<PAGE>
Exhibit: 4.1
MERRILL LYNCH MORTGAGE INVESTORS, INC.
Depositor
WILSHIRE CREDIT CORPORATION,
Servicer
and
WELLS FARGO BANK, N.A.
Trustee
----------
POOLING AND
SERVICING AGREEMENT
Dated as of August 1, 2005
----------
MERRILL LYNCH MORTGAGE INVESTORS TRUST,
MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2005-FM1
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ARTICLE I
DEFINITIONS...................................................
1
ARTICLE II CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES.. 45
SECTION 2.01. Conveyance of Mortgage
Loans........................... 45
SECTION 2.02. Acceptance by the Trustee of the
Mortgage Loans........ 47
SECTION 2.03. Representations, Warranties and
Covenants of the
Depositor..............................................
48
SECTION 2.04. Representations and Warranties of
the Servicer......... 52
SECTION 2.05. Substitutions and Repurchases of
Mortgage Loans which
are not "Qualified Mortgages"..........................
53
SECTION 2.06. Authentication and Delivery of
Certificates............ 54
SECTION 2.07. REMIC
Elections........................................ 54
SECTION 2.08.
[RESERVED].............................................
57
SECTION 2.09. Covenants of the
Servicer.............................. 57
SECTION 2.10.
[RESERVED].............................................
57
SECTION 2.11. Permitted Activities of the
Trust...................... 57
SECTION 2.12. Qualifying Special Purpose
Entity...................... 57
ARTICLE III ADMINISTRATION AND SERVICING OF
MORTGAGE LOANS............... 57
SECTION 3.01. Servicer to Service Mortgage
Loans..................... 58
SECTION 3.02. Servicing and Subservicing;
Enforcement of the
Obligations of Servicer................................
59
SECTION 3.03. Rights of the Depositor and the
Trustee in Respect of
the Servicer...........................................
60
SECTION 3.04. Trustee to Act as
Servicer............................. 60
SECTION 3.05. Collection of Mortgage Loan
Payments; Collection
Account; Certificate Account...........................
61
SECTION 3.06. Collection of Taxes, Assessments
and Similar Items;
Escrow Accounts........................................
64
SECTION 3.07. Access to Certain Documentation
and Information
Regarding the Mortgage Loans...........................
64
SECTION 3.08. Permitted Withdrawals from the
Collection Account and
Certificate Account....................................
65
SECTION 3.09.
[RESERVED].............................................
67
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SECTION 3.10. Maintenance of Hazard
Insurance........................ 67
SECTION 3.11. Enforcement of Due-On-Sale
Clauses; Assumption
Agreements.............................................
68
SECTION 3.12. Realization Upon Defaulted
Mortgage Loans;
Determination of Excess Proceeds; Special Loss
Mitigation.............................................
68
SECTION 3.13. Trustee to Cooperate; Release of
Mortgage Files........ 71
SECTION 3.14. Documents, Records and Funds in
Possession of
Servicer
to be Held for the Trustee.................... 72
SECTION 3.15. Servicing
Compensation................................. 73
SECTION 3.16. Access to Certain
Documentation........................ 73
SECTION 3.17. Annual Statement as to
Compliance...................... 73
SECTION 3.18. Annual Independent Public
Accountants' Servicing
Statement; Financial Statements........................
74
SECTION 3.19.
Reserved...............................................
74
SECTION 3.20. Periodic
Filings....................................... 74
SECTION 3.21. Annual Certificate by
Trustee.......................... 75
SECTION 3.22. Annual Certificate by
Servicer......................... 75
SECTION 3.23. Prepayment Charge Reporting
Requirements............... 76
SECTION 3.24. Information to the
Trustee............................. 76
SECTION 3.25.
Indemnification........................................
76
SECTION 3.26.
Nonsolicitation........................................
77
SECTION 3.27. High Cost Mortgage
Loans............................... 77
SECTION 3.28. MI Policies; Claims under the MI
Policies.............. 77
ARTICLE IV
DISTRIBUTIONS.................................................
77
SECTION 4.01.
Advances...............................................
77
SECTION 4.02. Reduction of Servicing
Compensation in Connection
with Prepayment Interest Shortfalls....................
78
SECTION 4.03. Distributions on the REMIC
Interests................... 79
SECTION 4.04.
Distributions..........................................
79
SECTION 4.05. Monthly Statements to
Certificateholders............... 85
ARTICLE V THE
CERTIFICATES...............................................
88
Section 5.01. The
Certificates....................................... 88
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SECTION 5.02. Certificate Register; Registration
of Transfer and
Exchange of Certificates...............................
89
SECTION 5.03. Mutilated, Destroyed, Lost or
Stolen Certificates...... 93
SECTION 5.04. Persons Deemed
Owners.................................. 93
SECTION 5.05. Access to List of
Certificateholders' Names and
Addresses..............................................
93
SECTION 5.06. Book-Entry
Certificates................................ 93
SECTION 5.07. Notices to
Depository.................................. 94
SECTION 5.08. Definitive
Certificates................................ 94
SECTION 5.09. Maintenance of Office or
Agency........................ 95
ARTICLE VI THE DEPOSITOR AND THE
SERVICER................................ 95
SECTION 6.01. Respective Liabilities of the
Depositor and the
Servicer...............................................
95
SECTION 6.02. Merger or Consolidation of the
Depositor and the
Servicer...............................................
95
SECTION 6.03. Limitation on Liability of the
Depositor, the
Servicer and Others....................................
96
SECTION 6.04. Limitation on Resignation of
Servicer.................. 96
SECTION 6.05. Errors and Omissions Insurance;
Fidelity Bonds......... 97
ARTICLE VII DEFAULT; TERMINATION OF
SERVICER............................. 97
SECTION 7.01. Events of
Default...................................... 97
SECTION 7.02. Trustee to Act; Appointment of
Successor............... 98
SECTION 7.03. Notification to
Certificateholders..................... 99
ARTICLE VIII CONCERNING The
Trustee...................................... 99
SECTION 8.01. Duties of the
Trustee.................................. 99
SECTION 8.02. Certain Matters Affecting the
Trustee.................. 100
SECTION 8.03. Trustee Not Liable for
Certificates or Mortgage Loans.. 102
SECTION 8.04. Trustee May Own
Certificates........................... 102
SECTION 8.05. Trustee's Fees and
Expenses............................ 102
SECTION 8.06. Indemnification and Expenses of
Trustee................ 102
SECTION 8.07. Eligibility Requirements for
Trustee................... 103
SECTION 8.08. Resignation and Removal of
Trustee..................... 104
SECTION 8.09. Successor
Trustee...................................... 104
SECTION 8.10. Merger or Consolidation of
Trustee..................... 105
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SECTION 8.11. Appointment of Co-Trustee or
Separate Trustee.......... 105
SECTION 8.12. Tax
Matters............................................ 106
ARTICLE IX
TERMINATION...................................................
108
SECTION 9.01. Termination upon Liquidation or
Repurchase of all
Mortgage Loans.........................................
108
SECTION 9.02. Final Distribution on the
Certificates................. 109
SECTION 9.03. Additional Termination
Requirements.................... 110
ARTICLE X MISCELLANEOUS
PROVISIONS....................................... 112
SECTION 10.01.
Amendment..............................................
112
SECTION 10.02.
Counterparts...........................................
113
SECTION 10.03. Governing
Law.......................................... 113
SECTION 10.04. Intention of
Parties................................... 113
SECTION 10.05.
Notices................................................
114
SECTION 10.06. Severability
of Provisions............................. 115
SECTION 10.07.
Assignment.............................................
115
SECTION 10.08. Limitation on
Rights of Certificateholders............. 116
SECTION 10.09. Inspection
and Audit Rights............................ 117
SECTION 10.10. Certificates
Nonassessable and Fully Paid.............. 117
SECTION 10.11. Third Party
Rights..................................... 117
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EXHIBIT A FORMS OF
CERTIFICATES
EXHIBIT B-1 MORTGAGE LOAN SCHEDULE
-MORTGAGE POOL
EXHIBIT B-2 MORTGAGE LOAN SCHEDULE -
GROUP ONE MORTGAGE LOANS
EXHIBIT B-3 MORTGAGE LOAN SCHEDULE -
GROUP TWO MORTGAGE LOANS
EXHIBIT B-4 MORTGAGE LOAN SCHEDULE - M1
MORTGAGE LOANS
EXHIBIT C [RESERVED]
EXHIBIT D FORM OF
CUSTODIAN CERTIFICATION
EXHIBIT E-1 FORM OF TRANSFEREE'S LETTER
AND AFFIDAVIT
EXHIBIT E-2 FORM OF TRANSFEROR'S
AFFIDAVIT
EXHIBIT F FORM OF
TRANSFEROR CERTIFICATE
EXHIBIT G FORM OF
INVESTMENT LETTER (ACCREDITED INVESTOR)
EXHIBIT H FORM OF RULE
144A LETTER (QUALIFIED INSTITUTIONAL BUYER)
EXHIBIT I FORM OF REQUEST
FOR RELEASE
EXHIBIT J [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 CAP
CONTRACT
EXHIBIT O ONE-MONTH LIBOR
CAP TABLE - CAP CONTRACT
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<PAGE>
POOLING AND SERVICING AGREEMENT (the "Agreement"), dated as of
August
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 WELLS FARGO BANK, N.A, a national
banking association, as trustee (the
"Trustee").
The Depositor is the owner of the Trust Fund that is hereby
conveyed
to the Trustee in return for the
Certificates. The Trust Fund for federal income
tax purposes will consist of (i) two real
estate mortgage investment conduits,
(ii) the right to receive payments
distributable to the Class P Certificates
pursuant to Section 4.04(b)(i) hereof,
(iii) the Cap Contract and the Cap
Contract Account and (iv) the grantor
trusts described in Section 2.07 hereof.
The Lower Tier REMIC will consist of all of
the assets constituting the Trust
Fund (other than the assets described in
clauses (ii), (iii) and (iv) above and
the Lower Tier REMIC Regular Interests) and
will be evidenced by the Lower Tier
REMIC Regular Interests (which will be
uncertificated and will represent the
"regular interests" in the Lower Tier
REMIC) and the Class LTR Interest as the
single "residual interest" in the Lower
Tier REMIC. The Trustee will hold the
Lower Tier REMIC Regular Interests. The
Upper Tier REMIC will consist of the
Lower Tier REMIC Regular Interests and will
be evidenced by the REMIC Regular
Interests (which will represent the
"regular interests" in the Upper Tier REMIC)
and the Residual Interest as the single
"residual interest" in the Upper Tier
REMIC. The Class R Certificate will
represent beneficial ownership of the Class
LTR Interest and the Residual Interest. The
"latest possible maturity date" for
federal income tax purposes of all
interests created hereby will be the Latest
Possible Maturity Date.
All covenants and agreements made by the Transferor in the
Transfer
Agreement, by the Seller in the Sale
Agreement and by the Depositor and the
Trustee herein with respect to the Mortgage
Loans and the other property
constituting the Trust Fund are for the
benefit of the Holders from time to time
of the Certificates.
In consideration of the mutual agreements herein contained, the
Depositor, the Servicer and the Trustee
hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and
phrases,
unless the context otherwise requires,
shall have the following meanings:
Accepted
Servicing Practices: The Servicer's normal servicing practices,
which will conform to the mortgage
servicing practices of prudent mortgage
lending institutions which service for
their own account mortgage loans of the
same type as the Mortgage Loans in the
jurisdictions in which the related
Mortgaged Properties are located.
Accrual Period:
With respect to each Class of Certificates and the Lower
Tier REMIC Interests and any Distribution
Date, the period commencing on the
immediately preceding Distribution Date
(or, in the case of the first
Distribution Date, the Closing Date) and
ending on the day immediately preceding
such Distribution Date. All calculations of
interest on each Class of
Certificates and the Lower Tier REMIC
Interests will be made on the basis of the
actual number of days elapsed in the
related Accrual Period and a 360 day year.
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Adjustable Rate
Mortgage Loan: A Mortgage Loan identified in the Mortgage
Loan Schedule as having a Mortgage Rate
that is adjustable.
Adjustment Date:
As to each Adjustable Rate Mortgage Loan, each date on
which the related Mortgage Rate is subject
to adjustment, as provided in the
related Mortgage Note.
Advance: The
aggregate of the advances required to be made by the Servicer
with respect to any Distribution Date
pursuant to Section 4.01, the amount of
any such advances being equal to the sum of
the aggregate of payments of
principal and interest (net of the
Servicing Fee Rate) on the Mortgage Loans
that were due during the applicable Due
Period and not received as of the close
of business on the related Determination
Date, less the aggregate amount of any
such Delinquent payments that the Servicer
has determined would constitute a
Non-Recoverable Advance were an advance to
be made with respect thereto;
provided, however, that with respect to any
Mortgage Loan 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 be limited to payments
of interest.
Advance
Facility: A financing or other facility as described in Section
10.07(a).
Advancing
Person: The Person to whom the Servicer's rights under this
Agreement to be reimbursed for any Advances
or Servicing Advances have been
assigned pursuant to Section 10.07.
Affiliate: With
respect to any specified Person, any other Person
controlling, controlled by or under common
control with such Person. For the
purposes of this definition, "control"
means the power to direct the management
and policies of a Person, directly or
indirectly, whether through ownership of
voting securities, by contract or
otherwise; and the terms "controlling" and
"controlled" have meanings correlative to
the foregoing.
Aggregate
Certificate Principal Balance: For any date of determination,
the
sum of the Class A-1A Certificate Principal
Balance, the Class A-1B Certificate
Principal Balance, the Class A-2A
Certificate Principal Balance, the Class A-2B
Certificate Principal Balance, the Class
A-2C Certificate Principal Balance, the
Class A-2D Certificate Principal Balance,
the Class R Certificate Principal
Balance, the Class M-1 Certificate
Principal Balance, the Class M-2 Certificate
Principal Balance, the Class M-3
Certificate Principal Balance, the Class M-4
Certificate Principal Balance, the Class
M-5 Certificate Principal Balance, the
Class M-6 Certificate Principal Balance,
the Class B-1 Certificate Principal
Balance, the Class B-2 Certificate
Principal Balance, and the Class B-3
Certificate Principal Balance, in each case
as of such date of determination.
Agreement: This
Pooling and Servicing Agreement and any and all amendments
or supplements hereto made in accordance
with the terms herein.
Applied Realized
Loss Amount: With respect to any Distribution Date, the
amount, if any, by which, the sum of (i)
the Aggregate Certificate Principal
Balance and (ii) the Class C Certificate
Principal Balance after distributions
of principal on such Distribution Date
exceeds the aggregate Stated Principal
Balance of the Mortgage Loans as of such
Distribution Date.
Appraised Value:
With respect to a Mortgage Loan the proceeds of which were
used to purchase the related Mortgaged
Property, the "Appraised Value" of a
Mortgaged Property is the lesser of (1) the
appraised value based on an
appraisal made for the Seller by an
independent fee appraiser at the time of the
origination of the related Mortgage Loan,
and (2) the sales price of such
Mortgaged Property at such time of
origination. With respect to a Mortgage Loan
the proceeds of which were used to
refinance an
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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 Date:
The date on which the Auction occurs.
Available Funds
Cap: With respect to any Distribution Date, 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 Class A, Class M and
Class B Certificates immediately prior to
such Distribution Date multiplied by
30 and divided by the actual number of days
in the related Accrual Period.
Balloon Loan: A
Mortgage Loan having an original term to stated maturity of
approximately 15 years and that provides
for level monthly payments of principal
and interest generally 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, Class M and Class B
Certificates constitutes a Class of Book-Entry
Certificates.
Book-Entry
Regulation S Global Securities: As defined in Section 5.01.
Bring Down
Letter: That certain letter agreement, dated as of August 31,
2005 between Fremont and the Seller.
Business Day:
Any day other than (1) a Saturday or a Sunday, or (2) a day
on which banking institutions in the State
of California, State of Maryland,
State of Minnesota, State of Oregon and in
the City of New York, New York are
authorized or obligated by law or executive
order to be closed.
Cap Contract: An
amended confirmation and agreement between the Trustee, on
behalf of the Trust, and the Cap Contract
Counterparty.
Cap Contract
Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 4.04(k)
in the name of the Trustee for the
benefit of the Trust Fund and designated
"Wells Fargo Bank, N.A., as Trustee, in
trust for registered holders of Merrill
Lynch Mortgage Investors Trust, Mortgage
Loan Asset-Backed Certificates, Series
2005-FM1." Funds in the Cap Contract
Account shall be held in trust for the
Trust Fund for the uses and purposes set
forth in this Agreement.
Cap Contract
Counterparty: Bear Stearns Financial Products Inc.
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Cap Contract
Notional Balance: As of any Distribution Date, the lesser of
(x) the Notional Balance of the Cap
Contract for such Distribution Date forth in
the table in Exhibit O and (y) the
outstanding Certificate Principal Balance of
the Class A, Class M and Class B
Certificates.
Cap Contract
Termination Date: The Distribution Date in March 2012.
Certificate: Any
one of the certificates of any Class executed by the
Trustee and authenticated by the Trustee in
substantially the forms attached
hereto as Exhibit A.
