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EXECUTION COPY
MERRILL LYNCH MORTGAGE INVESTORS, INC.,
Depositor
WILSHIRE CREDIT CORPORATION,
Servicer
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
----------
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 2005
----------
MERRILL LYNCH MORTGAGE INVESTORS TRUST,
MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2005-NCB
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ARTICLE I
DEFINITIONS....................................................
1
ARTICLE II CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES.. 43
SECTION 2.01. Conveyance of Mortgage
Loans........................... 43
SECTION 2.02. Acceptance by the Trustee of the
Mortgage Loans........ 46
SECTION 2.03. Representations, Warranties and
Covenants of the
Depositor..............................................
47
SECTION 2.04. Representations and Warranties of
the Servicer......... 52
SECTION 2.05. Substitutions and Repurchases of
Mortgage Loans that
are not "Qualified Mortgages"..........................
55
SECTION 2.06. Authentication and Delivery of
Certificates............ 56
SECTION 2.07. REMIC
Elections........................................ 56
SECTION 2.08.
[RESERVED].............................................
60
SECTION 2.09. Covenants of the
Servicer.............................. 60
SECTION 2.10.
[RESERVED].............................................
60
SECTION 2.11. Permitted Activities of the
Trust...................... 60
SECTION 2.12. Qualifying Special Purpose
Entity...................... 60
ARTICLE III ADMINISTRATION AND SERVICING OF
MORTGAGE LOANS............... 60
SECTION 3.01. Servicer to Service Mortgage
Loans..................... 60
SECTION 3.02. Servicing and Subservicing;
Enforcement of the
Obligations of Servicer................................
62
SECTION 3.03. Rights of the Depositor and the
Trustee in Respect of
the Servicer...........................................
63
SECTION 3.04.
[RESERVED].............................................
63
SECTION 3.05. Collection of Mortgage Loan
Payments; Collection
Account; Certificate Account...........................
64
SECTION 3.06. Collection of Taxes, Assessments
and Similar Items;
Escrow Accounts........................................
67
SECTION 3.07. Access to Certain Documentation
and Information
Regarding the Mortgage Loans...........................
68
SECTION 3.08. Permitted Withdrawals from the
Collection Account and
Certificate Account....................................
68
SECTION 3.09.
[RESERVED].............................................
70
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SECTION 3.10.
[RESERVED].............................................
70
SECTION 3.11. Enforcement of Due-On-Sale
Clauses; Assumption
Agreements.............................................
71
SECTION 3.13. Release of Mortgage
Files.............................. 76
SECTION 3.14. Documents, Records and Funds in
Possession of Servicer
to be Held for the Trustee.............................
77
SECTION 3.15. Servicing
Compensation................................. 77
SECTION 3.16. Access to Certain
Documentation........................ 78
SECTION 3.17. Annual Statement as to
Compliance...................... 78
SECTION 3.18. Annual Independent Public
Accountants' Servicing
Statement; Financial Statements........................
79
SECTION 3.19. Periodic
Filings....................................... 79
SECTION 3.20. Annual Certificate by
Trustee.......................... 79
SECTION 3.21.
[RESERVED].............................................
79
SECTION 3.22. Annual Certificate by
Servicer......................... 79
SECTION 3.23. Prepayment Charge Reporting
Requirements............... 80
SECTION 3.24. Information to the
Trustee............................. 80
SECTION 3.25.
Indemnification........................................
81
SECTION 3.26.
Nonsolicitation........................................
82
SECTION 3.27. High Cost Mortgage
Loans............................... 83
ARTICLE IV
DISTRIBUTIONS.................................................
83
SECTION 4.01.
Advances...............................................
83
SECTION 4.02. Reduction of Servicing
Compensation in Connection with
Prepayment Interest Shortfalls.........................
84
SECTION 4.03. Distributions on the REMIC
Interests................... 85
SECTION 4.04.
Distributions..........................................
85
SECTION 4.05. Monthly Statements to
Certificateholders............... 89
ARTICLE V THE
CERTIFICATES...............................................
92
SECTION 5.01. The
Certificates....................................... 92
SECTION 5.02. Certificate Register; Registration
of Transfer and
Exchange of Certificates...............................
93
SECTION 5.03. Mutilated, Destroyed, Lost or
Stolen Certificates...... 97
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SECTION 5.04. Persons Deemed
Owners.................................. 97
SECTION 5.05. Access to List of
Certificateholders' Names and
Addresses..............................................
97
SECTION 5.06. Book-Entry
Certificates................................ 98
SECTION 5.07. Notices to
Depository.................................. 99
SECTION 5.08. Definitive
Certificates................................ 99
SECTION 5.09. Maintenance of Office or
Agency........................ 100
SECTION 5.10. Authenticating
Agents.................................. 100
ARTICLE VI THE DEPOSITOR AND THE
SERVICER................................ 101
SECTION 6.01. Respective Liabilities of the
Depositor and the
Servicer...............................................
101
SECTION 6.02. Merger or Consolidation of the
Depositor or the
Servicer...............................................
101
SECTION 6.03. Limitation on Liability of the
Depositor, the Servicer
and Others.............................................
101
SECTION 6.04. Limitation on Resignation of
Servicer.................. 103
SECTION 6.05. Errors and Omissions Insurance;
Fidelity Bonds......... 103
ARTICLE VII DEFAULT; TERMINATION OF
SERVICER............................. 104
SECTION 7.01. Events of
Default...................................... 104
SECTION 7.02. Trustee to Act; Appointment of
Successor............... 106
SECTION 7.03. Notification to
Certificateholders..................... 107
ARTICLE VIII CONCERNING THE
TRUSTEE...................................... 107
SECTION 8.01. Duties of the
Trustee.................................. 107
SECTION 8.02. Certain Matters Affecting the
Trustee.................. 109
SECTION 8.03. Trustee Not Liable for
Certificates or Mortgage Loans.. 110
SECTION 8.04. Trustee May Own
Certificates........................... 110
SECTION 8.05. Trustee's Fees and
Expenses............................ 111
SECTION 8.06. Indemnification and Expenses of
Trustee................ 111
SECTION 8.07. Eligibility Requirements for
Trustee................... 112
SECTION 8.08. Resignation and Removal of
Trustee..................... 112
SECTION 8.09. Successor
Trustee...................................... 113
SECTION 8.10. Merger or Consolidation of
Trustee..................... 114
SECTION 8.11. Appointment of Co-Trustee or
Separate Trustee.......... 114
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SECTION 8.12. Tax
Matters............................................ 115
ARTICLE IX
TERMINATION...................................................
117
SECTION 9.01. Termination upon Liquidation or
Repurchase of all
Mortgage Loans.........................................
117
SECTION 9.02. Final Distribution on the
Certificates................. 119
SECTION 9.03. Additional Termination
Requirements.................... 120
ARTICLE X MISCELLANEOUS
PROVISIONS....................................... 122
SECTION 10.01.
Amendment..............................................
122
SECTION 10.02.
Counterparts...........................................
123
SECTION 10.03. Governing
Law.......................................... 123
SECTION 10.04. Intention of
Parties................................... 124
SECTION 10.05.
Notices................................................
124
SECTION 10.06. Severability
of Provisions............................. 125
SECTION 10.07.
Assignment.............................................
125
SECTION 10.08. Limitation on
Rights of Certificateholders............. 127
SECTION 10.09. Inspection
and Audit Rights............................ 127
SECTION 10.10. Certificates
Nonassessable and Fully Paid.............. 128
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
EXHIBIT G FORM OF
INVESTMENT LETTER
EXHIBIT H FORM OF RULE
144A LETTER
EXHIBIT I FORM OF REQUEST
FOR RELEASE
EXHIBIT J [RESERVED]
EXHIBIT K FORM OF
OFFICER'S CERTIFICATE OF TRUSTEE
EXHIBIT L FORM OF
OFFICER'S CERTIFICATE OF SERVICER
EXHIBIT M-1 FORM OF DELINQUENCY
REPORT
EXHIBIT M-2 FORM OF MONTHLY REMITTANCE
ADVICE
EXHIBIT N FORM OF AUCTION
PROCEDURES
EXHIBIT O FORM OF
TRANSFEROR REPRESENTATION LETTER FOR TRANSFER TO
REGULATION S BOOK-ENTRY CERTIFICATE
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FROM A HOLDER OF A RULE 144A BOOK-ENTRY CERTIFICATE OR
DEFINITIVE CERTIFICATE
EXHIBIT P FORM OF
TRANSFEROR REPRESENTATION LETTER FOR TRANSFER
PURSUANT TO RULE 144A FROM A HOLDER OF A REGULATION S
BOOK-ENTRY CERTIFICATE OR DEFINITIVE CERTIFICATE
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POOLING AND
SERVICING AGREEMENT, dated as of November 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 DEUTSCHE BANK
NATIONAL TRUST COMPANY, 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 two (i) two real
estate mortgage investment conduits,
(ii) the right to receive payments
distributable to the Class P Certificates
pursuant to Section 4.04(b)(i) hereof and
(iii) the grantor trusts described in
Section 2.07 hereof. The Lower Tier REMIC
will consist of all of the assets
constituting the Trust Fund (other than the
assets described in clauses (ii) and
(iii) above and the Lower Tier REMIC
Regular Interests) and will be evidenced by
the Lower Tier REMIC Regular Interests
(which will be uncertificated and will
represent the "regular interests" in the
Lower Tier REMIC) and the Class LTR
Interest as the single "residual interest"
in the Lower Tier REMIC. The Trustee
will hold the Lower Tier REMIC Regular
Interests. The Upper Tier REMIC will
consist of the Lower Tier REMIC Regular
Interests and will be evidenced by the
REMIC Regular Interests (which will
represent the "regular interests" in the
Upper Tier REMIC) and the Residual Interest
as the single "residual interest" in
the Upper Tier REMIC. The Class R
Certificate will represent beneficial
ownership of the Class LTR Interest and the
Residual Interest. The "latest
possible maturity date" for federal income
tax purposes of all interests created
hereby will be the Latest Possible Maturity
Date.
All covenants
and agreements made by the Sellers 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.
In consideration
of the mutual agreements herein contained, the Depositor,
the Servicer and the Trustee hereby agree
as follows:
ARTICLE I
DEFINITIONS
Whenever used in
this Agreement, the following words and phrases, unless
the context otherwise requires, shall have
the following meanings:
Accepted
Servicing Practices: The Servicer's normal servicing practices,
which will conform to the mortgage
servicing practices of prudent mortgage
lending institutions that service for their
own account mortgage loans of the
same type as the Mortgages Loans in the
jurisdictions in which the related
Mortgaged Properties are located.
Accrual Period:
With respect to the Class M and Class B Certificates and
the Lower Tier REMIC Interests and any
Distribution Date, the period from and
including the preceding Distribution Date
(or from the Closing Date in the case
of the first Distribution Date) to and
including the day prior to such
Distribution Date and with respect to the
Class A and Class R
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Certificates and a Distribution Date, the
calendar month preceding the month in
which such Distribution Date occurs. All
calculations of interest on each Class
of Class M and Class B Certificates and the
Lower Tier REMIC Interests will be
made on the basis of the actual number of
days elapsed in the related Accrual
Period and a 360 day year and all
calculations of interest on each Class of
Class A and Class R Certificates will be
made on the basis of a 360 day year
consisting of twelve 30-day months.
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 Fees) on the Mortgage Loans that
were due during the applicable Due Period
and not received as of the close of
business on the related Determination Date,
less the aggregate amount of any
such Delinquent payments that the Servicer
has determined would constitute a
Non-Recoverable Advance were an advance to
be made with respect thereto;
provided, however, that with respect to any
Mortgage Loan that is 150 days
delinquent or more (whether or not the
Mortgage Loan has been converted to an
REO Property), there will be no obligation
to make Advances and, provided
further, however, that with respect to any
Mortgage Loan that has been converted
to an REO Property which is less than 150
days delinquent, the obligation to
make Advances shall only be to payments of
interest.
Advance
Facility: A financing or other facility as described in Section
10.07.
Advancing
Person: The Person to whom the Servicer's rights under this
Agreement to be reimbursed for any Advances
or Servicing Advances have been
assigned pursuant to Section 10.07.
Affiliate: With
respect to any specified Person, any other Person
controlling, controlled by or under common
control with such Person. For the
purposes of this definition, "control"
means the power to direct the management
and policies of a Person, directly or
indirectly, whether through ownership of
voting securities, by contract or
otherwise; and the terms "controlling" and
"controlled" have meanings correlative to
the foregoing.
Aggregate
Certificate Principal Balance: For any date of determination,
the
sum of the Class A 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
B-1 Certificate Principal Balance, the
Class B-2 Certificate Principal Balance,
the Class B-3 Certificate Principal
Balance, the Class B-4 Certificate
Principal Balance and the Class B-5
Certificate Principal Balance, in each case
as of such date of determination.
Agreement: This
Pooling and Servicing Agreement and any and all amendments
or supplements hereto made in accordance
with the terms herein.
Applied Realized
Loss Amount: With respect to any Distribution Date, the
amount, if any, by which the sum of (i) the
Aggregate Certificate Principal
Balance and (ii) the Class C Certificate
Principal Balance after distributions
of principal on such Distribution Date
exceeds the aggregate Stated Principal
Balance of the Mortgage Loans as of such
Distribution Date.
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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 Sellers 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 one or more blanket
assignments covering Mortgages
secured by Mortgaged Properties located in
the same county.
Auction: The
one-time auction conducted by the Trustee, as described in
Section 9.01(b) hereof.
Auction Agent:
Any nationally recognized dealer in mortgage securities,
which may include an affiliate of the
Sellers, chosen by the Trustee and the
Sellers in consultation.
Authenticating
Agent: As defined in Section 5.10.
Available Funds
Cap: With respect to any Distribution Date for the Class M
and Class B Certificates, the per annum
rate equal to 12 times 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 principal
balance of the Offered Certificates and the
Class B-4 and Class B-5 Certificates
immediately prior to such Distribution Date
with such rate being multiplied by
30 and divided by the actual number of days
in the related Accrual Period; and
with respect to any Distribution Date for
the Class A and Class R Certificates,
the per annum rate equal to 12 times 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 principal balance of the Offered
Certificates and the Class B-4 and Class
B-5 Certificates immediately prior to
such Distribution Date.
Balloon Loan: A
Mortgage Loan having an original term to stated maturity of
approximately 15 years or 20 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
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(other than the Class R), Class M and Class
B Certificates constitutes a Class
of Book-Entry Certificates.
Bring Down
Letter: That certain letter agreement, dated as of November 29,
2005 between the Sellers and the
Transferors.
Business Day:
Any day other than (1) a Saturday or a Sunday, or (2) a day
on which banking institutions in the State
of California, State of Oregon and in
the City of New York, New York are
authorized or obligated by law or executive
order to be closed.
