<PAGE>
EXECUTION COPY
MERRILL LYNCH MORTGAGE INVESTORS, INC.,
Depositor
WILSHIRE CREDIT CORPORATION,
Servicer
and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
Trustee
----------
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 2005
----------
SPECIALTY UNDERWRITING AND RESIDENTIAL FINANCE TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2005-AB3
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S>
<C>
ARTICLE I
DEFINITIONS......................................................
1
ARTICLE II CONVEYANCE OF
MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES..... 41
SECTION 2.01.
Conveyance
of Mortgage Loans................................ 41
SECTION 2.02.
Acceptance
by Trustee of the Mortgage Loans................. 44
SECTION 2.03.
Representations, Warranties and Covenants of the Depositor..
45
SECTION 2.04.
Representations and Warranties of the Servicer..............
48
SECTION 2.05.
Substitutions and Repurchases of Mortgage Loans Which Are
Not "Qualified Mortgages"...................................
49
SECTION 2.06.
Authentication and Delivery of Certificates.................
49
SECTION 2.07.
REMIC
Elections............................................. 50
SECTION 2.08.
Covenants
of the Servicer................................... 53
SECTION 2.09.
[RESERVED]..................................................
53
SECTION 2.10.
[RESERVED]..................................................
53
SECTION 2.11.
Permitted
Activities of the Trust Fund...................... 53
SECTION 2.12.
Qualification of Special Purpose Entity.....................
53
SECTION 2.13.
Depositor
Notification of NIM Notes......................... 53
ARTICLE III ADMINISTRATION AND
SERVICING OF MORTGAGE LOANS................... 53
SECTION 3.01.
Servicer
to Service Mortgage Loans.......................... 53
SECTION 3.02.
Servicing
and Subservicing; Enforcement of the Obligations
of Servicer.................................................
55
SECTION 3.03.
Rights of
the Depositor and the Trustee in Respect of the
Servicer....................................................
55
SECTION 3.04.
Trustee to
Act as Servicer.................................. 55
SECTION 3.05.
Collection
of Mortgage Loan Payments; Collection Account;
Certificate Account.........................................
56
SECTION 3.06.
Collection
of Taxes, Assessments and Similar Items; Escrow
Accounts....................................................
59
SECTION 3.07.
Access to
Certain Documentation and Information Regarding
the Mortgage Loans..........................................
60
SECTION 3.08.
Permitted
Withdrawals from the Collection Account and
Certificate Account.........................................
60
SECTION 3.09.
[RESERVED]..................................................
62
SECTION 3.10.
Maintenance of Hazard Insurance.............................
62
SECTION 3.11.
Enforcement of Due-On-Sale Clauses; Assumption Agreements...
63
</TABLE>
i
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
----
<S>
<C>
SECTION 3.12.
Realization Upon Defaulted Mortgage Loans; Determination of
Excess Proceeds.............................................
64
SECTION 3.13.
Trustee to
Cooperate; Release of Mortgage Files............. 67
SECTION 3.14.
Documents
Records and Funds in Possession of Servicer to be
Held for the Trustee........................................
68
SECTION 3.15.
Servicing
Compensation...................................... 69
SECTION 3.16.
Access to
Certain Documentation............................. 69
SECTION 3.17.
Annual
Statement as to Compliance........................... 69
SECTION 3.18.
Annual
Independent Public Accountants' Servicing Statement;
Financial Statements........................................
69
SECTION 3.19.
[RESERVED]..................................................
70
SECTION 3.20.
Periodic
Filings............................................ 70
SECTION 3.21.
Annual
Certificate by Trustee............................... 71
SECTION 3.22.
Annual
Certificate by Servicer.............................. 71
SECTION 3.23.
Prepayment
Charge Reporting Requirements.................... 72
SECTION 3.24.
Statements
to Trustee....................................... 72
SECTION 3.25.
Indemnification.............................................
72
SECTION 3.26.
Nonsolicitation.............................................
73
SECTION 3.27.
Existing
Servicing Agreement................................ 73
SECTION 3.28.
High Cost
Mortgage Loans.................................... 73
SECTION 3.29.
MI
Policies, Claims Under the MI Policies...................
73
ARTICLE IV
DISTRIBUTIONS....................................................
74
SECTION 4.01.
Advances....................................................
74
SECTION 4.02.
Reduction
of Servicing Compensation in Connection with
Prepayment Interest Shortfalls..............................
74
SECTION 4.03.
Distributions on the REMIC Interests........................
75
SECTION 4.04.
Distributions...............................................
75
SECTION 4.05.
Monthly
Statements to Certificateholders.................... 80
ARTICLE V THE
CERTIFICATES.................................................
83
SECTION 5.01.
The
Certificates............................................
83
SECTION 5.02.
Certificate Register; Registration of Transfer and Exchange
of Certificates.............................................
84
SECTION 5.03.
Mutilated,
Destroyed, Lost or Stolen Certificates........... 88
SECTION 5.04.
Persons
Deemed Owners....................................... 88
</TABLE>
ii
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
----
<S>
<C>
SECTION 5.05.
Access to
List of Certificateholders' Names and Addresses... 88
SECTION 5.06.
Book-Entry
Certificates..................................... 88
SECTION 5.07.
Notices to
Depository....................................... 89
SECTION 5.08.
Definitive
Certificates..................................... 89
SECTION 5.09.
Maintenance of Office or Agency.............................
90
ARTICLE VI THE DEPOSITOR
AND THE SERVICER................................... 90
SECTION 6.01.
Respective
Liabilities of the Depositor and the Servicer.... 90
SECTION 6.02.
Merger or
Consolidation of the Depositor or the Servicer.... 90
SECTION 6.03.
Limitation
on Liability of the Depositor, the Servicer and
Others......................................................
91
SECTION 6.04.
Limitation
on Resignation of Servicer....................... 91
SECTION 6.05.
Errors and
Omissions Insurance; Fidelity Bonds.............. 92
ARTICLE VII DEFAULT; TERMINATION
OF SERVICER................................. 92
SECTION 7.01.
Events of
Default........................................... 92
SECTION 7.02.
[RESERVED]..................................................
93
SECTION 7.03.
Trustee to
Act; Appointment of Successor.................... 93
SECTION 7.04.
Notification to Certificateholders..........................
94
ARTICLE VIII
CONCERNING THE TRUSTEE...........................................
95
SECTION 8.01.
Duties of
Trustee........................................... 95
SECTION 8.02.
Certain
Matters Affecting the Trustee....................... 96
SECTION 8.03.
Trustee
Not Liable for Mortgage Loans....................... 97
SECTION 8.04.
Trustee
May Own Certificates................................ 97
SECTION 8.05.
Trustee's
Fees.............................................. 98
SECTION 8.06.
Indemnification of Trustee; Expenses........................
98
SECTION 8.07.
Eligibility Requirements for Trustee........................
99
SECTION 8.08.
Resignation and Removal of Trustee..........................
99
SECTION 8.09.
Successor
Trustee........................................... 100
SECTION 8.10.
Merger or
Consolidation of Trustee.......................... 100
SECTION 8.11.
Appointment of Co-Trustee or Separate Trustee...............
100
SECTION 8.12.
Tax
Matters.................................................
101
ARTICLE IX
TERMINATION......................................................
104
SECTION 9.01.
Termination upon Liquidation or Repurchase of all Mortgage
Loans.......................................................
104
SECTION 9.02.
Final
Distribution on the Certificates...................... 105
</TABLE>
iii
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
----
<S>
<C>
SECTION 9.03.
Additional
Termination Requirements......................... 106
ARTICLE X
MISCELLANEOUS PROVISIONS.........................................
107
SECTION 10.01.
Amendment...................................................
107
SECTION 10.02.
Counterparts................................................
109
SECTION 10.03.
Governing
Law............................................... 109
SECTION 10.04.
Intention of
Parties........................................ 109
SECTION 10.05.
Notices.....................................................
109
SECTION 10.06.
Severability of
Provisions.................................. 110
SECTION 10.07.
Assignment..................................................
110
SECTION 10.08.
Limitation on
Rights of Certificateholders.................. 110
SECTION 10.09.
Inspection and
Audit Rights................................. 111
SECTION 10.10.
Certificates
Nonassessable and Fully Paid................... 111
SECTION 10.11.
Third Party
Rights.......................................... 112
SECTION 10.12.
[RESERVED]..................................................
112
SECTION 10.13.
[RESERVED]..................................................
112
SECTION 10.14.
Assignment;
Sales; Advance Facilities....................... 112
</TABLE>
iv
<PAGE>
<TABLE>
<S>
<C>
EXHIBIT A FORMS OF
CERTIFICATES
EXHIBIT B-1
MORTGAGE LOAN SCHEDULE - MORTGAGE POOL
EXHIBIT B-2
MORTGAGE LOAN SCHEDULE - GROUP ONE MORTGAGE LOANS
EXHIBIT B-3
MORTGAGE LOAN SCHEDULE - GROUP TWO MORTGAGE LOANS
EXHIBIT C-1 MI
MORTGAGE LOANS
EXHIBIT C-2
MORTGAGE INSURANCE POLICY
EXHIBIT D FORM OF TRUSTEE
CERTIFICATION
EXHIBIT E-1 FORM
OF TRANSFEREE'S LETTER AND AFFIDAVIT
EXHIBIT E-2 FORM
OF TRANSFEROR'S AFFIDAVIT
EXHIBIT F FORM OF
TRANSFEROR CERTIFICATE FOR CLASS P AND CLASS C
CERTIFICATES
EXHIBIT G FORM OF
INVESTMENT LETTER
EXHIBIT H FORM OF RULE
144A INVESTMENT LETTER
EXHIBIT I REQUEST FOR
RELEASE OF DOCUMENTS
EXHIBIT J FORM OF POWER OF
ATTORNEY
EXHIBIT K FORM OF
OFFICER'S CERTIFICATE OF TRUSTEE
EXHIBIT L FORM OF
OFFICER'S CERTIFICATE OF SERVICER
EXHIBIT M [RESERVED]
EXHIBIT N FORM OF AUCTION
PROCEDURES
EXHIBIT O-1 FORM
OF CLASS A -1 CAP CONTRACT
EXHIBIT O-2 FORM
OF CLASS A -2 CAP CONTRACT
EXHIBIT O-3 FORM
OF SUBORDINATED CERTIFICATE CAP CONTRACT
EXHIBIT P-1
CLASS A-1 ONE MONTH LIBOR CAP TABLE - CAP CONTRACT
EXHIBIT P-2
CLASS A-2 ONE MONTH LIBOR CAP TABLE - CAP CONTRACT
EXHIBIT P-3
SUBORDINATED CERTIFICATE ONE MONTH LIBOR CAP TABLE - CAP
CONTRACT
</TABLE>
v
<PAGE>
POOLING AND SERVICING AGREEMENT, dated as of December 1, 2005,
among
MERRILL LYNCH MORTGAGE INVESTORS, INC., a Delaware corporation, as
depositor
(the "Depositor"), WILSHIRE CREDIT CORPORATION, a Nevada
corporation, as
servicer (the "Servicer") and JPMORGAN CHASE BANK, N.A., a national
banking
association, as trustee (the "Trustee").
The
Depositor is the owner of the Trust Fund that is hereby conveyed to
the
Trustee in return for the Certificates. The Trust Fund for federal
income tax
purposes will consist of (i) two real estate mortgage investment
conduits in a
tiered structure, (ii) the grantor trusts described in Section 2.07
hereof and
(iii) the Cap Contracts and the Cap Contract Account. The Lower
Tier REMIC will
consist of all of the assets constituting the Trust Fund (other
than the assets
described in clauses (ii) and (iii) above and the Lower Tier REMIC
Interests)
and will be evidenced by the Lower Tier REMIC Regular Interests
(which will be
uncertificated and will represent the "regular interests" in the
Lower Tier
REMIC) and the Class LTR Interest as the single "residual interest"
in the Lower
Tier REMIC. The Trustee will hold the Lower Tier REMIC Regular
Interests. The
Upper Tier REMIC will consist of the Lower Tier REMIC Regular
Interests and will
be evidenced by the REMIC Regular Interests (which will represent
the "regular
interests" in the Upper Tier REMIC) and the Residual Interest as
the single
"residual interest" in the Upper Tier REMIC. The Class R
Certificate will
represent beneficial ownership of the Class LTR Interest and the
Residual
Interest. The "latest possible maturity date" for federal income
tax purposes of
all interests created hereby will be the Latest Possible Maturity
Date.
All
covenants and agreements made by the Seller in the Sale Agreement
and
by the Depositor and the Trustee herein with respect to the
Mortgage Loans and
the other property constituting the Trust Fund are for the benefit
of the
Holders from time to time of the Certificates.
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 Regular Interests and any Distribution Date, the period
commencing on
the immediately preceding Distribution Date (or, in the case of the
first
Distribution Date, the Closing Date) and ending on the day
immediately preceding
such Distribution Date. All calculations of interest on each Class
of
Certificates and the Lower Tier REMIC Regular Interests will be
made on the
basis of the actual number of days elapsed in the related Accrual
Period and a
360 day year.
Adjustable Rate Mortgage Loan: A Mortgage Loan identified in the
Mortgage
Loan Schedule as having a Mortgage Rate 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.
1
<PAGE>
Advance: The aggregate of the advances required to be made by the
Servicer
with respect to any Distribution Date pursuant to Section 4.01, the
amount of
any such advances being equal to the sum of the aggregate of
payments of
principal and interest (net of the Servicing Fee Rate) on the
Mortgage Loans
that were due during the applicable Due Period and not received as
of the close
of business on the related Determination Date, less the aggregate
amount of any
such Delinquent payments that the Servicer has determined would
constitute a
Non-Recoverable Advance were an advance to be made with respect
thereto.
Advance Facility: A financing or other facility as described in
Section
10.14(a).
Advance Facility Notice: As defined in Section 10.14(b).
Advance Financing Person: As defined in Section 10.14(a).
Advance Reimbursement Amounts: As defined in Section 10.14(a).
Affiliate: With respect to
any specified Person, any other Person
controlling, controlled by or under common control with such
Person. For the
purposes of this definition, "control" means the power to direct
the management
and policies of a Person, directly or indirectly, whether through
ownership of
voting securities, by contract or otherwise; and the terms
"controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Certificate Principal Balance: For any date of
determination, the
sum of the Class A-1 Certificate Principal Balance, the Class A-2A
Certificate
Principal Balance, the Class A-2B Certificate Principal Balance,
the Class A-2C
Certificate Principal Balance, the Class R Certificate Principal
Balance, the
Class M-1 Certificate Principal Balance, the Class M-2 Certificate
Principal
Balance, the Class M-3 Certificate Principal Balance, the Class M-4
Certificate
Principal Balance, the Class M-5 Certificate Principal Balance, the
Class M-6
Certificate Principal Balance and the Class B-1 Certificate
Principal Balance in
each case as of such date of determination.
Agreement: This Pooling and Servicing Agreement and any and all
amendments
or supplements hereto made in accordance with the terms herein.
Applied Realized Loss Amount: With respect to any Distribution
Date, the
amount, if any, by which, the sum of (i) the Aggregate Certificate
Principal
Balance and (ii) the Class C Certificate Principal Balance after
distributions
of principal on such Distribution Date exceeds the aggregate Stated
Principal
Balance of the Mortgage Loans as of such Distribution Date.
Appraised Value: With respect to a Mortgage Loan the proceeds of
which were
used to purchase the related Mortgaged Property, the "Appraised
Value" of a
Mortgaged Property is the lesser of (1) the appraised value based
on an
appraisal made for the Seller by an independent fee appraiser at
the time of the
origination of the related Mortgage Loan, and (2) the sales price
of such
Mortgaged Property at such time of origination. With respect to a
Mortgage Loan
the proceeds of which were used to refinance an existing mortgage
loan, the
"Appraised Value" is the appraised value of the Mortgaged Property
based upon
the appraisal obtained at the time of refinancing.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer
or equivalent instrument, in recordable form, sufficient under the
laws of the
jurisdiction where the related Mortgaged Property is located to
reflect of
record the sale and assignment of the Mortgage Loan to the Trustee,
which
assignment, notice of transfer or equivalent instrument may, if
permitted by
law, be in the form of
2
<PAGE>
one or more blanket assignments covering Mortgages secured by
Mortgaged
Properties located in the same county.
Auction Termination: The termination of the Trust Fund hereunder
pursuant
to Section 9.01(a)(i) hereof.
Auction Termination Amount: The purchase price received by the
Trustee in
connection with any purchase of all of the Mortgage Loans pursuant
to Section
9.01(a)(i).
Auction Termination Date: The Distribution Date on which the
aggregate
Stated Principal Balance of the Mortgage Loans is equal to or less
than 10% of
the aggregate Stated Principal Balance of the Mortgage Loans as of
the Cut-off
Date.
Auction Termination Price: In the case of an Auction Termination,
as of the
initial Distribution Date on or after the Auction Termination Date,
an amount
equal to the sum of (A) the aggregate Stated Principal Balance of
each Mortgage
Loan (other than any Mortgage Loan that has become an REO
Property), plus
accrued interest thereon at the applicable Mortgage Rate through
the Due Date
preceding distribution of the proceeds, the fair market value of
any REO
Property, plus accrued interest thereon, (B) any unreimbursed
out-of-pocket
costs and expenses owed to the Trustee or the Servicer (including
any costs and
expenses incurred in connection with the Auction Termination) and
any
unreimbursed Servicing Fees, Advances and Servicing Advances and
(C) any costs
and damages incurred by the Trust Fund (or the Trustee on behalf of
the Trust
Fund) in connection with any violation of any anti-predatory or
anti-abusive
lending laws.
Available Funds Cap: Any of the Class A-1 Available Funds Cap, the
Class
A-2 Available Funds Cap or the Subordinated Certificate Available
Funds Cap.
Balloon Loan: A Mortgage Loan having an original term to stated
maturity of
approximately 15 years 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-1, Class A-2A, Class A-2B, Class A-2C, Class M-1, Class
M-2, Class
M-3, Class M-4, Class M-5, Class M-6 and Class B-1 Certificates
constitutes a
Class of Book-Entry Certificates.
Business Day: Any day other than (1) a Saturday or a Sunday, or (2)
a day
on which banking institutions in the State of Oregon or in the City
of New York,
New York are authorized or obligated by law or executive order to
be closed.
Cap
Contract: Any of the Class A-1 Cap Contract, the Class A-2 Cap
Contract
or the Subordinated Certificate Cap Contract.
