<PAGE>
EXHIBIT 4.1
EXECUTION COPY
MERRILL LYNCH MORTGAGE INVESTORS, INC.,
Depositor
WILSHIRE CREDIT CORPORATION,
Servicer
and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
Trustee
--------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of May 1, 2005
--------------------------------------
SPECIALTY UNDERWRITING AND RESIDENTIAL FINANCE TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2005-AB1
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS................................................................................1
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES..............................38
SECTION 2.01.
Conveyance of Mortgage
Loans................................................38
SECTION 2.02.
Acceptance by Trustee of the Mortgage
Loans.................................40
SECTION 2.03.
Representations, Warranties and Covenants of the
Depositor..................41
SECTION 2.04.
Representations and Warranties of the
Servicer..............................44
SECTION 2.05.
Substitutions and Repurchases of Mortgage Loans Which Are Not
"Qualified
Mortgages".......................................................45
SECTION 2.06.
Authentication and Delivery of
Certificates.................................46
SECTION 2.07.
REMIC
Elections.............................................................46
SECTION 2.08.
Covenants of the
Servicer...................................................49
SECTION 2.09.
[RESERVED]..................................................................49
SECTION 2.10.
[RESERVED]..................................................................49
SECTION 2.11.
Permitted Activities of the Trust
Fund......................................49
SECTION 2.12.
Qualification of Special Purpose
Entity.....................................50
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS............................................50
SECTION 3.01.
Servicer to Service Mortgage
Loans..........................................50
SECTION 3.02.
Servicing and Subservicing; Enforcement of the Obligations of
Servicer......51
SECTION 3.03.
Rights of the Depositor and the Trustee in Respect of the
Servicer..........52
SECTION 3.04.
Trustee to Act as
Servicer..................................................52
SECTION 3.05.
Collection of Mortgage Loan Payments; Collection Account;
Certificate
Account.....................................................................53
SECTION 3.06.
Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.........56
SECTION 3.07.
Access to Certain Documentation and Information Regarding the
Mortgage
Loans.......................................................................56
SECTION 3.08.
Permitted Withdrawals from the Collection Account and Certificate
Account...57
SECTION 3.09.
[RESERVED]..................................................................59
SECTION 3.10.
Maintenance of Hazard
Insurance.............................................59
SECTION 3.11.
Enforcement of Due-On-Sale Clauses; Assumption
Agreements...................60
SECTION 3.12.
Realization Upon Defaulted Mortgage Loans; Determination of
Excess
Proceeds....................................................................61
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SECTION 3.13.
Trustee to Cooperate; Release of Mortgage
Files.............................64
SECTION 3.14.
Documents Records and Funds in Possession of Servicer to be Held
for the
Trustee.....................................................................65
SECTION 3.15.
Servicing
Compensation......................................................65
SECTION 3.16.
Access to Certain
Documentation.............................................65
SECTION 3.17.
Annual Statement as to
Compliance...........................................66
SECTION 3.18.
Annual Independent Public Accountants' Servicing Statement;
Financial
Statements..................................................................66
SECTION 3.19.
Rights of the NIM
Insurer...................................................66
SECTION 3.20.
Periodic
Filings............................................................66
SECTION 3.21.
Annual Certificate by
Trustee...............................................67
SECTION 3.22.
Annual Certificate by
Servicer..............................................67
SECTION 3.23.
Prepayment Charge Reporting
Requirements....................................68
SECTION 3.24.
Statements to
Trustee.......................................................69
SECTION 3.25.
Indemnification.............................................................69
SECTION 3.26.
Nonsolicitation.............................................................69
SECTION 3.27.
Existing Servicing
Agreement................................................69
SECTION 3.28.
High Cost Mortgage
Loans....................................................70
ARTICLE IV
DISTRIBUTIONS.............................................................................70
SECTION 4.01.
Advances....................................................................70
SECTION 4.02.
Reduction of Servicing Compensation in Connection with
Prepayment
Interest
Shortfalls.........................................................71
SECTION 4.03.
Distributions on the REMIC
Interests........................................71
SECTION 4.04.
Distributions...............................................................71
SECTION 4.05.
Monthly Statements to
Certificateholders....................................76
ARTICLE V
THE
CERTIFICATES..........................................................................79
SECTION 5.01.
The
Certificates............................................................79
SECTION 5.02.
Certificate Register; Registration of Transfer and Exchange of
Certificates................................................................80
SECTION 5.03.
Mutilated, Destroyed, Lost or Stolen
Certificates...........................83
SECTION 5.04.
Persons Deemed
Owners.......................................................84
SECTION 5.05.
Access to List of Certificateholders' Names and
Addresses...................84
SECTION 5.06.
Book-Entry
Certificates.....................................................84
SECTION 5.07.
Notices to
Depository.......................................................85
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SECTION 5.08.
Definitive
Certificates.....................................................85
SECTION 5.09.
Maintenance of Office or
Agency.............................................86
ARTICLE VI
THE DEPOSITOR AND THE
SERVICER............................................................86
SECTION 6.01.
Respective Liabilities of the Depositor and the
Servicer....................86
SECTION 6.02.
Merger or Consolidation of the Depositor or the
Servicer....................86
SECTION 6.03.
Limitation on Liability of the Depositor, the Servicer and
Others...........86
SECTION 6.04.
Limitation on Resignation of
Servicer.......................................87
SECTION 6.05.
Errors and Omissions Insurance; Fidelity
Bonds..............................87
ARTICLE VII
DEFAULT; TERMINATION OF
SERVICER..........................................................88
SECTION 7.01.
Events of
Default...........................................................88
SECTION 7.02.
[RESERVED]..................................................................89
SECTION 7.03.
Trustee to Act; Appointment of
Successor....................................89
SECTION 7.04.
Notification to
Certificateholders..........................................90
ARTICLE VIII
CONCERNING THE
TRUSTEE....................................................................90
SECTION 8.01.
Duties of
Trustee...........................................................90
SECTION 8.02.
Certain Matters Affecting the
Trustee.......................................92
SECTION 8.03.
Trustee Not Liable for Mortgage
Loans.......................................93
SECTION 8.04.
Trustee May Own
Certificates................................................93
SECTION 8.05.
Trustee's
Fees..............................................................93
SECTION 8.06.
Indemnification of Trustee;
Expenses........................................93
SECTION 8.07.
Eligibility Requirements for
Trustee........................................95
SECTION 8.08.
Resignation and Removal of
Trustee..........................................95
SECTION 8.09.
Successor
Trustee...........................................................96
SECTION 8.10.
Merger or Consolidation of
Trustee..........................................96
SECTION 8.11.
Appointment of Co-Trustee or Separate
Trustee...............................96
SECTION 8.12.
Tax
Matters.................................................................97
ARTICLE IX
TERMINATION...............................................................................99
SECTION 9.01.
Termination upon Liquidation or Repurchase of all Mortgage
Loans............99
SECTION 9.02.
Final Distribution on the
Certificates.....................................101
SECTION 9.03.
Additional Termination
Requirements........................................102
ARTICLE X
MISCELLANEOUS
PROVISIONS.................................................................103
SECTION 10.01.
Amendment..................................................................103
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SECTION 10.02.
Counterparts...............................................................105
SECTION 10.03.
Governing
Law..............................................................105
SECTION 10.04.
Intention of
Parties.......................................................105
SECTION 10.05.
Notices....................................................................105
SECTION 10.06.
Severability of
Provisions.................................................106
SECTION 10.07.
Assignment.................................................................107
SECTION 10.08.
Limitation on Rights of
Certificateholders.................................107
SECTION 10.09.
Inspection and Audit
Rights................................................107
SECTION 10.10.
Certificates Nonassessable and Fully
Paid..................................108
SECTION
10.11.
Third Party
Rights.........................................................108
SECTION 10.12.
Additional Rights of the NIM
Insurer.......................................108
SECTION 10.13.
[RESERVED].................................................................108
SECTION 10.14.
Assignment; Sales; Advance
Facilities......................................108
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EXHIBIT A
FORMS OF CERTIFICATES
EXHIBIT B
MORTGAGE LOAN SCHEDULE
EXHIBIT C
[RESERVED]
EXHIBIT D
FORM OF TRUSTEE CERTIFICATION
EXHIBIT E-1
FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
EXHIBIT E-2
FORM OF TRANSFEROR'S AFFIDAVIT
EXHIBIT F
FORM OF TRANSFEROR CERTIFICATE FOR CLASS P, CLASS C AND
CLASS B-3 CERTIFICATES
EXHIBIT G
FORM OF INVESTMENT LETTER
EXHIBIT H
FORM OF RULE 144A INVESTMENT LETTER
EXHIBIT I
REQUEST FOR RELEASE OF DOCUMENTS
EXHIBIT J
FORM OF POWER OF ATTORNEY
EXHIBIT K
FORM OF OFFICER'S CERTIFICATE OF TRUSTEE
EXHIBIT L
FORM OF OFFICER'S CERTIFICATE OF SERVICER
EXHIBIT M
FORM OF TRANSFEREE'S LETTER
EXHIBIT N
FORM OF AUCTION PROCEDURES
EXHIBIT O
FORM OF CAP CONTRACT
EXHIBIT P
ONE MONTH LIBOR CAP TABLE - CAP CONTRACT
</TABLE>
v
<PAGE>
POOLING
AND SERVICING AGREEMENT, dated as of May 1, 2005, among MERRILL
LYNCH MORTGAGE INVESTORS, INC., a Delaware
corporation, as depositor (the
"Depositor"), WILSHIRE CREDIT CORPORATION,
a Nevada corporation, as servicer
(the "Servicer") and JPMORGAN CHASE BANK,
N.A., a national banking association,
as trustee (the "Trustee").
The
Depositor is the owner of the Trust Fund that is hereby conveyed
to
the Trustee in return for the Certificates.
The Trust Fund for federal income
tax purposes will consist of (i) two real
estate mortgage investment conduits in
a tiered structure, (ii) the grantor trusts
described in Section 2.07 hereof and
(iii) the Cap Contract and the Cap Contract
Account. The Lower Tier REMIC will
consist of all of the assets constituting
the Trust Fund (other than the assets
described in clauses (ii) and (iii) above
and the Lower Tier REMIC Interests)
and will be evidenced by the Lower Tier
REMIC Regular Interests (which will be
uncertificated and will represent the
"regular interests" in the Lower Tier
REMIC) and the Class LTR Interest as the
single "residual interest" in the Lower
Tier REMIC. The Trustee will hold the Lower
Tier REMIC Regular Interests. The
Upper Tier REMIC will consist of the Lower
Tier REMIC Regular Interests and will
be evidenced by the REMIC Regular Interests
(which will represent the "regular
interests" in the Upper Tier REMIC) and the
Residual Interest as the single
"residual interest" in the Upper Tier
REMIC. The Class R Certificate will
represent beneficial ownership of the Class
LTR Interest and the Residual
Interest. The "latest possible maturity
date" for federal income tax purposes of
all interests created hereby will be the
Latest Possible Maturity Date.
All
covenants and agreements made by the Seller in the Sale Agreement
and
by the Depositor and the Trustee herein
with respect to the Mortgage Loans and
the other property constituting the Trust
Fund are for the benefit of the
Holders from time to time of the
Certificates and, to the extent provided
herein, the NIM Insurer.
In
consideration of the mutual agreements herein contained, the
Depositor,
the Servicer and the Trustee hereby agree
as follows:
ARTICLE I
DEFINITIONS
Whenever
used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have
the following meanings:
Accepted
Servicing Practices: The Servicer's normal servicing practices,
which will conform to the mortgage
servicing practices of prudent mortgage
lending institutions which service for
their own account mortgage loans of the
same type as the Mortgages Loans in the
jurisdictions in which the related
Mortgaged Properties are located.
Accrual
Period: With respect to each Class of Certificates and the
Lower
Tier REMIC Regular 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
Regular 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.
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.
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Advance:
The aggregate of the advances required to be made by the
Servicer
with respect to any Distribution Date
pursuant to Section 4.01, the amount of
any such advances being equal to the sum of
the aggregate of payments of
principal and interest (net of the
Servicing Fee Rate) on the Mortgage Loans
that were due during the applicable Due
Period and not received as of the close
of business on the related Determination
Date, less the aggregate amount of any
such Delinquent payments that the Servicer
has determined would constitute a
Non-Recoverable Advance were an advance to
be made with respect thereto.
Advance
Facility: A financing or other facility as described in Section
10.14(a).
Advance
Facility Notice: As defined in Section 10.14(b).
Advance
Financing Person: As defined in Section 10.14(a).
Advance
Reimbursement Amounts: As defined in Section 10.14(a).
Affiliate:
With respect to any specified Person, any other Person
controlling, controlled by or under common
control with such Person. For the
purposes of this definition, "control"
means the power to direct the management
and policies of a Person, directly or
indirectly, whether through ownership of
voting securities, by contract or
otherwise; and the terms "controlling" and
"controlled" have meanings correlative to
the foregoing.
Aggregate
Certificate Principal Balance: For any date of determination,
the sum of the Class A-1A Certificate
Principal Balance, the Class A-1B
Certificate Principal Balance, the Class
A-1C Certificate Principal Balance, the
Class R Certificate Principal Balance, the
Class M-1 Certificate Principal
Balance, the Class M-2 Certificate
Principal Balance, the Class M-3 Certificate
Principal Balance, the Class M-4
Certificate Principal Balance, the Class B-1
Certificate Principal Balance, the Class
B-2 Certificate Principal Balance and
the Class B-3 Certificate Principal Balance
in each case as of such date of
determination.
Agreement:
This Pooling and Servicing Agreement and any and all amendments
or supplements hereto made in accordance
with the terms herein.
Applied
Realized Loss Amount: With respect to any Distribution Date,
the
amount, if any, by which, the sum of (i)
the Aggregate Certificate Principal
Balance and (ii) the Class C Certificate
Principal Balance after distributions
of principal on such Distribution Date
exceeds the aggregate Stated Principal
Balance of the Mortgage Loans as of such
Distribution Date.
Appraised
Value: With respect to a Mortgage Loan the proceeds of which
were used to purchase the related Mortgaged
Property, the "Appraised Value" of a
Mortgaged Property is the lesser of (1) the
appraised value based on an
appraisal made for the Seller by an
independent fee appraiser at the time of the
origination of the related Mortgage Loan,
and (2) the sales price of such
Mortgaged Property at such time of
origination. With respect to a Mortgage Loan
the proceeds of which were used to
refinance an existing mortgage loan, the
"Appraised Value" is the appraised value of
the Mortgaged Property based upon
the appraisal obtained at the time of
refinancing.
Assignment
of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument, in recordable
form, sufficient under the laws of the
jurisdiction where the related Mortgaged
Property is located to reflect of
record the sale and assignment of the
Mortgage Loan to the Trustee, which
assignment, notice of transfer or
equivalent instrument may, if permitted by
law, be in the form of
2
<PAGE>
one or more blanket assignments covering
Mortgages secured by Mortgaged
Properties located in the same county.
Auction
Termination: The termination of the Trust Fund hereunder
pursuant
to Section 9.01(a)(i) hereof.
Auction
Termination Amount: The purchase price received by the Trustee
in
connection with any purchase of all of the
Mortgage Loans pursuant to Section
9.01(a) (i).
Auction
Termination Date: The Distribution Date on which the aggregate
Stated Principal Balance of the Mortgage
Loans is equal to or less than 10% of
the aggregate Stated Principal Balance of
the Mortgage Loans as of the Cut-off
Date.
Auction
Termination Price: In the case of an Auction Termination, as of
the initial Distribution Date on or after
the Auction Termination Date, an
amount equal to the sum of (A) the
aggregate Stated Principal Balance of each
Mortgage Loan (other than any Mortgage Loan
that has become an REO Property),
plus accrued interest thereon at the
applicable Mortgage Rate through the Due
Date preceding distribution of the
proceeds, the fair market value of any REO
Property, plus accrued interest thereon,
(B) any unreimbursed out-of-pocket
costs and expenses owed to the Trustee or
the Servicer (including any costs and
expenses incurred in connection with the
Auction Termination) and any
unreimbursed Servicing Fees, Advances and
Servicing Advances, (C) all interest
accrued on, as well as amounts necessary to
retire the principal balance of, the
notes guaranteed by the NIM Insurer, (D)
any and all amounts then owed to the
NIM Insurer and (E) any costs and damages
incurred by the Trust Fund (or the
Trustee on behalf of the Trust Fund) in
connection with any violation of any
anti-predatory or anti-abusive lending
laws.
Available
Funds Cap: 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
based on the Net Mortgage Rates in
effect on the related Due Date divided by
(y) the Aggregate Certificate
Principal Balance for such Distribution
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.
Balloon
Loan: A Mortgage Loan having an original term to stated
maturity
of approximately 15 years which provides
for level monthly payments of principal
and interest based on a 30-year
amortization schedule, with a balloon payment of
the remaining outstanding principal balance
due on such Mortgage Loan at its
stated maturity.
Book-Entry
Certificates: Any of the Certificates that shall be registered
in the name of the Depository or its
nominee, the ownership of which is
reflected on the books of the Depository or
on the books of a Person maintaining
an account with the Depository (directly,
as a "Depository Participant", or
indirectly, as an indirect participant in
accordance with the rules of the
Depository and as described in Section
5.06). As of the Closing Date, each of
the Class A-1A, Class A-1B, Class A-1C,
Class M-1, Class M-2, Class M-3, Class
M-4, Class B-1, Class B-2 and Class B-3
Certificates constitutes a Class of
Book-Entry Certificates.
Business
Day: Any day other than (1) a Saturday or a Sunday, or (2) a
day
on which banking institutions in the State
of Oregon or in the City of New York,
New York are authorized or obligated by law
or executive order to be closed.
3
<PAGE>
Cap
Contract: The amended confirmation and agreement and any
related
confirmation thereto, between the Trust
Fund or Trustee and Bear Stearns
Financial Products, Inc. (in the form of
Exhibit O hereto).
Cap
Contract Account: The separate Eligible Account created and
maintained
by the Trustee pursuant to Section 4.04(j)
in the name of the Trustee for the
benefit of the Trust Fund and designated
"JPMorgan Chase Bank, N.A., as trustee,
in trust for registered holders of
Specialty Underwriting and Residential
Finance Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-AB1." 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 Notional Balance: With respect to any Distribution Date,
the
Cap Contract Notional Balance set forth for
such Distribution Date in the
One-Month LIBOR Cap Table attached hereto
as Exhibit P.
Cap
Contract Termination Date: The day after the Distribution Date in
June
2008.
Certificate: Any one of the certificates of any Class executed by
the
Trustee and authenticated by the Trustee in
substantially the forms attached
hereto as Exhibit A.
Certificate Account: The separate Eligible Account created and
maintained
by the Trustee pursuant to Section 3.05(f)
in the name of the Trustee for the
benefit of the Certificateholders and
designated "JPMorgan Chase Bank, N.A., as
trustee, in trust for registered holders of
Specialty Underwriting and
Residential Finance Trust, Mortgage Loan
Asset-Backed Certificates, Series
2005-AB1." Funds in the Certificate Account
shall be held in trust for the
Certificateholders for the uses and
purposes set forth in this Agreement.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person
that is the beneficial owner of such
Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate and as of
any
Distribution Date, the Initial Certificate
Principal Balance of such Certificate
less the sum of (1) all amounts distributed
with respect to such Certificate in
reduction of the Certificate Principal
Balance thereof on previous Distribution
Dates pursuant to Section 4.04, and (2) any
Applied Realized Loss Amounts
allocated to such Certificate on previous
Distribution Dates pursuant to Section
4.04(h). On each Distribution Date, after
all distributions of principal on such
Distribution Date, a portion of the Class C
Interest Carry Forward Amount in an
amount equal to the excess of the
Overcollateralization Amount on such
Distribution Date over the
Overcollateralization Amount as of the preceding
Distribution Date (or, in the case of the
first Distribution Date, the initial
Overcollateralization Amount (based on the
Stated Principal Balance of the
Mortgage Loans as of the Cut-Off Date))
will be added to the aggregate
Certificate Principal Balance of the Class
C Certificates (on a pro rata basis).
