<PAGE>
Exhibit 4.1
EXECUTION COPY
MERRILL LYNCH MORTGAGE INVESTORS, INC.,
Depositor
WELLS FARGO BANK, N.A.
Master Servicer and Securities Administrator
and
HSBC BANK USA, NATIONAL ASSOCIATION,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2007
----------
Mortgage Pass-Through Certificates, MLMBS Series 2007-1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S>
<C>
ARTICLE I
DEFINITIONS....................................................
7
Section 1.02
Accounting............................................ 51
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES...............................................
52
Section 2.01
Conveyance
of Mortgage Loans to Trustee............... 52
Section 2.02
Acceptance
of Mortgage Loans by Trustee............... 55
Section 2.03
Assignment
of Interest in the Mortgage Loan Purchase
Agreement............................................. 58
Section 2.04
Substitution of Mortgage Loans........................ 59
Section 2.05
Issuance
of Certificates.............................. 61
Section 2.06
Representations and Warranties Concerning the
Depositor............................................. 61
Section 2.07
Representations and Warranties Concerning the Master
Servicer and Securities Administrator................. 62
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS............... 64
Section 3.01
Master
Servicer....................................... 64
Section 3.02
REMIC-Related Covenants............................... 65
Section 3.03
Monitoring
of Servicers............................... 65
Section 3.04
Fidelity
Bond......................................... 66
Section 3.05
Power to
Act; Procedures.............................. 66
Section 3.06
Due-on-Sale Clauses; Assumption Agreements............ 67
Section 3.07
Release of
Mortgage Files............................. 67
Section 3.08
Documents,
Records and Funds in Possession of Master
Servicer To Be Held for Trustee....................... 68
Section 3.09
Standard
Hazard Insurance and Flood Insurance
Policies.............................................. 69
Section 3.10
Presentment of Claims and Collection of Proceeds...... 69
Section 3.11
Maintenance of the Primary Mortgage Insurance
Policies.............................................. 70
Section 3.12
Trustee to
Retain Possession of Certain Insurance
Policies and Documents................................ 70
Section 3.13
Realization Upon Defaulted Mortgage Loans............. 71
Section 3.14
Compensation for the Master Servicer.................. 71
Section 3.15
REO
Property.......................................... 71
Section 3.16
Annual
Statement as to Compliance..................... 72
Section 3.17
Reports on
Assessment of Compliance and Attestation... 73
Section 3.18
Periodic
Filings...................................... 75
Section 3.19
Compliance
with Regulation AB......................... 82
ARTICLE IV
ACCOUNTS......................................................
83
Section 4.01
Protected
Accounts.................................... 83
Section 4.02
Master
Servicer Collection Account.................... 84
Section 4.03
Permitted
Withdrawals and Transfers from the Master
Servicer Collection Account........................... 85
</TABLE>
<PAGE>
<TABLE>
<S>
<C>
Section 4.04
Distribution Account.................................. 86
Section 4.05
Permitted
Withdrawals and Transfers from the
Distribution Account.................................. 86
Section 4.06
Reserve
Account....................................... 88
ARTICLE V
CERTIFICATES...................................................
90
Section 5.01
The
Certificates...................................... 90
Section 5.02
Certificate Register; Registration of Transfer and
Exchange of Certificates.............................. 90
Section 5.03
Mutilated,
Destroyed, Lost or Stolen Certificates..... 94
Section 5.04
Persons
Deemed Owners................................. 95
Section 5.05
Access to
List of Certificateholders' Names and
Addresses............................................. 95
Section 5.06
Book-Entry
Certificates............................... 95
Section 5.07
Notices to
Depository................................. 96
Section 5.08
Definitive
Certificates............................... 96
Section 5.09
Maintenance of Office or Agency....................... 97
ARTICLE VI PAYMENTS TO
CERTIFICATEHOLDERS................................ 98
Section 6.01
Distributions on the Certificates..................... 98
Section 6.02
Allocation
of Losses.................................. 103
Section 6.03
Payments.............................................. 104
Section 6.04
Statements
to Certificateholders...................... 104
Section 6.05
Monthly
Advances...................................... 107
Section 6.06
Compensating Interest Payments........................ 107
ARTICLE VII THE MASTER SERVICER AND THE
DEPOSITOR........................ 108
Section 7.01
Liabilities of the Master Servicer.................... 108
Section 7.02
Merger or
Consolidation of the Master Servicer........ 108
Section 7.03
Indemnification from the Master Servicer and the
Depositor............................................. 108
Section 7.04
Limitations on Liability of the Master Servicer and
Others................................................ 109
Section 7.05
Master
Servicer Not to Resign......................... 110
Section 7.06
Successor
Master Servicer............................. 110
Section 7.07
Sale and
Assignment of Master Servicing............... 110
ARTICLE VIII
DEFAULT.....................................................