Certificate: Any
one of the certificates of any Class executed by the
Trustee and authenticated by the
Authenticating Agent in substantially the forms
attached hereto as Exhibit A.
Certificate
Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 3.05(e)
in the name of the Trustee for the
benefit of the Certificateholders and
designated "Deutsche Bank National Trust
Company, as trustee, in trust for
registered holders of Merrill Lynch Mortgage
Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-NCB."
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(i). On each Distribution Date, after
all distributions of principal on such
Distribution Date, a portion of the Class C
Interest Carry Forward Amount in an
amount equal to the excess of the
Overcollateralization Amount on such
Distribution Date over the
Overcollateralization Amount as of the preceding
Distribution Date (or, in the case of the
first Distribution Date, the initial
Overcollateralization Amount (based on the
Stated Principal Balance of the
Mortgage Loans as of the Cut-Off Date))
will be added to the aggregate
Certificate Principal Balance of the Class
C Certificates (on a pro rata basis).
Notwithstanding the foregoing on any
Distribution Date relating to a Due Period
in which a Subsequent Recovery has been
received by the Servicer, the
Certificate Principal Balance of any Class
of Certificates then outstanding for
which any Applied Realized Loss Amount has
been allocated will be increased, in
order of seniority, by an amount equal to
the lesser of (i) the Unpaid Realized
Loss Amount for such Class of Certificates
and (ii) the total of any Subsequent
Recovery distributed on such date to the
Certificateholders (reduced by the
amount of the increase in the Certificate
Principal Balance of any more senior
Class of Certificates pursuant to this
sentence on such Distribution Date).
Certificate
Register: The register maintained pursuant to Section 5.02
hereof.
Certificateholder or Holder: The Person in whose name a Certificate
is
registered in the Certificate Register
(initially, Cede & Co., as nominee for
the Depository) in the case of any
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Class of Regular Certificates or the Class
R Certificate, except that solely for
the purpose of giving any consent pursuant
to this Agreement, any Certificate
registered in the name of the Depositor or
any Affiliate of the Depositor shall
be deemed not to be Outstanding and the
Percentage Interest evidenced thereby
shall not be taken into account in
determining whether the requisite amount of
Percentage Interests necessary to effect
such consent has been obtained;
provided, however, that if any such Person
(including the Depositor) owns 100%
of the Percentage Interests evidenced by a
Class of Certificates, such
Certificates shall be deemed to be
Outstanding for purposes of any provision
hereof that requires the consent of the
Holders of Certificates of a particular
Class as a condition to the taking of any
action hereunder. The Trustee is
entitled to rely conclusively on a
certification of the Depositor or any
Affiliate of the Depositor in determining
which Certificates are registered in
the name of an Affiliate of the
Depositor.
Class: All
Certificates bearing the same Class designation as set forth in
Section 5.01 hereof.
Class A
Certificate: Any Certificate designated as a "Class A-1A
Certificate" or "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-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 Current Interest and Interest Carry
Forward Amount portions of any previous
distributions on such Class that are
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. For purposes of
calculating interest, principal
distributions on a Distribution Date will be
deemed to have been made on the first day
of the Accrual Period in which such
Distribution Date occurs.
Class A-1A
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-1A
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
A-1A Certificates with respect to interest
on such prior Distribution Dates and
(2) interest on such excess (to the extent
permitted by applicable law) at the
Class A-1A Pass-Through Rate for the
related Accrual Period.
Class A-1A
Pass-Through Rate: As of any Distribution Date, the lesser of
(1) 5.4508% and (2) the Available Funds
Cap.
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 Current Interest and Interest Carry
Forward Amount portions of any previous
distributions on such Class that are
recovered as a
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voidable preference by a trustee in
bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution
Date to the Class A-1B Certificates.
For purposes of calculating interest,
principal distributions on a Distribution
Date will be deemed to have been made on
the first day of the Accrual Period in
which such Distribution Date occurs.
Class A-1B
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-1B
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
A-1B Certificates with respect to interest
on such prior Distribution Dates and
(2) interest on such excess (to the extent
permitted by applicable law) at the
Class A-1B Pass-Through Rate for the
related Accrual Period.
Class A-1B
Pass-Through Rate: As of any Distribution Date on or before the
Initial Optional Termination Date, the
lesser of (1) 5.4563% and (2) the
Available Funds Cap; and as of any
Distribution Date after the Initial Optional
Termination Date, the lesser of (1) 5.9563%
and (2) the Available Funds Cap.
Class A
Principal Distribution Amount: With respect to any Distribution
Date (1) prior to the Stepdown Date or any
Distribution Date on which a Trigger
Event exists, 100% of the Principal
Distribution Amount for such Distribution
Date and (2) on or after the Stepdown Date
where a Trigger Event does not exist,
the excess of (A) the sum of the Class A
Certificate Principal Balance and the
Class R Certificate Principal Balance
immediately prior to such Distribution
Date over (B) the lesser of (i) 27.60% of
the Stated Principal Balance of the
Mortgage Loans as of the end of the
immediately preceding Due Period and (ii)
the excess of the Stated Principal Balance
of the Mortgage Loans as of the end
of the immediately preceding Due Period
over the Minimum Required
Overcollateralization Amount; provided,
however, that in no event will the Class
A Principal Distribution Amount with
respect to any Distribution Date exceed the
aggregate Certificate Principal Balance of
the Class A and Class R Certificates.
Class B
Certificates: The Class B-1 Certificates, Class B-2
Certificates,
Class B-3 Certificates, Class B-4
Certificates and Class B-5 Certificates.
Class B-1
Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts
with respect to the Mortgage Loans
which have been applied to the reduction of
the Certificate Principal Balance of
the Class B-1 Certificates.
Class B-1
Certificate: Any Certificate designated as a "Class B-1
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class B-1
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class B-1 Certificates.
Class B-1
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class B-1 Pass-Through Rate on
the Class B-1 Certificate Principal Balance
as of such Distribution Date plus
the Current Interest and Interest Carry
Forward Amount portions of any previous
distributions on such Class that are
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. For purposes of
calculating interest,
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<PAGE>
principal distributions on a Distribution
Date will be deemed to have been made
on the first day of the Accrual Period in
which such Distribution Date occurs.
Class B-1
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-1
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
B-1 Certificates with respect to interest
on such prior Distribution Dates and
(2) interest on such excess (to the extent
permitted by applicable law) at the
Class B-1 Pass-Through Rate for the related
Accrual Period.
Class B-1
Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 1.50%
per annum and, as of any Distribution
Date after the Initial Optional Termination
Date, 2.25% per annum.
Class B-1
Pass-Through Rate: For the first Distribution Date, 5.7193% per
annum. As of any Distribution Date
thereafter, the lesser of (1) One-Month LIBOR
plus the Class B-1 Margin and (2) 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 Class A
Certificate Principal Balance, the
Class R Certificate Principal Balance, the
Class M-1 Certificate Principal
Balance and the Class M-2 Certificate
Principal Balance have been reduced to
zero and a Trigger Event exists, or as long
as a Trigger Event does not exist,
the excess of (1) the sum of (A) the sum of
the Class A Certificate Principal
Balance and the Class R Certificate
Principal Balance (after taking into account
distributions of the Class A Principal
Distribution Amount on such Distribution
Date), (B) the Class M-1 Certificate
Principal Balance (after taking into
account distributions of the Class M-1
Principal Distribution Amount on such
Distribution Date), (C) the Class M-2
Certificate Principal Balance (after
taking into account distributions of the
Class M-2 Principal Distribution Amount
on such Distribution Date), (D) the Class
B-1 Certificate Principal Balance
immediately prior to such Distribution Date
over (2) the lesser of (A) 68.70% of
the aggregate 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, provided,
however, that on any Distribution Date
prior to the Stepdown Date on which the
Class A Certificate Principal Balance, the
Class R Certificate Principal
Balance, the Class M-1 Certificate
Principal Balance and the Class M-2
Certificate Principal Balance have been
reduced to zero, the Class B-1 Principal
Distribution Amount for such Distribution
Date will equal the lesser of (A) the
outstanding Class B-1 Certificate Principal
Balance and (B) 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 provided further, however,
that 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."
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<PAGE>
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 Current Interest and Interest Carry
Forward Amount portions of any previous
distributions on such Class that are
recovered as a voidable preference by a
trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class B-2
Certificates. For purposes of
calculating interest, principal
distributions on a Distribution Date will be
deemed to have been made on the first day
of the Accrual Period in which such
Distribution Date occurs.
Class B-2
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-2
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
B-2 Certificates with respect to interest
on such prior Distribution Dates and
(2) interest on such excess (to the extent
permitted by applicable law) at the
Class B-2 Pass-Through Rate for the related
Accrual Period.
Class B-2
Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 1.90%
per annum and, as of any Distribution
Date after the Initial Optional Termination
Date, 2.85% per annum.
Class B-2
Pass-Through Rate: For the first Distribution Date, 6.1193% per
annum. As of any Distribution Date
thereafter, the lesser of (1) One-Month LIBOR
plus the Class B-2 Margin and (2) the
Available Funds Cap for such Distribution
Date.
Class B-2
Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of
the Principal Distribution Amount
for such Distribution Date if the Class A
Certificate Principal Balance, the
Class R Certificate Principal Balance, the
Class M-1 Certificate Principal
Balance, the Class M-2 Certificate
Principal Balance and the Class B-1
Certificate Principal Balance have been
reduced to zero and a Trigger Event
exists, or as long as a Trigger Event does
not exist, the excess of (1) the sum
of (A) the sum of the Class A Certificate
Principal Balance and the Class R
Certificate Principal Balance (after taking
into account distributions of the
Class A Principal Distribution Amount on
such Distribution Date), (B) the Class
M-1 Certificate Principal Balance (after
taking into account distributions of
the Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance
(after taking into account distributions
of the Class M-2 Principal Distribution
Amount on such Distribution Date), (D)
the Class B-1 Certificate Principal Balance
(after taking into account
distributions of the Class B-1 Principal
Distribution Amount on such
Distribution Date) and (E) the Class B-2
Certificate Principal Balance
immediately prior to such
-8-
<PAGE>
Distribution Date over (2) the lesser of
(A) 72.40% 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 aggregate
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 on any
Distribution Date prior to the Stepdown
Date on which the Class A Certificate
Principal Balance, the Class R Certificate
Principal Balance, the Class M-1
Certificate Principal Balance, the Class
M-2 Certificate Principal Balance and
the Class B-1 Certificate Principal Balance
have been reduced to zero, the Class
B-2 Principal Distribution Amount for such
Distribution Date will equal the
lesser of (A) the outstanding Class B-2
Principal Distribution Amount and (B)
100% of the Principal Distribution Amount
remaining after any distributions on
such Class A, Class R, Class M-1, Class M-2
and Class B-1 Certificates; and
provided further, however, that 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 Current Interest and Interest Carry
Forward Amount portions of any previous
distributions on such Class that are
recovered as a voidable preference by a
trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class B-3
Certificates. For purposes of
calculating interest, principal
distributions on a Distribution Date will be
deemed to have been made on the first day
of the Accrual Period in which such
Distribution Date occurs.
Class B-3
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-3
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
B-3 Certificates with respect to interest
on such prior Distribution Dates and
(2) interest on such excess (to the extent
permitted by applicable law) at the
Class B-3 Pass-Through Rate for the related
Accrual Period.
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<PAGE>
Class B-3
Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 2.50%
per annum and, as of any Distribution
Date after the Initial Optional Termination
Date, 3.75% per annum.
Class B-3
Pass-Through Rate: For the first Distribution Date, 6.7193% per
annum. As of any Distribution Date
thereafter, the lesser of (1) One-Month LIBOR
plus the Class B-3 Margin and (2) 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 Class A
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 B-1 Certificate
Principal Balance and the Class B-2
Certificate Principal Balance have been
reduced to zero and a Trigger Event exists,
or as long as a Trigger Event does
not exist, the excess of (1) the sum of (A)
the sum of the Class A Certificate
Principal Balance and the Class R
Certificate Principal Balance (after taking
into account distributions of the Class A
Principal Distribution Amount on such
Distribution Date), (B) the Class M-1
Certificate Principal Balance (after
taking into account distributions of the
Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Class
M-2 Certificate Principal Balance
(after taking into account distributions of
the Class M-2 Principal Distribution
Amount on such Distribution Date), (D) the
Class B-1 Certificate Principal
Balance (after taking into account
distributions of the Class B-1 Principal
Distribution Amount on such Distribution
Date), (E) 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 (F) the Class B-3
Certificate Principal Balance immediately
prior to such Distribution Date over
(2) the lesser of (A) 75.80% of the
aggregate 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; provided,
however, that on any Distribution Date
prior to the Stepdown Date on which the
Class A 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 B-1 Certificate
Principal Balance and the Class B-2
Certificate Principal Balance have been
reduced to zero, the Class B-3 Principal
Distribution Amount for such
Distribution Date will equal the lesser of
(A) the outstanding Class B-3
Certificate Principal Balance and (B) 100%
of the Principal Distribution Amount
remaining after any distributions on such
Class A, Class R, Class M-1, Class
M-2, Class B-1 and Class B-2 Certificates;
and provided further, however, that
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."
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<PAGE>
Class B-4
Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts
with respect to the Mortgage Loans
which have been applied to the reduction of
the Certificate Principal Balance of
the Class B-4 Certificates.
Class B-4
Certificate: Any Certificate designated as a "Class B-4
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class B-4
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class B-4 Certificates.
Class B-4
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class B-4 Pass-Through Rate on
the Class B-4 Certificate Principal Balance
as of such Distribution Date plus
the Current Interest and Interest Carry
Forward Amount portions of any previous
distributions on such Class that are
recovered as a voidable preference by a
trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class B-4
Certificates. For purposes of
calculating interest, principal
distributions on a Distribution Date will be
deemed to have been made on the first day
of the Accrual Period in which such
Distribution Date occurs.
Class B-4
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-4
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
B-4 Certificates with respect to interest
on such prior Distribution Dates and
(2) interest on such excess (to the extent
permitted by applicable law) at the
Class B-4 Pass-Through Rate for the related
Accrual Period.
Class B-4
Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 4.25%
per annum and, as of any Distribution
Date after the Initial Optional Termination
Date, 6.375% per annum.
Class B-4
Pass-Through Rate: For the first Distribution Date, 8.4693% per
annum. As of any Distribution Date
thereafter, the lesser of (1) One-Month LIBOR
plus the Class B-4 Margin and (2) the
Available Funds Cap for such Distribution
Date.