Notwithstanding the foregoing on any
Distribution Date relating to a Due Period
in which a Subsequent Recovery has been
received by the Servicer, the
Certificate Principal Balance of any Class
of Certificates then outstanding for
which any Applied Realized Loss Amount has
been allocated will be increased, in
order of seniority, by an amount equal to
the lesser of (i) the Unpaid Realized
Loss Amount for such Class of Certificates
and (ii) the total of any Subsequent
Recovery distributed on such date to the
Certificateholders (reduced by the
amount of the increase in the Certificate
Principal Balance of any more senior
Class of Certificates pursuant to this
sentence on such Distribution Date).
Certificate Register: The register maintained pursuant to Section
5.02
hereof.
4
<PAGE>
Certificateholder or Holder: The Person in whose name a Certificate
is
registered in the Certificate Register
(initially, Cede & Co., as nominee for
the Depository) in the case of any Class of
Regular Certificates or the Class R
Certificate, except that solely for the
purpose of giving any consent pursuant
to this Agreement, any Certificate
registered in the name of the Depositor or
any Affiliate of the Depositor shall be
deemed not to be Outstanding and the
Percentage Interest evidenced thereby shall
not be taken into account in
determining whether the requisite amount of
Percentage Interests necessary to
effect such consent has been obtained;
provided, however, that if any such
Person (including the Depositor) owns 100%
of the Percentage Interests evidenced
by a Class of Certificates, such
Certificates shall be deemed to be Outstanding
for purposes of any provision hereof that
requires the consent of the Holders of
Certificates of a particular Class as a
condition to the taking of any action
hereunder. The Trustee and the NIM Insurer
are entitled to rely conclusively on
a certification of the Depositor or any
Affiliate of the Depositor in
determining which Certificates are
registered in the name of an Affiliate of the
Depositor.
Class: All
Certificates bearing the same Class designation as set forth in
Section 5.01 hereof.
Class A
Certificates: Any of the Class A-1A, Class A-1B and Class A-1C
Certificates.
Class A
Principal Distribution Amount: With respect to any Distribution
Date (1) prior to the Stepdown Date or any
Distribution Date on which a Stepdown
Trigger Event exists, 100% of the Principal
Distribution Amount for such
Distribution Date and (2) on or after the
Stepdown Date where a Stepdown Trigger
Event does not exist, the excess of (A) the
Certificate Principal Balance of the
Class A and Class R Certificates
immediately prior to such Distribution Date
over (B) the lesser of (1) 68.90% of the
Stated Principal Balances of the
Mortgage Loans as of the end of the
immediately preceding Due Period, and (2)
the excess of the Stated Principal Balances
of the Mortgage Loans as of the end
of the immediately preceding Due Period
over the Minimum Required
Overcollateralization Amount; provided,
however, that in no event will the Class
A Principal Distribution Amount with
respect to any Distribution Date exceed the
aggregate Certificate Principal Balance of
the Class A and Class R Certificates.
Class A-1A
Certificate: Any Certificate designated as a "Class A-1A
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class A-1A
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class A-1A Certificates.
Class A-1A
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class A-1A Pass-Through Rate on
the Class A-1A Certificate Principal
Balance as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Class A-1A
Current Interest or a Class A-1A Interest
Carry Forward Amount that is recovered
as a voidable preference by a trustee in
bankruptcy, less any Non-Supported
Interest Shortfall allocated on such
Distribution Date to the Class A-1A
Certificates.
Class A-1A
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-1A
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
A-1A Certificates with respect to Current
Interest or Interest Carry Forward
Amounts on such prior Distribution Dates
and (2) interest on such excess (to the
extent permitted by applicable law) at the
Class A-1A Pass-Through Rate for the
related Accrual Period.
Class A-1A
Margin: As of any Distribution Date up to and including the
Auction Termination Date for the
Certificates, 0.090% per annum and, as of any
Distribution Date after the Auction
Termination Date, 0.180% per annum.
5
<PAGE>
Class A-1A
Pass-Through Rate: For the first Distribution Date, 3.18000%
per annum. As of any Distribution Date
thereafter, the least of (1) One-Month
LIBOR plus the Class A-1A Margin, (2) the
Maximum Rate Cap and (3) the 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 Class A-1B
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 Current
Interest or Interest Carry Forward
Amounts on such prior Distribution Dates
and (2) interest on such excess (to the
extent permitted by applicable law) at the
Class A-1B Pass-Through Rate for the
related Accrual Period.
Class A-1B
Margin: As of any Distribution Date up to and including the
Auction Termination Date for the
Certificates, 0.230% per annum and, as of any
Distribution Date after the Auction
Termination Date, 0.460% per annum.
Class A-1B
Pass-Through Rate: For the first Distribution Date, 3.32000%
per annum. As of any Distribution Date
thereafter, the least of (1) One-Month
LIBOR plus the Class A-1B Margin, (2) the
Maximum Rate Cap and (3) the Available
Funds Cap for such Distribution Date.
Class A-1C
Certificate: Any Certificate designated as a "Class A-1C
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class A-1C
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class A-1C Certificates.
Class A-1C
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class A-1C Pass-Through Rate on
the Class A-1C Certificate Principal
Balance as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Class A-1C
Current Interest or a Class A-1C 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-1C
Certificates.
Class A-1C Interest Carry Forward
Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-1C
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
A-1C Certificates with respect to Current
Interest or Interest Carry Forward
Amounts on such prior Distribution Dates
and (2) interest on such excess (to the
extent permitted by applicable law) at the
Class A-1C Pass-Through Rate for the
related Accrual Period.
6
<PAGE>
Class A-1C
Margin: As of any Distribution Date up to and including the
Auction Termination Date for the
Certificates, 0.340% per annum and, as of any
Distribution Date after the Auction
Termination Date, 0.680% per annum.
Class A-1C
Pass-Through Rate: For the first Distribution Date, 3.43000%
per annum. As of any Distribution Date
thereafter, the least of (1) One-Month
LIBOR plus the Class A-1C Margin, (2) the
Maximum Rate Cap and (3) the Available
Funds Cap for such Distribution Date.
Class B-1
Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts
with respect to the Mortgage Loans
which have been applied to the reduction of
the Certificate Principal Balance of
the Class B-1 Certificates.
Class B-1
Certificate: Any Certificate designated as a "Class B-1
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class B-1
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class B-1 Certificates.
Class B-1
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class B-1 Pass-Through Rate on
the Class B-1 Certificate Principal Balance
as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Class B-1
Current Interest or a Class B-1 Interest
Carry Forward Amount that is recovered
as a voidable preference by a trustee in
bankruptcy, less any Non-Supported
Interest Shortfall allocated on such
Distribution Date to the Class B-1
Certificates.
Class B-1
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-1
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
B-1 Certificates with respect to Current
Interest or Interest Carry Forward
Amounts on such prior Distribution Dates
and (2) interest on such excess (to the
extent permitted by applicable law) at the
Class B-1 Pass-Through Rate for the
related Accrual Period.
Class B-1
Margin: As of any Distribution Date up to and including the
Auction Termination Date for the
Certificates, 1.200% per annum and, as of any
Distribution Date after the Auction
Termination Date, 1.800% per annum.
Class B-1
Pass-Through Rate: For the first Distribution Date, 4.29000%
per
annum. As of any Distribution Date
thereafter, the least of (1) One-Month LIBOR
plus the Class B-1 Margin, (2) the Maximum
Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
Class B-1
Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of
the Principal Distribution Amount
for such Distribution Date if the
Certificate Principal Balances of the Class A,
Class R and Class M Certificates have been
reduced to zero and a Stepdown
Trigger Event exists, or as long as a
Stepdown Trigger Event does not exist, the
excess of (1) the sum of (A) the sum of the
Certificate Principal Balances of
the Class A and Class R Certificates (after
taking into account distributions of
the Class A Principal Distribution Amount
on such Distribution Date), (B) the
Class M-1 Certificate Principal Balance
(after taking into account distributions
of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C)
the Class M-2 Certificate Principal Balance
(after taking into account
distributions of the Class M-2 Principal
Distribution Amount on such
Distribution Date), (D) the Class M-3
Certificate Principal Balance (after
taking into account distributions of the
Class M-3 Principal Distribution Amount
on such Distribution Date), (E) the Class
M-4 Certificate Principal Balance
(after taking into account distributions of
the Class M-4 Principal Distribution
Amount
7
<PAGE>
on such Distribution Date) and (F) the
Class B-1 Certificate Principal Balance
immediately prior to such Distribution Date
over (2) the lesser of (A) 94.40% 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 of the Mortgage Loans as of the
end of the immediately preceding Due
Period over the Minimum Required
Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date
prior to the Stepdown Date on which
the Certificate Principal Balance of each
Class of the Class A Certificates,
Class R Certificates and Class M
Certificates has been reduced to zero, the
Class B-1 Principal Distribution Amount
will equal the lesser of (x) the
outstanding Certificate Principal Balance
of the Class B-1 Certificates and (y)
100% of the Principal Distribution Amount
remaining after any distributions on
such Class A, Class R and Class M
Certificates and (II) in no event will the
Class B-1 Principal Distribution Amount
with respect to any Distribution Date
exceed the Class B-1 Certificate Principal
Balance.
Class B-1
Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-1 Applied
Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class
B-1 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all
increases in the Certificate
Principal Balance of such Class B-1
Certificates pursuant to the last sentence
of the definition of "Certificate Principal
Balance."
Class B-2
Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts
with respect to the Mortgage Loans
which have been applied to the reduction of
the Certificate Principal Balance of
the Class B-2 Certificates.
Class B-2
Certificate: Any Certificate designated as a "Class B-2
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class B-2
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class B-2 Certificates.
Class B-2
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class B-2 Pass-Through Rate on
the Class B-2 Certificate Principal Balance
as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Class B-2
Current Interest or a Class B-2 Interest
Carry Forward Amount that is recovered
as a voidable preference by a trustee in
bankruptcy, less any Non-Supported
Interest Shortfall allocated on such
Distribution Date to the Class B-2
Certificates.
Class B-2
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-2
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
B-2 Certificates with respect to Current
Interest or Interest Carry Forward
Amounts on such prior Distribution Dates
and (2) interest on such excess (to the
extent permitted by applicable law) at the
Class B-2 Pass-Through Rate for the
related Accrual Period.
Class B-2
Margin: As of any Distribution Date up to and including the
Auction Termination Date for the
Certificates, 1.700% per annum and, as of any
Distribution Date after the Auction
Termination Date, 2.550% per annum.
Class B-2
Pass-Through Rate: For the first Distribution Date, 4.79000%
per
annum. As of any Distribution Date
thereafter, the least of (1) One-Month LIBOR
plus the Class B-2 Margin, (2) the Maximum
Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
8
<PAGE>
Class B-2
Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of
the Principal Distribution Amount
for such Distribution Date if the
Certificate Principal Balances of the Class A,
Class R, Class M and Class B-1 Certificates
have been reduced to zero and a
Stepdown Trigger Event exists, or as long
as a Stepdown Trigger Event does not
exist, the excess of (1) the sum of (A) the
sum of the Certificate Principal
Balances of the Class A and Class R
Certificates (after taking into account
distributions of the Class A Principal
Distribution Amount on such Distribution
Date), (B) the Class M-1 Certificate
Principal Balance (after taking into
account distributions of the Class M-1
Principal Distribution Amount on such
Distribution Date), (C) the Class M-2
Certificate Principal Balance (after
taking into account distributions of the
Class M-2 Principal Distribution Amount
on such Distribution Date), (D) the Class
M-3 Certificate Principal Balance
(after taking into account distributions of
the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the
Class M-4 Certificate Principal
Balance (after taking into account
distributions of the Class M-4 Principal
Distribution Amount on such Distribution
Date), (F) the Class B-1 Certificate
Principal Balance (after taking into
account distributions of the Class B-1
Principal Distribution Amount on such
Distribution Date) and (G) the Class B-2
Certificate Principal Balance immediately
prior to such Distribution Date over
(2) the lesser of (A) 96.90% of the Stated
Principal Balances of the Mortgage
Loans as of the end of the immediately
preceding Due Period and (B) the excess
of the Stated Principal Balances of the
Mortgage Loans as of the end of the
immediately preceding Due Period over the
Minimum Required Overcollateralization
Amount. Notwithstanding the foregoing, (I)
on any Distribution Date prior to the
Stepdown Date on which the Certificate
Principal Balance of each Class of the
Class A Certificates, Class R Certificates,
Class M Certificates and Class B-1
Certificates has been reduced to zero, the
Class B-2 Principal Distribution
Amount will equal the lesser of (x) the
outstanding Certificate Principal
Balance of the Class B-2 Certificates and
(y) 100% of the Principal Distribution
Amount remaining after any distributions on
such Class A, Class R, Class M and
Class B-1 Certificates and (II) in no event
will the Class B-2 Principal
Distribution Amount with respect to any
Distribution Date exceed the Class B-2
Certificate Principal Balance.
Class B-2
Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-2 Applied
Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class
B-2 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all
increases in the Certificate
Principal Balance of such Class B-2
Certificates pursuant to the last sentence
of the definition of "Certificate Principal
Balance."
Class B-3
Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts
with respect to the Mortgage Loans
which have been applied to the reduction of
the Certificate Principal Balance of
the Class B-3 Certificates.
Class B-3
Certificate: Any Certificate designated as a "Class B-3
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class B-3
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class B-3 Certificates.
Class B-3
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class B-3 Pass-Through Rate on
the Class B-3 Certificate Principal Balance
as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Class B-3
Current Interest or a Class B-3 Interest
Carry Forward Amount that is recovered
as a voidable preference by a trustee in
bankruptcy, less any Non-Supported
Interest Shortfall allocated on such
Distribution Date to the Class B-3
Certificates.
9
<PAGE>
Class B-3
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-3
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
B-3 Certificates with respect to Current
Interest or Interest Carry Forward
Amounts on such prior Distribution Dates
and (2) interest on such excess (to the
extent permitted by applicable law) at the
Class B-3 Pass-Through Rate for the
related Accrual Period.
Class B-3
Margin: As of any Distribution Date up to and including the
Auction Termination Date for the
Certificates, 3.500% per annum and, as of any
Distribution Date after the Auction
Termination Date, 5.250% per annum.
Class B-3
Pass-Through Rate: For the first Distribution Date, 6.59000%
per
annum. As of any Distribution Date
thereafter, the least of (1) One-Month LIBOR
plus the Class B-3 Margin, (2) the Maximum
Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
Class B-3
Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of
the Principal Distribution Amount
for such Distribution Date if the
Certificate Principal Balances of the Class A,
Class R, Class M, Class B-1 and Class B-2
Certificates have been reduced to zero
and a Stepdown Trigger Event exists, or as
long as a Stepdown Trigger Event does
not exist, the excess of (1) the sum of (A)
the sum of the Certificate Principal
Balances of the Class A and Class R
Certificates (after taking into account
distributions of the Class A Principal
Distribution Amount on such Distribution
Date), (B) the Class M-1 Certificate
Principal Balance (after taking into
account distributions of the Class M-1
Principal Distribution Amount on such
Distribution Date), (C) the Class M-2
Certificate Principal Balance (after
taking into account distributions of the
Class M-2 Principal Distribution Amount
on such Distribution Date), (D) the Class
M-3 Certificate Principal Balance
(after taking into account distributions of
the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the
Class M-4 Certificate Principal
Balance (after taking into account
distributions of the Class M-4 Principal
Distribution Amount on such Distribution
Date), (F) the Class B-1 Certificate
Principal Balance (after taking into
account distributions of the Class B-1
Principal Distribution Amount on such
Distribution Date), (G) the Class B-2
Certificate Principal Balance (after taking
into account distributions of the
Class B-2 Principal Distribution Amount on
such Distribution Date) and (H) the
Class B-3 Certificate Principal Balance
immediately prior to such Distribution
Date over (2) the lesser of (A) 98.90% of
the Stated Principal Balances of the
Mortgage Loans as of the end of the
immediately preceding Due Period and (B) the
excess of the Stated Principal Balances of
the Mortgage Loans as of the end of
the immediately preceding Due Period over
the Minimum Required
Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown
Date on which the Certificate Principal
Balance of each Class of the Class A
Certificates, Class R Certificates, Class M
Certificates, Class B-1 and Class B-2
Certificates has been reduced to zero, the
Class B-3 Principal Distribution Amount
will equal the lesser of (x) the
outstanding Certificate Principal Balance
of the Class B-3 Certificates and (y)
100% of the Principal Distribution Amount
remaining after any distributions on
such Class A, Class R, Class M, Class B-1
and Class B-2 Certificates and (II) in
no event will the Class B-3 Principal
Distribution Amount with respect to any
Distribution Date exceed the Class B-3
Certificate Principal Balance.
Class B-3
Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-3 Applied
Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class
B-3 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all
increases in the Certificate
Principal Balance of such Class B-3
Certificates pursuant to the last sentence
of the definition of "Certificate Principal
Balance."
10
<PAGE>
Class C
Applied Realized Loss Amount: As of any Distribution Date, the
sum
of all Applied Realized Loss Amounts with
respect to the Mortgage Loans which
have been applied to the reduction of the
Certificate Principal Balance of the
Class C Certificates.
Class C
Certificate: Any Certificate designated as a "Class C
Certificate"
on the face thereof, in the form of Exhibit
A hereto, representing the right to
distributions as set forth herein.
Class C
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class C Certificates.
Class C
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class C Distributable Interest
Rate on a notional amount equal to the
aggregate principal balance of the Lower
Tier REMIC Regular Interests immediately
prior to such Distribution Date, plus
the interest portion of any previous
distributions on such Class that is
recovered as a voidable preference by a
trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated
on such Distribution Date to the
Class C Certificates.
Class C
Distributable Interest Rate: The excess, if any, of (a) the
weighted average of the interest rates on
the Lower Tier REMIC Regular Interests
over (b) two times the weighted average of
the interest rates on the Lower Tier
REMIC Regular Interests (treating for
purposes of this clause (b) the interest
rate on each of the Lower Tier REMIC Marker
Classes as being capped at the
interest rate of its Related Certificates
and treating the Class LTX 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.
Class C
Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class C Applied Realized
Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class
C Unpaid Realized Loss Amount on all
previous Distribution Dates and (y) all
increases in the Certificate Principal
Balance of such Class C Certificates
pursuant to the last sentence of the
definition of "Certificate Principal
Balance."
Class
LTA-1A Interest: An uncertificated regular interest in the
Lower
Tier REMIC with an initial principal
balance equal to 1/2 of the initial
principal balance of its Related
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 1/2 of the initial
principal balance of its Related
Certificate and an interest rate equal to the
Net Rate.
Class
LTA-1C Interest: An uncertificated regular interest in the
Lower
Tier REMIC with an initial principal
balance equal to 1/2 of the initial
principal balance of its Related
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 1/2 of the initial principal
balance of its Related Certificate and an
interest rate equal to the Net Rate.
