MERRILL LYNCH MORTGAGE INVESTORS, INC.
Depositor,
PHH MORTGAGE CORPORATION
Servicer,
and
WELLS FARGO BANK, N.A.
Trustee
---------------------------
POOLING AND SERVICING AGREEMENT
Dated as of April 1, 2005
---------------------------
MERRILL LYNCH MORTGAGE INVESTORS TRUST SERIES MLCC 2005-1
MORTGAGE PASS-THROUGH CERTIFICATES
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TABLE OF
CONTENTS
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ARTICLE I.
DEFINITIONS...................................................................................
Section 1.01.
Definitions...............................................................
Section
1.02.
Calculations Respecting Mortgage
Loans....................................
ARTICLE II. DECLARATION OF TRUST;
ISSUANCE OF
CERTIFICATES..............................................
Section 2.01.
Creation and Declaration of Trust Fund; Conveyance of Mortgage
Loans......
Section 2.02.
Acceptance of Trust Fund by Trustee; Review of Documentation for
Trust
Fund......................................................................
Section 2.03.
Representations and Warranties of the Depositor and the
Servicer..........
Section 2.04.
Discovery of Breach; Repurchase or Substitution of Mortgage
Loans.........
Section 2.05.
Grant
Clause..............................................................
ARTICLE III. THE
CERTIFICATES............................................................................
Section 3.01.
The
Certificates..........................................................
Section 3.02.
Registration..............................................................
Section 3.03.
Transfer and Exchange of
Certificates.....................................
Section 3.04.
Cancellation of
Certificates..............................................
Section 3.05.
Replacement of
Certificates...............................................
Section 3.06.
Persons Deemed
Owners.....................................................
Section 3.07.
Temporary
Certificates....................................................
Section 3.08.
Appointment of Paying
Agent...............................................
Section 3.09.
Book-Entry
Certificates...................................................
ARTICLE IV. ADMINISTRATION OF THE TRUST
FUND.............................................................
Section 4.01.
Custodial Accounts; Distribution
Account..................................
Section 4.02.
Reports to Trustee and
Certificateholders.................................
ARTICLE V. DISTRIBUTIONS TO HOLDERS OF
CERTIFICATES......................................................
Section 5.01.
Distributions
Generally...................................................
Section 5.02.
Distributions from the Distribution
Account...............................
Section 5.03.
Allocation of
Losses......................................................
Section 5.04.
Advances..................................................................
Section 5.05.
Distributions On The REMIC 1 Regular
Interests............................
ARTICLE VI. CONCERNING THE TRUSTEE; EVENTS
OF DEFAULT....................................................
Section 6.01.
Duties of
Trustee.........................................................
Section 6.02.
Certain Matters Affecting the
Trustee.....................................
Section 6.03.
Trustee Not Liable for
Certificates.......................................
Section 6.04.
Trustee May Own
Certificates..............................................
Section 6.05.
Eligibility Requirements for
Trustee......................................
Section 6.06.
Resignation and Removal of
Trustee........................................
Section 6.07.
Successor
Trustee.........................................................
Section 6.08.
Merger or Consolidation of
Trustee........................................
Section 6.09.
Appointment of Co-Trustee, Separate Trustee or
Custodian..................
Section 6.10.
Authenticating
Agents.....................................................
Section 6.11.
Indemnification of
Trustee................................................
Section 6.12.
Fees and Expenses of the
Trustee..........................................
Section 6.13.
Collection of
Monies......................................................
Section 6.14.
Events of Default; Trustee To Act; Appointment of
Successor...............
Section 6.15.
Additional Remedies of Trustee Upon Event of
Default......................
Section 6.16.
Waiver of
Defaults........................................................
Section 6.17.
Notification to
Holders...................................................
Section 6.18.
Directions by Certificateholders and Duties of Trustee During Event
of
Default...................................................................
Section 6.19.
Preparation of Tax Returns and Other
Reports..............................
Section 6.20.
Annual Certificate by
Trustee.............................................
ARTICLE VII. PURCHASE OF MORTGAGE LOANS AND
TERMINATION OF THE TRUST FUND................................
Section 7.01.
Purchase of Mortgage Loans; Termination of Trust Fund Upon Purchase
or
Liquidation of All Mortgage
Loans.........................................
Section 7.02.
Procedure Upon Termination of Trust
Fund..................................
Section 7.03.
Additional Trust Fund Termination
Requirements............................
ARTICLE VIII. RIGHTS OF
CERTIFICATEHOLDERS...............................................................
Section 8.01.
Limitation on Rights of
Holders...........................................
Section 8.02.
Access to List of
Holders.................................................
Section 8.03.
Acts of Holders of
Certificates...........................................
ARTICLE IX. ADMINISTRATION AND SERVICING OF
THE MORTGAGE LOANS...........................................
Section 9.01.
Servicer to Act as
Servicer...............................................
Section 9.02.
Title, Management and Disposition of REO
Property.........................
Section 9.03.
Trustee and Depositor's Right to Examine Servicer
Records.................
Section 9.04.
Legal Proceedings Involving the Servicer and/or the Mortgage
Loans........
Section 9.05.
Material
Changes..........................................................
Section 9.06.
Servicer Shall Provide Information as Reasonably
Required.................
Section 9.07.
Servicer Not to
Resign....................................................
Section 9.08.
Custodial Accounts and Escrow
Accounts....................................
Section 9.09.
Assumption
Processing.....................................................
Section 9.10.
Books and
Records.........................................................
Section 9.11.
Annual Statement as to
Compliance.........................................
Section 9.12.
Annual Independent Certified Public Accountants' Servicing
Reports........
Section 9.13.
Officer's
Certificate.....................................................
Section 9.14.
Servicing
Compensation....................................................
Section 9.15.
Indemnification...........................................................
Section 9.16.
Non
Solicitation..........................................................
Section 9.17.
Successor to the
Servicer.................................................
Section 9.18.
Statements to the
Trustee.................................................
Section 9.19.
Merger or Consolidation of the
Servicer...................................
Section 9.20.
Limitation on Liability of the
Servicer...................................
ARTICLE X. REMIC
ADMINISTRATION..........................................................................
Section 10.01.
REMIC
Administration......................................................
Section 10.02.
Prohibited Transactions and
Activities....................................
Section 10.03.
Indemnification with Respect to Prohibited Transactions or Loss of
REMIC
Status....................................................................
Section 10.04.
REO
Property..............................................................
ARTICLE XI. MISCELLANEOUS
PROVISIONS.....................................................................
Section 11.01.
Binding Nature of Agreement;
Assignment...................................
Section 11.02.
Entire
Agreement..........................................................
Section 11.03.
Amendment.................................................................
Section 11.04.
Voting
Rights.............................................................
Section 11.05.
Provision of
Information..................................................
Section 11.06.
Governing
Law.............................................................
Section 11.07.
Notices...................................................................
Section 11.08.
Severability of
Provisions................................................
Section 11.09.
Indulgences; No
Waivers...................................................
Section 11.10.
Headings Not To Affect
Interpretation.....................................
Section 11.11.
Benefits of
Agreement.....................................................
Section 11.12.
Special Notices to the Rating
Agencies....................................
Section 11.13.
[RESERVED]................................................................
Section 11.14.
Counterparts..............................................................
Section 11.15.
No
Petitions..............................................................
</TABLE>
<PAGE>
This POOLING AND SERVICING AGREEMENT, dated as of April 1, 2005
(the
"Agreement"), by and among MERRILL LYNCH
MORTGAGE INVESTORS, INC., a Delaware
corporation, as depositor (the
"Depositor"), PHH MORTGAGE CORPORATION , a New
Jersey corporation, as servicer (the
"Servicer") and WELLS FARGO BANK, N.A., as
Trustee (the "Trustee"), and acknowledged
by MERRILL LYNCH MORTGAGE LENDING,
INC. a Delaware corporation, as seller (the
"Seller"), for purposes of Section
2.04.
PRELIMINARY STATEMENT
The Depositor intends to sell mortgage pass-through
certificates
(collectively, the "Certificates"), to be
issued hereunder in multiple classes,
which in the aggregate will evidence the
entire beneficial ownership interest in
the Mortgage Loans (as defined herein). As
provided herein, the Trustee will
make, in accordance with Section 10.01, an
election to treat the entire
segregated pool of assets described in the
definition of REMIC 1 (as defined
herein), and subject to this Agreement, as
a real estate mortgage investment
conduit (a "REMIC") for federal income tax
purposes and such segregated pool of
assets will be designated as "REMIC 1." The
REMIC 1 Regular Interests will be
the "regular interests" in REMIC 1 and the
Class R-1 Certificates will be the
sole class of "residual interests" in REMIC
1 for purposes of the REMIC
Provisions (as defined herein) under the
federal income tax law. A segregated
pool of assets consisting of the REMIC 1
Regular Interests will be designated as
"REMIC 2" and the REMIC Administrator will
make a separate REMIC election with
respect thereto. The Class 1-A, Class
2-A-1, Class 2-A-2, Class 2-A-3, Class
2-A-4, Class 2-A-5, Class M-1, Class M-2,
Class M-3, Class B-1, Class B-2 and
Class B-3 Certificates will be "regular
interests" in REMIC 2, and the Class R-2
Certificates will be the sole class of
"residual interests" therein for purposes
of the REMIC Provisions (as defined herein)
under federal income tax law.
The following table irrevocably sets forth the designation, the
REMIC 1
Pass-Through Rate, the initial
Uncertificated Principal Balance and, for
purposes of satisfying Treasury regulation
Section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" for the
REMIC 1 Regular Interest. The REMIC 1
Regular Interests will not be
certificated.
<TABLE>
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Initial
REMIC I
REMIC I
Uncertificated
Latest Possible
Regular Interest Designation
Pass-Through Rate
Principal Balance
Maturity Date(1)
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1-A
Variable (2)
$
348.63
April 25, 2035
1-B
Variable (2)
$
11,243.83
April 25, 2035
2-A
Variable (2)
$
913.31
April 25, 2035
2-B
Variable (2)
$
29,461.01
April 25, 2035
ZZZ
Variable (2)
$ 407,006,481.68
April 25, 2035
</TABLE>
-----------------
(1) For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the
latest
possible maturity date for the Mortgage Loans has been designated
as
the "latest possible maturity date" for each REMIC 1 Regular
Interest.
(2) Calculated
in accordance with the definition of "REMIC 1 Pass-Through
Rate" herein.
<PAGE>
THE CERTIFICATES
The following table sets forth (or describes) the Class
designation,
Certificate Interest Rate, initial Class
Principal Amount and minimum
denomination for each Class of Certificates
comprising interests in the Trust
Fund created hereunder.
<TABLE>
<CAPTION>
Minimum
Class
Certificate Interest Initial
Class Principal
Denominations or
Designation
Rate
Amount
Percentage Interest
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Class 1-A
(1)
$108,952,000.00 $
50,000.00
Class 2-A-1
(2)
$80,000,000.00 $
50,000.00
Class 2-A-2
(2)
$96,900,000.00 $
50,000.00
Class 2-A-3
(2)
$3,100,000.00 $
50,000.00
Class 2-A-4
(2)
$78,450,000.00 $
50,000.00
Class 2-A-5
(2)
$27,027,000.00 $
50,000.00
Class R-1
N/A
N/A
100%
Class R-2
N/A
N/A
100%
Class M-1
(3)
$4,274,000.00 $
50,000.00
Class M-2
(3)
$3,256,000.00 $
50,000.00
Class M-3
(3)
$2,238,000.00 $
50,000.00
Class B-1
(3)
$1,221,000.00 $
250,000.00
Class B-2
(3)
$203,000.00 $
250,000.00
Class B-3
(3)
$1,427,448.96 $
250,000.00
</TABLE>
(1) The
Certificate Interest Rate with respect to any Distribution Date
(and the related Accrual Period) for the Class 1-A Certificates
will
accrue based upon the weighted average of the net mortgage rates on
the
Pool 1 Mortgage Loans as described in this prospectus
supplement.
(2) The
Certificate Interest Rate with respect to any Distribution Date
(and the related Accrual Period) for the Class 2-A-1, Class
2-A-2,
Class 2-A-3, Class 2-A-4 and Class 2-A-5 Certificates will accrue
based
upon the weighted average of the net mortgage rates on the Pool
2
Mortgage Loans as described in this prospectus supplement.
(3) The
Certificate Interest Rates with respect to any Distribution
Date
(and the related Accrual Period) for the Class M-1, Class M-2,
Class
M-3, Class B-1, Class B-2 and Class B-3 Certificates will be equal
to
the Subordinate Net WAC.
As of the Cut-off
Date, the Mortgage Loans had an aggregate Scheduled
Principal Balance of $407,048,448.47.
In consideration of the mutual agreements herein contained, the
Depositor, the Servicer and the Trustee
hereby agree as follows:
<PAGE>
ARTICLE I.
DEFINITIONS
Section 1.01. DEFINITIONS.
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.
ACCOUNTANT: A Person engaged in the practice of accounting who
(except
when this Agreement provides that an
Accountant must be Independent) may be
employed by or affiliated with the
Depositor or an Affiliate of the Depositor.
ACCRUAL PERIOD: With respect to each Distribution Date, for each
Class
of Certificates, the calendar month
preceding the month in which such
Distribution Date occurs. Interest shall
accrue on all Classes of Certificates
on the basis of a 360-day year consisting
of twelve 30-day months.
ACT: The Securities
Act of 1933, as amended.
ADDITIONAL COLLATERAL: With respect to any Additional
Collateral
Mortgage Loan, the meaning assigned thereto
in the Mortgage Loan Purchase
Agreement.
ADDITIONAL COLLATERAL MORTGAGE LOAN: Each Mortgage Loan identified
as
such in the Mortgage Loan Schedule.
ADJUSTMENT DATE: As to any Mortgage Loan, the date on which the
related
Mortgage Rate adjusts in accordance with
the terms of the related Mortgage Note.
ADVERSE REMIC EVENT:
As defined in Section 10.01(f) hereof.
AFFILIATE: With respect to any specified Person, any other
Person
controlling or controlled by or under
common control with such specified Person.
For the purposes of this definition,
"control" when used with respect to any
specified Person means the power to direct
the management and policies of such
Person, directly or indirectly, whether
through the ownership of voting
securities, by contract or otherwise; and
the terms "controlling" and
"controlled" have meanings correlative to
the foregoing.
AGGREGATE SENIOR PERCENTAGE: As to any Distribution Date, the
percentage equivalent of a fraction, the
numerator of which is the aggregate of
the Class Principal Amounts of the Class
1-A, Class 2-A-1, Class 2-A-2, Class
2-A-3, Class 2-A-4 and Class 2-A-5
Certificates and the denominator of which is
the Aggregate Stated Principal Balance, but
in no event greater than 100%.
AGGREGATE STATED PRINCIPAL BALANCE: As to any Distribution Date,
the
aggregate of the Stated Principal Balances
for all Mortgage Loans (and when such
term is used with respect to a particular
Mortgage Pool, the aggregate of the
Stated Principal Balances of the Mortgage
Loans in such Mortgage Pool) which
were outstanding on the Due Date in the
month preceding the month of such
Distribution Date.
AGGREGATE SUBORDINATE PERCENTAGE: As to any Distribution Date,
the
difference between 100% and the Aggregate
Senior Percentage for such
Distribution Date, but in no event less
than zero.
AGGREGATE VOTING INTERESTS: The aggregate of the Voting Interests
of
all the Certificates under this
Agreement.
AGREEMENT: This Pooling and Servicing Agreement and all amendments
and
supplements hereto.
ALLOCABLE SHARE: With respect to each Class of Subordinate
Certificates
and any Distribution Date, the percentage
equivalent of a fraction, the
numerator of which is the Class Principal
Amount of such Class and the
denominator of which is the aggregate of
the Class Principal Amounts of each
Class of Subordinate Certificates.
ANCILLARY FEES: With respect to any Mortgage Loan, (i) all late
charges, (ii) all fees payable pursuant to
PHH's "Speed Pay" program, (iii) all
returned-item charges (e.g. insufficient
funds charges) and (iv) modification or
conversion fees.
APPLICABLE CREDIT SUPPORT PERCENTAGE: As to any Class of
Subordinate
Certificates and any Distribution Date, the
sum of the Class Subordination
Percentages of such Class and the aggregate
Class Subordination Percentage of
all other Classes of Subordinate
Certificates having higher numerical Class
designations than such Class.
APPORTIONED
PRINCIPAL BALANCE: As to any Distribution Date and each
Class of Subordinate Certificates and any
Mortgage Pool, the Class Principal
Amount thereof multiplied by a fraction,
the numerator of which is the
applicable Pool Subordinate Amount (i.e.,
the Pool 1 Subordinate Amount or the
Pool 2 Subordinate Amount, as the case may
require), and the denominator of
which is the sum of such Pool Subordinate
Amounts on such date.