112
Section 8.01
Events of
Default..................................... 112
Section 8.02
Trustee to
Act; Appointment of Successor.............. 113
Section 8.03
Notification to Certificateholders.................... 114
Section 8.04
Waiver of
Defaults.................................... 114
Section 8.05
List of
Certificateholders............................ 115
ARTICLE IX CONCERNING THE TRUSTEE AND THE SECURITIES
ADMINISTRATOR....... 116
Section 9.01
Duties of
Trustee..................................... 116
Section 9.02
Certain
Matters Affecting the Trustee and the
Securities Administrator.............................. 118
</TABLE>
iii
<PAGE>
<TABLE>
<S>
<C>
Section 9.03
Trustee
and Securities Administrator Not Liable for
Certificates or Mortgage Loans........................ 120
Section 9.04
Trustee
and Securities Administrator May Own
Certificates.......................................... 120
Section 9.05
Trustee's
and Securities Administrator's Fees and
Expenses.............................................. 120
Section 9.06
Eligibility Requirements for Trustee and Securities
Administrator......................................... 121
Section 9.07
Insurance............................................. 122
Section 9.08
Resignation and Removal of the Trustee and Securities
Administrator......................................... 122
Section 9.09
Successor
Trustee and Successor Securities
Administrator......................................... 123
Section 9.10
Merger or
Consolidation of Trustee or Securities
Administrator......................................... 123
Section 9.11
Appointment of Co-Trustee or Separate Trustee......... 124
Section 9.12
Federal
Information Returns and Reports to
Certificateholders; REMIC Administration.............. 125
ARTICLE X
TERMINATION....................................................
130
Section 10.01
Termination upon
Liquidation or Repurchase of all
Mortgage Loans........................................ 130
Section 10.02
Final
Distribution on the Certificates................ 131
Section 10.03
Additional
Termination Requirements................... 132
ARTICLE XI MISCELLANEOUS
PROVISIONS...................................... 134
Section 11.01
Intent of
Parties..................................... 134
Section 11.02
Amendment............................................. 134
Section 11.03
Recordation of
Agreement.............................. 136
Section 11.04
Limitation on
Rights of Certificateholders............ 136
Section 11.05
Acts of
Certificateholders............................ 136
Section 11.06
Governing
Law......................................... 138
Section 11.07
Notices............................................... 138
Section 11.08
Severability of
Provisions............................ 139
Section 11.09
Successors and
Assigns................................ 139
Section 11.10
Article and
Section Headings.......................... 139
Section 11.11
Counterparts.......................................... 139
Section 11.12
Notice to Rating
Agencies............................. 139
Section 11.13
Third Party
Rights.................................... 139
ARTICLE XII REMIC
ADMINISTRATION.........................................
140
Section 12.01
REMIC
Administration.................................. 140
Section 12.02
Prohibited
Transactions and Activities................ 140
Section 12.03
Indemnification
with Respect to Prohibited
Transactions or Loss of REMIC Status.................. 140
Section 12.04
REO
Property.......................................... 141
</TABLE>
iv
<PAGE>
EXHIBITS
Exhibit A-1
- Form of Class
A and Class M Certificates
Exhibit A-2
- Form of Class
B Certificates
Exhibit A-3
- Form of Class
A-R Certificate
Exhibit A-4
- Form of Class
P Certificate
Exhibit B
- Mortgage Loan
Schedule
Exhibit C
- [Reserved]
Exhibit D
- Request for
Release of Documents
Exhibit E-1
- Form of
Transferee's Letter and Affidavit
Exhibit E-2
- Form of
Transferor Certificate
Exhibit F-1
- Form of
Transferor Representation Letter
Exhibit F-2
- Form of
Investor Representation Letter
Exhibit F-3
- Form of Rule
144A Letter
Exhibit G
- Form of
Custodial Agreement
Exhibit H
-
[Reserved]
Exhibit I-1 to I-7 - Assignment Agreements
Exhibit J
- Mortgage Loan
Purchase Agreement
Exhibit K
- Servicing
Criteria To Be Addressed in Assessment of
Compliance
Exhibit L
- Form of Sarbanes-Oxley
Certification
Exhibit M
- Form of
Back-up Sarbanes-Oxley Certification
Exhibit N
- [Reserved]
Exhibit O
- Additional
Disclosure Notification
Exhibit P
- Form of Item
1123 Certification of Servicer
Exhibit Q-1
- Additional
Form 10-D Disclosure
Exhibit Q-2
- Additional
Form 10-K Disclosure
Exhibit Q-3
- Form 8-K
Disclosure Information
SCHEDULE I
- Prepayment
Penalty Mortgage Loans
v
<PAGE>
POOLING AND SERVICING AGREEMENT
This
Pooling and Servicing Agreement is dated as of March 1, 2007
(the
"Agreement"), among MERRILL LYNCH MORTGAGE INVESTORS, INC., as
depositor (the
"Depositor"), WELLS FARGO BANK, N.A., as master servicer (in such
capacity, the
"Master Servicer") and as securities administrator (in such
capacity, the
"Securities Administrator") and HSBC BANK USA, NATIONAL
ASSOCIATION, as trustee
(the "Trustee").