11
<PAGE>
Class
LTB-2 Interest: An uncertificated regular interest in the Lower
Tier
REMIC with an initial principal balance
equal to 1/2 of the initial principal
balance of its Related 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 1/2 of the initial principal
balance of its Related Certificate and an
interest rate equal to the Net Rate.
Class
LTM-1 Interest: An uncertificated regular interest in the Lower
Tier
REMIC with an initial principal balance
equal to 1/2 of the initial principal
balance of its Related 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 1/2 of the initial principal
balance of its Related 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 1/2 of the initial principal
balance of its Related Certificate and an
interest rate equal to the Net Rate.
Class
LTM-4 Interest: An uncertificated regular interest in the Lower
Tier
REMIC with an initial principal balance
equal to 1/2 of the initial principal
balance of its Related 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 LTX
Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance
equal to the excess of (i) the aggregate
Cut-off Date Principal Balance of the
Mortgage Loans over (ii) the aggregate
initial principal balance of the Lower Tier
REMIC Marker Classes, and with an
interest rate equal to the Net Rate.
Class M
Certificates: Any of the Class M-1, Class M-2, Class M-3 and
Class
M-4 Certificates.
Class M-1
Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts
with respect to the Mortgage Loans
which have been applied to the reduction of
the Certificate Principal Balance of
the Class M-1 Certificates.
Class M-1
Certificate: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class M-1
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class M-1 Certificates.
Class M-1
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class M-1 Pass-Through Rate on
the Class M-1 Certificate Principal Balance
as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Class M-1
Current Interest or a Class M-1 Interest
Carry Forward Amount that is recovered
as a voidable preference by a trustee in
bankruptcy, less any Non-Supported
Interest Shortfall allocated on such
Distribution Date to the Class M-1
Certificates.
12
<PAGE>
Class M-1
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-1
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
M-1 Certificates with respect to Current
Interest or Interest Carry Forward
Amounts on such prior Distribution Dates
and (2) interest on such excess (to the
extent permitted by applicable law) at the
Class M-1 Pass-Through Rate for the
related Accrual Period.
Class M-1
Margin: As of any Distribution Date up to and including the
Auction Termination Date for the
Certificates, 0.430% per annum and, as of any
Distribution Date after the Auction
Termination Date, 0.645% per annum.
Class M-1
Pass-Through Rate: For the first Distribution Date, 3.52000%
per
annum. As of any Distribution Date
thereafter, the least of (1) One-Month LIBOR
plus the Class M-1 Margin, (2) the Maximum
Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
Class M-1
Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of
the Principal Distribution Amount
for such Distribution Date if the
Certificate Principal Balances of the Class A
and Class R Certificates have been reduced
to zero and a Stepdown Trigger Event
exists, or as long as a Stepdown Trigger
Event does not exist, the excess of (1)
the sum of (A) the sum of the Certificate
Principal Balances of the Class A and
Class R Certificates (after taking into
account distributions of the Class A
Principal Distribution Amount on such
Distribution Date) and (B) the Class M-1
Certificate Principal Balance immediately
prior to such Distribution Date over
(2) the lesser of (A) 74.70% of the Stated
Principal Balances of the Mortgage
Loans as of the end of the immediately
preceding Due Period and (B) the excess
of the Stated Principal Balances for the
Mortgage Loans as of the end of the
immediately preceding Due Period over the
Minimum Required Overcollateralization
Amount. Notwithstanding the foregoing, (I)
on any Distribution Date prior to the
Stepdown Date on which the Certificate
Principal Balance of each Class of the
Class A Certificates and Class R
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 Class R
Certificates and (II) in no event will the
Class M-1 Principal Distribution Amount
with respect to any Distribution Date
exceed the Class M-1 Certificate Principal
Balance.
Class M-1
Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-1 Applied
Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class
M-1 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all
increases in the Certificate
Principal Balance of such Class M-1
Certificates pursuant to the last sentence
of the definition of "Certificate Principal
Balance."
Class M-2
Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts
with respect to the Mortgage Loans
which have been applied to the reduction of
the Certificate Principal Balance of
the Class M-2 Certificates.
Class M-2
Certificate: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class M-2
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class M-2 Certificates.
Class M-2
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class M-2 Pass-Through Rate on
the Class M-2 Certificate Principal Balance
as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Class M-2
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<PAGE>
Current Interest or a Class M-2 Interest
Carry Forward Amount that is recovered
as a voidable preference by a trustee in
bankruptcy, less any Non-Supported
Interest Shortfall allocated on such
Distribution Date to the Class M-2
Certificates.
Class M-2
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-2
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
M-2 Certificates with respect to Current
Interest or Interest Carry Forward
Amounts on such prior Distribution Dates
and (2) interest on such excess (to the
extent permitted by applicable law) at the
Class M-2 Pass-Through Rate for the
related Accrual Period.
Class M-2
Margin: As of any Distribution Date up to and including the
Auction Termination Date for the
Certificates, 0.450% per annum and, as of any
Distribution Date after the Auction
Termination Date, 0.675% per annum.
Class M-2
Pass-Through Rate: For the first Distribution Date, 3.54000%
per
annum. As of any Distribution Date
thereafter, the least of (1) One-Month LIBOR
plus the Class M-2 Margin, (2) the Maximum
Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
Class M-2
Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of
the Principal Distribution Amount
for such Distribution Date if the
Certificate Principal Balances of the Class A,
Class R and Class M-1 Certificates have
been reduced to zero and a Stepdown
Trigger Event exists, or as long as a
Stepdown Trigger Event does not exist, the
excess of (1) the sum of (A) the sum of the
Certificate Principal Balances of
the Class A and Class R Certificates (after
taking into account distributions of
the Class A Principal Distribution Amount
on such Distribution Date), (B) the
Class M-1 Certificate Principal Balance
(after taking into account distributions
of the Class M-1 Principal Distribution
Amount on such Distribution Date) and
(C) the Class M-2 Certificate Principal
Balance immediately prior to such
Distribution Date over (2) the lesser of
(A) 82.90% of the Stated Principal
Balances of the Mortgage Loans as of the
end of the immediately preceding Due
Period and (B) the excess of the Stated
Principal Balances of the Mortgage Loans
as of the end of the immediately preceding
Due Period over the Minimum Required
Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown
Date on which the Certificate Principal
Balance of each Class of Class A
Certificates, Class R 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, Class R
and Class M-1 Certificates and (II) in no
event will the Class M-2 Principal
Distribution Amount with respect to any
Distribution Date exceed the Class M-2
Certificate Principal Balance.
Class M-2
Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-2 Applied
Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class
M-2 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all
increases in the Certificate
Principal Balance of such Class M-2
Certificates pursuant to the last sentence
of the definition of "Certificate Principal
Balance."
Class M-3
Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts
with respect to the Mortgage Loans
which have been applied to the reduction of
the Certificate Principal Balance of
the Class M-3 Certificates.
Class M-3
Certificate: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
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<PAGE>
Class M-3
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class M-3 Certificates.
Class M-3
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class M-3 Pass-Through Rate on
the Class M-3 Certificate Principal Balance
as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Class M-3
Current Interest or a Class M-3 Interest
Carry Forward Amount that is recovered
as a voidable preference by a trustee in
bankruptcy, less any Non-Supported
Interest Shortfall allocated on such
Distribution Date to the Class M-3
Certificates.
Class M-3
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-3
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
M-3 Certificates with respect to Current
Interest or Interest Carry Forward
Amounts on such prior Distribution Dates
and (2) interest on such excess (to the
extent permitted by applicable law) at the
Class M-3 Pass-Through Rate for the
related Accrual Period.
Class M-3
Margin: As of any Distribution Date up to and including the
Auction Termination Date for the
Certificates, 0.650% per annum and, as of any
Distribution Date after the Auction
Termination Date, 0.975% per annum.
Class M-3
Pass-Through Rate: For the first Distribution Date, 3.74000%
per
annum. As of any Distribution Date
thereafter, the least of (1) One-Month LIBOR
plus the Class M-3 Margin, (2) the Maximum
Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
Class M-3
Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of
the Principal Distribution Amount
for such Distribution Date if the
Certificate Principal Balances of the Class A,
Class R, Class M-1 and Class M-2
Certificates have been reduced to zero and a
Stepdown Trigger Event exists, or as long
as a Stepdown Trigger Event does not
exist, the excess of (1) the sum of (A) the
sum of the Certificate Principal
Balances of the Class A and Class R
Certificates (after taking into account
distributions of the Class A Principal
Distribution Amount on such Distribution
Date), (B) the Class M-1 Certificate
Principal Balance (after taking into
account distributions of the Class M-1
Principal Distribution Amount on such
Distribution Date), (C) the Class M-2
Certificate Principal Balance (after
taking into account distributions of the
Class M-2 Principal Distribution Amount
on such Distribution Date) and (D) the
Class M-3 Certificate Principal Balance
immediately prior to such Distribution Date
over (2) the lesser of (A) 87.90% of
the Stated Principal Balances of the
Mortgage Loans as of the end of the
immediately preceding Due Period and (B)
the excess of the Stated Principal
Balances for the Mortgage Loans as of the
end of the immediately preceding Due
Period over the Minimum Required
Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date
prior to the Stepdown Date on which
the Certificate Principal Balance of each
Class of the Class A Certificates, the
Class R Certificates, the Class M-1
Certificates and the Class M-2 Certificates
has been reduced to zero, the Class M-3
Principal Distribution Amount will equal
the lesser of (x) the outstanding
Certificate Principal Balance of the Class M-3
Certificates and (y) 100% of the Principal
Distribution Amount remaining after
any distributions on such Class A, Class R,
Class M-1 and Class M-2 Certificates
and (II) in no event will the Class M-3
Principal Distribution Amount with
respect to any Distribution Date exceed the
Class M-3 Certificate Principal
Balance.
Class M-3
Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-3 Applied
Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class
M-3 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all
increases in the Certificate
Principal Balance of such Class M-3
Certificates pursuant to the last sentence
of the definition of "Certificate Principal
Balance."
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<PAGE>
Class M-4
Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts
with respect to the Mortgage Loans
which have been applied to the reduction of
the Certificate Principal Balance of
the Class M-4 Certificates.
Class M-4
Certificate: Any Certificate designated as a "Class M-4
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class M-4
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class M-4 Certificates.
Class M-4
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class M-4 Pass-Through Rate on
the Class M-4 Certificate Principal Balance
as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Class M-4
Current Interest or a Class M-4 Interest
Carry Forward Amount that is recovered
as a voidable preference by a trustee in
bankruptcy, less any Non-Supported
Interest Shortfall allocated on such
Distribution Date to the Class M-4
Certificates.
Class M-4
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-4
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
M-4 Certificates with respect to Current
Interest or Interest Carry Forward
Amounts on such prior Distribution Dates
and (2) interest on such excess (to the
extent permitted by applicable law) at the
Class M-4 Pass-Through Rate for the
related Accrual Period.
Class M-4
Margin: As of any Distribution Date up to and including the
Auction Termination Date for the
Certificates, 0.700% per annum and, as of any
Distribution Date after the Auction
Termination Date, 1.050% per annum.
Class M-4
Pass-Through Rate: For the first Distribution Date, 3.79000%
per
annum. As of any Distribution Date
thereafter, the least of (1) One-Month LIBOR
plus the Class M-4 Margin, (2) the Maximum
Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
Class M-4
Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of
the Principal Distribution Amount
for such Distribution Date if the
Certificate Principal Balances of the Class A,
Class R, Class M-1, Class M-2 and Class M-3
Certificates have been reduced to
zero and a Stepdown Trigger Event exists,
or as long as a Stepdown Trigger Event
does not exist, the excess of (1) the sum
of (A) the sum of the Certificate
Principal Balances of the Class A and Class
R Certificates (after taking into
account distributions of the Class A
Principal Distribution Amount on such
Distribution Date), (B) the Class M-1
Certificate Principal Balance (after
taking into account distributions of the
Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Class
M-2 Certificate Principal Balance
(after taking into account distributions of
the Class M-2 Principal Distribution
Amount on such Distribution Date), (D) the
Class M-3 Certificate Principal
Balance (after taking into account
distributions of the Class M-3 Principal
Distribution Amount on such Distribution
Date) and (E) the Class M-4 Certificate
Principal Balance immediately prior to such
Distribution Date over (2) the
lesser of (A) 90.90% of the Stated
Principal Balances of the Mortgage Loans as
of the end of the immediately preceding Due
Period and (B) the excess of the
Stated Principal Balances for the Mortgage
Loans as of the end of the
immediately preceding Due Period over the
Minimum Required Overcollateralization
Amount. Notwithstanding the foregoing, (I)
on any Distribution Date prior to the
Stepdown Date on which the Certificate
Principal Balance of each Class of the
Class A Certificates, the Class R
Certificates, the Class M-1 Certificates, the
Class M-2 and the Class M-3 Certificates
has been reduced to zero, the Class M-4
Principal Distribution Amount will equal
the lesser of (x) the outstanding
Certificate Principal Balance of the Class
M-3 Certificates and (y) 100% of the
Principal Distribution
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<PAGE>
Amount remaining after any distributions on
such Class A, Class R, Class M-1,
Class M-2 and Class M-3 Certificates and
(II) in no event will the Class M-4
Principal Distribution Amount with respect
to any Distribution Date exceed the
Class M-4 Certificate Principal
Balance.
Class M-4
Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-4 Applied
Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class
M-4 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all
increases in the Certificate
Principal Balance of such Class M-4
Certificates pursuant to the last sentence
of the definition of "Certificate Principal
Balance."
Class P
Certificate: Any Certificate designated as a Class P
Certificate
on the face thereof, executed by the
Trustee and authenticated by the Trustee in
substantially the form set forth in Exhibit
A, representing the right to
distributions as set forth herein.
Class R
Certificate: The Class R Certificate executed by the Trustee
and
authenticated by the Trustee in
substantially the form set forth in Exhibit A.
Class R
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class R Certificate.
Class R
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class R Pass-Through Rate on
the Class R Certificate Principal Balance
as of such Distribution Date plus the
portion of any previous distributions on
such Class in respect of Class R
Current Interest or a Class R Interest
Carry Forward Amount that is recovered as
a voidable preference by a trustee in
bankruptcy, less any Non-Supported
Interest Shortfall allocated on such
Distribution Date to the Class R
Certificate.
Class R
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class R
Current Interest with respect to prior
Distribution Dates over (B) the amount
actually distributed to the Class R
Certificate with respect to Current
Interest or Interest Carry Forward Amounts
on such prior Distribution Dates and (2)
interest on such excess (to the extent
permitted by applicable law) at the Class R
Pass-Through Rate for the related
Accrual Period.
Class R
Margin: As of any Distribution Date up to and including the
Auction Termination Date for the
Certificates, 0.090% per annum and, as of any
Distribution Date after the Auction
Termination Date, 0.180% per annum.
Class R
Pass-Through Rate: For the first Distribution Date, 3.18000%
per
annum. As of any Distribution Date
thereafter, the least of (1) One-Month LIBOR
plus the Class R Margin, (2) the Maximum
Rate Cap and (3) the Available Funds
Cap for such Distribution Date.
Clean Up
Call: The termination
of the Trust Fund hereunder pursuant
to Section 9.01(a)(ii).
Clean Up
Call Date: The second Distribution Date immediately following
the
Auction Termination Date.
Clean Up
Call Price: An amount equal to the sum of (a) the aggregate
Stated Principal Balance of each Mortgage
Loan (other than any Mortgage Loan
that is an REO Property), plus accrued
interest thereon at the applicable
Mortgage Rate through the Due Date
preceding distribution of the proceeds, the
fair market value of any REO Property, plus
accrued interest thereon, (b) any
unreimbursed out-of-pocket expenses owed to
the Trustee or the Servicer
(including the costs and expenses of
conducting the auction
17
<PAGE>
described in Section 9.01(a)) and any
unreimbursed Servicing Fees, Advances or
Servicing Advances, (c) all interest
accrued on, as well as amounts necessary to
retire the principal balance of the notes
guaranteed by the NIM Insurer, (d) any
amounts owed to the NIM Insurer at the time
the Clean Up Call is exercised and
(e) any costs and damages incurred by the
Trust Fund (or the Trustee on behalf
of the Trust Fund) in connection with any
violation by the affected Mortgage
Loan of any anti-predatory or anti-abusive
lending laws.
Closing
Date: May 17,
2005.
Code:
The Internal Revenue
Code of 1986, including any successor or
amendatory provisions.
Collection
Account: The separate Eligible Account created and initially
maintained by the Servicer pursuant to
Section 3.05(d) in the name of the
Trustee for the benefit of the
Certificateholders and designated "Wilshire
Credit Corporation, in trust for registered
holders of Specialty Underwriting
and Residential Finance Trust, Mortgage
Loan Asset-Backed Certificates, Series
2005-AB1". Funds in the Collection Account
shall be held in trust for the
Certificateholders for the uses and
purposes set forth in this Agreement.
Compensating Interest: With respect to any Mortgage Loan and
any
Distribution Date, an amount equal to the
portion of any Prepayment Interest
Shortfalls required to be deposited in the
Collection Account by the Servicer
pursuant to Section 4.02 hereof.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged
Property, 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.
Current
Interest: Any of the Class A-1A Current Interest, the Class
A-1B
Current Interest, the Class A-1C Current
Interest, the Class R Current Interest,
the Class M-1 Current Interest, the Class
M-2 Current Interest, the Class M-3
Current Interest, the Class M-4 Current
Interest, the Class B-1 Current
Interest, the Class B-2 Current Interest,
the Class B-3 Current Interest and the
Class C Current Interest.
Cut-off
Date: May 1, 2005.
Cut-off
Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close
of business on the calendar day
immediately preceding the Cut-off Date
after application of all payments of
principal due on or prior to the Cut-off
Date, whether or not received, and all
Principal Prepayments received prior to the
Cut-off Date, but without giving
effect to any installments of principal
received in respect of Due Dates on and
after the Cut-off Date.
Definitive
Certificates: As defined in Section 5.06.
Deleted
Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
Delinquent: A Mortgage Loan is "delinquent" if any payment due
thereon is
not made pursuant to the terms of such
Mortgage Loan by the close of business on
the day such payment is scheduled to be
due. A Mortgage Loan is "30 days
delinquent" if such payment has not been
received by the close of business on
the corresponding day of the month
immediately succeeding the month in which
such payment was due, or, if there is no
such corresponding day (e.g., as when a
30-day month follows a
18
<PAGE>
31-day month in which a payment was due on
the 31st day of such month), then on
the last day of such immediately succeeding
month. Similarly for "60 days
delinquent," "90 days delinquent" and so
on.
Denomination: With respect to each Certificate, the amount set
forth on
the face thereof as the "Initial Principal
Balance of this Certificate."
Depositor:
Merrill Lynch Mortgage Investors, Inc., a Delaware corporation,
or its successor in
Depository: The initial Depository shall be The Depository Trust
Company
("DTC"), the nominee of which is Cede &
Co., or any other organization
registered as a "clearing agency" pursuant
to Section 17A of the Securities
Exchange Act of 1934, as amended. The
Depository shall initially be the
registered Holder of the Book-Entry
Certificates. The Depository shall at all
times be a "clearing corporation" as
defined in Section 8-102(3) of the Uniform
Commercial Code of the State of New
York.
Depository
Agreement: With respect to Classes of Book-Entry Certificates,
the agreement between the Trustee and the
initial Depository.
Depository
Participant: A broker, dealer, bank or other financial
institution or other Person for whom from
time to time a Depository effects
book-entry transfers and pledges of
securities deposited with the Depository.
Designated
Transaction: A transaction in which the assets underlying the
Certificates consist of single-family
residential, multi-family residential,
home equity, manufactured housing and/or
commercial mortgage obligations that
are secured by single family residential,
multi-family residential, commercial
real property or leasehold interests
therein.