Class B-4
Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of
the Principal Distribution Amount
for such Distribution Date if the Class A
Certificate Principal Balance, the
Class R Certificate Principal Balance, the
Class M-1 Certificate Principal
Balance, the Class M-2 Certificate
Principal Balance, the Class B-1 Certificate
Principal Balance, the Class B-2
Certificate Principal Balance and the Class B-3
Certificate Principal Balance have been
reduced to zero and a Trigger Event
exists, or as long as a Trigger Event does
not exist, the excess of (1) the sum
of (A) the sum of the Class A Certificate
Principal Balance and the Class R
Certificate Principal Balance (after taking
into account distributions of the
Class A Principal Distribution Amount on
such Distribution Date), (B) the Class
M-1 Certificate Principal Balance (after
taking into account distributions of
the Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance
(after taking into account distributions
of the Class M-2 Principal Distribution
Amount on such Distribution Date), (D)
the Class B-1 Certificate Principal Balance
(after taking into account
distributions of the Class B-1 Principal
Distribution Amount on such
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<PAGE>
Distribution Date), (E) the Class B-2
Certificate Principal Balance (after
taking into account distributions of the
Class B-2 Principal Distribution Amount
on such Distribution Date), (F) the Class
B-3 Certificate Principal Balance
(after taking into account distributions of
the Class B-3 Principal Distribution
Amount on such Distribution Date) and (G)
the Class B-4 Certificate Principal
Balance immediately prior to such
Distribution Date over (2) the lesser of (A)
79.30% of the aggregate 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;
provided, however, that on any Distribution
Date prior to the Stepdown Date on
which the Class A 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
B-1 Certificate Principal Balance, the
Class B-2 Certificate Principal Balance and
the Class B-3 Certificate Principal
Balance have been reduced to zero, the
Class B-4 Principal Distribution Amount
for such Distribution Date will equal the
lesser of (A) the outstanding Class
B-4 Certificate Principal Balance and (B)
100% of the Principal Distribution
Amount remaining after any distributions on
such Class A, Class R, Class M-1,
Class M-2, Class B-1, Class B-2 and Class
B-3 Certificates; and provided
further, however, that in no event will the
Class B-4 Principal Distribution
Amount with respect to any Distribution
Date exceed the Class B-4 Certificate
Principal Balance.
Class B-4 Unpaid
Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-4 Applied
Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class
B-4 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all
increases in the Certificate
Principal Balance of such Class B-4
Certificates pursuant to the last sentence
of the definition of "Certificate Principal
Balance."
Class B-5
Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts
with respect to the Mortgage Loans
which have been applied to the reduction of
the Certificate Principal Balance of
the Class B-5 Certificates.
Class B-5
Certificate: Any Certificate designated as a "Class B-5
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class B-5
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class B-5 Certificates.
Class B-5
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class B-5 Pass-Through Rate on
the Class B-5 Certificate Principal Balance
as of such Distribution Date plus
the Current Interest and Interest Carry
Forward Amount portions of any previous
distributions on such Class that are
recovered as a voidable preference by a
trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class B-5
Certificates. For purposes of
calculating interest, principal
distributions on a Distribution Date will be
deemed to have been made on the first day
of the Accrual Period in which such
Distribution Date occurs.
Class B-5
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-5
Current Interest with respect to
prior Distribution Dates over (B)
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<PAGE>
the amount actually distributed to the
Class B-5 Certificates with respect to
interest on such prior Distribution Dates
and (2) interest on such excess (to
the extent permitted by applicable law) at
the Class B-5 Pass-Through Rate for
the related Accrual Period.
Class B-5
Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 4.25%
per annum and, as of any Distribution
Date after the Initial Optional Termination
Date, 6.375% per annum.
Class B-5
Pass-Through Rate: For the first Distribution Date, 8.4693% per
annum. As of any Distribution Date
thereafter, the lesser of (1) One-Month LIBOR
plus the Class B-5 Margin and (2) the
Available Funds Cap for such Distribution
Date.
Class B-5
Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of
the Principal Distribution Amount
for such Distribution Date if the Class A
Certificate Principal Balance, the
Class R Certificate Principal Balance, the
Class M-1 Certificate Principal
Balance, the Class M-2 Certificate
Principal Balance, the Class B-1 Certificate
Principal Balance, the Class B-2
Certificate Principal Balance, the Class B-3
Certificate Principal Balance and the Class
B-4 Certificate Principal Balance
have been reduced to zero and a Trigger
Event exists, or as long as a Trigger
Event does not exist, the excess of (1) the
sum of (A) the sum of the Class A
Certificate Principal Balance and the Class
R Certificate Principal Balance
(after taking into account distributions of
the Class A Principal Distribution
Amount on such Distribution Date), (B) the
Class M-1 Certificate Principal
Balance (after taking into account
distributions of the Class M-1 Principal
Distribution Amount on such Distribution
Date), (C) the Class M-2 Certificate
Principal Balance (after taking into
account distributions of the Class M-2
Principal Distribution Amount on such
Distribution Date), (D) the Class B-1
Certificate Principal Balance (after taking
into account distributions of the
Class B-1 Principal Distribution Amount on
such Distribution Date), (E) the
Class B-2 Certificate Principal Balance
(after taking into account distributions
of the Class B-2 Principal Distribution
Amount on such Distribution Date), (F)
the Class B-3 Certificate Principal Balance
(after taking into account
distributions of the Class B-3 Principal
Distribution Amount on such
Distribution Date), (G) the Class B-4
Certificate Principal Balance (after
taking into account distributions of the
Class B-4 Principal Distribution Amount
on such Distribution Date) and (H) the
Class B-5 Certificate Principal Balance
immediately prior to such Distribution Date
over (2) the lesser of (A) 82.70% of
the aggregate 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; provided,
however, that on any Distribution Date
prior to the Stepdown Date on which the
Class A 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 B-1
Certificate Principal Balance, the Class B-2
Certificate Principal Balance, the Class
B-3 Certificate Principal Balance and
the Class B-4 Certificate Principal Balance
have been reduced to zero, the Class
B-5 Principal Distribution Amount for such
Distribution Date will equal the
lesser of (A) the outstanding Class B-5
Certificate Principal Balance and (B)
100% of the Principal Distribution Amount
remaining after any distributions on
such Class A, Class R, Class M-1, Class
M-2, Class B-1, Class B-2, Class B-3 and
Class B-4 Certificates; and provided
further, however, that in no event will the
Class B-5 Principal
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<PAGE>
Distribution Amount with respect to any
Distribution Date exceed the Class B-5
Certificate Principal Balance.
Class B-5 Unpaid
Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-5 Applied
Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class
B-5 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all
increases in the Certificate
Principal Balance of such Class B-5
Certificates pursuant to the last sentence
of the definition of "Certificate Principal
Balance."
Class C Applied
Realized Loss Amount: As of any Distribution Date, the sum
of all Applied Realized Loss Amounts with
respect to the Mortgage Loans which
have been applied to the reduction of the
Certificate Principal Balance of the
Class C Certificates.
Class C
Certificate: Any Certificate designated as a "Class C
Certificate"
on the face thereof, in the form of Exhibit
A hereto, representing the right to
distributions as set forth herein.
Class C
Certificate Principal Balance: As of any date of determination,
the
aggregate Certificate Principal Balance of
the Class C Certificates.
Class C Current
Interest: As of any Distribution Date, the interest accrued
during the related Accrual Period at the
Class C Distributable Interest Rate on
a notional amount equal to 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
(as adjusted for the length of the
Accrual Period) 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 Amounts on
all previous Distribution Dates and (y) all
increases in the Certificate
Principal Balance of such Class C
Certificates pursuant to the last sentence of
the definition of "Certificate Principal
Balance."
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<PAGE>
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 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.
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 LTB-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 LTB-5
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 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 an interest
rate equal to the Net Rate.
Class M
Certificates: The Class M-1 Certificates and Class M-2
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.
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<PAGE>
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 Current Interest and Interest Carry
Forward Amount portions of any previous
distributions on such Class that are
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. For purposes of
calculating interest, principal
distributions on a Distribution Date will be
deemed to have been made on the first day
of the Accrual Period in which such
Distribution Date occurs.
Class M-1
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-1
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
M-1 Certificates with respect to interest
on such prior Distribution Dates and
(2) interest on such excess (to the extent
permitted by applicable law) at the
Class M-1 Pass-Through Rate for the related
Accrual Period.
Class M-1
Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.470%
per annum and, as of any Distribution
Date after the Initial Optional Termination
Date, 0.705% per annum.
Class M-1
Pass-Through Rate: For the first Distribution Date, 4.6893% per
annum. As of any Distribution Date
thereafter, the lesser of (1) One-Month LIBOR
plus the Class M-1 Margin and (2) 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 Class A
Certificate Principal Balance and the
Class R Certificate Principal Balance has
been reduced to zero and a Trigger
Event exists, or as long as a Trigger Event
does not exist, the excess of (1)
the sum of (A) the sum of the Class A
Certificate Principal Balance and the
Class R Certificate Principal Balance
(after taking into account distributions
of the Class A Principal Distribution
Amount on such Distribution Date) and (B)
the Class M-1 Certificate Principal Balance
immediately prior to such
Distribution Date over (2) the lesser of
(A) 45.20% 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 aggregate
Stated Principal Balances for the
Mortgage Loans as of the end of the
immediately preceding Due Period over the
Minimum Required Overcollateralization
Amount; provided, however, that on any
Distribution Date prior to the Stepdown
Date on which the Class A Certificate
Principal Balance and the Class R
Certificate Principal Balance has been reduced
to zero, the Class M-1 Principal
Distribution Amount will equal the lesser of
(A) the outstanding Class M-1 Certificate
Principal Balance and (B) 100% of the
Principal Distribution Amount remaining
after any distributions on such Class A
and Class R Certificates; and, provided,
further that in no event will the Class
M-1 Principal Distribution
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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 Current Interest and Interest Carry
Forward Amount portions of any previous
distributions on such Class that are
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. For purposes of
calculating interest, principal
distributions on a Distribution Date will be
deemed to have been made on the first day
of the Accrual Period in which such
Distribution Date occurs.
Class M-2
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-2
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
M-2 Certificates with respect to interest
on such prior Distribution Dates and
(2) interest on such excess (to the extent
permitted by applicable law) at the
Class M-2 Pass-Through Rate for the related
Accrual Period.
Class M-2
Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.700%
per annum and, as of any Distribution
Date after the Initial Optional Termination
Date, 1.05% per annum.
Class M-2 Pass-Through Rate: For the first Distribution Date,
4.9193%
per annum. As of any Distribution Date
thereafter, the lesser of (1) One-Month
LIBOR plus the Class M-2 Margin and (2) 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 each of the
Class A Certificate Principal Balance,
the Class R Certificate Principal Balance
and the Class M-1 Certificate
Principal Balance has been reduced to zero
and a Trigger Event exists, or as
long as a Trigger Event does not exist, the
excess of (1) the sum of (A) the sum
of the Class
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A Certificate Principal Balance and the
Class R Certificate Principal Balance
(after taking into account distributions of
the Class A Principal Distribution
Amount on such Distribution Date), (B) the
Class M-1 Certificate Principal
Balance (after taking into account
distributions of the Class M-1 Principal
Distribution Amount on such Distribution
Date) and (C) the Class M-2 Certificate
Principal Balance immediately prior to such
Distribution Date over (2) the
lesser of (A) 60.10% of the aggregate
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; provided, however, that on any
Distribution Date prior to the Stepdown
Date on which the Class A Certificate
Principal Balance, the Class R Certificate
Principal Balance and the Class M-1
Certificate Principal Balance have been
reduced to zero, the Class M-2 Principal
Distribution Amount will equal the
lesser of (A) the outstanding Class M-2
Certificate Principal Balance and (B)
100% of the Principal Distribution Amount
remaining after any distributions on
such Class A, Class R and Class M-1
Certificates; provided, further, however, 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 P
Certificate: Any Certificate designated as a "Class P
Certificate"
on the face thereof, in the form of Exhibit
A hereto, representing the right to
distributions as set forth herein.
Class R
Certificate: Any Certificate designated as a "Class R
Certificate"
on the face thereof, in the form of Exhibit
A hereto, representing the right to
distributions as set forth herein.
Class R
Certificate Principal Balance: As of any date of determination,
the
aggregate Certificate Principal Balance of
the Class R Certificate.
Class R Current
Interest: As of any Distribution Date, the interest accrued
during the related Accrual Period at the
Class R Pass-Through Rate on the Class
R Certificate Principal Balance as of such
Distribution Date plus the Current
Interest and Interest Carry Forward Amount
portions of any previous
distributions on such Class that are
recovered as a voidable preference by a
trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class R
Certificate. For purposes of calculating
interest, principal distributions on a
Distribution Date will be deemed to have
been made on the first day of the Accrual
Period in which such Distribution Date
occurs.
Class R Interest
Carry Forward Amount: As of any Distribution Date, the sum
of (1) the excess of (A) the Class R
Current Interest with respect to prior
Distribution Dates over (B) the amount
actually distributed to the Class R
Certificate with respect to interest on
such prior Distribution Dates and (2)
interest on such excess (to the extent
permitted by applicable law) at the Class
R Pass-Through Rate for the related Accrual
Period.
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<PAGE>
Class R
Pass-Through Rate: As of any Distribution Date, the lesser of
(1)
5.4508% and (2) the Available Funds
Cap.
Closing Date:
November 29, 2005.
Code: The
Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection
Account: The separate Eligible Account created and initially
maintained by the Servicer pursuant to
Section 3.05(d) in the name of the
Trustee for the benefit of the
Certificateholders and designated "Wilshire
Credit Corporation, as servicer for
Deutsche Bank, National Trust Company, as
trustee, in trust for registered holders of
Merrill Lynch Mortgage Investors
Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-NCB". Funds in the
Collection Account shall be held in trust
for the Certificateholders for the
uses and purposes set forth in this
Agreement.
Combined
Loan-to-Value Ratio: The fraction, expressed as a percentage,
the
numerator of which is the sum of (1) the
original principal balance of the
related Mortgage Loan and (2) any
outstanding principal balances of Mortgage
Loans the liens on which are senior to the
lien on such related Mortgage Loan
(such sum calculated at the date of
origination of such related Mortgage Loan)
and the denominator of which is the lesser
of (A) the Appraised Value of the
related Mortgaged Property and (B) the
sales price of the related Mortgaged
Property at time of origination.
Compensating
Interest: For any Distribution Date and all Principal
Prepayments in full in respect of a
Mortgage Loan that are received during the
period from the first day of the related
Prepayment Period through the last day
of the calendar month preceding such
Distribution Date, a payment made by the
Servicer in an amount not to exceed the
product of (a) one-twelfth of 0.25% and
(b) the aggregate Stated Principal Balance
of the Mortgage Loans for such
Distribution Date, equal to the amount of
interest at the Net Mortgage Rate for
that Mortgage Loan from the date of
prepayment through the 30th day of such
preceding calendar month.
Corporate Trust
Office: With respect to the Trustee, the principal
corporate trust office of the Trustee at
which at any particular time its
corporate trust business shall be
administered, which office at the date of
execution of this Agreement is located at
1761 East St. Andrew Place, Santa Ana,
California 92705, Attention: Trust
Administration - ML05CA.