Certificate
Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 3.05(f)
in the name of the Trustee for the
benefit of the Certificateholders and
designated "Wells Fargo Bank, N.A., as
Trustee, in trust for registered holders of
Merrill Lynch Mortgage Investors
Trust, Mortgage Loan Asset-Backed
Certificates, Series 2005-FM1." Funds in the
Certificate Account shall be held in trust
for the Certificateholders for the
uses and purposes set forth in this
Agreement.
Certificate
Group: Either of Certificate Group One or Certificate Group
Two.
Certificate
Group One: The Class A-1A, Class A-1B and Class R Certificates.
For purposes of Section 2.07 hereof,
Certificate Group One shall be related to
Group One.
Certificate
Group Two: The Class A-2A, Class A-2B, Class A-2C and Class
A-2D Certificates. For purposes of Section
2.07 hereof, Certificate Group Two
shall be related to Group Two.
Certificate
Owner: With respect to a Book-Entry Certificate, the Person
that is the beneficial owner of such
Book-Entry Certificate.
Certificate
Principal Balance: As to any Certificate and as of any
Distribution Date, the Initial Certificate
Principal Balance of such Certificate
less the sum of (1) all amounts distributed
with respect to such Certificate in
reduction of the Certificate Principal
Balance thereof on previous Distribution
Dates pursuant to Section 4.04, and (2) any
Applied Realized Loss Amounts
allocated to such Certificate on previous
Distribution Dates pursuant to Section
4.04(i). On each Distribution Date, after
all distributions of principal on such
Distribution Date, a portion of the Class C
Interest Carry Forward Amount in an
amount equal to the excess of the
Overcollateralization Amount on such
Distribution Date over the
Overcollateralization Amount as of the preceding
Distribution Date (or, in the case of the
first Distribution Date, the initial
Overcollateralization Amount (based on the
Stated Principal Balance of the
Mortgage Loans as of the Cut-Off Date))
will be added to the aggregate
Certificate Principal Balance of the Class
C Certificates (on a pro rata basis).
Notwithstanding the foregoing on any
Distribution Date relating to a Due Period
in which a Subsequent Recovery has been
received by the Servicer, the
Certificate Principal Balance of any Class
of Certificates then outstanding for
which any Applied Realized Loss Amount has
been allocated will be increased, in
order of seniority, by an amount equal to
the lesser of (i) the Unpaid Realized
Loss Amount for such Class of Certificates
and (ii) the total of any Subsequent
Recovery distributed on such date to the
Certificateholders (reduced by the
amount of the increase in the Certificate
Principal Balance of any more senior
Class of Certificates pursuant to this
sentence on such Distribution Date).
Certificate Register:
The register maintained pursuant to Section 5.02
hereof.
Certificateholder or Holder: The Person in whose name a Certificate
is
registered in the Certificate Register
(initially, Cede & Co., as nominee for
the Depository) in the case of any Class of
Regular Certificates or the Class R
Certificate, except that solely for the
purpose of giving any consent pursuant
to this Agreement, any Certificate
registered in the name of the Depositor or
any Affiliate of the
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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 Principal Balance: For any date of determination,
the
sum of the Class A-1A Certificate Principal
Balance, the Class A-1B Certificate
Principal Balance, the Class R Certificate
Principal Balance, the Class A-2A
Certificate Principal Balance, the Class
A-2B Certificate Principal Balance, the
Class A-2C Certificate Principal Balance
and the Class A-2D Certificate
Principal Balance.
Class A
Certificates: Any of the Class A-1A Certificates, the Class
A-1B
Certificates, the Class A-2A Certificates,
the Class A-2B Certificates, the
Class A-2C Certificates, the Class A-2D
Certificates and the Class R
Certificates
Class A
Principal Distribution Amount: With respect to any Distribution
Date (1) prior to the Stepdown Date or any
Distribution Date on which a Stepdown
Trigger Event exists, 100% of the Principal
Distribution Amount for such
Distribution Date and (2) on or after the
Stepdown Date where a Stepdown Trigger
Event does not exist, the excess of (A) the
Class A Certificate Principal
Balance immediately prior to such
Distribution Date over (B) the lesser of (i)
62.30% of the Stated Principal Balance of
the Mortgage Loans as of the end of
the immediately preceding Due Period and
(ii) the excess of the Stated Principal
Balance of the Mortgage Loans as of the end
of the immediately preceding Due
Period over the Minimum Required
Overcollateralization Amount provided, however,
that in no event will the Class A Principal
Distribution Amount with respect to
any Distribution Date exceed the aggregate
Certificate Principal Balance of the
Class A Certificates.
Class A-1
Trigger Event: The situation that exists with respect to any
Distribution Date (a) during the period
from the Closing Date through the
Distribution Date in August 2008, if the
aggregate amount of Realized Losses
incurred from the Cut-off Date through the
last day of the related Due Period
(after giving effect to scheduled payments
received or advanced on or before the
related Determination Date and Principal
Prepayments received during the related
Prepayment Period) divided by the sum of
the aggregate Stated Principal Balance
of the Mortgage Loans as of the Cut-off
Date exceeds 2.25%, or (b) on any
Distribution Date on or after September
2008, if a Stepdown Trigger Event is in
effect.
Class A-1A
Certificate: Any Certificate designated as a "Class A-1A
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class A-1A
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class A-1A Certificates.
Class A-1A
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class A-1A Pass-Through Rate on
the Class A-1A Certificate Principal
Balance as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Current
Interest or a Class A-1A Interest Carry
Forward Amount that is recovered as a
voidable preference by a trustee in
bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution
Date to the Class A-1A Certificates.
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Class A-1A
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-1A
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
A-1A Certificates with respect to interest
on such prior Distribution Dates and
(2) interest on such excess (to the extent
permitted by applicable law) at the
Class A-1A Pass-Through Rate for the
related Accrual Period.
Class A-1A
Margin: As of any Distribution Date up to and including the
Optional Termination Date for the
Certificates, 0.270% per annum and, as of any
Distribution Date after the Optional
Termination Date, 0.540% per annum.
Class A-1A
Pass-Through Rate: For the first Distribution Date, 3.940% per
annum. As of any Distribution Date
thereafter, the least of (1) One-Month LIBOR
plus the Class A-1A Margin, (2) the
Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.
Class A-1B
Certificate: Any Certificate designated as a "Class A-1B
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class A-1B
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class A-1B Certificates.
Class A-1B
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class A-1B Pass-Through Rate on
the Class A-1B Certificate Principal
Balance as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Current
Interest or a Class A-1B Interest Carry
Forward Amount that is recovered as a
voidable preference by a trustee in
bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution
Date to the Class A-1B Certificates.
Class A-1B
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-1B
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
A-1B Certificates with respect to interest
on such prior Distribution Dates and
(2) interest on such excess (to the extent
permitted by applicable law) at the
Class A-1B Pass-Through Rate for the
related Accrual Period.
Class A-1B
Margin: As of any Distribution Date up to and including the
Optional Termination Date for the
Certificates, 0.320% per annum and, as of any
Distribution Date after the Optional
Termination Date, 0.640% per annum.
Class A-1B
Pass-Through Rate: For the first Distribution Date, 3.990% per
annum. As of any Distribution Date
thereafter, the least of (1) One-Month LIBOR
plus the Class A-1B Margin, (2) the
Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.
Class A-2
Certificates: Each of the Class A-2A Certificates, the Class
A-2B
Certificates, the Class A-2C Certificates
and the Class A-2D Certificates.
Class A-2A
Certificate: Any Certificate designated as a "Class A-2A
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class A-2A
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class A-2A Certificates.
Class A-2A
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class A-2A Pass-Through Rate on
the Class A-2A Certificate Principal
Balance as
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<PAGE>
of such Distribution Date plus the portion
of any previous distributions on such
Class in respect of Current Interest or a
Class A-2A Interest Carry Forward
Amount that is recovered as a voidable
preference by a trustee in bankruptcy,
less any Non-Supported Interest Shortfall
allocated on such Distribution Date to
the Class A-2A Certificates.
Class A-2A Interest
Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2A
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
A-2A Certificates with respect to interest
on such prior Distribution Dates and
(2) interest on such excess (to the extent
permitted by applicable law) at the
Class A-2A Pass-Through Rate for the
related Accrual Period.
Class A-2A
Margin: As of any Distribution Date up to and including the
Optional Termination Date for the
Certificates, 0.120% per annum and, as of any
Distribution Date after the Optional
Termination Date, 0.240% per annum.
Class A-2A
Pass-Through Rate: For the first Distribution Date, 3.790% per
annum. As of any Distribution Date
thereafter, the least of (1) One-Month LIBOR
plus the Class A-2A Margin, (2) the
Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.
Class A-2B
Certificate: Any Certificate designated as a "Class A-2B
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class A-2B
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class A-2B Certificates.
Class A-2B
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class A-2B Pass-Through Rate on
the Class A-2B Certificate Principal
Balance as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Current
Interest or a Class A-2B Interest Carry
Forward Amount that is recovered as a
voidable preference by a trustee in
bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution
Date to the Class A-2B Certificates.
Class A-2B
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2B
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
A-2B Certificates with respect to interest
on such prior Distribution Dates and
(2) interest on such excess (to the extent
permitted by applicable law) at the
Class A-2B Pass-Through Rate for the
related Accrual Period.
Class A-2B
Margin: As of any Distribution Date up to and including the
Optional Termination Date for the
Certificates, 0.180% per annum and, as of any
Distribution Date after the Optional
Termination Date, 0.360% per annum.
Class A-2B
Pass-Through Rate: For the first Distribution Date, 3.850% per
annum. As of any Distribution Date
thereafter, the least of (1) One-Month LIBOR
plus the Class A-2B Margin, (2) the
Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.
Class A-2C
Certificate: Any Certificate designated as a "Class A-2C
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class A-2C
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class A-2C Certificates.
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<PAGE>
Class A-2C
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class A-2C Pass-Through Rate on
the Class A-2C Certificate Principal
Balance as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Current
Interest or a Class A-2C Interest Carry
Forward Amount that is recovered as a
voidable preference by a trustee in
bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution
Date to the Class A-2C Certificates.
Class A-2C
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2C
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
A-2C Certificates with respect to interest
on such prior Distribution Dates and
(2) interest on such excess (to the extent
permitted by applicable law) at the
Class A-2C Pass-Through Rate for the
related Accrual Period.
Class A-2C
Margin: As of any Distribution Date up to and including the
Optional Termination Date for the
Certificates, 0.250% per annum and, as of any
Distribution Date after the Optional
Termination Date, 0.500% per annum.
Class A-2C
Pass-Through Rate: For the first Distribution Date, 3.920% per
annum. As of any Distribution Date
thereafter, the least of (1) One-Month LIBOR
plus the Class A-2C Margin, (2) the
Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.
Class A-2D
Certificate: Any Certificate designated as a "Class A-2D
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class A-2D
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class A-2D Certificates.
Class A-2D
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class A-2D Pass-Through Rate on
the Class A-2D Certificate Principal
Balance as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Current
Interest or a Class A-2D Interest Carry
Forward Amount that is recovered as a
voidable preference by a trustee in
bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution
Date to the Class A-2D Certificates.
Class A-2D
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2D
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
A-2D 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-2D Pass-Through Rate for the
related Accrual Period.
Class A-2D
Margin: As of any Distribution Date up to and including the
Optional Termination Date for the
Certificates, 0.380% per annum and, as of any
Distribution Date after the Optional
Termination Date, 0.760% per annum.
Class A-2D
Pass-Through Rate: For the first Distribution Date, 4.050% per
annum. As of any Distribution Date
thereafter, the least of (1) One-Month LIBOR
plus the Class A-2D Margin, (2) the
Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.
Class B
Certificates: Any of the Class B-1, Class B-2 or Class B-3
Certificates.
-8-
<PAGE>
Class B-1
Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts
with respect to the Mortgage Loans that
have been applied to the reduction of the
Certificate Principal Balance of the
Class B-1 Certificates.
Class B-1
Certificate: Any Certificate designated as a "Class B-1
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class B-1
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class B-1 Certificates.
Class B-1
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class B-1 Pass-Through Rate on
the Class B-1 Certificate Principal Balance
as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Current
Interest or a Class B-1 Interest Carry
Forward Amount that is recovered as a
voidable preference by a trustee in
bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution
Date to the Class B-1 Certificates.
Class B-1
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-1
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
B-1 Certificates with respect to interest
on such prior Distribution Dates and
(2) interest on such excess (to the extent
permitted by applicable law) at the
Class B-1 Pass-Through Rate for the related
Accrual Period.
Class B-1
Margin: As of any Distribution Date up to and including the
Optional Termination Date for the
Certificates, 1.800% per annum and, as of any
Distribution Date after the Optional
Termination Date, 2.700% per annum.
Class B-1
Pass-Through Rate: For the first Distribution Date, 5.470% per
annum. As of any Distribution Date
thereafter, the least of (1) One-Month LIBOR
plus the Class B-1 Margin, (2) the
Available Funds Cap and (3) the Maximum Rate
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 M-1 Certificate Principal Balance,
the Class M-2 Certificate Principal
Balance, the Class M-3 Certificate
Principal Balance, the Class M-4 Certificate
Principal Balance, the Class M-5
Certificate Principal Balance and the Class M-6
Certificate Principal Balance have been
reduced to zero and a Stepdown Trigger
Event exists, or as long as a Stepdown
Trigger Event does not exist, the excess
of (1) the sum of (A) the Class A
Certificate Principal Balance (after taking
into account distributions of the Class A
Principal Distribution Amount on such
Distribution Date), (B) the Class M-1
Certificate Principal Balance (after
taking into account distributions of the
Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Class
M-2 Certificate Principal Balance
(after taking into account distributions of
the Class M-2 Principal Distribution
Amount on such Distribution Date), (D) the
Class M-3 Certificate Principal
Balance (after taking into account
distributions of the Class M-3 Principal
Distribution Amount on such Distribution
Date), (E) the Class M-4 Certificate
Principal Balance (after taking into
account distributions of the Class M-4
Principal Distribution Amount on such
Distribution Date), (F) the Class M-5
Certificate Principal Balance (after taking
into account distributions of the
Class M-5 Principal Distribution Amount on
such Distribution Date), (G) the
Class M-6 Certificate Principal Balance
(after taking into account distributions
of the Class M-6 Principal Distribution
Amount on such Distribution Date) and
(H) the Class B-1 Certificate Principal
Balance immediately prior to such
Distribution Date over (2) the lesser of
(A) 95.00% of the Stated Principal
Balance of the Mortgage Loans as of the end
of the immediately preceding Due
Period and (B) the excess of the Stated
Principal Balance of the Mortgage Loans
as of the end of the immediately preceding
Due Period over the Minimum
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<PAGE>
Required Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown
Date on which the Certificate Principal
Balance of each Class of Class A
Certificates and Class M Certificates has been
reduced to zero, the Class B-1 Principal
Distribution Amount will equal the
lesser of (x) the outstanding Certificate
Principal Balance of the Class B-1
Certificates and (y) 100% of the Principal
Distribution Amount remaining after
any distributions on such Class A and Class
M Certificates and (II) in no event
will the Class B-1 Principal Distribution
Amount with respect to any
Distribution Date exceed the Class B-1
Certificate Principal Balance.
Class B-1 Unpaid
Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-1 Applied
Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class
B-1 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all
increases in the Certificate
Principal Balance of such Class B-1
Certificates pursuant to the last sentence
of the definition of "Certificate Principal
Balance."
Class B-2
Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts
with respect to the Mortgage Loans that
have been applied to the reduction of the
Certificate Principal Balance of the
Class B-2 Certificates.
Class B-2
Certificate: Any Certificate designated as a "Class B-2
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class B-2
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class B-2 Certificates.
Class B-2
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class B-2 Pass-Through Rate on
the Class B-2 Certificate Principal Balance
as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Current
Interest or a Class B-2 Interest Carry
Forward Amount that is recovered as a
voidable preference by a trustee in
bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution
Date to the Class B-2 Certificates.
Class B-2
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-2
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
B-2 Certificates with respect to interest
on such prior Distribution Dates and
(2) interest on such excess (to the extent
permitted by applicable law) at the
Class B-2 Pass-Through Rate for the related
Accrual Period.
Class B-2
Margin: As of any Distribution Date up to and including the
Optional Termination Date for the
Certificates, 2.000% per annum and, as of any
Distribution Date after the Optional
Termination Date, 3.000% per annum.
Class B-2
Pass-Through Rate: For the first Distribution Date, 5.670% per
annum. As of any Distribution Date
thereafter, the least of (1) One-Month LIBOR
plus the Class B-2 Margin, (2) the
Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.