Determination Date: With respect to any Distribution Date, the 15th
day of
the month of such Distribution Date or, if
such 15th day is not a Business Day,
the immediately preceding Business Day.
Disqualified Organization: (1) the
United States, any state or political
subdivision thereof, any foreign
government, any international organization, or
any agency or instrumentality of any of the
foregoing, (2) any organization
(other than a cooperative described in
Section 521 of the Code) which is exempt
from tax under Chapter 1 of Subtitle A of
the Code unless such organization is
subject to the tax imposed by Section 511
of the Code and (3) any organization
described in Section 1381(a)(2)(C) of the
Code.
Distribution Date: The 25th day of each calendar month after the
initial
issuance of the Certificates, or if such
25th day is not a Business Day, the
next succeeding Business Day, commencing in
June 2005.
Due Date:
With respect to any Distribution Date and any Mortgage Loan,
the
day during the related Due Period on which
a Scheduled Payment is due.
Due
Period: With respect to any Distribution Date, the period beginning
on
the second day of the calendar month
preceding the calendar month in which such
Distribution Date occurs and ending on the
first day of the month in which such
Distribution Date occurs.
Eligible
Account: An account that is (i) maintained with a depository
institution the long-term unsecured debt
obligations of which are rated by each
Rating Agency in one of its two highest
rating categories, or (ii) maintained
with the corporate trust department of a
bank which (A) has a rating of at least
Baa3 or P-3 by Moody's and (B) is either
the Depositor or the corporate trust
department of a
19
<PAGE>
national bank or banking corporation which
has a rating of at least A-1 by S&P
or F1 by Fitch, or (iii) an account or
accounts the deposits in which are fully
insured by the FDIC, or (iv) an account or
accounts, acceptable to each Rating
Agency without reduction or withdrawal of
the rating of any Class of
Certificates, as evidenced in writing, by a
depository institution in which such
accounts are insured by the FDIC (to the
limit established by the FDIC), the
uninsured deposits in which accounts are
otherwise secured such that, as
evidenced by an Opinion of Counsel
delivered to and acceptable to the Trustee,
the NIM Insurer and each Rating Agency, the
Certificateholders have a claim with
respect to the funds in such account and a
perfected first security interest
against any collateral (which shall be
limited to Permitted Investments)
securing such funds that is superior to
claims of any other depositors or
creditors of the depository institution
with which such account is maintained,
or (v) maintained at an eligible
institution whose commercial paper, short-term
debt or other short-term deposits are rated
at least A-1+ by S&P and F-1+ by
Fitch, or (vi) maintained with a federal or
state chartered depository
institution the deposits in which are
insured by the FDIC to the applicable
limits and the short-term unsecured debt
obligations of which (or, in the case
of a depository institution that is a
subsidiary of a holding company, the
short-term unsecured debt obligations of
such holding company) are rated A-1 by
S&P or Prime-1 by Moody's at the time
any deposits are held on deposit therein,
or (vii) a segregated trust account or
accounts maintained with a federal or
state chartered depository institution or
trust company acting in its fiduciary
capacity, that is acceptable to the Rating
Agencies, or (viii) otherwise
acceptable to each Rating Agency, as
evidenced by a letter from each Rating
Agency to the Trustee and the NIM
Insurer.
ERISA: The Employee Retirement
Income Security Act of 1974, including any
successor or amendatory provisions.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that
would satisfy the requirements of any
applicable underwriter's exemption granted
by the United States Department of
Labor, except, in relevant part, for the
requirement that the certificates have
received a rating at the time of
acquisition that is in one of the three (or
four, in the case of a "designated
transaction") highest generic rating
categories by at least one of the Rating
Agencies.
ERISA
Restricted Certificate: The Class B-3, Class C, Class P and Class
R
Certificate and any other Certificate,
unless the acquisition and holding of
such other Certificate is covered by and
exempt under any applicable
underwriter's exemption granted by the
United States Department of Labor.
Event of
Default: As defined in Section 7.01 hereof.
Excess
Interest: On any Distribution Date, for the Class A-1A
Certificates, Class A-1B Certificates,
Class A-1C Certificates, Class R
Certificate, Class M-1 Certificates, Class
M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates, Class
B-1 Certificates, Class B-2
Certificates and Class B-3 Certificates,
the excess, if any, of (1) the amount
of interest such Class of Certificates is
entitled to receive on such
Distribution Date at its Pass-Through Rate
over (2) the amount of interest such
Class of Certificates would have been
entitled to receive on such Distribution
Date had the Pass-Through Rate for such
Class been the REMIC Pass-Through Rate.
Excess
Proceeds: With respect to any Liquidated Loan, any Liquidation
Proceeds that are in excess of the sum of
(1) the unpaid principal balance of
such Liquidated Loan as of the date of such
liquidation plus (2) interest at the
Mortgage Rate from the Due Date as to which
interest was last paid or advanced
to Certificateholders (and not reimbursed
to the Servicer) up to the Due Date in
the month in which such Liquidation
Proceeds are required to be distributed on
the unpaid principal balance of such
Liquidated Loan outstanding during each Due
Period as to which such interest was not
paid or advanced.
Exchange
Act: The Securities
Exchange Act of 1934, as amended.
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<PAGE>
Existing
Servicing Agreement: The Servicing Agreement between Merrill
Lynch Mortgage Lending, Inc., as Owner and
Wilshire Credit Corporation, as
Servicer, dated as of January 1, 2005, as
at any time amended and in effect.
Extra
Principal Distribution Amount: Prior to the Stepdown Date, the
excess of (A) the sum of (i) the Aggregate
Certificate Principal Balance
immediately preceding such Distribution
Date reduced by the Principal Funds with
respect to such Distribution Date and (ii)
$1,485,001 over (B) the Pool Stated
Principal Balance of the Mortgage Loans as
of such Distribution Date and (2) on
and after the Stepdown Date, (A) the sum of
(i) the Aggregate Certificate
Principal Balance immediately preceding
such Distribution Date, reduced by the
Principal Funds with respect to such
Distribution Date and (ii) the greater of
(a) 1.10% of the Pool Stated Principal
Balances of the Mortgage Loans and (b)
the Minimum Required Overcollateralization
Amount less (B) the Pool Stated
Principal Balance of the Mortgage Loans as
of such Distribution Date; provided,
however, that if on any Distribution Date a
Stepdown Trigger Event is in effect,
the Extra Principal Distribution Amount
will not be reduced to the applicable
percentage of the then-current Stated
Principal Balance of the Mortgage Loans as
of the Due Date immediately prior to the
Stepdown Trigger Event until the next
Distribution Date on which the Stepdown
Trigger Event is not in effect.
Fannie
Mae: A federally chartered and privately owned corporation
organized and existing under the Federal
National Mortgage Association Charter
Act, or any successor thereto.
FDIC: The
Federal Deposit Insurance Corporation, or any successor
thereto.
FIFO: As
defined in Section 10.14(e).
Fitch:
Fitch, Inc., or its successor in interest.
Fixed Rate
Mortgage Loan: A Mortgage Loan identified in the Mortgage Loan
Schedule as having a Mortgage Rate which is
fixed.
Floating
Rate Certificate Carryover: With respect to a Distribution
Date,
in the event that the Pass-Through Rate for
a class of the Class A, Class R,
Class M or Class B Certificates is based
upon the Available Funds Cap or the
Maximum Rate 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 Available Funds Cap or the
Maximum Rate Cap, up to but not exceeding
greater of (x) the Maximum Rate Cap or
(y) the Upper Collar, over (2) the amount
of interest such class was entitled to
receive on such Distribution Date based on
the lesser of (a) the Available Funds
Cap or (b) the Maximum Rate Cap, together
with (i) the unpaid portion of any
such excess from prior Distribution Dates
(and interest accrued thereon at the
then applicable Pass-Through Rate, without
giving effect to the applicable
Available Funds Cap) and (ii) any amount
previously distributed with respect to
Floating Rate Certificate Carryover for
such class that is recovered as a
voidable preference by a trustee in
bankruptcy.
Freddie
Mac: A corporate instrumentality of the United States created
and
existing under Title III of the Emergency
Home Finance Act of 1970, as amended,
or any successor thereto.
Grantor
Trusts: The grantor
trusts described in Section 2.07 hereof.
Gross
Margin: The percentage set forth in the related Mortgage Note
for
each of the Adjustable Rate Mortgage Loans
which is to be added to the
applicable index for use in determining the
Mortgage Rate on each Adjustment
Date, and which is set forth in the
Mortgage Loan Schedule for each Adjustable
Rate Mortgage Loan.
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Indenture:
An indenture relating to the issuance of notes guaranteed by
the NIM Insurer.
Initial
Adjustment Date: As to
any Adjustable Rate Mortgage Loan,
the first Adjustment Date following the
origination of such Mortgage Loan.
Initial Certificate Principal
Balance: With respect to any Certificate
(other than the Class P Certificates), the
Certificate Principal Balance of such
Certificate or any predecessor Certificate
on the Closing Date as set forth in
Section 5.01 hereof.
Initial Mortgage
Rate: As to each
Mortgage Loan, the Mortgage Rate
in effect prior to the Initial Adjustment
Date.
Insurance
Policy: With respect to any Mortgage Loan included in the Trust
Fund, any insurance policy, including all
riders and endorsements thereto in
effect with respect to such Mortgage Loan,
including any replacement policy or
policies for any insurance policies.
Insurance
Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant to any Insurance Policy or any
other insurance policy covering a
Mortgage Loan, to the extent such proceeds
are payable to the mortgagee under
the Mortgage, the Servicer or the trustee
under the deed of trust and are not
applied to the restoration of the related
Mortgaged Property or released to the
Mortgagor in accordance with the procedures
that the Servicer would follow in
servicing mortgage loans held for its own
account, in each case other than any
amount included in such Insurance Proceeds
in respect of Insured Expenses.
Insured
Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the
Mortgage Loans.
Interest
Carry Forward Amount: Any of the Class A-1A Interest Carry
Forward Amount, the Class A-1B Interest
Carry Forward Amount, the Class A-1C
Interest Carry Forward Amount, the Class R
Interest Carry Forward Amount, the
Class M-1 Interest Carry Forward Amount,
the Class M-2 Interest Carry Forward
Amount, the Class M-3 Interest Carry
Forward Amount, the Class M-4 Interest
Carry Forward Amount, the Class B-1
Interest Carry Forward Amount, the Class B-2
Interest Carry Forward Amount or the Class
B-3 Interest Carry Forward Amount, as
the case may be.
Interest
Determination Date: With respect to the Certificates, for any
Accrual Period, the second LIBOR Business
Day preceding the commencement of such
Accrual Period.
Interest
Funds: With respect to any Distribution Date, the sum, without
duplication, of (1) all scheduled interest
due during the related Due Period and
received before the related Servicer
Remittance Date or advanced on or before
the related Servicer Remittance Date less
the Servicing Fee, (2) all Advances
relating to interest with respect to the
Mortgage Loans, (3) all Compensating
Interest with respect to the Mortgage
Loans, (4) Liquidation Proceeds with
respect to the Mortgage Loans (to the
extent such Liquidation Proceeds relate to
interest) collected during the related
Prepayment Period, (5) proceeds of any
purchase pursuant to Sections 2.02, 2.03 or
9.01 (to the extent such proceeds
relate to interest) and (6) prepayment
charges received with respect to the
Mortgage Loans during the related
Prepayment Period less (A) all Non-Recoverable
Advances relating to interest and (B) other
amounts reimbursable to the Servicer
and the Trustee pursuant to this Agreement
and allocable to interest.
Last
Scheduled Distribution Date: With respect to any Class of
Certificates, the Distribution Date in May
2036.
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Latest
Possible Maturity Date: The first Distribution Date following
the
third anniversary of the scheduled maturity
date of the Mortgage Loan in the
Trust Fund having the latest scheduled
maturity date as of the Cut-off Date.
Lender: As
defined in Section 10.14(a).
LIBOR
Business Day: Any day on which banks in the City of London,
England
and New York City, U.S.A. are open and
conducting transactions in foreign
currency and exchange.
Liquidated
Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan that has been liquidated
through deed-in-lieu of foreclosure,
foreclosure sale, trustee's sale or other
realization as provided by applicable
law governing the real property subject to
the related Mortgage and any security
agreements and as to which the Servicer has
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.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in
connection with the partial or complete
liquidation of Mortgage Loans, whether
through trustee's sale, foreclosure sale,
sale by the Servicer pursuant to this
Agreement or otherwise or amounts received
in connection with any condemnation
or partial release of a Mortgaged Property
and any other proceeds received in
connection with an REO Property, less the
sum of related unreimbursed Advances,
Servicing Fees, Servicing Advances and any
other expenses related to such
Mortgage Loan.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the
fraction,
expressed as a percentage, the numerator of
which is the original principal
balance of the related Mortgage Loan and
the denominator of which is the lesser
of (x) the Appraised Value of the related
Mortgaged Property and (y) the sales
price of the related Mortgaged Property at
the time of origination.
Losses:
Any losses, claims, damages, liabilities or expenses
collectively.
Lower Tier
REMIC: As described in the Preliminary Statement and Section
2.07.
Lower Tier
REMIC Interests: Each of the Class LTA-1A Interest, the Class
LTA-1B Interest, the Class LTA-1C Interest,
the Class LTM-1 Interest, the Class
LTM-2 Interest, the Class LTM-3 Interest,
the Class LTM-4 Interest, the Class
LTB-1 Interest, the Class LTB-2 Interest,
the Class LTB-3 Interest, the Class
LTX Interest and the Class LTR
Interest.
Lower Tier
REMIC Marker Classes: Each of the Lower Tier REMIC Regular
Interests other than the Class LTX
Interest.
Lower Tier
REMIC Regular Interests: Each of the Lower Tier REMIC Interests
other than the Class LTR Interest.
Maximum
Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan,
the maximum rate of interest set forth as
such in the related Mortgage Note and
with respect to each Fixed Rate Mortgage
Loan, the rate of interest set forth in
the related Mortgage Note.
Maximum
Rate Cap: With respect to a Distribution Date, 12 times the
quotient of (x) the aggregate scheduled
interest that would have been due on the
Mortgage Loans during the related Due
Period had the Adjustable Rate Mortgage
Loans provided for interest at their
maximum lifetime Net Mortgage Rates and the
Fixed Rate Mortgage Loans provided for
interest at their Net Mortgage Rates,
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<PAGE>
divided by (y) the aggregate Stated
Principal Balance of the Mortgage Loans as
of the preceding Distribution Date. With
respect to the Class A, Class R, Class
M and Class B Certificates, such rate is
multiplied by 30 and divided by the
actual number of days in the related
Accrual Period.
MERS:
Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of
the State of Delaware, or any successor
thereto.
MERS Loan:
Any Mortgage Loan registered with MERS on the MERS System.
MERS
System: The system of recording transfers of mortgage
electronically
maintained by MERS.
MIN:
The loan number for
any MERS Loan.
Minimum
Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan,
the minimum rate of interest set forth as
such in the related Mortgage Note.
Minimum
Required Overcollateralization Amount: The product of (x)
0.50% and (y) the Stated Principal Balance
of the Mortgage Loans as of the
Cut-off Date.
Monthly
Statement: The statement delivered to the Certificateholders
pursuant to Section 4.05.
Moody's:
Moody's Investors Service, Inc. or its successor in interest.
MOM Loan:
Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of
such Mortgage Loan and its successors
and assigns.
Mortgage:
With respect to a Mortgage Loan, the mortgage, deed of trust or
other instrument creating a first lien or a
first priority ownership interest in
an estate in fee simple in real property
securing a Mortgage Note.
Mortgage
File: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan
and any additional documents delivered
to the Trustee to be added to the Mortgage
File pursuant to this Agreement.
Mortgage
Loans: Such of the mortgage loans transferred and assigned to
the
Trustee pursuant to the provisions hereof
as from time to time are held as a
part of the Trust Fund (including any REO
Property), the mortgage loans so held
being identified in the Mortgage Loan
Schedule, notwithstanding foreclosure or
other acquisition of title of the related
Mortgaged Property. Any mortgage loan
that was intended by the parties hereto to
be transferred to the Trust Fund as
indicated by such Mortgage Loan Schedule
which is in fact not so transferred for
any reason shall continue to be a Mortgage
Loan hereunder until the Purchase
Price with respect thereto has been paid to
the Trust Fund.
Mortgage
Loan Schedule: The lists of Mortgage Loans (as from time to
time
amended by the Seller to reflect the
deletion of Deleted Mortgage Loans and the
addition of Replacement Mortgage Loans
pursuant to the provisions of this
Agreement) transferred to the Trustee as
part of the Trust Fund and from time to
time subject to this Agreement, attached
hereto as Exhibits B-1, B-2, B-3 and
B-4, setting forth the following
information with respect to each Mortgage Loan:
(i)
the loan
number;
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<PAGE>
(ii)
the
unpaid principal balance of the Mortgage Loans;
(iii)
the
Initial Mortgage Rate;
(iv)
the
maturity date and the months remaining before maturity date;
(v)
the
original principal balance;
(vi)
the
Cut-off Date Principal Balance;
(vii)
the first
payment date of the Mortgage Loan;
(viii)
the
Loan-to-Value Ratio at origination with respect to a first
lien Mortgage Loan;
(ix)
a
code indicating whether the residential dwelling at the time of
origination was represented to be owner-occupied;
(x)
a code
indicating the property type;
(xi)
with
respect to each Adjustable Rate Mortgage Loan:
(a) the frequency of
each Adjustment Date;
(b) the next
Adjustment Date;
(c) the Maximum
Mortgage Rate;
(d) the Minimum
Mortgage Rate;
(e) the Mortgage Rate
as of the Cut-off Date;
(f) the related
Periodic Rate Cap;
(g) the Gross
Margin;
(xiii)
the location of
the related Mortgaged Property; and
(xiv)
a code
indicating whether a prepayment charge is applicable and,
if so, the term of such prepayment charge.
Mortgage
Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of
a Mortgagor under a Mortgage Loan
and all amendments, modifications and
attachments thereto.
Mortgage
Pool: The aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule.
Mortgage
Rate: The annual rate of interest borne by a Mortgage Note from
time to time.
Mortgaged
Property: The underlying property securing a Mortgage Loan.
Mortgagor:
The obligor on a Mortgage Note.
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<PAGE>
Net
Mortgage Rate: As to each Mortgage Loan, and at any time, the
per
annum rate equal to the then current
Mortgage Rate less the Servicing Fee Rate.
Net Rate:
With respect to any Distribution Date, the product of (x) the
weighted average Net Mortgage Rate for the
Mortgage Loans calculated based on
the Net Mortgage Rates and the Stated
Principal Balances of the Mortgage Loans
as of the preceding Distribution Date, (or,
in the case of the first
Distribution Date, as of the Cut-off Date)
and (y) a fraction, the numerator of
which is 30 and the denominator of which is
the actual number of days in the
related Accrual Period.
NIM Notes:
The notes to be issued pursuant to the Indenture.
NIM
Insurer: Any of the one or more insurers that is guaranteeing
certain
payments under any NIM Notes.
NIM
Insurer Default: A default by each of the NIM Insurers as such
default
is defined in the Indenture.
Non-Recoverable Advance: Any portion of an Advance previously made
or
proposed to be made by the Servicer that,
in the good faith judgment of the
Servicer, will not or, in the case of a
current delinquency, would not, be
ultimately recoverable by the Servicer from
the related Mortgagor, related
Liquidation Proceeds or otherwise with
respect to the related Mortgage Loan.