Cap
Contract Account: The separate Eligible Account created and
maintained
by the Trustee pursuant to Section 4.04(j) in the name of the
Trustee for the
benefit of the Trust Fund and designated "JPMorgan Chase Bank,
N.A., as trustee,
in trust for registered holders of Specialty Underwriting and
Residential
Finance Trust, Mortgage Loan Asset-Backed Certificates, Series
2005-AB3." Funds
in the
3
<PAGE>
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.
Cap
Contract Notional Balance: Any of the Class A-1 Cap Contract
Notional
Balance, the Class A-2 Cap Contract Notional Balance or the
Subordinated
Certificate Cap Contract Notional Balance.
Cap
Contract Termination Date: Any of the Class A-1 Cap Contract
Termination Date, the Class A-2 Cap Contract Termination Date or
the
Subordinated Certificate Cap Contract Termination Date.
Certificate: Any one of the certificates of any Class executed by
the
Trustee and authenticated by the Trustee in substantially the forms
attached
hereto as Exhibit A.
Certificate Account: The separate Eligible Account created and
maintained
by the Trustee pursuant to Section 3.05(f) in the name of the
Trustee for the
benefit of the Certificateholders and designated "JPMorgan Chase
Bank, N.A., as
trustee, in trust for registered holders of Specialty Underwriting
and
Residential Finance Trust, Mortgage Loan Asset-Backed Certificates,
Series
2005-AB3." 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 and Class R Certificates.
For
purposes of Section 2.07 hereof, Certificate Group One shall be
related to Group
One.
Certificate Group Two: The Class A-2A, Class A-2B and Class
A-2C
Certificates. For purposes of Section 2.07 hereof, Certificate
Group Two shall
be related to Group Two.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person
that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate and as of
any
Distribution Date, the Initial Certificate Principal Balance of
such Certificate
less the sum of (1) all amounts distributed with respect to such
Certificate in
reduction of the Certificate Principal Balance thereof on previous
Distribution
Dates pursuant to Section 4.04, and (2) any Applied Realized Loss
Amounts
allocated to such Certificate on previous Distribution Dates
pursuant to Section
4.04(h). On each Distribution Date, after all distributions of
principal on such
Distribution Date, a portion of the Class C Interest Carry Forward
Amount in an
amount equal to the excess of the Overcollateralization Amount on
such
Distribution Date over the Overcollateralization Amount as of the
preceding
Distribution Date (or, in the case of the first Distribution Date,
the initial
Overcollateralization Amount (based on the Stated Principal Balance
of the
Mortgage Loans as of the Cut-off Date)) will be added to the
aggregate
Certificate Principal Balance of the Class C Certificates (on a pro
rata basis).
Notwithstanding the foregoing on any Distribution Date relating to
a Due Period
in which a Subsequent Recovery has been received by the Servicer,
the
Certificate Principal Balance of any Class of Certificates then
outstanding for
which any Applied Realized Loss Amount has been allocated will be
increased, in
order of seniority, by an amount equal to the lesser of (i) the
Unpaid Realized
Loss Amount for such Class of Certificates and (ii) the total of
any Subsequent
Recovery distributed on such date to the Certificateholders
(reduced by the
amount of the increase in the Certificate Principal Balance of any
more senior
Class of Certificates pursuant to this sentence on such
Distribution Date).
4
<PAGE>
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 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-1 Certificate Principal Balance, the Class A-2A
Certificate
Principal Balance, the Class A-2B Certificate Principal Balance and
the Class
A-2C Certificate Principal Balance.
Class A Certificates: Any of the Class A-1, Class A-2A, Class A-2B
and
Class A-2C Certificates.
Class A Principal Distribution Amount: With respect to any
Distribution
Date (1) prior to the Stepdown Date or any Distribution Date on
which a Stepdown
Trigger Event exists, 100% of the Principal Distribution Amount for
such
Distribution Date and (2) on or after the Stepdown Date where a
Stepdown Trigger
Event does not exist, the excess of (A) the Certificate Principal
Balance of the
Class A and Class R Certificates immediately prior to such
Distribution Date
over (B) the lesser of (1) 74.10% of the Stated Principal Balances
of the
Mortgage Loans as of such Distribution Date, and (2) the excess of
the Stated
Principal Balances of the Mortgage Loans as of such Distribution
Date over the
Minimum Required Overcollateralization Amount; provided, however,
that in no
event will the Class A Principal Distribution Amount with respect
to any
Distribution Date exceed the aggregate Certificate Principal
Balance of the
Class A and Class R Certificates.
Class A-1 Available Funds Cap: With respect to a Distribution Date,
the per
annum rate equal to the product of (1) 12, (ii) the quotient of (x)
the total
scheduled interest on the Mortgage Loans in Group One based on the
Net Mortgage
Rates in effect on the related Due Date, divided by (y) the
aggregate Stated
Principal Balance of the Mortgage Loans in Group One as of the
first day of the
related Accrual Period and (iii) a fraction, the numerator of which
is 30 and
the denominator of which is the actual number of days in the
related Accrual
Period.
Class A-1 Cap Contract: The confirmation and agreement between the
Trust
Fund or the Trustee and the Cap Contract Counterparty (in the form
attached
hereto as Exhibit O-1).
Class A-1 Cap Contract Notional Balance: With respect to any
Distribution
Date, the notional balance set forth for such Distribution Date in
the Class A-1
One-Month LIBOR Cap Table attached hereto as Exhibit P-1.
Class A-1 Cap Contract Termination Date: The Distribution Date
after the
Distribution Date in May 2012.
5
<PAGE>
Class A-1 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-1 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class A-1
Certificates.
Class A-1 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class A-1
Pass-Through Rate on
the Class A-1 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or a Class A-1 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-1
Certificates.
Class A-1 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class A-1 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
A-1 Certificates with respect to Current Interest or Interest Carry
Forward
Amounts on such prior Distribution Dates and (2) interest on such
excess (to the
extent permitted by applicable law) at the Class A-1 Pass-Through
Rate for the
related Accrual Period.
Class A-1 Margin: As of any Distribution Date up to and including
the
Auction Termination Date for the Certificates, 0.260% per annum
and, as of any
Distribution Date after the Auction Termination Date, 0.520% per
annum.
Class A-1 Maximum Rate Cap: With respect to any Distribution Date,
the per
annum rate, adjusted to reflect the length of the related Accrual
Period, equal
to the weighted average of the maximum lifetime Net Mortgage Rates
on the
Adjustable Rate Mortgage Loans in Group One and the Net Mortgage
Rates on the
Fixed Rate Mortgage Loans in Group One. The Class A-1 Maximum Rate
Cap shall
relate to the Class A-1 and Class R Certificates.
Class A-1 Pass-Through Rate: For the first Distribution Date,
4.63875% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class A-1 Margin, (2) the Class A-1 Maximum Rate Cap and
(3) the Class
A-1 Available Funds Cap for such Distribution Date.
Class A-1 Upper Collar: With respect to each Distribution Date with
respect
to which payments are received on the Class A-1 Cap Contract, a
rate equal to
the lesser of One-Month LIBOR and 9.740% per annum.
Class A-2 Available Funds Cap: With respect to a Distribution Date,
the per
annum rate equal to the product of (1) 12, (ii) the quotient of (x)
the total
scheduled interest on the Mortgage Loans in Group Two based on the
Net Mortgage
Rates in effect on the related Due Date, divided by (y) the
aggregate Stated
Principal Balance of the Mortgage Loans in Group Two as of the
first day of the
related Accrual Period and (iii) a fraction, the numerator of which
is 30 and
the denominator of which is the actual number of days in the
related Accrual
Period.
Class A-2 Cap Contract: The confirmation and agreement, between the
Trust
Fund or the Trustee and Bear Stearns Financial Products, Inc. (in
the form
attached hereto as Exhibit O-2).
Class A-2 Cap Contract Notional Balance: With respect to any
Distribution
Date, the notional balance set forth for such Distribution Date in
the Class A-2
One-Month LIBOR Cap Table attached hereto as Exhibit P-2.
6
<PAGE>
Class A-2 Cap Contract Termination Date: The Distribution Date
after the
Distribution Date in May 2012.
Class A-2 Certificates: The Class A-2A, Class A-2B and Class
A-2C
Certificates.
Class A-2 Maximum Rate Cap: With respect to any Distribution Date,
the per
annum rate, adjusted to reflect the length of the related Accrual
Period, equal
to the weighted average of the maximum lifetime Net Mortgage Rates
on the
Adjustable Rate Mortgage Loans in Group Two and the Net Mortgage
Rates on the
Fixed Rate Mortgage Loans in Group Two. The Class A-2 Maximum Rate
Cap shall
relate to the Class A-2 Certificates.
Class A-2 Upper Collar: With respect to each Distribution Date with
respect
to which payments are received on the Class A-2 Cap Contract, a
date equal to
the lesser of One-Month Libor and 9.740% per annum.
Class A-2A Certificate: Any Certificate designated as a "Class
A-2A
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class A-2A Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class A-2A
Certificates.
Class A-2A Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class A-2A
Pass-Through Rate on
the Class A-2A Certificate Principal Balance as of such
Distribution Date plus
the portion of any previous distributions on such Class in respect
of Class A-2A
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 Current Interest or Interest
Carry Forward
Amounts on such prior Distribution Dates and (2) interest on such
excess (to the
extent permitted by applicable law) at the Class A-2A Pass-Through
Rate for the
related Accrual Period.
Class A-2A Margin: As of any Distribution Date up to and including
the
Auction Termination Date for the Certificates, 0.110% per annum
and, as of any
Distribution Date after the Auction Termination Date, 0.220% per
annum.
Class A-2A Pass-Through Rate: For the first Distribution Date,
4.48875% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class A-1B Margin, (2) the Class A-2 Maximum Rate Cap and
(3) the Class
A-2 Available Funds Cap for such Distribution Date.
Class A-2B Certificate: Any Certificate designated as a "Class
A-2B
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class A-2B Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class A-2B
Certificates.
Class A-2B Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class A-2B
Pass-Through Rate on
the Class A-2B Certificate Principal Balance as of such
Distribution Date plus
the portion of any previous distributions on such Class in respect
of Class
7
<PAGE>
A-2B 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 Current Interest or Interest
Carry Forward
Amounts on such prior Distribution Dates and (2) interest on such
excess (to the
extent permitted by applicable law) at the Class A-2B Pass-Through
Rate for the
related Accrual Period.
Class A-2B Margin: As of any Distribution Date up to and including
the
Auction Termination Date for the Certificates, 0.250% per annum
and, as of any
Distribution Date after the Auction Termination Date, 0.500% per
annum.
Class A-2B Pass-Through Rate: For the first Distribution Date,
4.62875% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class A-2B Margin, (2) the Maximum Rate Cap and (3) the
Available Funds
Cap for such Distribution Date.
Class A-2C Certificate: Any Certificate designated as a "Class
A-2C
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class A-2C Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class A-2C
Certificates.
Class A-2C Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class A-2C
Pass-Through Rate on
the Class A-2C Certificate Principal Balance as of such
Distribution Date plus
the portion of any previous distributions on such Class in respect
of Class A-2C
Current Interest or a Class A-2C Interest Carry Forward Amount that
is recovered
as a voidable preference by a trustee in bankruptcy, less any
Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class
A-2C
Certificates.
Class A-2C Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class A-2C Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
A-2C Certificates with respect to Current Interest or Interest
Carry Forward
Amounts on such prior Distribution Dates and (2) interest on such
excess (to the
extent permitted by applicable law) at the Class A-2C Pass-Through
Rate for the
related Accrual Period.
Class A-2C Margin: As of any Distribution Date up to and including
the
Auction Termination Date for the Certificates, 0.360% per annum
and, as of any
Distribution Date after the Auction Termination Date, 0.720% per
annum.
Class A-2C Pass-Through Rate: For the first Distribution Date,
4.73875% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class A-2C Margin, (2) the Class A-2 Maximum Rate Cap and
(3) the Class
A-2 Available Funds Cap for such Distribution Date.
Class B-1 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans 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.
8
<PAGE>
Class B-1 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class B-1
Certificates.
Class B-1 Current
Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-1
Pass-Through Rate on
the Class B-1 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Class B-1
Current Interest or a Class B-1 Interest Carry Forward Amount that
is recovered
as a voidable preference by a trustee in bankruptcy, less any
Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class
B-1
Certificates.
Class B-1 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class B-1 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
B-1 Certificates with respect to Current Interest or Interest Carry
Forward
Amounts on such prior Distribution Dates and (2) interest on such
excess (to the
extent permitted by applicable law) at the Class B-1 Pass-Through
Rate for the
related Accrual Period.
Class B-1 Margin: As of any Distribution Date up to and including
the
Auction Termination Date for the Certificates, 1.350% per annum
and, as of any
Distribution Date after the Auction Termination Date, 2.025% per
annum.
Class B-1 Pass-Through Rate: For the first Distribution Date,
5.72875% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class B-1 Margin, (2) the Subordinated Certificate Maximum
Rate Cap and
(3) the Subordinated Certificate Available Funds Cap for such
Distribution Date.
Class B-1 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Certificate Principal Balances of
the Class A,
Class R and Class M Certificates have been reduced to zero and a
Stepdown
Trigger Event exists, or as long as a Stepdown Trigger Event does
not exist, the
excess of (1) the sum of (A) the sum of the Certificate Principal
Balances of
the Class A and Class R Certificates (after taking into account
distributions of
the Class A Principal Distribution Amount on such Distribution
Date), (B) the
Class M-1 Certificate Principal Balance (after taking into account
distributions
of the Class M-1 Principal Distribution Amount on such Distribution
Date), (C)
the Class M-2 Certificate Principal Balance (after taking into
account
distributions of the Class M-2 Principal Distribution Amount on
such
Distribution Date), (D) the Class M-3 Certificate Principal Balance
(after
taking into account distributions of the Class M-3 Principal
Distribution Amount
on such Distribution Date), (E) the Class M-4 Certificate Principal
Balance
(after taking into account distributions of the Class M-4 Principal
Distribution
Amount 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) 96.70% of the Stated Principal Balances of
the Mortgage
Loans as of such Distribution Date and (B) the excess of the Stated
Principal
Balances of the Mortgage Loans as of such Distribution Date over
the Minimum
Required Overcollateralization Amount. Notwithstanding the
foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the
Certificate Principal
Balance of each Class of the Class A Certificates, Class R
Certificates and
Class M Certificates has been reduced to zero, the Class B-1
Principal
Distribution Amount will equal the lesser of (x) the outstanding
Certificate
Principal Balance of the Class B-1 Certificates and (y) 100% of the
Principal
Distribution Amount remaining after any distributions on such Class
A, Class R
and Class M Certificates and (II) in no event will the Class B-1
Principal
Distribution Amount with respect to any Distribution Date exceed
the Class B-1
Certificate Principal Balance.
9
<PAGE>
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 C Applied Realized Loss Amount: As of any Distribution Date,
the sum
of all Applied Realized Loss Amounts with respect to the Mortgage
that which
have been applied to the reduction of the Certificate Principal
Balance of the
Class C Certificates.
Class C Certificate: Any Certificate designated as a "Class C
Certificate"
on the face thereof, in the form of Exhibit A hereto, representing
the right to
distributions as set forth herein.
Class C Certificate Principal Balance: As of any date of
determination, the
aggregate Certificate Principal Balance of the Class C
Certificates.
Class C Current Interest: As of any Distribution Date, the interest
accrued
during the related Accrual Period at the Class C Distributable
Interest Rate on
a notional amount equal to the aggregate principal balance of the
Lower Tier
REMIC Regular Interests immediately prior to such Distribution
Date, plus the
interest portion of any previous distributions on such Class that
is recovered
as a voidable preference by a trustee in bankruptcy, less any
Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class
C
Certificates.
Class C Distributable Interest Rate: The excess, if any, of (a)
the
weighted average of the interest rates on the Lower Tier REMIC
Regular Interests
over (b) two times the weighted average of the interest rates on
the Lower Tier
REMIC I Marker Interests and the Class LTIX Interest (treating for
purposes of
this clause (b) the interest rate on each of the Lower Tier REMIC I
Marker
Interests as being subject to a cap and a floor equal to the
interest rate of
the Corresponding Certificates and treating the Class LTIX Interest
as being
capped at zero). The averages described in the preceding sentence
shall be
weighted on the basis of the respective principal balances of the
Lower Tier
REMIC Regular Interests immediately prior to any date of
determination.
Class C Interest Carry Forward Amount: As of any Distribution Date,
the
excess of (A) the Class C Current Interest with respect to prior
Distribution
Dates over (B) the amount actually distributed to the Class C
Certificates with
respect to interest on such prior Distribution Dates or added to
the aggregate
Certificate Principal Balance of the Class C Certificates.
Class C Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class C Applied Realized Loss Amount over (2) the
sum of (x)
all distributions in reduction of the Class C Unpaid Realized Loss
Amount on all
previous Distribution Dates and (y) all increases in the
Certificate Principal
Balance of such Class C Certificates pursuant to the last sentence
of the
definition of "Certificate Principal Balance."
Class LTA-1A Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificates and an interest rate
equal to the Net
Rate.
Class LTA-2A Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
10
<PAGE>
Class LTA-2B Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTA-2C Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTB-1 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTII1A Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 0.05% of the
excess of (i) the
aggregate Cut-off Date Principal Balance of the Group One Mortgage
Loans over
(ii) the aggregate of the initial Certificate Principal Balances of
Certificate
Group One, and with an interest rate equal to the Net Rate.
Class LTII1B Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 0.05% of the
aggregate Cut-off
Date Principal Balance of the Group One Mortgage Loans, and with an
interest
rate equal to the Class A-1 Available Funds Cap.
Class LTII2A Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 0.05% of the
excess of (i) the
aggregate Cut-off Date Principal Balance of the Group Two Mortgage
Loans over
(ii) the aggregate of the initial Certificate Principal Balances of
Certificate
Group Two, and with an interest rate equal to the Net Rate.
Class LTII2B Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 0.05% of the
aggregate Cut-off
Date Principal Balance of the Group Two Mortgage Loans, and with an
interest
rate equal to the Class A-2 Available Funds Cap.
Class LTIX Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to the excess of (i)
50% of the
aggregate Cut-off Date Principal Balance of the Mortgage Loans over
(ii) the
initial principal balance of the Lower Tier REMIC I Marker
Interests, and with
an interest rate equal to the Net Rate.
Class LTIIX Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to the excess of (i)
50% of the
aggregate Cut-off Date Principal Balance of the Mortgage Loans over
(ii) the
initial principal balance of the Lower Tier REMIC II Marker
Interests, and with
an interest rate equal to the Net Rate.