PRELIMINARY STATEMENT
The
Depositor has acquired the Mortgage Loans from the Seller and at
the
Closing Date is the owner of the Mortgage Loans and the other
property being
conveyed by the Depositor to the Trustee hereunder for inclusion in
the Trust
Fund. On the Closing Date, the Depositor will acquire the
Certificates from the
Securities Administrator as consideration for the Depositor's
transfer to the
Trust Fund of the Mortgage Loans and the other property
constituting the Trust
Fund. The Depositor has duly authorized the execution and delivery
of this
Agreement to provide for the conveyance to the Trustee of the
Mortgage Loans and
the other property constituting the Trust Fund. All covenants and
agreements
made by the Seller in the Mortgage Loan Purchase Agreement and in
this Agreement
and all covenants and agreements made by the Depositor, the
Trustee, the
Securities Administrator and the Master Servicer herein with
respect to the
Mortgage Loans and the other property constituting the Trust Fund
are for the
benefit of the Holders from time to time of the Certificates. The
Depositor, the
Trustee, the Securities Administrator and the Master Servicer are
entering into
this Agreement, and the Trustee is accepting the Trust Fund created
hereby, for
good and valuable consideration, the receipt and sufficiency of
which are hereby
acknowledged.
As
provided herein, the Securities Administrator shall elect that the
Trust
Fund be treated for federal income tax purposes as consisting of
(i) two real
estate mortgage investment conduits (each a "REMIC" or, in the
alternative,
"REMIC 1" and the "Upper Tier REMIC," respectively) in a tiered
structure, (ii)
the right to receive payments distributable to the Class P
Certificates and
(iii) the grantor trust described in Section 9.12 hereof . The
Certificates,
other than the Class A-R and Class P Certificates, shall represent
ownership of
regular interests in the Upper Tier REMIC. The Class A-R
Certificate represents
the sole class of residual interest in each of REMIC 1 and the
Upper Tier REMIC.
The
Upper Tier REMIC shall hold as its assets the several classes
of
uncertificated REMIC 1 Regular Interests. REMIC 1 shall hold as its
assets the
property of the Trust Fund other than the REMIC 1 Interests and
other than the
right to receive payments distributable to the Class P
Certificates.
Each
Upper Tier REMIC Regular Interest is hereby designated as a
regular
interest in the Upper Tier REMIC for purposes of the REMIC
Provisions. Each
REMIC 1 Regular Interest is hereby designated as a regular interest
in REMIC 1
for purposes of the REMIC Provisions.
The
Class LT1-R Interest is hereby designated as the sole class of
residual
interest in REMIC 1 for purposes of the REMIC Provisions. The Class
A-R
Certificate, other than the portion thereof representing the right
to receive
payments in respect of the Class LT1-R Interest,
-1-
<PAGE>
is hereby designated as the sole class of residual interest in the
Upper Tier
REMIC for purposes of the REMIC provisions. The Class A-R
Certificate will also
represent the Class LT1-R Interest.
THE REMIC 1 INTERESTS
The
following table sets forth (or describes) the class
designation,
interest rate, initial principal balance, and related group of
Mortgage Loans
for each class of REMIC 1 Interests:
<TABLE>
<CAPTION>
Interest
Related Loan Groups
Class Designation Principal Balance
Rate
or Loan Group
----------------- -----------------
--------
------------------------------
<S>
<C>
<C>
<C>
LT11A
$
150,992.7331 (2)
Loan
Group I
LT11B
$ 3,552,582.7331
(3) Loan Group I
LT12A
$
41,831.9635 (2)
Loan
Group II
LT12B
$
984,221.9635 (4)
Loan
Group II
LT1Z
$448,950,840.2668 (2)
Loan
Group I and Loan Group II
LT1-R
(1)
(1)
N/A
</TABLE>
----------
(1) The Class LT1-R
Interest represents the sole class of residual interest in
REMIC 1 and has neither a principal amount nor an interest rate.
The Class
LT1-R Interest shall be represented by the Class A-R
Certificate.
(2) The Class LT11A
Interest, the Class LT12A Interest and the Class LT1Z
Interest shall have an interest rate for each Distribution Date
(and the
related Interest Accrual Period) equal to the Net WAC.
(3) The Class LT11B
Interest shall have an interest rate for any Distribution
Date
(and the related Interest Accrual Period) equal to the Loan Group
I
Net
WAC.
(4) The Class LT12B
Interest shall have an interest rate for any Distribution
Date
(and the related Interest Accrual Period) equal to the Loan Group
II
Net
WAC.
On
each Distribution Date, the Securities Administrator shall first
pay or
charge as an expense of REMIC 1 all expenses of the Issuing Entity
for such
Distribution Date.