APPRAISED VALUE: With respect to any Mortgage Loan, the Appraised
Value
of the related Mortgaged Property shall be:
(i) with respect to a Mortgage Loan
other than a Refinancing Mortgage Loan, the
lesser of (a) the value of the
Mortgaged Property based upon the appraisal
made at the time of the origination
of such Mortgage Loan and (b) the sales
price of the Mortgaged Property at the
time of the origination of such Mortgage
Loan; and (ii) with respect to a
Refinancing Mortgage Loan, the value of the
Mortgaged Property based upon the
appraisal made at the time of the
origination of such Refinancing Mortgage Loan.
ASSIGNMENT OF MORTGAGE: An assignment of the Mortgage, notice
of
transfer or equivalent instrument, in
recordable form, sufficient under the laws
of the jurisdiction wherein the related
Mortgaged Property is located to reflect
the sale of the Mortgage to the Trustee,
which assignment, notice of transfer or
equivalent instrument may be in the form of
one or more blanket assignments
covering the Mortgage Loans secured by
Mortgaged Properties located in the same
jurisdiction, if permitted by law;
provided, however, that the Trustee shall not
be responsible for determining whether any
such assignment is in recordable
form.
AUTHENTICATING AGENT: The Trustee or any authenticating agent
appointed
by the Trustee pursuant to Section 6.10
until any successor authenticating agent
for the Certificates is named, and
thereafter "Authenticating Agent" shall mean
any such successor.
AUTHORIZED OFFICER: Any Person who may execute an Officer's
Certificate
on behalf of the Depositor.
AVAILABLE DISTRIBUTION AMOUNT: With respect to any Distribution
Date
and each Mortgage Pool, the total amount of
all cash received by the Trustee on
the Mortgage Loans in such Mortgage Pool
from the Servicer or otherwise through
the Distribution Account Deposit Date for
deposit into the Distribution Account
in respect of such Distribution Date,
including (1) all scheduled installments
of interest (net of the Servicing Fee) and
principal collected on the related
Mortgage Loans and due during the Due
Period related to such Distribution Date,
together with any Monthly Advances in
respect thereof, (2) all Insurance
Proceeds, Liquidation Proceeds, Subsequent
Recoveries and the proceeds of any
Additional Collateral from the related
Mortgage Loans, in each case for such
Distribution Date, (3) all partial or full
Principal Prepayments, together with
any accrued interest thereon, identified as
having been received from the
related Mortgage Loans during the related
Prepayment Period, (4) any amounts
received from the Servicer in respect of
Prepayment Interest Shortfalls with
respect to the related Mortgage Loans; and
(5) the aggregate Purchase Price of
all Defective Mortgage Loans in such
Mortgage Pool purchased from the Trust Fund
during the related Prepayment Period,
minus:
(A) all related fees, charges and amounts payable or reimbursable
to
the Trustee under this Agreement, to the
extent that, if paid by the Trust Fund,
such fees, charges or other amounts would
constitute "unanticipated expenses"
(within the meaning of Treasury Regulations
Section 1.860G-1(b)(3)(ii)) of any
of the REMICs provided for herein and up to
an aggregate maximum amount equal to
$300,000 annually; provided, such annual
aggregate maximum amount shall exclude
(i) any Servicing Transfer Costs, or
amounts reimbursable to the Servicer under
this Agreement and (ii) any costs, damages
or expenses incurred by the Trustee
in connection with any "high cost" home
loans or any predatory or abusive
lending laws, which amounts shall in no
case be subject to any such limitation;
(B) in the case of (2), (3), (4) and (5) above, any related
unreimbursed expenses incurred by the
Servicer in connection with a liquidation
or foreclosure and any unreimbursed Monthly
Advances due to the Servicer (or,
pursuant to Section 5.04, the Trustee);
(C) any related unreimbursed nonrecoverable Monthly Advances due to
the
Servicer (or, pursuant to Section 5.04, the
Trustee); and
(D) in the case of (1) through (4) above, any related amounts
collected
which are determined to be attributable to
a subsequent Due Period or Prepayment
Period.
BANKRUPTCY: As to any Person, the making of an assignment for
the
benefit of creditors, the filing of a
voluntary petition in bankruptcy,
adjudication as a bankrupt or insolvent,
the entry of an order for relief in a
bankruptcy or insolvency proceeding, the
seeking of reorganization, arrangement,
composition, readjustment, liquidation,
dissolution or similar relief, or
seeking, consenting to or acquiescing in
the appointment of a trustee, receiver
or liquidator, dissolution, or termination,
as the case may be, of such Person
pursuant to the provisions of either the
Bankruptcy Code or any other similar
state laws.
BANKRUPTCY CODE: The United States Bankruptcy Code of 1986, as
amended.
BBA: The British
Banker's Association.
BOOK-ENTRY CERTIFICATES: Beneficial interests in Certificates
designated as "Book-Entry Certificates" in
this Agreement, ownership and
transfers of which shall be evidenced or
made through book entries by a Clearing
Agency as described in Section 3.09;
provided, that after the occurrence of a
Book-Entry Termination whereupon book-entry
registration and transfer are no
longer permitted and Definitive
Certificates are to be issued to Certificate
Owners, such Book-Entry Certificates shall
no longer be "Book-Entry
Certificates." As of the Closing Date, the
following Classes of Certificates
constitute Book-Entry Certificates: Class
1-A, Class 2-A-1, Class 2-A-2, Class
2-A-3, Class 2-A-4, Class 2-A-5, Class M-1,
Class M-2, Class M-3, Class B-1,
Class B-2 and Class B-3 Certificates.
BOOK-ENTRY TERMINATION: The occurrence of any of the following
events:
(i) the Clearing Agency is no longer
willing or able to properly discharge its
responsibilities with respect to the Book
Entry Certificates, and the Depositor
is unable to locate a qualified successor;
or (ii) the Depositor at its option
advises the Trustee and the Certificate
Registrar in writing that it elects to
terminate the book-entry system through the
Clearing Agency.
BUSINESS DAY: Any day other than (i) a Saturday or a Sunday or (ii)
a
day on which banking institutions in New
York, New York or, if other than New
York, any city in which the Corporate Trust
Office of the Trustee is located, or
the States of Maryland or Minnesota, are
authorized or obligated by law or
executive order to be closed.
CERTIFICATE: Any one of the certificates signed by the Trustee
and
authenticated by the Authenticating Agent
in substantially the forms attached
hereto as Exhibit A.
CERTIFICATE GROUP: Each of the Group 1 Certificates and the Group
2
Certificates.
CERTIFICATE INTEREST RATE: With respect to each Class of
Certificates
and any Distribution Date, the applicable
per annum rate described in the
Preliminary Statement hereto.
CERTIFICATE OWNER: With respect to a Book-Entry Certificate, the
Person
who is the owner of such Book-Entry
Certificate, as reflected on the books of
the Clearing Agency, or on the books of a
Person maintaining an account with
such Clearing Agency (directly or as an
indirect participant, in accordance with
the rules of such Clearing Agency).
CERTIFICATE PRINCIPAL AMOUNT: With respect to any Certificate, at
the
time of determination, the maximum
specified dollar amount of principal to which
the Holder thereof is then entitled
hereunder, such amount being equal to the
initial principal amount set forth on the
face of such Certificate, less (i) the
amount of all principal distributions
previously made with respect to such
Certificate; (ii) all Realized Losses
allocated to such Certificate; and (iii)
in the case of a Subordinate Certificate,
any Subordinate Certificate Writedown
Amount allocated to such Certificates.
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 Amount of any Class of
Certificates then outstanding for which any
Realized Loss or any Subordinate
Certificate Writedown Amount has been
applied will be increased, in order of
seniority, by an amount equal to the lesser
of (i) the amount such Class of
Certificates has been written down in
respect of Realized Losses or Subordinate
Certificate Writedown Amounts, to the
extent not previously offset by increases
in Certificate Principal Amount pursuant to
this sentence and (ii) the total of
any Subsequent Recovery distributed on such
date to the Certificateholders
(reduced (x) by the amount of the increase
in the Certificate Principal Amount
of any more senior Class of Certificates
pursuant to this sentence on such
Distribution Date and (y) to reflect a
proportionate amount of the increase in
the Certificate Principal Amount of any
pari passu Class of Certificates on such
Distribution Date pursuant to this
sentence). For purposes of Article V hereof,
unless specifically provided to the
contrary, Certificate Principal Amounts
shall be determined as of the close of
business of the immediately preceding
Distribution Date, after giving effect to
all distributions made on such date.
CERTIFICATE REGISTER AND CERTIFICATE REGISTRAR: The register
maintained
and the registrar appointed pursuant to
Section 3.02.
CERTIFICATEHOLDER: The
meaning provided in the definition of "Holder."
CIVIL RELIEF ACT: The
Servicemembers Civil Relief Act as amended.
CLASS: Collectively, Certificates which have the same priority
of
payment and bear the same class designation
and the form of which is identical
except for variation in the Percentage
Interest evidenced thereby.
CLASS 1-A CERTIFICATES: Any of the Class 1-A
Certificates.
CLASS 2-A CERTIFICATES: Any of the Class 2-A-1, Class 2-A-2,
Class
2-A-3, Class 2-A-4 or Class 2-A-5
Certificates.
CLASS R CERTIFICATES: The Class R-1 Certificate and Class R-2
Certificates executed by the Trustee, and
authenticated and delivered by the
Authenticating Agent, substantially in the
form annexed hereto as Exhibit A.
CLASS PRINCIPAL AMOUNT: With respect to each Class of Certificates,
the
aggregate of the Certificate Principal
Amounts of all Certificates of such Class
at the date of determination.
CLASS SUBORDINATION PERCENTAGE: With respect to each Class of
Subordinate Certificates, for each
Distribution Date, the percentage obtained by
dividing the Class Principal Amount of such
Class immediately prior to such
Distribution Date by the sum of the Class
Principal Amounts of all Classes of
Certificates immediately prior to such
Distribution Date.
CLEARING AGENCY: An organization registered as a "clearing
agency"
pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. As
of the Closing Date, the Clearing Agency
shall be The Depository Trust Company.
CLEARING AGENCY PARTICIPANT: A broker, dealer, bank, other
financial
institution or other Person for whom from
time to time a Clearing Agency effects
book-entry transfers and pledges of
securities deposited with the Clearing
Agency.
CLOSING DATE: April
29, 2005.
CODE: The Internal Revenue Code of 1986, as amended, and as it may
be
further amended from time to time, any
successor statutes thereto, and
applicable U.S. Department of Treasury
regulations issued pursuant thereto in
temporary or final form.
COMPENSATING INTEREST PAYMENT: As to any Distribution Date, the
lesser
of (1) the Servicing Fee for such date and
(2) any Prepayment Interest Shortfall
for such date.
COOPERATIVE CORPORATION: The entity that holds title (fee or an
acceptable leasehold estate) to the real
property and improvements constituting
the Cooperative Property and which governs
the Cooperative Property, which
Cooperative Corporation must qualify as a
Cooperative Housing Corporation under
Section 216 of the Code.
COOPERATIVE LOAN: Any Mortgage Loan secured by Cooperative Shares
and a
Proprietary Lease.
COOPERATIVE PROPERTY: The real property and improvements owned by
the
Cooperative Corporation, that includes the
allocation of individual dwelling
units to the holders of the shares of the
Cooperative Corporation.
COOPERATIVE SHARES:
Shares issued by a Cooperative Corporation.
CORPORATE TRUST OFFICE: With respect to the presentment of
Certificates
for registration of transfer, exchange or
final payment, Wells Fargo Bank, N.A.,
Sixth Street and Marquette Avenue,
Minneapolis, Minnesota 55479, Attention:
Corporate Trust Services - MLMI Series MLCC
2005-1 and for all other purposes,
Wells Fargo Bank, N.A., 9062 Old Annapolis
Road, Columbia, Maryland 21045,
Attention: Corporate Trust Services - MLMI
Series MLCC 2005-1, or such other
address as the Trustee may designate from
time to time by notice to the
Certificateholders.
CREDIT SUPPORT DEPLETION DATE: The first Distribution Date, if any,
on
which the aggregate Certificate Principal
Amounts of the Subordinate
Certificates have been reduced to zero.
CURRENT INTEREST: With respect to each Class of Certificates on
each
Distribution Date, the aggregate amount of
interest accrued at the applicable
Certificate Interest Rate during the
related Accrual Period on the Class
Principal Amount of such Class.
CUSTODIAL ACCOUNT: The separate trust account or accounts created
and
maintained by the Servicer pursuant to the
Fannie Mae Servicing Guide which
shall be entitled "Wells Fargo Bank, N.A.,
in trust for the registered holders
for Merrill Lynch Mortgage Investors Trust
Series MLCC 2005-1 Mortgage
Pass-Through Certificates." The Custodial
Account shall be an Eligible Account.
CUT-OFF DATE: April 1,
2005.
CUT-OFF DATE BALANCE: With respect to the Mortgage Loans in the
Trust
Fund on the Closing Date, the Aggregate
Stated Principal Balance as of the
Cut-off Date.
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a
reduction
by a court of competent jurisdiction in a
proceeding under the Bankruptcy Code
in the Scheduled Payment for such Mortgage
Loan which became final and
non-appealable, except such a reduction
resulting from a Deficient Valuation or
any reduction that results in a permanent
forgiveness of principal.
DEFECTIVE MORTGAGE LOAN: The meaning specified in Section
2.04(a).
DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation
of
the related Mortgaged Property by a court
of competent jurisdiction in an amount
less than the then outstanding indebtedness
under the Mortgage Loan, or any
reduction in the amount of principal to be
paid in connection with any Scheduled
Payment that results in a permanent
forgiveness of principal, which valuation or
reduction results from an order of such
court which is final and non-appealable
in a proceeding under the Bankruptcy
Code.
DEFINITIVE CERTIFICATE: A Certificate of any Class issued in
definitive, fully registered, certificated
form.
DELETED MORTGAGE LOAN:
As defined in Section 2.04(a).
DELINQUENT: Any Mortgage Loan with respect to which the
Scheduled
Payment due on a Due Date is not
received.
DEPOSITOR: Merrill Lynch Mortgage Investors, Inc., a Delaware
corporation, having its principal place of
business at 250 Vesey Street, 4 World
Financial Center, 10th Floor, New York, New
York 10080, or its successors in
interest.
DETERMINATION DATE: With respect to each Distribution Date, the
15th
day of the month in which such Distribution
Date occurs, or, if such 15th day is
not a Business Day, the next succeeding
Business Day.
DISQUALIFIED ORGANIZATION: A "disqualified organization" as defined
in
Section 860E(e)(5) of the Code.
DISTRIBUTION ACCOUNT: The separate Eligible Account created and
maintained by the Trustee pursuant to
Section 4.01 in the name of the Trustee
for the benefit of the Certificateholders
and designated "Wells Fargo Bank,
N.A., in trust for registered holders of
Merrill Lynch Mortgage Investors Trust
Series MLCC 2005-1, Mortgage Pass-Through
Certificates." Funds in the
Distribution Account (exclusive of any
earnings on investments made with funds
deposited in the Distribution Account)
shall be held in trust for the Trustee
and the Certificateholders for the uses and
purposes set forth in this
Agreement.
DISTRIBUTION ACCOUNT DEPOSIT DATE: The 18th day of each calendar
month
after the initial issuance of the
Certificates or, if such 18th day is not a
Business Day, the immediately preceding
Business Day, commencing in May 2005.
DISTRIBUTION DATE: The 25th day of each month or, if such 25th day
is
not a Business Day, the next succeeding
Business Day, commencing in May 2005.
DUE DATE: With respect to any Mortgage Loan, the date on which
a
Scheduled Payment is due under the related
Mortgage Note as indicated in the
Mortgage Note, which is the first day of
the calendar month.
DUE PERIOD: As to any Distribution Date, the period beginning on
the
second day of the month preceding the month
of such Distribution Date, and
ending on the first day of the month of
such Distribution Date.
EDP: The electronic data processing system used by the Seller and
the
Servicer, which are licensees of ALLTEL
Information Services, Inc.
EFFECTIVE LOAN-TO-VALUE RATIO: A fraction, expressed as a
percentage,
the numerator of which is the original
Stated Principal Balance of the Mortgage
Loan, less the amount of Additional
Collateral required to secure such Mortgage
Loan at the time of origination, if any,
and the denominator of which is the
Appraised Value of the related Mortgage
Property at such date, or in the case of
a Mortgage Loan financing the acquisition
of the Mortgaged Property, the sales
price of the Mortgaged Property if such
sales price is less than such Appraised
Value.