Class LTM-1 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTM-2 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTM-3 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
11
<PAGE>
Class LTM-4 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTM-5 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTM-6 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTR Interest: The sole class of "residual interest" in the
Lower Tier
REMIC.
Class M Certificates: Any of the Class M-1, Class M-2, Class M-3,
Class
M-4, Class M-5 and Class M-6 Certificates.
Class M-1 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans 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 Class M-1
Current Interest or a Class M-1 Interest Carry Forward Amount that
is recovered
as a voidable preference by a trustee in bankruptcy, less any
Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class
M-1
Certificates.
Class M-1 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-1 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-1 Certificates with respect to Current Interest or Interest Carry
Forward
Amounts on such prior Distribution Dates and (2) interest on such
excess (to the
extent permitted by applicable law) at the Class M-1 Pass-Through
Rate for the
related Accrual Period.
Class M-1 Margin: As of any Distribution Date up to and including
the
Auction Termination Date for the Certificates, 0.510% per annum
and, as of any
Distribution Date after the Auction Termination Date, 0.765% per
annum.
Class M-1 Pass-Through Rate: For the first Distribution Date,
4.88875% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class M-1 Margin, (2) the Subordinated Certificate Maximum
Rate Cap and
(3) the Subordinated Certificate Available Funds Cap for such
Distribution Date.
Class M-1 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Certificate
12
<PAGE>
Principal Balances of the Class A and Class R Certificates have
been reduced to
zero and a Stepdown Trigger Event exists, or as long as a Stepdown
Trigger Event
does not exist, the excess of (1) the sum of (A) the sum of the
Certificate
Principal Balances of the Class A and Class R Certificates (after
taking into
account distributions of the Class A Principal Distribution Amount
on such
Distribution Date) and (B) the Class M-1 Certificate Principal
Balance
immediately prior to such Distribution Date over (2) the lesser of
(A) 89.50% of
the Stated Principal Balances of the Mortgage Loans as of such
Distribution Date
and (B) the excess of the Stated Principal Balances for the
Mortgage Loans as of
such Distribution Date over the Minimum Required
Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any Distribution Date prior
to the
Stepdown Date on which the Certificate Principal Balance of each
Class of the
Class A Certificates and Class R Certificates has been reduced to
zero, the
Class M-1 Principal Distribution Amount will equal the lesser of
(x) the
outstanding Certificate Principal Balance of the Class M-1
Certificates and (y)
100% of the Principal Distribution Amount remaining after any
distributions on
such Class A Certificates and Class R Certificates and (II) in no
event will the
Class M-1 Principal Distribution Amount with respect to any
Distribution Date
exceed the Class M-1 Certificate Principal Balance.
Class M-1 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class M-1 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class M-1 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-1 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class M-2 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans 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 Class M-2
Current Interest or a Class M-2 Interest Carry Forward Amount that
is recovered
as a voidable preference by a trustee in bankruptcy, less any
Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class
M-2
Certificates.
Class M-2 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-2 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-2 Certificates with respect to Current Interest or Interest Carry
Forward
Amounts on such prior Distribution Dates and (2) interest on such
excess (to the
extent permitted by applicable law) at the Class M-2 Pass-Through
Rate for the
related Accrual Period.
Class M-2 Margin: As of any Distribution Date up to and including
the
Auction Termination Date for the Certificates, 0.620% per annum
and, as of any
Distribution Date after the Auction Termination Date, 0.930% per
annum.
Class M-2 Pass-Through Rate: For the first Distribution Date,
4.99875% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class M-2 Margin, (2) the
13
<PAGE>
Subordinated Certificate Maximum Rate Cap and (3) the Subordinated
Certificate
Available Funds Cap for such Distribution Date.
Class M-2 Principal
Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Certificate Principal Balances of
the Class A,
Class R and Class M-1 Certificates have been reduced to zero and a
Stepdown
Trigger Event exists, or as long as a Stepdown Trigger Event does
not exist, the
excess of (1) the sum of (A) the sum of the Certificate Principal
Balances of
the Class A and Class R Certificates (after taking into account
distributions of
the Class A Principal Distribution Amount on such Distribution
Date), (B) the
Class M-1 Certificate Principal Balance (after taking into account
distributions
of the Class M-1 Principal Distribution Amount on such Distribution
Date) and
(C) the Class M-2 Certificate Principal Balance immediately prior
to such
Distribution Date over (2) the lesser of (A) 91.70% of the Stated
Principal
Balances of the Mortgage Loans as of such Distribution Date and (B)
the excess
of the Stated Principal Balances of the Mortgage Loans as of such
Distribution
Date over the Minimum Required Overcollateralization Amount.
Notwithstanding the
foregoing, (I) on any Distribution Date prior to the Stepdown Date
on which the
Certificate Principal Balance of each Class of Class A
Certificates, Class R
Certificates and the Class M-1 Certificates has been reduced to
zero, the Class
M-2 Principal Distribution Amount will equal the lesser of (x) the
outstanding
Certificate Principal Balance of the Class M-2 Certificates and (y)
100% of the
Principal Distribution Amount remaining after any distributions on
such Class A,
Class R and Class M-1 Certificates and (II) in no event will the
Class M-2
Principal Distribution Amount with respect to any Distribution Date
exceed the
Class M-2 Certificate Principal Balance.
Class M-2 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class M-2 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class M-2 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-2 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class M-3 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans 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 Class M-3
Current Interest or a Class M-3 Interest Carry Forward Amount that
is recovered
as a voidable preference by a trustee in bankruptcy, less any
Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class
M-3
Certificates.
Class M-3 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-3 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-3 Certificates with respect to Current Interest or Interest Carry
Forward
Amounts on such prior Distribution Dates and (2) interest on such
excess (to the
extent permitted by applicable law) at the Class M-3 Pass-Through
Rate for the
related Accrual Period.
14
<PAGE>
Class M-3 Margin: As of any Distribution Date up to and including
the
Auction Termination Date for the Certificates, 0.700% per annum
and, as of any
Distribution Date after the Auction Termination Date, 1.050% per
annum.
Class M-3 Pass-Through Rate: For the first Distribution Date,
5.07875% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class M-3 Margin, (2) the Subordinated Certificate Maximum
Rate Cap and
(3) the Subordinated Certificate Available Funds Cap for such
Distribution Date.
Class M-3 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Certificate Principal Balances of
the Class A,
Class R, Class M-1 and Class M-2 Certificates have been reduced to
zero and a
Stepdown Trigger Event exists, or as long as a Stepdown Trigger
Event does not
exist, the excess of (1) the sum of (A) the sum of the Certificate
Principal
Balances of the Class A and Class R Certificates (after taking into
account
distributions of the Class A Principal Distribution Amount on such
Distribution
Date), (B) the Class M-1 Certificate Principal Balance (after
taking into
account distributions of the Class M-1 Principal Distribution
Amount on such
Distribution Date), (C) the Class M-2 Certificate Principal Balance
(after
taking into account distributions of the Class M-2 Principal
Distribution Amount
on such Distribution Date) and (D) the Class M-3 Certificate
Principal Balance
immediately prior to such Distribution Date over (2) the lesser of
(A) 92.70% of
the Stated Principal Balances of the Mortgage Loans as of such
Distribution Date
and (B) the excess of the Stated Principal Balances for the
Mortgage Loans as of
such Distribution Date over the Minimum Required
Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any Distribution Date prior
to the
Stepdown Date on which the Certificate Principal Balance of each
Class of the
Class A Certificates, the Class R Certificates, the Class M-1
Certificates and
the Class M-2 Certificates has been reduced to zero, the Class M-3
Principal
Distribution Amount will equal the lesser of (x) the outstanding
Certificate
Principal Balance of the Class M-3 Certificates and (y) 100% of the
Principal
Distribution Amount remaining after any distributions on such Class
A, Class R,
Class M-1 and Class M-2 Certificates and (II) in no event will the
Class M-3
Principal Distribution Amount with respect to any Distribution Date
exceed the
Class M-3 Certificate Principal Balance.
Class M-3 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class M-3 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class M-3 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-3 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
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 Class M-4
Current Interest or a Class M-4 Interest Carry Forward Amount that
is recovered
as a voidable
15
<PAGE>
preference by a trustee in bankruptcy, less any Non-Supported
Interest Shortfall
allocated on such Distribution Date to the Class M-4
Certificates.
Class M-4 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-4 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-4 Certificates with respect to Current Interest or Interest Carry
Forward
Amounts on such prior Distribution Dates and (2) interest on such
excess (to the
extent permitted by applicable law) at the Class M-4 Pass-Through
Rate for the
related Accrual Period.
Class M-4 Margin: As of any Distribution Date up to and including
the
Auction Termination Date for the Certificates, 0.850% per annum
and, as of any
Distribution Date after the Auction Termination Date, 1.275% per
annum.
Class M-4 Pass-Through Rate: For the first Distribution Date,
5.22875% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class M-4 Margin, (2) the Subordinated Certificate
Available Funds Cap
and (3) the Subordinated Certificate 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 Certificate Principal Balances of
the Class A,
Class R, Class M-1, Class M-2 and Class M-3 Certificates have been
reduced to
zero and a Stepdown Trigger Event exists, or as long as a Stepdown
Trigger Event
does not exist, the excess of (1) the sum of (A) the sum of the
Certificate
Principal Balances of the Class A and Class R Certificates (after
taking into
account distributions of the Class A Principal Distribution Amount
on such
Distribution Date), (B) the Class M-1 Certificate Principal Balance
(after
taking into account distributions of the Class M-1 Principal
Distribution Amount
on such Distribution Date), (C) the Class M-2 Certificate Principal
Balance
(after taking into account distributions of the Class M-2 Principal
Distribution
Amount on such Distribution Date), (D) the Class M-3 Certificate
Principal
Balance (after taking into account distributions of the Class M-3
Principal
Distribution Amount on such Distribution Date) and (E) the Class
M-4 Certificate
Principal Balance immediately prior to such Distribution Date over
(2) the
lesser of (A) 93.70% of the Stated Principal Balances of the
Mortgage Loans as
of such Distribution Date and (B) the excess of the Stated
Principal Balances
for the Mortgage Loans as of such Distribution Date over the
Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, (I) on
any
Distribution Date prior to the Stepdown Date on which the
Certificate Principal
Balance of each Class of the Class A Certificates, the Class R
Certificates, the
Class M-1 Certificates, the Class M-2 Certificates and the Class
M-3
Certificates has been reduced to zero, the Class M-4 Principal
Distribution
Amount will equal the lesser of (x) the outstanding Certificate
Principal
Balance of the Class M-4 Certificates and (y) 100% of the Principal
Distribution
Amount remaining after any distributions on such Class A, Class R,
Class M-1,
Class M-2 and Class M-3 Certificates and (II) in no event will the
Class M-4
Principal Distribution Amount with respect to any Distribution Date
exceed the
Class M-4 Certificate Principal Balance.
Class M-4 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class M-4 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class M-4 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-4 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class 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.
16
<PAGE>
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 Class M-5
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 Current Interest or Interest Carry
Forward
Amounts on such prior Distribution Dates and (2) interest on such
excess (to the
extent permitted by applicable law) at the Class M-5 Pass-Through
Rate for the
related Accrual Period.
Class M-5 Margin: As of any Distribution Date up to and including
the
Auction Termination Date for the Certificates, 1.350% per annum
and, as of any
Distribution Date after the Auction Termination Date, 2.025% per
annum.
Class M-5 Pass-Through Rate: For the first Distribution Date,
5.72875% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class M-5 Margin, (2) the Subordinated Certificate
Available Funds Cap
and (3) the Subordinated Certificate Maximum Rate Cap for such
Distribution
Date.
Class M-5 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Certificate Principal Balances of
the Class A,
Class R, Class M-1, Class M-2, Class M-3 and Class M-4 Certificates
have been
reduced to zero and a Stepdown Trigger Event exists, or as long as
a Stepdown
Trigger Event does not exist, the excess of (1) the sum of (A) the
Certificate
Principal Balances of the Class A and Class R Certificates (after
taking into
account distributions of the Class A Principal Distribution Amount
on such
Distribution Date), (B) the Class M-1 Certificate Principal Balance
(after
taking into account distributions of the Class M-1 Principal
Distribution Amount
on such Distribution Date), (C) the Class M-2 Certificate Principal
Balance
(after taking into account distributions of the Class M-2 Principal
Distribution
Amount on such Distribution Date), (D) the Class M-3 Certificate
Principal
Balance (after taking into account distributions of the Class M-3
Principal
Distribution Amount on such Distribution Date, (E) the Class M-4
Certificate
Principal Balance (after taking into account distributions of the
Class M-4
Principal Distribution Amount on such Distribution Date) and (F)
the Class M-5
Certificate Principal Balance immediately prior to such
Distribution Date over
(2) the lesser of (A) 94.70% of the Stated Principal Balances of
the Mortgage
Loans as of such Distribution Date and (B) the excess of the Stated
Principal
Balances for the Mortgage Loans as of such Distribution Date over
the Minimum
Required Overcollateralization Amount. Notwithstanding the
foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the
Certificate Principal
Balance of each Class of Class A Certificates, the Class R
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 R, 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
17
<PAGE>
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 Class M-6
Current Interest or Class M-6 Interest Carry Forward Amount that is
recovered as
a voidable preference by a trustee in bankruptcy, less any
Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class
M-6
Certificates.
Class M-6 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-6 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-6 Certificates with respect to Current Interest or Interest Carry
Forward
Amounts on such prior Distribution Dates and (2) interest on such
excess (to the
extent permitted by applicable law) at the Class M-6 Pass-Through
Rate for the
related Accrual Period.
Class M-6 Margin: As of any Distribution Date up to and including
the
Auction Termination Date for the Certificates, 1.350% per annum
and, as of any
Distribution Date after the Auction Termination Date, 2.025% per
annum.
Class M-6 Pass-Through Rate: For the first Distribution Date,
5.72875% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class M-6 Margin, (2) the Subordinated Certificate
Available Funds Cap
and (3) the Subordinated Certificate 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 Certificate Principal Balances of
the Class A,
Class R, Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5
Certificates
have been reduced to zero and a Stepdown Trigger Event exists, or
as long as a
Stepdown Trigger Event does not exist, the excess of (1) the sum of
(A) the
Certificate Principal Balances of the Class A and Class R
Certificates (after
taking into account distributions of the Class A Principal
Distribution Amount
on such Distribution Date), (B) the Class M-1 Certificate Principal
Balance
(after taking into account distributions of the Class M-1 Principal
Distribution
Amount on such Distribution Date), (C) the Class M-2 Certificate
Principal
Balance (after taking into account distributions of the Class M-2
Principal
Distribution Amount on such Distribution Date), (D) the Class M-3
Certificate
Principal Balance (after taking into account distributions of the
Class M-3
Principal Distribution Amount on such
18
<PAGE>
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) 95.70% of
the Stated Principal Balances of the Mortgage Loans as of such
Distribution Date
and (B) the excess of the Stated Principal Balances for the
Mortgage Loans as of
such Distribution Date over the Minimum Required
Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any Distribution Date prior
to the
Stepdown Date on which the Certificate Principal Balance of each
Class of Class
A Certificates, the Class R 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 R,
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.
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 Current Interest or Interest Carry
Forward Amounts
on such prior Distribution Dates and (2) interest on such excess
(to the extent
permitted by applicable law) at the Class R Pass-Through Rate for
the related
Accrual Period.
Class R Margin: As of any Distribution Date up to and including the
Auction
Termination Date for the Certificates, 0.260% per annum and, as of
any
Distribution Date after the Auction Termination Date, 0.520% per
annum.
19
<PAGE>
Class R Pass-Through Rate: For the first Distribution Date,
4.63875% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class R Margin, (2) the Class A-1 Maximum Rate Cap and (3)
the Class
A-1 Available Funds Cap for such Distribution Date.
Clean Up Call: The termination of the Trust Fund hereunder pursuant
to
Section 9.01(a)(ii).
Clean Up Call Date: The second Distribution Date immediately
following the
Auction Termination Date.
Clean Up Call Price: An amount equal to the sum of (a) the
aggregate Stated
Principal Balance of each Mortgage Loan (other than any Mortgage
Loan that is an
REO Property), plus accrued interest thereon at the applicable
Mortgage Rate
through the Due Date preceding distribution of the proceeds, the
fair market
value of any REO Property, plus accrued interest thereon, (b) any
unreimbursed
out-of-pocket expenses owed to the Trustee or the Servicer
(including the costs
and expenses of conducting the auction described in Section
9.01(a)) and any
unreimbursed Servicing Fees, Advances or Servicing Advances, and
(c) any costs
and damages incurred by the Trust Fund (or the Trustee on behalf of
the Trust
Fund) in connection with any violation by the affected Mortgage
Loan of any
anti-predatory or anti-abusive lending laws.
Closing Date: December 28, 2005.
Code: The Internal Revenue Code of 1986, including any successor
or
amendatory provisions.
Collection Account: The separate Eligible Account created and
initially
maintained by the Servicer pursuant to Section 3.05(d) in the name
of the
Trustee for the benefit of the Certificateholders and designated
"Wilshire
Credit Corporation, in trust for registered holders of Specialty
Underwriting
and Residential Finance Trust, Mortgage Loan Asset-Backed
Certificates, Series
2005-AB3". Funds in the Collection Account shall be held in trust
for the
Certificateholders for the uses and purposes set forth in this
Agreement.
Compensating Interest: With respect to any Mortgage Loan and
any
Distribution Date, an amount equal to the portion of any Prepayment
Interest
Shortfalls required to be deposited in the Collection Account by
the Servicer
pursuant to Section 4.02 hereof.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged
Property, whether permanent or temporary, partial or entire, by
exercise of the
power of eminent domain or condemnation, to the extent not required
to be
released either to a Mortgagor in accordance with the terms of the
related
mortgage loan documents or to the holder of a senior lien on the
Mortgaged
Property.
Corresponding Certificates: With respect to the Class LTA-1A
Interest, the
Class A-1 and Class R Certificates. With respect to the Class
LTA-2A Interest,
the Class A-2A Certificates. With respect to the Class LTA-2B
Interest, the
Class A-2B Certificates. With respect to the Class LTA-2C Interest,
the Class
A-2C Certificates. With respect to the Class LTB-1 Interest, the
Class B-1
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.
Current Interest: Any of the Class A-1 Current Interest, the Class
A-2A
Current Interest, the Class A-2B Current Interest, the Class A-2C
Current
Interest, the Class R Current Interest, the Class M-1 Current
Interest, the
Class M-2 Current Interest, the Class M-3 Current Interest, the
Class M-4
Current
20
<PAGE>
Interest, the Class M-5 Current Interest, the Class M-6 Current
Interest, the
Class B-1 Current Interest and the Class C Current Interest.