Principal
distributions shall be deemed to be made on the REMIC 1
Interests
first, so as to keep the uncertificated principal balance of each
REMIC 1
Interest ending with the designation "A" equal to 1% of the excess
of (x) the
aggregate Stated Principal Balance of the Mortgage Loans in the
related Loan
Group over (y) the aggregate class principal amounts of the
Certificates in the
Certificate Group related to such Loan Group (except that if 1% of
any such
excess is greater than the principal amount of the corresponding
REMIC 1
Interest ending with the designation "A", the least amount of
principal shall be
distributed to such REMIC 1 Interests such that the REMIC 1
Subordinate Balance
Ratio is maintained); second, to each REMIC 1 Interest ending with
the
designation "B" so as to keep the uncertificated principal balance
of each such
REMIC 1 Interest equal to 1% of the aggregate Stated Principal
Balance of the
Mortgage Loans in the related Loan Group and finally, all remaining
principal
amounts shall be distributed in respect of the Class LT1Z Interest.
Realized
Losses with respect to principal shall be allocated among the REMIC
1 Interests
first, so as to keep the uncertificated principal balance of each
REMIC 1
Interest ending with the designation "A" equal to 1% of the excess
of (x) the
aggregate Stated Principal Balance of the Mortgage Loans in the
related Loan
Group over (y) the
-2-
<PAGE>
aggregate class principal amounts of the Certificates in the
Certificate Group
related to such Loan Group (except that if 1% of any such excess is
greater than
the principal amount of the corresponding REMIC 1 Interest ending
with the
designation "A", the least amount of losses shall be allocated to
such REMIC 1
Interests such that the REMIC 1 Subordinate Balance Ratio is
maintained);
second, to each REMIC 1 Interest ending with the designation "B" so
as to keep
the uncertificated principal balance of each such REMIC 1 Interest
equal to 1%
of the aggregate Principal Balance of the Mortgage Loans in the
related Loan
Group and finally, all remaining Realized Losses with respect to
principal shall
be distributed in respect of the Class LT1Z Interest.
If
on any Distribution Date the Class Certificate Balance of any Class
of
Certificates is increased due to Subsequent Recoveries pursuant to
the
definition of "Class Certificate Balance", then there shall be an
equivalent
aggregate increase in the principal amounts of the REMIC 1 Regular
Interests,
with such increase allocated (before the making of distributions
and the
allocation of losses on the REMIC 1 Regular Interests on such
Distribution Date)
among the REMIC 1 Regular Interests as follows: (i) first, to each
REMIC 1
Interest ending with the designation "B" so as to keep the
uncertificated
principal balance of each such REMIC 1 Interest equal to 1% of the
aggregate
Stated Principal Balance of the Mortgage Loans in the related Loan
Group, (ii)
second, to each REMIC 1 Regular Interest ending with the
designation "A", so
that the uncertificated principal balance of each REMIC 1 Regular
Interest
ending with the designation "A" is as close as possible to (but
does not exceed)
1% of the excess of (x) the aggregate Stated Principal Balance of
the Mortgage
Loans in related Loan Group over (y) the aggregate class principal
balance of
the Certificates in the Certificate Group related to such Loan
Group; provided,
however, that (a) the REMIC 1 Subordinate Balance Ratio is
maintained and (b)
amounts allocated to any REMIC 1 Regular Interest pursuant to this
clause (ii)
shall not exceed the amount of any previous realized losses
allocated to such
REMIC 1 Regular Interest not previously offset by distributions or
increases in
the principal amount of such REMIC 1 Regular Interest and (iii)
finally, all
remaining amounts to the Class LT1Z Interest.
All
computations with respect to the REMIC 1 Interests shall be
computed to
eight decimal places.
THE CERTIFICATES
The
following table sets forth (or describes) the Class
designation,
Pass-Through Rate, initial Class Certificate Balance or initial
notional amount,
and minimum denomination for each Class of Certificates comprising
interests in
the Trust Fund created hereunder.
<TABLE>
<CAPTION>
Related Class
or Classes
of interests
Initial
Minimum
in the
Class
Denominations
Class
Upper Tier
Pass-Through Certificate
or
Percentage
Designation
REMIC
Rate
Balance
Interest
------------
-------------
------------
------------
-------------
<S>
<C>
<C>
<C>
<C>
Class I-A-1 Class I-A-1
(1)
$325,701,900
$25,000.00
Class I-A-2 Class I-A-2
(1) $
14,457,000
$25,000.00
Class II-A-1 Class II-A-1
(2) $
90,234,000
$25,000.00
Class II-A-2 Class II-A-2
(2) $
4,005,000
$25,000.00
Class A-R
Class A-R
(3) $
100
100%
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
Related Class
or Classes
of interests
Initial
Minimum
in the
Class
Denominations
Class
Upper Tier
Pass-Through Certificate
or
Percentage
Designation
REMIC
Rate
Balance
Interest
------------
-------------
------------
------------
-------------
<S>
<C>
<C>
<C>
<C>
Class M-1 Class M-1
(4) $
9,074,000
$25,000.00
Class M-2 Class M-2
(4) $ 3,402,000
$25,000.00
Class M-3 Class M-3
(4) $
2,495,000
$25,000.00
Class B-1 Class B-1
(4) $
1,814,000
$25,000.00
Class B-2 Class B-2
(4) $
1,134,000
$25,000.00
Class B-3 Class B-3
(4) $
1,363,469
$25,000.00
Class P
Class P
N/A(5)
N/A(5)
100%
</TABLE>
(1) The Pass-Through
Rate with respect to any Distribution Date (and the
related Interest Accrual Period) for the Class I-A-1 and Class
I-A-2
Certificates will be the Loan Group I Net WAC.