Class B-2
Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of
the Principal Distribution Amount
for such Distribution Date if the Class A
Certificate Principal Balance, the
Class M-1 Certificate Principal Balance,
the Class M-2 Certificate Principal
Balance, the Class M-3 Certificate
Principal Balance, the Class M-4 Certificate
Principal Balance, the Class M-5
Certificate Principal Balance, the Class M-6
Certificate Principal Balance and the Class
B-1 Certificate Principal Balance
have been reduced to zero and a Stepdown
Trigger Event exists, or as long as a
Stepdown Trigger Event does not exist, the
excess of (1) the sum of (A) the
Class A
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<PAGE>
Certificate Principal Balance (after taking
into account distributions of the
Class A Principal Distribution Amount on
such Distribution Date), (B) the Class
M-1 Certificate Principal Balance (after
taking into account distributions of
the Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance
(after taking into account distributions
of the Class M-2 Principal Distribution
Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance
(after taking into account
distributions of the Class M-3 Principal
Distribution Amount on such
Distribution Date), (E) the Class M-4
Certificate Principal Balance (after
taking into account distributions of the
Class M-4 Principal Distribution Amount
on such Distribution Date), (F) the Class
M-5 Certificate Principal Balance
(after taking into account distributions of
the Class M-5 Principal Distribution
Amount on such Distribution Date), (G) the
Class M-6 Certificate Principal
Balance (after taking into account
distributions of the Class M-6 Principal
Distribution Amount on such Distribution
Date), (H) the Class B-1 Certificate
Principal Balance (after taking into
account distributions of the Class B-1
Principal Distribution Amount on such
Distribution Date) and (I) the Class B-2
Certificate Principal Balance immediately
prior to such Distribution Date over
(2) the lesser of (A) 96.00% of the Stated
Principal Balance of the Mortgage
Loans as of the end of the immediately
preceding Due Period and (B) the excess
of the Stated Principal Balance of the
Mortgage Loans as of the end of the
immediately preceding Due Period over the
Minimum Required Overcollateralization
Amount. Notwithstanding the foregoing, (I)
on any Distribution Date prior to the
Stepdown Date on which the Certificate
Principal Balance of each Class of Class
A, Class M and Class B-1 Certificates has
been reduced to zero, the Class B-2
Principal Distribution Amount will equal
the lesser of (x) the outstanding
Certificate Principal Balance of the Class
B-2 Certificates and (y) 100% of the
Principal Distribution Amount remaining
after any distributions on such Class A,
Class M and Class B-1 Certificates and (II)
in no event will the Class B-2
Principal Distribution Amount with respect
to any Distribution Date exceed the
Class B-2 Certificate Principal
Balance.
Class B-2 Unpaid
Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-2 Applied
Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class
B-2 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all
increases in the Certificate
Principal Balance of such Class B-2
Certificates pursuant to the last sentence
of the definition of "Certificate Principal
Balance."
Class B-3
Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts
with respect to the Mortgage Loans that
have been applied to the reduction of the
Certificate Principal Balance of the
Class B-3 Certificates.
Class B-3
Certificate: Any Certificate designated as a "Class B-3
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class B-3
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class B-3 Certificates.
Class B-3
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class B-3 Pass-Through Rate on
the Class B-3 Certificate Principal Balance
as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Current
Interest or a Class B-3 Interest Carry
Forward Amount that is recovered as a
voidable preference by a trustee in
bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution
Date to the Class B-3 Certificates.
Class B-3
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-3
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
B-3 Certificates with respect to interest
on such prior Distribution Dates and
(2) interest on such excess (to the extent
permitted by applicable law) at the
Class B-3 Pass-Through Rate for the related
Accrual Period.
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<PAGE>
Class B-3
Margin: As of any Distribution Date up to and including the
Optional Termination Date for the
Certificates, 2.000% per annum and, as of any
Distribution Date after the Optional
Termination Date, 3.000% per annum.
Class B-3
Pass-Through Rate: For the first Distribution Date, 5.670% per
annum. As of any Distribution Date
thereafter, the least of (1) One-Month LIBOR
plus the Class B-3 Margin, (2) the
Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.
Class B-3
Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of
the Principal Distribution Amount
for such Distribution Date if the Class A
Certificate Principal Balance, the
Class M-1 Certificate Principal Balance,
the Class M-2 Certificate Principal
Balance, the Class M-3 Certificate
Principal Balance, the Class M-4 Certificate
Principal Balance, the Class M-5
Certificate Principal Balance, the Class M-6
Certificate Principal Balance, the Class
B-1 Certificate Principal Balance and
the Class B-2 Certificate Principal Balance
have been reduced to zero and a
Stepdown Trigger Event exists, or as long
as a Stepdown Trigger Event does not
exist, the excess of (1) the sum of (A) the
Class A Certificate Principal
Balance (after taking into account
distributions of the Class A Principal
Distribution Amount on such Distribution
Date), (B) the Class M-1 Certificate
Principal Balance (after taking into
account distributions of the Class M-1
Principal Distribution Amount on such
Distribution Date), (C) the Class M-2
Certificate Principal Balance (after taking
into account distributions of the
Class M-2 Principal Distribution Amount on
such Distribution Date), (D) the
Class M-3 Certificate Principal Balance
(after taking into account distributions
of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E)
the Class M-4 Certificate Principal Balance
(after taking into account
distributions of the Class M-4 Principal
Distribution Amount on such
Distribution Date), (F) the Class M-5
Certificate Principal Balance (after
taking into account distributions of the
Class M-5 Principal Distribution Amount
on such Distribution Date), (G) the Class
M-6 Certificate Principal Balance
(after taking into account distributions of
the Class M-6 Principal Distribution
Amount on such Distribution Date) and (H)
the Class B-1 Certificate Principal
Balance (after taking into account
distributions of the Class B-1 Principal
Distribution Amount on such Distribution
Date), (G) the Class B-2 Certificate
Principal Balance (after taking into
account distributions of the Class B-2
Principal Distribution Amount on such
Distribution Date) and (H) the Class B-3
Certificate Principal Balance (after taking
into account distributions of the
Class B-3 Principal Distribution Amount on
such Distribution Date) over (2) the
lesser of (A) 99.00% of the Stated
Principal Balance of the Mortgage Loans as of
the end of the immediately preceding Due
Period and (B) the excess of the Stated
Principal Balance of the Mortgage Loans as
of the end of the immediately
preceding Due Period over the Minimum
Required Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any
Distribution Date prior to the
Stepdown Date on which the Certificate
Principal Balance of each Class of Class
A, Class M, Class B-1 and Class B-2
Certificates has been reduced to zero, the
Class B-3 Principal Distribution Amount
will equal the lesser of (x) the
outstanding Certificate Principal Balance
of the Class B-3 Certificates and (y)
100% of the Principal Distribution Amount
remaining after any distributions on
such Class A, Class M, Class B-1 and Class
B-2 Certificates and (II) in no event
will the Class B-3 Principal Distribution
Amount with respect to any
Distribution Date exceed the Class B-3
Certificate Principal Balance.
Class B-3 Unpaid
Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-3 Applied
Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class
B-3 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all
increases in the Certificate
Principal Balance of such Class B-3
Certificates pursuant to the last sentence
of the definition of "Certificate Principal
Balance."
Class 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.
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<PAGE>
Class C
Certificate: Any Certificate designated as a "Class C
Certificate"
on the face thereof, in the form of Exhibit
A hereto, representing the right to
distributions as set forth herein.
Class C
Certificate Principal Balance: As of any date of determination,
the
aggregate Certificate Principal Balance of
the Class C Certificates.
Class C Current
Interest: As of any Distribution Date, the interest accrued
during the related Accrual Period at the
Class C Distributable Interest Rate on
a notional amount equal to the aggregate
principal balance of the Lower Tier
REMIC Regular Interests immediately prior
to such Distribution Date, plus the
interest portion of any previous
distributions on such Class that is recovered
as a voidable preference by a trustee in
bankruptcy, less any Non-Supported
Interest Shortfall allocated on such
Distribution Date to the Class C
Certificates.
Class C
Distributable Interest Rate: The excess, if any, of (a) the
weighted average of the interest rates on
the Lower Tier REMIC Regular Interests
over (b) two times the weighted average of
the interest rates on the Lower Tier
REMIC Regular Interests (treating for
purposes of this clause (b) the interest
rate on each of the Lower Tier REMIC Marker
Classes as being capped at the
interest rate of its Related Certificates
and treating the Class LTX Interest as
being capped at zero). The averages
described in the preceding sentence shall be
weighted on the basis of the respective
principal balances of the Lower Tier
REMIC Regular Interests immediately prior
to any date of determination.
Class C Interest
Carry Forward Amount: As of any Distribution Date, the
excess of (A) the Class C Current Interest
with respect to prior Distribution
Dates over (B) the amount actually
distributed to the Class C Certificates with
respect to interest on such prior
Distribution Dates or added to the aggregate
Certificate Principal Balance of the Class
C Certificates.
Class C Unpaid
Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class C Applied Realized
Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class
C Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all
increases in the Certificate
Principal Balance of such Class C
Certificates pursuant to the last sentence of
the definition of "Certificate Principal
Balance."
Class LTA-1A
Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance
equal to 1/2 of the initial principal
balance of its Related Certificates and an
interest rate equal to the Net Rate.
Class LTA-1B
Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance
equal to 1/2 of the initial principal
balance of its Related Certificate and an
interest rate equal to the Net Rate.
Class LTA-2A
Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance
equal to 1/2 of the initial principal
balance of its Related Certificate and an
interest rate equal to the Net Rate.
Class LTA-2B
Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance
equal to 1/2 of the initial principal
balance of its Related Certificate and an
interest rate equal to the Net Rate.
Class LTA-2C
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.
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<PAGE>
Class LTA-2D
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 LTM-1
Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance
equal to 1/2 of the initial principal
balance of its Related Certificate and an
interest rate equal to the Net Rate.
Class LTM-2
Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance
equal to 1/2 of the initial principal
balance of its Related Certificate and an
interest rate equal to the Net Rate.
Class LTM-3
Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance
equal to 1/2 of the initial principal
balance of its Related Certificate and an
interest rate equal to the Net Rate.
Class LTM-4
Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance
equal to 1/2 of the initial principal
balance of its Related Certificate and an
interest rate equal to the Net Rate.
Class LTM-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-6
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: Any of the Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5 and Class M-6
Certificates.
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<PAGE>
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 that
have been applied to the reduction of the
Certificate Principal Balance of the
Class M-1 Certificates.
Class M-1
Certificate: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class M-1
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class M-1 Certificates.
Class M-1
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class M-1 Pass-Through Rate on
the Class M-1 Certificate Principal Balance
as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Current
Interest or Class M-1 Interest Carry
Forward Amount that is recovered as a
voidable preference by a trustee in
bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution
Date to the Class M-1 Certificates.
Class M-1
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-1
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
M-1 Certificates with respect to interest
on such prior Distribution Dates and
(2) interest on such excess (to the extent
permitted by applicable law) at the
Class M-1 Pass-Through Rate for the related
Accrual Period.
Class M-1
Margin: As of any Distribution Date up to and including the
Optional Termination Date for the
Certificates, 0.480% per annum and, as of any
Distribution Date after the Optional
Termination Date, 0.720% per annum.
Class M-1
Pass-Through Rate: For the first Distribution Date, 4.150% per
annum. As of any Distribution Date
thereafter, the least of (1) One-Month LIBOR
plus the Class M-1 Margin, (2) the
Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.
Class M-1
Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of
the Principal Distribution Amount
for such Distribution Date if the Class A
Certificate Principal Balance has been
reduced to zero and a Stepdown Trigger
Event exists, or as long as a Stepdown
Trigger Event does not exist, the excess of
(1) the sum of (A) the Class A
Certificate Principal Balance (after taking
into account distributions of the
Class A Principal Distribution Amount on
such Distribution Date) and (B) the
Class M-1 Certificate Principal Balance
immediately prior to such Distribution
Date over (2) the lesser of (A) 76.90% of
the Stated Principal Balances of the
Mortgage Loans as of the end of the
immediately preceding Due Period and (B) the
excess of the Stated Principal Balances for
the Mortgage Loans as of the end of
the immediately preceding Due Period over
the Minimum Required
Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown
Date on which the Certificate Principal
Balance of each Class of Class A
Certificates has been reduced to zero, the
Class M-1 Principal Distribution Amount
will equal the lesser of (x) the
outstanding Certificate Principal Balance
of the Class M-1 Certificates and (y)
100% of the Principal Distribution Amount
remaining after any distributions on
such Class A Certificates and (II) in no
event will the Class M-1 Principal
Distribution Amount with respect to any
Distribution Date exceed the Class M-1
Certificate Principal Balance.
Class M-1 Unpaid
Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-1 Applied
Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class
M-1 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all
increases in the
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<PAGE>
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 that
have been applied to the reduction of the
Certificate Principal Balance of the
Class M-2 Certificates.
Class M-2
Certificate: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class M-2
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class M-2 Certificates.
Class M-2
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class M-2 Pass-Through Rate on
the Class M-2 Certificate Principal Balance
as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Current
Interest or Class M-2 Interest Carry
Forward Amount that is recovered as a
voidable preference by a trustee in
bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution
Date to the Class M-2 Certificates.
Class M-2
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-2
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
M-2 Certificates with respect to interest
on such prior Distribution Dates 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
Optional Termination Date for the
Certificates, 0.580% per annum and, as of any
Distribution Date after the Optional
Termination Date, 0.870% per annum.
Class M-2
Pass-Through Rate: For the first Distribution Date, 4.250% per
annum. As of any Distribution Date
thereafter, the least of (1) One-Month LIBOR
plus the Class M-2 Margin, (2) the
Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.
Class M-2
Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of
the Principal Distribution Amount
for such Distribution Date if the Class A
Certificate Principal Balance and the
Class M-1 Certificate Principal Balance
have been reduced to zero and a Stepdown
Trigger Event exists, or as long as a
Stepdown Trigger Event does not exist, the
excess of (1) the sum of (A) the Class A
Certificate Principal Balance (after
taking into account distributions of the
Class A Principal Distribution Amount
on such Distribution Date), (B) the Class
M-1 Certificate Principal Balance
(after taking into account distributions of
the Class M-1 Principal Distribution
Amount on such Distribution Date) and (C)
the Class M-2 Certificate Principal
Balance immediately prior to such
Distribution Date over (2) the lesser of (A)
83.70% of the Stated Principal Balances of
the Mortgage Loans as of the end of
the immediately preceding Due Period and
(B) the excess of the Stated Principal
Balances of the Mortgage Loans as of the
end of the immediately preceding Due
Period over the Minimum Required
Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date
prior to the Stepdown Date on which
the Certificate Principal Balance of each
Class of Class A Certificates and the
Class M-1 Certificates has been reduced to
zero, the Class M-2 Principal
Distribution Amount will equal the lesser
of (x) the outstanding Certificate
Principal Balance of the Class M-2
Certificates and (y) 100% of the Principal
Distribution Amount remaining after any
distributions on such Class A and Class
M-1 Certificates and (II) in no event will
the Class M-2 Principal Distribution
Amount with respect to any Distribution
Date exceed the Class M-2 Certificate
Principal Balance.
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<PAGE>
Class M-2 Unpaid
Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-2 Applied
Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class
M-2 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all
increases in the Certificate
Principal Balance of such Class M-2
Certificates pursuant to the last sentence
of the definition of "Certificate Principal
Balance."
Class M-3
Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts
with respect to the Mortgage Loans that
have been applied to the reduction of the
Certificate Principal Balance of the
Class M-3 Certificates.
Class M-3
Certificate: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class M-3
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class M-3 Certificates.
Class M-3
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class M-3 Pass-Through Rate on
the Class M-3 Certificate Principal Balance
as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Current
Interest or Class M-3 Interest Carry
Forward Amount that is recovered as a
voidable preference by a trustee in
bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution
Date to the Class M-3 Certificates.
Class M-3
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-3
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
M-3 Certificates with respect to interest
on such prior Distribution Dates and
(2) interest on such excess (to the extent
permitted by applicable law) at the
Class M-3 Pass-Through Rate for the related
Accrual Period.
Class M-3
Margin: As of any Distribution Date up to and including the
Optional Termination Date for the
Certificates, 0.630% per annum and, as of any
Distribution Date after the Optional
Termination Date, 0.945% per annum.
Class M-3
Pass-Through Rate: For the first Distribution Date, 4.300% per
annum. As of any Distribution Date
thereafter, the least of (1) One-Month LIBOR
plus the Class M-3 Margin, (2) the
Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.
Class M-3
Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of
the Principal Distribution Amount
for such Distribution Date if the Class A
Certificate Principal Balance, Class
M-1 Certificate Principal Balance and Class
M-2 Certificate Principal Balance
have been reduced to zero and a Stepdown
Trigger Event exists, or as long as a
Stepdown Trigger Event does not exist, the
excess of (1) the sum of (A) the
Class A Certificate Principal Balance
(after taking into account distributions
of the Class A Principal Distribution
Amount on such Distribution Date), (B) the
Class M-1 Certificate Principal Balance
(after taking into account distributions
of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C)
the Class M-2 Certificate Principal Balance
(after taking into account
distributions of the Class M-2 Principal
Distribution Amount on such
Distribution Date) and (D) the Class M-3
Certificate Principal Balance
immediately prior to such Distribution Date
over (2) the lesser of (A) 85.50% of
the Stated Principal Balances of the
Mortgage Loans as of the end of the
immediately preceding Due Period and (B)
the excess of the Stated Principal
Balances for the Mortgage Loans as of the
end of the immediately preceding Due
Period over the Minimum Required
Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date
prior to the Stepdown Date on which
the Certificate Principal Balance of each
Class of
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<PAGE>
Class A Certificates, the Class M-1
Certificates and the Class M-2 Certificates
has been reduced to zero, the Class M-3
Principal Distribution Amount will equal
the lesser of (x) the outstanding
Certificate Principal Balance of the Class M-3
Certificates and (y) 100% of the Principal
Distribution Amount remaining after
any distributions on such Class A, Class
M-1 and Class M-2 Certificates and (II)
in no event will the Class M-3 Principal
Distribution Amount with respect to any
Distribution Date exceed the Class M-3
Certificate Principal Balance.