Non-Recoverable Servicing Advance: Any portion of a Servicing
Advance
previously made or proposed to be made by
the Servicer that, in the good faith
judgment of the Servicer, will not or, in
the case of a current Servicing
Advance, would not, be ultimately
recoverable by the Servicer from the related
Mortgagor, related Liquidation Proceeds or
otherwise with respect to the related
Mortgage Loan.
Non-Supported Interest Shortfall: As defined in Section 4.02.
Officer's
Certificate: A certificate (1) signed by the Chairman of the
Board, the Vice Chairman of the Board, the
President, a vice president (however
denominated), an Assistant Vice President,
the Treasurer, the Secretary, or one
of the assistant treasurers or assistant
secretaries of the Depositor, the
Servicer (or any other officer customarily
performing functions similar to those
performed by any of the above designated
officers and also to whom, with respect
to a particular matter, such matter is
referred because of such officer's
knowledge of and familiarity with a
particular subject) or (2), if provided for
in this Agreement, signed by a Servicing
Officer, as the case may be, and
delivered to the Depositor, the Servicer or
the Trustee, as the case may be, as
required by this Agreement.
One-Month
LIBOR: With respect to any Accrual Period, the rate determined
by the Trustee on the related Interest
Determination Date on the basis of (a)
the offered rates for one-month United
States dollar deposits, as such rates
appear on Telerate page 3750, as of 11:00
a.m. (London time) on such Interest
Determination Date or (b) if such rate does
not appear on Telerate Page 3750 as
of 11:00 a.m. (London time), the offered
rates of the Reference Banks for
one-month United States dollar deposits, as
such rates appear on the Reuters
Screen LIBO Page, as of 11:00 a.m. (London
time) on such Interest Determination
Date. If One-Month LIBOR is determined
pursuant to clause (b) above, on each
Interest Determination Date, One-Month
LIBOR for the related Accrual Period will
be established by the Trustee as
follows:
(i) If on such
Interest Determination Date two or more
Reference Banks provide such offered quotations,
One-Month LIBOR for the related
26
<PAGE>
Accrual Period shall be the arithmetic mean of such
offered quotations (rounded upwards if necessary to the
nearest whole multiple of 0.03125%).
(ii) If on such
Interest Determination Date fewer than two
Reference Banks provide such offered quotations,
One-Month LIBOR for the related Accrual Period shall be
the higher of (i) One-Month LIBOR as determined on the
previous Interest Determination Date and (ii) the Reserve
Interest Rate.
Opinion of
Counsel: A written opinion of counsel, who may be counsel for
the Depositor or the Servicer, reasonably
acceptable to each addressee of such
opinion; provided, however, that with
respect to Section 6.04 or 10.01, or the
interpretation or application of the REMIC
Provisions, such counsel must (1) in
fact be independent of the Depositor and
the Servicer, (2) not have any direct
financial interest in the Depositor or the
Servicer or in any affiliate of
either, and (3) not be connected with the
Depositor or the Servicer as an
officer, employee, promoter, underwriter,
trustee, partner, director or person
performing similar functions.
OTS: The
Office of Thrift Supervision.
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 the Class A-1A Certificates, the
Class
A-1A Pass-Through Rate; with respect to the
Class A-1B Certificates, the Class
A-1B Pass-Through Rate; with respect to the
Class A-1C Certificates, the Class
A-1C Pass-Through Rate; with respect to the
Class M-1 Certificates, the Class
M-1 Pass-Through Rate; with respect to the
Class M-2 Certificates, the Class M-2
Pass-Through Rate; with respect to the
Class M-3 Certificates, the Class M-3
Pass-Through Rate; with respect to the
Class M-4 Certificates, the Class M-4
Pass-Through Rate; with respect to the
Class B-1 Certificates, the Class B-1
Pass-Through Rate; with respect to the
Class B-2 Certificates, the Class B-2
Pass-Through Rate; with respect to the
Class B-3 Certificates, the Class B-3
Pass-Through Rate; and, with respect to the
Class R Certificate, the Class R
Pass-Through Rate.
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
27
<PAGE>
Principal Balance of such Class divided by the aggregate
Certificate Principal
Balance of all Classes; and
(ii) any Certificate,
the Percentage Interest evidenced
thereby of the related Class shall equal the percentage
obtained by dividing the Denomination of such Certificate
by the aggregate of the Denominations of all Certificates
of such Class; except that in the case of any Class P
Certificates, the Percentage Interest with respect to
such Certificate shown on the face of such Certificate.
Periodic
Rate Cap: As to each Adjustable Rate Mortgage Loan and the
related Mortgage Note, the provision
therein that limits permissible increases
and decreases in the Mortgage Rate on any
Adjustment Date.
Permitted
Activities: The
primary activities of the trust created
pursuant to this Agreement which shall
be:
(i)
holding Mortgage Loans transferred from the Depositor and
other
assets of the Trust Fund, including the Cap Contract
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
Contract 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 banker's acceptances issued by the
Trustee or any of its Affiliates) issued by any depository
institution or trust company incorporated under the laws of
the United States or of any state thereof and subject to
supervision and examination by federal and/or state banking
authorities, provided that the commercial paper and/or long
term unsecured debt obligations of such depository
institution or trust
28
<PAGE>
company are then rated one of the two highest long-term and
the highest short-term ratings of each such Rating Agency for
such
securities;
(v)
demand or time deposits or certificates of deposit issued by
any bank or trust company or savings institution to the
extent that such deposits are fully insured by the FDIC;
(vi)
guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation rated in the two
highest long-term or the highest short-term ratings of each
Rating Agency containing, at the time of the issuance of such
agreements, such terms and conditions as will not result in
the downgrading or withdrawal of the rating then assigned to
the Certificates by any such Rating Agency as evidenced by a
letter from each Rating Agency;
(vii) repurchase
obligations with respect to any security described
in clauses (i) and (ii) above, in either case entered into
with a depository institution or trust company (acting as
principal) described in clause (v) above;
(viii) securities
(other than stripped bonds, stripped coupons or
instruments sold at a purchase price in excess of 115% of the
face amount thereof) bearing interest or sold at a discount
issued by any corporation, other than the Trustee or any of
its Affiliates, incorporated under the laws of the United
States or any state thereof which, at the time of such
investment, have one of the two highest long term ratings of
each Rating Agency;
(ix)
interests in any money market fund (including those managed
or advised by the Trustee or its affiliates) which at the
date of acquisition of the interests in such fund and
throughout the time such interests are held in such fund has
the highest applicable long term rating by each such Rating
Agency; and
(x)
short term investment funds sponsored by any trust company or
national banking association incorporated under the laws of
the United States or any state thereof, other than the
Trustee or any of its Affiliates, which on the date of
acquisition has been rated by each such Rating Agency in
their respective highest applicable rating category;
provided, that no such instrument shall be
a Permitted Investment if such
instrument (i) evidences the right to
receive interest only payments with
respect to the obligations underlying such
instrument, (ii) is purchased at a
premium or above par or (iii) is purchased
at a deep discount; provided,
further, that no such instrument shall be a
Permitted Investment (A) if such
instrument evidences principal and interest
payments derived from obligations
underlying such instrument and the interest
payments with respect to such
instrument provide a yield to maturity of
greater than 120% of the yield to
maturity at par of such underlying
obligations, or (B) if it may be redeemed at
a price below the purchase price (the
foregoing clause (B) not to apply to
investments in units of money market funds
pursuant to clause (ix) above); and
provided, further, (I) that no amount
beneficially owned by any REMIC
(including, without limitation, any amounts
collected by the Servicer but not
yet deposited in the Collection Account)
may be invested in investments (other
than money market funds) treated as equity
interests for Federal income tax
purposes, unless the Servicer and/or the
Trustee, shall receive an Opinion of
Counsel acceptable to the Servicer and/or
the Trustee, at the expense of the
party requesting that such investment be
made, to the effect that such
investment will not adversely affect the
status of the any REMIC provided for
herein as a REMIC under the Code or result
in imposition of a tax on the Trust
Fund or any REMIC provided for herein and
(II) any such investment must be a
"permitted investment" within the meaning
of Section 860G(a)(5) of the Code.
Permitted Investments that are subject to
prepayment or call may not be
purchased at a price in excess of par.
29
<PAGE>
Permitted
Transferee: Any Person other than (i) the United States, any
State or political subdivision thereof, or
any agency or instrumentality of any
of the foregoing, (ii) a foreign
government, International Organization or any
agency or instrumentality of either of the
foregoing, (iii) an organization
(except certain farmers' cooperatives
described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of
the Code (including the tax imposed
by section 511 of the Code on unrelated
business taxable income) on any excess
inclusions (as defined in section
860E(c)(1) of the Code) with respect to a
Certificate, (iv) rural electric and
telephone cooperatives described in section
1381(a)(2)(C) of the Code, and (v) a Person
that is not a citizen or resident of
the United States, a corporation or
partnership (or other entity treated as a
corporation or partnership for United
States federal income tax purposes)
created or organized in or under the laws
of the United States or any State
thereof or the District of Columbia or an
estate whose income from sources
without the United States is includable in
gross income for United States
federal income tax purposes regardless of
its connection with the conduct of a
trade or business within the United States,
or a trust if a court within the
United States is able to exercise primary
supervision over the administration of
the trust and one or more United States
persons have authority to control all
substantial decisions of the trust, unless,
in the case of this clause (v), such
Person has furnished the transferor, the
Trustee with a duly completed Internal
Revenue Service Form W-8ECI or applicable
successor form. The terms "United
States," "State" and "International
Organization" shall have the meanings set
forth in section 7701 of the Code. A
corporation will not be treated as an
instrumentality of the United States or of
any State thereof for these purposes
if all of its activities are subject to tax
and, with the exception of the
Federal Home Loan Mortgage Corporation, a
majority of its board of directors is
not selected by such government unit.
Person:
Any individual, corporation, partnership, limited liability
company, joint venture, association,
joint-stock company, trust, unincorporated
organization or government, or any agency
or political subdivision thereof.
Pool
Stated Principal Balance: As to any Distribution Date, the
aggregate
of the Stated Principal Balance, as of such
Distribution Date, of the Mortgage
Loans that were Outstanding Mortgage Loans
as of such date.
Preference
Claim: The meaning set out in Section 4.04(l) hereof.
Prepayment
Assumption: A rate of prepayment, as described in the
Prospectus Supplement in the definition of
"Modeling Assumptions," relating to
the Certificates.
Prepayment
Interest Excess: With respect to any Servicer Remittance Date,
for each Mortgage Loan that was the subject
of a Principal Prepayment in full
during the portion of the related
Prepayment Period occurring between the first
day of the calendar month in which such
Servicer Remittance Date occurs and the
last day of the related Prepayment Period,
an amount equal to interest (to the
extent received) at the applicable Net
Mortgage Rate on the amount of such
Principal Prepayment for the number of days
commencing on the first day of the
calendar month in which such Servicer
Remittance Date occurs and ending on the
date on which such Principal Prepayment is
so applied.
Prepayment
Interest Shortfall: With respect to any Distribution Date, for
each Mortgage Loan that was the subject of
a Principal Prepayment in full (other
than a Principal Prepayment in full
resulting from the purchase of a Mortgage
Loan pursuant to Section 2.02, 2.03 or 9.01
hereof and other than a Principal
Prepayment in full on a Mortgage Loan
received during the period from and
including the first day to and including
the 14th day of the month of such
Distribution Date), the amount, if any, by
which (i) one month's interest at the
applicable Net Mortgage Rate on the Stated
Principal Balance of such Mortgage
Loan as of the preceding Distribution Date
exceeds (ii) the amount of interest
paid or collected in connection with such
Principal Prepayment.
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<PAGE>
Prepayment
Period: As to any Distribution Date, the period beginning with
the opening of business on the 15th day of
the calendar month preceding the
month in which such Distribution Date
occurs (or in the case of the first
Distribution Date, beginning with the
opening of business on the Cut-off Date)
and ending on the close of business on the
14th day of the month in which such
Distribution Date occurs.
Principal
Distribution Amount: With respect to each Distribution Date,
the
sum of (1) the Principal Funds for such
Distribution Date and (ii) any Extra
Principal Distribution Amount for such
Distribution Date.
Principal
Funds: With respect to the Mortgage Loans and any Distribution
Date, the sum, without duplication, of (1)
the scheduled principal due during
the related Due Period and received before
the related Servicer Remittance Date
or advanced on or before the related
Servicer Remittance Date, (2) prepayments
collected in the related Prepayment Period,
(3) the Stated Principal Balance of
each Mortgage Loan that was purchased by
the Depositor or the Servicer during
the related Prepayment Period or, in the
case of a purchase pursuant to Section
9.01, on the Business Day prior to such
Distribution Date, (4) the amount, if
any, by which the aggregate unpaid
principal balance of any Replacement Mortgage
Loan is less than the aggregate unpaid
principal of the related Deleted Mortgage
Loans delivered by the Seller in connection
with a substitution of a Mortgage
Loan pursuant to Section 2.03(c), (5) all
Liquidation Proceeds collected during
the related Prepayment Period (to the
extent such Liquidation Proceeds related
to principal), (6) Subsequent Recoveries
received during the related Due Period
and (7) all other collections and
recoveries in respect of principal during the
related Prepayment Period less (A) all
Non-Recoverable Advances relating to
principal with respect to the Mortgage
Loans and (B) other amounts reimbursable
to the Servicer and the Trustee pursuant to
this Agreement and allocable to
principal.
Principal
Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a
Mortgage Loan (including Mortgage Loans
purchased or repurchased under Sections
2.02, 2.03 and 9.01 hereof) that
is received in advance of its scheduled Due
Date and is not accompanied by an
amount as to interest representing
scheduled interest due on any date or dates
in any month or months subsequent to the
month of prepayment. Partial Principal
Prepayments shall be applied by the
Servicer in accordance with the terms of the
related Mortgage Note.
Prospectus
Supplement: The Prospectus Supplement dated May 12, 2005
relating to the public offering of the
Class A-1A, Class A-1B, Class A-1C, Class
R, Class M-1, Class M-2, Class M-3, Class
M-4, Class B-1 and Class B-2
Certificates.
PUD: A
Planned Unit Development.
Purchase
Price: With respect to any Mortgage Loan required to be
repurchased by the Seller, pursuant to
Section 2.02 or 2.03 hereof, an amount
equal to the sum of (i) 100% of the unpaid
principal balance of the Mortgage
Loan as of the date of such purchase
together with any unreimbursed Servicing
Advances, (ii) accrued interest thereon at
the applicable Mortgage Rate from (a)
the date through which interest was last
paid by the Mortgagor to (b) the Due
Date in the month in which the Purchase
Price is to be distributed to
Certificateholders and (iii) any costs and
damages incurred by the Trust Fund
(or the Trustee on behalf of the Trust
Fund) in connection with any violation by
the affected Mortgage Loan of any
anti-predatory or anti-abusive lending laws.
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<PAGE>
Rating Agency: Any of
Fitch, Moody's or S&P. If any such organization or
its successor is no longer in existence,
"Rating Agency" shall be a nationally
recognized statistical rating organization,
or other comparable Person,
designated by the Depositor, notice of
which designation shall be given to the
Trustee. References herein to a given
rating category of a Rating Agency shall
mean such rating category without giving
effect to any modifiers.
Realized
Loss: With respect to (1) a Liquidated Loan, the amount, if
any,
by which the Stated Principal Balance and
accrued interest thereon at the Net
Mortgage Rate exceeds the amount actually
recovered by the Servicer with respect
thereto (net of reimbursement of Advances
and Servicing Advances) at the time
such Mortgage Loan became a Liquidated Loan
or (2) with respect to a Mortgage
Loan which is not a Liquidated Loan, any
amount of principal that the Mortgagor
is no longer legally required to pay
(except for the extinguishment of debt that
results from the exercise of remedies due
to default by the Mortgagor).
Record
Date: With respect to any Distribution Date, the close of
business
on the last Business Day of the month
preceding the month in which the
applicable Distribution Date occurs.
Reference
Banks: Barclays Bank PLC, JPMorgan Chase Bank, N.A., Citibank,
N.A., and NatWest, N.A.; provided that if
any of the foregoing banks are not
suitable to serve as a Reference Bank, then
any leading banks selected by the
Trustee with the consent of the NIM Insurer
which are engaged in transactions in
Eurodollar deposits in the international
Eurocurrency market (i) with an
established place of business in London,
England and (ii) whose quotations
appear on the Reuters Screen LIBO Page on
the relevant Interest Determination
Date.
Regular
Certificate: Any one of the Class A-1A, Class A-1B, Class A-1C,
Class M-1, Class M-2, Class M-3, Class M-4,
Class B-1, Class B-2 and Class B-3
Certificates.
Related
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-1C Interest, the Class
A-1C Certificates. With respect to the
Class LTM-1 Interest, the Class M-1
Certificates. With respect to the Class
LTM-2 Interest, the Class M-2
Certificates. With respect to the Class
LTM-3 Interest, the Class M-3
Certificates. With respect to the Class
LTM-4 Interest, the Class M-4
Certificates. With respect to the Class
LTB-1 Interest, the Class B-1
Certificates. With respect to the Class
LTB-2 Interest, the Class B-2
Certificates. With respect to the Class
LTB-3 Interest, the Class B-3
Certificates.
Relief
Act: The Servicemembers Civil Relief Act or any similar state
laws.
REMIC: A
"real estate mortgage investment conduit" within the meaning of
section 860D of the Code. References herein
to "the REMICs" or "a REMIC" shall
mean any of or, as the context requires,
both of the Lower Tier REMIC and the
Upper Tier REMIC.
REMIC
Pass-Through Rate: The Pass-Through Rate for a Class of Related
Certificates calculated by replacing
"Available Funds Cap" in such definition
with "Net Rate."
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.
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<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 contract
described in Section 2.07 and (ii) the
Uncertificated Class C Interest.
Remittance
Report: The meaning
specified in Section 4.04(k) hereof.
REO
Property: A Mortgaged Property acquired by the Servicer, on behalf
of
the Trustee for the benefit of the
Certificateholders, through foreclosure or
deed-in-lieu of foreclosure in connection
with a defaulted Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by the
Depositor
for a Deleted Mortgage Loan, which must, on
the date of such substitution, as
confirmed in a Request for Release,
substantially in the form of Exhibit I (1)
have a Stated Principal Balance, after
deduction of the principal portion of the
Scheduled Payment due in the month of
substitution, not in excess of, and not
less than 90% of the Stated Principal
Balance of the Deleted Mortgage Loan; (2)
with respect to any Fixed Rate Mortgage
Loan, have a Mortgage Rate not less than
or no more than 1% per annum higher than
the Mortgage Rate of the Deleted
Mortgage Loan and, with respect to any
Adjustable Rate Mortgage Loan: (A) have a
Maximum Mortgage Rate no more than 1% per
annum higher or lower than the Maximum
Mortgage Rate of the Deleted Mortgage Loan;
(B) have a Minimum Mortgage Rate no
more than 1% per annum higher or lower than
the Minimum Mortgage Rate of the
Deleted Mortgage Loan; (C) have the same
index and Periodic Rate Cap as that of
the Deleted Mortgage Loan and a Gross
Margin not more than 1% per annum higher
or lower than that of the Deleted Mortgage
Loan; (D) not permit conversion of
the related Mortgage Rate to a fixed
Mortgage Rate and (F) currently be accruing
interest at a rate not more than 1% per
annum higher or lower than that of the
Deleted Mortgage Loan; (3) have a similar
or higher FICO score or credit grade
than that of the Deleted Mortgage Loan; (4)
have a Loan-to-Value Ratio no higher
than that of the Deleted Mortgage Loan; (5)
have a remaining term to maturity no
greater than (and not more than one year
less than) that of the Deleted Mortgage
Loan; (6) provide for a prepayment charge
on terms substantially similar to
those of the prepayment charge, if any, of
the Deleted Mortgage Loan; (7) have
the same lien priority as the Deleted
Mortgage Loan; (8) constitute the same
occupancy type as the Deleted Mortgage
Loan; and (9) comply with each
representation and warranty set forth in
Section 2.03 hereof.