ELIGIBLE ACCOUNT: Any of (i) an account or accounts maintained with
a
federal or state chartered depository
institution or trust company the
short-term unsecured debt obligations of
which (or, in the case of a depository
institution or trust company that is the
principal subsidiary of a holding
company, the debt obligations of such
holding company) have the highest
short-term ratings of each Rating Agency at
the time any amounts are held on
deposit therein, or (ii) an account or
accounts in a depository institution or
trust company in which such accounts are
insured by the FDIC or the SAIF (to the
limits established by the FDIC or the SAIF)
and the uninsured deposits in which
accounts are otherwise secured such that,
as evidenced by an Opinion of Counsel
delivered to the Trustee and to each Rating
Agency, the Certificateholders have
a claim with respect to the funds in such
account or a perfected first priority
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 or trust company in which
such account is maintained, or (iii) a
trust account or accounts maintained with
the trust department of a federal or state
chartered depository institution or
trust company, acting in its fiduciary
capacity or (iv) any other account
acceptable to each Rating Agency. Eligible
Accounts may bear interest, and may
include, if otherwise qualified under this
definition, accounts maintained with
the Trustee, any Paying Agent, or the
Servicer.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended,
and as it may be further amended from time
to time, any successor statutes
thereto, and applicable U.S. Department of
Labor regulations issued pursuant
thereto in temporary or final form.
ERISA-QUALIFYING UNDERWRITING: A best efforts or firm
commitment
underwriting or private placement that
meets the requirements of an
Underwriter's Exemption.
ERISA-RESTRICTED CERTIFICATES: The Class B-1, Class B-2, Class
B-3,
Class R-1 or Class R-2 Certificates.
ESCROW ACCOUNT: The separate trust account or accounts created
and
maintained by the Servicer pursuant to the
Fannie Mae Servicing Guide which
shall be entitled "Wells Fargo Bank, N.A.,
in trust for the registered holders
for Merrill Lynch Mortgage Investors Trust
Series MLCC 2005-1 Mortgage
Pass-Through Certificates." The Escrow
Account shall be an Eligible Account.
EVENT OF DEFAULT: As
defined in Section 6.14.
FANNIE MAE: The entity formerly known as the Federal National
Mortgage
Association, 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.
FHA: The Federal
Housing Administration or any successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, 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.
FINAL CERTIFICATION: As referred to in Section 2.02(c), the form
of
which is set forth at Exhibit L.
FITCH RATINGS: Fitch,
Inc., or any successor in interest.
GNMA: The Government National Mortgage Association, or any
successor
thereto.
GLOBAL SECURITIES: The global certificates representing the
Book-Entry
Certificates.
GROUP 1: All of the
Group 1 Certificates.
GROUP 1 CERTIFICATE:
Any Class 1-A Certificate.
GROUP 2: All of the
Group 2 Certificates.
GROUP 2 CERTIFICATE: Any Class 2-A-1, Class 2-A-2, Class 2-A-3,
Class
2-A-4 or Class 2-A-5 Certificate.
HOLDER OR CERTIFICATEHOLDER: The registered owner of any
Certificate as
recorded on the books of the Certificate
Registrar except that, solely for the
purposes of taking any action or giving any
consent pursuant to this Agreement,
any Certificate registered in the name of
the Depositor, the Trustee or the
Servicer, or any Affiliate thereof shall be
deemed not to be outstanding in
determining whether the requisite
percentage necessary to effect any such
consent has been obtained, except that, in
determining whether the Trustee shall
be protected in relying upon any such
consent, only Certificates which a
Responsible Officer of the Trustee knows to
be so owned shall be disregarded.
The Trustee may request and conclusively
rely on certifications by the Depositor
and the Servicer in determining whether any
Certificates are registered to an
Affiliate of the Depositor or the
Servicer.
HUD: The United States Department of Housing and Urban Development,
or
any successor thereto.
INDEMNIFIED PARTIES:
As defined in Section 9.15.
INDEPENDENT: When used with respect to any Accountants, a Person
who is
"independent" within the meaning of Rule
2-01(b) of the Securities and Exchange
Commission's Regulation S-X. When used with
respect to any other Person, a
Person who (a) is in fact independent of
another specified Person and any
Affiliate of such other Person, (b) does
not have any material direct financial
interest in such other Person or any
Affiliate of such other Person, and (c) is
not connected with such other Person or any
Affiliate of such other Person as an
officer, employee, promoter, underwriter,
trustee, partner, director or Person
performing similar functions.
INDEX: As to each Mortgage Loan, the index from time to time in
effect
for adjustment of the Mortgage Rate as set
forth as such on the related Mortgage
Note.
INITIAL CERTIFICATION: As referred to in Section 2.02(a), the form
of
which is set forth at Exhibit K.
INITIAL OPTIONAL PURCHASE DATE: The first Distribution Date
following
the date on which the Aggregate Stated
Principal Balance is less than 10.00% of
the Cut-off Date Balance.
INSURANCE POLICY: With respect to any Mortgage Loan, any
insurance
policy, including all names and
endorsements thereto in effect, including any
replacement policy or policies for any
Insurance Policies.
INSURANCE PROCEEDS: Proceeds paid by any Insurance Policy
(excluding
proceeds required to be applied to the
restoration and repair of the related
Mortgaged Property or released to the
Mortgagor), in each case other than any
amount included in such Insurance Proceeds
in respect of Insured Expenses and
the proceeds from any Limited Purpose
Surety Bond.
INSURED EXPENSES: Expenses covered by an Insurance Policy or any
other
insurance policy with respect to the
Mortgage Loans.
INTEREST DISTRIBUTION AMOUNT: For each Class of Certificates, on
any
Distribution Date, the Current Interest for
such Class, as reduced by such
Class's share of Net Interest Shortfalls
and Relief Act Reductions.
INTEREST SHORTFALL: As to any Class of Certificates and any
Distribution Date, (i) the amount by which
the Interest Distribution Amount for
such Class on such Distribution Date and
all prior Distribution Dates exceeds
(ii) amounts distributed in respect thereof
to such Class on prior Distribution
Dates (as determined without reduction for
amounts not paid to such Class as a
result of the provisos set forth in
Sections 5.02(a)(i) and 5.02(b) hereof).
INTEREST TRANSFER AMOUNT: For any Distribution Date and for any
Undercollateralized Group, an amount equal
to one month's interest on the
applicable Principal Transfer Amount at the
related Mortgage Pool's Net WAC,
plus any shortfall of interest on the
Senior Certificates related to such
Undercollateralized Group remaining unpaid
from prior Distribution Dates.
INTERVENING ASSIGNMENTS: The original intervening assignments of
the
Mortgage, notices of transfer or equivalent
instrument.
IRS: As defined in Section 4.02.
LATEST POSSIBLE MATURITY DATE: The Distribution Date in May
2035.
LIMITED PURPOSE SURETY BOND: Any Limited Purpose Surety Bond listed
in
Exhibit F.
LIQUIDATED MORTGAGE LOAN: With respect to any Distribution Date,
a
defaulted Mortgage Loan (including any REO
Property) which was liquidated in the
calendar month preceding the month of such
Distribution Date and as to which the
Servicer has certified (in accordance with
this Agreement) that it has received
all amounts it expects to receive in
connection with the liquidation of such
Mortgage Loan including the final
disposition of an REO Property.
LIQUIDATION PROCEEDS: Amounts, including Insurance Proceeds,
received
in connection with the partial or complete
liquidation of defaulted Mortgage
Loans, whether through trustee's sale,
foreclosure sale 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.
LOAN-TO-VALUE RATIO: With respect to any Mortgage Loan and as to
any
date of determination, the fraction
(expressed as a percentage) the numerator of
which is the principal balance of the
related Mortgage Loan at such date of
determination and the denominator of which
is (a) in the case of a purchase, the
lesser of the selling price of the
Mortgaged Property and its Appraised Value
determined in an appraisal obtained by the
originator at origination of such
Mortgage Loan, or (b) in the case of a
refinance, the Appraised Value of the
Mortgaged Property at the time of such
refinance.
LOSS: With respect to any indemnification arising under Section
9.15 of
this Agreement, any and all losses, claims,
damages, penalties, liabilities,
obligations, judgments, settlements,
awards, demands, offsets, defenses,
counterclaims, actions or proceedings,
reasonable out-of-pocket costs, expenses
and attorneys' fees of an Indemnified Party
(including but not limited to, (a)
any reasonable costs, expenses and
attorneys' fees incurred by such Indemnified
Party in enforcing such right of
indemnification against any indemnifying party
or with respect to any appeal, and (b)
interest on any amount for which an
Indemnified Party is entitled to be
indemnified from the date such Indemnified
Party notifies the Servicer of the
expenditure or such amounts until such
amounts are paid by the Servicer; provided,
however, that in no event shall a
"Loss" include a claim for consequential
damages, indirect damages or lost
profits except when the Loss results from
the gross negligence, fraud or willful
misconduct of the Servicer.
MATERIAL DEFECT: As
defined in Section 2.02(b).
MAXIMUM RATE: As to any Mortgage Loan, the maximum rate set forth
on
the related Mortgage Note at which interest
can accrue on such Mortgage Loan.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation
organized and existing under the laws of
the State of Delaware or any successor
thereto.
MERS MORTGAGE LOAN: Any Mortgage Loan registered with MERS on the
MERS
System.
MERS SYSTEM: The system of recording transfers of mortgages
electronically maintained by MERS.
MOODY'S: Moody's Investors Service, Inc., or any successor in
interest.
MONTHLY ADVANCE: With respect to a Mortgage Loan, the payments
required
to be made by the Trustee solely in its
capacity as successor servicer or by the
Servicer with respect to any Distribution
Date pursuant to this Agreement, the
amount of any such payment being equal to
the aggregate of the payments of
principal and interest (net of the
applicable Servicing Fee and net of any net
income in the case of any REO Property) on
the Mortgage Loans that were due on
the related Due Date and not received as of
the close of business on the related
Determination Date, less the aggregate
amount of any such delinquent payment
that either the Trustee or the Servicer has
determined would constitute
Nonrecoverable Advances if advanced.
MONTHLY STATEMENT: The statement delivered to the
Certificateholders
pursuant to Section 4.02.
MORTGAGE: A mortgage, deed of trust or other instrument encumbering
a
fee simple interest in real property
securing a Mortgage Note, together with
improvements thereto.
MORTGAGE DOCUMENTS: With respect to each Mortgage Loan, the
mortgage
documents required to be delivered to the
Trustee pursuant to this Agreement.
MORTGAGE LOAN: A Mortgage and the related notes or other evidences
of
indebtedness secured by each such Mortgage
conveyed, transferred, sold, assigned
to or deposited with the Trustee pursuant
to Section 2.01 (including any
Replacement Mortgage Loan and REO
Property), including without limitation, each
Mortgage Loan listed on the Mortgage Loan
Schedule, as amended from time to
time.
MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase
Agreement,
dated as of April 1, 2005, between the
Seller and the Depositor with respect to
the sale and purchase of the Mortgage
Loans.
MORTGAGE LOAN SCHEDULE: The schedule attached hereto as Schedule
A,
which shall identify each Mortgage Loan, as
such schedule may be amended by the
Depositor or the Servicer from time to time
to reflect the addition of
Replacement Mortgage Loans to, or the
deletion of Deleted Mortgage Loans from,
the Trust Fund. Such schedule shall, among
other things (1) identify the
designated Mortgage Pool in which such
Mortgage Loan is included, (2) separately
identify Six-Month LIBOR Loans, One-Year
U.S. Treasury Loans and Additional
Collateral Mortgage Loans and (3) set forth
the following information with
respect to each Mortgage Loan:
(i) the loan number;
(ii) the Mortgagor's name;
(iii) the street address of the Mortgaged Property, including
city,
state and zip code, if available;
(iv) the Mortgage Interest Rate at origination and, in the case of
an
adjustable rate Mortgage Loan, the Mortgage
Interest Rate in effect as of the
related Cut-off Date, which rate may vary
from that reflected in the Mortgage
and Note;
(v) for each adjustable rate Mortgage Loan, the first Interest
Rate
Adjustment Date;
(vi) for each adjustable rate Mortgage Loan, the Margin;
(vii) for each adjustable rate Mortgage Loan, the Lifetime Rate
Cap, if
applicable;
(viii) for each adjustable rate Mortgage Loan, the Periodic Rate
Cap,
if applicable;
(ix) the original term to maturity and remaining term to
maturity;
(x) the original principal balance;
(xi) the first payment due date;
(xii) the maturity date;
(xiii) the monthly payment in effect as of the related Cut-off
Date;
(xiv) the principal balance as of the related Cut-off Date;
(xv) as to any First Mortgage Loan the Loan-to-Value Ratio at
origination;
(xvi) a code indicating whether the Mortgaged Property is occupied
by
the Mortgagor;
(xvii) a code indicating the type of Residential Dwelling;
(xviii) a code indicating the purpose of the Mortgage Loan;
(xix) a code indicating the Mortgage Loan documentation type
(i.e.
limited documentation, full documentation,
easy documentation, etc.); and
(xx) for each adjustable rate Mortgage Loan, a code indicating the
type
of Index.
MORTGAGE NOTE: The original executed note or other evidence of
the
indebtedness of a Mortgagor secured by a
Mortgage under a Mortgage Loan.
MORTGAGE POOLS: Any of
Pool 1 and Pool 2.
MORTGAGE RATE: As to any Mortgage Loan, the annual rate of
interest
borne by the related Mortgage Notes.
MORTGAGED PROPERTY: The underlying property, including any
Additional
Collateral, securing a Mortgage Loan which,
with respect to a Cooperative Loan,
is the related Cooperative Shares and
property lease.
MORTGAGOR: The obligor
on a Mortgage Note.
NET INTEREST SHORTFALLS: With respect to any Distribution Date, any
Net
Prepayment Interest Shortfalls for that
Distribution Date and the amount of
interest that would otherwise have been
received with respect to any Mortgage
Loan which was subject to (i) a Relief Act
Reduction or (ii) the interest
portion of any Debt Service Reduction or
Deficient Valuation, after exhaustion
of the respective amounts of coverage
provided by the Subordinate Certificates
for those type of losses.
NET LIQUIDATION PROCEEDS: With respect to any Liquidated Mortgage
Loan
or any other disposition of related
Mortgaged Property, the related Liquidation
Proceeds net of Monthly Advances, related
Servicing Fees and any other accrued
and unpaid fees received and retained in
connection with the liquidation of such
Mortgage Loan or Mortgaged Property.
NET MORTGAGE
RATE: With respect to any Mortgage Loan and any
Distribution Date, the related Mortgage
Rate as of the Due Date in the month
preceding the month of such Distribution
Date reduced by the Servicing Fee Rate
for such Mortgage Loan.
NET PREPAYMENT INTEREST SHORTFALL: With respect to any Mortgage
Loan
and any Distribution Date, the amount by
which any Prepayment Interest Shortfall
for the related Due Period exceeds the
amount payable by the Servicer in respect
of such shortfall.
NET WAC: As to any
Distribution Date, the weighted average of the Net
Mortgage Rates of the Mortgage Loans as of
the first day of the calendar month
immediately preceding the calendar month of
such Distribution Date, weighted on
the basis of their outstanding Stated
Principal Balances at such time. When the
term "Net WAC" is used herein with
reference to only the Six-Month LIBOR Loans
and One-Year U.S. Treasury Loans, such
weighted average shall be computed with
reference solely to the Mortgage Loans in
the relevant group.
NON-BOOK-ENTRY CERTIFICATE: Any Certificate other than a
Book-Entry
Certificate.
NON-PERMITTED FOREIGN HOLDER: As defined in Section 3.03(f).
NONRECOVERABLE ADVANCE: Any portion of a Monthly Advance
previously
made or proposed to be made by the Servicer
(as certified in an Officer's
Certificate of the Servicer) or by the
Trustee pursuant to Section 5.04, which
in the good faith judgment of such party,
shall not be ultimately recoverable by
such party from the related Mortgagor,
related Liquidation Proceeds or
otherwise.
NON-U.S. PERSON: Any person other than a "United States person"
within
the meaning of Section 7701(a)(30) of the
Code.
OFFERED CERTIFICATE: Any Senior Certificate or Offered
Subordinate
Certificate.
OFFERED SUBORDINATE CERTIFICATES: The Class M-l, Class M-2 and
Class
M-3 Certificates.
OFFERING DOCUMENT: The
Prospectus.
OFFICER'S CERTIFICATE: A certificate 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 (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) of the Depositor or the
Trustee, as the case may be, and
delivered to the Depositor or the Trustee,
as the case may be, as required by
this Agreement.
OFFICER'S CERTIFICATE OF THE SERVICER: A certificate (i) signed by
the
Chairman of the Board, the Vice Chairman of
the Board, the President, a Managing
Director, a Vice President (however
denominated), an Assistant Vice President,
the Treasurer, the Secretary, or one of the
Assistant Treasurers or Assistant
Secretaries of the Servicer, or (ii) if
provided for herein, signed by a
Servicing Officer, as the case may be, and
delivered to the Trustee or the
Depositor, as the case may be.
ONE-YEAR U.S. TREASURY LOAN: Each Mortgage Loan bearing a Mortgage
Rate
that adjusts in accordance with the U.S.
Treasury for one-year U.S. dollar
deposits.