Class M-3 Unpaid
Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-3 Applied
Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class
M-3 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all
increases in the Certificate
Principal Balance of such Class M-3
Certificates pursuant to the last sentence
of the definition of "Certificate Principal
Balance."
Class M-4
Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts
with respect to the Mortgage Loans that
have been applied to the reduction of the
Certificate Principal Balance of the
Class M-4 Certificates.
Class M-4
Certificate: Any Certificate designated as a "Class M-4
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class M-4
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class M-4 Certificates.
Class M-4
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class M-4 Pass-Through Rate on
the Class M-4 Certificate Principal Balance
as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Current
Interest or Class M-4 Interest Carry
Forward Amount that is recovered as a
voidable preference by a trustee in
bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution
Date to the Class M-4 Certificates.
Class M-4
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-4
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
M-4 Certificates with respect to interest
on such prior Distribution Dates and
(2) interest on such excess (to the extent
permitted by applicable law) at the
Class M-4 Pass-Through Rate for the related
Accrual Period.
Class M-4
Margin: As of any Distribution Date up to and including the
Optional Termination Date for the
Certificates, 0.680% per annum and, as of any
Distribution Date after the Optional
Termination Date, 1.020% per annum.
Class M-4
Pass-Through Rate: For the first Distribution Date, 4.350% per
annum. As of any Distribution Date
thereafter, the least of (1) One-Month LIBOR
plus the Class M-4 Margin, (2) the
Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.
Class M-4
Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of
the Principal Distribution Amount
for such Distribution Date if the Class A
Certificate Principal Balance, Class
M-1 Certificate Principal Balance and Class
M-2 Certificate Principal Balance
and the Class M-3 Certificate Principal
Balance have been reduced to zero and a
Stepdown Trigger Event exists, or as long
as a Stepdown Trigger Event does not
exist, the excess of (1) the sum of (A) the
Class A Certificate Principal
Balance (after taking into account
distributions of the Class A Principal
Distribution Amount on such Distribution
Date), (B) the Class M-1 Certificate
Principal Balance (after taking into
account distributions of the Class M-1
Principal Distribution Amount on such
-18-
<PAGE>
Distribution Date), (C) the Class M-2
Certificate Principal Balance (after
taking into account distributions of the
Class M-2 Principal Distribution Amount
on such Distribution Date), (D) the Class
M-3 Certificate Principal Balance
(after taking into account distributions of
the Class M-3 Principal Distribution
Amount on such Distribution Date and (E)
the Class M-4 Certificate Principal
Balance immediately prior to such
Distribution Date over (2) the lesser of (A)
89.20% 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 Stated Principal
Balances for the Mortgage Loans as of the
end of the immediately preceding Due
Period over the Minimum Required
Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date
prior to the Stepdown Date on which
the Certificate Principal Balance of each
Class of Class A Certificates, the
Class M-1 Certificates, the Class M-2
Certificates, and the Class M-3
Certificates have been reduced to zero, the
Class M-4 Principal Distribution
Amount will equal the lesser of (x) the
outstanding Certificate Principal
Balance of the Class M-4 Certificates and
(y) 100% of the Principal Distribution
Amount remaining after any distributions on
such Class A, Class M-1, Class M-2,
and Class M-3 Certificates and (II) in no
event will the Class M-4 Principal
Distribution Amount with respect to any
Distribution Date exceed the Class M-4
Certificate Principal Balance.
Class M-4 Unpaid
Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-4 Applied
Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class
M-4 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all
increases in the Certificate
Principal Balance of such Class M-4
Certificates pursuant to the last sentence
of the definition of "Certificate Principal
Balance."
Class M-5 Applied
Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts
with respect to the Mortgage Loans that
have been applied to the reduction of the
Certificate Principal Balance of the
Class M-5 Certificates.
Class M-5
Certificate: Any Certificate designated as a "Class M-5
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class M-5
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class M-5 Certificates.
Class M-5
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class M-5 Pass-Through Rate on
the Class M-5 Certificate Principal Balance
as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Current
Interest or Class M-5 Interest Carry
Forward Amount that is recovered as a
voidable preference by a trustee in
bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution
Date to the Class M-5 Certificates.
Class M-5
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-5
Current Interest with respect to
prior Distribution Dates over (B) the
amount actually distributed to the Class
M-5 Certificates with respect to interest
on such prior Distribution Dates and
(2) interest on such excess (to the extent
permitted by applicable law) at the
Class M-5 Pass-Through Rate for the related
Accrual Period.
Class M-5
Margin: As of any Distribution Date up to and including the
Optional Termination Date for the
Certificates, 1.150% per annum and, as of any
Distribution Date after the Optional
Termination Date, 1.725% per annum.
Class M-5
Pass-Through Rate: For the first Distribution Date, 4.820% per
annum. As of any Distribution Date
thereafter, the least of (1) One-Month LIBOR
plus the Class M-5 Margin, (2) the
Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.
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<PAGE>
Class M-5
Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of
the Principal Distribution Amount
for such Distribution Date if the Class A
Certificate Principal Balance, Class
M-1 Certificate Principal Balance and Class
M-2 Certificate Principal Balance,
the Class M-3 Certificate Principal Balance
and the Class M-4 Certificate
Principal Balance have been reduced to zero
and a Stepdown Trigger Event exists,
or as long as a Stepdown Trigger Event does
not exist, the excess of (1) the sum
of (A) the Class A Certificate Principal
Balance (after taking into account
distributions of the Class A Principal
Distribution Amount on such Distribution
Date), (B) the Class M-1 Certificate
Principal Balance (after taking into
account distributions of the Class M-1
Principal Distribution Amount on such
Distribution Date), (C) the Class M-2
Certificate Principal Balance (after
taking into account distributions of the
Class M-2 Principal Distribution Amount
on such Distribution Date), (D) the Class
M-3 Certificate Principal Balance
(after taking into account distributions of
the Class M-3 Principal Distribution
Amount on such Distribution Date, (E) the
Class M-4 Certificate Principal
Balance (after taking into account
distributions of the Class M-4 Principal
Distribution Amount on such Distribution
Date) and (F) the Class M-5 Certificate
Principal Balance immediately prior to such
Distribution Date over (2) the
lesser of (A) 91.60% of the Stated
Principal Balances of the Mortgage Loans as
of the end of the immediately preceding Due
Period and (B) the excess of the
Stated Principal Balances for the Mortgage
Loans as of the end of the
immediately preceding Due Period over the
Minimum Required Overcollateralization
Amount. Notwithstanding the foregoing, (I)
on any Distribution Date prior to the
Stepdown Date on which the Certificate
Principal Balance of each Class of Class
A Certificates, the Class M-1 Certificates,
the Class M-2 Certificates, the
Class M-3 Certificates and the Class M-4
Certificates have been reduced to zero,
the Class M-5 Principal Distribution Amount
will equal the lesser of (x) the
outstanding Certificate Principal Balance
of the Class M-5 Certificates and (y)
100% of the Principal Distribution Amount
remaining after any distributions on
such Class A, Class M-1, Class M-2, Class
M-3 and Class M-4 Certificates and
(II) in no event will the Class M-5
Principal Distribution Amount with respect
to any Distribution Date exceed the Class
M-5 Certificate Principal Balance.
Class M-5 Unpaid
Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-5 Applied
Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class
M-5 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all
increases in the Certificate
Principal Balance of such Class M-5
Certificates pursuant to the last sentence
of the definition of "Certificate Principal
Balance."
Class M-6
Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts
with respect to the Mortgage Loans that
have been applied to the reduction of the
Certificate Principal Balance of the
Class M-6 Certificates.
Class M-6
Certificate: Any Certificate designated as a "Class M-6
Certificate" on the face thereof, in the
form of Exhibit A hereto, representing
the right to distributions as set forth
herein.
Class M-6
Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance
of the Class M-6 Certificates.
Class M-6
Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period
at the Class M-6 Pass-Through Rate on
the Class M-6 Certificate Principal Balance
as of such Distribution Date plus
the portion of any previous distributions
on such Class in respect of Current
Interest or Class M-6 Interest Carry
Forward Amount that is recovered as a
voidable preference by a trustee in
bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution
Date to the Class M-6 Certificates.
Class M-6
Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-6
Current Interest with respect to
prior Distribution Dates over (B) the
amount
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<PAGE>
actually distributed to the Class M-6
Certificates with respect to interest on
such prior Distribution Dates and (2)
interest on such excess (to the extent
permitted by applicable law) at the Class
M-6 Pass-Through Rate for the related
Accrual Period.
Class M-6
Margin: As of any Distribution Date up to and including the
Optional Termination Date for the
Certificates, 1.350% per annum and, as of any
Distribution Date after the Optional
Termination Date, 2.025% per annum.
Class M-6
Pass-Through Rate: For the first Distribution Date, 5.020% per
annum. As of any Distribution Date
thereafter, the least of (1) One-Month LIBOR
plus the Class M-6 Margin, (2) the
Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.
Class M-6
Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of
the Principal Distribution Amount
for such Distribution Date if the Class A
Certificate Principal Balance, Class
M-1 Certificate Principal Balance and Class
M-2 Certificate Principal Balance,
the Class M-3 Certificate Principal
Balance, the Class M-4 Certificate Principal
Balance and the Class M-5 Certificate
Principal Balance have been reduced to
zero and a Stepdown Trigger Event exists,
or as long as a Stepdown Trigger Event
does not exist, the excess of (1) the sum
of (A) the Class A Certificate
Principal Balance (after taking into
account distributions of the Class A
Principal Distribution Amount on such
Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking
into account distributions of the
Class M-1 Principal Distribution Amount on
such Distribution Date), (C) the
Class M-2 Certificate Principal Balance
(after taking into account distributions
of the Class M-2 Principal Distribution
Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance
(after taking into account
distributions of the Class M-3 Principal
Distribution Amount on such
Distribution Date, (E) the Class M-4
Certificate Principal Balance (after taking
into account distributions of the Class M-4
Principal Distribution Amount on
such Distribution Date), (F) the Class M-5
Certificate Principal Balance (after
taking into account distributions of the
Class M-5 Principal Distribution Amount
on such Distribution Date) and (G) the
Class M-6 Certificate Principal Balance
immediately prior to such Distribution Date
over (2) the lesser of (A) 93.10% of
the Stated Principal Balances of the
Mortgage Loans as of the end of the
immediately preceding Due Period and (B)
the excess of the Stated Principal
Balances for the Mortgage Loans as of the
end of the immediately preceding Due
Period over the Minimum Required
Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date
prior to the Stepdown Date on which
the Certificate Principal Balance of each
Class of Class A Certificates, the
Class M-1 Certificates, the Class M-2
Certificates, the Class M-3 Certificates,
the Class M-4 Certificates and the Class
M-5 Certificates have been reduced to
zero, the Class M-6 Principal Distribution
Amount will equal the lesser of (x)
the outstanding Certificate Principal
Balance of the Class M-6 Certificates and
(y) 100% of the Principal Distribution
Amount remaining after any distributions
on such Class A, Class M-1, Class M-2,
Class M-3, Class M-4 and Class M-5
Certificates and (II) in no event will the
Class M-6 Principal Distribution
Amount with respect to any Distribution
Date exceed the Class M-6 Certificate
Principal Balance.
Class M-6 Unpaid
Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-6 Applied
Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class
M-6 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all
increases in the Certificate
Principal Balance of such Class M-6
Certificates pursuant to the last sentence
of the definition of "Certificate Principal
Balance."
Class P
Certificate: Any Certificate designated as a Class P Certificate
on
the face thereof, executed by the Trustee
and authenticated by the Trustee in
substantially the form set forth in Exhibit
A, representing the right to
distributions as set forth herein.
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Class R
Certificate: The Class R Certificate executed by the Trustee
and
authenticated by the Trustee in
substantially the form set forth in Exhibit A.
Class R
Certificate Principal Balance: As of any date of determination,
the
aggregate Certificate Principal Balance of
the Class R Certificate.
Class R Current
Interest: As of any Distribution Date, the interest accrued
during the related Accrual Period at the
Class R Pass-Through Rate on the Class
R Certificate Principal Balance as of such
Distribution Date plus the portion of
any previous distributions on such Class in
respect of Current Interest or a
Class R Interest Carry Forward Amount that
is recovered as a voidable preference
by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated
on such Distribution Date to the Class R
Certificate.
Class R Interest Carry
Forward Amount: As of any Distribution Date, the sum
of (1) the excess of (A) the Class R
Current Interest with respect to prior
Distribution Dates over (B) the amount
actually distributed to the Class R
Certificate with respect to interest on
such prior Distribution Dates and (2)
interest on such excess (to the extent
permitted by applicable law) at the Class
R Pass-Through Rate for the related Accrual
Period.
Class R Margin:
As of any Distribution Date up to and including the
Optional Termination Date for the
Certificates, 0.270% per annum and, as of any
Distribution Date after the Optional
Termination Date, 0.540% per annum.
Class R
Pass-Through Rate: For the first Distribution Date, 3.940% per
annum. As of any Distribution Date
thereafter, the least of (1) One-Month LIBOR
plus the Class R Margin, (2) the Available
Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.
Closing Date:
August 31, 2005.
Code: The
Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection
Account: The separate Eligible Account created and initially
maintained by the Servicer pursuant to
Section 3.05(d) in the name of the
Trustee for the benefit of the
Certificateholders and designated "Wilshire
Credit Corporation, as servicer for Wells
Fargo Bank, N.A., as Trustee, in trust
for registered holders of Merrill Lynch
Mortgage Investors Trust, Mortgage Loan
Asset-Backed Certificates, Series
2005-FM1". Funds in the Collection Account
shall be held in trust for the
Certificateholders for the uses and purposes set
forth in this Agreement.
Combined
Loan-to-Value Ratio: For any Mortgage Loan in a second lien
position, the fraction, expressed as a
percentage, the numerator of which is the
sum of (1) the original principal balance
of the related Mortgage Loan and (2)
any outstanding principal balances of
Mortgage Loans the liens on which are
senior to the lien on such related Mortgage
Loan (such sum calculated at the
date of origination of such related
Mortgage Loan) and the denominator of which
is the lesser of (A) the Appraised Value of
the related Mortgaged Property and
(B) the sales price of the related
Mortgaged Property at time of origination.
Compensating
Interest: With respect to any Mortgage Loan and any
Distribution Date, an amount equal to the
portion of any Prepayment Interest
Shortfalls required to be deposited in the
Collection Account by the Servicer
pursuant to Section 4.02 hereof.
Condemnation
Proceeds: All awards or settlements in respect of a Mortgaged
Property, whether permanent or temporary,
partial or entire, by exercise of the
power of eminent domain or
condemnation,
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to the extent not required to be released
either to a Mortgagor in accordance
with the terms of the related mortgage loan
documents or to the holder of a
senior lien on the Mortgaged Property.
Corresponding
Certificates: With respect to the Class LTA-1A Interest, the
Class A-1A and Class R Certificates. With
respect to the Class LTA-1B Interest,
the Class A-1B Certificates. With respect
to the Class LTA-2A Interest, the
Class A-2A Certificates. With respect to
the Class LTA-2B Interest, the Class
A-2B Certificates. With respect to the
Class LTA-2C Interest, the Class A-2C
Certificates. With respect to the Class
LTA-2D Interest, the Class A-2D
Certificates. With respect to the Class
LTM-1 Interest, the Class M-1
Certificates. With respect to the Class
LTM-2 Interest, the Class M-2
Certificates. With respect to the Class
LTM-3 Interest, the Class M-3
Certificates. With respect to the Class
LTM-4 Interest, the Class M-4
Certificates. With respect to the Class
LTM-5 Interest, the Class M-5
Certificates. With respect to the Class
LTM-6 Interest, the Class M-6
Certificates. With respect to the Class
LTB-1 Interest, the Class B-1
Certificates. With respect to the Class
LTB-2 Interest, the Class B-2
Certificates. With respect to the Class
LTB-3 Interest, the Class B-3
Certificates.
Current
Interest: Any of the Class A Current Interest, the Class R
Current
Interest, the Class M-1 Current Interest,
the Class M-2 Current Interest, the
Class M-3 Current Interest, the Class M-4
Current Interest, the Class M-5
Current Interest, the Class M-6 Current
Interest, the Class
B-1 Current
Interest, the Class B-2 Current Interest
and the Class B-3 Current Interest.
Cut-off Date:
August 1, 2005.
Cut-off Date
Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close
of business on the calendar day
immediately preceding the Cut-off Date
after application of all payments of
principal due on or prior to the Cut-off
Date, whether or not received, and all
Principal Prepayments received prior to the
Cut-off Date, but without giving
effect to any installments of principal
received in respect of Due Dates on and
after the Cut-off Date.
Definitive
Certificates: As defined in Section 5.06.