Request
for Release: The Request for Release of Documents submitted by
the
Servicer to the Trustee, substantially in
the form of Exhibit I hereto.
Required
Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be
maintained from time to time under this
Agreement.
Required
Percentage: Means on any Distribution Date following a Stepdown
Date, the quotient of (1) the excess of (A)
the aggregate Stated Principal
Balance of the Mortgage Loans as of such
Distribution Date, over (B) the
Certificate Principal Balance of the most
senior Class of Certificates
outstanding as of such Distribution Date,
prior to giving effect to
distributions to be made on such
Distribution Date and (2) the aggregate Stated
Principal Balance of the Mortgage Loans as
of such Distribution Date.
Reserve
Interest Rate: With respect to any Interest Determination Date,
the rate per annum that the Trustee
determines to be (1) the arithmetic mean
(rounded upwards if necessary to the
nearest whole multiple of 0.03125%) of the
one-month United States dollar lending
rates which New York City banks selected
by the Trustee are quoting on the relevant
Interest Determination Date to the
principal London offices of leading banks
in the London interbank market or (2)
in the event that the Trustee can
determine
33
<PAGE>
no such arithmetic mean, the lowest
one-month United States dollar lending rate
which New York City banks selected by the
Trustee are quoting on such Interest
Determination Date to leading European
banks.
Residual
Certificate: The Class
R Certificate.
Residual
Interest: An interest in the Upper Tier REMIC that is entitled
to
all distributions of principal and interest
on the Class R Certificate other
than (i) distributions in respect of the
Class LTR Interest, and (ii)
distributions on the Class R Certificate in
respect of Excess Interest.
Responsible Officer: When used with respect to the Trustee or
Servicer,
any officer of the Trustee or Servicer with
direct responsibility for the
administration of this Agreement and also
means any other officer to whom, with
respect to a particular matter, such matter
is referred because of such
officer's knowledge of and familiarity with
the particular subject.
Reuters
Screen LIBO Page: The display designated as page "LIBO" on the
Reuters Monitor Money Rates Service (or
such other page as may replace such LIBO
page on that service for the purpose of
displaying London interbank offered
rates of major banks.
S&P:
Standard & Poor's Ratings Services, a Division of The
McGraw-Hill
Companies, Inc., or its successor in
interest.
Sale
Agreement: The Mortgage Loan Sale and Assignment Agreement dated
as
of May 1, 2005 between the Depositor and
the Seller.
Scheduled
Payment: The scheduled monthly payment on a Mortgage Loan due
on
any Due Date allocable to principal and/or
interest on such Mortgage Loan.
Section
302 Requirements: Any rules or regulations promulgated pursuant
to
the Sarbanes-Oxley Act of 2002 (as such may
be amended from time to time).
Securities
Act: The Securities Act of 1933, as amended.
Seller:
Merrill Lynch Mortgage Lending, Inc., a Delaware corporation,
or
its successor in interest.
Servicer:
Wilshire Credit Corporation, a Nevada corporation, or its
successor in interest.
Servicer
Advance Date: As to any Distribution Date, the related Servicer
Remittance Date.
Servicer
Remittance Date: With respect to any Distribution Date, the
later
of (x) the date that is two Business Days
after the 15th day of the month in
which the related Distribution Date occurs
and (y) the 18th day (or, if such day
is not a Business Day, the next succeeding
Business Day) of the month in which
the related Distribution Date occurs.
Servicer's
Assignee: As defined in Section 10.14(a).
Servicing
Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the
performance by the Servicer of its
servicing obligations hereunder, including,
but not limited to, the cost of (1)
the preservation, restoration and
protection of a Mortgaged Property, including
without limitation advances in respect of
real estate taxes and assessments, (2)
any collection, enforcement or judicial
proceedings, including without
limitation foreclosures, collections
and
34
<PAGE>
liquidations, (3) the conservation,
management, sale and liquidation of any REO
Property (4) executing and recording
instruments of satisfaction, deeds of
reconveyance or assignments of mortgage to
the extent not otherwise recovered
from the related Mortgages or payable under
this Agreement, (5) correcting
errors of prior servicers; tax tracking;
title research; flood certification and
lender paid mortgage insurance, (6)
obtaining or correcting any legal
documentation required to be included in
the Mortgage Files and reasonably
necessary for the Servicer to perform its
obligations under this Agreement and
(7) compliance with the obligations under
Sections 3.01 and 3.10.
Servicing
Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to one month's interest at the
Servicing Fee Rate on the Stated
Principal Balance of such Mortgage Loan as
of the preceding Distribution Date
or, in the event of any payment of interest
that accompanies a Principal
Prepayment in full made by the Mortgagor,
interest at the Servicing Fee Rate on
the Stated Principal Balance of such
Mortgage Loan as of the preceding
Distribution Date for the period covered by
such payment of interest.
Servicing
Fee Rate: 0.500% per annum.
Servicing
Officer: Any officer of the Servicer involved in, or
responsible
for, the administration and servicing of
the Mortgage Loans whose name and
facsimile signature appear on a list of
servicing officers furnished to the
Trustee by the Servicer on the Closing Date
pursuant to this Agreement, as such
lists may from time to time be amended.
Servicing
Rights Pledgee: One or more lenders, selected by the Servicer,
to which the Servicer may pledge and assign
all of its right, title and interest
in, to and under this Agreement.
Servicing
Transfer Costs: In the event that the Servicer does not
reimburse the Trustee under the this
Agreement, all costs associated with the
transfer of servicing from the predecessor
Servicer, including, without
limitation, any costs or expenses
associated with the termination of the
predecessor Servicer, the appointment of a
successor servicer, the complete
transfer of all servicing data and the
completion, correction or manipulation of
such servicing data as may be required by
the Trustee or any successor servicer
to correct any errors or insufficiencies in
the servicing data or otherwise to
enable the Trustee or successor servicer to
service the Mortgage Loans properly
and effectively.
SFAS 140:
Statement of Financial Accounting Standard No. 140, Accounting
for Transfers and Servicing of Financial
Assets and Extinguishments of
Liabilities dated September 2000, published
by the Financial Accounting
Standards Board of the Financial Accounting
Foundation.
SPV: As
defined in Section 10.14(a).
Startup
Day: As defined in Section 2.07 hereof.
Stated
Principal Balance: With respect to any Mortgage Loan or related
REO
Property (1) as of the Cut-off Date, the
Cut-off Date Principal Balance thereof,
and (2) as of any Distribution Date, such
Cut-off Date Principal Balance, minus
the sum of (A) the principal portion of the
Scheduled Payments (x) due with
respect to such Mortgage Loan during each
Due Period ending prior to such
Distribution Date and (y) that were
received by the Servicer as of the close of
business on the Determination Date related
to such Distribution Date or with
respect to which Advances were made on the
Servicer Advance Date prior to such
Distribution Date and (B) all Principal
Prepayments with respect to such
Mortgage Loan received on or prior to the
last day of the related Prepayment
Period, and all Liquidation Proceeds to the
extent applied by the Servicer as
recoveries of principal in accordance with
Section 3.12 with respect to such
Mortgage Loan, that were received by the
Servicer as of the close of business on
the last day of the
35
<PAGE>
related Due Period. Notwithstanding the
foregoing, the Stated Principal Balance
of a Liquidated Loan shall be deemed to be
zero.
Stepdown
Date: The later to occur of (1) the Distribution Date in June
2008 or (2) the first Distribution Date on
which (A) the Class A Certificate
Principal Balance and Class R Certificate
Principal Balance (reduced by the
Principal Funds with respect to such
Distribution Date) are less than or equal
to (B) 68.90% of the aggregate Stated
Principal Balance of the Mortgage Loans as
of such Distribution Date.
Stepdown
Required Loss Percentage: For any Distribution Date, the
applicable percentage for such Distribution
Date set forth in the following
table:
<TABLE>
<CAPTION>
DISTRIBUTION DATE OCCURRING IN STEPDOWN REQUIRED LOSS
PERCENTAGE
------------------------------
---------------------------------
<S>
<C>
June 2008 - May 2009
1.50% with respect to June 2008, plus an
additional 1/12th of 1.00% for each month
thereafter
June 2009 - May 2010
2.50% with respect to June 2009, plus an
additional 1/12th of 0.75% for each month
thereafter
June 2010 - May 2011
3.25% with respect to June 2010, plus an
additional 1/12th of 0.50% for each month
thereafter
June 2011 and thereafter
3.50%
</TABLE>
Stepdown
Trigger Event: With respect to the Certificates on or after the
Stepdown Date, a Distribution Date on which
(1) the quotient of (A) the
aggregate Stated Principal Balance of all
Mortgage Loans which are 60 or more
days Delinquent measured on a rolling three
month basis (including, for the
purposes of this calculation, Mortgage
Loans in foreclosure, REO Properties and
Mortgage Loans with respect to which the
applicable Mortgagor is in bankruptcy)
and (B) the Stated Principal Balance of the
Mortgage Loans as of the preceding
Servicer Advance Date, equals or exceeds
the product of (i) 35.00% and (ii)
Required Percentage or (2) the quotient
(expressed as a percentage) of (A) the
aggregate Realized Losses incurred from the
Cut-off Date through the last day of
the calendar month preceding such
Distribution Date and (B) the aggregate
principal balance of the Mortgage Loans as
of the Cut-off Date exceeds the
Stepdown Required Loss Percentage.
Subordinated Certificates: The Class M-1, Class M-2, Class M-3,
Class M-4,
Class B-1, Class B-2 and Class B-3
Certificates.
Subsequent
Recovery: The amount, if any, recovered by the Servicer with
respect to a Liquidated Loan with respect
to which a Realized Loss has been
incurred after liquidation and disposition
of such Mortgage Loan.
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant
to Section 2.03(c).
Tax
Matters Person: The Person designated as "tax matters person" in
the
manner provided under Treasury regulation
Section 1.860F-4(d) and Treasury
regulation Section 301.6231(a)(7)-1.
Transfer:
Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
36
<PAGE>
Trust
Fund: The corpus of the trust (the "Specialty Underwriting and
Residential Finance Trust, Series
2005-AB1") created hereunder consisting of (i)
the Mortgage Loans and all interest and
principal received on or with respect
thereto on and after the Cut-off Date to
the extent not applied in computing the
Cut-off Date Principal Balance thereof,
exclusive of interest not required to be
deposited in the Collection Account; (ii)
the Collection Account and the
Certificate Account and all amounts
deposited therein pursuant to the applicable
provisions of this Agreement; (iii)
property that secured a Mortgage Loan and
has been acquired by foreclosure, deed in
lieu of foreclosure or otherwise; (iv)
the mortgagee's rights under the Insurance
Policies with respect to the Mortgage
Loans and/or the related Mortgaged
Properties; (v) all proceeds of the
conversion, voluntary or involuntary, of
any of the foregoing into cash or other
liquid property; and (vi) the Cap Contract
and the Cap Contract Account.
Trustee:
JPMorgan Chase Bank, N.A., a national banking association, not
in
its individual capacity, but solely in its
capacity as trustee for the benefit
of the Certificateholders under this
Agreement, and any successor thereto, and
any corporation or national banking
association resulting from or surviving any
consolidation or merger to which it or its
successors may be a party and any
successor trustee as may from time to time
be serving as successor trustee
hereunder.
Uncertificated Class C Interest: An uncertificated interest having
(i) the
same rights to payments as the Class C
Certificates, other than the rights to
payments of amounts with respect to the Cap
Contract, and (ii) the rights to the
payments treated as distributed to the
Class C Certificates under Section
2.07(d), provided, however, that such
interest shall have no obligation to make
any payments treated as paid by the Class C
Certificates pursuant to interest
rate cap agreements under Section
2.07(d).
Unpaid
Realized Loss Amount: The Class M-1 Unpaid Realized Loss
Amount,
Class M-2 Unpaid Realized Loss Amount,
Class M-3 Unpaid Realized Loss Amount,
Class M-4 Unpaid Realized Loss Amount,
Class B-1 Unpaid Realized Loss Amount,
Class B-2 Unpaid Realized Loss Amount,
Class B-2 Unpaid Realized Loss Amount,
Class B-3 Unpaid Realized Loss Amount and
Class C Unpaid Realized Loss Amount,
collectively.
Upper
Collar: With respect to each Distribution Date with respect to
which
payments are received on the Cap Contract,
a rate equal to the lesser of
One-Month LIBOR and 9.270% per annum.
Upper Tier
REMIC: As described in the Preliminary Statement and Section
2.07.
USAP
Report: A report in compliance with the Uniform Single
Attestation
Program for Mortgage Bankers delivered in
accordance with Section 3.18.
Voting
Rights: The portion of the voting rights of all the
Certificates
that is allocated to any of the
Certificates for purposes of the voting
provisions hereunder. Voting Rights
allocated to each Class of Certificates
shall be allocated 98% to the Class A,
Class R, Class M and Class B
Certificates, 2% to the Class C and Class P
Certificates, with the allocation
among the Class A, Class R, Class M and
Class B Certificates to be in proportion
to the Class Certificate Principal Balance
of each Class relative to the Class
Certificate Principal Balance of all other
Classes. Voting Rights will be
allocated among the Certificates of each
such Class in accordance with their
respective Percentage Interests.
37
<PAGE>
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
SECTION
2.01.
Conveyance of Mortgage Loans.
The
Depositor, concurrently with the execution and delivery hereof,
does
hereby sell, transfer, assign, set over and
convey to the Trustee without
recourse all the right, title and interest
of the Depositor in and to the assets
of the Trust Fund. Such assignment includes
all interest and principal received
on or with respect to the Mortgage Loans on
or after the Cut-off Date (other
than Scheduled Payments due on the Mortgage
Loans on or before the Cut-off
Date).
In
connection with such assignment, the Depositor does hereby deliver
to,
and deposit with, the Trustee the following
documents or instruments with
respect to each Mortgage Loan so
assigned:
(A)
The Original
Mortgage Note, together with all riders thereto,
endorsed, "Pay to the order of JPMorgan
Chase Bank, N.A., as trustee - SURF
2005-AB1, without recourse" together with
all riders thereto. The Mortgage Note
shall include all intervening endorsements
showing a complete chain of the title
from the originator to the Seller.
(B)
Except as
provided below and for each Mortgage Loan that is not a
MERS Loan, the original recorded Mortgage
together with all riders thereto, with
evidence of recording thereon, or, if the
original Mortgage has not yet been
returned from the recording office, a copy
of the original Mortgage together
with all riders thereto certified by the
Seller to be a true copy of the
original of the Mortgage that has been
delivered for recording in the
appropriate recording office of the
jurisdiction in which the Mortgaged Property
is located and in the case of each MERS
Loan, the original Mortgage together
with all riders thereto, noting the
presence of the MIN of the Loan and either
language indicating that the Mortgage Loan
is a MOM Loan or if the Mortgage Loan
was not a MOM Loan at origination, the
original Mortgage and the assignment
thereof to MERS, with evidence of recording
indicated thereon, or a copy of the
Mortgage certified by the public recording
office in which such Mortgage has
been recorded.
(C)
In the case of
each Mortgage Loan that is not a MERS Loan, the
original Assignment of each Mortgage, to
"JPMorgan Chase Bank, N.A., as trustee
- SURF 2005-AB1."
(D)
The original
policy of title insurance (or a preliminary title
report, commitment or binder if the
original title insurance policy has not been
received from the title insurance
company).
(E)
Originals of any
intervening assignments of the Mortgage, with
evidence of recording thereon or, if the
original intervening assignment has not
yet been returned from the recording
office, a copy of such assignment certified
to be a true copy of the original of the
assignment which has been sent for
recording in the appropriate jurisdiction
in which the Mortgaged Property is
located.
(F)
Originals of all
assumption and modification agreements, if any.
If in
connection with any Mortgage Loan, the Depositor cannot deliver
the
Mortgage, Assignments of Mortgage or
assumption, consolidation or modification,
as the case may be, with evidence of
recording thereon, if applicable,
concurrently with the execution and
delivery of this Agreement solely because of
a delay caused by the public recording
office where such Mortgage, Assignments
of Mortgage or assumption, consolidation or
modification, as the case may be,
has been delivered for recordation, the
Depositor shall deliver or cause to be
delivered to the Trustee written notice
stating that such Mortgage or
assumption, consolidation or modification,
as the case may be, has been
delivered to the appropriate public
recording office for recordation.
Thereafter, the Depositor shall
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deliver or cause to be delivered to the
Trustee such Mortgage, Assignments of
Mortgage or assumption, consolidation or
modification, as the case may be, with
evidence of recording indicated thereon, if
applicable, upon receipt thereof
from the public recording office. To the
extent any required endorsement is not
contained on a Mortgage Note or an
Assignment of Mortgage, the Depositor shall
make or cause such endorsement to be
made.
With
respect to any Mortgage Loan, none of the Depositor, the Servicer
or
the Trustee shall be obligated to cause to
be recorded the Assignment of
Mortgage referred to in this Section 2.01.
In the event that any Assignment of
Mortgage is not recorded or is improperly
recorded, the Servicer shall have no
liability for its failure to receive or act
on notices related to such
Assignment of Mortgage.
The
ownership of each Mortgage Note, the Mortgage and the contents of
the
related Mortgage File is vested in the
Trustee. Neither the Depositor nor the
Servicer shall take any action inconsistent
with such ownership and shall not
claim any ownership interest therein. The
Depositor and the Servicer shall
respond to any third party inquiries with
respect to ownership of the Mortgage
Loans by stating that such ownership is
held by the Trustee on behalf of the
Certificateholders. Mortgage documents
relating to the Mortgage Loans not
delivered to the Trustee are and shall be
held in trust by the Servicer, for the
benefit of the Trustee as the owner
thereof, and the Servicer's possession of
the contents of each Mortgage File so
retained is for the sole purpose of
servicing the related Mortgage Loan, and
such retention and possession by the
Servicer is in a custodial capacity only.
The Depositor agrees to take no action
inconsistent with the Trustee's ownership
of the Mortgage Loans, to promptly
indicate to all inquiring parties that the
Mortgage Loans have been sold and to
claim no ownership interest in the Mortgage
Loans.
It is the
intention of this Agreement that the conveyance of the
Depositor's right, title and interest in
and to the Trust Fund pursuant to this
Agreement shall constitute a purchase and
sale and not a loan. If a conveyance
of Mortgage Loans from the Seller to the
Depositor is characterized as a pledge
and not a sale, then the Depositor shall be
deemed to have transferred to the
Trustee all of the Depositor's right, title
and interest in, to and under the
obligations of the Seller deemed to be
secured by said pledge; and it is the
intention of this Agreement that the
Depositor shall also be deemed to have
granted to the Trustee a first priority
security interest in all of the
Depositor's right, title, and interest in,
to and under the obligations of the
Seller to the Depositor deemed to be
secured by said pledge and that the Trustee
shall be deemed to be an independent
custodian for purposes of perfection of the
security interest granted to the Depositor.