OPINION OF COUNSEL: A written opinion of counsel, who may be an
employee of the Depositor or the Servicer,
that is reasonably acceptable to each
addressee of such opinion; provided that
any Opinion of Counsel relating to (a)
qualification of the Mortgage Loans in a
REMIC or (b) compliance with the REMIC
Provisions, must be an opinion of counsel
reasonably acceptable to each
addressee of such opinion, who (i) is in
fact independent of the Servicer and
the Depositor, (ii) does not have any
material direct or indirect financial
interest in the Servicer or the Depositor
or in an affiliate of either and (iii)
is not connected with the Servicer or the
Depositor as an officer, employee,
director or person performing similar
functions.
OPTIONAL TERMINATION PRICE: An amount equal to the sum of (i) 100%
of
the Stated Principal Balance of the
Mortgage Loans (other than any Mortgage Loan
that has become an REO Property) plus
accrued interest thereon at the applicable
Mortgage Rate through the Due Date in the
month in which the Optional
Termination Price is to be distributed to
the Certificateholders and the fair
market value of any REO Property plus
accrued interest thereon; (ii) any
unreimbursed costs and damages incurred by
the Trust Fund (or the Trustee on
behalf of the Trust Fund) in connection
with the violation of any anti-predatory
or anti-abusive lending laws; and (iii) the
payment of all amounts (including,
without limitation, all previously
unreimbursed Monthly Advances and accrued and
unpaid Servicing Fees) payable or
reimbursable to the Servicer or Trustee.
ORIGINAL APPLICABLE CREDIT SUPPORT PERCENTAGE: With respect to
each
Class of Subordinate Certificates, the
corresponding percentage set forth
opposite its Class designation: Class M-1 -
3.10%; Class M-2 - 2.05%; Class M-3
- 1.25%; Class B-1 - 0.70%; Class B-2 -
0.40%; and Class B-3 - 0.35%.
ORIGINAL SUBORDINATE CLASS PRINCIPAL AMOUNT: The aggregate
Class
Principal Amounts of the Subordinate
Certificates as of the Closing Date.
ORIGINATOR: Merrill
Lynch Credit Corporation.
OVERCOLLATERALIZED GROUP: On any Distribution Date, any
Certificate
Group which is not an Undercollateralized
Group.
PAYING AGENT: Any paying agent appointed by the Trustee pursuant
to
Section 3.08.
PERCENTAGE INTEREST: With respect to any Certificate (other than
a
Class R Certificate), a fraction, expressed
as a percentage, the numerator of
which is the initial Certificate Principal
Amount represented by such
Certificate and the denominator of which is
the initial Class Principal Amount
of the related Class. With respect to any
Class of Class R Certificates, the
portion of such Class evidenced thereby,
expressed as a percentage, as stated on
the face of such Certificate; provided,
however, that the sum of all such
percentages for each such Class totals
100%.
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 that 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, or such lower rating as shall not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by the Rating Agencies, as evidenced by a signed
writing delivered by each Rating Agency;
(iii) commercial or finance company paper which is
then receiving the highest commercial or finance company paper
rating of each Rating Agency rating such paper, or such lower
rating as shall not result in the downgrading or withdrawal of
the ratings then assigned to the Certificates by the Rating
Agencies, as evidenced by a signed writing delivered by each
Rating Agency;
(iv) certificates of deposit, demand or time
deposits, or bankers' acceptances 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 (or in the case of the principal
depository institution in a holding company system, the
commercial paper or long-term unsecured debt obligations of
such holding company, but only if Moody's is not the
applicable Rating Agency) are then rated one of the two
highest long-term and the highest short-term ratings of each
Rating Agency for such securities, or such lower ratings as
shall not
result in the downgrading or withdrawal of the
ratings then assigned to the Certificates by the Rating
Agencies, as evidenced by a signed writing delivered by each
Rating Agency;
(v) guaranteed reinvestment agreements issued by any
bank, insurance company or other corporation acceptable to the
Rating Agencies at the time of the issuance of such
agreements, as evidenced by a signed writing delivered by each
Rating Agency;
(vi) 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 (iv) above;
(vii) securities (other than stripped bonds, stripped
coupons or instruments sold at a purchase price in excess of
115% of the face amount thereof) bearing interest or sold at a
discount issued by any corporation incorporated under the laws
of the United States or any state thereof which, at the time
of such investment, have one of the two highest ratings of
each Rating Agency (except if the Rating Agency is Moody's,
such rating shall be the highest commercial paper rating of
Moody's for any such series), or such lower rating as shall
not result in the downgrading or withdrawal of the ratings
then assigned to the Certificates by the Rating Agencies, as
evidenced by a signed writing delivered by each Rating Agency;
(viii) interests in any money market fund 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 rating by each Rating Agency rating
such fund or such lower rating as shall not result in a change
in the rating then assigned to the Certificates by each Rating
Agency including funds for which the Trustee or any of its
Affiliates is investment manager or adviser;
(ix) short-term investment funds sponsored by any
trust company or
national banking association incorporated
under the laws of the United States or any state thereof which
on the date of acquisition has been rated by each applicable
Rating Agency in their respective highest applicable rating
category or such lower rating as shall not result in a change
in the rating then specified stated maturity and bearing
interest or sold at a discount acceptable to each Rating
Agency as shall not result in the downgrading or withdrawal of
the ratings then assigned to the Certificates by the Rating
Agencies; and
(x) such other investments having a specified stated
maturity and bearing interest or sold at a discount acceptable
to the Rating Agencies as shall not result in the downgrading
or withdrawal of the ratings then assigned to the Certificates
by the Rating Agencies;
provided, that no such instrument shall be a Permitted Investment
if
(i) such instrument evidences the right to
receive interest only payments with
respect to the obligations underlying such
instrument, (ii) such instrument
would require the Depositor to register as
an investment company under the
Investment Company Act of 1940, as amended,
or (iii) such instrument would not
be a "permitted investment" within the
meaning of such term as provided for in
Section 860G(a)(5) of the Code and the
Treasury Regulations thereunder.
PERSON: Any individual, corporation, partnership, joint
venture,
association, joint-stock company, limited
liability company, trust,
unincorporated organization or government
or any agency or political subdivision
thereof.
PHH: PHH means PHH Mortgage Corporation and its successors and
assigns.
POOL NET WAC: The Pool 1 Net WAC or Pool 2 Net WAC, as the context
may
require.
POOL 1: The aggregate of Mortgage Loans identified on the Mortgage
Loan
Schedule as being included in Pool 1.
POOL 1 MORTGAGE LOANS:
Any Mortgage Loan in Pool 1.
POOL 1 NET WAC: With respect to any Distribution Date, the
weighted
average of the Net Mortgage Rates of the
Pool 1 Mortgage Loans as of the first
day of the calendar month immediately
preceding the calendar month of such
Distribution Date, weighted on the basis of
their Stated Principal Balances at
such time.
POOL 1 SUBORDINATE AMOUNT: For any Distribution Date, the excess of
(a)
the Aggregate Stated Principal Balance of
the Pool 1 Mortgage Loans as of the
first day of the month preceding the month
in which such Distribution Date
occurs over (b) the Class Principal Amount
of the Class 1-A Certificates
immediately before such Distribution
Date.
POOL 2: The aggregate of Mortgage Loans identified on the Mortgage
Loan
Schedule as being included in Pool 2.
POOL 2 MORTGAGE LOANS:
Any Mortgage Loan in Pool 2.
POOL
2 NET WAC: With respect to any Distribution Date, the weighted
average of the Net Mortgage Rates of the
Pool 2 Mortgage Loans as of the first
day of the calendar month immediately
preceding the calendar month of such
Distribution Date, weighted on the basis of
their Stated Principal Balances at
such time.
POOL 2 SUBORDINATE AMOUNT: For any Distribution Date, the excess of
(a)
the Aggregate Stated Principal Balance of
the Pool 2 Mortgage Loans as of the
first day of the month preceding the month
in which such Distribution Date
occurs over (b) the Class Principal Amounts
of the Class 2-A-1, Class 2-A-2,
Class 2-A-3, Class 2-A-4 and Class 2-A-5
Certificates immediately before such
Distribution Date.
POOL PERCENTAGE: With respect to each Mortgage Pool and any
Distribution Date, a fraction, expressed as
a percentage, the numerator of which
is the Aggregate Stated Principal Balance
of such Mortgage Pool and the
denominator of which is the Aggregate
Stated Principal Balance as of such Due
Date.
POOL SUBORDINATE AMOUNT: Any of the Pool 1 Subordinate Amount or
the
Pool 2 Subordinate Amount.
PREPAYMENT INTEREST SHORTFALL: With respect to any full or
partial
Principal Prepayment of a Mortgage Loan,
the excess, if any, of (i) one full
month's interest at the applicable Mortgage
Rate on the outstanding principal
balance of such Mortgage Loan immediately
prior to such Principal Prepayment
over (ii) the amount of interest actually
received with respect to such Mortgage
Loan in connection with such Principal
Prepayment.
PREPAYMENT PERIOD: With respect to each Distribution Date, the
calendar
month immediately preceding the month in
which the Distribution Date occurs.
PRIMARY MORTGAGE INSURANCE POLICY: Each policy of primary
mortgage
guaranty insurance or any replacement
policy therefor with respect to any
Mortgage Loan.
PRINCIPAL PREPAYMENT: Any Mortgagor payment of principal or
other
recovery of principal on a Mortgage Loan
that is recognized as having been
received or recovered in advance of its
scheduled Due Date and applied to reduce
the principal balance of the Mortgage Loan
in accordance with the terms of the
Mortgage Note or this Agreement.
PRINCIPAL PREPAYMENT IN FULL: Any Principal Prepayment of the
entire
principal balance of the Mortgage
Loans.
PRINCIPAL TRANSFER AMOUNT: For any Distribution Date and for
any
Undercollateralized Group, the excess, if
any, of the aggregate Class Principal
Amount of such Undercollateralized Group
immediately prior to such Distribution
Date over the Aggregate Stated Principal
Balance of the Mortgage Loans in the
related Mortgage Pool immediately prior to
such Distribution Date.
PROCEEDING: Any suit in equity, action at law or other judicial
or
administrative proceeding.
PROPRIETARY LEASE: With respect to any Cooperative Property, a
lease or
occupancy agreement between a Cooperative
Corporation and a holder of related
Cooperative Shares.
PRO RATA SENIOR PERCENTAGE: With respect to each Distribution Date
and
each Mortgage Pool, the percentage
equivalent of a fraction the numerator of
which is the aggregate Class Principal
Amount of the senior class or classes of
the related Certificate Group immediately
prior to such Distribution Date and
the denominator of which is the Aggregate
Stated Principal Balance of the
Mortgage Loans in the related Mortgage Pool
for such Distribution Date.
PROSPECTUS: The prospectus supplement, dated April 27, 2005,
together
with the accompanying prospectus dated June
18, 2004, relating to the initial
sale of the Class 1-A, Class 2-A-1, Class
2-A-2, Class 2-A-3, Class 2-A-4, Class
2-A-5, Class M-1, Class M-2 and Class M-3
Certificates.
PURCHASE DATE: Any Distribution Date on which Certificates may
be
repurchased pursuant to Section
7.01(c).
PURCHASE PRICE: With respect to any Mortgage Loan required or
permitted
to be purchased by the Depositor pursuant
to this Agreement, by the Servicer
pursuant to this Agreement, or by the
Seller pursuant to the Mortgage Loan
Purchase Agreement, an amount equal to the
sum of (i) 100% of the unpaid
principal balance of the Mortgage Loan on
the date of such purchase, (ii)
accrued interest thereon at the applicable
Net Mortgage Rate from the date
through which interest was last paid by the
Mortgagor to the Due Date in the
month in which the Purchase Price is to be
distributed to Certificateholders and
(iii) any unreimbursed costs, penalties
and/or damages incurred by the Trust
Fund in connection with any violation
relating to such Mortgage Loan of any
predatory or abusive lending law.
RAPID PREPAYMENT CONDITIONS: As to any Distribution Date either of
the
following conditions: if (1) the Aggregate
Subordinate Percentage on such date
is less than 200% of the Aggregate
Subordinate Percentage on the Closing Date or
(2) the outstanding Stated Principal
Balance of the Mortgage Loans in any
Mortgage Pool delinquent 60 days or months,
as a percentage of such Mortgage
Pool's Pool Subordinate Amount, is greater
than or equal to 50%.
RATING AGENCY: Each of
Moody's and Fitch Ratings.
REALIZED LOSS: With respect to each Liquidated Mortgage Loan, an
amount
(not less than zero or more than the Stated
Principal Balance of the Mortgage
Loan) as of the date of such liquidation,
equal to (i) the Stated Principal
Balance of the Liquidated Mortgage Loan as
of the date of such liquidation, plus
(ii) interest at the Net Mortgage Rate from
the Due Date as to which interest
was last paid or advanced (and not
reimbursed) to Certificateholders up to the
Due Date in the month in which Liquidation
Proceeds are required to be
distributed on the Stated Principal Balance
of such Liquidated Mortgage Loan
from time to time, minus (iii) the Net
Liquidation Proceeds and the proceeds of
any Additional Collateral, if any, received
during the month in which such
liquidation occurred, to the extent applied
as recoveries of interest at the Net
Mortgage Rate and to principal of the
Liquidated Mortgage Loan. With respect to
each Mortgage Loan which has become the
subject of a Deficient Valuation, if the
principal amount due under the related
Mortgage Note has been reduced, the
difference between the principal balance of
the Mortgage Loan outstanding
immediately prior to such Deficient
Valuation and the principal balance of the
Mortgage Loan as reduced by the Deficient
Valuation.
RECORD DATE: With respect to each Distribution Date and each class
of
Offered Certificates, the close of business
on the last Business Day of the
month immediately preceding the month in
which the related Distribution Date
occurs.
REFINANCING MORTGAGE LOAN: Any Mortgage Loan originated in
connection
with the refinancing of an existing
mortgage loan.
RELATED CERTIFICATE GROUP: The Certificate Group related to a
particular Mortgage Pool as indicated by
the same numerical designation (i.e.,
Group 1 Certificates are related to Pool 1
and Group 2 Certificates are related
to Pool 2).
RELIEF ACT REDUCTIONS: With respect to any Distribution Date and
any
Mortgage Loan as to which there has been a
reduction in the amount of interest
collectible thereon for the most recently
ended calendar month as a result of
the application of the Civil Relief Act,
the amount, if any, by which (i)
interest collectible on such Mortgage Loan
for the most recently ended calendar
month is less than (ii) interest accrued
thereon for such month pursuant to the
Mortgage Note.
REMIC: A "real estate mortgage investment conduit" within the
meaning
of Section 860D of the Code.
REMIC 1: The segregated pool of assets, with respect to which a
REMIC
election is to be made, consisting of: (i)
each Mortgage Loan (exclusive of
payments of principal and interest due on
or before the Cut off Date, if any,
received by the Servicer which shall not
constitute an asset of the Trust Fund)
as from time to time are subject to this
Agreement and all payments under and
proceeds of such Mortgage Loans (exclusive
of any prepayment fees and late
payment charges received on the Mortgage
Loans), together with all documents
included in the related Trustee Mortgage
File, subject to Section 2.02; (ii) any
REO Property; (iii) the primary hazard
insurance policies, if any, the Primary
Mortgage Insurance Policies, if any, and
all other insurance policies with
respect to the Mortgage Loans; and (iv) the
Depositor's interest in respect of
the representations and warranties made by
the Seller in the Mortgage Loan
Purchase Agreement.
REMIC 1 PASS-THROUGH RATE: With respect to REMIC 1 Regular
Interests
1-A, 2-A and ZZZ, the weighted average of
the Net Mortgage Rates of the Mortgage
Loans, weighted on the basis of the
respective Stated Principal Balance of each
such Mortgage Loan as of the beginning of
the Due Period immediately preceding
the related Distribution Date. With respect
to REMIC 1 Regular Interest 1-B, the
weighted average of the Net Mortgage Rates
of the Pool 1 Mortgage Loans,
weighted on the basis of the respective
Stated Principal Balance of each such
Mortgage Loan as of the beginning of the
Due Period immediately preceding the
related Distribution Date. With respect to
REMIC 1 Regular Interest 2-B, the
weighted average of the Net Mortgage Rates
of the Pool 2 Mortgage Loans,
weighted on the basis of the respective
Stated Principal Balance of each such
Mortgage Loan as of the beginning of the
Due Period immediately preceding the
related Distribution Date
REMIC 1 REGULAR INTERESTS: Each uncertificated partial
undivided
beneficial ownership interest in REMIC 1 as
designated in the Preliminary
Statement having a principal balance equal
to its Uncertificated Principal
Balance, and which bears interest at a rate
equal to its REMIC 1 Pass Through
Rate.