Current
Interest: Any of the Class A-1A Current Interest, the Class
A-1B
Current Interest, the Class R Current
Interest, the Class M-1 Current Interest,
the Class M-2 Current Interest, the Class
B-1 Current Interest, the Class B-2
Current Interest, the Class B-3 Current
Interest, the Class B-4 Current
Interest, the Class B-5 Current Interest
and the Class C Current Interest.
Cut-off Date:
November 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
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<PAGE>
received, and all Principal Prepayments
received prior to the Cut-off Date, but
without giving effect to any installments
of principal received in respect of
Due Dates after the Cut-off Date.
DBRS: Dominion
Bond Rating Service, Inc. or any successor in interest.
Definitive
Certificates: As defined in Section 5.06.
Deleted Mortgage
Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
Delinquent: A
Mortgage Loan is "delinquent" if any payment due thereon is
not made pursuant to the terms of such
Mortgage Loan by the close of business on
the day such payment is scheduled to be
due. A Mortgage Loan is "30 days
delinquent" if such payment has not been
received by the close of business on
the corresponding day of the month
immediately succeeding the month in which
such payment was due, or, if there is no
such corresponding day (e.g., as when a
30-day month follows a 31-day month in
which a payment was due on the 31st day
of such month), then on the last day of
such immediately succeeding month. With
respect to any Mortgage Loan due on any day
other than the first day of the
month, such Mortgage Loan shall be deemed
to be due on the first day of the
immediately succeeding month. Similarly for
"60 days delinquent," "90 days
delinquent" and so on.
Denomination: With
respect to each Certificate, the amount set forth on the
face thereof as the "Initial Principal
Balance of this Certificate."
Depositor:
Merrill Lynch Mortgage Investors, Inc., a Delaware corporation,
or any successor in interest.
Depository: The
initial Depository shall be The Depository Trust Company
("DTC"), the nominee of which is Cede &
Co., or any other organization
registered as a "clearing agency" pursuant
to Section 17A of the Securities
Exchange Act of 1934, as amended. The
Depository shall initially be the
registered Holder of the Book-Entry
Certificates. The Depository shall at all
times be a "clearing corporation" as
defined in Section 8-102(3) of the Uniform
Commercial Code of the State of New
York.
Depository
Agreement: With respect to Classes of Book-Entry Certificates,
the agreement between the Trustee and the
initial Depository.
Depository
Participant: A broker, dealer, bank or other financial
institution or other Person for whom from
time to time a Depository effects
book-entry transfers and pledges of
securities deposited with the Depository.
Designated
Transaction: A transaction in which the assets underlying the
Certificates consist of single-family
residential, multi-family residential,
home equity, manufactured housing and/or
commercial mortgage obligations that
are secured by single-family residential,
multi-family residential, commercial
real property or leasehold interests
therein.
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<PAGE>
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
December 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 (1) 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 (2) maintained
with the corporate trust department of a
bank which (A) has a rating of at least
Baa3 or P-3 by Moody's and (B) is either
the Depositor or the corporate trust
department of a national bank or banking
corporation which has a rating of at
least A-1 by S&P, R-1 by DBRS or F1 by
Fitch, or (iii) an account or accounts
the deposits in which are fully insured by
the FDIC, or (iv) an account or
accounts, acceptable to each Rating Agency
without reduction or withdrawal of
the rating of any Class of Certificates, as
evidenced in writing, by a
depository institution in which such
accounts are insured by the FDIC (to the
limit established by the FDIC), the
uninsured deposits in which accounts are
otherwise secured such that, as evidenced
by an Opinion of Counsel delivered to
and acceptable to the Trustee and each
Rating Agency, the Certificateholders
have a claim with respect to the funds in
such account and a perfected first
security interest against any collateral
(which shall be limited to Permitted
Investments) securing such funds that is
superior to claims of any other
depositors or creditors of the depository
institution with which such account is
maintained, or (v) maintained at an
eligible institution whose commercial paper,
short-term debt or other short-term
deposits are rated at least A-1+ by S&P and
F-1+ by Fitch, or (vi) maintained with a
federal or state chartered depository
institution the deposits in which are
insured by the FDIC to the applicable
limits and the short-term unsecured debt
obligations of which (or, in the case
of a depository institution that is a
subsidiary of a holding company, the
short-term unsecured debt obligations of
such holding company) are rated A-1 by
S&P or Prime-1 by Moody's at the time
any deposits are held on deposit therein,
or (vii) otherwise acceptable to each
Rating Agency, as evidenced by a letter
from each Rating Agency to the Trustee.
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ERISA: The
Employee Retirement Income Security Act of 1974, including any
successor or amendatory provisions.
ERISA-Qualifying
Underwriting: A best efforts or firm commitment
underwriting or private placement that
would satisfy the requirements of
Prohibited Transaction Exemption 90-29,
Exemption Application No. D-8012, 55
Fed. Reg. 21459 (1990), as amended, granted
by the United States Department of
Labor (or any other applicable
underwriter's exemption granted by the United
States Department of Labor), except, in
relevant part, for the requirement that
the certificates have received a rating at
the time of acquisition that is in
one of the three (or four, in the case of a
"designated transaction") highest
generic rating categories by at least one
of S&P, Moody's or Fitch.
ERISA Restricted
Certificates: The Class C Certificates, Class P
Certificates, Class B-4 Certificates, Class
B-5 Certificates and any other
Certificate, as long as the acquisition and
holding of such other Certificate is
not covered by and exempt under an
underwriter's exemption.
Event of
Default: As defined in Section 7.01 hereof.
Excess Interest:
On any Distribution Date, for the Class A Certificates,
Class R Certificate, Class M-1
Certificates, Class M-2 Certificates, Class B-1
Certificates, Class B-2 Certificates, Class
B-3 Certificates, Class B-4
Certificates and Class B-5 Certificates,
the excess, if any, of (1) the amount
of interest such Class of Certificates is
entitled to receive on such
Distribution Date over (2) the amount of
interest such Class of Certificates
would have been entitled to receive on such
Distribution Date at an interest
rate equal to the REMIC Pass-Through
Rate.
Excess Proceeds:
With respect to any Liquidated Loan, any Liquidation
Proceeds that are in excess of the sum of
(1) the unpaid principal balance of
such Liquidated Loan as of the date of such
liquidation plus (2) interest at the
Mortgage Rate from the Due Date as to which
interest was last paid or advanced
to Certificateholders (and not reimbursed
to the Servicer) up to the Due Date in
the month in which such Liquidation
Proceeds are required to be distributed on
the unpaid principal balance of such
Liquidated Loan outstanding during each Due
Period as to which such interest was not
paid or advanced.
Exchange Act: The Securities
Exchange Act of 1934, as amended.
Extra Principal
Distribution Amount: With respect to any Distribution Date,
(1) prior to the Stepdown Date, the excess
of (A) the sum of (i) the Aggregate
Certificate Principal Balance immediately
preceding such Distribution Date
reduced by the Principal Funds with respect
to such Distribution Date and (ii)
$21,446,320 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
(x) the Aggregate Certificate Principal
Balance immediately preceding such
Distribution Date, reduced by the Principal
Funds with respect to such
Distribution Date and (y) the greater of
(a) 17.30% of the Pool Stated Principal
Balance of the Mortgage Loans and (b) the
Minimum Required Overcollateralization
Amount less (B) the Pool Stated Principal
Balance of the Mortgage Loans as of
such Distribution Date; provided, however,
that if on any Distribution
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<PAGE>
Date a Trigger Event is in effect, the
Extra Principal Distribution Amount will
not be reduced to the applicable percentage
of the then-current Pool Stated
Principal Balance of the Mortgage Loans
(and will remain fixed at the applicable
percentage of the aggregate Stated
Principal Balance of the Mortgage Loans as of
the Due Date immediately prior to the
Trigger Event) until the next Distribution
Date on which the Trigger Event is not in
effect.
Fannie Mae: A
federally chartered and privately owned corporation organized
and existing under the Federal National
Mortgage Association Charter Act, or any
successor thereto.
FDIC: The
Federal Deposit Insurance Corporation, or any successor
thereto.
Fitch: Fitch,
Inc., or any successor in interest.
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, the
excess of (x) 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 over (y) the amount of interest
payable on such Class on such Distribution
Date based on the Available Funds
Cap, together with (i) the unpaid portion
of any such excess from prior
Distribution Dates (and interest accrued
thereon at the then applicable
Pass-Through Rate for such Class, without
giving effect to the 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.
Initial
Certificate Principal Balance: With respect to any Class A,
Class
M, Class B, Class C or Class R Certificate,
the Certificate Principal Balance of
such Certificate or any predecessor
Certificate on the Closing Date as set forth
in Section 5.01 hereof.
Initial Optional
Termination Date: The first Distribution Date on which the
aggregate Stated Principal Balance of the
Mortgage Loans is equal to or less
than 10% of the aggregate Stated Principal
Balance of the Mortgage Loans as of
the Cut-off Date.
Institutional
Accredited Investors: Institutions that are "accredited
investors" within the meaning of Rule
501(a)(1), (2), (3) or (7) promulgated
pursuant to Regulation D.
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
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<PAGE>
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 R Interest Carry
Forward Amount, the Class M-1 Interest
Carry Forward Amount, the Class M-2
Interest Carry Forward Amount, the Class
B-1 Interest Carry Forward Amount, the
Class B-2 Interest Carry Forward Amount,
the Class B-3 Interest Carry Forward
Amount, the Class B-4 Interest Carry
Forward Amount, the Class B-5 Interest
Carry Forward Amount or the Class C
Interest Carry Forward Amount, as the case
may be.
Interest Determination Date:
With respect to the Class M and Class B
Certificates, 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) all proceeds of
any purchase pursuant to Section 2.02 or
2.03 during the related Prepayment
Period or pursuant to Section 9.01 not
later than the related Determination Date
(to the extent that such proceeds relate to
interest) less the Servicing Fee and
(6) all Prepayment Charges received with
respect to the Mortgage Loans during
the related Prepayment Period, less (A) all
Non-Recoverable Advances relating to
interest and (B) other amounts reimbursable
to the Servicer and the Trustee
pursuant to this Agreement.
Latest Possible
Maturity Date: The latest maturity date for any Mortgage
Loan in the Trust Fund plus one year.
LIBOR Business
Day: Any day on which banks in the City of London, England
and New York City, U.S.A. are open and
conducting transactions in foreign
currency and exchange.
Liquidated Loan:
With respect to any Distribution Date, a defaulted
Mortgage Loan that either (a) 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
or (b) is delinquent 180 days or longer, as
to which the Servicer has certified
in a certificate of an officer of the
Servicer delivered to the Trustee that it
does not believe that there is a reasonable
likelihood that any further net
proceeds will be received or recovered with
respect to such Mortgage Loan.
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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.
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 LTM-1 Interest,
the Class LTM-2 Interest, the Class
LTB-1 Interest, the Class LTB-2 Interest,
the Class LTB-3 Interest, the Class
LTB-4 Interest, the Class LTB-5 Interest,
the Class LTX Interest and the Class
LTR Interest.
Lower Tier REMIC
Marker Classes: Each of the classes of 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.
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.
Minimum Required
Overcollateralization Amount: An amount equal to the
product of (x) 0.50% and (y) the Stated
Principal Balance of the Mortgage Loans
as of the Cut-off Date.
MIN: The loan
number for any MERS Loan.
MOM Loan: Any
Mortgage Loan as to which MERS is acting as mortgagee, solely
as nominee for the originator of such
Mortgage Loan and its successors and
assigns.
Monthly
Statement: The statement delivered to the Certificateholders
pursuant to Section 4.05.
Moody's: Moody's
Investors Service, Inc. or any successor in interest.
Mortgage: With
respect to a Mortgage Loan, the mortgage, deed of trust or
other instrument creating a second lien or
a second priority ownership interest
in an estate in fee simple in real property
securing a Mortgage Note.
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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 list of Mortgage Loans (as from time to time
amended by the Trustee to reflect the
deletion of Deleted Mortgage Loans and the
addition of Replacement Mortgage Loans
pursuant to the provisions of this
Agreement) transferred to the Trustee as
part of the Trust Fund and from time to
time subject to this Agreement, attached
hereto as Exhibit B, setting forth the
following information with respect to each
Mortgage Loan:
(i) the loan
number;
(ii)
borrower name and address;
(iii) the unpaid principal balance of the Mortgage Loans;
(iv) the initial Mortgage Rate;
(v) the original
maturity date and the months remaining before
maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the first payment due date of the Mortgage Loan;
(ix) the Combined Loan-to-Value Ratio
(x) a code indicating
whether the residential dwelling at the time of
origination was represented to be owner-occupied;
(xi) a code indicating the property type;
(xii) location of the related Mortgaged Property;
(xiii) a code indicating whether a Prepayment Charge is
applicable
and, if so,
(A) the period during
which such Prepayment Charge is in effect;
(B) the amount of such
Prepayment Charge;
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(C) any limitations or
other conditions on the enforceability of
such Prepayment Charge; and
(D) any other
information pertaining to the Prepayment Charge
specified in the related Mortgage Note; and
(xiv) the Credit Score and date obtained.
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.
Mortgaged
Property: The underlying property securing a Mortgage Loan.
Mortgage Rate:
The annual rate of interest borne by a Mortgage Note from
time to time.
Mortgagor: The
obligor on a Mortgage Note.
Net Mortgage
Rate: As to each Mortgage Loan, and at any time, the per annum
rate equal to the then current Mortgage
Rate less the Servicing Fee Rate.
Net Rate: With
respect to any interest in any REMIC and any Distribution
Date, the product of (x) the weighted
average Net Mortgage Rate for the Mortgage
Loans calculated based on the respective
Net Mortgage Rates and the Stated
Principal Balances of such Mortgage Loans
as of the preceding Distribution Date
(or, in the case of the first Distribution
Date, as of the Cut-off Date) and (y)
a fraction, the numerator of which is 30
and the denominator of which is the
actual number of days in the related
Accrual Period for such interest.
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 related
to the Mortgage Loans.
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 related to the Mortgage
Loans.
Non-Supported
Interest Shortfall: As defined in Section 4.02.
Offered
Certificates: The Class A-1A, Class A-1B, Class M-1, Class M-2,
Class B-1, Class B-2, Class B-3 and Class R
Certificates.
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Officer's
Certificate: A certificate (1) signed by the Chairman of the
Board, the Vice Chairman of the Board, the
President, a vice president (however
denominated), an Assistant Vice President,
the Treasurer, the Secretary, or one
of the assistant treasurers or assistant
secretaries of the Depositor, or the
Servicer (or any other officer customarily
performing functions similar to those
performed by any of the above designated
officers and to whom, with respect to a
particular matter, such matter is referred
because of such officer's knowledge
of and familiarity with a particular
subject) or (2), if provided for in this
Agreement, signed by a Servicing Officer,
as the case may be, and delivered to
the Depositor, the Servicer or the Trustee,
as the case may be, as required by
this Agreement.