Cut-off Date: December 1, 2005.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
unpaid
principal balance thereof as of the close of business on the
calendar day
immediately preceding the Cut-off Date after application of all
payments of
principal due on or prior to the Cut-off Date, whether or not
received, and all
Principal Prepayments received prior to the Cut-off Date, but
without giving
effect to any installments of principal received in respect of Due
Dates 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.
Similarly for "60 days delinquent," "90 days delinquent" and so
on.
Denomination: With respect to each Certificate, the amount set
forth on the
face thereof as the "Initial Principal Balance of this
Certificate."
Depositor: Merrill Lynch Mortgage Investors, Inc., a Delaware
corporation,
or its successor in
Depository: The initial Depository shall be The Depository Trust
Company
("DTC"), the nominee of which is Cede & Co., or any other
organization
registered as a "clearing agency" pursuant to Section 17A of the
Securities
Exchange Act of 1934, as amended. The Depository shall initially be
the
registered Holder of the Book-Entry Certificates. The Depository
shall at all
times be a "clearing corporation" as defined in Section 8-102(3) of
the Uniform
Commercial Code of the State of New York.
Depository Agreement: With respect to Classes of Book-Entry
Certificates,
the agreement between the Trustee and the initial Depository.
Depository Participant: A broker, dealer, bank or other
financial
institution or other Person for whom from time to time a Depository
effects
book-entry transfers and pledges of securities deposited with the
Depository.
Designated Transaction: A transaction in which the assets
underlying the
Certificates consist of single-family residential, multi-family
residential,
home equity, manufactured housing and/or commercial mortgage
obligations that
are secured by single family residential, multi-family residential,
commercial
real property or leasehold interests therein.
Determination Date: With respect to any Distribution Date, the 15th
day of
the month of such Distribution Date or, if such 15th day is not a
Business Day,
the immediately preceding Business Day.
21
<PAGE>
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 January 2006.
Due
Date: With respect to any Distribution Date and any Mortgage Loan,
the
day during the related Due Period on which a Scheduled Payment is
due.
Due
Period: With respect to any Distribution Date, the period beginning
on
the second day of the calendar month preceding the calendar month
in which such
Distribution Date occurs and ending on the first day of the month
in which such
Distribution Date occurs.
Eligible Account: An account that is (i) maintained with a
depository
institution the long-term unsecured debt obligations of which are
rated by each
Rating Agency in one of its two highest rating categories, or (ii)
maintained
with the corporate trust department of a bank which (A) has a
rating of at least
Baa3 or P-3 by Moody's and (B) is either the Depositor or the
corporate trust
department of a national bank or banking corporation which has a
rating of at
least A-1 by S&P or (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 or (vi)
maintained with a
federal or state chartered depository institution the deposits in
which are
insured by the FDIC to the applicable limits and the short-term
unsecured debt
obligations of which (or, in the case of a depository institution
that is a
subsidiary of a holding company, the short-term unsecured debt
obligations of
such holding company) are rated A-1 by S&P or Prime-1 by
Moody's at the time any
deposits are held on deposit therein, or (vii) a segregated trust
account or
accounts maintained with a federal or state chartered depository
institution or
trust company acting in its fiduciary capacity, that is acceptable
to the Rating
Agencies, or (viii) otherwise acceptable to each Rating Agency, as
evidenced by
a letter from each Rating Agency to the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974,
including any
successor or amendatory provisions.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that would satisfy the
requirements of any
applicable underwriter's exemption granted by the United States
Department of
Labor, except, in relevant part, for the requirement that the
certificates have
received a rating at the time of acquisition that is in one of the
three (or
four, in the case of a "designated transaction") highest generic
rating
categories by at least one of the Rating Agencies.
22
<PAGE>
ERISA Restricted Certificate: The Class C and Class P Certificates
and any
other Certificate, as long as the acquisition and holding of such
other
Certificate is not 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-1
Certificates,
Class A-2A Certificates, Class A-2B Certificates, Class A-2C
Certificates, Class
R Certificate, Class M-1 Certificates, Class M-2 Certificates,
Class M-3
Certificates, Class M-4 Certificates, Class M-5 Certificates, Class
M-6
Certificates and Class B-1 Certificates, the excess, if any, of (1)
the amount
of interest such Class of Certificates is entitled to receive on
such
Distribution Date over (2) the amount of interest such Class of
Certificates
would have been entitled to receive on such Distribution Date at an
interest
rate equal to the REMIC Pass-Through Rate.
Excess Proceeds: With respect to any Liquidated Loan, any
Liquidation
Proceeds that are in excess of the sum of (1) the unpaid principal
balance of
such Liquidated Loan as of the date of such liquidation plus (2)
interest at the
Mortgage Rate from the Due Date as to which interest was last paid
or advanced
to Certificateholders (and not reimbursed to the Servicer) up to
the Due Date in
the month in which such Liquidation Proceeds are required to be
distributed on
the unpaid principal balance of such Liquidated Loan outstanding
during each Due
Period as to which such interest was not paid or advanced.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Existing Servicing Agreement: The Servicing Agreement between
Merrill Lynch
Mortgage Lending, Inc., as Owner and Wilshire Credit Corporation,
as Servicer,
dated as of January 1, 2005, as at any time amended and in
effect.
Extra Principal Distribution Amount: Prior to the Stepdown Date,
the excess
of (A) the sum of (i) the Aggregate Certificate Principal Balance
immediately
preceding such Distribution Date reduced by the Principal Funds
with respect to
such Distribution Date and (ii) $5,197,527 over (B) the Pool Stated
Principal
Balance of the Mortgage Loans as of such Distribution Date and (2)
on and after
the Stepdown Date, (A) the sum of (i) the Aggregate Certificate
Principal
Balance immediately preceding such Distribution Date, reduced by
the Principal
Funds with respect to such Distribution Date and (ii) the greater
of (a) 3.30%
of the Pool Stated Principal Balances of the Mortgage Loans and (b)
the Minimum
Required Overcollateralization Amount less (B) the Pool Stated
Principal Balance
of the Mortgage Loans as of such Distribution Date; provided,
however, that if
on any Distribution Date a Stepdown Trigger Event is in effect, the
Extra
Principal Distribution Amount will not be reduced to the applicable
percentage
of the then-current Stated Principal Balance of the Mortgage Loans
as of the Due
Date immediately prior to the Stepdown Trigger Event until the next
Distribution
Date on which the Stepdown Trigger Event is not in effect.
Fannie Mae: A federally chartered and privately owned corporation
organized
and existing under the Federal National Mortgage Association
Charter Act, or any
successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FIFO: As defined in Section 10.14(e).
Fitch: Fitch, Inc., or its successor in interest.
23
<PAGE>
Fixed Rate Mortgage Loan: A Mortgage Loan identified in the
Mortgage Loan
Schedule as having a Mortgage Rate which is fixed.
Floating Rate Certificate Carryover: With respect to a Distribution
Date,
in the event that the Pass-Through Rate for a class of the Class A,
Class R,
Class M or Class B-1 Certificates is based upon the related
Available Funds Cap
or the related Maximum Rate Cap, the excess of (1) the amount of
interest that
such Class would have been entitled to receive on such Distribution
Date had the
Pass-Through Rate for that Class not been calculated based on the
related
Available Funds Cap or the related Maximum Rate Cap, up to but not
exceeding
greater of (x) the related Maximum Rate Cap or (y) the related
Upper Collar,
over (2) the amount of interest such class was entitled to receive
on such
Distribution Date based on the lesser of (a) the related Available
Funds Cap or
(b) the related Maximum Rate Cap, together with (i) the unpaid
portion of any
such excess from prior Distribution Dates (and interest accrued
thereon at the
then applicable Pass-Through Rate, without giving effect to the
applicable
Available Funds Cap) and (ii) any amount previously distributed
with respect to
Floating Rate Certificate Carryover for such class that is
recovered as a
voidable preference by a trustee in bankruptcy.
Freddie Mac: A corporate instrumentality of the United States
created and
existing under Title III of the Emergency Home Finance Act of 1970,
as amended,
or any successor thereto.
Grantor Trusts: The
grantor trusts described in Section 2.07 hereof.
Gross Margin: The percentage set forth in the related Mortgage Note
for
each of the Adjustable Rate Mortgage Loans which is to be added to
the
applicable index for use in determining the Mortgage Rate on each
Adjustment
Date, and which is set forth in the Mortgage Loan Schedule for each
Adjustable
Rate Mortgage Loan.
Group One: The portion of the Mortgage Pool identified as "Group
One" in
the Prospectus Supplement.
Group One Mortgage Loan: Any Mortgage Loan at any time identified
in the
Group One Mortgage Loan Schedule attached hereto as Exhibit
B-2.
Group One Principal Distribution Amount: As of any Distribution
Date, the
amount equal to the lesser of (i) the aggregate Certificate
Principal Balance of
the Class A-1 and Class R Certificates and (ii) the product of (x)
the Group One
Principal Distribution Percentage and (y) the Class A Principal
Distribution
Amount; provided, however, that with respect to any Distribution
Date on which
the Class A-1 and Class R Certificates are outstanding and the
Certificate
Principal Balance of the Class A-2 Certificates has been reduced to
zero, the
Group One Principal Distribution Amount will equal the Class A
Principal
Distribution Amount.
Group One Principal Distribution Percentage: With respect to
any
Distribution Date, a fraction expressed as a percentage, the
numerator of which
is the amount of Principal Funds received with respect to Mortgage
Loans in
Group One and the denominator of which is the amount of Principal
Funds received
from all of the Mortgage Loans in the mortgage pool.
Group Two: The portion of the Mortgage Pool identified as "Group
Two" in
the Prospectus Supplement.
Group Two Mortgage Loan: Any Mortgage Loan at any time identified
in the
Group Two Mortgage Loan Schedule attached hereto as Exhibit
B-3.
24
<PAGE>
Group Two Principal Distribution Amount: As of any Distribution
Date, the
amount equal to the lesser of (i) the aggregate Certificate
Principal Balance of
the Class A-2 Certificates and (ii) the product of (x) the Group
Two Principal
Distribution Percentage and (y) the Class A Principal Distribution
Amount;
provided, however, that with respect to any Distribution Date on
which the Class
A-2 Certificates are outstanding and the Certificate Principal
Balances of the
Class A-1 and Class R Certificates have been reduced to zero, the
Group Two
Principal Distribution Amount will equal the Class A Principal
Distribution
Amount.
Group Two Principal Distribution Percentage: With respect to
any
Distribution Date, a fraction expressed as a percentage, the
numerator of which
is the amount of Principal Funds received with respect to Mortgage
Loans in
Group Two and the denominator of which is the amount of Principal
Funds received
from all of the Mortgage Loans in the mortgage pool.
Indenture: An indenture relating to the issuance of 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
Certificate
(other than the Class P Certificates), the Certificate Principal
Balance of such
Certificate or any predecessor Certificate on the Closing Date as
set forth in
Section 5.01 hereof.
Initial Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate
in
effect prior to the Initial Adjustment Date.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust
Fund, any insurance policy, including all riders and endorsements
thereto in
effect with respect to such Mortgage Loan, including any
replacement policy or
policies for any insurance policies, 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-1 Interest Carry
Forward
Amount, the Class A-2A Interest Carry Forward Amount, the Class
A-2B Interest
Carry Forward Amount, the Class A-2C Interest Carry Forward Amount,
the Class R
Interest Carry Forward Amount, the Class M-1 Interest Carry Forward
Amount, the
Class M-2 Interest Carry Forward Amount, the Class M-3 Interest
Carry Forward
Amount, the Class M-4 Interest Carry Forward Amount, the Class M-5
Interest
Carry Forward Amount, the Class M-6 Interest Carry Forward Amount
or the Class
B-1 Interest Carry Forward Amount, as the case may be.
Interest Determination Date: With respect to the Certificates, for
any
Accrual Period, the second LIBOR Business Day preceding the
commencement of such
Accrual Period.
25
<PAGE>
Interest Funds: With respect to any Distribution Date, the sum,
without
duplication, of (1) all scheduled interest due during the related
Due Period and
received before the related Servicer Remittance Date or advanced on
or before
the related Servicer Remittance Date less the Servicing Fee and the
MI Insurer
Fee, (2) all Advances relating to interest with respect to the
Mortgage Loans,
(3) all Compensating Interest with respect to the Mortgage Loans,
(4)
Liquidation Proceeds with respect to the Mortgage Loans (to the
extent such
Liquidation Proceeds relate to interest) collected during the
related Prepayment
Period, (5) proceeds of any purchase pursuant to Sections 2.02,
2.03 or 9.01 (to
the extent such proceeds relate to interest) and (6) prepayment
charges received
with respect to the Mortgage Loans during the related Prepayment
Period less (A)
all Non-Recoverable Advances relating to interest and (B) other
amounts
reimbursable to the Servicer and the Trustee pursuant to this
Agreement and
allocable to interest.
Last
Scheduled Distribution Date: With respect to any Class of
Certificates, the Distribution Date in September 2036.
Latest Possible Maturity Date: The first Distribution Date
following the
third anniversary of the scheduled maturity date of the Mortgage
Loan in the
Trust Fund having the latest scheduled maturity date as of the
Cut-off Date.
Lender: As defined in Section 10.14(a).
LIBOR Business Day: Any day on which banks in the City of London,
England
and New York City, U.S.A. are open and conducting transactions in
foreign
currency and exchange.
Liquidated Loan: With respect to any Distribution Date, a
defaulted
Mortgage Loan that has been liquidated through deed-in-lieu of
foreclosure,
foreclosure sale, trustee's sale or other realization as provided
by applicable
law governing the real property subject to the related Mortgage and
any security
agreements and as to which the Servicer has certified (in
accordance with
Section 3.12) in the related Prepayment Period that it has received
all amounts
it expects to receive in connection with such liquidation.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in
connection with the partial or complete liquidation of Mortgage
Loans, whether
through trustee's sale, foreclosure sale, sale by the Servicer
pursuant to this
Agreement or otherwise or amounts received in connection with any
condemnation
or partial release of a Mortgaged Property and any other proceeds
received in
connection with an REO Property, less the sum of related
unreimbursed Advances,
Servicing Fees, Servicing Advances and any other expenses related
to such
Mortgage Loan.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the
fraction,
expressed as a percentage, the numerator of which is the original
principal
balance of the related Mortgage Loan and the denominator of which
is the lesser
of (x) the Appraised Value of the related Mortgaged Property and
(y) the sales
price of the related Mortgaged Property at the time of
origination.
Losses: Any losses, claims, damages, liabilities or expenses
collectively.
Lower Tier REMIC: As described in the Preliminary Statement and
Section
2.07.
Lower Tier REMIC Interests: Each of the Class LTA-1A Interest, the
Class
LTA-2A Interest, the Class LTA-2B Interest, the Class LTA-2C
Interest, the Class
LTM-1 Interest, the Class LTM-2 Interest, the Class LTM-3 Interest,
the Class
LTM-4 Interest, the Class LTM-5 Interest, the Class LTM-6 Interest,
the Class
LTB-1 Interest, the Class LTIX Interest, the Class LTIIX Interest,
the Class
LTII1A Interest, the Class LTII1B Interest, the Class LTII2A
Interest, the Class
LTII2B Interest and the Class LTR Interest.
26
<PAGE>
Lower Tier REMIC I Marker Interests: Each of the classes of Lower
Tier
REMIC Regular Interests other than the Class LTIX Interest, the
Class LTIIX
Interest, the Class LTII1A Interest, the Class LTII1B Interest, the
Class LTII2A
Interest and the Class LTII2B Interest.
Lower Tier REMIC II Marker Interests: Each of the Class LTII1A
Interest,
the Class LTII1B Interest, the Class LTII2A Interest and the Class
LTII2B
Interest.
Lower Tier REMIC Regular Interests: Each of the Lower Tier REMIC
Interests
other than the Class LTR Interest.
Lower Tier REMIC Subordinated Balance Ratio: The ratio of (i) the
principal
balance of the Class LTII1A Interest to (ii) the principal balance
of the Class
LTII2A Interest that is equal to the ratio of (i) the excess of (A)
the
aggregate Stated Principal Balance of Group One over (B) the
current Certificate
Principal Balance of the Class A-1 and Class R Certificates to (ii)
the excess
of (A) the aggregate Stated Principal Balance of Group Two over (B)
the current
Certificate Principal Balance of the Class A-2 Certificates.
Maximum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan,
the maximum rate of interest set forth as such in the related
Mortgage Note and
with respect to each Fixed Rate Mortgage Loan, the rate of interest
set forth in
the related Mortgage Note.
Maximum Rate Cap: Any of the Class A-1 Maximum Rate Cap, the Class
A-2
Maximum Rate Cap or the Subordinated Certificate Maximum Rate
Cap.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation
organized and existing under the laws of the State of Delaware, or
any successor
thereto.
MERS
Loan: Any Mortgage Loan registered with MERS on the MERS
System.
MERS
System: The system of recording transfers of mortgage
electronically
maintained by MERS.
MI
Insurer: PMI Mortgage Insurance Co., or its successor in
interest.
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.
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
Mortgage Loans: The list of Mortgage Loans insured by the MI
Insurer
attached hereto as Exhibit B-2.
MI
Policy: The Bulk Primary First Lien Master Policy UW 2510.00
(09/00)
issued by the MI Insurer to the Trustee and all endorsements
thereto, which is
attached hereto as Exhibit C.
MIN:
The loan number for any MERS Loan.
27
<PAGE>
Minimum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan,
the minimum rate of interest set forth as such in the related
Mortgage Note.
Minimum Required Overcollateralization Amount: The product of (x)
0.50% and
(y) the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date.
Monthly Statement: The statement delivered to the
Certificateholders
pursuant to Section 4.05.
Moody's: Moody's Investors Service, Inc. or its successor in
interest.
MOM
Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely
as nominee for the originator of such Mortgage Loan and its
successors and
assigns.
Mortgage: With respect to a Mortgage Loan, the mortgage, deed of
trust or
other instrument creating a first lien or a first priority
ownership interest in
an estate in fee simple in real property securing a Mortgage
Note.
Mortgage File: The mortgage documents listed in Section 2.01
hereof
pertaining to a particular Mortgage Loan and any additional
documents delivered
to the Trustee to be added to the Mortgage File pursuant to this
Agreement.