REMIC 1 SUBORDINATED BALANCE RATIO: The ratio among the
Uncertificated
Principal Balances of each of the REMIC 1
Regular Interests ending with the
designation "A," equal to the ratio
among:
(1) the excess of (x) the aggregate Stated Principal Balance of
the
Pool 1 Mortgage Loans over (y) the Class
Principal Amount of the Class 1-A
Certificates; and
(2) the excess of (x) the aggregate Stated Principal Balance of
the
Pool 2 Mortgage Loans over (y) the Class
Principal Amount of the Class 2-A-1,
Class 2-A-2, Class 2-A-3, Class 2-A-4 and
Class 2-A-5 Certificates;
REMIC 2: The segregated pool of assets consisting of the REMIC
1
Regular Interests conveyed in trust to the
Trustee for the benefit of the
holders of the Class 1-A, Class 2-A-1,
Class 2-A-2, Class 2-A-3, Class 2-A-4,
Class 2-A-5, Class M-1, Class M-2, Class
M-3, Class B-1, Class B-2, Class B-3
and Class R-2 Certificates, with respect to
which a separate REMIC election is
to be made.
REMIC 2 CERTIFICATES: Any of the Class 1-A, Class 2-A-1, Class
2-A-2,
Class 2-A-3, Class 2-A-4, Class 2-A-5,
Class M-1, Class M-2, Class M-3, Class
B-1, Class B-2, Class B-3 and Class R-2
Certificates.
REMIC PROVISIONS: The 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 regulations, including proposed
regulations and rulings, and administrative
pronouncements promulgated thereunder, as
the foregoing may be in effect from
time to time.
REMIC 1: As described
in the Preliminary Statement.
REMIC 2: As described
in the Preliminary Statement.
REO DISPOSITION: The final sale by the Servicer of an REO
Property.
REO
PROPERTY: A Mortgaged Property acquired by the Trust Fund
through
foreclosure or deed-in-lieu of foreclosure
in connection with a defaulted
Mortgage Loan or otherwise treated as
having been acquired pursuant to the REMIC
Provisions.
REPLACEMENT MORTGAGE LOAN: A mortgage loan substituted by the
Seller
for a Deleted Mortgage Loan which must, on
the date of such substitution, as
confirmed in a Request for Release
substantially in the form attached to this
Agreement, (i) 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 more than 10% less than, the
Stated Principal Balance of the Deleted
Mortgage Loan; (ii) have a Maximum Rate not
less than (and not more than two
percentage points greater than) the Maximum
Rate of the Deleted Mortgage Loan;
(iii) have a gross margin not less than
that of the Deleted Mortgage Loan and,
if Mortgage Loans equal to 1% or more of
the balance of the related Mortgage
Pool as of the Cut-off Date have become
Deleted Mortgage Loans, not more than
two percentage points more than that of the
Deleted Mortgage Loan; (iv) have an
Effective Loan-to-Value Ratio no higher
than that of the Deleted Mortgage Loan;
(v) have Adjustment Dates that are no more
or less frequent than the Deleted
Mortgage Loan; (vi) have a remaining term
to maturity no greater than (and not
more than one year less than that of) the
Deleted Mortgage Loan; (vii) not
permit conversion of the related Mortgage
Rate to a permanent fixed Mortgage
Rate; (viii) not be a Cooperative Loan
unless the Deleted Mortgage Loan was a
Cooperative Loan; (ix) have the same or
better FICO credit score; (x) have an
initial interest adjustment date no earlier
than five months before (and no
later than five months after) the initial
adjustment date of the Deleted
Mortgage Loan, (xi) comply with each
representation and warranty set forth in
Schedule B of this Agreement; and (xii)
shall be accompanied by an Opinion of
Counsel that such Replacement Mortgage Loan
would not adversely affect the REMIC
status of the Trust Estate or would not
otherwise be prohibited by this
Indenture.
REQUEST FOR RELEASE: A request for release, substantially in the
form
of Exhibit N attached hereto, properly
completed and signed by a Servicing
Officer (or, if delivered on behalf of the
Seller or Depositor, an Authorized
Officer thereof).
RESIDUAL CERTIFICATES: The Class R-1 Certificates and the Class
R-2
Certificates.
RESPA: The Real Estate Settlement Procedures Act, 12 U.S.C ss. 2601
et
seq., and Regulation X, 24 C.F.R. ss.
3500.21, thereunder, as the foregoing may
be amended from time to time.
RESPONSIBLE OFFICER: With respect to the Trustee, any officer in
the
corporate trust department or similar group
of the Trustee with direct
responsibility for the administration of
this Agreement and also, with respect
to a particular corporate trust matter, any
other officer to whom such matter is
referred because of his or her knowledge of
and familiarity with the particular
subject.
RESTRICTED CERTIFICATE: Any Class B-1, Class B-2 or Class B-3
Certificate.
RESTRICTED GLOBAL SECURITY: As defined in Section 3.01(c).
S&P: Standard & Poor's, a division of The McGraw-Hill
Companies, Inc.,
or any successor in interest.
SAIF: The Saving's Association Insurance Fund, or any successor
thereto.
SCHEDULE OF EXCEPTIONS: As defined in Section 2.02(a) of this
Agreement.
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
which, unless otherwise specified in this
Agreement, shall give effect to any
related Debt Service Reduction and any
Deficient Valuation that affects the
amount of the monthly payment due 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).
SELLER: Merrill Lynch
Mortgage Lending, Inc., a Delaware corporation.
SENIOR CERTIFICATE: Any one of the Class 1-A, Class 2-A-1, Class
2-A-2,
Class 2-A-3, Class 2-A-4 or Class 2-A-5
Certificates.
SENIOR PERCENTAGE: With respect to each Mortgage Pool for any
Distribution Date, the related Pro Rata
Senior Percentage. With respect to any
Distribution Date after the related Senior
Termination Date, the related Senior
Percentage will be 0%.
SENIOR PREPAYMENT PERCENTAGE: With respect to any Distribution
Date,
during the ten years beginning on the first
Distribution Date, 100%. Except as
provided herein, the related Senior
Prepayment Percentage for each Mortgage Pool
and any Distribution Date occurring on or
after the fifth anniversary of the
first Distribution Date shall be as
follows: (i) from May 2010 through April
2011, the Senior Percentage plus 70% of the
Subordinate Percentage for that
Distribution Date; (ii) from May 2011
through April 2012, the Senior Percentage
plus 60% of the Subordinate Percentage for
that Distribution Date; (iii) from
May 2012 through April 2013, the Senior
Percentage plus 40% of the Subordinate
Percentage for that Distribution Date; (iv)
from May 2013 through April 2014,
the related Senior Percentage plus 20% of
the Subordinate Percentage for that
Distribution Date; and (v) from and after
May 2014, the Senior Percentage for
that Distribution Date; provided, however,
that there shall be no reduction in
the Senior Prepayment Percentage for a
Mortgage Pool unless both Step Down
Conditions are satisfied; and provided,
further, that if on any such
Distribution Date the Pro Rata Senior
Percentage exceeds the initial Pro Rata
Senior Percentage, the Senior Prepayment
Percentage for a Mortgage Pool for that
Distribution Date shall again equal
100%.
Notwithstanding the above, if on any Distribution Date the Two
Times
Test is satisfied, the Senior Prepayment
Percentage for a Mortgage Pool shall
equal the related Senior Percentage for
such Distribution Date. In addition, if
on any Distribution Date the allocation to
the Senior Certificates of the
related Certificate Group then entitled to
distributions of principal of full
and partial principal prepayments and other
amounts in the percentage required
above would reduce the sum of the Class
Principal Amounts of those Certificates
to below zero, the Senior Prepayment
Percentage for a Mortgage Pool for such
Distribution Date shall be limited to the
percentage necessary to reduce the
related Class Principal Amounts to
zero.
SENIOR PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Certificate
Group and Distribution Date, the sum
of:
(i) the
product of (a) the related Senior Percentage and
(b) the principal portion of each Scheduled Payment
(without giving effect to any Deficient Valuations or
Debt Service Reductions) on each Mortgage Loan in the
related Mortgage Pool due during the related Due
Period;
(ii)
the product of (a) the related Senior Prepayment
Percentage and (b) each of the following amounts: (i)
the principal portion of each full and partial
principal prepayment made by a borrower on a Mortgage
Loan in the related Mortgage Pool during the related
Prepayment Period; (ii) each other unscheduled
collection, including Insurance Proceeds and Net
Liquidation Proceeds (other than with respect to any
Mortgage Loan in the related Mortgage Pool that was
finally liquidated during the related Prepayment
Period) representing or allocable to recoveries of
principal of the related Mortgage Loans received
during the related Prepayment Period; and (iii) the
principal portion of the purchase price of each
Mortgage Loan purchased by the Seller or any other
person pursuant to the Mortgage Loan Purchase
Agreement due to a defect in documentation or a
material breach of a representation and warranty with
respect to such Mortgage Loan or, in the case of a
permitted substitution of a Defective Mortgage Loan,
the amount representing any principal adjustment in
connection with any such replaced Mortgage Loan in
the
related Mortgage Pool with respect to the related
Prepayment Period;
(iii) with
respect to unscheduled recoveries allocable to
principal of any Mortgage Loan in the related
Mortgage Pool that was fully liquidated during the
related Prepayment Period, the lesser of (a) the
product of (1) the Senior Percentage for that date
and (2)
the remaining Stated Principal Balance of the
related Mortgage Loan at the time of liquidation and
(b) the product of (1) the Senior Prepayment
Percentage for that date and (2) the Net Liquidation
Proceeds allocable to principal; and
(iv)
any amounts described in clauses (i) through (iii)
above that remain unpaid with respect to such
Certificate Group from prior Distribution Dates.
SENIOR TERMINATION DATE: For each Certificate Group, the
Distribution
Date when the aggregate Class Principal
Amount of the Senior Certificates
related to a Mortgage Pool has been reduced
to zero.
SERVICER: PHH and its
successors and assigns.
SERVICING FEE: As to any Distribution Date and each Mortgage Loan,
an
amount equal to the product of (a) the
outstanding principal balance of such
Mortgage Loan as of the first day of the
related Due Period and (b) one-twelfth
of the Servicing Fee Rate.
SERVICING FEE RATE: With respect to each Mortgage Loan and any
Distribution Date, 0.25% 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 and attached hereto as Exhibit
M, as such list may from time to time be
amended.
SERVICING TRANSFER COSTS: As defined in Section 6.14(b).
SIX-MONTH LIBOR LOAN: Each Mortgage Loan bearing a Mortgage Rate
that
adjusts in accordance with LIBOR for
six-month U.S. dollar deposits.
STARTUP DAY: The day designated as such pursuant to Section
10.01(b)
hereof.
STATED PRINCIPAL BALANCE: As to any Mortgage Loan and Due Date,
the
unpaid principal balance of such Mortgage
Loan as of such Due Date as specified
in the amortization schedule at the time
relating thereto (before any adjustment
to such amortization schedule by reason of
any moratorium or similar waiver or
grace period) after giving effect to any
previous Principal Prepayments and
Liquidation Proceeds allocable to principal
and to the payment of principal due
on such Due Date and irrespective of any
delinquency in payment by the related
Mortgagor.
STEP-DOWN TEST: As of the first Distribution Date as to which
any
decrease in any Senior Prepayment
Percentage applies, (i) the outstanding Stated
Principal Balance of all Mortgage Loans
Delinquent 60 days or more (including
Mortgage Loans in bankruptcy, foreclosure
and REO Property), averaged over the
preceding six month period, as a percentage
of the aggregate Class Principal
Amounts on such Distribution Date (without
giving effect to any payments on such
Distribution Date) of the Subordinate
Certificates, does not equal or exceed 50%
and (ii) cumulative Realized Losses with
respect to the Mortgage Loans do not
exceed (a) with respect to each
Distribution Date occurring in the period from
May 2010 to April 2011, 30% of the Original
Subordinate Class Principal Amount,
(b) with respect to each Distribution Date
occurring in the period from May 2011
through April 2012, 35% of the Original
Subordinate Class Principal Amount, (c)
with respect to each Distribution Date
occurring in the period from May 2012
through April 2013, 40% of the Original
Subordinate Class Principal Amount, (d)
with respect to each Distribution Date
occurring in the period from May 2013
through April 2014, 45% of the Original
Subordinate Class Principal Amount and
(e) with respect to each Distribution Date
occurring in May 2014 and thereafter,
50% of the Original Subordinate Class
Principal Amount.
SUBORDINATE CERTIFICATE: Any of the Class M-1, Class M-2, Class
M-3,
Class B-1, Class B-2 and Class B-3
Certificates.
SUBORDINATE CERTIFICATE WRITEDOWN AMOUNT: The amount equal to
the
excess of the total Certificate Principal
Amount of all the Certificates on any
Distribution Date (after giving effect to
distributions of principal and
allocation or Realized Losses on that date)
over the total Stated Principal
Balance of the Mortgage Loans for the
related Distribution Date by which the
Class Principal Amount of the lowest
ranking class of Subordinate Certificates
then outstanding will be reduced.
SUBORDINATE CLASS PERCENTAGE: As to any Distribution Date and any
Class
of Subordinate Certificates, the percentage
obtained by dividing the Class
Principal Amount of such class immediately
prior to such Distribution Date by
the aggregate Class Principal Amount of all
classes of Subordinate Certificates
immediately prior to such date.
SUBORDINATE NET WAC: For any Distribution Date, the weighted
average of
the Pool 1 Net WAC and the Pool 2 Net WAC,
in each case weighted on the basis of
the relative Pool Subordinate Amounts for
Pool 1 and Pool 2, respectively, for
such Distribution Date.
SUBORDINATE PERCENTAGE: With respect to each Mortgage Pool and
any
Distribution Date, the difference between
100% and the related Senior Percentage
for such Mortgage Pool on such Distribution
Date; provided, however, that on any
Distribution Date after a Senior
Termination Date has occurred with respect to a
Mortgage Pool, the Subordinate Percentage
will represent the entire interest of
the Subordinate Certificates in the
Mortgage Loans and will be equal to the
difference between 100% and the Senior
Percentage related to the Mortgage Loans
in the aggregate for such Distribution
Date.
SUBORDINATE PREPAYMENT PERCENTAGE: With respect to any
Distribution
Date and for any Mortgage Pool, the
difference between 100% and the related
Senior Prepayment Percentage for such
Mortgage Pool for that Distribution Date;
provided; however, that on any Distribution
Date after a Senior Termination Date
has occurred with respect to a Mortgage
Pool, the Subordinate Prepayment
Percentage will represent the entire
interest of the Subordinate Certificates in
the Mortgage Loans and will be equal to the
difference between 100% and the
Senior Prepayment Percentage related to the
Mortgage Loans in the aggregate for
such Distribution Date.
SUBORDINATE PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date and each Mortgage Pool,
an amount equal to the sum of:
(i) the
product of (a) the related Subordinate Percentage
and (b) the principal portion of each related
Scheduled Payment (without giving effect to any
Deficient Valuations or Debt Service Reductions) on
each Mortgage Loan in the related Mortgage Pool due
during the related Due Period;
(ii)
the product of (a) the related Subordinate Prepayment
Percentage and (b) each of the following amounts: (1)
the principal portion of each full and partial
principal prepayment made by a borrower on a Mortgage
Loan in the related Mortgage Pool during the related
Prepayment Period, (2) each other unscheduled
collection,
including Insurance Proceeds and Net
Liquidation Proceeds (other than with respect to any
Mortgage Loan in the related Mortgage Pool that was
finally liquidated during the related Prepayment
Period), representing or allocable to recoveries of
principal of Mortgage Loans in the related Mortgage
Pool received during the related Prepayment Period
and (3) the principal portion of the purchase price
of each Mortgage Loan in the related Mortgage Pool
that was purchased by the Seller or any other person
pursuant to the Mortgage Loan Purchase Agreement due
to a defect in documentation or a material breach of
a representation or warranty with respect to such
Mortgage Loan or, in the case of a permitted
substitution of a Defective Mortgage Loan, the amount
representing any principal adjustment in connection
with any such replaced Mortgage Loan in the related
Mortgage Pool with respect to such Distribution Date;
(iii) with
respect to unscheduled recoveries allocable to
principal of any Mortgage Loan in the related
Mortgage Pool that was finally liquidated during the
related Prepayment Period, the related Net
Liquidation Proceeds allocable to principal, to the
extent not
distributed pursuant to clause (iii) of
the definition of Senior Principal Distribution
Amount; and
(iv)
any amounts described in clauses (i) through (iii)
for any previous Distribution Date that remain
unpaid;
minus the sum of:
(A) if the
aggregate Class Principal Amount of any
Certificate Group has been reduced to zero, principal
paid from the Available Distribution Amount from the
related Mortgage Pool to the remaining Certificate
Group; and
(B) the
amounts paid from the Available Distribution
Amount for an Overcollateralized Group to the Senior
Certificates related to an Undercollateralized Group.
SUBSEQUENT RECOVERY: The amount, if any, recovered by the Servicer
with
respect to a Liquidated Mortgage Loan with
respect to which a Realized Loss has
been incurred after liquidation and
disposition of such Mortgage Loan.
SUBSTITUTION AMOUNT: As defined in the second paragraph of
Section
2.04(b).
TAX MATTERS PERSON: The "tax matters person" as specified in the
REMIC
Provisions hereof which shall initially be
the Holder of each Class of Residual
Certificates for the related REMIC.