Deleted Mortgage
Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
Delinquent: A
Mortgage Loan is "delinquent" if any payment due thereon is
not made pursuant to the terms of such
Mortgage Loan by the close of business on
the day such payment is scheduled to be
due. A Mortgage Loan is "30 days
delinquent" if such payment has not been
received by the close of business on
the corresponding day of the month
immediately succeeding the month in which
such payment was due, or, if there is no
such corresponding day (e.g., as when a
30-day month follows a 31-day month in
which a payment was due on the 31st day
of such month), then on the last day of
such immediately succeeding month. 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
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registered Holder of the Book-Entry
Certificates. The Depository shall at all
times be a "clearing corporation" as
defined in Section 8-102(3) of the Uniform
Commercial Code of the State of New
York.
Depository
Agreement: With respect to Classes of Book-Entry Certificates,
the agreement between the Trustee and the
initial Depository.
Depository
Participant: A broker, dealer, bank or other financial
institution or other Person for whom from
time to time a Depository effects
book-entry transfers and pledges of
securities deposited with the Depository.
Designated
Transaction: A transaction in which the assets underlying the
Certificates consist of single-family
residential, multi-family residential,
home equity, manufactured housing and/or
commercial mortgage obligations that
are secured by single-family residential,
multi-family residential, commercial
real property or leasehold interests
therein.
Determination
Date: With respect to any Distribution Date, the 15th day of
the month of such Distribution Date or, if
such 15th day is not a Business Day,
the immediately preceding Business Day.
Disqualified
Organization: (1) the United States, any state or political
subdivision thereof, any foreign
government, any international organization, or
any agency or instrumentality of any of the
foregoing, (2) any organization
(other than a cooperative described in
Section 521 of the Code) which is exempt
from tax under Chapter 1 of Subtitle A of
the Code unless such organization is
subject to the tax imposed by Section 511
of the Code and (3) any organization
described in Section 1381(a)(2)(C) of the
Code.
Distribution
Date: The 25th day of each calendar month after the initial
issuance of the Certificates, or if such
25th day is not a Business Day, the
next succeeding Business Day, commencing in
September 2005.
Due Date: With
respect to any Distribution Date and any Mortgage Loan, the
day during the related Due Period on which
a Scheduled Payment is due.
Due Period: With
respect to any Distribution Date, the period beginning on
the second day of the calendar month
preceding the calendar month in which such
Distribution Date occurs and ending on the
first day of the month in which such
Distribution Date occurs.
Eligible
Account: An account that is (i) maintained with a depository
institution the long-term unsecured debt
obligations of which are rated by each
Rating Agency in one of its two highest
rating categories, or (ii) maintained
with the corporate trust department of a
bank which (A) has a rating of at least
Baa3 or P-3 by Moody's and (B) is either
the Depositor or the corporate trust
department of a national bank or banking
corporation which has a rating of at
least A-1 by S&P or F1 by Fitch, or
(iii) an account or accounts the deposits in
which are fully insured by the FDIC, or
(iv) an account or accounts, acceptable
to each Rating Agency without reduction or
withdrawal of the rating of any Class
of Certificates, as evidenced in writing,
by a depository institution in which
such accounts are insured by the FDIC (to
the limit established by the FDIC),
the uninsured deposits in which accounts
are otherwise secured such that, as
evidenced by an Opinion of Counsel
delivered to and acceptable to the Trustee
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
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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.
ERISA: The
Employee Retirement Income Security Act of 1974, including any
successor or amendatory provisions.
ERISA-Qualifying
Underwriting: A best efforts or firm commitment
underwriting or private placement that
would satisfy the requirements of
Prohibited Transaction Exemption 90-29,
Exemption Application No. D-8012, 55
Fed. Reg. 21459 (1990), as amended, granted
to the Underwriter by the United
States Department of Labor (or any other
applicable underwriter's exemption
granted by the United States Department of
Labor), except, in relevant part, for
the requirement that the certificates have
received a rating at the time of
acquisition that is in one of the three (or
four, in the case of a "designated
transaction") highest generic rating
categories by at least one of the Rating
Agencies.
ERISA Restricted
Certificates: The Class C Certificates, Class P
Certificates, and Class R Certificate and
any other Certificate, unless the
acquisition and holding of such other
Certificate is covered by and exempt under
any applicable underwriter's exemption
granted by the United States Department
of Labor.
Event of
Default: As defined in Section 7.01 hereof.
Excess Interest:
On any Distribution Date, for the Class A, Class M and
Class B Certificates, the excess, if any,
of (1) the amount of interest such
Class of Certificates is entitled to
receive on such Distribution Date at its
Pass-Through Rate over (2) the amount of
interest such Class of Certificates
would have been entitled to receive on such
Distribution Date had the
Pass-Through Rate for such Class been the
REMIC Pass-Through Rate.
Excess Proceeds:
With respect to any Liquidated Loan, any Liquidation
Proceeds that are in excess of the sum of
(1) the unpaid principal balance of
such Liquidated Loan as of the date of such
liquidation plus (2) interest at the
Mortgage Rate from the Due Date as to which
interest was last paid or advanced
to Certificateholders (and not reimbursed
to the Servicer) up to the Due Date in
the month in which such Liquidation
Proceeds are required to be distributed on
the unpaid principal balance of such
Liquidated Loan outstanding during each Due
Period as to which such interest was not
paid or advanced.
Exchange Act:
The Securities Exchange Act of 1934, as amended.
Extra Principal
Distribution Amount: With respect to any Distribution Date,
(1) prior to the Stepdown Date, the excess
of (A) the sum of (i) the Aggregate
Certificate Principal Balance immediately
preceding such Distribution Date
reduced by the Principal Funds with respect
to such Distribution Date and (ii)
$4,509,535 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) the sum of 1.00% 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 Date a Stepdown Trigger Event
is in effect, the Extra Principal
Distribution Amount will not be reduced to
the applicable percentage of the
then-current Pool Stated Principal Balance
of the Mortgage Loans (and will
remain fixed at the applicable percentage
of the aggregate Stated
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Principal Balance of the Mortgage Loans as
of the Due Date immediately prior to
the Stepdown Trigger Event) until the next
Distribution Date on which the
Stepdown Trigger Event is not in
effect.
Fannie Mae: A
federally chartered and privately owned corporation organized
and existing under the Federal National
Mortgage Association Charter Act, or any
successor thereto.
FDIC: The
Federal Deposit Insurance Corporation, or any successor
thereto.
Fitch: Fitch,
Inc., or any successor in interest.
Fixed Rate
Mortgage Loan: A Mortgage Loan identified in the Mortgage Loan
Schedule as having a Mortgage Rate which is
fixed.
Floating Rate
Certificate Carryover: With respect to a Distribution Date,
in the event that the Pass-Through Rate for
a class of the Class A, Class M or
Class B Certificates is based upon the
Available Funds Cap, the excess of (1)
the amount of interest that such class
would have been entitled to receive on
such Distribution Date had the Pass-Through
Rate for that class not been
calculated based on the Available Funds
Cap, up to but not exceeding the greater
of (a) the Maximum Rate Cap or (b) the sum
of (i) the Available Funds Cap and
(ii) the product of (A) a fraction, the
numerator of which is 360 and the
denominator of which is the actual number
of days in the related Accrual Period
and (B) the quotient obtained by dividing
(I) an amount equal to the proceeds,
if any, payable under the Cap Contract with
respect to such Distribution Date by
(II) the aggregate Certificate Principal
Balance of each of the Classes of
Certificates to which the Cap Contract
relates for such Distribution Date over
(2) the amount of interest such class was
entitled to receive on such
Distribution Date based on the Available
Funds Cap together with (A) 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 (B)
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.
Fremont: Fremont
Investment & Loan, or its successor in interest.
Grantor Trusts:
The grantor trusts described in Section 2.07 hereof.
Gross Margin:
The percentage set forth in the related Mortgage Note for
each of the Adjustable Rate Mortgage Loans
which is to be added to the
applicable index for use in determining the
Mortgage Rate on each Adjustment
Date and which is set forth in the Mortgage
Loan Schedule for each Adjustable
Rate Mortgage Loan.
Group One: The
portion of the Mortgage Pool identified as "Group One" in
the Prospectus Supplement.
Group One
Mortgage Loan: Any Mortgage Loan identified in the Group One
Mortgage Loan Schedule attached hereto as
Exhibit B-2.
Group One
Principal Distribution Amount: As of any Distribution Date, the
amount equal to the lesser of (1) the sum
of the respective Certificate
Principal Balances of the Class A-1 and
Class R Certificates and (2) the product
of (x) the Group One Principal Distribution
Percentage and (y) the Class A
Principal Distribution Amount; provided,
however, that (A) with respect to the
Distribution Date on which the Certificate
Principal Balance of each Class of
the Class A-2 Certificates is initially
reduced to
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zero (so long as the Class A-1 and Class R
Certificates are outstanding), the
excess of (i) the Group Two Principal
Distribution Percentage of the Class A
Principal Distribution Amount over (ii) the
amount necessary to reduce the
Certificate Principal Balance of each of
the Class A-2 Certificates to zero will
be added to the Group One Principal
Distribution Amount and (B) with respect to
any Distribution Date thereafter, the Group
One Principal Distribution Amount
shall equal the Class A Principal
Distribution Amount.
Group One
Principal Distribution Percentage: With respect to any
Distribution Date, a fraction expressed as
a percentage, the numerator of which
is the amount of Principal Funds with
respect to such Distribution Date received
with respect to Group One Mortgage Loans,
and the denominator of which is the
amount of all Principal Funds with respect
to such Distribution Date received on
all the Mortgage Loans.
Group Two: The
portion of the Mortgage Pool identified as "Group Two" in
the Prospectus Supplement.
Group Two
Mortgage Loan: Any Mortgage Loan identified in the Group Two
Mortgage Loan Schedule attached hereto as
Exhibit B-3.
Group Two
Principal Distribution Amount: As of any Distribution Date, the
amount equal to the lesser of (1) the sum
of the Certificate Principal Balance
of the Class A-2 Certificates and (2) the
product of (x) the Group Two Principal
Distribution Percentage and (y) the Class A
Principal Distribution Amount;
provided, however, that (A) with respect to
the Distribution Date on which the
Certificate Principal Balance of the Class
A-1 and Class R Certificates is
initially reduced to zero (so long as any
of the Class A-2 Certificates is
outstanding), the excess of (i) the Group
One Principal Distribution Percentage
of the Class A Principal Distribution
Amount over (ii) the amount necessary to
reduce the Certificate Principal Balances
of the Class A-1 Certificates to zero
will be added to the Group Two Principal
Distribution Amount and (B) with
respect to any Distribution Date
thereafter, the Group Two Principal
Distribution Amount shall equal the Class A
Principal Distribution Amount.
Group Two
Principal Distribution Percentage: With respect to any
Distribution Date, a fraction expressed as
a percentage, the numerator of which
is the amount of Principal Funds with
respect to such Distribution Date received
with respect to Group Two Mortgage Loans,
and the denominator of which is the
amount of all Principal Funds with respect
to such Distribution Date received on
all the Mortgage Loans.
Indenture: An
indenture relating to the issuance of NIM Notes.
Initial
Adjustment Date: As to any Adjustable Rate Mortgage Loan, the
first
Adjustment Date following the origination
of such Mortgage Loan.
Initial
Certificate Principal Balance: With respect to any Class A,
Class
M, Class B or Class C or Certificate, the
Certificate Principal Balance of such
Certificate or any predecessor Certificate
on the Closing Date as set forth in
Section 5.01 hereof.
Initial Mortgage
Rate: As to each Mortgage Loan, the Mortgage Rate in
effect prior to the Initial Adjustment
Date.
Initial Optional
Termination Date: The 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.
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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,
including, without limitation, the MI
Policies.
Insurance
Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant
to any Insurance Policy or any other
insurance policy covering a Mortgage Loan,
to the extent such proceeds are payable to
the mortgagee under the Mortgage, the
Servicer or the Trustee under the deed of
trust and are not applied to the
restoration of the related Mortgaged
Property or released to the Mortgagor in
accordance with the procedures that the
Servicer would follow in servicing
mortgage loans held for its own account, in
each case other than any amount
included in such Insurance Proceeds in
respect of Insured Expenses.
Insured
Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the
Mortgage Loans.
Interest Carry
Forward Amount: Any of the Class A-1A Interest Carry Forward
Amount, the Class A-1B Interest Carry
Forward Amount, the Class A-2A Interest
Carry Forward Amount, the Class A-2B
Interest Carry Forward Amount, the Class
A-2C Interest Carry Forward Amount, the
Class A-2D Interest Carry Forward
Amount, the Class R Interest Carry Forward
Amount, the Class M-1 Interest Carry
Forward Amount, the Class M-2 Interest
Carry Forward Amount, the Class M-3
Interest Carry Forward Amount, the Class
M-4 Interest Carry Forward Amount, the
Class M-5 Interest Carry Forward Amount,
the Class M-6 Interest Carry Forward
Amount, the Class B-1 Interest Carry
Forward Amount, the Class B-2 Interest
Carry Forward Amount, the Class B-3
Interest Carry Forward Amount or the Class C
Interest Carry Forward Amount, as the case
may be.
Interest
Determination Date: With respect to the Certificates, 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 not a first lien Mortgage Loan
and is delinquent 180 days or longer,
the Servicer
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has certified in a certificate of an
officer of the Servicer delivered to the
Depositor and the Trustee that it does not
believe that there is a reasonable
likelihood that any further net proceeds
will be received or recovered with
respect to such Mortgage Loan.
Liquidation
Proceeds: Amounts, including Condemnation Proceeds and
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 LTA-2A Interest,
the Class LTA-2B Interest, the Class
LTA-2C Interest, the Class LTA-2D Interest,
the Class LTM-1 Interest, the Class
LTM-2 Interest, the Class LTM-3 Interest,
the Class LTM-4 Interest, the Class
LTM-5 Interest, the Class LTM-6 Interest,
the Class LTB-1 Interest, the Class
LTB-2 Interest, the Class LTB-3 Interest,
the Class 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.
Maximum Mortgage
Rate: With respect to each Adjustable Rate Mortgage Loan,
the maximum rate of interest set forth as
such in the related Mortgage Note and
with respect to each Fixed Rate Mortgage
Loan, the rate of interest set forth in
the related Mortgage Note.
Maximum Rate
Cap: With respect to any Distribution Date, the per annum rate
equal to 12 times the quotient of (x) the
aggregate scheduled interest that
would have been due on the Mortgage Loans
during the related Due Period had the
Adjustable Rate Mortgage Loans provided for
interest at their maximum lifetime
Net Mortgage Rates and the Fixed Rate
Mortgage Loans provided for interest at
their Net Mortgage Rates, divided by (y)
the aggregate Stated Principal Balance
of the Mortgage Loans as of the preceding
Distribution Date (or in the case of
the first Distribution Date, as of the
Cut-off Date) multiplied by 30 and
divided by the actual number of days in the
related Accrual Period.
MERS: Mortgage
Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of
the State of Delaware, or any successor
thereto.
MERS Loan: Any
Mortgage Loan registered with MERS on the MERS System.
MERS System: The
system of recording transfers of mortgage electronically
maintained by MERS.
MI Insurer Fee:
The amount payable to the MI Insurer on each Distribution
Date, which amount shall equal one-twelfth
of the product of (i) the MI Insurer
Fee Rate and (ii) the Stated Principal
Balance of the applicable MI Mortgage
Loan (or the related REO Property) as of
the first day of the related Due
Period.
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MI Insurer Fee
Rate: With respect to each MI Mortgage Loan, the rate
specified for such MI Mortgage Loan on the
schedule attached to the MI Policy,
plus a rate computed so that the MI Insurer
Fee would make the MI Insurer whole
for any taxes imposed on the MI Insurer by
the States of Kentucky or West
Virginia with respect to MI Mortgage Loans
located in such States.
MI Insurer:
Radian Guaranty Inc., or its successor in interest.
MI Mortgage
Loans: The list of Mortgage Loans insured by the MI Insurers
attached hereto as Exhibit B-4.
MI Policy: The
Radian primary private mortgage Insurance Policy No. 57466
and the related Mortgage Guaranty
Commitment Certificate reference ID# 05-993094
and all endorsements thereto, dated August
31, 2005, which is attached hereto as
Exhibit J-2.
Minimum Mortgage
Rate: With respect to each Adjustable Rate Mortgage Loan,
the minimum rate of interest set forth as
such in the related Mortgage Note.
Minimum Required
Overcollateralization Amount: An amount equal to the
product of (x) 0.50% and (y) the Stated
Principal Balance of the Mortgage Loans
as of the Cut-off Date.
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.
Mortgage File:
The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan
and any additional documents delivered
to the Trustee to be added to the Mortgage
File pursuant to this Agreement.
Mortgage Group:
Either of Group One or Group Two.
Mortgage Loans:
Such of the mortgage loans transferred and assigned to the
Trustee pursuant to the provisions hereof
as from time to time are held as a
part of the Trust Fund (including any REO
Property), the mortgage loans so held
being identified in the Mortgage Loan
Schedule, notwithstanding foreclosure or
other acquisition of title of the related
Mortgaged Property. Any mortgage loan
that was intended by the parties hereto to
be transferred to the Trust Fund as
indicated by such Mortgage Loan Schedule
which is in fact not so transferred for
any reason shall continue to be a Mortgage
Loan hereunder until the Purchase
Price with respect thereto has been paid to
the Trust Fund.