(2) The Pass-Through
Rate with respect to any Distribution Date (and the
related Interest Accrual Period) for the Class II-A-1 and Class
II-A-2
Certificates will be the Loan Group II Net WAC.
(3) The Pass-Through
Rate with respect to any Distribution Date (and the
related Interest Accrual Period) for the Class A-R Certificates
will be the
Loan
Group I Net WAC.
(4) The Pass-Through
Rates with respect to any Distribution Date (and the
related Interest 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.
(5) The Class P
Certificates shall not have minimum dollar denominations or
Class Certificate Balance and shall be issued in a minimum
percentage
interest of 10% and an aggregate percentage interest of 100%. The
Class P
Certificates will be entitled to receive Prepayment Penalties on
the
Prepayment Penalty Mortgage Loans.
As
of the Cut-off Date, the Mortgage Loans had an aggregate Stated
Principal Balance of $453,680,469.66.
In
consideration of the mutual agreements herein contained, the
Depositor,
the Trustee, Securities Administrator and the Master Servicer
hereby agree as
follows:
-4-
<PAGE>
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless
otherwise expressly provided or unless the context otherwise
requires, shall
have the meanings specified in this Article.
ABN
AMRO: ABN AMRO Mortgage Group, Inc. or any successor thereto.
ABN
AMRO Assignment Agreement: The Assignment, Assumption and
Recognition
Agreement, dated as of March 1, 2007, among the Seller, the
Depositor and ABN
AMRO, pursuant to which the ABN AMRO Servicing Agreement (other
than the rights
to enforce the representations and warranties with respect to the
ABN AMRO
Loans) were assigned to the Depositor for the benefit of the
Certificateholders.
ABN
AMRO Loans: The Mortgage Loans serviced by ABN AMRO pursuant to the
ABN
AMRO Servicing Agreement.
ABN
AMRO Servicing Agreement: The Master Mortgage Loan Sale and
Servicing
Agreement, dated as of October 1, 2006, between ABN AMRO and the
Seller.
Accepted Master Servicing Practices: With respect to any Mortgage
Loan, as
applicable, either (x) those customary mortgage master servicing
practices of
prudent mortgage servicing institutions that master service
mortgage loans of
the same type and quality as such Mortgage Loan in the jurisdiction
where the
related Mortgaged Property is located, to the extent applicable to
the Trustee
or the Master Servicer (except in its capacity as successor to a
Servicer), or
(y) as provided in the applicable Servicing Agreement, to the
extent applicable
to any Servicer, but in no event below the standard set forth in
clause (x).
Account: The Master Servicer Collection Account, Distribution
Account and
any Protected Account as the context may require.
Accountant's Attestation: As defined in Section 3.17.
Accrued Certificate Interest: With respect to each Class of
Certificates,
an amount equal to the interest accrued during the related Interest
Accrual
Period on the Class Certificate Balance thereof at the
then-applicable
Pass-Through Rate. Accrued Certificate Interest on any Class of
Certificates
will be reduced by the amount of (i) Prepayment Interest Shortfalls
(to the
extent not offset by the related Servicer or Master Servicer with a
payment of
Compensating Interest as provided in Section 6.06), (ii) the
interest portion of
Realized Losses allocated to such Class of Certificates pursuant to
Section 6.02
and (iii) any other interest shortfalls not covered by the
subordination
provided by the Class M Certificates and Class B Certificates,
including
shortfalls as a result of the Relief Act or similar legislation or
regulations,
with all such reductions allocated among all of the Certificates in
proportion
to their respective amounts of Accrued Certificate Interest payable
on such
Distribution Date which would have resulted absent such
reductions.
Additional Disclosure Notification: As defined in Section
3.18(b).
-5-
<PAGE>
Additional Form 10-D Disclosure: As defined in Section 3.18(e).
Additional Form 10-K Disclosure: As defined in Section 3.18(h).
Adverse REMIC Event: As
defined in Section 9.12(g).
Affiliate: As to any Person, any other Person controlling,
controlled by or
under common control with such Person. "Control" means the power to
direct the
management and policies of a Person, directly or indirectly,
whether through
ownership of voting securities, by contract or otherwise.
"Controlled" and
"Controlling" have meanings correlative to the foregoing. The
Master Servicer
may conclusively presume that a Person is not an Affiliate of
another Person
unless a Responsible Officer of the Master Servicer has actual
knowledge to the
contrary.
Agreement: This Pooling and Servicing Agreement, including the
exhibits
hereto, and all amendments hereof and supplements hereto.