If the conveyance of the Mortgage
Loans from the Depositor to the Trustee is
characterized as a pledge, it is the
intention of this Agreement that this
Agreement shall constitute a security
agreement under applicable law, and that
the Depositor shall be deemed to have
granted to the Trustee a first priority
security interest in all of the
Depositor's right, title and interest in,
to and under the Mortgage Loans, all
payments of principal of or interest on
such Mortgage Loans, all other rights
relating to and payments made in respect of
the Trust Fund, and all proceeds of
any thereof. If the trust created by this
Agreement terminates prior to the
satisfaction of the claims of any Person in
any Certificates, the security
interest created hereby shall continue in
full force and effect and the Trustee
shall be deemed to be the collateral agent
for the benefit of such Person.
In
addition to the conveyance made in the first paragraph of this
Section
2.01, the Depositor does hereby convey,
assign and set over to the Trustee for
the benefit of the Certificateholders its
rights and interests under the Sale
Agreement, including the Depositor's right,
title and interest in the
representations and warranties contained in
the Sale Agreement and the benefit
of the repurchase obligations and the
obligation of the Seller contained in the
Sale Agreement to take, at the request of
the Depositor or the Trustee, all
action on its part which is reasonably
necessary to ensure the enforceability of
a Mortgage Loan. The Trustee hereby accepts
such assignment, and shall be
entitled to exercise all rights of the
Depositor under the Sale Agreement as if,
for such purpose, it were the Depositor.
The foregoing sale,
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transfer, assignment, set-over, deposit and
conveyance does not and is not
intended to result in creation or
assumption by the Trustee of any obligation of
the Depositor, the Seller, or any other
Person in connection with the Mortgage
Loans or any other agreement or instrument
relating thereto.
The
parties hereto agree and understand that it is not intended that
any
Mortgage Loan be included in the Trust that
is, without limitation, a "High-Cost
Home Loan" as defined by the Home Ownership
and Equity Protection Act of 1994 or
any other applicable anti-predatory lending
laws, including but not limited to
(i) a "High-Cost Home Loan" as defined in
the New Jersey Home Ownership Act
effective November 27, 2003; (ii) a
"High-Cost Home Loan" as defined in the New
Mexico Home Loan Protection Act effective
January 1, 2004; (iii) a "High-Cost
Home Loan" as defined in the Massachusetts
Predatory Home Loan Practices Act
effective November 7, 2004 or (iv) a
"High-Cost Home Loan" as defined by the
Indiana High Cost Home Loan Law effective
January 1, 2005.
SECTION
2.02.
Acceptance by Trustee of the Mortgage Loans.
Except as
set forth in the Exception Report delivered contemporaneously
herewith (the "Exception Report"), the
Trustee acknowledges receipt of the
Mortgage Note for each Mortgage Loan and
delivery of a Mortgage File (but does
not acknowledge receipt of all documents
required to be included in such
Mortgage File) with respect to each
Mortgage Loan and declares that it holds and
will hold such documents and any other
documents constituting a part of the
Mortgage Files delivered to it in trust for
the use and benefit of all present
and future Certificateholders. The
Depositor will cause the Seller to repurchase
any Mortgage Loan to which a material
exception was taken in the Exception
Report unless such exception is cured to
the satisfaction of the Trustee within
45 Business Days of the Closing Date.
The
Trustee acknowledges receipt of the Cap Contract (a form of which
is
attached hereto as Exhibit O), Transfer
Agreement and the Sale Agreement.
The
Trustee agrees, for the benefit of Certificateholders and the
NIM
Insurer, to review each Mortgage File
delivered to it within 60 days after the
Closing Date to ascertain and to certify,
within 70 days of the Closing Date, to
the NIM Insurer, the Depositor and the
Servicer that all documents required by
Section 2.01 have been executed and
received, and that such documents relate to
the Mortgage Loans identified in Exhibit B
that have been conveyed to it. If the
Trustee finds any document or documents
constituting a part of a Mortgage File
to be missing or defective (that is,
mutilated, damaged, defaced or unexecuted)
in any material respect, the Trustee shall
promptly (and in any event within no
more than five Business Days) after such
finding so notify the Servicer, the
Seller, the Depositor and the NIM Insurer.
In addition, the Trustee shall also
notify the Servicer, the Seller, the
Depositor and the NIM Insurer, if the
original Mortgage with evidence of
recording thereon with respect to a Mortgage
Loan is not received within 70 days of the
Closing Date; if it has not been
received because of a delay caused by the
public recording office where such
Mortgage has been delivered for
recordation, the Depositor shall deliver or
cause to be delivered to the Trustee
written notice stating that such Mortgage
has been delivered to the appropriate
public recording officer for recordation
and thereafter the Depositor shall deliver
or cause to be delivered such
Mortgage with evidence of recording thereon
upon receipt thereof from the public
recording office. The Trustee shall request
that the Seller correct or cure such
omission, defect or other irregularity, or
substitute a Mortgage Loan pursuant
to the provisions of Section 2.03(c),
within 90 days from the date the Seller
was notified of such omission or defect
and, if the Seller does not correct or
cure such omission or defect within such
period, that the Seller purchase such
Mortgage Loan from the Trust Fund within 90
days from the date the Trustee
notified the Seller of such omission,
defect or other irregularity at the
Purchase Price of such Mortgage Loan. The
Purchase Price for any Mortgage Loan
purchased pursuant to this Section 2.02
shall be paid to the Servicer and
deposited by the Servicer in the Collection
Account promptly upon receipt, and,
upon receipt by the Trustee of written
notification of such
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deposit signed by a Servicing Officer, the
Trustee, upon receipt of a Request
for Release, shall promptly release to the
Seller the related Mortgage File and
the Trustee shall execute and deliver such
instruments of transfer or
assignment, without recourse,
representation or warranty, as shall be necessary
to vest in the Seller or its designee, as
the case may be, any Mortgage Loan
released pursuant hereto, and the Trustee
shall have no further responsibility
with regard to such Mortgage Loan. It is
understood and agreed that the
obligation of the Seller to purchase, cure
or substitute any Mortgage Loan as to
which a material defect in or omission of a
constituent document exists shall
constitute the sole remedy respecting such
defect or omission available to the
Trustee on behalf of Certificateholders and
the NIM Insurer. The preceding
sentence shall not, however, limit any
remedies available to the
Certificateholders, the Depositor, the
Trustee or the NIM Insurer pursuant to
the Sale Agreement. The Trustee shall be
under no duty or obligation to inspect,
review and examine such documents,
instruments, certificates or other papers to
determine that they are genuine,
enforceable, recordable or appropriate to the
represented purpose, or that they have
actually been recorded, or that they are
other than what they purport to be on their
face. The Trustee shall keep
confidential the name of each Mortgagor and
the Trustee shall not solicit any
such Mortgagor for the purpose of
refinancing the related Mortgage Loan. It is
understood and agreed that all rights and
benefits relating to the solicitation
of any Mortgagors and the attendant rights,
title and interest in and to the
list of Mortgagors and data relating to
their Mortgages shall be retained by the
Servicer.
Within 70
days of the Closing Date, the Trustee shall deliver to the
Depositor, the Servicer and the NIM Insurer
the Trustee's Certification,
substantially in the form of Exhibit D
attached hereto, evidencing the
completeness of the Mortgage Files, with
any exceptions noted thereto.
SECTION
2.03. Representations, Warranties and Covenants of the
Depositor.
(a) The
Depositor hereby represents and warrants to the Servicer, the
Trustee and the NIM Insurer as follows, as
of the date hereof
(i) The Depositor is duly organized and is validly existing as
a
corporation in good standing under the laws of the State of
Delaware and
has full
power and authority (corporate and other) necessary to own or
hold its
properties and to conduct its business as now conducted by it
and
to enter
into and perform its obligations under this Agreement and the
Sale
Agreement.
(ii) The Depositor has the full corporate power and authority
to
execute,
deliver and perform, and to enter into and consummate the
transactions
contemplated by, this Agreement and the Sale Agreement and
has duly
authorized, by all necessary corporate action on its part, the
execution,
delivery and performance of this Agreement and the Sale
Agreement;
and this Agreement and the Sale Agreement, assuming the due
authorization, execution and delivery hereof by the other parties
hereto,
constitutes a legal, valid and binding obligation of the
Depositor,
enforceable against the Depositor in accordance with its terms,
subject,
as to
enforceability, to (i) bankruptcy, insolvency, reorganization,
moratorium
and other similar laws affecting creditors' rights generally
and (ii)
general principles of equity, regardless of whether enforcement
is sought
in a proceeding in equity or at law.
(iii) The execution and delivery of this Agreement and the Sale
Agreement
by the Depositor, the consummation of the transactions
contemplated by this Agreement and the Sale Agreement, and the
fulfillment
of or
compliance with the terms hereof are in the ordinary course of
business
of the Depositor and will not (A) result in a material breach
of
any term
or provision of the charter or by-laws of the Depositor or (B)
materially
conflict with, result in a violation or acceleration of, or
result in
a material default under, the terms of any other material
agreement
or instrument to which the Depositor is a party or by which it
may be
bound or (C) constitute a
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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) To the
extent that any fact, condition or event with respect to a
Mortgage Loan constitutes a breach of a
representation or warranty of the Seller
under the Sale Agreement, the only right or
remedy of the Trustee, the NIM
Insurer or of any Certificateholder shall
be the Trustee's right to enforce the
obligations of the Seller under any
applicable representation or warranty made
by it. The Trustee acknowledges that the
Depositor shall have no obligation or
liability with respect to any breach of any
representation or warranty with
respect to the Mortgage Loans (except as
set forth in Section 2.03(a)(v)) under
any circumstances.
(c) Upon
discovery by any of the Depositor, the Servicer, the NIM
Insurer,
or the Trustee of a breach of any of
representations and warranties set forth in
the Sale Agreement that adversely and
materially affects the value of the
related Mortgage Loan, prepayment charges
or the interests of the
Certificateholders, the party discovering
such breach shall give prompt written
notice to the other parties. Within 90 days
of the discovery of a breach of any
representation or warranty given to the
Trustee by the Depositor, the Seller and
assigned to the Trustee, the Depositor, or
the Seller shall either (a) cure such
breach in all material respects, (b)
repurchase such Mortgage Loan or any
property acquired in respect thereof from
the Trustee at the Purchase Price or
(c) within the two year period following
the Closing Date, substitute a
Replacement Mortgage Loan for the affected
Mortgage Loan. In the event of
discovery of a breach of any representation
and warranty of the Seller or the
Depositor, the Trustee shall enforce its
rights under the Sale Agreement or
thereunder for the benefit of
Certificateholders and the NIM Insurer. If a
breach of the representations and
warranties set forth in the Sale Agreement
hereof exists solely due to the
unenforceability of a prepayment charge, the
Trustee shall notify the NIM Insurer
thereof and not seek to enforce the
repurchase remedy provided for herein
unless directed in writing to do so by the
NIM Insurer. In the event of a breach of
the representations and warranties with
respect to the Mortgage Loans set forth in
a Sale Agreement, the Trustee shall
at the request of the NIM Insurer enforce
the right of the Trust Fund and the
NIM Insurer to be indemnified for such
breach of representation and warranty. In
the event that such breach relates solely
to the unenforceability of a
prepayment charge, amounts received in
respect of such indemnity up to the
amount of such prepayment charge shall be
distributed pursuant to
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Section 4.04(b)(i)(B). As provided in the
Sale Agreement, if the Seller
substitutes for a Mortgage Loan for which
there is a breach of any
representations and warranties which
adversely and materially affects the value
of such Mortgage Loan and such substitute
mortgage loan is not a Replacement
Mortgage Loan, under the terms of the Sale
Agreement, the Seller will, in
exchange for such substitute Mortgage Loan,
(i) provide the applicable Purchase
Price for the affected Mortgage Loan or
(ii) within two years of the Closing
Date, substitute such affected Mortgage
Loan with a Replacement Mortgage Loan.
Any such substitution shall not be effected
prior to the additional delivery to
the Trustee of a Request for Release
substantially in the form of Exhibit I and
shall not be effected unless it is within
two years of the Startup Day. As
provided in the Sale Agreement, the Seller
indemnifies and holds the Trust Fund,
the Trustee, the Depositor, the NIM
Insurer, the Servicer and each
Certificateholder harmless against any and
all taxes, claims, losses, penalties,
fines, forfeitures, reasonable legal fees
and related costs, judgments, and any
other costs, fees and expenses that the
Trust Fund, the Trustee, the Depositor,
the NIM Insurer, the Servicer and any
Certificateholder may sustain in
connection with any actions of the Seller
relating to a repurchase of a Mortgage
Loan other than in compliance with the
terms of this Section 2.03 and the Sale
Agreement, to the extent that any such
action causes (i) any federal or state
tax to be imposed on the Trust Fund or any
REMIC provided for herein, including
without limitation, any federal tax imposed
on "prohibited transactions" under
Section 860F(a)(1) of the Code or on
"contributions after the startup day" under
Section 860G(d)(1) of the Code, or (ii) any
REMIC created hereunder to fail to
qualify as a REMIC at any time that any
Certificate is outstanding.
With
respect to any Mortgage Loan repurchased by the Depositor pursuant
to
this Agreement or by the Seller pursuant to
the Sale Agreement, the principal
portion of the funds received by the
Servicer in respect of such repurchase of a
Mortgage Loan will be considered a
Principal Prepayment and shall be deposited
by the Servicer in the Certificate Account
pursuant to Section 3.05. The
Trustee, upon receipt of the full amount of
the Purchase Price for a Deleted
Mortgage Loan, or upon receipt of the
Mortgage File for a Replacement Mortgage
Loan substituted for a Deleted Mortgage
Loan, shall release or cause to be
released and reassign to the Depositor or
the Seller, as applicable, the related
Mortgage File for the Deleted Mortgage Loan
and shall execute and deliver such
instruments of transfer or assignment, in
each case without recourse,
representation or warranty, as shall be
necessary to vest in such party or its
designee or assignee title to any Deleted
Mortgage Loan released pursuant
hereto, free and clear of all security
interests, liens and other encumbrances
created by this Agreement, which
instruments shall be prepared by the Trustee,
and the Trustee shall not have any further
responsibility with respect to the
Mortgage File relating to such Deleted
Mortgage Loan.
With
respect to each Replacement Mortgage Loan to be delivered to
the
Trustee pursuant to the terms of this
Article II in exchange for a Deleted
Mortgage Loan: (i) the Depositor or the
Seller, as applicable, must deliver to
the Trustee the Mortgage File for the
Replacement Mortgage Loan containing the
documents set forth in Section 2.01 along
with a written certification
certifying as to the delivery of such
Mortgage File and containing the granting
language set forth in the first sentence of
Section 2.01; and (ii) the Depositor
will be deemed to have made, with respect
to such Replacement Mortgage Loan,
each of the representations and warranties
made by it with respect to the
related Deleted Mortgage Loan. The Trustee
shall review the Mortgage File with
respect to each Replacement Mortgage Loan
and certify to the NIM Insurer and the
Depositor that all documents required by
Section 2.01 have been executed and
received.
For any
month in which the Seller substitutes one or more Replacement
Mortgage Loans for one or more Deleted
Mortgage Loans, the Seller will determine
the amount (if any) by which the aggregate
principal balance of all such
Replacement Mortgage Loans as of the date
of substitution and the aggregate
prepayment charges with respect to such
Replacement Mortgage Loans is less than
the aggregate Stated Principal Balance
(after application of the principal
portion of the Scheduled Payment due in the
month of substitution) and aggregate
prepayment charges of all such Deleted
Mortgage Loans. An amount equal to
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the aggregate of the deficiencies described
in the preceding sentence (such
amount, the "Substitution Adjustment
Amount") shall be delivered by the Seller
to the Servicer for deposit into the
Collection Account on the Determination
Date for the Distribution Date relating to
the Prepayment Period during which
the related Mortgage Loan became required
to be purchased or replaced hereunder.
The Seller
shall give or cause to be given written notice to the
Certificateholders and the NIM Insurer that
such substitution has taken place,
shall amend the Mortgage Loan Schedule to
reflect the removal of such Deleted
Mortgage Loan from the terms of this
Agreement and the substitution of the
Replacement Mortgage Loan or Replacement
Mortgage Loans and shall deliver a copy
of such amended Mortgage Loan Schedule to
the NIM Insurer and the Trustee. Upon
such substitution by the Seller, such
Replacement Mortgage Loan or Replacement
Mortgage Loans shall constitute part of the
Mortgage Pool and shall be subject
in all respects to the terms of this
Agreement and the Sale Agreement, including
all applicable representations and
warranties thereof included in the Sale
Agreement as of the date of
substitution.
In addition, the Seller
shall obtain at its own expense and deliver to the
Trustee and the NIM Insurer an Opinion of
Counsel addressed to the Trustee and
the NIM Insurer to the effect that such
substitution will not (a) cause any
federal tax to be imposed on the Trust Fund
or any REMIC provided for herein,
including without limitation, any federal
tax imposed on "prohibited
transactions" under Section 860F(a)(1) of
the Code or on "contributions after
the startup day" under Section 860G(d)(1)
of the Code or (b) adversely affect
the status of any REMIC provided for herein
as a REMIC. If any such Opinion of
Counsel can not be delivered, then such
substitution may only be effected at
such time as the required Opinion of
Counsel can be given.
(d) It is
understood and agreed that the representations, warranties and
indemnification (i) set forth in this
Section 2.03 and (ii) of the Seller and
the Depositor set forth in the Sale
Agreement and assigned to the Trustee by the
Depositor hereunder shall each survive
delivery of the Mortgage Files and the
Assignment of Mortgage of each Mortgage
Loan to the Trustee and shall continue
throughout the term of this Agreement.
SECTION
2.04.
Representations and Warranties of the Servicer.
The
Servicer hereby represents and warrants to the Depositor and
the
Trustee as follows, as of the date
hereof
(i) The Servicer is a duly formed corporation and is validly
existing
and in good standing under the laws of the state of its
formation
and is
duly authorized and qualified to transact any and all business
contemplated by this Agreement to be conducted by the Servicer in
any
state in
which a Mortgaged Property is located or is otherwise not
required
under applicable law to effect such qualification and, in any
event, is
in compliance with the doing business laws of any such state,
to
the extent
necessary to ensure its ability to enforce each Mortgage Loan,
to service
the Mortgage Loans in accordance with the terms of this
Agreement
and to perform any of its other obligations under this
Agreement
in
accordance with the terms hereof.
(ii) The Servicer has the power and authority to service each
Mortgage
Loan, and to execute, deliver and perform, and to enter into
and
consummate
the transactions contemplated by this Agreement and has duly
authorized
by all necessary corporate action on the part of the Servicer
the
execution, delivery and performance of this Agreement; and this
Agreement,
assuming the due authorization, execution and delivery hereof
by the
other parties hereto, constitutes a legal, valid and binding
obligation
of the Servicer, enforceable against the Servicer in accordance
with its
terms, except that (a) the enforceability hereof may be limited
by
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bankruptcy, insolvency, moratorium, receivership and other similar
laws
relating
to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may
be
subject to
equitable defenses and to the discretion of the court before
which any
proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement by the
Servicer,
the
servicing of the Mortgage Loans under this Agreement, the
consummation
of any
other of the transactions contemplated by this Agreement, and
the
fulfillment of or compliance with the terms hereof are in the
ordinary
course of
business of the Servicer and will not (A) result in a material
breach of
any term or provision of the charter or by-laws of the Servicer
or (B)
materially conflict with, result in a material breach, violation
or
acceleration of, or result in a material default under, the terms
of any
other
material agreement or instrument to which the Servicer is a party
or
by which
it may be bound, or (C) constitute a material violation of any
statute,
order or regulation applicable to the Servicer of any court,
regulatory
body, administrative agency or governmental body having
jurisdiction over the Servicer; and the Servicer is not in breach
or
violation
of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of
any
court,
regulatory body, administrative agency or governmental body
having
jurisdiction over it which breach or violation may materially
impair the
Servicer's
ability to perform or meet any of its obligations under this
Agreement.