Mortgage Loan
Schedule: The lists of Mortgage Loans (as from time to time
amended by the Trustee to reflect the
deletion of Deleted Mortgage Loans and the
addition of Replacement Mortgage Loans
pursuant to the provisions of this
Agreement) transferred to the Trustee as
part of the Trust Fund and from time to
time subject to this Agreement, attached
hereto as Exhibits B-1, B-2 and B-3,
setting forth the following information
with respect to each Mortgage Loan:
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(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 Loan-to-Value Ratio at origination with respect to a
first
lien Mortgage Loan, or the Combined Loan-to-Value Ratio with
respect to a second lien Mortgage Loan;
(x) a code indicating
whether the residential dwelling at the time of
origination was represented to be owner-occupied;
(xi) a code indicating the property type;
(xii) with respect to each Adjustable Rate Mortgage Loan;
(A) the frequency of
each Adjustment Date;
(B) the next
Adjustment Date;
(C) the Maximum
Mortgage Rate;
(D)
the Minimum Mortgage
Rate;
(E) the Mortgage Rate
as of the Cut-off Date;
(F) the related
Periodic Rate Cap;
(G) the Gross
Margin;
(xiii) location of the related Mortgaged Property;
(xiv) 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;
(C) any limitations or
other conditions on the enforceability of
such Prepayment Charge; and
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(D) any other
information pertaining to the Prepayment Charge
specified in the related Mortgage Note;
(xv) the Credit Score and date obtained;
(xvi) a code indicating whether such loan is a MI Mortgage
Loan;
(xvii) the MI Insurer Fee Rate; and
(xviii) the coverage percentage under the MI Policy.
Mortgage Note:
The original executed note or other evidence of indebtedness
evidencing the indebtedness of a Mortgagor
under a Mortgage Loan and all
amendments, modifications and attachments
thereto.
Mortgage Pool:
The aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule set out on Exhibit
B-1.
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 (1) the Servicing Fee Rate and
(2) the MI Insurer Rate, if applicable.
Net Rate: With
respect to any Distribution Date, the product of (x) the
weighted average Net Mortgage Rate for the
Mortgage Loans calculated based on
the respective Net Mortgage Rates and the
Stated Principal Balances of such
Mortgage Loans as of the preceding
Distribution Date (or, in the case of the
first Distribution Date, as of the Cut-off
Date) and (y) a fraction, the
numerator of which is 30 and the
denominator of which is the actual number of
days in the related Accrual Period.
NIM Notes: The notes to be
issued pursuant to the Indenture.
Non-Recoverable
Advance: Any portion of an Advance previously made or
proposed to be made by the Servicer that,
in the good faith judgment of the
Servicer, will not or, in the case of a
current delinquency, would not, be
ultimately recoverable by the Servicer from
the related Mortgagor, related
Liquidation Proceeds or otherwise 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 A-2A, Class
A-2B,
Class A-2C, Class A-2D, Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5,
Class M-6, 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, the
Servicer or the Trustee (or any other
officer customarily performing functions
similar to those performed by any of the
above designated officers and also to
whom, with respect to a particular matter,
such matter is referred because of
such officer's knowledge of and familiarity
with a particular subject) or (2),
if provided for in this Agreement, signed
by a Servicing Officer, as the case
may be, and delivered to the Depositor, the
Servicer or the Trustee, as the case
may be, as required by this Agreement.
One-Month LIBOR:
With respect to any Accrual Period, the rate determined by
the Trustee on the related Interest
Determination Date on the basis of (a) the
offered rates for one-month United States
dollar deposits, as such rates appear
on Telerate page 3750, as of 11:00 a.m.
(London time) on such Interest
Determination Date or (b) if such rate does
not appear on Telerate Page 3750 as
of 11:00 a.m. (London time), the offered
rates of the Reference Banks for
one-month United States dollar deposits, as
such rates appear on the Reuters
Screen LIBO Page, as of 11:00 a.m. (London
time) on such Interest Determination
Date. If One-Month LIBOR is determined
pursuant to clause (b) above, on each
Interest Determination Date, One-Month
LIBOR for the related Accrual Period will
be established by the Trustee as
follows:
(i) If on such
Interest Determination Date two or more Reference
Banks provide such offered quotations, One-Month LIBOR for the
related Accrual Period shall be the arithmetic mean of such
offered quotations (rounded upwards if necessary to the nearest
whole multiple of 0.03125%).
(ii) If on such Interest Determination Date fewer than two
Reference
Banks provide such offered quotations, One-Month LIBOR for the
related Accrual Period shall be the higher of (i) One-Month
LIBOR
as determined on the previous Interest Determination Date and
(ii) the Reserve Interest Rate.
Opinion of
Counsel: A written opinion of counsel, who may be counsel for
the Depositor or the Servicer, reasonably
acceptable to each addressee of such
opinion; provided, however, that with
respect to Section 6.04 or 10.01, or the
interpretation or application of the REMIC
Provisions, such counsel must (1) in
fact be independent of the Depositor or the
Servicer, (2) not have any direct
financial interest in the Depositor or the
Servicer or in any affiliate of
either and (3) not be connected with the
Depositor or the Servicer as an
officer, employee, promoter, underwriter,
trustee, partner, director or person
performing similar functions.
Optional
Termination: The termination of the Trust Fund 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.
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
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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 and (C) any unreimbursed costs,
penalties and/or damages incurred by the
Trust Fund in connection with any
violation relating to any of the Mortgage
Loans of any predatory or abusive
lending law.
OTS: The Office
of Thrift Supervision.
Outstanding:
With respect to the Certificates as of any date of
determination, all Certificates theretofore
executed and authenticated under
this Agreement except: (1) Certificates
theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
and (2) Certificates in exchange for
which or in lieu of which other
Certificates have been executed by the Trustee
and delivered by the Trustee pursuant to
this Agreement.
Outstanding
Mortgage Loan: As of any Distribution Date, a Mortgage Loan
with a Stated Principal Balance greater
than zero that was not the subject of a
Principal Prepayment in full, and that did
not become a Liquidated Loan, prior
to the end of the related Due Period.
Overcollateralization Amount: As of any date of determination, the
excess
of (1) the Stated Principal Balance of the
Mortgage Loans over (2) the
Certificate Principal Balance of the
Certificates (other than the Class P
Certificates and the Class C
Certificates).
Ownership
Interest: As to any Certificate, any ownership interest in such
Certificate including any interest in such
Certificate as the Holder thereof and
any other interest therein, whether direct
or indirect, legal or beneficial.
Pass-Through
Rate: With respect to any Class of Certificates, the
corresponding Pass-Through Rate for such
Class of Certificates.
Percentage
Interest: With respect to:
(i) any Class, the
percentage interest in the undivided beneficial
ownership interest evidenced by such Class which shall be equal
to the Certificate Principal Balance of such Class divided by
the
aggregate Certificate Principal Balance of all Classes; and
(ii) any Certificate, the Percentage Interest evidenced thereby of
the
related Class shall equal the percentage obtained by dividing
the
Denomination of such Certificate by the aggregate of the
Denominations of all Certificates of such Class; except that in
the case of any Class P Certificates, the Percentage Interest
with respect to such Certificate shown on the face of such
Certificate.
Periodic Rate
Cap: As to each Adjustable Rate Mortgage Loan and the related
Mortgage Note, the provision therein that
limits permissible increases and
decreases in the Mortgage Rate on any
Adjustment Date.
Permitted
Activities: The primary activities of the trust created
pursuant
to this Agreement which shall be:
(i) holding Mortgage
Loans transferred from the Depositor and other
assets of the Trust Fund, including the Cap Contract and any
credit enhancement and passive
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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, the Trustee or
any
of its Affiliates, which is then receiving the highest
commercial
or finance company paper rating of each such Rating Agency;
(iv) certificates of deposit, demand or time deposits, or
bankers'
acceptances (other than banker's acceptances issued by the
Trustee or any of its Affiliates) issued by any depository
institution or trust company incorporated under the laws of the
United States or of any state thereof and subject to
supervision
and examination by federal and/or state banking authorities,
provided that the commercial paper and/or long term unsecured
debt obligations of such depository institution or trust
company
are then rated one of the two highest long-term and the highest
short-term ratings of each such Rating Agency for such
securities;
(v) demand or time
deposits or certificates of deposit issued by any
bank or trust company or savings institution to the extent that
such deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance
company or other corporation rated in the two highest long-term
or the highest short-term ratings of each Rating Agency
containing, at the time of the issuance of such agreements,
such
terms and conditions as will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by
any
such Rating Agency as evidenced by a letter from each Rating
Agency;
(vii) repurchase obligations with respect to any security described
in
clauses (i) and (ii) above, in either case entered into with a
depository institution or trust company (acting as principal)
described in clause (v) above;
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(viii) securities (other than stripped bonds, stripped coupons
or
instruments sold at a purchase price in excess of 115% of the
face amount thereof) bearing interest or sold at a discount
issued by any corporation, other than the Trustee or any of its
Affiliates, incorporated under the laws of the United States or
any state thereof which, at the time of such investment, have
one
of the two highest long term ratings of each Rating Agency;
(ix) interests in any money market fund (including those managed
or
advised by the Trustee or its affiliates) which at the date of
acquisition of the interests in such fund and throughout the
time
such interests are held in such fund has the highest applicable
long term rating by each Rating Agency rating such fund, if so
rated; and
(x) short term
investment funds sponsored by any trust company or
national banking association incorporated under the laws of the
United States or any state thereof, other than the Trustee or
any
of its Affiliates, which on the date of acquisition has been
rated by each such Rating Agency in their respective highest
applicable rating category;
provided, that no such instrument shall be
a Permitted Investment if such
instrument (i) evidences the right to
receive interest only payments with
respect to the obligations underlying such
instrument, (ii) is purchased at a
premium or above par or (iii) is purchased
at a deep discount; provided,
further, that no such instrument shall be a
Permitted Investment (A) if such
instrument evidences principal and interest
payments derived from obligations
underlying such instrument and the interest
payments with respect to such
instrument provide a yield to maturity of
greater than 120% of the yield to
maturity at par of such underlying
obligations, or (B) if it may be redeemed at
a price below the purchase price (the
foregoing clause (B) not to apply to
investments in units of money market funds
pursuant to clause (ix) above); and
provided, further, (I) that no amount
beneficially owned by any REMIC
(including, without limitation, any amounts
collected by the Servicer but not
yet deposited in the Collection Account)
may be invested in investments (other
than money market funds) treated as equity
interests for Federal income tax
purposes, unless the Servicer 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
Class R Certificate, (iv) rural electric
and telephone cooperatives described in
Section 1381(a)(2)(C) of the Code, and (v)
a Person that is not a citizen or
resident of the United States, a
corporation or partnership (or other entity
treated as a corporation or partnership for
United States federal income tax
purposes) created or organized in or under
the laws of the United States or any
State thereof or the District of Columbia
or an estate whose income from sources
without the United States is includable in
gross income for United States
federal income tax purposes regardless of
its connection with the conduct of a
trade or business within the United States,
or a trust if a court within the
United States is able to exercise primary
supervision over the administration of
the trust and one or more United States
persons
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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.
Prepayment
Assumption: A rate or rates of prepayment, as described in the
Prospectus Supplement in the definition of
"Modeling Assumptions," relating to
the Offered Certificates.
Prepayment
Charges: Any prepayment premium 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 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 Cut-off Date) and ending
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)
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prepayments collected in the related
Prepayment Period, (3) the Stated Principal
Balance of each Mortgage Loan that was
purchased by the Depositor or the
Servicer during the related Prepayment
Period or, in the case of a purchase
pursuant to Section 9.01, on the Business
Day prior to such Distribution Date,
(4) the amount, if any, by which the
aggregate unpaid principal balance of any
Replacement Mortgage Loan is less than the
aggregate unpaid principal of the
related Deleted Mortgage Loans delivered by
the Seller in connection with a
substitution of a Mortgage Loan pursuant to
Section 2.03(c), (5) all Liquidation
Proceeds collected during the related
Prepayment Period (to the extent such
Liquidation Proceeds relate 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 and allocable to
principal.
Principal
Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a
Mortgage Loan (including Mortgage Loans
purchased or repurchased under Sections
2.02, 2.03, 3.12 and 9.01 hereof) that
is received or recovered in advance of its
scheduled Due Date and is not
accompanied by an amount as to interest
representing scheduled interest due on
any date or dates in any month or months
subsequent to the month of prepayment.
Partial Principal Prepayments shall be
applied by the Servicer in accordance
with the terms of the related Mortgage
Note.
Prospectus
Supplement: The Prospectus Supplement dated August 29, 2005
relating to the public offering of the
Offered Certificates.
PUD: A Planned
Unit Development.
Purchase Price:
With respect to any Mortgage Loan required to be
repurchased by the Seller or the applicable
Transferor pursuant to Section 2.02
or 2.03 hereof or purchased by the Servicer
pursuant to Section 3.12(c) hereof,
an amount equal to the sum of (i) 100% of
the unpaid principal balance of the
Mortgage Loan as of the date of such
purchase together with any unreimbursed
Servicing Advances, (ii) accrued interest
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.
Rating Agency:
Either of 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 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).
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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 which are
engaged in transactions in Eurodollar
deposits in the international Eurocurrency
market (i) with an established place
of business in London, England and (ii)
whose quotations appear on the Reuters
Screen LIBO Page on the relevant Interest
Determination Date.
Regular
Certificate: Any one of the Class A, 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
Global Securities: The Book-Entry Regulation S Global
Securities and the Definitive Regulation S
Global Securities.
Related
Certificates: With respect to the Class LTA-1A Interest, the
Class
A-1A and Class R Certificates. With respect
to the Class LTA-1B Interest, the
Class A-1B Certificates. With respect to
the Class LTA-2A Interest, the Class
A-2A Certificates. With respect to the
Class LTA-2B Interest, the Class A-2B
Certificates. With respect to the Class
LTA-2C Interest, the Class A-2C
Certificates. With respect to the Class
LTA-2D Interest, the Class A-2D
Certificates. With respect to the Class
LTM-1 Interest, the Class M-1
Certificates. With respect to the Class
LTM-2 Interest, the Class M-2
Certificates. With respect to the Class
LTM-3 Interest, the Class M-3
Certificates. With respect to the Class
LTM-4 Interest, the Class M-4
Certificates. With respect to the Class
LTM-5 Interest, the Class M-5
Certificates. With respect to the Class
LTM-6 Interest, the Class M-6
Certificates. With respect to the Class
LTB-1 Interest, the Class B-1
Certificates. With respect to the Class
LTB-2 Interest, the Class B-2
Certificates. With respect to the Class
LTB-3 Interest, the Class B-3
Certificates.
Relief Act: The
Servicemembers Civil Relief Act or any similar state or
local law.
Relief Act
Shortfall: With respect to any Distribution Date and any
Mortgage Loan, any reduction in the amount
of interest or principal collectible
on such Mortgage Loan for the most recently
ended calendar month as a result of
the application of the Relief Act.
REMIC: A "real
estate mortgage investment conduit" within the meaning of
section 860D of the Code. References herein
to "the REMICs" or "a REMIC" shall
mean any of (or, as the context requires,
all of) the Lower Tier REMIC and the
Upper Tier REMIC.
REMIC
Pass-Through Rate: The 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.
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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 Depositor for
a Deleted Mortgage Loan, which must, on the
date of such substitution, as
confirmed in a Request for Release,
substantially in the form of Exhibit I (1)
have a Stated Principal Balance, after
deduction of the principal portion of the
Scheduled Payment due in the month of
substitution, not in excess of, and not
less than 90% of the Stated Principal
Balance of the Deleted Mortgage Loan; (2)
with respect to any Fixed Rate Mortgage
Loan, have a Mortgage Rate not less than
or no more than 1% per annum higher than
the Mortgage Rate of the Deleted
Mortgage Loan and, with respect to any
Adjustable Rate Mortgage Loan: (A) have a
Maximum Mortgage Rate no more than 1% per
annum higher or lower than the Maximum
Mortgage Rate of the Deleted Mortgage Loan;
(B) have a Minimum Mortgage Rate no
more than 1% per annum higher or lower than
the Minimum Mortgage Rate of the
Deleted Mortgage Loan; (C) have the same
index and Periodic Rate Cap as that of
the Deleted Mortgage Loan and a Gross
Margin not more than 1% per annum higher
or lower than that of the Deleted Mortgage
Loan; (D) not permit conversion of
the related Mortgage Rate to a fixed
Mortgage Rate and (F) currently be accruing
interest at a rate not more than 1% per
annum higher or lower than that of the
Deleted Mortgage Loan; (3) have a similar
or higher FICO score or credit grade
than that of the Deleted Mortgage Loan; (4)
have a Loan-to-Value Ratio (or
Combined Loan-to-Value Ratio, in the case
of the Mortgage Loans in a second lien
position) no higher than that of the
Deleted Mortgage Loan; (5) have a remaining
term to maturity no greater than (and not
more than one year less than) that of
the Deleted Mortgage Loan; (6) provide for
a Prepayment Charge on terms
substantially similar to those of the
Prepayment Charge, if any, of the Deleted
Mortgage Loan; (7) have the same lien
priority as the Deleted Mortgage Loan; (8)
constitute the same occupancy type as the
Deleted Mortgage Loan; and (9) comply
with each representation and warranty set
forth in Section 2.03 hereof.