One-Month LIBOR:
With respect to any Accrual Period, the rate determined by
the Trustee on the related Interest
Determination Date on the basis of (a) the
offered rates for one-month United States
dollar deposits, as such rates appear
on Telerate page 3750, as of 11:00 a.m.
(London time) on such Interest
Determination Date or (b) if such rate does
not appear on Telerate Page 3750 as
of 11:00 a.m. (London time), the offered
rates of the Reference Banks for
one-month United States dollar deposits, as
such rates appear on the Reuters
Screen LIBO Page, as of 11:00 a.m. (London
time) on such Interest Determination
Date. If One-Month LIBOR is determined
pursuant to clause (b) above, on each
Interest Determination Date, One-Month
LIBOR for the related Accrual Period will
be established by the Trustee as
follows:
(i) If on such
Interest Determination Date two or more Reference
Banks provide such offered quotations, One-Month LIBOR for the
related Accrual Period shall be the arithmetic mean of such
offered quotations (rounded upwards if necessary to the nearest
whole multiple of 0.03125%).
(ii) If on such Interest Determination Date fewer than two
Reference
Banks provide such offered quotations, One-Month LIBOR for the
related Accrual Period shall be the higher of (i) One-Month
LIBOR
as determined on the previous Interest Determination Date and
(ii) the Reserve Interest Rate.
Opinion of
Counsel: A written opinion of counsel, who may be counsel for
the Depositor, or the Servicer reasonably
acceptable to each addressee of such
opinion; provided, however, that with
respect to Section 6.04 or 10.01, or the
interpretation or application of the REMIC
Provisions, such counsel must (1) in
fact be independent of the Depositor or the
Servicer (2) not have any direct
financial interest in the Depositor or the
Servicer or in any affiliate of any
such party, and (3) not be connected with
the Depositor or the Servicer as an
officer, employee, promoter, underwriter,
trustee, partner, director or person
performing similar functions.
Optional
Termination: The termination of the trust hereunder pursuant to
clause (a) of Section 9.01 hereof.
Optional
Termination Amount: The repurchase price received by the
Trustee
in connection with any repurchase of all of
the Mortgage Loans pursuant to
Section 9.01.
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Optional
Termination Price: On any date after the Initial Optional
Termination Date, an amount equal to the
sum of (A) the aggregate Stated
Principal Balance of each Mortgage Loan
(other than any Mortgage Loan that has
become an REO Property) as of the
Distribution Date on which the proceeds of the
Optional Termination are distributed to the
Certificateholders, plus accrued
interest thereon at the applicable Mortgage
Rate as of the Due Date preceding
the Distribution Date on which the proceeds
of the Optional Termination are
distributed to Certificateholders and the
fair market value of any REO Property,
plus accrued interest thereon as of the
Distribution Date on which the proceeds
of the Optional Termination are distributed
to Certificateholders, (B) any
unreimbursed out-of-pocket costs and
expenses owed to the Trustee (including any
amounts incurred by the Trustee in
connection with conducting the Auction) or
the Servicer and any unpaid or unreimbursed
Servicing Fees, Advances and
Servicing Advances, (C) any unreimbursed
costs, penalties and/or damages
incurred by the Trust Fund in connection
with any violation relating to any of
the Mortgage Loans of any predatory or
abusive lending law and (D) in the event
an Auction has been conducted, all
reasonable fees and expenses incurred by the
Trustee to conduct such Auction.
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 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 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; with respect to the
Class B-4 Certificates, the Class B-4
Pass-Through Rate; with respect to the
Class B-5 Certificates, the Class B-5
Pass-Through Rate; and with respect to the
Class R Certificate, the Class R
Pass-Through Rate.
Percentage
Interest: With respect to:
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(i) any Class, the
percentage interest in the undivided beneficial
ownership interest evidenced by such Class which shall be equal
to the Certificate Principal Balance of such Class divided by
the
aggregate Certificate Principal Balance of all Classes; and
(ii) any Certificate, the Percentage Interest evidenced thereby of
the
related Class shall equal the percentage obtained by dividing
the
Denomination of such Certificate by the aggregate of the
Denominations of all Certificates of such Class; except that in
the case of any Class P Certificates, the Percentage Interest
with respect to such Certificate shown on the face of such
Certificate.
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 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 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 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 issued by any depository institution or trust
company
incorporated under
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the laws of the United States or of any state thereof and
subject
to supervision and examination by federal and/or state banking
authorities, provided that the commercial paper and/or long
term
unsecured debt obligations of such depository institution or
trust company are then rated one of the two highest long-term
and
the highest short-term ratings of each such Rating Agency for
such securities;
(v) demand or time
deposits or certificates of deposit issued by any
bank or trust company or savings institution to the extent that
such deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance
company or other corporation rated in the two highest long-term
or the highest short-term ratings of each Rating Agency
containing, at the time of the issuance of such agreements,
such
terms and conditions as will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by
any
such Rating Agency as evidenced by a letter from each Rating
Agency;
(vii) repurchase obligations with respect to any security described
in
clauses (i) and (ii) above, in either case entered into with a
depository institution or trust company (acting as principal)
described in clause (v) above;
(viii) securities (other than stripped bonds, stripped coupons
or
instruments sold at a purchase price in excess of 115% of the
face amount thereof) bearing interest or sold at a discount
issued by any corporation, 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 their respective Affiliates) which at
the date of acquisition of the interests in such fund and
throughout the time such interests are held in such fund has
the
highest applicable long term rating by each Rating Agency
rating
such fund; and
(x) short term
investment funds sponsored by any trust company or
national banking association incorporated under the laws of the
United States or any state thereof, 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
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of greater than 120% of the yield to
maturity at par of such underlying
obligations, or (B) if it may be redeemed
at a price below the purchase price
(the foregoing clause (B) not to apply to
investments in units of money market
funds pursuant to clause (ix) above); and
provided, further, (I) that no amount
beneficially owned by any REMIC (including,
without limitation, any amounts
collected by the Servicer but not yet
deposited in the Collection Account) may
be invested in investments (other than
money market funds) treated as equity
interests for Federal income tax purposes,
unless the Servicer shall receive an
Opinion of Counsel, at the expense of the
party requesting that such investment
be made, to the effect that such investment
will not adversely affect the status
of the any REMIC provided for herein as a
REMIC under the Code or result in
imposition of a tax on the Trust Fund or
any REMIC provided for herein and (II)
each such investment must be a "permitted
investment" within the meaning of
Section 860G(a)(5) of the Code. Permitted
Investments that are subject to
prepayment or call may not be purchased at
a price in excess of par.
Permitted
Transferee: Any Person other than (i) the United States, any
State or political subdivision thereof, or
any agency or instrumentality of any
of the foregoing, (ii) a foreign
government, International Organization or any
agency or instrumentality of either of the
foregoing, (iii) an organization
(except certain farmers' cooperatives
described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of
the Code (including the tax imposed
by section 511 of the Code on unrelated
business taxable income) on any excess
inclusions (as defined in section
860E(c)(1) of the Code) with respect to 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 and the
Trustee with a duly completed
Internal Revenue Service Form W-8ECI or
applicable successor form. The terms
"United States," "State" and "International
Organization" shall have the
meanings set forth in section 7701 of the
Code. A corporation will not be
treated as an instrumentality of the United
States or of any State thereof for
these purposes if all of its activities are
subject to tax and, with the
exception of the Federal Home Loan Mortgage
Corporation, a majority of its board
of directors is not selected by such
government unit.
Person: Any
individual, corporation, partnership, limited liability
company, joint venture, association,
joint-stock company, trust, unincorporated
organization or government, or any agency
or political subdivision thereof.
Pool Stated
Principal Balance: As to any Distribution Date, the aggregate
of the Stated Principal Balances, as of
such Distribution Date, of the Mortgage
Loans that were Outstanding Mortgage Loans
as of such date.
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Prepayment
Assumption: A rate of prepayment, as described in the
Prospectus
Supplement in the definition of "Modeling
Assumptions," relating to the Offered
Certificates or as described in the Private
Placement Memorandum relating to the
Class B-4 and Class B-5 Certificates.
Prepayment
Charges: Any prepayment premium or charge payable by a
Mortgagor
in connection with any Principal Prepayment
on a Mortgage Loan pursuant to the
terms of the related Mortgage Note or
Mortgage, as applicable.
Prepayment
Interest Excess: With respect to any Servicer Remittance Date,
for each Mortgage Loan that was the subject
of a Principal Prepayment in full
during the portion of the related
Prepayment Period occurring between the first
day of the calendar month in which such
Servicer Remittance Date occurs and the
last day of the related Prepayment Period,
an amount equal to interest (to the
extent received) at the applicable Net
Mortgage Rate on the amount of such
Principal Prepayment for the number of days
commencing on the first day of the
calendar month in which such Servicer
Remittance Date occurs and ending on the
date on which such Principal Prepayment is
so applied.
Prepayment
Interest Shortfall: With respect to any Distribution Date, for
each Mortgage Loan that was the subject of
a Principal Prepayment in full (other
than a Principal Prepayment in full
resulting from the purchase of a Mortgage
Loan pursuant to Section 2.02, 2.03 or 9.01
hereof and other than a Principal
Prepayment in full on a Mortgage Loan
received during the period from and
including the first day to and including
the 14th day of the month of such
Distribution Date), the amount, if any, by
which (i) one month's interest at the
applicable Net Mortgage Rate on the Stated
Principal Balance of such Mortgage
Loan as of the preceding Distribution Date
exceeds (ii) the amount of interest
paid or collected in connection with such
Principal Prepayment.
Prepayment
Period: As to any Distribution Date, the period beginning with
the opening of business on the 15th day of
the calendar month preceding the
month in which such Distribution Date
occurs (or in the case of the first
Distribution Date, beginning with the
opening of business on the Cut-off Date)
and ending on the close of business on the
14th day of the month in which such
Distribution Date occurs.
Principal
Distribution Amount: With respect to each Distribution Date,
the
sum of (i) the Principal Funds for such
Distribution Date and (ii) any Extra
Principal Distribution Amount for such
Distribution Date.
Principal Funds:
With respect to the Mortgage Loans and any Distribution
Date, the sum, without duplication, of (1)
the scheduled principal due during
the related Due Period and received before
the related Servicer Remittance Date
or 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 Sellers in
connection
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with a substitution of a Mortgage Loan
pursuant to Section 2.03(c), (5) all
Liquidation Proceeds collected during the
related Prepayment Period (to the
extent such Liquidation Proceeds related to
principal), (6) all Subsequent
Recoveries received during the related Due
Period and (7) all other collections
and recoveries in respect of principal
during the related Prepayment Period less
(A) all Non-Recoverable Advances relating
to principal with respect to the
Mortgage Loans and (B) other amounts
reimbursable to the Servicer and the
Trustee pursuant to this Agreement
allocable to principal.
Principal
Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a
Mortgage Loan (including Mortgage Loans
purchased or repurchased under Sections
2.02, 2.03 and 9.01 hereof) that is
received or recovered in advance of its
scheduled Due Date and is not
accompanied by an amount as to interest
representing scheduled interest due on
any date or dates in any month or months
subsequent to the month of prepayment.
Partial Principal Prepayments shall be
applied by the Servicer in accordance
with the terms of the related Mortgage
Note.
Private
Placement Memorandum: The Private Placement Memorandum dated
November 29, 2005, relating to the private
placement of the Class B-4 and Class
B-5 Certificates.
Prospectus
Supplement: The Prospectus Supplement dated November 22, 2005
relating to the public offering of the
Offered Certificates.
PUD: A Planned
Unit Development.
Purchase Price:
With respect to any Mortgage Loan required to be
repurchased by the Sellers or the
applicable Transferor pursuant to Section 2.02
or 2.03 hereof, an amount equal to the sum
of (i) 100% of the unpaid principal
balance of the Mortgage Loan as of the date
of such purchase together with any
unreimbursed Servicing Advances, (ii)
accrued interest thereon at the applicable
Mortgage Rate from (a) the date through
which interest was last paid by the
Mortgagor to (b) the Due Date in the month
in which the Purchase Price is to be
distributed to Certificateholders and (iii)
any unreimbursed costs, penalties
and/or damages incurred by the Trust Fund
in connection with any violation
relating to such Mortgage Loan of any
predatory or abusive lending law.
QIB: A
"qualified institutional buyer" within the meaning of Rule
144A.
Rating Agency:
Any of Fitch, S&P or Moody's. If any such organization or
its successor is no longer in existence,
"Rating Agency" shall be a nationally
recognized statistical rating organization,
or other comparable Person,
designated by the Depositor, notice of
which designation shall be given to the
Trustee. References herein to a given
rating category of a Rating Agency shall
mean such rating category without giving
effect to any modifiers.
Realized Loss:
With respect to (1) a Liquidated Loan, the amount, if any,
by which the Stated Principal Balance and
accrued interest thereon at the Net
Mortgage Rate exceeds the amount actually
recovered by the Servicer with respect
thereto (net of reimbursement of Advances
and Servicing Advances) at the time
such Mortgage Loan became a Liquidated Loan
or (2) with respect to a Mortgage
Loan which is not a Liquidated Loan, any
amount of principal
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<PAGE>
that the Mortgagor is no longer legally
required to pay (except for the
extinguishment of debt that results from
the exercise of remedies due to default
by the Mortgagor).
Record Date:
With respect to any Distribution Date, the close of business
on the last Business Day of the month
preceding the month in which the
applicable Distribution Date occurs (or, in
the case of the first Distribution
Date, the Closing Date).
Reference Banks:
Barclays Bank PLC, JPMorgan Chase Bank, N.A., Citibank,
N.A., Wells Fargo Bank, N.A. and NatWest,
N.A.; provided that if any of the
foregoing banks are not suitable to serve
as a Reference Bank, then any leading
banks selected by the Trustee (in
consultation with the Depositor) which are
engaged in transactions in Eurodollar
deposits in the international Eurocurrency
market (i) with an established place of
business in London, England, (ii) whose
quotations appear on the Reuters Screen
LIBO Page on the relevant Interest
Determination Date and (iii) which have
been designated as such by the Trustee.
Regular
Certificate: Any one of the Class A, Class M and Class B
Certificates.
Regulation S:
Regulation S promulgated under the Securities Act or any
successor provision thereto, in each case
as the same may be amended from time
to time; and all references to any rule,
section or subsection of, or definition
or term contained in, Regulation S means
such rule, section, subsection,
definition or term, as the case may be, or
any successor thereto, in each case
as the same may be amended from time to
time.
Regulation S
Book-Entry Certificates: Certificates sold in offshore
transactions in reliance on Regulation S in
the form of one or more permanent
global Certificates in definitive, fully
registered form without interest
coupons, which shall be deposited on behalf
of the subscribers for such
Certificates represented thereby with the
Trustee, as custodian for DTC and
registered in the name of a nominee of
DTC.