TELERATE PAGE 3750: The display currently so designated as "Page
3750"
on the Bridge Telerate Service (or such
other page selected by the Trustee as
may replace Page 3750 on that service for
the purpose of displaying daily
comparable rates on prices).
TRUST FUND: The corpus of the trust created pursuant to this
Agreement,
consisting of (i) the Mortgage Loans,
including the right to all payments of
principal and interest received on or with
respect to the Mortgage Loans on and
after the Cut-off Date (other than
Scheduled Payments due on or before such
date), and all such payments due after such
date but received prior to such date
and intended by the related Mortgagors to
be applied after such date; (ii) all
of the Depositor's right, title and
interest in and to all amounts from time to
time credited to and the proceeds of the
Distribution Account, any Custodial
Accounts or any Escrow Accounts established
with respect to the Mortgage Loans;
(iii) all of the Depositor's rights under
the Mortgage Loan Purchase Agreement;
(iv) all of the Depositor's right, title or
interest in REO Property and the
proceeds thereof; (v) all of the
Depositor's rights under any Insurance Policies
relating to the Mortgage Loans; (vi) all
proceeds of the conversion, voluntary
or involuntary, of any of the foregoing
into cash or other liquid assets,
including without limitation, all Insurance
Proceeds, Liquidation Proceeds and
condemnation awards; and (vii) the
Depositor's security interest in any
collateral pledged to secure the Mortgage
Loans, including the Mortgaged
Properties and any Additional Collateral
relating to the Additional Collateral
Mortgage Loans, including, but not limited
to, any pledge, control and guaranty
agreements and the Limited Purpose Surety
Bond and any proceeds of the
foregoing.
TRUSTEE: Wells
Fargo Bank, N.A. and any Person succeeding the Trustee
hereunder, or if any separate trustee or
any co-trustee shall be appointed as
herein provided, then such separate trustee
and such co-trustee, as the case may
be.
TRUSTEE MORTGAGE FILES: With respect to each Mortgage Loan, the
Mortgage Documents to be retained in the
custody and possession of the Trustee.
TWO TIMES TEST: As to any Distribution Date, (i) the related
Subordinate Percentage is at least two
times the related Subordinate Percentage
as of the Closing Date; (ii) the
outstanding Stated Principal Balance of all
Mortgage Loans Delinquent 60 days or more
(including Mortgage Loans in
bankruptcy, foreclosure and REO Property),
averaged over the preceding six month
period, as a percentage of the aggregate
Class Principal Amounts on such
Distribution Date (without giving effect to
any payments on such Distribution
Date) of the Subordinate Certificates, does
not equal or exceed 50%; and (iii)
cumulative Realized Losses with respect to
the Mortgage Loans do not exceed 20%
of the aggregate Class Principal Amount of
the Subordinate Certificates as of
the Closing Date.
UCC: The Uniform Commercial Code as enacted in the relevant
jurisdiction.
UNDERCOLLATERALIZED GROUP: With respect to any Distribution Date,
and
any Certificate Group, the aggregate Class
Principal Amount of such Certificate
Group is greater than the aggregate Stated
Principal Balance of the Mortgage
Loans in the related Mortgage Pool
immediately prior to such Distribution Date.
UNDERWRITER: Merrill
Lynch, Pierce, Fenner & Smith Incorporated.
UNDERWRITER'S EXEMPTION: Prohibited Transaction Exemption ("PTE")
90-29
(Exemption Application No. D-8019, 55 Fed.
Reg. 21459 (1990)) as amended, or any
substantially similar administrative
exemption granted by the U.S. Department of
Labor to an Underwriter.
UNDERWRITING AGREEMENT: The underwriting agreement, dated October
28,
2003 and the related terms agreement, dated
April 27, 2005, each between the
Depositor and the Underwriter, referred to
collectively.
UNDERWRITING STANDARDS: As to each Mortgage Loan, the
Originator's
written underwriting guidelines in effect
as of the origination date of such
Mortgage Loan.
UNIFORM COMMERCIAL CODE: The Uniform Commercial Code as in effect
in
any applicable jurisdiction from time to
time.
UNCERTIFICATED PRINCIPAL BALANCE: With respect to each REMIC 1
Regular
Interest on any date of determination, the
amount set forth in the Preliminary
Statement hereto minus the sum of (x) the
aggregate of all amounts previously
deemed distributed with respect to such
interest and applied to reduce the
Uncertificated Principal Balance thereof
pursuant to Section 5.05 and (y) the
aggregate of all reductions in Class
Principal Amount deemed to have occurred in
connection with Realized Losses that were
previously deemed allocated to the
Uncertificated Principal Balance of such
REMIC 1 Regular Interest pursuant to
Section 5.05.
UNCERTIFICATED REMIC ACCRUED INTEREST: With respect to each
Distribution Date, as to any REMIC 1
Regular Interest, interest accrued during
the related Accrual Period at the related
REMIC 1 Pass Through Rate on the
Uncertificated Principal Balance thereof
immediately prior to such Distribution
Date. Uncertificated REMIC Accrued Interest
will be calculated on the basis of a
360 day year, consisting of twelve 30 day
months. In each case Uncertificated
REMIC Accrued Interest on any REMIC 1
Regular Interest will be reduced by the
amount of: (i) Prepayment Interest
Shortfalls on all Mortgage Loans (to the
extent not offset by the Servicer with a
Compensating Interest Payment), (ii)
the interest portion (adjusted to the Net
Mortgage Rate) of Realized Losses not
allocated solely to one or more specific
Classes of Certificates pursuant to
Section 6.02, (iii) the interest portion of
Monthly Advances previously made
with respect to a Mortgage Loan or REO
Property which remained unreimbursed
following the liquidation or other
disposition of such Mortgage Loan or REO
Property by the Servicer or the Servicer
that were made with respect to
delinquencies that were ultimately
determined to be Excess Losses and (iv) any
other interest shortfalls not covered by
the subordination provided by the Class
M Certificates and the Class B Certificates
with all such reductions allocated
among all of the REMIC 1 Regular Interests
in proportion to their respective
amounts of Uncertificated REMIC Accrued
Interest payable on such Distribution
Date which would have resulted absent such
reductions.
USAP REPORT: A report in compliance with the Uniform Single
Attestation
Program for Mortgage Bankers delivered in
accordance with Section 9.13.
VOTING INTERESTS: The portion of the voting rights of all of
the
Certificates which is allocated to any
Certificate. The voting rights allocated
among Holders of such Certificates
outstanding shall be the fraction, expressed
as a percentage, the numerator of which is
the aggregate Certificate Principal
Amounts of all the Certificates of such
Class then outstanding and the
denominator of which is the Aggregate
Stated Principal Balance of all the
Certificates then outstanding (other than
the Class R Certificates). 99.00% of
all voting rights will be allocated among
all holders of the Certificates (other
than the Class R Certificates) in
proportion to their then outstanding
Certificate Principal Amount, 0.5% and 0.5%
of all voting rights will be
allocated among the holders of the Class
R-1 Certificates and Class R-2
Certificates, respectively, in proportion
to the Percentage Interests evidenced
by their respective Certificates; provided,
however, that any Certificate
registered in the name of the Servicer, the
Depositor or the Trustee or any of
their respective affiliates shall not be
included in the calculation of voting
rights.
Section 1.02. CALCULATIONS RESPECTING MORTGAGE LOANS.
Calculations required to be made pursuant to this Agreement
with
respect to any Mortgage Loan in the Trust
Fund shall be made based upon current
information as to the terms of the Mortgage
Loans and reports of payments
received from the Mortgagor on such
Mortgage Loans and payments to be made to
the Trustee as provided by the Servicer.
The Trustee shall not be required to
recompute, verify or recalculate the
information supplied to it by the Servicer.
<PAGE>
ARTICLE II.
DECLARATION OF TRUST;
ISSUANCE OF CERTIFICATES
Section 2.01. CREATION AND DECLARATION OF TRUST FUND; CONVEYANCE
OF
MORTGAGE LOANS.
(a) Concurrently with the execution and delivery of this
Agreement, the Depositor does hereby
establish the Trust Fund and transfer,
assign, set over, deposit with and
otherwise convey to the Trustee, without
recourse, subject to Sections 2.02 and
2.04, in trust, all the right, title and
interest of the Depositor in and to the
Trust Fund. Such conveyance includes,
without limitation, (i) the Mortgage Loans,
including the right to all payments
of principal and interest received on or
with respect to the Mortgage Loans on
and after the Cut-off Date (other than
Scheduled Payments due on or before such
date), and all such payments due after such
date but received prior to such date
and intended by the related Mortgagors to
be applied after such date; (ii) all
of the Depositor's right, title and
interest in and to all amounts from time to
time credited to and the proceeds of the
Distribution Account, any Custodial
Accounts or any Escrow Account established
with respect to the Mortgage Loans;
(iii) all of the Depositor's rights under
the Mortgage Loan Purchase Agreement;
(iv) all of the Depositor's right, title or
interest in REO Property and the
proceeds thereof; (v) all of the
Depositor's rights under any Insurance Policies
relating to the Mortgage Loans; (vi) all
proceeds of the conversion, voluntary
or involuntary, of any of the foregoing
into cash or other liquid assets,
including, without limitation, all
Insurance Proceeds, Liquidation Proceeds and
condemnation awards; and (vii) the
Depositor's security interest in any
collateral pledged to secure the Mortgage
Loans, including the Mortgaged
Properties and any Additional Collateral
relating to the Additional Collateral
Mortgage Loans, including, but not limited
to, any pledge, control and guaranty
agreements and the Limited Purpose Surety
Bond and any proceeds of the
foregoing, to have and to hold, in trust;
and the Trustee declares that, subject
to the review provided for in Section 2.02,
it has received and shall hold the
Trust Fund, as trustee, in trust, for the
benefit and use of the Holders of the
Certificates and for the purposes and
subject to the terms and conditions set
forth in this Agreement, and, concurrently
with such receipt, has caused to be
executed, authenticated and delivered to or
upon the order of the Depositor, in
exchange for the Trust Fund, Certificates
in the authorized denominations
evidencing the entire ownership of the
Trust Fund. Notwithstanding anything to
the contrary in this Agreement, the Trust
Fund shall not obtain title to or
beneficial ownership of any Additional
Collateral as a result of or in lieu of
the disposition thereof or otherwise.
The Depositor, concurrently with the execution and delivery
hereof,
does hereby transfer, assign, set over and
otherwise convey in trust to the
Trustee without recourse all the right,
title and interest of the Depositor in
and to the assets of REMIC 1 for the
benefit of the holders of the REMIC 1
Regular Interests. The Trustee acknowledges
receipt of the assets of REMIC 1 and
declares that it holds and will hold the
same in trust for the exclusive use and
benefit of the holders of the REMIC 1
Regular Interests.
The Depositor, concurrently with the execution and delivery
hereof,
does hereby transfer, assign, set over and
otherwise convey in trust to the
Trustee without recourse all the right,
title and interest of the Depositor in
and to the REMIC 1 Regular Interests and
the other assets of REMIC 2 for the
benefit of the holders of the REMIC 2
Certificates. The Trustee acknowledges
receipt of the REMIC 1 Regular Interests
(which are uncertificated) and the
other assets of REMIC 2 and declares that
it holds and will hold the same in
trust for the exclusive use and benefit of
the holders of the REMIC 2
Certificates. The foregoing sale, transfer,
assignment, set-over, deposit and
conveyance does not and is not intended to
result in the 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 except as
specifically set forth therein.
It is agreed and understood by the parties hereto that it is
not
intended that any Mortgage Loan be included
in the Trust Fund that is a
"High-Cost Home Loan" as defined in the New
Jersey Home Ownership Act, effective
November 27, 2003, the New Mexico Home Loan
Protection Act, effective January 1,
2004, the Massachusetts Predatory Home Loan
Practices Act, effective November 7,
2004, and a "High-cost Home Loan" as
defined by the Indiana High Cost Home Loan
Law effective January 1, 2005.
In connection with such transfer and assignment of the Mortgage
Loans,
the Depositor shall deliver to, and deposit
with, or cause to be delivered to
and deposited with, the Trustee, the
following documents or instruments with
respect to each Mortgage Loan so
transferred and assigned (each a "Trustee
Mortgage File"):
(1) The original Mortgage Note endorsed, "Pay to the order of
___________, without recourse" and signed
in the name of the name of last
endorsee, by an authorized officer of the
last endorsee. If the Mortgage Loan
was acquired by the last endorsee in a
merger or other type of acquisition, the
endorsement must be by "[name of last
endorsee], successor [by merger to or in
interest to, as applicable] [name of
predecessor]"; and if the Mortgage Loan was
acquired or originated by the last endorsee
while doing business under another
name, the endorsement must be by "[name of
last endorsee], successor in interest
to [previous name]." The Mortgage Note
shall include all intervening
endorsements showing a complete chain of
title from the originator to the last
endorsee. A lost note affidavit (including
a copy of the original Mortgage Note)
may be delivered in lieu of the original
Mortgage Note.
(2) The original recorded Mortgage, 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
certified by the previous owner to be a
true copy of the original of the Mortgage
which has been delivered for recording
in the appropriate recording office of the
jurisdiction in which the Mortgaged
Property is located.
(3) The original Assignment of Mortgage, executed in blank by
either
MLML or its Servicer. If the Mortgage Loan
was acquired by the last endorsee in
a merger or other type of acquisition, the
assignment must be by "[name of last
assignee], successor [by merger to or in
interest to, as applicable] [name of
predecessor]"; and if the Mortgage Loan was
acquired or originated by the last
endorsee while doing business under another
name, the assignment must be by
"[name of last assignee], successor in
interest to [previous name]."
(4) The original policy of title insurance (or a preliminary
title
report if the original title insurance
policy has not been received from the
title insurance company).
(5) 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
by the Seller to be a true copy of the
original of the assignment which has been
delivered for recording in the appropriate
recording office of the jurisdiction
in which the Mortgaged Property is
located.
(6) With respect to a Mortgage Loan that, according to the
Mortgage
Loan Schedule is covered by a primary
mortgage insurance policy, the original or
a copy of primary mortgage insurance
certificate, if any.
(7) If indicated on the Mortgage Loan Schedule, originals of
all
assumption and modification agreements, if
any, with originals or copies of the
underlying instruments being modified.
(8) With respect to each Additional Collateral Mortgage Loan,
a. Copy of the related Mortgage 100 Pledge Agreement for
Securities Account or the Parent Power
Guaranty and Security Agreement for
Securities Account or the Parent Power
Guaranty Agreement for Real Estate, as
the case may be;
b. copy of the UCC-1 (applicable for South Carolina and Rhode
Island only);
c. an original form UCC-3, if applicable;
d. For loans originated by a correspondent lender, an original
assignment of security interest of the
related Mortgage 100 Pledge Agreement or
Parent Power Agreement, as the case may
be.
(9) With respect to each Cooperative Loan:
a. the original proprietary lease;
b. the original recognition agreement;
c. the original security agreement;
d. the
original or copy of the assignment of proprietary
lease;
e. the original cooperative stock certificate and stock power
executed by borrower in blank; f. the
original UCC-1 Financing Statements; and
g. the original UCC-3 Financing Statements.
(10) Power of Attorney, if applicable.
(b) The Depositor shall cause the Mortgage Notes with respect
to each Mortgage Loan to be completed
either (A) in blank, without recourse, or
(B) endorsed to "Wells Fargo Bank, N.A., as
Trustee of the Merrill Lynch
Mortgage Investors Trust Series MLCC
2005-1, Mortgage Pass-Through Certificates,
without recourse" and the Depositor shall
cause Assignments of Mortgage with
respect to each Mortgage Loan other than a
Cooperative Mortgage Loan to be
completed either (A) in blank or (B) to
"Wells Fargo Bank, N.A., as Trustee of
the Merrill Lynch Mortgage Investors Trust
Series MLCC 2005-1, Mortgage
Pass-Through Certificates," within 30 days
of the Closing Date for purpose of
their recording; provided, however, that
such Assignments of Mortgage need not
be recorded unless required in writing by
the Rating Agencies; provided,
further, that with respect to each MERS
Mortgage Loan where MERS is not the
Mortgagee of record, the original
Assignment of Mortgage showing MERS as the
assignee of the Mortgage, with the evidence
of recording thereon or copies
thereof certified by an officer of the
Depositor to have been submitted for
recordation, shall be delivered to the
Trustee.
If any Mortgage has been recorded in the name of MERS or its
designee,
no Assignment of Mortgage in favor of the
Trustee will be required to be
prepared or delivered and instead, the
Servicer shall take all actions as are
necessary to cause the Trustee to be shown
as the owner of the related Mortgage
Loan on the records of MERS for the purpose
of the system of recording transfer
of beneficial ownership of mortgages
maintained by MERS.
(c) In instances where a title insurance policy is required to
be delivered to the Trustee and is not so
delivered, the Depositor will provide
a copy of such title insurance policy to
the Trustee, as promptly as practicable
after the execution and delivery hereof,
but in any case within 270 days of the
Closing Date.