Mortgage 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 Seller to reflect the deletion of Deleted Mortgage
Loans and the
addition of Replacement Mortgage Loans pursuant to the provisions
of this
Agreement) transferred to the Trustee as part of the Trust Fund and
from time to
time subject to this Agreement, attached hereto as Exhibits B-1,
B-2 and B-3,
setting forth the following information with respect to each
Mortgage Loan:
(i)
the loan number;
(ii)
the unpaid principal balance of the Mortgage Loans;
(iii) the Initial Mortgage Rate;
(iv)
the maturity date and the months remaining before maturity
date;
(v)
the original principal
balance;
(vi)
the Cut-off Date Principal Balance;
(vii) the first payment date of the Mortgage Loan;
(viii) the Loan-to-Value Ratio at origination with respect to a
first lien
Mortgage Loan;
28
<PAGE>
(ix)
a code indicating whether the residential dwelling at the time
of
origination was represented to be owner-occupied;
(x)
a code indicating the
property type;
(xi)
with respect to each Adjustable Rate Mortgage Loan:
(a) the frequency of
each Adjustment Date;
(b) the next
Adjustment Date;
(c) the Maximum
Mortgage Rate;
(d) the Minimum
Mortgage Rate;
(e) the Mortgage Rate
as of the Cut-off Date;
(f) the related Periodic Rate Cap;
(g) the Gross
Margin;
(xii) the location of the related Mortgaged Property;
(xiii) a code indicating whether a prepayment charge is applicable
and, if
so, the term of such prepayment charge;
(xiv) a code indicating whether such loan is a MI Mortgage
Loan;
(xv)
the MI Insurer Fee Rate; and
(xvi) 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.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note
from
time to time.
Mortgaged Property: The underlying property securing a Mortgage
Loan.
Mortgagor: The obligor on a Mortgage Note.
Net
Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum
rate equal to the then current Mortgage Rate less the Servicing Fee
Rate and the
MI Insurer Fee Rate, if applicable.
Net
Rate: With respect to any Distribution Date, the product of (x)
the
weighted average Net Mortgage Rate for the Mortgage Loans
calculated based on
the Net Mortgage Rates and the Stated Principal Balances of the
Mortgage Loans
as of the preceding Distribution Date, (or, in the case of the
first
Distribution Date, as of the Cut-off Date) and (y) a fraction, the
numerator of
which is 30 and the denominator of which is the actual number of
days in the
related Accrual Period.
29
<PAGE>
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 with respect to the related
Mortgage Loan.
Non-Recoverable Servicing Advance: Any portion of a Servicing
Advance
previously made or proposed to be made by the Servicer that, in the
good faith
judgment of the Servicer, will not or, in the case of a current
Servicing
Advance, would not, be ultimately recoverable by the Servicer from
the related
Mortgagor, related Liquidation Proceeds or otherwise with respect
to the related
Mortgage Loan.
Non-Supported Interest Shortfall: As defined in Section 4.02.
Officer's Certificate: A certificate (1) signed by the Chairman of
the
Board, the Vice Chairman of the Board, the President, a vice
president (however
denominated), an Assistant Vice President, the Treasurer, the
Secretary, or one
of the assistant treasurers or assistant secretaries of the
Depositor, the
Servicer (or any other officer customarily performing functions
similar to those
performed by any of the above designated officers and also to whom,
with respect
to a particular matter, such matter is referred because of such
officer's
knowledge of and familiarity with a particular subject) or (2), if
provided for
in this Agreement, signed by a Servicing Officer, as the case may
be, and
delivered to the Depositor, the Servicer or the Trustee, as the
case may be, as
required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period, the rate
determined by
the Trustee on the related Interest Determination Date on the basis
of (a) the
offered rates for one-month United States dollar deposits, as such
rates appear
on Telerate page 3750, as of 11:00 a.m. (London time) on such
Interest
Determination Date or (b) if such rate does not appear on Telerate
Page 3750 as
of 11:00 a.m. (London time), the offered rates of the Reference
Banks for
one-month United States dollar deposits, as such rates appear on
the Reuters
Screen LIBO Page, as of 11:00 a.m. (London time) on such Interest
Determination
Date. If One-Month LIBOR is determined pursuant to clause (b)
above, on each
Interest Determination Date, One-Month LIBOR for the related
Accrual Period will
be established by the Trustee as follows:
(i) If on such
Interest Determination Date two or more Reference
Banks provide such offered quotations, One-Month LIBOR for
the related Accrual Period shall be the arithmetic mean of
such offered quotations (rounded upwards if necessary to the
nearest whole multiple of 0.03125%).
(ii) If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations, One-Month
LIBOR for the related Accrual Period shall be the higher of
(i) One-Month LIBOR as determined on the previous Interest
Determination Date and (ii) the Reserve Interest Rate.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for
the Depositor or the Servicer, reasonably acceptable to each
addressee of such
opinion; provided, however, that with respect to Section 6.04 or
10.01, or the
interpretation or application of the REMIC Provisions, such counsel
must (1) in
fact be independent of the Depositor and the Servicer, (2) not have
any direct
financial interest in the Depositor or the Servicer or in any
affiliate of
either, and (3) not be connected with the Depositor or the Servicer
as an
officer, employee, promoter, underwriter, trustee, partner,
director or person
performing similar functions.
30
<PAGE>
OTS:
The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and
authenticated under
this Agreement except: (1) Certificates theretofore canceled by the
Trustee or
delivered to the Trustee for cancellation; and (2) Certificates in
exchange for
which or in lieu of which other Certificates have been executed by
the Trustee
and delivered by the Trustee pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage
Loan
with a Stated Principal Balance greater than zero that was not the
subject of a
Principal Prepayment in full, and that did not become a Liquidated
Loan, prior
to the end of the related Due Period.
Overcollateralization Amount: As of any date of determination, the
excess
of (1) the Stated Principal Balance of the Mortgage Loans over (2)
the
Certificate Principal Balance of the Certificates (other than the
Class P
Certificates and the Class C Certificates).
Ownership Interest: As to any Certificate, any ownership interest
in such
Certificate including any interest in such Certificate as the
Holder thereof and
any other interest therein, whether direct or indirect, legal or
beneficial.
Pass-Through Rate: With respect to the Class A-1 Certificates, the
Class
A-1 Pass-Through Rate; with respect to the Class A-2A Certificates,
the Class
A-2A Pass-Through Rate; with respect to the Class A-2B
Certificates, the Class
A-2B Pass-Through Rate; with respect to the Class A-2C
Certificates, the Class
A-2C Pass-Through Rate, with respect to the Class M-1 Certificates,
the Class
M-1 Pass-Through Rate; with respect to the Class M-2 Certificates,
the Class M-2
Pass-Through Rate; with respect to the Class M-3 Certificates, the
Class M-3
Pass-Through Rate; with respect to the Class M-4 Certificates, the
Class M-4
Pass-Through Rate; with respect to the Class M-5 Certificates, the
Class M-5
Pass-Through Rate; with respect to the Class M-6 Certificates, the
Class M-6
Pass-Through Rate; with respect to the Class B-1 Certificates, the
Class B-1
Pass-Through Rate; and, with respect to the Class R Certificate,
the Class R
Pass-Through Rate.
Percentage Interest: With respect to:
(i) any Class, the
percentage interest in the undivided beneficial
ownership interest evidenced by such Class which shall be equal
to the Certificate 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:
31
<PAGE>
(i) holding Mortgage
Loans transferred from the Depositor and other
assets of the Trust Fund, including the Cap Contracts and any
credit enhancement and passive derivative financial instruments
that pertain to beneficial interests issued or sold to parties
other than the Depositor, its Affiliates, or its agents;
(ii) issuing Certificates and other interests in the assets of
the
Trust Fund;
(iii) receiving collections on the Mortgage Loans and the Cap
Contracts and making payments on such Certificates and
interests
in accordance with the terms of this Agreement; and
(iv) engaging in other activities that are necessary or incidental
to
accomplish these limited purposes, which activities cannot be
contrary to the status of the Trust Fund as a qualified special
purpose entity under existing accounting literature.
Permitted Investments: At any time, any one or more of the
following
obligations and securities:
(i) obligations of the
United States or any agency thereof, provided
such obligations are backed by the full faith and credit of the
United States;
(ii) general obligations of or obligations guaranteed by any state
of
the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency rating the
Certificates;
(iii) commercial or finance company paper, other than commercial
or
finance company paper issued by the Depositor, the Trustee or
any
of its Affiliates, which is then receiving the highest
commercial
or finance company paper rating of each such Rating Agency;
(iv) certificates of deposit, demand or time deposits, or
bankers'
acceptances (other than 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;
32
<PAGE>
(viii) securities (other than stripped bonds, stripped coupons
or
instruments sold at a purchase price in excess of 115% of the
face amount thereof) bearing interest or sold at a discount
issued by any corporation, other than the Trustee or any of its
Affiliates, incorporated under the laws of the United States or
any state thereof which, at the time of such investment, have
one
of the two highest long term ratings of each Rating Agency;
(ix) interests in any money market fund (including those managed
or
advised by the Trustee or its affiliates) which at the date of
acquisition of the interests in such fund and throughout the
time
such interests are held in such fund has the highest applicable
long term rating by each such Rating Agency; and
(x) short term
investment funds sponsored by any trust company or
national banking association incorporated under the laws of the
United States or any state thereof, other than the Trustee or
any
of its Affiliates, which on the date of acquisition has been
rated by each such Rating Agency in their respective highest
applicable rating category;
provided, that no such instrument shall be a Permitted Investment
if such
instrument (i) evidences the right to receive interest only
payments with
respect to the obligations underlying such instrument, (ii) is
purchased at a
premium or above par or (iii) is purchased at a deep discount;
provided,
further, that no such instrument shall be a Permitted Investment
(A) if such
instrument evidences principal and interest payments derived from
obligations
underlying such instrument and the interest payments with respect
to such
instrument provide a yield to maturity of greater than 120% of the
yield to
maturity at par of such underlying obligations, or (B) if it may be
redeemed at
a price below the purchase price (the foregoing clause (B) not to
apply to
investments in units of money market funds pursuant to clause (ix)
above); and
provided, further, (I) that no amount beneficially owned by any
REMIC
(including, without limitation, any amounts collected by the
Servicer but not
yet deposited in the Collection Account) may be invested in
investments (other
than money market funds) treated as equity interests for Federal
income tax
purposes, unless the Servicer and/or the Trustee, shall receive an
Opinion of
Counsel acceptable to the Servicer and/or the Trustee, at the
expense of the
party requesting that such investment be made, to the effect that
such
investment will not adversely affect the status of the any REMIC
provided for
herein as a REMIC under the Code or result in imposition of a tax
on the Trust
Fund or any REMIC provided for herein and (II) any such investment
must be a
"permitted investment" within the meaning of Section 860G(a)(5) of
the Code.
Permitted Investments that are subject to prepayment or call may
not be
purchased at a price in excess of par.
Permitted Transferee: Any Person other than (i) the United States,
any
State or political subdivision thereof, or any agency or
instrumentality of any
of the foregoing, (ii) a foreign government, International
Organization or any
agency or instrumentality of either of the foregoing, (iii) an
organization
(except certain farmers' cooperatives described in section 521 of
the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the
tax imposed
by section 511 of the Code on unrelated business taxable income) on
any excess
inclusions (as defined in section 860E(c)(1) of the Code) with
respect to a
Certificate, (iv) rural electric and telephone cooperatives
described in section
1381(a)(2)(C) of the Code, and (v) a Person that is not a citizen
or resident of
the United States, a corporation or partnership (or other entity
treated as a
corporation or partnership for United States federal income tax
purposes)
created or organized in or under the laws of the United States or
any State
thereof or the District of Columbia or an estate whose income from
sources
without the United States is includable in gross income for United
States
federal income tax purposes regardless of its connection with the
conduct of a
trade or business within the United States, or a trust if a court
within the
United States is able to exercise primary supervision over the
administration of
the trust and one or more United States persons have authority to
control all
substantial decisions of the trust, unless, in the case of this
clause (v), such
33
<PAGE>
Person has furnished the transferor, the Trustee with a duly
completed Internal
Revenue Service Form W-8ECI or applicable successor form. The terms
"United
States," "State" and "International Organization" shall have the
meanings set
forth in section 7701 of the Code. A corporation will not be
treated as an
instrumentality of the United States or of any State thereof for
these purposes
if all of its activities are subject to tax and, with the exception
of the
Federal Home Loan Mortgage Corporation, a majority of its board of
directors is
not selected by such government unit.
Person: Any individual, corporation, partnership, limited
liability
company, joint venture, association, joint-stock company, trust,
unincorporated
organization or government, or any agency or political subdivision
thereof.
Pool
Stated Principal Balance: As to any Distribution Date, the
aggregate
of the Stated Principal Balance, as of such Distribution Date, of
the Mortgage
Loans that were Outstanding Mortgage Loans as of such date.
Preference Claim: The meaning set out in Section 4.04(l)
hereof.
Prepayment Assumption: A rate of prepayment, as described in the
Prospectus
Supplement in the definition of "Modeling Assumptions," relating to
the
Certificates.
Prepayment Interest Excess: With respect to any Servicer Remittance
Date,
for each Mortgage Loan that was the subject of a Principal
Prepayment in full
during the portion of the related Prepayment Period occurring
between the first
day of the calendar month in which such Servicer Remittance Date
occurs and the
last day of the related Prepayment Period, an amount equal to
interest (to the
extent received) at the applicable Net Mortgage Rate on the amount
of such
Principal Prepayment for the number of days commencing on the first
day of the
calendar month in which such Servicer Remittance Date occurs and
ending on the
date on which such Principal Prepayment is so applied.
Prepayment Interest Shortfall: With respect to any Distribution
Date, for
each Mortgage Loan that was the subject of a Principal Prepayment
in full (other
than a Principal Prepayment in full resulting from the purchase of
a Mortgage
Loan pursuant to Section 2.02, 2.03 or 9.01 hereof and other than a
Principal
Prepayment in full on a Mortgage Loan received during the period
from and
including the first day to and including the 14th day of the month
of such
Distribution Date), the amount, if any, by which (i) one month's
interest at the
applicable Net Mortgage Rate on the Stated Principal Balance of
such Mortgage
Loan as of the preceding Distribution Date exceeds (ii) the amount
of interest
paid or collected in connection with such Principal Prepayment.
Prepayment Period: As to any Distribution Date, the period
beginning with
the opening of business on the 15th day of the calendar month
preceding the
month in which such Distribution Date occurs (or in the case of the
first
Distribution Date, beginning with the opening of business on the
Cut-off Date)
and ending on the close of business on the 14th day of the month in
which such
Distribution Date occurs.
Principal Distribution Amount: With respect to each Distribution
Date, the
sum of (1) the Principal Funds for such Distribution Date and (ii)
any Extra
Principal Distribution Amount for such Distribution Date.
Principal Funds: With respect to the Mortgage Loans and any
Distribution
Date, the sum, without duplication, of (1) the scheduled principal
due during
the related Due Period and received before the related Servicer
Remittance Date
or advanced on or before the related Servicer Remittance Date, (2)
prepayments
collected in the related Prepayment Period, (3) the Stated
Principal Balance of
each
34
<PAGE>
Mortgage Loan that was purchased by the Depositor or the Servicer
during the
related Prepayment Period or, in the case of a purchase pursuant to
Section
9.01, on the Business Day prior to such Distribution Date, (4) the
amount, if
any, by which the aggregate unpaid principal balance of any
Replacement Mortgage
Loan is less than the aggregate unpaid principal of the related
Deleted Mortgage
Loans delivered by the Seller in connection with a substitution of
a Mortgage
Loan pursuant to Section 2.03(c), (5) all Liquidation Proceeds
collected during
the related Prepayment Period (to the extent such Liquidation
Proceeds related
to principal), (6) Subsequent Recoveries received during the
related Due Period
and (7) all other collections and recoveries in respect of
principal during the
related Prepayment Period less (A) all Non-Recoverable Advances
relating to
principal with respect to the Mortgage Loans and (B) other amounts
reimbursable
to the Servicer and the Trustee pursuant to this Agreement and
allocable to
principal.
Principal Prepayment: Any Mortgagor payment or other recovery of
(or
proceeds with respect to) principal on a Mortgage Loan (including
Mortgage Loans
purchased or repurchased under Sections 2.02, 2.03, 3.12 and 9.01
hereof) that
is received in advance of its scheduled Due Date and is not
accompanied by an
amount as to interest representing scheduled interest due on any
date or dates
in any month or months subsequent to the month of prepayment.
Partial Principal
Prepayments shall be applied by the Servicer in accordance with the
terms of the
related Mortgage Note.
Prospectus Supplement: The Prospectus Supplement dated December 22,
2005
relating to the public offering of the Class A-1, Class A-2A, Class
A-2B, Class
A-2C, Class B-1, Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5, Class
M-6 and Class R Certificates.
PUD:
A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan required to
be
repurchased by the Seller, pursuant to Section 2.02 or 2.03 hereof,
or purchased
by the Servicer pursuant to Section 3.12(c) hereof, an amount equal
to the sum
of (i) 100% of the unpaid principal balance of the Mortgage Loan as
of the date
of such purchase together with any unreimbursed Servicing Advances,
(ii) accrued
interest thereon at the applicable Mortgage Rate from (a) the date
through which
interest was last paid by the Mortgagor to (b) the Due Date in the
month in
which the Purchase Price is to be distributed to Certificateholders
and (iii)
any costs and damages incurred by the Trust Fund (or the Trustee on
behalf of
the Trust Fund) in connection with any violation by the affected
Mortgage Loan
of any anti-predatory or anti-abusive lending laws. With respect to
any REO
Property purchased by the Servicer pursuant to Section 3.12(c)
hereof, an amount
equal to the fair market value of such REO Property, as determined
in good faith
by the Servicer.
Rating Agency: Either of Moody's or S&P. If any such
organization or its
successor is no longer in existence, "Rating Agency" shall be a
nationally
recognized statistical rating organization, or other comparable
Person,
designated by the Depositor, notice of which designation shall be
given to the
Trustee. References herein to a given rating category of a Rating
Agency shall
mean such rating category without giving effect to any
modifiers.
Realized Loss: With respect to (1) a Liquidated Loan, the amount,
if any,
by which the Stated Principal Balance and accrued interest thereon
at the Net
Mortgage Rate exceeds the amount actually recovered by the Servicer
with respect
thereto (net of reimbursement of Advances and Servicing Advances)
at the time
such Mortgage Loan became a Liquidated Loan or (2) with respect to
a Mortgage
Loan which is not a Liquidated Loan, any amount of principal that
the Mortgagor
is no longer legally required to pay (except for the extinguishment
of debt that
results from the exercise of remedies due to default by the
Mortgagor).