Applicable Credit Rating: For any long-term deposit or security, a
credit
rating of AAA in the case of S&P or AAA in the case of Fitch.
For any short-term
deposit or security, a rating of A-l+ in the case of S&P or
A-1+ in the case of
Fitch.
Applicable Credit Support Percentage: With respect to any Class
of
Subordinate Certificates, the sum of the related Class
Subordination Percentages
of such Class and all Classes of Subordinate Certificates which
have a lower
relative priority of payment than such Class.
Appraised Value: For any Mortgaged Property related to a Mortgage
Loan, the
amount set forth as the appraised value of such Mortgaged Property
in an
appraisal made for the mortgage originator in connection with its
origination of
the related Mortgage Loan.
Assessment of Compliance: As defined in Section 3.17.
Assignment: 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 of
record the sale
of the Mortgage Loan to the Trustee for the benefit of
Certificateholders, which
assignment, notice of transfer or equivalent instrument may be in
the form of
one or more blanket assignments covering Mortgages secured by
Mortgaged
Properties located in the same county, if permitted by law and
accompanied by an
Opinion of Counsel to that effect.
Assignment Agreements: The IndyMac Assignment Agreement, the PHH
Assignment
Agreement, the Wells Fargo Assignment Agreement, the ABN AMRO
Assignment
Agreement, the Washington Mutual Assignment Agreement, the
Countrywide
Assignment Agreement and the National City Assignment Agreement,
which are
attached hereto as Exhibits I-1, I-2, I-3, I-4, I-5, I-6 and I-7,
respectively.
Assumed Final Distribution Date: For all Classes of Certificates,
April 25,
2037, or if such day is not a Business Day, the next succeeding
Business Day.
-6-
<PAGE>
Auction: The one-time auction conducted by the Securities
Administrator, as
described in Section 10.01(b) hereof.
Auction date: The date on which the Auction occurs.
Available Funds: For any Distribution Date, the sum of the Group
I
Available Funds and the Group II Available Funds.
Average Loss Severity: With respect to any period and each Loan
Group, the
fraction obtained by dividing (x) the aggregate amount of Realized
Losses for
the related Mortgage Loans for such period by (y) the number of
related Mortgage
Loans which had Realized Losses for such period.
Back-Up Certification: As defined in Section 3.18(k).
Bankruptcy Code: The United States Bankruptcy Code, as amended as
codified
in 11 U.S.C. Sections 101-1330.
Book-Entry Certificates: Any of the Certificates that shall be
registered
in the name of the Depository or its nominee, the ownership of
which is
reflected on the books of the Depository or on the books of a
Person maintaining
an account with the Depository (directly, as a "Depository
Participant", or
indirectly, as an indirect participant in accordance with the rules
of the
Depository and as described in Section 5.02 hereof). On the Closing
Date, the
Certificates (other than the Class A-R Certificate and the Private
Certificates)
shall be Book-Entry Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or
(ii) a day
on which the New York Stock Exchange or Federal Reserve is closed
or on which
banking institutions in the jurisdiction in which the Trustee, the
Master
Servicer, any Servicer or the Securities Administrator are
authorized or
obligated by law or executive order to be closed.
Certificate: Any mortgage pass-through certificate evidencing a
beneficial
ownership interest in the Trust Fund signed and countersigned by
the Securities
Administrator.
Certificate Group: Each of the Group I Certificates and the Group
II
Certificates.
Certificateholder or Holder: The Person in whose name a Regular
Certificate
is registered in the Certificate Register, except that a
Disqualified
Organization or non-U.S. Person shall not be a Holder of the Class
A-R
Certificate for any purpose hereof.
Certificate Owner: With respect to each Book-Entry Certificate,
any
beneficial owner thereof.
Certificate Register: The register maintained pursuant to Section
5.02
hereof.
Certification Parties: As defined in Section 3.18(k).
Certifying Person: As defined in Section 3.18(k).
-7-
<PAGE>
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 A Certificate: Any of the Class I-A-1, Class I-A-2, Class
II-A-1,
Class II-A-2 or Class A-R Certificates as designated on the face
thereof
substantially in the form annexed (other than the Class A-R
Certificate) hereto
as Exhibit A-1, executed by the Securities Administrator and
authenticated and
delivered by the Securities Administrator, representing the right
to
distributions as set forth herein and therein.
Class A-R Certificate: The Class A-R Certificate executed,
authenticated
and delivered by the Securities Administrator substantially in the
form annexed
hereto as Exhibit A-3 and evidencing the ownership of the Class
LT1-R Interest
and the residual interest in the Upper Tier REMIC.
Class A Certificateholder: Any Holder of a Class A Certificate.
Class B Certificate: Any one of the Class B-1, Class B-2 or Class
B-3
Certificates as designated on the face thereof substantially in the
form annexed
hereto as Exhibit A-2, executed by the Securities Administrator
and
authenticated and delivered by the Securities Administrator,
representing the
right to distributions as set forth herein and therein.
Class B Certificateholder: Any Holder of a Class B Certificate.