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 LTB-1 Interest, the Class B-1
Certificates. With respect to the Class
LTB-2 Interest, the Class B-2
Certificates. With respect to the Class
LTB-3 Interest, the Class B-3
Certificates. With respect to the Class
LTB-4 Interest, the Class B-4
Certificates. With respect to the Class
LTB-5 Interest, the Class B-5
Certificates. 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.
Relief Act: The
Servicemembers Civil Relief Act or any similar state or
local law.
Relief Act
Shortfall: With respect to any Distribution Date and any
Mortgage Loan, any reduction in the amount
of interest or principal collectible
on such Mortgage Loan for the most recently
ended calendar month as a result of
the application of the Relief Act.
REMIC: A "real
estate mortgage investment conduit" within the meaning of
section 860D of the Code. References herein
to "the REMICs" or "a REMIC" shall
mean any of (or, as the context requires,
all of) the Lower Tier REMIC and the
Upper Tier REMIC.
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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.
REMIC Regular
Interests: (i) any of the rights under any of the
Certificates (other than the Class P
Certificates, the Class R Certificate and
the Class C Certificates) other than the
rights in interest rate cap contracts
described in Section 2.07 and (ii) the
Uncertificated Class C Interest.
Remittance
Report: As defined in Section 4.04(j) hereof.
REO Property: A
Mortgaged Property acquired by the Servicer through
foreclosure or deed-in-lieu of foreclosure
in connection with a defaulted
Mortgage Loan.
Replacement
Mortgage Loan: A Mortgage Loan substituted by the Sellers 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 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;
(3) have a similar or higher FICO score or
credit grade than that of the Deleted
Mortgage Loan; (4) have a Combined
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 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 REQUIRED LOSS PERCENTAGE
------------------------------ ------------------------
<S>
<C>
December 2008 - November 2009 5.95% with respect to
December 2008, plus
an additional 1/12th of 3.30% for each
month thereafter
</TABLE>
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<PAGE>
<TABLE>
<S>
<C>
December 2009 - November 2010 9.25% with respect to
December 2009, plus
an additional 1/12th of 2.25% for each
month thereafter
December 2010 - November 2011 11.50% with respect to
September 2010,
plus an additional 1/12th of 0.50% for
each month thereafter
December 2011 and thereafter 12.00%
</TABLE>
Required
Percentage: As of any Distribution Date on or after the
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, prior to giving effect to
distributions to be made on such
Distribution Date and (2) the Stated
Principal Balance of the Mortgage Loans as
of such Distribution Date.
Reserve Interest
Rate: With respect to any Interest Determination Date, the
rate per annum that the 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 (in consultation with the
Depositor) are quoting on the relevant
Interest Determination Date to the
principal London offices of leading banks in
the London interbank market or (2) in the
event that the Trustee can determine
no such arithmetic mean, the lowest
one-month United States dollar lending rate
which New York City banks selected by the
Trustee (in consultation with the
Depositor) are quoting on such Interest
Determination Date to leading European
banks.
Residual
Interest: An interest in the Upper Tier REMIC that is entitled
to
all distributions of principal and interest
on the Class R Certificate other
than distributions in respect of the Class
LTR Interest and distributions to the
extent attributable to an interest rate in
excess of the Net Rate.
Responsible
Officer: When used with respect to the Servicer, any officer of
the Servicer with direct responsibility for
the administration of this Agreement
and also means any other officer to whom,
with respect to a particular matter,
such matter is referred because of such
officer's knowledge of and familiarity
with the particular subject. When used with
respect to the Trustee, any Managing
Director, any Director, Vice President, any
Assistant Vice President, any
Associate, any Assistant Secretary, or any
other officer of the Trustee
customarily performing functions similar to
those performed by any of the above
designated officers who at such time shall
be officers to whom, with respect to
a particular matter, the matter is referred
because of the officer's knowledge
of and familiarity with the particular
subject and who has direct responsibility
for the administration of this
Agreement.
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.
Rule 144A: Rule
144A under the Securities Act.
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Rule 144A
Book-Entry Certificates: Certificates initially offered and
sold
in reliance on the exemption from
registration under Rule 144A in the form of
one or more permanent global Certificates
in definitive, fully registered form
without interest coupons, which shall be
deposited on behalf of the subscribers
for such Certificates represented thereby
with the Trustee, as custodian for DTC
and registered in the name of a nominee of
DTC.
S&P:
Standard & Poor's, a division of The McGraw-Hill Companies,
Inc., or
any successor in interest.
Sale Agreement:
The Mortgage Loan Sale and Assignment Agreement dated as of
November 29, 2005 between the Depositor and
the Sellers.
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.
Sellers: Merrill
Lynch Mortgage Capital Inc., a Delaware corporation, and
Merrill Lynch Mortgage Lending Inc., or
their respective successors in interest
Servicer:
Wilshire Credit Corporation, a Nevada corporation, or its
successor in interest.
Servicer Advance
Date: As to any Distribution Date, the related Servicer
Remittance Date.
Servicer
Remittance Date: With respect to any Distribution Date, the
later
of (i) two Business Days after the 15th day
of the month in which such
Distribution Date occurs and (ii) the 18th
day (or if such day is not a Business
Day, the next preceding Business Day) of
the month in which such Distribution
Date occurs.
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, inspection, restoration and
protection of a Mortgaged Property,
including without limitation advances in
respect of real estate taxes and
assessments, (2) any collection,
enforcement or judicial proceedings, including
without limitation foreclosures,
collections and liquidations, (3) the
conservation, management, sale and
liquidation of any REO Property, (4)
executing and recording instruments of
satisfaction, deeds of reconveyance,
substitutions of trustees on deeds of trust
or Assignments of Mortgage to the
extent not otherwise recovered from the
related Mortgagors or payable under this
Agreement, (5) correcting errors of prior
servicers; costs and expenses charged
to the Servicer by the Trustee; tax
tracking; title research; flood
certifications; lender paid mortgage
insurance, (6) obtaining or correcting any
legal documentation required to be included
in the Mortgage Files and reasonably
necessary for the Servicer to perform its
obligations under this Agreement and
(7) compliance with the obligations under
Sections 3.01 and 3.10.
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<PAGE>
Servicing Fee:
As to each Mortgage Loan and any Distribution Date, an
amount equal to the product of (x) the
Servicing Fee Rate and (y) the Stated
Principal Balance of such Mortgage Loan as
of the preceding Distribution Date
or, in the event of any payment of interest
that accompanies a Principal
Prepayment in full made by the Mortgagor,
interest at the Servicing Fee Rate on
the Stated Principal Balance of such
Mortgage Loan as of the preceding
Distribution Date for the period covered by
such payment of interest.
Servicing Fee Rate:
0.50% per annum.
Servicing
Officer: Any officer of the Servicer involved in, or
responsible
for, the administration and servicing of
the Mortgage Loans whose name and
facsimile signature appear on a list of
servicing officers furnished to the
Trustee by the Servicer on the Closing Date
pursuant to this Agreement, as such
lists may from time to time be amended.
SFAS 140:
Statement of Financial Accounting Standard No. 140, Accounting
for Transfers and Servicing of Financial
Assets and Extinguishments of
Liabilities dated September 2000, published
by the Financial Accounting
Standards Board of the Financial Accounting
Foundation.
Startup Day: As
defined in Section 2.07 hereof.
Stated Principal
Balance: With respect to any Mortgage Loan or related REO
Property (1) as of the Cut-off Date, the
Cut-off Date Principal Balance thereof,
and (2) as of any Distribution Date, such
Cut-off Date Principal Balance, minus
the sum of (A) the principal portion of the
Scheduled Payments (x) due with
respect to such Mortgage Loan during each
Due Period ending prior to such
Distribution Date and (y) that were
received by the Servicer as of the close of
business on the Determination Date related
to such Distribution Date or with
respect to which Advances were made on the
Servicer Advance Date prior to such
Distribution Date and (B) all Principal
Prepayments with respect to such
Mortgage Loan received on or prior to the
last day of the related Prepayment
Period, and all Liquidation Proceeds to the
extent applied by the Servicer as
recoveries of principal in accordance with
Section 3.12 with respect to such
Mortgage Loan, that were received by the
Servicer as of the close of business on
the last day of the related Due Period.
Notwithstanding the foregoing, the
Stated Principal Balance of a Liquidated
Loan shall be deemed to be zero.
Stepdown Date:
The later to occur of (1) the Distribution Date in December
2008 or (2) the first Distribution Date on
which (A) the sum of the Class A
Certificate Principal Balance and the Class
R Certificate Principal Balance
(reduced by the Principal Funds with
respect to such Distribution Date) is less
than or equal to (B) 27.60% of the Stated
Principal Balances of the Mortgage
Loans as of such Distribution Date.
Subordinated
Certificates: The Class M and Class B Certificates.
Subsequent
Recovery: Any amount received on a Mortgage Loan (net of
amounts
to be reimbursed to the Servicer related to
such Mortgage Loan) subsequent to
such Mortgage Loan being determined to be a
Liquidated Mortgage Loan.
Subservicing
Agreement: As defined in Section 3.02(a).
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Substitution
Adjustment Amount: The meaning ascribed to such term pursuant
to Section 2.03(c).
Tax Matters
Person: The Person designated as "tax matters person" in the
manner provided under Treasury regulation
Section 1.860F-4(d) and Treasury
regulation Section 301.6231(a)(7)-1.
Transfer: Any
direct or indirect transfer or sale of any Ownership Interest
in a Certificate.
Transfer
Agreement: Each of the Master Mortgage Loan Purchase and
Interim
Servicing Agreement, dated as of August 1,
2004, by and between the Seller and
the Transferors and the Master Mortgage
Loan Purchase and Interim Servicing
Agreement, dated as of April 1, 2005, by
and between the Seller and the
Transferors.
Transferor: Each
of NC Capital Corporation and New Century Mortgage
Corporation.
Trigger Event:
The situation that exists with respect to any Distribution
Date on and after the Stepdown Date, if (a)
the quotient of (1) the aggregate
Stated Principal Balance of all Mortgage
Loans 60 or more days delinquent,
measured on a rolling three-month basis
(including Mortgage Loans in
foreclosure, REO Properties and Mortgage
Loans with respect to which the
applicable mortgagor is in bankruptcy) and
(2) the Stated Principal Balance of
all of the Mortgage Loans as of the
preceding Servicer Remittance Date, equals
or exceeds the product of (i) 10% and (ii)
the Required Percentage or (b) the
quotient (expressed as a percentage) of (1)
the aggregate Realized Losses
incurred from the Cut-off Date through the
last day of the calendar month
preceding such Distribution Date and (2)
the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date
exceeds the Required Loss Percentage.
Trust Fund: The
corpus of the trust (the "Merrill Lynch Mortgage Investors
Trust, Series 2005-NCB") 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 (v)
all proceeds of the conversion, voluntary
or involuntary, of any of the
foregoing into cash or other liquid
property.
Trustee:
Deutsche Bank National Trust Company, a national banking
association, not in its individual
capacity, but solely in its capacity as
trustee for the benefit of the
Certificateholders under this Agreement, and any
successor thereto, and any corporation or
national banking association resulting
from or surviving any consolidation or
merger to which it or its successors may
be a party and any successor trustee as may
from time to time be serving as
successor trustee hereunder.
Uncertificated
Class C Interest: An uncertificated interest with an initial
principal amount equal to the initial
Overcollateralization Amount and having
(i) the same rights to
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payments as the Class C Certificates, 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).
United States
Person: (i) A citizen or resident of the United States, (ii)
a corporation, partnership or other entity
treated as a corporation or
partnership for federal income tax purposes
organized in or under the laws of
the United States or any state thereof or
the District of Columbia (unless, in
the case of a partnership, Treasury
regulations provide otherwise), (iii) an
estate the income of which is includible in
gross income for United States tax
purposes regardless of its source or (iv) 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.
Notwithstanding the preceding sentence, to
the extent provided in Treasury
regulations, certain trusts in existence on
August 20, 1996, and treated as United
States persons prior to such date, that
elect to continue to be treated as United
States persons will also be United
States Persons.
Unpaid Realized
Loss Amount: The Class M-1 Unpaid Realized Loss Amount,
Class M-2 Unpaid Realized Loss Amount,
Class B-1 Unpaid Realized Loss Amount,
Class B-2 Unpaid Realized Loss Amount,
Class B-3 Unpaid Realized Loss Amount,
Class B-4 Realized Loss Amount, Class B-5
Realized Loss Amount and Class C
Unpaid Realized Loss Amount,
collectively.
Upper Tier
REMIC: As described in the Preliminary Statement and Section
2.07.
USAP Report: A
report in compliance with the Uniform Single Attestation
Program for Mortgage Bankers delivered in
accordance with Section 3.18.
Voting Rights:
The portion of the voting rights of all the Certificates
that is allocated to any of the
Certificates for purposes of the voting
provisions hereunder. Voting Rights
allocated to each Class of Certificates
shall be allocated as follows: (1) 98% to
the Class A, Class M-1, Class M-2,
Class R, Class B-1, Class B-2, Class B-3,
Class B-4 and Class B-5 Certificates,
with the allocation among such 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 and
(2) each Class of the Class C and
Class P will be allocated 1% of the Voting
Rights Certificates. Voting Rights
will be allocated among the Certificates of
each such Class in accordance with
their respective Percentage Interests.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01.
Conveyance of Mortgage Loans.
The Depositor,
concurrently with the execution and delivery hereof, does
hereby sell, transfer, assign, set over and
convey to the Trustee without
recourse all the right, title and interest
of the Depositor in and to the assets
of the Trust Fund. Such assignment includes
all
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interest and principal received on or with
respect to the Mortgage Loans on or
after the Cut-off Date (other than
Scheduled Payments due on the Mortgage Loans
on or before the Cut-off Date).
It is agreed and
understood by the Depositor, the Servicer and the Trustee
that it is not intended that any Mortgage
Loan be included in the Trust that is,
without limitation, a "High-Cost Home
Loans" 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
Mortgage Loan" as defined in the
Massachusetts Predatory Home Loan Practices
Act effective November 7, 2004; (iv)
a "High-Cost Home Loan" as defined by the
Indiana High Cost Home Loan Law
effective January 1, 2005 or (v) a
"High-Cost Home Loan" as defined by the
Illinois High Risk Home Loan Act effective
January 1, 2004.
In connection
with such assignment, the Depositor does hereby deliver to,
and deposit with, the Trustee, the
following documents or instruments with
respect to each Mortgage Loan:
(A) The Original Mortgage Note endorsed in blank or, "Pay to the
order
of Deutsche Bank
National Trust Company, as trustee, without recourse"
together with
all riders thereto. The Mortgage Note shall include all
intervening
endorsements showing a complete chain of the title from the
Transferor to
[___________________].