35
<PAGE>
Record Date: With respect to any Distribution Date, the close of
business
on the last Business Day of the month preceding the month in which
the
applicable Distribution Date occurs.
Reference Banks: Barclays Bank PLC, JPMorgan Chase Bank, N.A.,
Citibank,
N.A., and NatWest, N.A.; provided that if any of the foregoing
banks are not
suitable to serve as a Reference Bank, then any leading banks
selected by the
Trustee with the consent of the NIM Insurer which are engaged in
transactions in
Eurodollar deposits in the international Eurocurrency market (i)
with an
established place of business in London, England and (ii) whose
quotations
appear on the Reuters Screen LIBO Page on the relevant Interest
Determination
Date.
Regular Certificate: Any one of the Class A-1, Class A-2A, Class
A-2B,
Class A-2C, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6 and
Class B-1 Certificates.
Relief Act: The Servicemembers Civil Relief Act or any similar
state laws.
REMIC: A "real estate mortgage investment conduit" within the
meaning of
section 860D of the Code. References herein to "the REMICs" or "a
REMIC" shall
mean any of or, as the context requires, both of the Lower Tier
REMIC and the
Upper Tier REMIC.
REMIC Pass-Through Rate: The Class A-1 Available Funds Cap (in
the
case of a Class included in Certificate Group One), the Class A-2
Available
Funds Cap (in the case of a Class included in Certificate Group
Two) or the
Subordinated Certificate Available Funds Cap (in the case of the
Subordinated
Certificates).
REMIC Provisions: Provisions of the federal income tax law relating
to real
estate mortgage investment conduits, which appear at sections 860A
through 860G
of Subchapter M of Chapter 1 of the Code, and related provisions,
and proposed,
temporary and final regulations and published rulings, notices and
announcements
promulgated thereunder, as the foregoing may be in effect from time
to time as
well as provisions of applicable state laws.
REMIC Regular Interests: (i) any of the rights under any of the
Certificates (other than the Class P Certificates, the Class R
Certificate and
the Class C Certificates) other than the rights in interest rate
cap contract
described in Section 2.07 and (ii) the Uncertificated Class C
Interest.
Remittance Report: The meaning specified in Section 4.04(k)
hereof.
REO
Property: A Mortgaged Property acquired by the Servicer, on behalf
of
the Trustee for the benefit of the Certificateholders, through
foreclosure or
deed-in-lieu of foreclosure in connection with a defaulted Mortgage
Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by the
Depositor for
a Deleted Mortgage Loan, which must, on the date of such
substitution, as
confirmed in a Request for Release, substantially in the form of
Exhibit I (1)
have a Stated Principal Balance, after deduction of the principal
portion of the
Scheduled Payment due in the month of substitution, not in excess
of, and not
less than 90% of the Stated Principal Balance of the Deleted
Mortgage Loan; (2)
with respect to any Fixed Rate Mortgage Loan, have a Mortgage Rate
not less than
or no more than 1% per annum higher than the Mortgage Rate of the
Deleted
Mortgage Loan and, with respect to any Adjustable Rate Mortgage
Loan: (A) have a
Maximum Mortgage Rate no more than 1% per annum higher or lower
than the Maximum
Mortgage Rate of the Deleted Mortgage Loan; (B) have a Minimum
Mortgage Rate no
more than 1% per annum higher or lower than the Minimum Mortgage
Rate of the
Deleted Mortgage Loan; (C) have the same index and Periodic Rate
Cap as that of
the Deleted Mortgage Loan and a Gross Margin not more
36
<PAGE>
than 1% per annum higher or lower than that of the Deleted Mortgage
Loan; (D)
not permit conversion of the related Mortgage Rate to a fixed
Mortgage Rate and
(F) currently be accruing interest at a rate not more than 1% per
annum higher
or lower than that of the Deleted Mortgage Loan; (3) have a similar
or higher
FICO score or credit grade than that of the Deleted Mortgage Loan;
(4) have a
Loan-to-Value Ratio no higher than that of the Deleted Mortgage
Loan; (5) have a
remaining term to maturity no greater than (and not more than one
year less
than) that of the Deleted Mortgage Loan; (6) provide for a
prepayment charge on
terms substantially similar to those of the prepayment charge, if
any, of the
Deleted Mortgage Loan; (7) have the same lien priority as the
Deleted Mortgage
Loan; (8) constitute the same occupancy type as the Deleted
Mortgage Loan; and
(9) comply with each representation and warranty set forth in
Section 2.03
hereof.
Request for Release: The Request for Release of Documents submitted
by the
Servicer to the Trustee, substantially in the form of Exhibit I
hereto.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance
policy that is required to be maintained from time to time under
this Agreement,
including without limitation, in the case of MI Mortgage Loans, the
MI Policy.
Required Percentage: With respect to any Distribution Date
following a
Stepdown Date, the quotient of (1) the excess of (A) the aggregate
Stated
Principal Balance of the Mortgage Loans as of such Distribution
Date, over (B)
the Certificate Principal Balance of the most senior Class of
Certificates
outstanding as of such Distribution Date, prior to giving effect
to
distributions to be made on such Distribution Date and (2) the
aggregate Stated
Principal Balance of the Mortgage Loans as of such Distribution
Date.
Reserve Interest Rate: With respect to any Interest Determination
Date, the
rate per annum that the Trustee determines to be (1) the arithmetic
mean
(rounded upwards if necessary to the nearest whole multiple of
0.03125%) of the
one-month United States dollar lending rates which New York City
banks selected
by the Trustee are quoting on the relevant Interest Determination
Date to the
principal London offices of leading banks in the London interbank
market or (2)
in the event that the Trustee can determine no such arithmetic
mean, the lowest
one-month United States dollar lending rate which New York City
banks selected
by the Trustee are quoting on such Interest Determination Date to
leading
European banks.
Residual Certificate: The Class R Certificate.
Residual Interest: An interest in the Upper Tier REMIC that is
entitled to
all distributions of principal and interest on the Class R
Certificate other
than (i) distributions in respect of the Class LTR Interest, and
(ii)
distributions on the Class R Certificate in respect of Excess
Interest.
Responsible Officer: When used with respect to the Trustee or
Servicer, any
officer of the Trustee or Servicer with direct responsibility for
the
administration of this Agreement and also means any other officer
to whom, with
respect to a particular matter, such matter is referred because of
such
officer's knowledge of and familiarity with the particular
subject.
Reuters Screen LIBO Page: The display designated as page "LIBO" on
the
Reuters Monitor Money Rates Service (or such other page as may
replace such LIBO
page on that service for the purpose of displaying London interbank
offered
rates of major banks.
S&P: Standard & Poor's Ratings Services, a Division of The
McGraw-Hill
Companies, Inc., or its successor in interest.
37
<PAGE>
Sale
Agreement: The Mortgage Loan Sale and Assignment Agreement dated as
of
December 1, 2005 between the Depositor and the Seller.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due on
any Due Date allocable to principal and/or interest on such
Mortgage Loan.
Section 302 Requirements: Any rules or regulations promulgated
pursuant to
the Sarbanes-Oxley Act of 2002 (as such may be amended from time to
time).
Securities Act: The Securities Act of 1933, as amended.
Seller: Merrill Lynch Mortgage Lending, Inc., a Delaware
corporation, or
its successor in interest.
Servicer: Wilshire Credit Corporation, a Nevada corporation, or
its
successor in interest.
Servicer Remittance Date: With respect to any Distribution Date,
the later
of (x) the date that is two Business Days after the 15th day of the
month in
which the related Distribution Date occurs and (y) the 18th day
(or, if such day
is not a Business Day, the next succeeding Business Day) of the
month in which
the related Distribution Date occurs.
Servicer's Assignee: As defined in Section 10.14(a).
Servicing Advances: All customary, reasonable and necessary "out of
pocket"
costs and expenses incurred in the performance by the Servicer of
its servicing
obligations hereunder, including, but not limited to, the cost of
(1) the
preservation, restoration and protection of a Mortgaged Property,
including
without limitation advances in respect of real estate taxes and
assessments, (2)
any collection, enforcement or judicial proceedings, including
without
limitation foreclosures, collections and 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 Mortgages or payable under this Agreement, (5)
correcting
errors of prior servicers; tax tracking; title research; flood
certification and
lender paid mortgage insurance, (6) obtaining or correcting any
legal
documentation required to be included in the Mortgage Files and
reasonably
necessary for the Servicer to perform its obligations under this
Agreement and
(7) compliance with the obligations under Sections 3.01 and
3.10.
Servicing Fee: As to each Mortgage Loan and any Distribution Date,
an
amount equal to one month's interest at the Servicing Fee Rate on
the Stated
Principal Balance of such Mortgage Loan as of the preceding
Distribution Date
or, in the event of any payment of interest that accompanies a
Principal
Prepayment in full made by the Mortgagor, interest at the Servicing
Fee Rate on
the Stated Principal Balance of such Mortgage Loan as of the
preceding
Distribution Date for the period covered by such payment of
interest.
Servicing Fee Rate: 0.500% per annum.
Servicing Officer: Any officer of the Servicer involved in, or
responsible
for, the administration and servicing of the Mortgage Loans whose
name and
facsimile signature appear on a list of servicing officers
furnished to the
Trustee by the Servicer on the Closing Date pursuant to this
Agreement, as such
lists may from time to time be amended.
38
<PAGE>
Servicing Rights Pledgee: One or more lenders, selected by the
Servicer, to
which the Servicer may pledge and assign all of its right, title
and interest
in, to and under this Agreement.
Servicing Transfer Costs: In the event that the Servicer does not
reimburse
the Trustee under the this Agreement, all costs associated with the
transfer of
servicing from the predecessor Servicer, including, without
limitation, any
costs or expenses associated with the termination of the
predecessor Servicer,
the appointment of a successor servicer, the complete transfer of
all servicing
data and the completion, correction or manipulation of such
servicing data as
may be required by the Trustee or any successor servicer to correct
any errors
or insufficiencies in the servicing data or otherwise to enable the
Trustee or
successor servicer to service the Mortgage Loans properly and
effectively.
SFAS
140: Statement of Financial Accounting Standard No. 140,
Accounting
for Transfers and Servicing of Financial Assets and Extinguishments
of
Liabilities dated September 2000, published by the Financial
Accounting
Standards Board of the Financial Accounting Foundation.
SPV:
As defined in Section 10.14(a).
Startup Day: As defined in Section 2.07 hereof.
Stated Principal Balance: With respect to any Mortgage Loan or
related REO
Property (1) as of the Cut-off Date, the Cut-off Date Principal
Balance thereof,
and (2) as of any Distribution Date, such Cut-off Date Principal
Balance, minus
the sum of (A) the principal portion of the Scheduled Payments (x)
due with
respect to such Mortgage Loan during each Due Period ending prior
to such
Distribution Date and (y) that were received by the Servicer as of
the close of
business on the Determination Date related to such Distribution
Date or with
respect to which Advances were made on the Servicer Remittance Date
prior to
such Distribution Date and (B) all Principal Prepayments with
respect to such
Mortgage Loan received on or prior to the last day of the related
Prepayment
Period, and all Liquidation Proceeds to the extent applied by the
Servicer as
recoveries of principal in accordance with Section 3.12 with
respect to such
Mortgage Loan, that were received by the Servicer as of the close
of business on
the last day of the related Due Period. Notwithstanding the
foregoing, the
Stated Principal Balance of a Liquidated Loan shall be deemed to be
zero.
Stepdown Date: The
later to occur of (1) the Distribution Date in January
2009 or (2) the first Distribution Date on which (A) the Class A
Certificate
Principal Balance and Class R Certificate Principal Balance
(reduced by the
Principal Funds with respect to such Distribution Date) are less
than or equal
to (B) 74.10% of the aggregate Stated Principal Balance of the
Mortgage Loans as
of such Distribution Date.
Stepdown Required Loss Percentage: For any Distribution Date,
the
applicable percentage for such Distribution Date set forth in the
following
table:
<TABLE>
<CAPTION>
DISTRIBUTION DATE OCCURRING IN STEPDOWN REQUIRED LOSS
PERCENTAGE
------------------------------
---------------------------------
<S>
<C>
January 2009 - December 2009 1.05% with
respect to January 2009, plus an
additional 1/12th of 0.35% for each month thereafter
January 2010 - December 2010 1.40% with
respect to January 2010, plus an
additional 1/12th of 0.25% for each month thereafter
January 2011 - December 2011 1.65% with
respect to January 2011, plus an
additional 1/12th of 0.10% for each month thereafter
January 2012 and thereafter 1.75%
</TABLE>
39
<PAGE>
Stepdown Trigger Event: With respect to the Certificates on or
after the
Stepdown Date, a Distribution Date on which (1) the quotient of (A)
the
aggregate Stated Principal Balance of all Mortgage Loans which are
60 or more
days Delinquent measured on a rolling three month basis (including,
for the
purposes of this calculation, Mortgage Loans in foreclosure, REO
Properties and
Mortgage Loans with respect to which the applicable Mortgagor is in
bankruptcy)
and (B) the Stated Principal Balance of the Mortgage Loans as of
the preceding
Servicer Remittance Date, equals or exceeds the product of (i)
41.00% and (ii)
Required Percentage or (2) the quotient (expressed as a percentage)
of (A) the
aggregate Realized Losses incurred from the Cut-off Date through
the last day of
the calendar month preceding such Distribution Date and (B) the
aggregate
principal balance of the Mortgage Loans as of the Cut-off Date
exceeds the
Stepdown Required Loss Percentage.
Subordinated Certificates: The Class M-1, Class M-2, Class M-3,
Class M-4,
Class M-5, Class M-6 and Class B-1 Certificates.
Subordinated Certificate Available Funds Cap: With respect to a
Distribution Date, the per annum rate equal to the weighted average
(weighted in
proportion to the results of subtracting the current Certificate
Principal
Balance of the related Class A Certificates (and, in the case of
Group One, the
Class R Certificate) from the aggregate Stated Principal Balance of
the Mortgage
Loans in each Mortgage Group as of the immediately preceding
Distribution Date
(or, in the case of the first Distribution Date, as of the Cut-off
Date)) of the
Class A-1 Available Funds Cap and the Class A-2 Available Funds
Cap.
Subordinated Certificate Cap Contract: The confirmation and
agreement
between the Trust Fund or Trustee and the Cap Contract Counterparty
(in the form
of Exhibit O-3 hereto).
Subordinated Certificate Cap Contract Notional Balance: With
respect to any
Distribution Date, the Subordinated Certificate Cap Contract
Notional Balance
set forth for such Distribution Date in the Subordinated
Certificate One Month
LIBOR Cap Table attached hereto as Exhibit P-3.
Subordinated Certificate Cap Contract Termination Date: The day
after the
Distribution Date in May 2012.
Subordinated Certificate Maximum Rate Cap: With respect to a
Distribution
Date, the per annum rate equal to the weighted average (weighted in
proportion
to the results of subtracting from the aggregate Stated Principal
Balance of the
Mortgage Loans in each Mortgage Group as of the immediately
preceding
Distribution Date (or, in the case of the first Distribution Date,
as of the
Cut-off Date) the current Certificate Principal Balance of the
related Class A
Certificates (and, in the case of Group One, the Class R
Certificate)) of the
Class A-1 Maximum Rate Cap and the Class A-2 Maximum Rate Cap.
Subordinated Certificate Upper Collar: With respect to each
Distribution
Date with respect to which payments are received on the
Subordinated Certificate
Cap Contract, a rate equal to the lesser of One-Month LIBOR and
9.340% per
annum.
Subordinated Certificates: Any of the Class M and Class B-1
Certificates.
Subsequent Recovery: The amount, if any, recovered by the Servicer
with
respect to a Liquidated Loan with respect to which a Realized Loss
has been
incurred after liquidation and disposition of such Mortgage
Loan.
Subservicing Agreement: As defined in Section 3.02(a).
40
<PAGE>
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.
Trust Fund: The corpus of the trust (the "Specialty Underwriting
and
Residential Finance Trust, Series 2005-AB3") 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 and/or the
related Mortgaged
Properties; (v) all proceeds of the conversion, voluntary or
involuntary, of any
of the foregoing into cash or other liquid property; and (vi) the
Cap Contracts
and the Cap Contract Account.
Trustee: JPMorgan Chase Bank, N.A., a national banking association,
not in
its individual capacity, but solely in its capacity as trustee for
the benefit
of the Certificateholders under this Agreement, and any successor
thereto, and
any corporation or national banking association resulting from or
surviving any
consolidation or merger to which it or its successors may be a
party and any
successor trustee as may from time to time be serving as successor
trustee
hereunder.
Uncertificated Class C Interest: An uncertificated interest with an
initial
principal amount equal to the initial Overcollateralization Amount
having (i)
the same rights to payments as the Class C Certificates, other than
the rights
to payments of amounts with respect to the Cap Contracts, and (ii)
the rights to
the payments treated as distributed to the Class C Certificates
under Section
2.07(d), provided, however, that such interest shall have no
obligation to make
any payments treated as paid by the Class C Certificates pursuant
to interest
rate cap agreements under Section 2.07(d).
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, the Class M-5 Unpaid
Realized Loss
Amount, the Class M-6 Unpaid Realized Loss Amount, Class B-1 Unpaid
Realized
Loss Amount and Class C Unpaid Realized Loss Amount,
collectively.
Upper Collar: Any of the Class A-1 Upper Collar, the Class A-2
Upper Collar
or the Subordinated Upper Collar.
Upper Tier REMIC: As
described in the Preliminary Statement and Section
2.07.
USAP
Report: A report in compliance with the Uniform Single
Attestation
Program for Mortgage Bankers delivered in accordance with Section
3.18.
Voting Rights: The portion of the voting rights of all the
Certificates
that is allocated to any of the Certificates for purposes of the
voting
provisions hereunder. Voting Rights allocated to each Class of
Certificates
shall be allocated 98% to the Class A, Class R, Class M and Class
B-1
Certificates, 2% to the Class C and Class P Certificates, with the
allocation
among the Class A, Class R, Class M and Class B-1
41
<PAGE>
Certificates to be in proportion to the Class Certificate Principal
Balance of
each Class relative to the Class Certificate Principal Balance of
all other
Classes. Voting Rights will be allocated among the Certificates of
each such
Class in accordance with their respective Percentage Interests.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage Loans.