Class B Percentage: The Class B-1 Percentage, Class B-2 Percentage
or Class
B-3 Percentage.
Class B-1 Percentage: With respect to any Distribution Date, the
lesser of
100% and a fraction, expressed as a percentage, the numerator of
which is the
aggregate Class Certificate Balance of the Class B-1 Certificates
immediately
prior to such Distribution Date and the denominator of which is the
aggregate
Stated Principal Balance of all of the Mortgage Loans (or related
REO
Properties) immediately prior to such Distribution Date.
Class B-2 Percentage: With respect to any Distribution Date, the
lesser of
100% and a fraction, expressed as a percentage, the numerator of
which is the
aggregate Class Certificate Balance of the Class B-2 Certificates
immediately
prior to such Distribution Date and the denominator of which is the
aggregate
Stated Principal Balance of all of the Mortgage Loans (or related
REO
Properties) immediately prior to such Distribution Date.
Class B-3 Percentage: With respect to any Distribution Date, the
lesser of
100% and a fraction, expressed as a percentage, the numerator of
which is the
aggregate Class Certificate Balance of the Class B-3 Certificates
immediately
prior to such Distribution Date and the denominator of which is the
aggregate
Stated Principal Balance of all of the Mortgage Loans (or related
REO
Properties) immediately prior to such Distribution Date.
Class Certificate Balance: With respect to any Certificate as of
any date
of determination, the Class Certificate Balance of such Certificate
on the
Distribution Date immediately prior to such date of determination,
plus any
Subsequent Recoveries added to the
-8-
<PAGE>
Class Certificate Balance of such Certificate pursuant to Section
6.01, and
reduced by the aggregate of (a) all distributions of principal made
thereon on
such immediately prior Distribution Date and (b) without
duplication of amounts
described in clause (a) above, reductions in the Class Certificate
Balance
thereof in connection with allocations thereto of Realized Losses
on the
Mortgage Loans and Extraordinary Trust Fund Expenses on such
immediately prior
Distribution Date (or, in the case of any date of determination up
to and
including the initial Distribution Date, the initial Class
Certificate Balance
of such Certificate, as stated on the face thereof); provided,
however, that the
Class Certificate Balance of each Subordinate Certificate of the
Class of
Subordinate Certificates outstanding with the highest numerical
designation at
any given time shall be calculated to equal the Percentage Interest
evidenced by
such Certificate multiplied by the excess, if any, of (A) the then
aggregate
Stated Principal Balance of the Mortgage Loans over (B) the then
aggregate Class
Certificate Balance of all other Classes of Certificates then
outstanding.
Class M Certificate: Any one of the Class M-1, Class M-2 or Class
M-3
Certificates as designated on the face thereof substantially in the
form annexed
hereto as Exhibit A-1, executed by the Securities Administrator
and
authenticated and delivered by the Securities Administrator,
representing the
right to distributions as set forth herein and therein.
Class M Certificateholder: Any Holder of a Class M Certificate.
Class M Percentage: The Class M-1 Percentage, Class M-2 Percentage
or Class
M-3 Percentage.
Class M-1 Percentage: With respect to any Distribution Date, the
lesser of
100% and a fraction, expressed as a percentage, the numerator of
which is the
aggregate Class Certificate Balance of the Class M-1 Certificates
immediately
prior to such date and the denominator of which is the aggregate
Stated
Principal Balance of all of the Mortgage Loans (or related REO
Properties)
immediately prior to such Distribution Date.
Class M-2 Percentage: With respect to any Distribution Date, the
lesser of
100% and a fraction, expressed as a percentage, the numerator of
which is the
aggregate Class Certificate Balance of the Class M-2 Certificates
immediately
prior to such date and the denominator of which is the aggregate
Stated
Principal Balance of all of the Mortgage Loans (or related REO
Properties)
immediately prior to such Distribution Date.
Class M-3 Percentage: With respect to any Distribution Date, the
lesser of
100% and a fraction, expressed as a percentage, the numerator of
which is the
aggregate Class Certificate Balance of the Class M-3 Certificates
immediately
prior to such date and the denominator of which is the aggregate
Stated
Principal Balance of all of the Mortgage Loans (or related REO
Properties)
immediately prior to such Distribution Date.
Class P Certificate: Any one of the Class P Certificates as
designated on
the face thereof substantially in the form annexed hereto as
Exhibit A-4,
executed by the Securities Administrator and authenticated and
delivered by the
Securities Administrator representing the right to distributions of
Prepayment
Penalties received on the Prepayment Penalty Mortgage Loans as set
forth herein.
-9-
<PAGE>
Class Subordination Percentage: With respect to any Distribution
Date and
each Class of Subordinate Certificates, the fraction (expressed as
a percentage)
the numerator of which is the Class Certificate Balance of such
Class of
Subordinate Certificates immediately prior to such Distribution
Date and the
denominator of which is the aggregate of the Class Certificate
Balances of all
Classes of Certificates immediately prior to such Distribution
Date.