(d) For Mortgage Loans (if any) that have been prepaid in full
after the Cut-off Date and prior to the
Closing Date, the Depositor, in lieu of
delivering the above Trustee Mortgage File,
shall deliver to the Trustee an
Officer's Certificate which shall include a
statement to the effect that all
amounts received in connection with such
prepayment that are required to be
deposited in the Distribution Account
pursuant to Section 4.01 have been so
deposited. All original documents that are
not delivered to the Trustee shall be
held by the Servicer in trust for the
benefit of the Trustee and the
Certificateholders.
Section 2.02. ACCEPTANCE OF TRUST FUND BY TRUSTEE; REVIEW OF
DOCUMENTATION FOR TRUST FUND.
(a) The Trustee, by execution and delivery hereof,
acknowledges receipt by it of the Trustee
Mortgage Files pertaining to the
Mortgage Loans listed on the Mortgage Loan
Schedule, subject to review thereof
as provided herein. Upon receipt by the
Trustee of each Trustee Mortgage File,
the Trustee shall review each Trustee
Mortgage File in accordance with the
following review procedures and verify
that: (a) all documents described in
Sections 2.01(a)(1), (2), (3), (4) and (5)
hereof and to the extent provided in
the Trustee Mortgage Files all documents
described in Sections 2.01(a)(6), (7),
(8), (9) and (10) hereof, if applicable,
are in its possession, (b) such
documents have been reviewed by it and
appear regular on their face and relate
to such Mortgage Loan, (c) based on its
examination and only as to the foregoing
documents, the information set forth in
terms (i), (ii), (iii) excluding the zip
code requirement, (iv), (vi), (vii), (viii)
and (x) of the definition of
"Mortgage Loan Schedule" respecting such
Mortgage Loan is correct, and which as
to items (iv) (vi), (viii) and (x) for
adjustable rate Mortgage Loan Documents
and (d) each Mortgage Note has been
endorsed and each Assignment of Mortgage has
been executed as provided in Section 2.01
hereof. .
In making such verifications, the Trustee may rely conclusively on
the
Mortgage Loan Schedule and the documents
constituting the Trustee Mortgage File,
and the Trustee shall have no obligation to
independently verify the validity,
enforceability, recordability, sufficiency,
due authorization or genuineness of
any document in any Trustee Mortgage File
or any Mortgage Loan hereunder, nor
the collectibility, insurability,
effectiveness or suitability of any Mortgage
Loan hereunder. The Trustee shall prepare
an initial certification to be
delivered to the Depositor, the Seller and
the Servicer on the Closing Date in
the form annexed hereto as Exhibit K (the
"Initial Certification") with respect
to the Mortgage Loans (other than any
Mortgage Loan paid in full or any Mortgage
Loan specifically identified on the
Schedule of Exceptions attached to the
Initial Certification (the "Schedule of
Exceptions") as not covered by such
Initial Certification) listed on the
Mortgage Loan Schedule. The Trustee (or any
custodian on its behalf) shall also note,
with respect to each Mortgage Loan,
whether a certified copy of the related
Mortgage was delivered to the Trustee
(or any custodian on its behalf) in lieu of
the original of such Mortgage,
whether a certified copy of an intervening
assignment of the related Mortgage
was delivered to the Trustee (or any
custodian on its behalf) in lieu of the
original of such assignment, and whether a
preliminary title report with respect
to such Mortgage Loan was delivered to the
Trustee (or any custodian on its
behalf) in lieu of the original policy of
title insurance. If the Trustee
determines from such verification that any
discrepancy or deficiency exists with
respect to a Trustee Mortgage File, the
Trustee shall note such omission,
discrepancy or deficiency on the Schedule
of Exceptions attached to the Initial
Certification, and shall deliver a copy
(which shall be electronic, if
requested) of the Schedule of Exceptions to
the Depositor on the Closing Date.
During the life of the Mortgage Loans
(while subject to this Agreement), in the
event the Trustee discovers any defect with
respect to any Trustee Mortgage
File, the Trustee shall give written
specification of such defect to the
Depositor. Except as specifically provided
above, the Trustee shall be under no
duty to review, inspect or examine such
documents to determine that any of them
are enforceable or appropriate for their
prescribed purpose.
(b) If in the course of the review described in paragraph (a)
of this Section 2.02 the Trustee discovers
any document or documents
constituting a part of a Trustee Mortgage
File that is missing, does not appear
regular on its face (i.e., is mutilated,
damaged, defaced, torn or otherwise
physically altered) or appears to be
unrelated to the Mortgage Loans identified
in the Mortgage Loan Schedule (each, a
"Material Defect"), the Trustee, upon
discovering such Material Defect shall
promptly identify the Mortgage Loan to
which such Material Defect relates to the
Depositor, the Seller and the
Servicer. Within 90 days of its receipt of
such notice (but in no case prior to
the 270th day following the Closing Date),
the Depositor shall be required to
cure such Material Defect (and, in such
event, the Depositor shall provide the
Trustee with an Officer's Certificate
confirming that such cure has been
effected). If the Servicer notifies the
Depositor and the Trustee in writing
that (i) a loss has occurred and (ii) such
loss relates to a Mortgage Loan for
which the Trustee previously identified a
Material Defect or for which the
Servicer has identified a Material Defect
and the Depositor has not cured such
Material Defect, then the Depositor shall
repurchase such Mortgage Loan at the
Purchase Price therefor in the event that
such loss would, if such Mortgage Loan
is not repurchased by the Depositor,
constitute a Realized Loss and such loss is
attributable to the failure of the
Depositor to have cured such Material Defect.
A loss shall be deemed to be attributable
to the failure of the Depositor to
cure a Material Defect if, as determined by
the Depositor, upon mutual agreement
with the Trustee each acting in good faith,
absent such Material Defect, such
loss would not have been incurred. Within
the two-year period following the
Closing Date, the Depositor may, in lieu of
repurchasing a Mortgage Loan
pursuant to this Section 2.02(b),
substitute for such Mortgage Loan a
Replacement Mortgage Loan subject to the
provisions of Section 2.04.
(c) Within 270 days following the Closing Date, the Trustee
shall deliver to the Depositor, the Seller
and the Servicer, a final
certification substantially in the form
attached as Exhibit L (the "Final
Certification") evidencing the completeness
of the Trustee Mortgage Files in its
possession or control, with any exceptions
noted on the Schedule of Exceptions
attached to the Final Certification.
(d) Nothing in this Agreement shall be construed to constitute
an assumption by the Trust Fund, the
Trustee or the Certificateholders of any
unsatisfied duty, claim or other liability
on any Mortgage Loan or to any
Mortgagor.
(e) Upon execution of this Agreement, the Depositor hereby
delivers to the Trustee and the Trustee
acknowledges receipt of the Mortgage
Loan Purchase Agreement.
Section 2.03. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR AND
THE
SERVICER.
A. The Depositor hereby represents and
warrants to the Servicer and to the
Trustee , for the benefit of the
Certificateholders as of the Closing Date or
such other date as is specified, that:
(i) the Depositor is a corporation duly organized,
validly existing and in good standing under the laws governing
its creation and existence and has full corporate power and
authority to own its property, to carry on its business as
presently conducted, to enter into and perform its obligations
under this Agreement, and to create the trust pursuant hereto;
(ii) the execution and delivery by the Depositor of
this Agreement have been duly authorized by all necessary
corporate action on the part of the Depositor; neither the
execution and delivery of this Agreement, nor the consummation
of the transactions herein contemplated, nor compliance with
the provisions hereof, will conflict with or result in a
breach of, or constitute a default under, any of the
provisions of any law, governmental rule, regulation,
judgment, decree or order binding on the Depositor or its
properties or the certificate of incorporation or bylaws of
the Depositor;
(iii) the execution, delivery and performance by the
Depositor of this Agreement and the consummation of the
transactions contemplated hereby do not require the consent or
approval of, the giving of notice to, the registration with,
or the taking of any other action in respect of, any state,
federal or other governmental authority or agency, except such
as has been obtained, given, effected or taken prior to the
date hereof;
(iv) this Agreement has been duly executed and
delivered by the Depositor and, assuming due authorization,
execution and delivery by the Trustee, constitutes a valid and
binding obligation of the Depositor enforceable against it in
accordance with its terms except as such enforceability may be
subject to (A) applicable bankruptcy and insolvency laws and
other similar laws affecting the enforcement of the rights of
creditors generally and (B) general principles of equity
regardless of whether
such enforcement is considered in a
proceeding in equity or at law;
(v) there are no actions, suits or proceedings
pending or, to the knowledge of the Depositor, threatened or
likely to be asserted against or affecting the Depositor,
before or by any court, administrative agency, arbitrator or
governmental body (A) with respect to any of the transactions
contemplated by this Agreement or (B) with respect to any
other matter which in the judgment of the Depositor will be
determined adversely to the Depositor and will if determined
adversely to the Depositor materially and adversely affect it
or its business, assets, operations or condition, financial or
otherwise, or adversely affect its ability to perform its
obligations under this Agreement;
(vi) immediately prior to the transfer and assignment
of the Mortgage Loans to the Trustee, the Depositor was the
sole owner of record and holder of each Mortgage Loan, and the
Depositor had good and marketable title thereto, and had full
right to transfer and sell each Mortgage Loan to the Trustee
free and clear, subject only to (1) liens of current real
property taxes and assessments not yet due and payable and, if
the related Mortgaged Property is a condominium unit, any lien
for common charges permitted by statute, (2) covenants,
conditions and restrictions, rights of way, easements and
other matters of public record as of the date of recording of
such Mortgage acceptable to mortgage lending institutions in
the area in which the related Mortgaged Property is located
and specifically referred to in the lender's title insurance
policy or attorney's opinion of title and abstract of title
delivered to the Originator of such Mortgage Loan, and (3)
such other matters to which like properties are commonly
subject which do not, individually or in the aggregate,
materially interfere with the benefits of the security
intended to be provided by the Mortgage, of any encumbrance,
equity, participation interest, lien, pledge, charge, claim or
security interest, and had full right and authority, subject
to no interest or participation of, or agreement with, any
other party, to sell and assign each Mortgage Loan pursuant to
this Agreement;
(vii) This Agreement creates a valid and continuing
security interest (as defined in the applicable Uniform
Commercial Code (the "UCC"), in the Mortgage Loans in favor of
the Trustee, which security interest is prior to all other
liens, and is enforceable as such against creditors of and
purchasers from the Depositor;
(viii) The Mortgage Loans constitute "instruments"
within the meaning of the applicable UCC;
(ix) Other than the security interest granted to the
Trustee pursuant to this Agreement, the Depositor has not
pledged, assigned, sold, granted a security interest in, or
otherwise conveyed any of the Mortgage Loans. The Depositor
has not authorized the filing of and is not aware of any
financing statement against the Depositor that includes a
description of the collateral covering the Mortgage Loans
other than a financing statement relating to the security
interest granted to the Trustee hereunder or that has been
terminated. The Depositor is not aware of any judgment or tax
lien filings against the Depositor;
(x) None of the Mortgage Loans have any marks or
notations indicating that such Mortgage Loans have been
pledged, assigned or otherwise conveyed to any Person other
than the Trustee; and
(xi) The Depositor has received all consents and
approvals required by the terms of the Mortgage Loans to
convey the Mortgage Loans hereunder to the Trustee;
(xii) As of the Closing Date, each Mortgage Loan is a
"qualified mortgage" within the meaning of Section 860G(a)(3)
of the Code (without regard to Treasury Regulations Section
1.860G-2(f) or any similar rule that provides that a defective
obligation is a qualified mortgage for a temporary period);
(xiii) As of the Closing Date, no Mortgage Loan
provides for interest other than at either (x) a single fixed
rate in effect throughout the term of the Mortgage Loan or (y)
a single "variable rate" (within the meaning of Treasury
Regulations Section 1.860G-1(a)(3)) in effect throughout the
term of
the Mortgage Loan;
(xiv) As of the Closing Date, no Mortgage is the
subject of pending or final foreclosure proceedings; and
(xv) As of the Closing Date, the Depositor would not
initiate foreclosure proceedings with respect to any Mortgage
Loan based on such Mortgage Loan's delinquency status prior to
the next scheduled payment date for such Mortgage Loan.
The foregoing representations made in this Section 2.03 by the
Depositor shall survive the termination of
this Agreement and shall not be
waived by any party hereto
B. The Servicer hereby represents and
warrants to the Depositor and to the
Trustee, for the benefit of the
Certificateholders as of the Closing Date that:
(i) The Servicer is a corporation duly organized,
validly existing and in good standing under the laws of the
State of New Jersey. The Servicer has in full force and effect
(without notice of possible suspension, revocation or
impairment) all required qualifications, permits, approvals,
licenses, and registrations, or exemption therefrom, to
conduct all activities in all jurisdictions in which its
activities with respect to the Mortgage Loans require it to be
qualified or licensed;
(ii) The Servicer has all requisite corporate power,
authority and capacity to carry on its business as it is now
being conducted, to execute and deliver this Agreement, and to
perform all of its obligations hereunder. The Servicer does
not believe, nor does it have any cause or reason to believe,
that it cannot perform each and every covenant contained in
this Agreement;
(iii) The execution, delivery and performance of this
Agreement by the Servicer and consummation of the transactions
contemplated hereby have been duly and validly authorized by
all necessary corporate, shareholder or other action by the
Servicer; this Agreement has been duly and validly executed
and delivered by the Servicer; and this Agreement is a valid
and legally binding agreement of the Servicer, enforceable
against the Servicer in accordance with its respective terms,
subject to bankruptcy, insolvency and similar laws affecting
generally the enforcement of creditors' rights and the
discretion of a court to grant specific performance of
contracts;
(iv) Neither the execution and delivery of this
Agreement, nor the consummation of the transactions
contemplated hereby, nor compliance with their respective
terms and conditions shall (a) violate, conflict with, result
in the breach of, constitute a default under, be prohibited by
or require any additional approval under any terms, conditions
or provisions of the Servicer's articles of incorporation or
by-laws or any other similar corporate or organizational
document of the Servicer; any mortgage, indenture, deed of
trust, loan or credit agreement or other agreement or
instrument to which the Servicer is now a party or by which it
is bound; or any law, ordinance, rule, regulation, order,
judgment or decree of any governmental authority applicable to
the Servicer; or (b) result in the creation or imposition of
any lien, charge or encumbrance of any material nature upon
any of the properties or assets of the Servicer;
(v) The Servicer holds all licenses, approvals,
permits and other authorizations, or exemptions therefrom,
required under applicable law to assume responsibility for
servicing the Mortgage Loans;
(vi) There is no litigation, claim, demand,
proceeding or governmental investigation existing or pending,
or to the knowledge of the Servicer, threatened, nor is there
any order, injunction or decree outstanding against or
relating to the Servicer that could (i) have a material
adverse effect upon the performance by the Servicer of its
obligations under this Agreement or (ii) to the Servicer's
knowledge, result in any material loss or liability to
Depositor, the Trustee, the Trust Fund or the Seller. Further,
to the Servicer's knowledge, there is no meritorious basis for
any such litigation, claim, demand, proceeding, or
governmental investigation;
(vii) The Servicer has been approved by GNMA, Fannie
Mae and FHLMC and will remain approved as an "eligible
seller/servicer" of residential mortgage loans as provided in
GNMA, Fannie Mae, or FHLMC guidelines and in good standing.