Request for
Release: The Request for Release of Documents submitted by the
Servicer to the Trustee (or its custodian),
substantially in the form of Exhibit
I hereto.
Required
Insurance Policy: With respect to any Mortgage Loan, any
insurance
policy that is required to be maintained
from time to time under this Agreement,
including, without limitation, in the case
of the MI Mortgage Loans, the MI
Policy.
Required Percentage:
As of any Distribution Date, the quotient of (1) the
excess of (A) the Stated Principal Balances
of the Mortgage Loans as of such
Distribution Date, over (B) the Certificate
Principal Balance of the most senior
Class of Certificates outstanding, 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 are quoting on the relevant
Interest Determination Date to the
principal London offices of leading banks
in the London interbank market or (2)
in the event that the Trustee can determine
no such arithmetic mean, the lowest
one-month United States dollar lending rate
which New York City banks selected
by the Trustee are quoting on such Interest
Determination Date to leading
European banks.
Residual
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.
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Responsible
Officer: When used with respect to the Trustee or the Servicer,
any officer of the Trustee or the Servicer
with direct responsibility for the
administration of this Agreement and also
means any other officer to whom, with
respect to a particular matter, such matter
is referred because of such
officer's knowledge of and familiarity with
the particular subject.
Reuters Screen
LIBO Page: The display designated as page "LIBO" on the
Reuters Monitor Money Rates Service (or
such other page as may replace such LIBO
page on that service for the purpose of
displaying London interbank offered
rates of major banks.
S&P:
Standard & Poor's, a division of The McGraw-Hill Companies,
Inc., or
any successor in interest.
Sale Agreement:
The Mortgage Loan Sale and Assignment Agreement dated as of
August 1, 2005 between the Depositor and
the Seller.
Scheduled
Payment: The scheduled monthly payment on a Mortgage Loan due
on
any Due Date allocable to principal and/or
interest on such Mortgage Loan.
Section 302
Requirements: Any rules or regulations promulgated pursuant to
the Sarbanes-Oxley Act of 2002 (as such may
be amended from time to time).
Securities Act:
The Securities Act of 1933, as amended.
Seller: Merrill
Lynch Mortgage Lending Inc., a Delaware corporation, or its
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's Assignee: As defined in
Section 10.14(a).
Servicer
Remittance Date: With respect to any Distribution Date, the
later
of (x) the date that is two Business Days
after the 15th day of the month in
which the related Distribution Date occurs
and (y) the 18th day (or if such day
is not a Business Day, the next 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;
tax tracking; title research; flood
certification and lender paid mortgage
insurance, (6) obtaining or correcting
any legal documentation required to be
included in the Mortgage Files and
reasonably necessary for the Servicer to
perform its obligations under this
Agreement and (7) compliance with the
obligations under Sections 3.01 and 3.10.
Servicing Fee:
As to each Mortgage Loan and any Distribution Date, an
amount equal to the product of (x) the
Servicing Fee Rate and (y) the Stated
Principal Balance of such Mortgage Loan as
of
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the preceding Distribution Date or, in the
event of any payment of interest that
accompanies a Principal Prepayment in full
made by the Mortgagor, interest at
the Servicing Fee Rate on the Stated
Principal Balance of such Mortgage Loan as
of the preceding Distribution Date for the
period covered by such payment of
interest.
Servicing Fee
Rate: 0.50% per annum.
Servicing
Officer: Any officer of the Servicer involved in, or
responsible
for, the administration and servicing of
the Mortgage Loans whose name and
facsimile signature appear on a list of
servicing officers furnished to the
Trustee by the Servicer on the Closing Date
pursuant to this Agreement, as such
lists may from time to time be amended.
Servicing
Transfer Costs: In the event that the Servicer does not
reimburse
the Trustee under this Agreement, all costs
associated with the transfer of
servicing from the predecessor Servicer,
including, without limitation, any
costs or expenses associated with the
termination of the predecessor Servicer,
the appointment of a successor servicer,
the complete transfer of all servicing
data and the completion, correction or
manipulation of such servicing data as
may be required by the Trustee or any
successor servicer to correct any errors
or insufficiencies in the servicing data or
otherwise to enable the Trustee or
successor servicer to service the Mortgage
Loans properly and effectively.
SFAS 140:
Statement of Financial Accounting Standard No. 140, Accounting
for Transfers and Servicing of Financial
Assets and Extinguishments of
Liabilities dated September 2000, published
by the Financial Accounting
Standards Board of the Financial Accounting
Foundation.
Startup Day: As
defined in Section 2.07 hereof.
Stated Principal
Balance: With respect to any Mortgage Loan or related REO
Property (1) as of the Cut-off Date, the
Cut-off Date Principal Balance thereof,
and (2) as of any Distribution Date, such
Cut-off Date Principal Balance, minus
the sum of (A) the principal portion of the
Scheduled Payments (x) due with
respect to such Mortgage Loan during each
Due Period ending prior to such
Distribution Date and (y) that were
received by the Servicer as of the close of
business on the Determination Date related
to such Distribution Date or with
respect to which Advances were made on the
Servicer Advance Date prior to such
Distribution Date and (B) all Principal
Prepayments with respect to such
Mortgage Loan received on or prior to the
last day of the related Prepayment
Period, and all Liquidation Proceeds to the
extent 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 September
2008 or (2) the first Distribution Date on
which (A) the Class A Certificate
Principal Balance (reduced by the Principal
Funds with respect to such
Distribution Date) is less than or equal to
(B) 37.70% of the Stated Principal
Balances of the Mortgage Loans as of such
Distribution Date.
Stepdown
Required Loss Percentage: For any Distribution Date, the
applicable percentage for such Distribution
Date set forth in the following
table:
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<TABLE>
<CAPTION>
DISTRIBUTION DATE OCCURRING IN STEPDOWN REQUIRED LOSS
PERCENTAGE
------------------------------
---------------------------------
<S>
<C>
September 2008 - August 2009 2.25% with
respect to September 2008, plus an
additional 1/12th of 0.75% for each month
thereafter
September 2009 - August 2010 3.00% with
respect to September 2009, plus an
additional
1/12th of 0.50% for each month
thereafter
September 2010 - August 2011 3.50% with
respect to September 2010, plus an
additional 1/12th of 0.25% for each month
thereafter
September 2011 and thereafter 3.75%
</TABLE>
Stepdown Trigger
Event: With respect to the Certificates on or after the
Stepdown Date, a Distribution Date on which
(1) the quotient of (A) the
aggregate Stated Principal Balance of all
Mortgage Loans which are 60 or more
days Delinquent measured on a rolling three
month basis (including, for the
purposes of this calculation, Mortgage
Loans in foreclosure and REO Properties)
and (B) the Stated Principal Balance of the
Mortgage Loans as of the last day of
the preceding calendar month, equals or
exceeds the product of (i) 39.70% and
(ii) the Required Percentage or (2) the
quotient (expressed as a percentage) of
(A) the aggregate Realized Losses incurred
from the Cut-off Date through the
last day of the calendar month preceding
such Distribution Date and (B) the
aggregate principal balance of the Mortgage
Loans as of the Cut-off Date exceeds
the Required Loss Percentage.
Subordinated
Certificates: The Class M and Class B Certificates.
Subsequent
Recovery: Any amount received on a Mortgage Loan (net of
amounts
reimbursed to the Servicer related to
Liquidated Mortgage Loans) subsequent to
such Mortgage Loan being determined to be a
Liquidated Mortgage Loan.
Subservicing
Agreement: As defined in Section 3.02(a).
Substitution
Adjustment Amount: The meaning ascribed to such term pursuant
to Section 2.03(c).
Tax Matters
Person: The Person designated as "tax matters person" in the
manner provided under Treasury regulation
Section 1.860F-4(d) and Treasury
regulation Section 301.6231(a)(7)-1.
Transfer: Any
direct or indirect transfer or sale of any Ownership Interest
in a Certificate.
Transfer
Agreement: The Master Mortgage Loan Purchase and Interim
Servicing
Agreement dated as of January 1, 2004, as
amended, between Merrill Lynch
Mortgage Capital Inc., as purchaser and
Fremont, as seller and interim servicer,
as supplemented by the Bring Down
Letter.
Transferor:
Fremont.
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Trust Fund: The
corpus of the trust (the "Merrill Lynch Mortgage Investors
Trust, Series 2005-FM1") created hereunder
consisting of (i) the Mortgage Loans
and all interest and principal received on
or with respect thereto on and after
the Cut-off Date to the extent not applied
in computing the Cut-off Date
Principal Balance thereof, exclusive of
interest not required to be deposited in
the Collection Account; (ii) the Collection
Account and the Certificate Account
and all amounts deposited therein pursuant
to the applicable provisions of this
Agreement; (iii) property that secured a
Mortgage Loan and has been acquired by
foreclosure, deed in lieu of foreclosure or
otherwise; (iv) the mortgagee's
rights under the Insurance Policies with
respect to the Mortgage Loans,
including, without limitation, the MI
Policy; (v) all proceeds of the
conversion, voluntary or involuntary, of
any of the foregoing into cash or other
liquid property; and (vi) the Cap Contract
and Cap Contract Account.
Trustee: Wells
Fargo Bank, N.A., a national banking association, not in its
individual capacity, but solely in its
capacity as trustee for the benefit of
the Certificateholders under this
Agreement, and any successor thereto, and any
corporation or national banking association
resulting from or surviving any
consolidation or merger to which it or its
successors may be a party and any
successor trustee as may from time to time
be serving as successor trustee
hereunder.
Uncertificated
Class C Interest: An uncertificated interest having (i) the
same rights to payments as the Class C
Certificates, other than the rights to
payments of amounts with respect to the Cap
Contract, and (ii) the rights to the
payments treated as distributed to the
Class C Certificates under Section
2.07(d), provided, however, that such
interest shall have no obligation to make
any payments treated as paid by the Class C
Certificates pursuant to interest
rate cap agreements under Section
2.07(d).
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 M-3 Unpaid Realized Loss Amount,
Class M-4 Unpaid Realized Loss Amount,
Class M-5 Unpaid Realized Loss Amount,
Class M-6 Unpaid Realized Loss Amount,
Class B-1 Unpaid Realized Loss Amount,
Class B-2 Unpaid Realized Loss Amount,
Class B-3 Unpaid Realized Loss Amount and
Class C Unpaid Realized Loss Amount,
collectively.
Upper Tier
REMIC: As described in the Preliminary Statement and Section
2.07.
USAP Report: A report in
compliance with the Uniform Single Attestation
Program for Mortgage Bankers delivered in
accordance with Section 3.18.
Voting Rights:
The portion of the voting rights of all the Certificates
that is allocated to any of the
Certificates for purposes of the voting
provisions hereunder. Voting Rights
allocated to each Class of Certificates
shall be allocated as follows: (1) 98% to
the Class A, Class M and Class B
Certificates, with the allocation among
such Certificates to be in proportion to
the 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
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allocated among the Certificates of each
such Class in accordance with their
respective Percentage Interests.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery
hereof,
does hereby sell, transfer, assign, set
over and convey to the Trustee without
recourse all the right, title and interest
of the Depositor in and to the assets
of the Trust Fund. Such assignment includes
all interest and principal received
on or with respect to the Mortgage Loans on
or after the Cut-off Date (other
than Scheduled Payments due on the Mortgage
Loans on or before the Cut-off
Date).
The parties hereto agree and understand that it is not intended
that
any Mortgage Loan be included in the Trust
that is, without limitation, a
"High-Cost Home Loan" as defined by the
Home Ownership and Equity Protection Act
of 1994 or any other applicable
anti-predatory lending laws, including but not
limited to (i) a "High-Cost Home Loan" as
defined in the New Jersey Home
Ownership Act effective November 27, 2003;
(ii) a "High-Cost Home Loan" as
defined in the New Mexico Home Loan
Protection Act effective January 1, 2004;
(iii) a "High-Cost Home Loan" as defined in
the Massachusetts Predatory Home
Loan Practices Act effective November 7,
2004 or (iv) a "High-Cost Home Loan" as
defined by the Indiana High Cost Home Loan
Law effective January 1, 2005.
In connection with such assignment, the Depositor does hereby
deliver
to, and deposit with, the Trustee, the
following documents or instruments with
respect to each Mortgage Loan:
(A) The Original Mortgage Note endorsed in blank or, "Pay to the
order
of Wells Fargo
Bank, N.A., as trustee, without recourse" together with all
riders thereto.
The Mortgage Note shall include all intervening
endorsements
showing a complete chain of the title from the originator 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 true copy of
the
original of the
Mortgage that has been delivered for recording in the
appropriate
recording office of the jurisdiction in which the Mortgaged
Property is
located and in the case of each MERS Loan, the original
Mortgage
together with all riders thereto, noting the presence of the
MIN
of the Loan and
either language indicating that the Mortgage Loan is a MOM
Loan or if the
Mortgage Loan was not a MOM Loan at origination, the
original
Mortgage and the assignment thereof to MERS, with evidence of
recording
indicated thereon, or a copy of the Mortgage certified by the
public recording
office in which such Mortgage has been recorded.
(C) In the case of each Mortgage Loan that is not a MERS Loan,
the
original
Assignment of each Mortgage, endorsed either in blank or, to
"Wells Fargo
Bank, N.A., as trustee"
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(D) The original policy of title insurance (or a preliminary
title
report,
commitment or binder if the original title insurance policy has
not
been received
from the title insurance company).
(E) Originals of any intervening assignments of the Mortgage,
with
evidence of
recording thereon or, if the original intervening assignment
has not yet been
returned from the recording office, a copy of such
assignment
certified to be a true copy of the original of the assignment
which has been
sent for recording in the appropriate jurisdiction in which
the Mortgaged
Property is located.
(F) Originals of all assumption and modification agreements, if
any.
(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 such endorsement to be made.
(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
not delivered to the Trustee are and
shall be held in trust by the Servicer, for
the benefit of the Trustee as the
owner thereof, and the Servicer's
possession of the contents of each Mortgage
File so retained is for the sole purpose of
servicing the related Mortgage Loan,
and such retention and possession by the
Servicer is in a custodial capacity
only. The Depositor agrees to take no
action inconsistent with the Trustee's
ownership of the Mortgage Loans, to
promptly indicate to all inquiring parties
that the Mortgage Loans have been sold and
to claim no ownership interest in the
Mortgage Loans.
It is the intention of this Agreement that the conveyance of
the
Depositor's right, title and interest in
and to the Trust Fund pursuant to this
Agreement shall constitute a purchase and
sale and not a loan. If a conveyance
of Mortgage Loans from the Seller to the
Depositor is characterized as a pledge
and not a sale, then the Depositor shall be
deemed to have transferred to the
Trustee all of the Depositor's right, title
and interest in, to and under the
obligations of the Seller deemed to be
secured by said pledge; and it is the
intention of this Agreement that the
Depositor shall also be deemed to have
granted to the
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Trustee a first priority security interest
in all of the Depositor's right,
title, and interest in, to and under the
obligations of the Seller to the
Depositor deemed to be secured by said
pledge and that the Trustee shall be
deemed to be an independent custodian for
purposes of perfection of the security
interest granted to the Depositor. If the
conveyance of the Mortgage Loans from
the Depositor to the Trustee is
characterized as a pledge, it is the intention
of this Agreement that this Agreement shall
constitute a security agreement
under applicable law, and that the
Depositor shall be deemed to have granted to
the Trustee a first priority security
interest in all of the Depositor's right,
title and interest in, to and under the
Mortgage Loans, all payments of
principal of or interest on such Mortgage
Loans, all other rights relating to
and payments made in respect of the Trust
Fund, and all proceeds of any thereof.
If the trust created by this Agreement
terminates prior to the satisfaction of
the claims of any Person in any
Certificates, the security interest created
hereby shall continue in full force and
effect and the Trustee shall be deemed
to be the collateral agent for the benefit
of such Person.
In addition to the conveyance made in the first paragraph of
this
Section 2.01, the Depositor does hereby
convey, assign and set over to the
Trustee for the benefit of the
Certificateholders its rights and interests under
the Sale Agreement, including the
Depositor's right, title and interest in the
representations and warranties contained in
the Sale Agreement and the benefit
of the repurchase obligations and the
obligation of the Seller contained in the
Sale Agreement to take, at the request of
the Depositor or the Trustee, all
action on its part which is reasonably
necessary to ensure the enforceability of
a Mortgage Loan. The Trustee hereby accepts
such assignment, and shall be
entitled to exercise all rights of the
Depositor under the Sale Agreement as if,
for such purpose, it were the Depositor.
The foregoing sale, transfer,
assignment, set-over, deposit and
conveyance does not and is not intended to
result in creation or assumption by the
Trustee of any obligation of the
Depositor, the Seller, or any other Person
in connection with the Mortgage Loans
or any other agreement or instrument
relating thereto.
SECTION 2.02. Acceptance by the Trustee of the Mortgage Loans.