The
Depositor, concurrently with the execution and delivery hereof,
does
hereby sell, transfer, assign, set over and convey to the Trustee
without
recourse all the right, title and interest of the Depositor in and
to the assets
of the Trust Fund. Such assignment includes all interest and
principal received
on or with respect to the Mortgage Loans on or after the Cut-off
Date (other
than Scheduled Payments due on the Mortgage Loans on or before the
Cut-off
Date).
In
connection with such assignment, the Depositor does hereby deliver
to,
and deposit with, the Trustee the following documents or
instruments with
respect to each Mortgage Loan so assigned:
(A)
The Original Mortgage Note, together with all riders thereto,
endorsed,
"Pay to the order of JPMorgan Chase Bank, N.A., as trustee - SURF
2005-AB3,
without recourse" together with all riders thereto. The Mortgage
Note shall
include all intervening endorsements showing a complete chain of
the title from
the originator to the Seller.
(B)
Except as provided below and for each Mortgage Loan that is not a
MERS
Loan, the original recorded Mortgage together with all riders
thereto, with
evidence of recording thereon, or, if the original Mortgage has not
yet been
returned from the recording office, a copy of the original Mortgage
together
with all riders thereto certified by the Seller to be a true copy
of the
original of the Mortgage that has been delivered for recording in
the
appropriate recording office of the jurisdiction in which the
Mortgaged Property
is located and in the case of each MERS Loan, the original Mortgage
together
with all riders thereto, noting the presence of the MIN of the Loan
and either
language indicating that the Mortgage Loan is a MOM Loan or if the
Mortgage Loan
was not a MOM Loan at origination, the original Mortgage and the
assignment
thereof to MERS, with evidence of recording indicated thereon, or a
copy of the
Mortgage certified by the public recording office in which such
Mortgage has
been recorded.
(C)
In the case of each Mortgage Loan that is not a MERS Loan, the
original
Assignment of each Mortgage, to "JPMorgan Chase Bank, N.A., as
trustee - SURF
2005-AB3."
(D)
The original policy of title insurance (or a preliminary title
report,
commitment or binder if the original title insurance policy has not
been
received from the title insurance company).
(E)
Originals of any intervening assignments of the Mortgage, with
evidence
of recording thereon or, if the original intervening assignment has
not yet been
returned from the recording office, a copy of such assignment
certified to be a
true copy of the original of the assignment which has been sent for
recording in
the appropriate jurisdiction in which the Mortgaged Property is
located.
(F)
Originals of all assumption and modification agreements, if
any.
If
in connection with any Mortgage Loan, the Depositor cannot deliver
the
Mortgage, Assignments of Mortgage or assumption, consolidation or
modification,
as the case may be, with evidence of recording thereon, if
applicable,
concurrently with the execution and delivery of this Agreement
solely because of
a delay caused by the public recording office where such
Mortgage,
42
<PAGE>
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.
With
respect to any Mortgage Loan, none of the Depositor, the Servicer
or
the Trustee shall be obligated to cause to be recorded the
Assignment of
Mortgage referred to in this Section 2.01. In the event that any
Assignment of
Mortgage is not recorded or is improperly recorded, the Servicer
shall have no
liability for its failure to receive or act on notices related to
such
Assignment of Mortgage.
The
ownership of each Mortgage Note, the Mortgage and the contents of
the
related Mortgage File is vested in the Trustee. Neither the
Depositor nor the
Servicer shall take any action inconsistent with such ownership and
shall not
claim any ownership interest therein. The Depositor and the
Servicer shall
respond to any third party inquiries with respect to ownership of
the Mortgage
Loans by stating that such ownership is held by the Trustee on
behalf of the
Certificateholders. Mortgage documents relating to the Mortgage
Loans not
delivered to the Trustee are and shall be held in trust by the
Servicer, for the
benefit of the Trustee as the owner thereof, and the Servicer's
possession of
the contents of each Mortgage File so retained is for the sole
purpose of
servicing the related Mortgage Loan, and such retention and
possession by the
Servicer is in a custodial capacity only. The Depositor agrees to
take no action
inconsistent with the Trustee's ownership of the Mortgage Loans, to
promptly
indicate to all inquiring parties that the Mortgage Loans have been
sold and to
claim no ownership interest in the Mortgage Loans.
It
is the intention of this Agreement that the conveyance of the
Depositor's right, title and interest in and to the Trust Fund
pursuant to this
Agreement shall constitute a purchase and sale and not a loan. If a
conveyance
of Mortgage Loans from the Seller to the Depositor is characterized
as a pledge
and not a sale, then the Depositor shall be deemed to have
transferred to the
Trustee all of the Depositor's right, title and interest in, to and
under the
obligations of the Seller deemed to be secured by said pledge; and
it is the
intention of this Agreement that the Depositor shall also be deemed
to have
granted to the Trustee a first priority security interest in all of
the
Depositor's right, title, and interest in, to and under the
obligations of the
Seller to the Depositor deemed to be secured by said pledge and
that the Trustee
shall be deemed to be an independent custodian for purposes of
perfection of the
security interest granted to the Depositor. If the conveyance of
the Mortgage
Loans from the Depositor to the Trustee is characterized as a
pledge, it is the
intention of this Agreement that this Agreement shall constitute a
security
agreement under applicable law, and that the Depositor shall be
deemed to have
granted to the Trustee a first priority security interest in all of
the
Depositor's right, title and interest in, to and under the Mortgage
Loans, all
payments of principal of or interest on such Mortgage Loans, all
other rights
relating to and payments made in respect of the Trust Fund, and all
proceeds of
any thereof. If the trust created by this Agreement terminates
prior to the
satisfaction of the claims of any Person in any Certificates, the
security
interest created hereby shall continue in full force and effect and
the Trustee
shall be deemed to be the collateral agent for the benefit of such
Person.
In
addition to the conveyance made in the first paragraph of this
Section
2.01, the Depositor does hereby convey, assign and set over to the
Trustee for
the benefit of the Certificateholders its rights and interests
under the Sale
Agreement, including the Depositor's right, title and interest in
the
representations and warranties contained in the Sale Agreement and
the benefit
of the repurchase obligations and the
43
<PAGE>
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.
The
parties hereto agree and understand that it is not intended that
any
Mortgage Loan be included in the Trust that is, without limitation,
a "High-Cost
Home Loan" as defined by the Home Ownership and Equity Protection
Act of 1994 or
any other applicable anti-predatory lending laws, including but not
limited to
(i) a "High-Cost Home Loan" as defined in the New Jersey Home
Ownership Act
effective November 27, 2003; (ii) a "High-Cost Home Loan" as
defined in the New
Mexico Home Loan Protection Act effective January 1, 2004; (iii) a
"High-Cost
Home Loan" as defined in the Massachusetts Predatory Home Loan
Practices Act
effective November 7, 2004 or (iv) a "High-Cost Home Loan" as
defined by the
Indiana High Cost Home Loan Law effective January 1, 2005.
SECTION 2.02. Acceptance by Trustee of the Mortgage Loans.
Except as set forth in the Exception Report delivered
contemporaneously
herewith (the "Exception Report"), the Trustee acknowledges receipt
of the
Mortgage Note for each Mortgage Loan and delivery of a Mortgage
File (but does
not acknowledge receipt of all documents required to be included in
such
Mortgage File) with respect to each Mortgage Loan and declares that
it holds and
will hold such documents and any other documents constituting a
part of the
Mortgage Files delivered to it in trust for the use and benefit of
all present
and future Certificateholders. The Depositor will cause the Seller
to repurchase
any Mortgage Loan to which a material exception was taken in the
Exception
Report unless such exception is cured to the satisfaction of the
Trustee within
45 Business Days of the Closing Date.
The
Trustee acknowledges receipt of the Cap Contracts (forms of which
are
attached hereto as Exhibits O-1, O-2 and O-3), the Transfer
Agreement 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 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 delivered for recordation, the
Depositor
shall deliver or cause to be delivered to the Trustee written
notice stating
that such Mortgage has been delivered to the appropriate public
recording
officer for recordation and thereafter the Depositor shall deliver
or cause to
be delivered such Mortgage with evidence of recording thereon upon
receipt
thereof from the public recording office. The Trustee shall request
that the
Seller correct or cure such omission, defect or other irregularity,
or
substitute a Mortgage Loan pursuant to the provisions of Section
2.03(c), within
90 days from the date the Seller was notified of such omission or
defect and, if
the Seller does not correct or cure such omission or defect within
such period,
that the Seller purchase such Mortgage Loan from the Trust Fund
within 90 days
from the date the Trustee notified the Seller of such
44
<PAGE>
omission, defect or other irregularity at the Purchase Price of
such Mortgage
Loan. The Purchase Price for any Mortgage Loan purchased pursuant
to this
Section 2.02 shall be paid to the Servicer and deposited by the
Servicer in the
Collection Account promptly upon receipt, and, upon receipt by the
Trustee of
written notification of such deposit signed by a Servicing Officer,
the Trustee,
upon receipt of a Request for Release, shall promptly release to
the Seller the
related Mortgage File and the Trustee shall execute and deliver
such instruments
of transfer or assignment, without recourse, representation or
warranty, as
shall be necessary to vest in the Seller or its designee, as the
case may be,
any Mortgage Loan released pursuant hereto, and the Trustee shall
have no
further responsibility with regard to such Mortgage Loan. It is
understood and
agreed that the obligation of the Seller to purchase, cure or
substitute any
Mortgage Loan as to which a material defect in or omission of a
constituent
document exists shall constitute the sole remedy respecting such
defect or
omission available to the Trustee on behalf of Certificateholders.
The preceding
sentence shall not, however, limit any remedies available to
the
Certificateholders, the Depositor or the Trustee pursuant to the
Sale Agreement.
The Trustee shall be under no duty or obligation to inspect, review
and examine
such documents, instruments, certificates or other papers to
determine that they
are genuine, enforceable, recordable or appropriate to the
represented purpose,
or that they have actually been recorded, or that they are other
than what they
purport to be on their face. The Trustee shall keep confidential
the name of
each Mortgagor and the Trustee shall not solicit any such Mortgagor
for the
purpose of refinancing the related Mortgage Loan. It is understood
and agreed
that all rights and benefits relating to the solicitation of any
Mortgagors and
the attendant rights, title and interest in and to the list of
Mortgagors and
data relating to their Mortgages shall be retained by the
Servicer.
Within 70 days of the Closing Date, the Trustee shall deliver to
the
Depositor 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 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
45
<PAGE>
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.
(vi) Each Mortgage Loan in Group One has a Stated Principal Balance
as
of
the Cut-off Date that complies with the loan limitations of Fannie
Mae
and
Freddie Mac as in effect on the Cut-off Date.
(b)
To the extent that any fact, condition or event with respect to
a
Mortgage Loan constitutes a breach of a representation or warranty
of the Seller
under the Sale Agreement, the only right or remedy of the Trustee
or of any
Certificateholder shall be the Trustee's right to enforce the
obligations of the
Seller under any applicable representation or warranty made by it.
The Trustee
acknowledges that the Depositor shall have no obligation or
liability with
respect to any breach of any representation or warranty with
respect to the
Mortgage Loans (except as set forth in Section 2.03(a)(v)) under
any
circumstances.
(c)
Upon discovery by any of the Depositor, the Servicer or the Trustee
of
a breach of any of representations and warranties set forth in the
Sale
Agreement that adversely and materially affects the value of the
related
Mortgage Loan, prepayment charges or the interests of the
Certificateholders,
the party discovering such breach shall give prompt written notice
to the other
parties. Within 90 days of the discovery of a breach of any
representation or
warranty given to the Trustee by the Depositor, the Seller and
assigned to the
Trustee, the Depositor, or the Seller shall either (a) cure such
breach in all
material respects, (b) repurchase such Mortgage Loan or any
property acquired in
respect thereof from the Trustee at the Purchase Price or (c)
within the two
year period following the Closing Date, substitute a Replacement
Mortgage Loan
for the affected Mortgage Loan. In the event of discovery of a
breach of any
representation and warranty of the Seller or the Depositor, the
Trustee shall
enforce its rights under the Sale Agreement or thereunder for the
benefit of
Certificateholders. In the event of a breach of the representations
and
warranties with respect to the Mortgage Loans set forth in a Sale
Agreement, the
Trustee shall enforce the right of the Trust Fund to be indemnified
for such
breach of representation and
46
<PAGE>
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)(B). As provided in the Sale Agreement, if the Seller
substitutes for
a Mortgage Loan for which there is a breach of any representations
and
warranties which adversely and materially affects the value of such
Mortgage
Loan and such substitute mortgage loan is not a Replacement
Mortgage Loan, under
the terms of the Sale Agreement, the Seller will, in exchange for
such
substitute Mortgage Loan, (i) provide the applicable Purchase Price
for the
affected Mortgage Loan or (ii) within two years of the Closing
Date, substitute
such affected Mortgage Loan with a Replacement Mortgage Loan. Any
such
substitution shall not be effected prior to the additional delivery
to the
Trustee of a Request for Release substantially in the form of
Exhibit I and
shall not be effected unless it is within two years of the Startup
Day. As
provided in the Sale Agreement, the Seller indemnifies and holds
the Trust Fund,
the Trustee, the Depositor, the 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.
With
respect to any Mortgage Loan repurchased by the Depositor pursuant
to
this Agreement or by the Seller pursuant to the Sale Agreement, the
principal
portion of the funds received by the Servicer in respect of such
repurchase of a
Mortgage Loan will be considered a Principal Prepayment and shall
be deposited
by the Servicer in the Certificate Account pursuant to Section
3.05. The
Trustee, upon receipt of the full amount of the Purchase Price for
a Deleted
Mortgage Loan, or upon receipt of the Mortgage File for a
Replacement Mortgage
Loan substituted for a Deleted Mortgage Loan, shall release or
cause to be
released and reassign to the Depositor or the Seller, as
applicable, the related
Mortgage File for the Deleted Mortgage Loan and shall execute and
deliver such
instruments of transfer or assignment, in each case without
recourse,
representation or warranty, as shall be necessary to vest in such
party or its
designee or assignee title to any Deleted Mortgage Loan released
pursuant
hereto, free and clear of all security interests, liens and other
encumbrances
created by this Agreement, which instruments shall be prepared by
the Trustee,
and the Trustee shall not have any further responsibility with
respect to the
Mortgage File relating to such Deleted Mortgage Loan.
With
respect to each Replacement Mortgage Loan to be delivered to
the
Trustee pursuant to the terms of this Article II in exchange for a
Deleted
Mortgage Loan: (i) the Depositor or the Seller, as applicable, must
deliver to
the Trustee the Mortgage File for the Replacement Mortgage Loan
containing the
documents set forth in Section 2.01 along with a written
certification
certifying as to the delivery of such Mortgage File and containing
the granting
language set forth in the first sentence of Section 2.01; and (ii)
the Depositor
will be deemed to have made, with respect to such Replacement
Mortgage Loan,
each of the representations and warranties made by it with respect
to the
related Deleted Mortgage Loan. The Trustee shall review the
Mortgage File with
respect to each Replacement Mortgage Loan and certify to the
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
47
<PAGE>
substitution) and aggregate prepayment charges of all such Deleted
Mortgage
Loans. An amount equal to the aggregate of the deficiencies
described in the
preceding sentence (such amount, the "Substitution Adjustment
Amount") shall be
delivered by the Seller to the Servicer for deposit into the
Collection Account
on the Determination Date for the Distribution Date relating to the
Prepayment
Period during which the related Mortgage Loan became required to be
purchased or
replaced hereunder.
The
Seller shall give or cause to be given written notice to the
Certificateholders that such substitution has taken place, shall
amend the
Mortgage Loan Schedule to reflect the removal of such Deleted
Mortgage Loan from
the terms of this Agreement and the substitution of the Replacement
Mortgage
Loan or Replacement Mortgage Loans and shall deliver a copy of such
amended
Mortgage Loan Schedule to the Trustee. Upon such substitution by
the Seller,
such Replacement Mortgage Loan or Replacement Mortgage Loans shall
constitute
part of the Mortgage Pool and shall be subject in all respects to
the terms of
this Agreement and the Sale Agreement, including all applicable
representations
and warranties thereof included in the Sale Agreement as of the
date of
substitution.
In
addition, the Seller shall obtain at its own expense and deliver to
the
Trustee an Opinion of Counsel addressed to the Trustee to the
effect that such
substitution will not (a) cause any federal tax to be imposed on
the Trust Fund
or any REMIC provided for herein, including without limitation, any
federal tax
imposed on "prohibited transactions" under Section 860F(a)(1) of
the Code or on
"contributions after the startup day" under Section 860G(d)(1) of
the Code or
(b) adversely affect the status of any REMIC provided for herein as
a REMIC. If
any such Opinion of Counsel can not be delivered, then such
substitution may
only be effected at such time as the required Opinion of Counsel
can be given.
(d)
It is understood and agreed that the representations, warranties
and
indemnification (i) set forth in this Section 2.03 and (ii) of the
Seller and
the Depositor set forth in the Sale Agreement and assigned to the
Trustee by the
Depositor hereunder shall each survive delivery of the Mortgage
Files and the
Assignment of Mortgage of each Mortgage Loan to the Trustee and
shall continue
throughout the term of this Agreement.
SECTION 2.04. Representations and Warranties of the Servicer.
The
Servicer hereby represents and warrants to the Depositor and
the
Trustee as follows, as of the date hereof
(i) The Servicer is a duly formed corporation and is validly
existing
and
in good standing under the laws of the state of its formation and
is
duly
authorized and qualified to transact any and all business
contemplated
by
this Agreement to be conducted by the Servicer in any state in
which a
Mortgaged Property is located or is otherwise not required under
applicable
law
to effect such qualification and, in any event, is in compliance
with
the
doing business laws of any such state, to the extent necessary
to
ensure its ability to enforce each Mortgage Loan, to service the
Mortgage
Loans in accordance with the terms of this Agreement and to perform
any of
its
other obligations under this Agreement in accordance with the
terms
hereof.