The Servicer has not received any notification from GNMA,
Fannie Mae or FHLMC that the Servicer is not in compliance
with the requirements of the approved "seller/servicer"
status. The Servicer is a mortgagee approved by the Secretary
of HUD pursuant to Section 203 and 211 of the National Housing
Act. The Servicer has not received any notification from HUD
that the Servicer is not in compliance with the requirements
of the approved mortgagee status;
(viii) The servicing practices to be used by the
Servicer under this Agreement are, and shall remain, in all
material respects in compliance with Accepted Servicing
Practices, including without limitation, all federal, state
and local laws, rules, all regulations and requirements in
connection therewith, and Fannie Mae guidelines, as
applicable;
(ix) The Servicer has not received written notice
from or on behalf of FHA, HUD, FDIC, Fannie Mae, FHLMC or
GNMA, advising the Servicer of its failure to comply with
applicable servicing or claims procedures, or resulted in a
request for repurchase of mortgage loans or indemnification in
connection with any mortgage loans;
(x) The Servicer has in place a contingency plan that
will enable it to perform its obligations under this Agreement
in all material respects, at another location within five (5)
Business Days in the event its primary location is rendered
inoperative as a result of a natural or other disaster or
emergency;
(xi) The Servicer maintains and shall maintain, in
good standing, all licenses and approvals necessary to service
the Mortgage Loans and maintains and shall at all times
maintain the capital requirements imposed by the licensing or
approving entities having jurisdiction over the Servicer. The
Servicer has filed applications for all applicable licenses
and qualifications to do business and to service the Mortgage
Loans in the U.S. Virgin Islands;
(xii) The Servicer maintains and shall at all times
maintain error and omissions and fidelity insurance coverage
of the type and in the amounts required by Fannie Mae;
(xiii) The Servicer has, and shall at all times
maintain during the term of this Agreement, sufficient
systems, including but not limited to the Servicer's EDP, and
trained and experienced personnel in place to perform its
obligations under this Agreement;
(xiv) For so long as, and to the extent that, the
Servicer services the Mortgage Loans, the Servicer will
continue to comply with each applicable federal, state, or
local, law, statute, and ordinance, and any rule, regulation,
or order issued thereunder, pertaining to the subject matter
of this Agreement, including, but not limited to, usury,
RESPA, Consumer Credit Reporting Act, Equal Credit Opportunity
Act, Federal Deposit Insurance Corporation Improvement Act,
Regulation B, Fair Credit Reporting Act, Fair Debt Collection
Practices Act, Fair Housing Act, Truth in Lending Act and
Regulation Z, Flood Disaster Protection Act of 1973, and any
applicable regulations related thereto, and such other fair
housing, anti-redlining, equal credit opportunity,
truth-in-lending, real estate settlement procedures, fair
credit reporting, and every other prohibition against unlawful
discrimination in residential mortgage lending or governing
consumer credit, and all state consumer credit statutes and
regulations, as amended. In the event the Depositor or the
Trustee has a reasonable good faith belief in the Servicer's
non-compliance with this representation and warranty and upon
the Depositor's or the Trustee's written request, the Servicer
shall deliver to the Depositor or the Trustee reasonable
evidence of compliance with any of the requirements of this
representation and warranty; and
(xv) Neither the Servicer, its parent, nor any of its
subsidiaries is in bankruptcy, receivership or
conservatorship. The Servicer has the requisite financial
resources and ability to meet its obligations under this
Agreement, including, but not limited to, any and all
indemnification obligations,
Within 60 days of the earlier of either discovery by or notice to
the
Servicer of any breach of a representation
or warranty set forth in this Section
2.03(B) which materially and adversely
affects the ability of the Servicer to
perform its duties and obligations under
this Agreement or otherwise materially
and adversely affects the value of the
Mortgage Loans, the Mortgaged Property or
the priority of the security interest on
such Mortgaged Property, the Servicer
shall use its best efforts promptly to cure
such breach in all material respects
and, if such breach cannot be cured, the
Servicer shall, at the Trustee's
option, assign the Servicer's rights and
obligations under this Agreement (or
respecting the affected Mortgage Loans) to
a successor servicer selected by the
Depositor with the prior consent and
approval of the Trustee. Such assignment
shall be made in accordance with this
Agreement.
Section 2.04. DISCOVERY OF BREACH; REPURCHASE OR SUBSTITUTION
OF
MORTGAGE LOANS.
(a) Pursuant to Section 7 of the Mortgage Loan Purchase
Agreement, the Seller has made certain
representations and warranties as to the
characteristics of the Mortgage Loans (such
representations and warranties are
set out in full in Schedule B of this
Agreement) as of the Closing Date and the
conveyance thereof from the Seller to the
Depositor, for the benefit of the
Trustee and the Certificateholders, and the
Seller has agreed to comply with the
provisions of this Section 2.04 in respect
of a breach of any of such
representations and warranties.
It is understood and agreed that (i) the representations and
warranties
of the Depositor and the Servicer set forth
in Section 2.03 and (ii) the
representations and warranties of the
Seller set forth in Section 7 of the
Mortgage Loan Purchase Agreement shall
survive delivery of the Trustee Mortgage
Files and the Assignment of Mortgage of
each Mortgage Loan to the Trustee and
shall continue throughout the term of this
Agreement. Upon discovery (i) by the
Depositor, the Seller, the Servicer or the
Trustee of a breach of any
representation or warranty made by the
Depositor under Section 2.03 which
materially adversely affects the value of a
Mortgage Loan or the interest
therein of the Certificateholder (a
"Defective Mortgage Loan"), or (ii) by the
Depositor or the Seller of the breach by
the Seller of any representation or
warranty under the Mortgage Loan Purchase
Agreement in respect of any Mortgage
Loan, which breach results in the Mortgage
Loan being a "Defective Mortgage
Loan" (each of such parties hereby agreeing
to give written notice of such
breach to the Trustee and the other of such
parties), the Trustee, or its
designee, shall promptly notify the
Depositor in writing of such breach and
request that the Depositor cure or cause
the cure of such breach within 90 days
from the date that the Depositor discovered
or was notified of such breach, and
if the Depositor does not cure such breach
in all material respects during such
period, the Trustee shall (i) in the case
of an uncured breach under Section
2.03, cause the Depositor to repurchase
such Defective Mortgage Loan at the
Purchase Price and (ii) in the case of an
uncured breach by the Seller under the
Mortgage Loan Purchase Agreement, cause the
Depositor to enforce the Seller's
obligation under the Mortgage Loan Purchase
Agreement to repurchase that
Defective Mortgage Loan from the Trust Fund
at the Purchase Price, in each case
on or prior to the Determination Date
following the expiration of such 90-day
period (subject to Section 2.04(b) below);
provided, however, that, in
connection with any such breach under
clause (ii) above that could not
reasonably have been cured within such
90-day period, if the Seller shall have
commenced to cure such breach within such
90-day period and, if the defective
Mortgage Loan qualifies as a "qualified
mortgage" within the meaning of Section
860G(a)(3) of the Code following such
90-day period, the Seller shall be
permitted to proceed thereafter diligently
and expeditiously to cure the same
within an additional 90-day period. The
Purchase Price for the repurchased
Defective Mortgage Loan shall be deposited
in the related Distribution Account,
and the Trustee, or its designee, upon
receipt of such deposit and two copies of
a Request for Release with respect to such
Defective Mortgage Loan, shall
release to the Seller or the Depositor, as
applicable, the related Trustee
Mortgage File and shall execute and deliver
such instruments of transfer or
assignment, in each case without recourse,
representation or warranties, as
either party shall furnish to it and as
shall be necessary to vest in such party
any Defective Mortgage Loan released
pursuant hereto and the Trustee, or its
designee, shall have no further
responsibility with regard to such Trustee
Mortgage File (it being understood that the
Trustee shall have no responsibility
for determining the sufficiency of such
assignment for its intended purpose). In
lieu of repurchasing any such Defective
Mortgage Loan as provided above, the
Seller may cause such Defective Mortgage
Loan to be removed from the Trust Fund
(in which case it shall become a Deleted
Mortgage Loan) and substitute one or
more Replacement Mortgage Loans in the
manner and subject to the limitations set
forth in Section 2.04(b) below. It is
understood and agreed that the obligation
of the Seller (or the Depositor, if
applicable) to cure or to repurchase (or to
substitute for) any Mortgage Loan as to
which a breach has occurred and is
continuing shall constitute the sole remedy
against the Seller (or the
Depositor, if applicable) respecting such
breach available to the Trustee on
behalf of the Certificateholders. With
respect to the representations and
warranties described in Schedule B which
are made to the best of the Seller's
knowledge, if it is discovered by any of
the Depositor, the Seller or the
Trustee that the substance of such
representation and warranty is inaccurate and
such inaccuracy materially and adversely
affects the value of the related
Mortgage Loan, then notwithstanding the
Seller's lack of knowledge with respect
to the substance of such representation and
warranty, such inaccuracy shall be
deemed a breach of the applicable
representation or warranty.
(b) Any substitution of Replacement Mortgage Loans for Deleted
Mortgage Loans made pursuant to Section
2.04(a) above must be effected prior to
the last Business Day that is within two
years after the Closing Date. As to any
Deleted Mortgage Loan for which the Seller
substitutes a Replacement Mortgage
Loan or Loans, such substitution shall be
effected by delivering to the Trustee
for such Replacement Mortgage Loan or
Loans, the Mortgage Note, the Mortgage,
the Assignment to the Trustee, and such
other documents and agreements, with all
necessary endorsements thereon, together
with an Officers' Certificate stating
that each such Replacement Mortgage Loan
satisfies the definition thereof and
specifying the Substitution Amount (as
described below), if any, in connection
with such substitution. The Trustee shall
acknowledge receipt for such
Replacement Mortgage Loan and, within 45
days thereafter, shall review such
Mortgage Documents as specified in this
Agreement under Section 2.02(a) and
deliver to the Depositor, with respect to
such Replacement Mortgage Loans, a
certification substantially in the form of
a revised Initial Certification, with
any exceptions noted thereon. Within one
year of the date of substitution, the
Trustee shall deliver to the Depositor a
certification substantially in the form
of a revised Final Certification, with
respect to such Replacement Mortgage
Loans, with any exceptions noted thereon.
Monthly Payments due with respect to
Replacement Mortgage Loans in the month of
substitution shall not be included as
part of the Trust Fund and shall be
retained by the Seller. For the month of
substitution, distributions to
Certificateholders shall reflect the collections
and recoveries in respect of such Deleted
Mortgage in the Due Period preceding
the month of substitution and the Seller
shall thereafter be entitled to retain
all amounts subsequently received in
respect of such Deleted Mortgage Loan. Upon
such substitution, such Replacement
Mortgage Loan shall constitute part of the
Trust Fund and shall be subject in all
respects to the terms of this Agreement
and the Mortgage Loan Purchase Agreement,
including all representations and
warranties thereof included in the Mortgage
Loan Purchase Agreement, in each
case as of the date of substitution.
For any month in which the Seller substitutes one or more
Replacement
Mortgage Loans for one or more Deleted
Mortgage Loans, the Trustee, based upon
information provided by the Servicer, shall
determine the excess (each, a
"Substitution Amount"), if any, by which
the aggregate Purchase Price of all
such Deleted Mortgage Loans exceeds the
aggregate Stated Principal Balance of
the Replacement Mortgage Loans replacing
such Deleted Mortgage Loans, together
with one month's interest on such excess
amount at the applicable Net Mortgage
Rate. On the date of such substitution, the
Seller shall deliver or cause to be
delivered to the Servicer for deposit in
the Custodial Account an amount equal
to the related Substitution Amount, if any,
and the Trustee, upon receipt of the
related Replacement Mortgage Loan or Loans
and two copies of a Request for
Release with respect to the Deleted
Mortgage Loan or Loans, shall release to the
Seller the related Trustee Mortgage File or
Files and shall execute and deliver
such instruments of transfer or assignment,
in each case without recourse, as
the Seller shall deliver to it and as shall
be necessary to vest therein any
Deleted Mortgage Loan released pursuant
hereto.
In addition, the Seller shall obtain at its own expense and deliver
to
the Trustee an Opinion of Counsel to the
effect that such substitution (either
specifically or as a class of transactions)
shall not cause (a) any federal tax
to be imposed on the Trust Fund, including
without limitation, any federal tax
imposed on "prohibited transactions" under
Section 860F(a)(l) of the Code or on
"contributions after the startup date"
under Section 860G(d)(l) of the Code, or
(b) any REMIC created hereunder to fail to
qualify as a REMIC at any time that
any Certificate is outstanding. If 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.
(c) Upon discovery by the Seller, 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 within two Business Days give
written notice thereof to the other
parties. In connection therewith, the
Seller or Depositor, as applicable, shall
repurchase, or the Seller, subject to the
limitations set forth in Section
2.04(b), shall substitute one or more
Replacement Mortgage Loans for the
affected Mortgage Loan within 90 days of
the earlier of discovery or receipt of
such notice with respect to such affected
Mortgage Loan. Any such repurchase or
substitution shall be made in the same
manner as set forth in Sections 2.04(a)
and 2.04(b) above. The Trustee shall
re-convey to the Seller the Mortgage Loan
to be released pursuant hereto in the same
manner, and on the same terms and
conditions, as it would a Mortgage Loan
repurchased for breach of a
representation or warranty.
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
such party relating to a repurchase of
a Mortgage Loan other than in compliance
with the terms of this Section 2.04 and
the Mortgage Loan Purchase Agreement, to
the extent that any such action causes
(i) any federal or state tax to be imposed
on the Trust Fund, including without
limitation, any federal tax imposed on
"prohibited transactions" under Section
860F(a)(1) of the Code or on "contributions
after the startup date" under
Section 860G(d)(1) of the Code, or (ii) any
REMIC formed hereby to fail to
qualify as a REMIC at any time that any
Certificate is outstanding.
(d) Notwithstanding anything to the contrary in this
Agreement, Seller shall service and
administer the Additional Collateral, it
being understood and agreed that only
Seller shall service and administer the
related securities accounts, lines of
credit and guarantees with respect to
Additional Collateral.
Section 2.05. GRANT CLAUSE.
(a) It is intended that the conveyance of the Depositor's
right, title and interest in and to
property constituting the Trust Fund
pursuant to this Agreement shall
constitute, and shall be construed as, a sale
of such property and not a grant of a
security interest to secure a loan.
However, if such conveyance is deemed to be
in respect of a loan, it is intended
that: (1) the rights and obligations of the
parties shall be established
pursuant to the terms of this Agreement;
(2) the Depositor hereby grants to the
Trustee for the benefit of the Holders of
the Certificates a first priority
security interest in all of the Depositor's
right, title and interest in, to and
under, whether now owned or hereafter
acquired, the Trust Fund and all proceeds
of any and all property constituting the
Trust Fund to secure payment of the
Certificates; and (3) this Agreement shall
constitute a security agreement under
applicable law. If such conveyance is
deemed to be in respect of a loan and the
trust created by this Agreement terminates
prior to the satisfaction of the
claims of any Person holding any
Certificate, 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, and all proceeds
shall be distributed as herein
provided.
(b) The Depositor shall, to the extent consistent with this
Agreement, take such reasonable actions as
may be necessary to ensure that, if
this Agreement were deemed to create a
security interest in the Mortgage Loans
and the other property described above,
such security interest would be deemed
to be a perfected security interest of
first priority under applicable law and
will be maintained as such throughout the
term of this Agreement. The Depositor
will, at its own expense, make all initial
filings on or about the Closing Date
and shall forward a copy of such filing or
filings to the Trustee. Without
limiting the generality of the foregoing,
the Depositor shall prepare and
forward for filing, or shall cause to be
forwarded for filing, at the expense of
the Depositor, all filings necessary to
maintain the effectiveness of any
original filings necessary under the
relevant UCC to perfect the Trustee's
security interest in or lien on the
Mortgage Loans and the other property
described above, including without
limitation (x) continuation statements, and
(y) such other statements as may be
occasioned by (1) any change of name of
Seller, the Depositor or the Trustee, (2)
any change of location of the place of
business or the chief executive office of
the Seller or the Depositor, (3) any
transfer of any interest of the Depositor
in any Mortgage Loan or (4) any change
under the relevant UCC or other applicable
laws. The Depositor shall not
organize under the law of any jurisdiction
other than the State under which each
is organized as of the Closing Date
(whether changing its jurisdiction of
organization or organizing under an
additional jurisdiction) without giving 30
days prior written notice of such action to
its immediate and intermediate
transferee, including the Trustee. Before
effecting such change, the Depositor
proposing to change its jurisdiction of
organization shall prepare and file in
the appropriate filing office any financing
statements or other statements
necessary to continue the perfection of the
interests of its immediate and
mediate transferees, including the Trustee,
in the Mortgage Loans and the other
property described above. In connection
with the transactions contemplated by
this Agreement, the Depositor authorizes
its immediate or mediate transferee to
file in any filing office any initial
financing statements, any amendments to
financing statements, any continuation
statements, or any other statements or
filings described in this paragraph
(b).
<PAGE>
ARTICLE III.
THE CERTIFICATES
Section 3.01. THE CERTIFICATES.
(a) The Certificates shall be issuable in registered form only
and shall be securities governed by Article
8 of the New York Uniform Commercial
Code. The Book-Entry Certificates will be
evidenced by one or more certificates,
beneficial ownership of which will be held
in the dollar denominations in
Certificate Principal Amount, or in the
Percentage Interests, specified herein.
Each Class of Book-Entry Certificates will
be issued in the minimum
denominations in Certificate Principal
Amount specified in the Preliminary
Statement hereto and in integral multiples
of $1 in excess thereof. Each Class
of Non-Book-Entry Certificates other than
the Residual Certificates shall be
issued in definitive, fully registered form
in the minimum denominations in
Certificate Principal Amount specified in
the Preliminary Statement hereto and
in integral multiples of $1 in excess
thereof. The Residual Certificates will be
issued in registered, certificated form in
minimum denominations of a 25%
Percentage Interest. Provided however, that
one Certificate of each such Class
of Certificates may be in a different
denomination so that the sum of the
denominations of all outstanding
Certificates of such Class shall equal the
Class Certificate Balance of such Class on
the Closing Date.
(b) The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an
authorized officer. Each Certificate
shall, on original issue, be authenticated
by the Trustee or an Authenticating
Agent upon the order of the Depositor upon
receipt by the Trustee of the Trustee
Mortgage Files described in Section 2.01.
No Certificate shall be entitled to
any benefit under this Agreement, or be
valid for any purpose, unless there
appear