(B) Except as provided below and for each Mortgage Loan that is not
a
MERS Loan, the
original recorded Mortgage together with all riders thereto,
with evidence of
recording thereon, or, if the original Mortgage has not
yet been
returned from the recording office, a copy of the original
Mortgage
together with all riders thereto certified 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 in blank or, to "Deutsche Bank
National Trust
Company, as trustee."
(D) The original policy of title insurance (or a preliminary
title
report,
commitment or binder if the original title insurance policy has
not
been received
from the title insurance company).
(E) Originals of any intervening assignments of the Mortgage,
with
evidence of
recording thereon or, if the original intervening assignment
has not yet been
returned from the recording office, a copy of such
assignment
certified to be a true copy of the
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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.
(G) If in connection with any Mortgage Loan, the Depositor
cannot
deliver the
Mortgage, Assignments of Mortgage or assumption, consolidation
or modification,
as the case may be, with evidence of recording thereon, if
applicable,
concurrently with the execution and delivery of this Agreement
solely because
of a delay caused by the public recording office where such
Mortgage,
Assignments of Mortgage or assumption, consolidation or
modification, as
the case may be, has been delivered for recordation, the
Depositor shall
deliver or cause to be delivered to the Trustee written
notice stating
that such Mortgage or assumption, consolidation or
modification, as
the case may be, has been delivered to the appropriate
public recording
office for recordation. Thereafter, the Depositor shall
deliver or cause
to be delivered to the Trustee such Mortgage, Assignments
of Mortgage or
assumption, consolidation or modification, as the case may
be, with
evidence of recording indicated thereon, if applicable, upon
receipt thereof
from the public recording office. To the extent any
required
endorsement is not contained on a Mortgage Note or an
Assignment
of Mortgage, the
Depositor shall make or cause to be made such endorsement.
(H) 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 an
Assignment of
Mortgage is not recorded, the Servicer shall have no
liability for
its failure to receive and act on notices related to such
Assignment of
Mortgage.
The ownership of
each Mortgage Note, the Mortgage and the contents of the
related Mortgage File is vested in the
Trustee on behalf of the
Certificateholders. Neither the Depositor,
nor the Servicer shall take any
action inconsistent with such ownership and
shall not claim any ownership
interest therein. The Depositor and the
Servicer shall respond to any third
party inquiries with respect to ownership
of the Mortgage Loans by stating that
such ownership is held by the Trustee on
behalf of the Certificateholders.
Mortgage documents relating to the Mortgage
Loans 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 Sellers 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 Sellers 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
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all of the Depositor's right, title, and
interest in, to and under the
obligations of the Sellers to the Depositor
deemed to be secured by said pledge.
If the conveyance of the Mortgage Loans
from the Depositor to the Trustee is
characterized as a pledge, it is the
intention of this Agreement that this
Agreement shall constitute a security
agreement under applicable law, and that
the Depositor shall be deemed to have
granted to the Trustee a first priority
security interest in all of the Depositor's
right, title and interest in, to and
under the Mortgage Loans, all payments of
principal of or interest on such
Mortgage Loans, all other rights relating
to and payments made in respect of the
Trust Fund, and all proceeds of any
thereof. If the trust created by this
Agreement terminates prior to the
satisfaction of the claims of any Person in
any Certificates, the security interest
created hereby shall continue in full
force and effect and the Trustee shall be
deemed to be the collateral agent for
the benefit of such Person.
In addition to
the conveyance made in the first paragraph of this Section
2.01, the Depositor does hereby convey,
assign and set over to the Trustee for
the benefit of the Certificateholders its
rights and interests under the Sale
Agreement, including the Depositor's right,
title and interest in the
representations and warranties contained in
the Sale Agreement, the rights in
the Transfer Agreements described therein,
and the benefit of the repurchase
obligations and the obligation of the
Sellers contained in the Sale Agreement to
take, at the request of the Depositor or
the Trustee, all action on its part
which is reasonably necessary to ensure the
enforceability of a Mortgage Loan.
The Trustee hereby accepts such assignment,
and shall be entitled to exercise
all rights of the Depositor under the Sale
Agreement as if, for such purpose, it
were the Depositor. The foregoing sale,
transfer, assignment, set-over, deposit
and conveyance does not and is not intended
to result in creation or assumption
by the Trustee of any obligation of the
Depositor, the Sellers, or any other
Person in connection with the Mortgage
Loans or any other agreement or
instrument relating thereto.
The parties
hereto acknowledge and agree that it is the policy and
intention of the Trust Fund to acquire only
Mortgage Loans meeting the
requirements set forth in this Agreement,
including without limitation, the
representations and warranties set forth in
the Sale Agreement.
SECTION 2.02.
Acceptance by the Trustee of the Mortgage Loans.
Except as set
forth in the exception report delivered contemporaneously
herewith (the "Exception Report"), the
Trustee acknowledges receipt of the
Mortgage Note for each Mortgage Loan and
delivery of a Mortgage File (but does
not acknowledge receipt of all documents
required to be included in such
Mortgage File) with respect to each
Mortgage Loan and declares that it holds and
will hold such documents and any other
documents constituting a part of the
Mortgage Files delivered to it in trust for
the use and benefit of all present
and future Certificateholders. The
Depositor will cause the Sellers 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
agrees, for the benefit of Certificateholders, 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 Depositor and the
Servicer that all documents required by
Section 2.01 (A)-(B), (C) (if
applicable), and (D)-(E), and the documents
if actually received by it, under
Section 2.01(F), have been executed and
received, and that such documents relate
to the
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Mortgage Loans identified in Exhibit B-1
that have been conveyed to it. The
Trustee shall have no obligation to verify
whether the documents under Section
2.01(F) exist. 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 Sellers and the
Depositor. In addition, the Trustee
shall also notify the Servicer, the Sellers
and the Depositor if the original
Mortgage with evidence of recording thereon
with respect to a Mortgage Loan is
not received within 70 days of the Closing
Date; if it has not been received
because of a delay caused by the public
recording office where such Mortgage has
been delivered for recordation, the
Depositor shall deliver or cause to be
delivered to the Trustee written notice
stating that such Mortgage has been
delivered to the appropriate public
recording office for recordation and
thereafter the Depositor shall deliver or
cause to be delivered such Mortgage
with evidence of recording thereon upon
receipt thereof from the public
recording office. The Trustee shall request
that the Sellers 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
Sellers were notified of such omission or
defect and, if the Sellers do not
correct or cure such omission or defect
within such period, that the Sellers
purchase such Mortgage Loan from the Trust
Fund within 90 days from the date the
Trustee notified the Sellers of such
omission, defect or other irregularity at
the Purchase Price of such Mortgage Loan.
The Purchase Price for any Mortgage
Loan purchased pursuant to this Section
2.02 shall be paid to the Servicer and
deposited by the Servicer in the
Certificate Account or Collection Account, as
appropriate, promptly upon receipt, and the
Trustee, upon receipt of a Request
for Release, shall promptly release to the
Sellers the related Mortgage File and
shall execute and deliver such instruments
of transfer or assignment, without
recourse, as shall be requested by the
Sellers and necessary to vest in the
Sellers 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 Sellers to
purchase, cure or substitute any Mortgage
Loan as to which a material defect in
or omission of a constituent document
exists shall constitute the sole remedy
respecting such defect or omission
available to the Trustee on behalf of
Certificateholders. The preceding sentence
shall not, however, limit any
remedies available to the
Certificateholders, the Depositor or the Trustee
pursuant to the Sale Agreement, Transfer
Agreement or any Bring Down Letter. The
Trustee shall be under no duty or
obligation to inspect, review and examine such
documents, instruments, certificates or
other papers to determine that they are
genuine, enforceable, recordable, duly
authorized, sufficient, legal, valid or
appropriate to the represented purpose, or
that they have actually been
recorded, or that they are other than what
they purport to be on their face. The
Servicer and the Trustee shall keep
confidential the name of each Mortgagor
except as required by this Agreement and
the Servicer and the Trustee shall not
solicit any such Mortgagor for the purpose
of refinancing the related Mortgage
Loan; notwithstanding anything herein to
the contrary, the foregoing shall not
be construed to prohibit (i) disclosure of
any and all information that is or
becomes publicly known, or information
obtained by the Trustee or the Servicer
from sources other than the other parties
hereto, (ii) disclosure of any and all
information (A) if required to do so by any
applicable law, rule or regulation,
(B) to any government agency or regulatory
body having or claiming authority to
regulate or oversee any aspects of the
business of the Trustee, the Servicer or
that of any affiliate, (C) pursuant to any
subpoena, civil investigation demand
or similar demand or request of any court,
regulatory authority, arbitrator or
arbitration to which the Trustee or the
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Servicer or any affiliate or an officer,
director, employer or shareholder
thereof is a party or (D) to any affiliate,
independent or internal auditor,
agent, employee or attorney of the Trustee
or the Servicer having a need to know
the same, provided that the Trustee or the
Servicer, as applicable, advises such
recipient of the confidential nature of the
information being disclosed, or
(iii) any other disclosure authorized by
the Depositor.
Within 70 days
of the Closing Date, the Trustee shall deliver to the
Depositor and the Servicer the
Certification, substantially in the form of
Exhibit D attached hereto, evidencing the
completeness of the Mortgage Files,
with any exceptions noted thereto.
SECTION 2.03.
Representations, Warranties and Covenants of the Depositor.
(a) The Depositor hereby represents and warrants to the Servicer
and
the Trustee as follows, as of the date
hereof:
(i) The Depositor is duly organized and is validly existing as
a
corporation in
good standing under the laws of the State of Delaware and
has full power
and authority (corporate and other) necessary to own or hold
its properties
and to conduct its business as now conducted by it and to
enter into and
perform its obligations under this Agreement and the Sale
Agreement.
(ii) The Depositor has the full corporate power and authority
to
execute, deliver
and perform, and to enter into and consummate the
transactions
contemplated by, this Agreement and the Sale Agreement and has
duly authorized,
by all necessary corporate action on its part, the
execution,
delivery and performance of this Agreement and the Sale
Agreement; and
this Agreement and the Sale Agreement, assuming the due
authorization,
execution and delivery hereof by the other parties hereto,
constitutes a
legal, valid and binding obligation of the Depositor,
enforceable
against the Depositor in accordance with its terms, subject, as
to
enforceability, to (i) bankruptcy, insolvency, reorganization,
moratorium and
other similar laws affecting creditors' rights generally and
(ii) general
principles of equity, regardless of whether enforcement is
sought in a
proceeding in equity or at law. (iii) The execution and
delivery of this Agreement and the
Sale Agreement by the Depositor, the
consummation of
the transactions contemplated by this Agreement and the
Sale Agreement,
and the fulfillment of or compliance with the terms hereof
are in the
ordinary course of business of the Depositor and will not (A)
result in a
material breach of any term or provision of the charter or
by-laws of the
Depositor or (B) materially conflict with, result in a
violation or
acceleration of, or result in a material default under, the
terms of any
other material agreement or instrument to which the Depositor
is a party or by
which it may be bound or (C) constitute a material
violation of any
statute, order or regulation applicable to the Depositor
of any court,
regulatory body, administrative agency or governmental body
having
jurisdiction over the Depositor; and the Depositor is not in
breach
or violation of
any material indenture or other material agreement or
instrument, or
in violation of any statute, order or regulation of any
court,
regulatory body, administrative agency or governmental body
having
jurisdiction
over it which
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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 Sellers, the Depositor had good title to the Mortgage
Loans and the
Mortgage Notes were subject to no offsets, claims, liens,
mortgage,
pledge, charge, security interest, defenses or counterclaims.
(b) The representations and warranties of each Transferor with
respect
to the related Mortgage Loans in the
applicable Transfer Agreement, which have
been assigned to the Trustee hereunder,
were made as of the date specified in
the applicable Transfer Agreement and
brought forward to the Closing Date
pursuant to the Bring Down Letter. The
representations and warranties of each
Transferor with respect to the Mortgage
Loans contained in the Bring Down Letter
were made as of the Closing Date. The
representations and warranties of the
Sellers with respect to the Mortgage Loans
contained in the Sale Agreement were
made as of the Closing Date. To the extent
that any fact, condition or event
with respect to a Mortgage Loan constitutes
a breach of both (i) a
representation or warranty of the
applicable Transferor under the applicable
Transfer Agreement and (ii) a
representation or warranty of the Sellers under
the Sale Agreement, the obligations of the
Sellers under the Sale Agreement
shall be enforced against the Transferor or
the Sellers, as applicable, as set
forth in the Sale Agreement. The Trustee
acknowledges that the Sellers shall
have no obligation or liability with
respect to any breach of a representation
or warranty made by it with respect to the
Mortgage Loans, except as otherwise
set forth in the Sale Agreement, if the
fact, condition or event constituting
such breach also constitutes a breach of a
representation or warranty made by
the Transferors in the Transfer Agreement,
without regard to whether the
Transferors fulfill their contractual
obligations in respect of such
representation or warranty. The Trustee
also acknowledges that the Sellers shall
have no obligation or liability with
respect to any breach of a representation
or warranty made solely by the Transferors
with respect to the Mortgage Loans,
without regard to whether the Transferors
fulfill their contractual obligations
in respect of such representation or
warranty. The Trustee further acknowledges
that the Depositor shall have no obligation
or liability with respect to any
breach of any representation or warranty
with respect to the Mortgage Loans
(except as set forth in Section 2.03(a)(v))
under any circumstances.
In addition to
the representations and warranties of the Transferors in the
Transfer Agreement that were brought
forward to the Closing Date pursuant to the
Bring Down Letter,
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with respect to each Mortgage Loan, the
Transferors made certain additional
covenants regarding such Mortgage Loan, as
set forth in the Transfer Agreement.
With respect to any breach of such
additional covenants that materially and
adversely affects the interests of the
Certificateholders in such Mortgage Loan,
the Sellers shall (1) use reasonable
efforts to enforce such covenant against
the Transferors and (2) if the Sellers
successfully enforces any obligation of
the Transferors to repurchase such Mortgage
Loan, the Sellers shall repurchase
such Mortgage Loan in accordance with this
Section 2.03. If the Sellers do not
successfully enforce the obligation, if
any, of the Transferors to repurchase a
Mortgage Loan with respect to any breach of
any such additional covenants, the
Sellers shall have no obligation or right
to repurchase or cure such Mortgage
Loan.