(ii) The Servicer has the power and authority to service each
Mortgage
Loan, and to execute, deliver and perform, and to enter into and
consummate
the
transactions contemplated by this Agreement and has duly authorized
by
all
necessary corporate action on the part of the Servicer the
execution,
delivery and performance of this Agreement; and this Agreement,
assuming
the
due authorization, execution and delivery hereof by the other
parties
hereto, constitutes a legal, valid and binding obligation of the
Servicer,
enforceable against the Servicer in accordance with its terms,
except that
(a)
the enforceability hereof may be limited by
48
<PAGE>
bankruptcy, insolvency, moratorium, receivership and other similar
laws
relating to creditors' rights generally and (b) the remedy of
specific
performance and injunctive and other forms of equitable relief may
be
subject to equitable defenses and to the discretion of the court
before
which any proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement by the
Servicer,
the
servicing of the Mortgage Loans under this Agreement, the
consummation
of any other of the
transactions contemplated by this Agreement, and the
fulfillment of or compliance with the terms hereof are in the
ordinary
course of business of the Servicer and will not (A) result in a
material
breach of any term or provision of the charter or by-laws of the
Servicer
or
(B) materially conflict with, result in a material breach,
violation or
acceleration of, or result in a material default under, the terms
of any
other material agreement or instrument to which the Servicer is a
party or
by
which it may be bound, or (C) constitute a material violation of
any
statute, order or regulation applicable to the Servicer of any
court,
regulatory body, administrative agency or governmental body
having
jurisdiction over the Servicer; and the Servicer is not in breach
or
violation of any material indenture or other material agreement
or
instrument, or in violation of any statute, order or regulation of
any
court, regulatory body, administrative agency or governmental body
having
jurisdiction over it which breach or violation may materially
impair the
Servicer's ability to perform or meet any of its obligations under
this
Agreement.
(iv) The Servicer is an approved servicer of mortgage loans for
Fannie
Mae
and is an approved servicer of mortgage loans for Freddie Mac.
(v) No litigation is pending or, to the best of the Servicer's
knowledge, threatened, against the Servicer that would materially
and
adversely affect the execution, delivery or enforceability of
this
Agreement or the ability of the Servicer to service the Mortgage
Loans or
to
perform any of its other obligations under this Agreement in
accordance
with
the terms hereof.
(vi) No consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution, delivery
and
performance by the Servicer of, or compliance by the Servicer with,
this
Agreement or the consummation of the transactions contemplated
hereby, or
if
any such consent, approval, authorization or order is required,
the
Servicer has obtained the same.
(vii) The Servicer has fully furnished and will fully furnish (for
the
period it serviced the Mortgage Loans), in accordance with the Fair
Credit
Reporting Act and its implementing regulations, accurate and
complete
information (e.g., favorable and unfavorable) on its borrower
credit files
to
Equifax, Experian and Trans Union Credit Information Company on
a
monthly basis.
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans
Which
Are
Not "Qualified Mortgages".
Upon
discovery by the Depositor, the Servicer or the Trustee that
any
Mortgage Loan does not constitute a "qualified mortgage" within the
meaning of
section 860G(a)(3) of the Code, the party discovering such fact
shall promptly
(and in any event within 5 Business Days of discovery) give written
notice
thereof to the other parties. In connection therewith, the
Depositor shall, at
the Depositor's option, either (i) substitute, if the conditions in
Section
2.03(c) with respect to substitutions are satisfied, a Replacement
Mortgage Loan
for the affected Mortgage Loan, or (ii) repurchase the affected
Mortgage Loan
within 90 days of such discovery in the same manner as it would a
Mortgage Loan
for a breach of representation or warranty contained in Section
2.03. The
Trustee shall reconvey to the Depositor the
49
<PAGE>
Mortgage Loan to be released pursuant hereto in the same manner,
and on the same
terms and conditions, as it would a Mortgage Loan repurchased for
breach of a
representation or warranty contained in Section 2.03.
SECTION 2.06. Authentication and Delivery of Certificates.
The
Trustee acknowledges the transfer and assignment to it of the
Trust
Fund and, concurrently with such transfer and assignment, the
Trustee has caused
to be authenticated and delivered to or upon the order of the
Depositor, in
exchange for the Mortgage Loans, Certificates duly authenticated by
the Trustee
in authorized denominations evidencing ownership of the entire
Trust Fund. The
Trustee agrees to hold the Trust Fund and exercise the rights
referred to above
for the benefit of all present and future Holders of the
Certificates and to
perform its duties set forth in this Agreement in accordance with
the provisions
hereof.
SECTION 2.07. REMIC Elections.
(a)
The Depositor hereby instructs and authorizes the Trustee to make
an
appropriate election to treat each of the Lower Tier REMIC and the
Upper Tier
REMIC as a REMIC. The Trustee shall sign the returns providing for
such
elections and such other tax or information returns that are
required to be
signed by the Trustee under applicable law. This Agreement shall be
construed so
as to carry out the intention of the parties that each of the Lower
Tier REMIC
and the Upper Tier REMIC be treated as a REMIC at all times prior
to the date on
which the Trust Fund is terminated.
(b)
The Preliminary Statement sets forth the designations and
"latest
possible maturity date" for federal income tax purposes of all
interests created
hereby. The "Startup Day," as defined in Section 860G(a)(9) of the
Code, for
purposes of the REMIC Provisions shall be the Closing Date. Each
REMIC's fiscal
year shall be the calendar year.
The
Lower Tier REMIC shall consist of all of the assets of the Trust
Fund
(other than (i) the interests issued by the Lower Tier REMIC, (ii)
the grantor
trusts described in this Section 2.07 and (iii) the Cap Contracts
and the Cap
Contract Account). The Lower Tier REMIC shall issue the Lower Tier
REMIC Regular
Interests which shall be designated as regular interests of such
REMIC and shall
issue the Class LTR Interest that shall be designated as the sole
class of
residual interest in the Lower Tier REMIC. Each of the Lower Tier
REMIC Regular
Interests shall have the characteristics set forth in its
definition.
The
assets of the Upper Tier REMIC shall be the Lower Tier REMIC
Regular
Interests. The REMIC Regular Interests shall be designated as the
regular
interests in the Upper Tier REMIC and the Residual Interest shall
be designated
as the sole class of residual interest in the Upper Tier REMIC. For
federal
income tax purposes, (i) the pass-through rate on the REMIC Regular
Interests
represented by the Class A-1 Certificates and on the sole class of
residual
interest in the Upper Tier REMIC shall be subject to a cap equal to
the Class
A-1 Available Funds Cap; (ii) the pass-through rate on the REMIC
Regular
Interests represented by the Class A-2 Certificates shall be
subject to a cap
equal to the Class A-2 Available Funds Cap; and (iii) the
pass-through rate on
the REMIC Regular Interests represented by the Subordinated
Certificates shall
be subject to a cap equal to the Subordinated Certificate Available
Funds Cap.
The
beneficial ownership of the Class LTR Interest and the Residual
Interest shall be represented by the Class R Certificate. The Class
LTR Interest
shall not have a principal balance or bear interest.
50
<PAGE>
(c)
The "tax matters person" with respect to each REMIC for purposes of
the
REMIC Provisions shall be the beneficial owner of the Class R
Certificate;
provided, however, that the Holder of the Class R Certificate, by
its acceptance
thereof, irrevocably appoints the Trustee as its agent and
attorney-in-fact to
act as "tax matters person" with respect to each such REMIC for
purposes of the
REMIC Provisions. If there is more than one beneficial owner of the
Class R
Certificate, the "tax matters person" shall be the Person with the
greatest
percentage interest in the Class R Certificate and, if there is
more than one
such Person, shall be determined under Treasury regulation Section
1.860F-4(d)
and Treasury regulation Section 301.6231(a)(7)-1.
(d)
It is intended that the rights of the Class A, Class R
Certificates,
Class M and Class B-1 Certificates to receive payments of Excess
Interest shall
be treated as a right in interest rate cap contracts written by the
Class C
Certificateholders in favor of the holders of the Class A, Class R
Certificate,
Class M and Class B-1 Certificates, and such shall be accounted for
as property
held separate and apart from the regular interests in the Upper
Tier REMIC held
by the holders of the Class A Certificates, Class M Certificates
and Class B-1
Certificates and the residual interest in the Upper Tier REMIC held
by the
holder of the Class R Certificate. This provision is intended to
satisfy the
requirements of Treasury Regulations Section 1.860G-2(i) for the
treatment of
property rights coupled with REMIC interests to be separately
respected and
shall be interpreted consistently with such regulation. On each
Distribution
Date, to the extent that any of the Class A Certificates, Class R
Certificate,
Class M Certificates and Class B-1 Certificates receive payments in
respect of
Excess Interest, such amounts, to the extent not derived from
payments on the
Cap Contracts, will be treated as distributed by the Upper Tier
REMIC to the
Class C Certificates pro rata in payment of the amounts specified
in Section
4.04(f) and then paid to the relevant Class of Certificates
pursuant to the
related interest rate cap agreement.
(e)
The parties intend that the portion of the Trust Fund consisting of
the
Uncertificated Class C Interest, the Cap Contract Account, the Cap
Contracts and
the obligation of the holders of the Class C Certificates to pay
amounts in
respect of Excess Interest to the holders of the Class A
Certificates, Class R
Certificate, Class M Certificates and Class B-1 Certificates shall
be treated as
a "grantor trust" under the Code, for the benefit of the holders of
the Class C
Certificates, and the provisions hereof shall be interpreted
consistently with
this intention. In furtherance of such intention, the Trustee shall
(i) furnish
or cause to be furnished to the holders of the Class C Certificates
information
regarding their allocable share, if any, of the income with respect
to such
grantor trust, (ii) file or cause to be filed with the Internal
Revenue Service
Form 1041 (together with any necessary attachments) and such other
forms as may
be applicable and (iii) comply with such information reporting
obligations with
respect to payments from such grantor trust to the holders of Class
A
Certificates, the Class R Certificate, Class M Certificates, Class
B-1
Certificates and Class C Certificates as may be applicable under
the Code.
(f)
The parties intend that the portion of the Trust Fund consisting of
the
right to receive the payments distributable to the Class P
Certificates pursuant
to Section 4.04(b)(i) hereof shall be treated as a "grantor trust"
under the
Code, for the benefit of the holders of the Class P Certificates,
and the
provisions hereof shall be interpreted consistently with this
intention. In
furtherance of such intention, the Trustee shall (i) furnish or
cause to be
furnished to the holders of the Class P Certificates information
regarding their
allocable share of the income with respect to such grantor trust
and (ii) file
or cause to be filed with the Internal Revenue Service Form 1041
(together with
any necessary attachments) and such other forms as may be
applicable.
(g)
[RESERVED].
(h)
All payments of principal and interest at the Net Mortgage Rate on
each
of the Mortgage Loans (other than payments distributable to the
Class P
Certificates pursuant to Section 4.04(b)(i) hereof) received from
the Mortgage
Loans shall be paid to the Lower Tier REMIC Regular Interests until
the
51
<PAGE>
principal balance of all such interests have been reduced to zero
and any losses
allocated to such interests have been reimbursed. Any excess
amounts shall be
distributed to the Class LTR Interest. On each Distribution Date,
payments and
losses shall be allocated among the Lower Tier REMIC Regular
Interests so that
(i) each of the Lower Tier REMIC I Marker Interests shall have a
principal
balance equal to 25% of the principal balance of the Corresponding
Certificates,
(ii) the Class LTIX Interest has a principal balance equal to the
excess of (x)
50% of the remaining principal balance of the Mortgage Loans over
(y) the
aggregate principal balance of the Lower Tier REMIC I Marker
Interests (if
necessary to reflect an increase in overcollateralization, accrued
and unpaid
interest on the Class LTIX interest may be added to its principal
amount to
achieve this result) and (iii) the aggregate principal amount of
the Class
LTII1A Interest, Class LTII1B Interest, Class LTII2A Interest,
Class LTII2B
Interest and Class LTIIX Interest shall equal 50% of the remaining
principal
balance of the Mortgage Loans. Distributions and losses allocated
to the Lower
Tier REMIC Regular Interests described in clause (iii) of the
preceding sentence
will be allocated among such Lower Tier REMIC Regular Interests in
the following
manner: (x) such distributions shall be deemed made to such Lower
Tier REMIC
Regular Interests first, so as to keep the principal balance of the
each such
Lower Tier REMIC Regular Interest with "B" at the end of its
designation equal
to 0.05% of the aggregate scheduled principal balance of the
Mortgage Loans in
the related Mortgage Group; second, to such Lower Tier REMIC
Regular Interests
with "A" at the end of its designation so that the uncertificated
principal
balance of each such Lower Tier REMIC Regular Interest is equal to
0.05% of the
excess of (I) the aggregate scheduled principal balance of the
Mortgage Loans in
the related Mortgage Group over (II) the aggregate principal
balance of
Certificate Group One, in the case of the Class LTII1A Interest, or
Certificate
Group Two, in the case of the Class LTII2A Interest (except that if
0.05% of any
such excess is greater than the principal amount of the related
Lower Tier REMIC
II Marker Interest with "A" at the end of its designation, the
least amount of
principal shall be distributed to each Lower Tier REMIC II Marker
Interest with
"A" at the end of its designation such that the Lower Tier REMIC
Subordinated
Balance Ratio is maintained) and finally, any remaining
distributions of
principal to the Class LTIIX Interest and (y) such losses shall be
allocated
among the Lower Tier REMIC Regular Interests described in clause
(iii) of the
preceding sentence first, so as to keep the principal balance of
the each such
Lower Tier REMIC Regular Interest with "B" at the end of its
designation equal
to 0.05% of the aggregate scheduled principal balance of the
Mortgage Loans in
the related Mortgage Group; second, to such Lower Tier REMIC
Regular Interests
with "A" at the end of its designation so that the uncertificated
principal
balance of each such Lower Tier REMIC Regular Interest is equal to
0.05% of the
excess of (I) the aggregate scheduled principal balance of the
Mortgage Loans in
the related Mortgage Group over (II) the aggregate principal
balance of
Certificate Group One, in the case of the Class LTII1A Interest, or
Certificate
Group Two, in the case of the Class LTII2A Interest (except that if
0.05% of any
such excess is greater than the principal amount of the related
Lower Tier REMIC
II Marker Interest with "A" at the end of its designation, the
least amount of
losses shall be allocated to each Lower REMIC II Marker Interest
with "A" at the
end of its designation such that the Lower Tier REMIC Subordinated
Balance Ratio
is maintained) and finally, any remaining losses to the Class LTIIX
Interest.
Notwithstanding the preceding two sentences, however, losses not
allocated to
any Class of Certificates will not be allocated to any Lower Tier
REMIC Regular
Interests. All computations with respect to the Lower Tier REMIC
Regular
Interests shall be taken out to ten decimal places.
Any available funds remaining in the Lower Tier REMIC on a
Distribution Date after distributions to the Lower Tier REMIC
Regular Interests
shall be distributed to the Class R Certificate in respect of the
Class LTR
Interest.
If on any
Distribution Date the Certificate Principal Balance of any
Class of Certificates is increased pursuant to the last sentence of
the
definition of "Certificate Principal Balance", then there shall be
an equivalent
increase in the principal amounts of the Lower Tier REMIC Regular
Interests,
with such increase allocated (before the making of distributions
and the
allocation of losses on the Lower Tier REMIC Regular Interests on
such
Distribution Date) among the Lower Tier REMIC Regular Interests
so
52
<PAGE>
that, to the greatest extent possible, (i) each of the Lower Tier
REMIC I Marker
Interests has a principal balance equal to 25% of the principal
balance of the
Corresponding Certificates, (ii) the Class LTIX Interest has a
principal balance
equal to the excess of (x) 50% of the remaining principal balance
of the
Mortgage Loans over (y) the aggregate principal balance of the
Lower Tier REMIC
I Marker Interests and (iii) the aggregate principal amount of the
Lower Tier
REMIC II Marker Interests and the Class LTIIX Interest shall equal
50% of the
remaining principal balance of the Mortgage Loans. Allocations in
connection
with clause (iii) shall be made so that, to the greatest extent
possible, (a)
the principal balance of each Lower Tier REMIC II Marker Interest
with "B" at
the end of its designation equals 0.05% of the aggregate scheduled
principal
balance of the Mortgage Loans in related Mortgage Group, (b) the
principal
balance of each Lower Tier REMIC II Marker Interest with "A" at the
end of its
designation equals 0.05% of the excess of (x) the aggregate
scheduled principal
balance of the Mortgage Loans in related Mortgage Group over (y)
the aggregate
principal balance of Certificate Group One in the case of the Class
LTII1A
Interest, or Certificate Group Two in the case of the Class LTII2A
Interest and
(c) any remaining allocations are made to the Class LTIIX
Interest.
For purposes of this Section 2.07, (i) the Class LTII1A Interest
and
Class LTII1B Interest shall be related to Group One, and (ii) the
Class LTII2A
Interest and Class LTII2B Interest shall be related to Group
Two.
(i)
In the event that any REMIC provided for herein fails to qualify as
a
REMIC, loses its status as a REMIC, or incurs federal, state or
local taxes as a
result of a prohibited transaction or prohibited contribution under
the REMIC
Provisions due to the negligent performance by the Servicer of its
duties and
obligations set forth herein, the Servicer shall indemnify the
Trustee and the
Trust Fund against any and all Losses resulting from such
negligence; provided,
however, that the Servicer shall not be liable for any such Losses
attributable
to the action or inaction of the Trustee, the Depositor or the
Holder of the
Class R Certificate, as applicable, nor for any such Losses
resulting from
misinformation provided by the Holder of the Class R Certificate on
which the
Servicer has relied. The foregoing shall not be deemed to limit or
restrict the
rights and remedies of the Holder of the Class R Certificate now or
hereafter
existing at law or in equity. Notwithstanding the foregoing,
however, in no
event shall the Servicer have any liability (1) for any action or
omission that
is taken in accordance with and in compliance with the express
terms of, or
which is expressly permitted by the terms of, this Agreement, (2)
for any Losses
other than arising out of a negligent performance by the Servicer
of its duties
and obligations set forth herein, and (3) for any special or
consequential
damages to Certificateholders (in addition to payment of principal
and interest
on the Certificates).
(j)
In the event that any REMIC provided for herein fails to qualify as
a
REMIC, loses its status as a REMIC, or incurs federal, state or
local taxes as a
result of a prohibited transaction or prohibited contribution under
the REMIC
Provisions due to the negligent performance by the Trustee of its
duties and
obligations set forth herein, the Trustee shall indemnify the Trust
Fund against
any and all Losses resulting from such negligence; provided,
however, that the
Trustee shall not be liable for any such Losses attributable to the
action or
inaction of the Servicer, the Depositor or the Holder of the Class
R
Certificate, as applicable, nor for any such Losses resulting
from
misinformation provided by the Holder of the Class R Certificate on
which the
Trustee has relied. The foregoing shall not be deemed to limit or
restrict the
rights and remedies of the Holder of the Class R Certificate now or
hereafter
existing at law or in equity. Notwithstanding the foregoing,
however, in no
event shall the Trustee have any liability (1) for any action or
omission that
is taken in accordance wit