Except as set forth in the Exception Report delivered
contemporaneously herewith (the "Exception
Report"), the Trustee acknowledges
receipt of the Mortgage Note for each
Mortgage Loan and delivery of a Mortgage
File (but does not acknowledge receipt of
all documents required to be included
in such Mortgage File) with respect to each
Mortgage Loan and declares that it
holds and will hold such documents and any
other documents constituting a part
of the Mortgage Files delivered to it in
trust for the use and benefit of all
present and future Certificateholders. The
Depositor will cause the Seller to
repurchase any Mortgage Loan to which a
material exception was taken in the
Exception Report unless such exception is
cured to the satisfaction of the
Trustee within 45 Business Days of the
Closing Date.
The Trustee acknowledges receipt of the Cap Contract (the form
of
which is attached hereto), the Transfer
Agreement, the Bring Down Letter and the
Sale Agreement.
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 have been executed
and received, and that such documents
relate to the Mortgage Loans identified in
Exhibit B-1 that have been conveyed to it.
If the Trustee finds any document or
documents constituting a part of a Mortgage
File to be missing or defective
(that is, mutilated, damaged, defaced or
unexecuted) in any material respect,
the Trustee shall promptly (and in any
event within no more than five Business
Days) after such finding so notify the
Servicer, the Seller and the Depositor.
In addition, the Trustee shall also notify
the Servicer, the Seller and the
Depositor if the original Mortgage with
evidence of recording thereon with
respect to a Mortgage Loan is not received
within 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
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delivered for recordation, the Depositor
shall deliver or cause to be delivered
to the Trustee written notice stating that
such Mortgage has been delivered to
the appropriate public recording office for
recordation and thereafter the
Depositor shall deliver or cause to be
delivered such Mortgage with evidence of
recording thereon upon receipt thereof from
the public recording office. The
Trustee shall request that the Seller
correct or cure such omission, defect or
other irregularity, or substitute a
Mortgage Loan pursuant to the provisions of
Section 2.03, within 90 days from the date
the Seller was notified of such
omission or defect and, if the Seller does
not correct or cure such omission or
defect within such period, that the Seller
purchase such Mortgage Loan from the
Trust Fund within 90 days from the date the
Trustee notified the Seller of such
omission, defect or other irregularity at
the Purchase Price of such Mortgage
Loan. The Purchase Price for any Mortgage
Loan purchased pursuant to this
Section 2.02 shall be paid to the Servicer
and deposited by the Servicer in the
Certificate Account or Collection Account,
as appropriate, promptly upon
receipt, and, upon receipt by the Trustee
of written notification of such
deposit signed by a Servicing Officer, the
Trustee, upon receipt of a Request
for Release, shall promptly release to the
Seller the related Mortgage File and
the Trustee shall execute and deliver such
instruments of transfer or
assignment, without recourse, as shall be
requested by the Seller and necessary
to vest in the Seller or its designee, as
the case may be, any Mortgage Loan
released pursuant hereto, and the Trustee
shall have no further responsibility
with regard to such Mortgage Loan. It is
understood and agreed that the
obligation of the Seller to purchase, cure
or substitute any Mortgage Loan as to
which a material defect in or omission of a
constituent document exists shall
constitute the sole remedy respecting such
defect or omission available to the
Trustee on behalf of Certificateholders.
The preceding sentence shall not,
however, limit any remedies available to
the Certificateholders, the Depositor
or the Trustee pursuant to the Sale
Agreement, the Transfer Agreement and the
Bring-Down Letter. The Trustee shall be
under no duty or obligation to inspect,
review and examine such documents,
instruments, certificates or other papers to
determine that they are genuine,
enforceable, recordable or appropriate to the
represented purpose, or that they have
actually been recorded, or that they are
other than what they purport to be on their
face. The Servicer and the Trustee
shall keep confidential the name of each
Mortgagor except as required 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 from sources other than the other
parties hereto, (ii) disclosure of any and
all information (A) if required to do
so by any applicable law, rule or
regulation, (B) to any government agency or
regulatory body having or claiming
authority to regulate or oversee any aspects
of the Trustee's business or that of its
affiliates, (C) pursuant to any
subpoena, civil investigation demand or
similar demand or request of any court,
regulatory authority, arbitrator or
arbitration to which Trustee or any
affiliate or an officer, director, employer
or shareholder thereof is a party or
(D) to any affiliate, independent or
internal auditor, agent, employee or
attorney of the Trustee having a need to
know the same, provided that the
Trustee advises such recipient of the
confidential nature of the information
being disclosed, or (iii) any other
disclosure authorized by the Depositor.
Within 70 days
of the Closing Date, the Trustee (or its custodian)
shall deliver to the Depositor and the
Servicer the Trustee's Certification,
substantially in the form of Exhibit D
attached hereto, evidencing the
completeness of the Mortgage Files, with
any exceptions noted thereto.
SECTION 2.03. Representations, Warranties and Covenants of the
Depositor.
(a) The Depositor hereby represents and warrants to the Servicer
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
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other) necessary
to own or hold its properties and to conduct its business
as now conducted
by it and to enter into and perform its obligations under
this Agreement
and the Sale Agreement.
(ii) The Depositor has the full corporate power and authority
to
execute, deliver
and perform, and to enter into and consummate the
transactions
contemplated by, this Agreement and the Sale Agreement and has
duly authorized,
by all necessary corporate action on its part, the
execution,
delivery and performance of this Agreement and the Sale
Agreement; and
this Agreement and the Sale Agreement, assuming the due
authorization,
execution and delivery hereof by the other parties hereto,
constitutes a
legal, valid and binding obligation of the Depositor,
enforceable
against the Depositor in accordance with its terms, subject, as
to
enforceability, to (i) bankruptcy, insolvency, reorganization,
moratorium and
other similar laws affecting creditors' rights generally and
(ii) general
principles of equity, regardless of whether enforcement is
sought in a
proceeding in equity or at law.
(iii) The execution and delivery of this Agreement and the Sale
Agreement by the
Depositor, the consummation of the transactions
contemplated by
this Agreement and the Sale Agreement, and the fulfillment
of or compliance
with the terms hereof are in the ordinary course of
business of the
Depositor and will not (A) result in a material breach of
any term or
provision of the charter or by-laws of the Depositor or (B)
materially
conflict with, result in a violation or acceleration of, or
result in a
material default under, the terms of any other material
agreement or
instrument to which the Depositor is a party or by which it
may be bound or
(C) constitute a material violation of any statute, order
or regulation
applicable to the Depositor of any court, regulatory body,
administrative
agency or governmental body having jurisdiction over the
Depositor; and
the Depositor is not in breach or violation of any material
indenture or
other material agreement or instrument, or in violation of any
statute, order
or regulation of any court, regulatory body, administrative
agency or
governmental body having jurisdiction over it which breach or
violation may
materially impair the Depositor's ability to perform or meet
any of its
obligations under this Agreement.
(iv) No litigation is pending, or, to the best of the
Depositor's
knowledge,
threatened, against the Depositor that would materially and
adversely affect
the execution, delivery or enforceability of this
Agreement and
the Sale Agreement or the ability of the Depositor to perform
its obligations
under this Agreement and the Sale Agreement in accordance
with the terms
hereof.
(v) No consent, approval, authorization or order of any court
or
governmental
agency or body is required for the execution, delivery and
performance by
the Depositor of, or compliance by the Depositor with, this
Agreement and
the Sale Agreement or the consummation of the transactions
contemplated
hereby, or if any such consent, approval, authorization or
order is
required, the Depositor has obtained the same. The Depositor
hereby
represents and warrants to the Trustee with respect to each
Mortgage
Loan as of the
Closing Date, and following the transfer of the Mortgage
Loans to it by
the Seller, the Depositor had good title to the Mortgage
Loans and the
Mortgage Notes were subject to no offsets, claims, liens,
mortgage,
pledge, charge, security interest, defenses or counterclaims.
(b) The representations and warranties of the Transferor with
respect
to the Mortgage Loans contained in the
Transfer Agreement were made as of the
date of the Transfer Agreement and brought
forward to the Closing Date pursuant
to the Bring Down Letter. The
representations and warranties of the Transferor
with respect to the Mortgage Loans
contained in the Bring Down Letter were made
as of the Closing Date. The representations
and warranties of the Seller with
respect to the Mortgage Loans contained in
the Sale Agreement were made as of
the Closing Date.
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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 Transferor
under the Transfer Agreement and (ii) a
representation or warranty of the Seller
under the Sale Agreement, the only right or
remedy of the Trustee or of any
Certificateholder shall be the Trustee's
right to enforce the obligations of the
Transferor under any applicable
representation or warranty made by it. The
Trustee acknowledges that the Seller shall
have no obligation or liability with
respect to any breach of a representation
or warranty made by it with respect to
the Mortgage Loans if the fact, condition
or event constituting such breach also
constitutes a breach of a representation or
warranty made by the Transferor in
the Transfer Agreement, without regard to
whether the Transferor fulfills its
contractual obligations in respect of such
representation or warranty. The
Trustee also acknowledges that the Seller
shall have no obligation or liability
with respect to any breach of a
representation or warranty made solely by the
Transferor with respect to the Mortgage
Loans, without regard to whether the
Transferor fulfills its contractual
obligations in respect of such
representation or warranty. The Trustee
further acknowledges that the Depositor
shall have no obligation or liability with
respect to any breach of any
representation or warranty with respect to
the Mortgage Loans (except as set
forth in Section 2.03(a)(v)) under any
circumstances.
In addition to the representations and warranties of the Transferor
in
the Transfer Agreement that were brought
forward to the Closing Date pursuant to
the Bring Down Letter, with respect to each
Mortgage Loan, the Transferor 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 Seller shall (1) use
reasonable efforts to enforce such
covenant against the Transferor and (2) if
the Seller successfully enforces any
obligation of the Transferor to repurchase
such Mortgage Loan, the Seller shall
repurchase such Mortgage Loan in accordance
with this Section 2.03. If the
Seller does not successfully enforce the
obligation, if any, of the Transferor
to repurchase a Mortgage Loan with respect
to any breach of any such additional
covenants, the Seller shall have no
obligation or right to repurchase or cure
such Mortgage Loan.
(c) Upon discovery by any of the Depositor, the Servicer 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 Transferor
or the Seller, as applicable, shall either
(a) cure such breach in all material
respects, (b) repurchase such Mortgage Loan
or any property acquired in respect
thereof from the Trustee at the Purchase
Price or (c) within the two year period
following the Closing Date, substitute a
Replacement Mortgage Loan for the
affected Mortgage Loan. In the event of
discovery of a breach of any
representation and warranty of the
Transferor or the Seller, the Trustee's
rights shall be enforced under the Transfer
Agreement or the Sale Agreement for
the benefit of Certificateholders. In the
event of a breach of the
representations and warranties with respect
to the Mortgage Loans set forth in
the 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
Seller substitutes for a Mortgage Loan
for which there is a breach of any
representations and warranties in the Sale
Agreement which adversely and materially
affects the value of such Mortgage Loan
and such substitute mortgage loan is not a
Replacement Mortgage Loan, under the
terms of the Sale Agreement, the Seller
will, in exchange for such substitute
Mortgage Loan, (i) provide the applicable
Purchase Price for the affected
Mortgage Loan or (ii) within two years of
the Closing Date, substitute such
affected Mortgage Loan with a Replacement
Mortgage Loan. Any such substitution
shall not be effected prior to the
additional delivery to the Trustee 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 Seller
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indemnifies and holds 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 Seller
relating to a repurchase of a Mortgage
Loan other than in compliance with the
terms of this Section 2.03 and the Sale
Agreement, to the extent that any such
action causes (i) any federal or state
tax to be imposed on the Trust Fund or any
REMIC provided for herein, including
without limitation, any federal tax imposed
on "prohibited transactions" under
Section 860F(a)(1) of the Code or on
"contributions after the startup day" under
Section 860G(d)(1) of the Code, or (ii) any
REMIC created hereunder to fail to
qualify as a REMIC at any time that any
Certificate is outstanding. In
furtherance of the foregoing, if the Seller
is not a member of MERS and
repurchases a Mortgage Loan which is
registered on the MERS System, the Seller,
at its own expense and without any right of
reimbursement, shall cause MERS to
execute and deliver an assignment of the
Mortgage in recordable form to transfer
the Mortgage from MERS to the Seller and
shall cause such Mortgage to be removed
from registration on the MERS System in
accordance with MERS' rules and
regulations.
With respect to any Mortgage Loan repurchased by the Depositor
pursuant to this Agreement, by the Seller
pursuant to the Sale Agreement or by
the 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 and the Servicer shall notify the
Trustee of its receipt of the same. The
Trustee, upon the Servicer's receipt of
the full amount of the Purchase Price for a
Deleted Mortgage Loan, or upon
receipt of the Mortgage File for a
Replacement Mortgage Loan substituted for a
Deleted Mortgage Loan, shall release or
cause to be released and reassign to the
Depositor, the Seller or the Transferor, as
applicable, the related Mortgage
File for the Deleted Mortgage Loan and
shall execute and deliver such
instruments of transfer or assignment, in
each case without recourse,
representation or warranty, as shall be
necessary to vest in such party or its
designee or assignee title to any Deleted
Mortgage Loan released pursuant
hereto, free and clear of all security
interests, liens and other encumbrances
created by this Agreement, which
instruments shall be prepared by the Trustee
(or its custodian), 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 (or its custodian) pursuant to the
terms of this Article II in exchange
for a Deleted Mortgage Loan: (i) the Seller
must deliver to the Trustee (or its
custodian) the Mortgage File for the
Replacement Mortgage Loan containing the
documents set forth in Section 2.01 along
with a written certification
certifying as to the 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
(or its custodian) 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 have been executed and
received.
For any month in which the Seller substitutes one or more
Replacement
Mortgage Loans for one or more Deleted
Mortgage Loans, the Seller will determine
the amount (if any) by which the aggregate
principal balance of all such
Replacement Mortgage Loans as of the date
of substitution and the aggregate
Prepayment Charges with respect to such
Replacement Mortgage Loans is less than
the aggregate Stated Principal Balance
(after application of the principal
portion of the Scheduled Payment due in the
month of substitution) and aggregate
Prepayment Charges of all such Deleted
Mortgage Loans. An amount equal to the
aggregate of the deficiencies described in
the preceding sentence (such amount,
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the "Substitution Adjustment Amount") plus
an amount equal to any unreimbursed
costs, penalties and/or damages incurred by
the Trust Fund in connection with
any violation relating to such Deleted
Mortgage Loan of any predatory or abusive
lending law shall be remitted by the Seller
to the Servicer for deposit into the
Certificate Account by the Seller 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 Trustee 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 Seller, such
Replacement Mortgage Loan or
Replacement Mortgage Loans shall constitute
part of the Mortgage Pool and shall
be subject in all respects to the terms of
this Agreement and the Sale
Agreement, including all applicable
representations and warranties thereof
included in the Sale Agreement as of the
date of substitution.
(d) It is understood and agreed that the representations,
warranties
and indemnification (i) set forth in this
Section 2.03, (ii) of the Seller and
the Depositor set forth in the Sale
Agreement and assigned to the Trustee by the
Depositor hereunder and (iii) of the
Transferor, assigned by the Seller to the
Depositor pursuant to the Sale Agreement
and assigned to the Trustee by the
Depositor hereunder shall each survive
delivery of the Mortgage Files and the
Assignment of Mortgage of each Mortgage
Loan to the Trustee and shall continue
throughout the term of this Agreement.
(e) The Depositor shall deliver a copy of the Mortgage Loan
Schedule
to the Servicer on the Closing Date.
SECTION 2.04. Representations and Warranties of the Servicer.
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 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 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
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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 hereunder 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) Except as previously disclosed to the Depositor in the
Prospectus Supplement, no litigation is
pending or, to the best of the
Servicer's knowledge, threatened, against
the Servicer that would materially and
adversely affect the execution, delivery or
enforceability of this Agreement or
the ability of the Servicer to service the
Mortgage Loans or to perform any of
its other obligations under this Agreement
in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court
or
governmental agency or body is required for
the execution, delivery and
performance by the Servicer of, or
compliance by the Servicer with, this
Agreement or the consummation of the
transactions contemplated hereby, or if any
such consent, approval, authorization or
order is required, the Servicer has
obtained the same.
(vii) The Servicer has fully furnished and will fully furnish
(for the period it serviced the Mortgage
Loans), in accordance with the Fair
Credit Reporting Act and its implementing
regulations, accurate and complete
information (e.g., favorable and
unfavorable) on its borrower credit files to
Equifax, Experian and Trans Union Credit
Information Company on a monthly basis.
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans
which
are not
"Qualified Mortgages".
Upon discovery by the Depositor, the Servicer or the Trustee that
any
Mortgage Loan does not constitute a
"qualified mortgage" within the meaning of
section 860G(a)(3) of the Code, the party
discovering such fact shall promptly
(and in any event within 5 Business Days of
discovery) give written notice
thereof to the other parties. In connection
therewith, the Depositor shall, at
the Depositor's option, either (i)
substitute, if the conditions in Section
2.03(c) with respect to substitutions are
satisfied, a Replacement Mortgage Loan
for the affected Mortgage Loan, or (ii)
repurchase the affected Mortgage
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<PAGE>
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 writte
