Loan of all requirements under the definition of
Replacement Mortgage
Loan and 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 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 its custodian) 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 and the
NIMs Insurer
shall 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
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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 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 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, (ii) of the
Seller and the Depositor set forth in the Sale Agreement and
assigned to the
Trustee by the Depositor hereunder and (iii) of each Transferor,
assigned by the
Seller to the Depositor pursuant to the Sale Agreement and
assigned to the
Trustee by the Depositor hereunder shall each survive delivery
of the Mortgage
Files and the Assignment of Mortgage of each Mortgage Loan to
the Trustee and
shall continue throughout the term of this Agreement.
(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
Servicer.
(i) The Servicer hereby represents and warrants to the Depositor
and
the Trustee as follows, as of the date hereof:
(ii) The 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 Servicer
in any
state in which a Mortgaged Property (or Underlying Mortgaged
Property,
in the case of a Co-op Loan) is located or is otherwise not
required
under applicable law to effect such qualification and, in any
event, is
in compliance with the doing business laws of any such state, to
the
extent necessary to ensure its ability to enforce each Mortgage
Loan,
to service the Mortgage Loans in accordance with the terms of
this
Agreement and to perform any of its other obligations under
this
Agreement in accordance with the terms hereof.
(iii) The Servicer has the corporate power and authority to
service
each Mortgage Loan, and to execute, deliver and perform, and to
enter
into and consummate the transactions contemplated by this
Agreement and
has duly authorized by all necessary corporate action on the
part of
the Servicer the execution, delivery and performance of this
Agreement;
and this Agreement, assuming the due authorization, execution
and
delivery hereof by the other parties hereto, constitutes a
legal, valid
and binding obligation of the Servicer, enforceable against
the
Servicer in accordance with its terms, except that (a) the
enforceability hereof may be limited by bankruptcy,
insolvency,
moratorium, receivership and other similar laws relating to
creditors'
rights generally and (b) the remedy of specific performance
and
injunctive and other forms
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of equitable relief may be subject to equitable defenses and to
the
discretion of the court before which any proceeding therefor may
be
brought.
(iv) 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.
(v) The Servicer is an approved servicer of mortgage loans
for
Fannie Mae and is an approved servicer of mortgage loans for
Freddie
Mac.
(vi) 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.
(vii) 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.
(viii) 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.
(ix) Unless otherwise indicated on Exhibit M, the Servicer has
not
by written agreement with the Mortgagor waived, altered,
modified or
released the Mortgage or Mortgage Note during such time as the
Servicer
serviced the related Mortgage Loan.
Section 2.05. Substitutions and Repurchases of Mortgage Loans
which are
not "Qualified Mortgages."
Upon discovery by the Depositor, the Servicer or the Trustee
that any
Mortgage Loan does not constitute a "qualified mortgage" within
the meaning of
section 860G(a)(3) of the Code, the party discovering such fact
shall promptly
(and in any event within 5 Business Days of discovery) give
written notice
thereof to the other parties. In connection therewith, the
Depositor shall, at
the Depositor's option, either (i) substitute, if the conditions
in Section
2.03(c) with respect to substitutions are satisfied, a
Replacement Mortgage Loan
for the affected Mortgage Loan, or (ii) repurchase the affected
Mortgage
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Loan within 90 days of such discovery in the same manner as it
would a Mortgage
Loan for a breach of representation or warranty contained in
Section 2.03. The
Trustee shall reconvey to the Depositor the Mortgage Loan to be
released
pursuant hereto in the same manner, and on the same terms and
conditions, as it
would a Mortgage Loan repurchased for breach of a representation
or warranty
contained in Section 2.03.
Section 2.06. Authentication and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of
the Trust
Fund and, concurrently with such transfer and assignment, the
Trustee has caused
to be authenticated and delivered to or upon the order of the
Depositor, in
exchange for the Mortgage Loans, Certificates duly authenticated
by the Trustee
in authorized denominations evidencing ownership of the entire
Trust Fund. The
Trustee agrees to hold the Trust Fund and exercise the rights
referred to above
for the benefit of all present and future Holders of the
Certificates and to
perform its duties set forth in this Agreement in accordance
with the provisions
hereof 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 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 purpo
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