(c) Upon discovery by any of the Depositor, the Servicer or the
Trustee of a breach of any of such
representations and warranties that adversely
and materially affects the value of the
related Mortgage Loan, Prepayment
Charges or the interests of the
Certificateholders, the party discovering such
breach shall give prompt written notice to
the other parties. Within 90 days of
the discovery of such breach of any
representation or warranty, the Transferors
or the Sellers, as applicable, shall either
(a) cure such breach in all material
respects, (b) repurchase such Mortgage Loan
or any property acquired in respect
thereof from the Trustee at the Purchase
Price or (c) within the two year period
following the Closing Date, substitute a
Replacement Mortgage Loan for the
affected Mortgage Loan. In the event of
discovery of a breach of any
representation and warranty of the
Transferors or the Sellers, the Trustee's
rights shall be enforced under the
applicable Transfer Agreement and the Sale
Agreement for the benefit of
Certificateholders. If a breach of the
representations and warranties set forth in
the Transfer Agreement hereof exists
solely due to the unenforceability of a
Prepayment Charge, the Trustee or the
other party having notice thereof shall
notify the Servicer thereof and not seek
to enforce the repurchase remedy provided
for herein unless such Mortgage Loan
is not current. In the event of a breach of
the representations and warranties
with respect to the Mortgage Loans set
forth in a Transfer Agreement, the
Trustee shall enforce the right of the
Trust Fund to be indemnified for such
breach of representation and warranty. In
the event that such breach relates
solely to the unenforceability of a
Prepayment Charge, amounts received in
respect of such indemnity up to the amount
of such Prepayment Charge shall be
distributed pursuant to Section 4.04(b)(i).
As provided in the Sale Agreement,
if the Sellers substitute for a Mortgage
Loan for which there is a breach of any
representations and warranties in the
related Transfer Agreement which adversely
and materially affects the value of such
Mortgage Loan and such substitute
mortgage loan is not a Replacement Mortgage
Loan, under the terms of the Sale
Agreement, the Sellers 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. The
Sellers indemnify and hold the Trust
Fund, the Trustee, the Depositor, the
Servicer and each Certificateholder
harmless against any and all taxes, claims,
losses, penalties, fines,
forfeitures, reasonable legal fees and
related costs, judgments, and any other
costs, fees and expenses that the Trust
Fund, the Trustee, the Depositor, the
Servicer and any Certificateholder may
sustain in connection with any actions of
the Sellers 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
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causes (i) any federal or state tax to be
imposed on the Trust Fund or any REMIC
provided for herein, including without
limitation, any federal tax imposed on
"prohibited transactions" under Section
860F(a)(1) of the Code or on
"contributions after the startup day" under
Section 860G(d)(1) of the Code, or
(ii) any REMIC created hereunder to fail to
qualify as a REMIC at any time that
any Certificate is outstanding. In
furtherance of the foregoing, if the
Transferor or the Sellers, as applicable,
are not a member of MERS and
repurchases a Mortgage Loan which is
registered on the MERS System, the
Transferor or the Sellers, as applicable,
at its own expense and without any
right of reimbursement, shall cause MERS to
execute and deliver an assignment of
the Mortgage in recordable form to transfer
the Mortgage from MERS to the
Transferor or the Sellers, as applicable,
and shall cause such Mortgage to be
removed from registration on the MERS
System in accordance with MERS' rules and
regulations.
With respect to
any Mortgage Loan repurchased by the Sellers pursuant to
the Sale Agreement or by either Transferor
pursuant to the Transfer Agreement,
the principal portion of the funds received
by the Servicer in respect of such
repurchase of a Mortgage Loan will be
considered a Principal Prepayment and
shall be deposited in the Certificate
Account pursuant to Section 3.05. Upon
receipt by the Trustee of notice from the
Servicer of receipt by the Servicer of
the full amount of the Purchase Price for a
Deleted Mortgage Loan, and upon
receipt by the Trustee of the Substitution
Adjustment Amount, if applicable, and
the Mortgage File for a Replacement
Mortgage Loan substituted for a Deleted
Mortgage Loan, the Trustee shall release
and reassign to the Sellers or the
applicable Transferor, as applicable, the
related Mortgage File for the Deleted
Mortgage Loan and the Trustee 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 Depositor, the Sellers or
the Transferors, and the Trustee shall have
no 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 Transferors or the
Sellers, 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 Mortgage Loan
satisfying all requirements under the
definition of Replacement Mortgage Loan and
the delivery of such Mortgage File
and containing the granting language set
forth in Section 2.01; and (ii) the
Depositor will be deemed to have made, with
respect to such Replacement Mortgage
Loan, each of the representations and
warranties made by it with respect to the
related Deleted Mortgage Loan. The Trustee
shall review the Mortgage File with
respect to each Replacement Mortgage Loan
and certify to the Depositor that all
documents required by Section 2.01(A)-(B),
(C) (if applicable), and (D)-(E) have
been executed and received.
For any month in
which the Sellers substitute one or more Replacement
Mortgage Loans for one or more Deleted
Mortgage Loans, the Sellers 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
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portion of the Scheduled Payment due in the
month of substitution) and aggregate
Prepayment Charges of all such Deleted
Mortgage Loans. An amount equal to the
aggregate of the deficiencies described in
the preceding sentence (such amount,
the "Substitution Adjustment Amount") plus
an amount equal to any unreimbursed
costs, penalties and/or damages incurred by
the Trust Fund in connection with
any violation relating to such Deleted
Mortgage Loan of any predatory or abusive
lending law shall be remitted by the
Sellers to the Trustee for deposit into the
Certificate Account by the Sellers on the
Determination Date for the
Distribution Date relating to the
Prepayment Period during which the related
Mortgage Loan became required to be
purchased or replaced hereunder.
Notwithstanding
any other provision of this Agreement, the right to
substitute Mortgage Loans pursuant to this
Article II shall be subject to the
additional limitations that no substitution
of a Replacement Mortgage Loan for a
Deleted Mortgage Loan shall be made unless
the Trustee shall have received an
Opinion of Counsel (at the expense of the
party seeking to make the
substitution) that, under current law, such
substitution will not (A) affect
adversely the status of any REMIC
established hereunder as a REMIC, or of the
related "regular interests" as "regular
interests" in any such REMIC, or (B)
cause any such REMIC to engage in a
"prohibited transaction" or prohibited
contribution pursuant to the REMIC
Provisions.
The Depositor
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.
Upon such substitution by the Sellers, such
Replacement Mortgage Loan or
Replacement Mortgage Loans shall constitute
part of the Mortgage Pool and shall
be subject in all respects to the terms of
this Agreement and the Sale
Agreement, including all applicable
representations and warranties thereof
included in the Sale Agreement as of the
date of substitution.
(d) It is understood and agreed that the representations,
warranties
and indemnification (i) set forth in this
Section 2.03, (ii) of the Sellers and
the Depositor set forth in the Sale
Agreement and assigned to the Trustee by the
Depositor hereunder and (iii) of each
Transferor, assigned by the Sellers to the
Depositor pursuant to the Sale Agreement
and assigned to the Trustee by the
Depositor hereunder shall each survive
delivery of the Mortgage Files and the
Assignment of Mortgage of each Mortgage
Loan to the Trustee and shall continue
throughout the term of this Agreement.
(e) The Depositor shall deliver a copy of the Mortgage Loan
Schedule
to the Servicer on the Closing Date.
SECTION 2.04.
Representations and Warranties of the Servicer.
(a) The Servicer hereby represents and warrants to the Depositor
and
the Trustee as follows, as of the date
hereof:
(i) The Servicer is duly organized and is validly existing as a
corporation in good standing under the laws
of the State of Nevada and is duly
authorized and qualified to transact any
and all business contemplated by this
Agreement to be conducted by the Servicer
in any state in which a Mortgaged
Property is located or is otherwise not
required under
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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 corporate power and authority and to
service each Mortgage Loan, and to execute,
deliver and perform, and to enter
into and consummate the transactions
contemplated by this Agreement and has duly
authorized by all necessary corporate
action on the part of the Servicer the
execution, delivery and performance of this
Agreement; and this Agreement,
assuming the due authorization, execution
and delivery hereof by the other
parties hereto, constitutes a legal, valid
and binding obligation of the
Servicer, enforceable against the Servicer
in accordance with its terms, except
that (a) the enforceability hereof may be
limited by bankruptcy, insolvency,
moratorium, receivership and other similar
laws relating to creditors' rights
generally and (b) the remedy of specific
performance and injunctive and other
forms of equitable relief may be subject to
equitable defenses and to the
discretion of the court before which any
proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement by the
Servicer, the servicing of the Mortgage
Loans under this Agreement, the
consummation of any other of the
transactions contemplated by this Agreement,
and the fulfillment of or compliance with
the terms hereof are in the ordinary
course of business of the Servicer and will
not (A) result in a material breach
of any term or provision of the charter or
by-laws of the Servicer or (B)
materially conflict with, result in a
material breach, violation or acceleration
of, or result in a material default under,
the terms of any other material
agreement or instrument to which the
Servicer is a party or by which it may be
bound, or (C) constitute a material
violation of any statute, order or
regulation applicable to the Servicer of
any court, regulatory body,
administrative agency or governmental body
having jurisdiction over the
Servicer; and the Servicer is not in breach
or violation of any material
indenture or other material agreement or
instrument, or in violation of any
statute, order or regulation of any court,
regulatory body, administrative
agency or governmental body having
jurisdiction over it which breach or
violation may materially impair the
Servicer's ability to perform or meet any of
its obligations under this Agreement.
(iv) The Servicer is an approved servicer of mortgage loans for
Fannie Mae and is an approved servicer of
mortgage loans for Freddie Mac.
(v) No litigation is pending or, to the best of the Servicer's
knowledge, threatened, against the Servicer
that would materially and adversely
affect the execution, delivery or
enforceability of this Agreement or the
ability of the Servicer to service the
Mortgage Loans or to perform any of its
other obligations under this Agreement in
accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court
or
governmental agency or body is required for
the execution, delivery and
performance by the Servicer of, or
compliance by the Servicer with, this
Agreement or the consummation of the
transactions contemplated hereby, or if any
such consent, approval, authorization or
order is required, the Servicer has
obtained the same.
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(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 that 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, upon the written direction of the
Depositor, shall reconvey to the
Depositor the Mortgage Loan to be released
pursuant hereto in the same manner,
and on the same terms and conditions, as it
would a Mortgage Loan repurchased
for breach of a representation or warranty
contained in Section 2.03.
SECTION 2.06.
Authentication and Delivery of Certificates.
The Trustee
acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer
and assignment, the Trustee has caused
to be authenticated and delivered to or
upon the order of the Depositor, in
exchange for the Mortgage Loans,
Certificates duly authenticated by the
Authenticating Agent in authorized
denominations evidencing ownership of the
entire Trust Fund. The Trustee agrees to
hold the Trust Fund and exercise the
rights referred to above for the benefit of
all present and future Holders of
the Certificates and to perform its duties
set forth in this Agreement in
accordance with the provisions hereof.
SECTION 2.07.
REMIC Elections.
(a) The Depositor hereby instructs and authorizes the Trustee to
make
an appropriate election to treat each of
the Upper Tier REMIC and the Lower Tier
REMIC as a REMIC. The Trustee shall sign
the returns providing for such
elections and such other tax or information
returns that are required to be
signed by the Trustee under applicable law.
This Agreement shall be construed so
as to carry out the intention of the
parties that each of the Upper Tier REMIC
and the Lower Tier REMIC be treated as a
REMIC at all times prior to the date on
which the Trust Fund is terminated.
(b) The Preliminary Statement sets forth the designations and
"latest
possible maturity date" for federal income
tax purposes of all interests created
hereby. The "Startup Day" for purposes of
the REMIC Provisions shall be the
Closing Date. Each REMIC's fiscal year
shall be the calendar year.
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The Lower Tier REMIC shall consist of all of the assets of the
Trust
Fund (other than (i) amounts distributable
to the Class P Certificates pursuant
to Section 4.04(b)(i) hereof, (ii) the
interests issued by the Lower Tier REMIC
and (iii) the grantor trusts described in
Section 2.07 hereof. The Lower Tier
REMIC shall issue the Class LTA-1A
Interest, Class LTA-1B Interest, Class LTB-1
Interest, Class LTB-2 Interest, Class LTB-3
Interest, Class LTB-4 Interest,
Class LTB-5 Interest, Class LTM-1 Interest,
Class LTM-2 Interest and Class LTX
Interest, 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 a 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 REMIC for
purposes of the REMIC Provisions. If there
is more than one beneficial owner of
the Class R Certificate, the "tax matters
person" shall be the Person with the
greatest percentage interest in the Class R
Certificate and, if there is more
than one such Person, shall be determined
under Treasury regulation Section
1.860F-4(d) and Treasury regulation Section
301.6231(a)(7)-1.
(d) It is intended that the rights of each Class of the Class A,
Class
R, Class M and Class B Certificates to
receive payments in respect of Excess
Interest shall be treated as a right in
interest rate cap contracts written by
the Class C Certificateholders in favor of
the holders of each Class of the
Class A, Class R, Class M and Class B
Certificates and such shall be accounted
for as property held separate and apart
from the regular interests in the Upper
Tier REMIC held by the holders of the Class
A (other than the Class R
Certificate), Class M and Class B
Certificates and the residual interest in the
Upper Tier REMIC held by the holder of the
Class R Certificate. For information
reporting requirements, the rights of the
Class A, Class R, Class M and Class B
Certificates to receive payments in respect
of Excess Interest shall be assumed
to have zero value or a de minimis value.
This provision is intended to satisfy
the requirements of Treasury Regulations
Section 1.860G-2(i) for the treatment
of property rights coupled with REMIC
interests to be separately respected and
shall be interpreted consistently with such
regulation. On each Distribution
Date, to the extent that any of the Class
A, Class R, Class M and Class B
Certificates receive payments of Excess
Interest, such amounts will be treated
as distributed by the Upper-Tier REMIC to
the Class C Certificates pro rata in
payment
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of the amounts specified in Section 4.04(g)
and then paid to the relevant Class
of Certificates pursuant to the related
interest rate cap agreement.
(e) The parties intend that the portion of the Trust Fund
consisting
of the Uncertificated Class C Interest and
the obligation of the holders of the
Class C Certificates to pay amounts of
Excess Interest to the holders of the
Class A, Class R, Class M and Class B
Certificates shall be treated as a
"grantor trust" under the Code, 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, Class R, Class M, Class
B and Class C Certificates as may be
applicable under the Code.
(f) The parties intend that the portion of the Trust Fund
consisting
of the right to receive 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, and the provisions hereof
shall be interpreted consistently with
this intention. In furtherance of such
intention, the Trustee shall (i) furnish
or cause to be furnished to the holders of
the Class P Certificates information
regarding their allocable share of the
income with respect to such grantor trust
and (ii) file or cause to be filed with the
Internal Revenue Service Form 1041
(together with any necessary attachments)
and such other forms as may be
applicable.
(g) Reserved.
(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
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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.
(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 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 a Class R Certificate, as
applicable, nor for any such Losses
resulting from misinformation provided by
the Holder of such 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 such 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 those 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 Servicer 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, the
Trustee or the Holder of a Class R
Certificate, as applicable, nor for any such
Losses resulting from misinformation
provided by the Holder of such Class R
Certificate on which the Trustee has
relied. The
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foregoing shall not be deemed to limit or
restrict the rights and remedies of
the Holder of such 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 those
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).
S