(iv) The Servicer is an approved servicer of mortgage loans for
Fannie Mae
and is an approved servicer of mortgage loans for Freddie Mac.
(v) No litigation is pending or, to the best of the Servicer's
knowledge,
threatened, against the Servicer that would materially and
adversely
affect the execution, delivery or enforceability of this
Agreement or the ability of
the Servicer to service the Mortgage Loans or
to perform
any of its other obligations under this Agreement in accordance
with the
terms hereof.
(vi) No consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution, delivery
and
performance by the Servicer of, or compliance by the Servicer with,
this
Agreement
or the consummation of the transactions contemplated hereby, or
if any
such consent, approval, authorization or order is required, the
Servicer
has obtained the same.
(vii) The Servicer has fully furnished and will fully furnish
(for
the period
it serviced the Mortgage Loans), in accordance with the Fair
Credit
Reporting Act and its implementing regulations, accurate and
complete
information (e.g., favorable and unfavorable) on its borrower
credit
files to Equifax, Experian and Trans Union Credit Information
Company on
a monthly basis.
SECTION
2.05. Substitutions and Repurchases of Mortgage Loans Which Are
Not "Qualified Mortgages".
Upon
discovery by the Depositor, the Servicer or the Trustee that
any
Mortgage Loan does not constitute a
"qualified mortgage" within the meaning of
section 860G(a)(3) of the Code, the party
discovering such fact shall promptly
(and in any event within 5 Business Days of
discovery) give written notice
thereof to the other parties. In connection
therewith, the Depositor shall, at
the Depositor's option, either (i)
substitute, if the conditions in Section
2.03(c) with respect to substitutions are
satisfied, a Replacement Mortgage Loan
for the affected Mortgage Loan, or (ii)
repurchase the affected Mortgage Loan
within 90 days of such discovery in the
same manner as it would a Mortgage Loan
for a breach of representation or warranty
contained in Section 2.03. The
Trustee shall reconvey to the Depositor
the
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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.
SECTION
2.07. REMIC Elections.
(a) The
Depositor hereby instructs and authorizes the Trustee to make
an
appropriate election to treat each of the
Lower Tier REMIC and the Upper Tier
REMIC as a REMIC. The Trustee shall sign
the returns providing for such
elections and such other tax or information
returns which are required to be
signed by the Trustee under applicable law.
This Agreement shall be construed so
as to carry out the intention of the
parties that each of the Lower Tier REMIC
and the Upper Tier REMIC be treated as a
REMIC at all times prior to the date on
which the Trust Fund is terminated.
(b) The
Preliminary Statement sets forth the designations and "latest
possible maturity date" for federal income
tax purposes of all interests created
hereby. The "Startup Day," as defined in
Section 860G(a)(9) of the Code, for
purposes of the REMIC Provisions shall be
the Closing Date. Each REMIC's fiscal
year shall be the calendar year.
The Lower
Tier REMIC shall consist of all of the assets of the Trust Fund
(other than (i) the interests issued by the
Lower Tier REMIC, (ii) the grantor
trusts described in this Section 2.07 and
(iii) the Cap Contract and the Cap
Contract Account). The Lower Tier REMIC
shall issue the Lower Tier REMIC Regular
Interests which shall be designated as
regular interests of such REMIC and shall
issue the Class LTR Interest that shall be
designated as the sole class of
residual interest in the Lower Tier REMIC.
Each of the Lower Tier REMIC Regular
Interests shall have the characteristics
set forth in its definition.
The assets
of the Upper Tier REMIC shall be the Lower Tier REMIC Regular
Interests. The REMIC Regular Interests
shall be designated as the regular
interests in the Upper Tier REMIC and the
Residual Interest shall be designated
as the sole class of residual interest in
the Upper Tier REMIC. For federal
income tax purposes, the pass-through rate
on each REMIC Regular Interest (other
than the Uncertificated Class C Interest)
and on the sole class of residual
interest in the Upper Tier REMIC shall be
subject to a cap equal to the Net
Rate.
The
beneficial ownership of the Class LTR Interest and the Residual
Interest shall be represented by the Class
R Certificate. The Class LTR Interest
shall not have a principal balance or bear
interest.
(c) The
"tax matters person" with respect to each REMIC for purposes of
the REMIC Provisions shall be the
beneficial owner of the Class R Certificate;
provided, however, that the Holder of the
Class R Certificate, by its acceptance
thereof, irrevocably appoints the Trustee
as its agent and attorney-in-fact to
act as "tax matters person" with respect to
each such REMIC for purposes of the
REMIC Provisions. If there is more than one
beneficial owner of the Class R
Certificate, the "tax matters
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person" shall be the Person with the
greatest percentage interest in the Class R
Certificate and, if there is more than one
such Person, shall be determined
under Treasury regulation Section
1.860F-4(d) and Treasury regulation Section
301.6231(a)(7)-1.
(d) It is
intended that the rights of the Class A-1A Certificates, Class
A-1B Certificates, Class A-1C Certificates,
Class R Certificate, Class M-1
Certificates, Class M-2 Certificates, Class
M-3 Certificates, Class M-4
Certificates, Class B-1 Certificates, Class
B-2 Certificates and Class B-3
Certificates to receive payments of Excess
Interest shall be treated as a right
in interest rate cap contracts written by
the Class C Certificateholders in
favor of the holders of the Class A-1A
Certificates, Class A-1B Certificates,
Class A-1C Certificates, Class R
Certificate, Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class
M-4 Certificates, Class B-1
Certificates, Class B-2 Certificates and
Class B-3 Certificates, and such shall
be accounted for as property held separate
and apart from the regular interests
in the Upper Tier REMIC held by the holders
of the Class A-1A Certificates,
Class A-1B Certificates, Class A-1C
Certificates, Class M-1 Certificates, Class
M-2 Certificates, Class M-3 Certificates,
Class M-4 Certificates, Class B-1
Certificates, Class B-2 Certificates and
Class B-3 Certificates and the residual
interest in the Upper Tier REMIC held by
the holder of the Class R Certificate.
This provision is intended to satisfy the
requirements of Treasury Regulations
Section 1.860G-2(i) for the treatment of
property rights coupled with REMIC
interests to be separately respected and
shall be interpreted consistently with
such regulation. On each Distribution Date,
to the extent that any of the Class
A-1A Certificates, Class A-1B Certificates,
Class A-1C Certificates, Class R
Certificate, Class M-1 Certificates, Class
M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates, Class
B-1 Certificates, Class B-2
Certificates and Class B-3 Certificates
receive payments in respect of Excess
Interest, such amounts, to the extent not
derived from payments on the Cap
Contract, will be treated as distributed by
the Upper Tier REMIC to the Class C
Certificates pro rata in payment of the
amounts specified in Section 4.04(f) and
then paid to the relevant Class of
Certificates pursuant to the related interest
rate cap agreement.
(e) The
parties intend that the portion of the Trust Fund consisting of
the Uncertificated Class C Interest, the
Cap Contract Account, the Cap Contract
and the obligation of the holders of the
Class C Certificates to pay amounts in
respect of Excess Interest to the holders
of the Class A-1A Certificates, Class
A-1B Certificates, Class A-1C Certificates,
Class R Certificate, Class M-1
Certificates, Class M-2 Certificates, Class
M-3 Certificates, Class M-4
Certificates, Class B-1 Certificates, Class
B-2 Certificates and Class B-3
Certificates shall be treated as a "grantor
trust" under the Code, for the
benefit of the holders of the Class C
Certificates, and the provisions hereof
shall be interpreted consistently with this
intention. In furtherance of such
intention, the Trustee shall (i) furnish or
cause to be furnished to the holders
of the Class C Certificates information
regarding their allocable share, if any,
of the income with respect to such grantor
trust, (ii) file or cause to be filed
with the Internal Revenue Service Form 1041
(together with any necessary
attachments) and such other forms as may be
applicable and (iii) comply with
such information reporting obligations with
respect to payments from such
grantor trust to the holders of Class A-1A
Certificates, Class A-1B
Certificates, Class A-1C Certificates,
Class R Certificate, Class M-1
Certificates, Class M-2 Certificates, Class
M-3 Certificates, Class M-4
Certificates, Class B-1 Certificates, Class
B-2 Certificates, Class B-3
Certificates and Class C Certificates as
may be applicable under the Code.
(f) The
parties intend that the portion of the Trust Fund consisting of
the right to receive the payments
distributable to the Class P Certificates
pursuant to Section 4.04(b)(i) hereof shall
be treated as a "grantor trust"
under the Code, for the benefit of the
holders of the Class P Certificates, and
the provisions hereof shall be interpreted
consistently with this intention. In
furtherance of such intention, the Trustee
shall (i) furnish or cause to be
furnished to the holders of the Class P
Certificates information regarding their
allocable share of the income with respect
to such grantor trust and (ii) file
or cause to be
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filed with the Internal Revenue Service
Form 1041 (together with any necessary
attachments) and such other forms as may be
applicable.
(g) The
parties intend that the portion of the Trust Fund consisting of
the Class R Certificate and the right of
the Class C Certificates to receive the
amounts described in Section 9.01(f) hereof
shall be treated as a "grantor
trust" under the Code, for the benefit of
the holders of the Class R
Certificates and the Class C Certificates,
and the provisions hereof shall be
interpreted consistent with this intention.
In furtherance of this intention,
the Trustee shall (i) furnish or cause to
be furnished to the holders of the
Class R Certificate and the Class C
Certificates information regarding their
allocable share of the income with respect
to such grantor trust, (ii) file or
cause to be filed with the Internal Revenue
Service Form 1041 (together with any
necessary attachments) and such other forms
as may be applicable and (iii)
comply with such information reporting
obligations with respect to payments from
such grantor trust as may be applicable
under the Code.
(h) All
payments of principal and interest at the Net Mortgage Rate on
each of the Mortgage Loans (other than
payments distributable to the Class P
Certificates pursuant to Section 4.04(b)(i)
hereof) received from the Mortgage
Loans shall be paid to the Lower Tier REMIC
Regular Interests until the
principal balance of all such interests
have been reduced to zero and any losses
allocated to such interests have been
reimbursed. Any excess amounts shall be
distributed to the Class LTR Interest. On
each Distribution Date, an amount
equal to 50% of the increase in the
Overcollateralization Amount shall be
payable as a reduction of the principal
amounts of the Lower Tier REMIC Marker
Classes (with such amount allocated among
the Lower Tier REMIC Marker Classes so
that each Lower Tier REMIC Marker Class
will have its principal reduced by an
amount equal to 50% of any increase in the
Overcollateralization Amount that
results in a reduction in the principal
balance of its Related Certificates) and
will be accrued and added to the principal
balance of the Class LTX Interest.
All payments of scheduled principal and
prepayments of principal on the Mortgage
Loans shall be allocated 50% to the Class
LTX Interest and 50% to the Lower Tier
REMIC Marker Classes (with principal
payments allocated to each of the Lower
Tier REMIC Marker Classes in an amount
equal to 50% of the principal amounts
distributed to the Related Certificates in
reduction of their principal
amounts). Notwithstanding the preceding
sentence, an amount equal to the
principal payments that result in a
reduction in the Overcollateralization
Amount shall be treated as payable entirely
to the Class LTX Interest. Realized
Losses that are allocated to the
Certificates shall be applied to the Lower Tier
REMIC Marker Classes and the Class LTX
Interest so that after all distributions
have been made on each Distribution Date
(i) the principal balance of each of
the Lower Tier REMIC Marker Classes is
equal to 50% of the principal balance of
the Related Certificates and (ii) the
principal balance of the Class LTX
Interest is equal to the sum of (x) 50% of
the aggregate Stated Principal
Balance of the Mortgage Loans and (y) 50%
of the Overcollateralization Amount.
Each Lower Tier REMIC Marker Class shall be
entitled to receive an amount equal
to 50% of all amounts distributed to the
Related Certificates in respect of
unreimbursed amounts of Realized Losses.
The Class LTX Interest shall be
entitled to receive all other amounts
distributed to the Certificates in respect
of unreimbursed amounts of Realized
Losses.
If on any Distribution Date the Certificate Principal Balance of
any
Class of Certificates is increased pursuant
to the last sentence of the
definition of "Certificate Principal
Balance", then there shall be an equivalent
increase in the principal amounts of the
Lower Tier REMIC Regular Interests,
with such increase allocated (before the
making of distributions and the
allocation of losses on the Lower Tier
REMIC Regular Interests on such
Distribution Date) among the Lower Tier
REMIC Regular Interests so that (i) each
of the Lower Tier Marker Classes has a
principal balance equal to 50% of the
principal balance of the Related
Certificates, (ii) the Class LTX Interest has a
principal balance equal to the sum of (x)
50% of the aggregate Stated Principal
Balance of the Mortgage Loans and (y) 50%
of the Overcollateralization Amount.
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<PAGE>
(i) In the
event that any REMIC provided for herein fails to qualify as a
REMIC, loses its status as a REMIC, or
incurs federal, state or local taxes as a
result of a prohibited transaction or
prohibited contribution under the REMIC
Provisions due to the negligent performance
by the Servicer of its duties and
obligations set forth herein, the Servicer
shall indemnify the NIM Insurer, the
Trustee and the Trust Fund against any and
all Losses resulting from such
negligence; provided, however, that the
Servicer shall not be liable for any
such Losses attributable to the action or
inaction of the Trustee, the Depositor
or the Holder of the Class R Certificate,
as applicable, nor for any such Losses
resulting from misinformation provided by
the Holder of the Class R Certificate
on which the Servicer has relied. The
foregoing shall not be deemed to limit or
restrict the rights and remedies of the
Holder of the Class R Certificate now or
hereafter existing at law or in equity.
Notwithstanding the foregoing, however,
in no event shall the Servicer have any
liability (1) for any action or omission
that is taken in accordance with and in
compliance with the express terms of, or
which is expressly permitted by the terms
of, this Agreement, (2) for any Losses
other than arising out of a negligent
performance by the Servicer of its duties
and obligations set forth herein, and (3)
for any special or consequential
damages to Certificateholders (in addition
to payment of principal and interest
on the Certificates).
(j) In the event that any REMIC provided for herein fails to
qualify as
a REMIC, loses its status as a REMIC, or
incurs federal, state or local taxes as
a result of a prohibited transaction or
prohibited contribution under the REMIC
Provisions due to the negligent performance
by the Trustee of its duties and
obligations set forth herein, the Trustee
shall indemnify the NIM Insurer and
the Trust Fund against any and all Losses
resulting from such negligence;
provided, however, that the Trustee shall
not be liable for any such Losses
attributable to the action or inaction of
the Servicer, the Depositor or the
Holder of the Class R Certificate, as
applicable, nor for any such Losses
resulting from misinformation provided by
the Holder of the Class R Certificate
on which the Trustee has relied. The
foregoing shall not be deemed to limit or
restrict the rights and remedies of the
Holder of the Class R Certificate now or
hereafter existing at law or in equity.
Notwithstanding the foregoing, however,
in no event shall the Trustee have any
liability (1) for any action or omission
that is taken in accordance with and in
compliance with the express terms of, or
which is expressly permitted by the terms
of, this Agreement, (2) for any Losses
other than arising out of a negligent
performance by the Trustee of its duties
and obligations set forth herein, and (3)
for any special or consequential
damages to Certificateholders (in addition
to payment of principal and interest
on the Certificates).
SECTION
2.08. Covenants of the Servicer.
The
Servicer hereby covenants to each of the other parties to this
Agreement as follows:
(a) the
Servicer shall comply in the performance of its obligations
under
this Agreement with all reasonable rules
and requirements of the insurer under
each Required Insurance Policy;
(b) no
written information, certificate of an officer, statement
furnished
in writing or written report delivered to
the Depositor, the Trustee or the NIM
Insurer, any affiliate of the Depositor,
the Trustee or the NIM Insurer and
prepared by the Servicer pursuant to this
Agreement will be inaccurate in any
material respect, provided, however, that
the Servicer shall not be responsible
for inaccurate information provided to it
by third parties.
SECTION
2.09. [RESERVED].
SECTION
2.10. [RESERVED].
SECTION
2.11. Permitted Activities of the Trust Fund. The Trust Fund is
created for the object and purpose of
engaging in the Permitted Activities. In
furtherance of the foregoing, the Trustee
is
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hereby authorized and directed to execute
and deliver, on behalf of the Trust
Fund, the Cap Contract, and to execute and
deliver on behalf of the Trust Fund,
and to perform the duties and obligations
of the Trustee under an insurance and
indemnity agreement with a NIM Insurer and
any other agreement or instrument
related thereto, in each case in such form
as the Depositor shall direct or
shall approve, the execution and delivery
of any such agreement by the Depositor
to be conclusive evidence of its approval
thereof.
SECTION
2.12. Qualification of Special Purpose Entity. For purposes of
SFAS 140, the parties hereto intend that
the Trust Fund shall be treated as a
"qualifying special purpose entity" as such
term is used in SFAS 140 and any
successor rule thereto and its power and
authority as stated in Section 2.11 of
this Agreement shall be limited in
accordance with paragraph 35 of SFAS 140.
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
SECTION
3.01. Servicer to Service Mortgage Loans.
For and on
behalf of the Certificateholders, the Servicer shall service
and administer the Mortgage Loans in
accordance with Accepted Servicing
Practices. In connection with such
servicing and administration, the Servicer
shall have full power and authority, acting
alone and/or through subservicers as
provided in Section 3.02 hereof, to do or
cause to be done any and all things
that it may deem necessary or desirable in
connection with such servicing and
administration, including but not limited
to, the power and authority, subject
to the terms hereof (i) to execute and
deliver, on behalf of the
Certificateholders and the Trustee,
customary consents or waivers and other
instruments and documents, (ii) to consent
to transfers of any Mortgaged
Property and assumptions of the Mortgage
Notes and related Mortgages (but only
in the manner provided in this Agreement),
(iii) to collect any Insurance
Proceeds and other Liquidation Proceeds and
(iv) subject to Section 3.12(a), to
effectuate foreclosure or other conversion
of the ownership of the Mortgaged
Property securing any Mortgage Loan;
provided that, subject to Section 6.03, the
Servicer shall not take any action that is
inconsistent with or prejudices the
interests of the Trust Fund or the
Certificateholders in any Mortgage Loan
serviced by it under this Agreement or the
rights and interests of the other
parties to this Agreement except as
otherwise required by this Agreement or by
law. The Servicer shall represent and
protect the interest of the Trust Fund in
the same manner as it currently protects
its own interest in mortgage loans in
its own portfolio in any claim, proceeding
or litigation regarding a Mortgage
Loan, but in any case not in any manner
that is a lesser standard than that
provided in the first sentence of this
Section 3.01. Notwithstanding anything in
this Agreement to the contrary, the
Servicer shall not make or permit any
modification, waiver or amendment of any
term of any Mortgage Loan which would
cause any of the REMICs provided for herein
to fail to qualify as a REMIC or
result in the imposition of any tax under
Section 860G(a) or 860G(d) of the
Code. Without limiting the generality of
the foregoing, the Servicer, in its own
name or in the name of the Depositor and
the Trustee, is hereby authorized and
empowered by the