Closing Date: March 30, 2007.
Code: The Internal Revenue Code of 1986, as amended.
Commission: The Securities and Exchange Commission.
Compensating Interest Payment: As defined in Section 6.06.
Cooperative: A corporation that has been formed for the purpose
of
cooperative apartment ownership.
Cooperative Assets: Shares issued by Cooperatives, the related
Cooperative
Lease and any other collateral securing the Cooperative Loans.
Cooperative Lease: With respect to a Cooperative Loan, the
proprietary
lease or occupancy agreement with respect to the cooperative
apartment occupied
by the Mortgagor and relating to the related Cooperative Assets,
which lease or
agreement confers an exclusive right to the holder of such
Cooperative Assets to
occupy such apartment.
Cooperative Loan: The indebtedness of a Mortgagor evidenced by a
Mortgage
Note which is secured by Cooperative Assets and which is being sold
to the
Depositor pursuant to this Agreement, the Mortgage Loans so sold
being
identified in the Mortgage Loan Schedule.
Cooperative Stock: With respect to a Cooperative Loan, the
single
outstanding class of stock, partnership interest or other ownership
instrument
in the related Cooperative.
Corporate Trust Office: With respect to the Trustee, the
principal
corporate trust office of the Trustee at which at any particular
time its
corporate trust business in connection with this Agreement shall
be
administered, which office at the date of the execution of this
instrument is
located at HSBC Bank USA, National Association, 452 Fifth Avenue,
New York, New
York 10018, Attention: Issuer Services - Merrill Lynch Mortgage
Investors, Inc.,
MLMBS Series 2007-1, or at such other address as the Trustee may
designate from
time to time by notice to the Certificateholders, the Depositor and
the Master
Servicer and with respect to the Securities Administrator, for
Certificate
transfer purposes, Wells Fargo Center, Sixth Street and Marquette
Avenue,
Minneapolis, Minnesota 55479, Attn: Corporate Trust Services -
MLMBS 2007-1, and
for all other purposes, 9062 Old Annapolis Road, Columbia,
Maryland, 21045,
Attn: Corporate Trust Services - MLMBS 2007-1.
Countrywide: Countrywide Home Loans Servicing LP or any successor
thereto.
Countrywide Assignment Agreement: The Assignment, Assumption
and
Recognition Agreement, dated as of March 1, 2007, among the Seller,
the
Depositor, Countrywide and
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<PAGE>
Countrywide Home Loans, Inc., pursuant to which the Countrywide
Servicing
Agreement (other than the rights to enforce the representations and
warranties
with respect to the Countrywide Loans) were assigned to the
Depositor for the
benefit of the Certificateholders.
Countrywide Loans: The Mortgage Loans serviced by Countrywide
pursuant to
the Countrywide Servicing Agreement.
Countrywide Servicing Agreement: The Master Mortgage Loan Purchase
and
Servicing Agreement dated as of November 1, 2004, between
Countrywide Home Loans
Inc. and MLBUSA.
Credit Support Depletion Date: The first Distribution Date on which
the
Class Certificate Balances of the Subordinate Certificates are
reduced to zero.
Curtailment: Any Principal Prepayment made by a Mortgagor which is
not a
Principal Prepayment in Full.
Custodial Agreement: An agreement, dated as of the Closing Date
among the
Depositor, the Master Servicer, the Securities Administrator, the
Trustee and
the Custodian in substantially the form of Exhibit G hereto.
Custodian: Wells Fargo Bank, N.A., including any successors in
interest, or
any successor custodian appointed pursuant to the provisions hereof
and of the
Custodial Agreement.
Cut-off Date: March 1, 2007.
Debt
Service Reduction: Any reduction of the Monthly Payments which
a
Mortgagor is obligated to pay with respect to a Mortgage Loan as a
result of any
proceeding under the Bankruptcy Code or any other similar state law
or other
proceeding.
Defective Mortgage Loan: A Mortgage Loan replaced or to be replaced
by one
or more Substitute Mortgage Loans.
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 principal balance of the Mortgage
Loan, which
valuation results from a proceeding initiated under the Bankruptcy
Code.
Definitive Certificates: As defined in Section 5.06.
Depositor: Merrill Lynch Mortgage Investors, Inc., a Delaware
corporation,
or any successor in interest.
Depository: The Depository Trust Company, the nominee of which is
Cede &
Co., or any successor thereto.
-11-
<PAGE>
Depository Participant: A broker, dealer, bank or other
financial
institution or other Person for whom from time to time the
Depository effects
book-entry transfers and pledges of securities deposited with the
Depository.
Designated Depository Institution: A depository institution
(commercial
bank, federal savings bank, mutual savings bank or savings and loan
association)
or trust company (which may include the Trustee), the deposits of
which are
fully insured by the FDIC to the extent provided by law.
Determination Date: With respect to each Mortgage Loan, the
Determination
Date as defined in the related Servicing Agreement.
Disqualified Organization: A "disqualified organization" as defined
in
Section 860 E(e)(5) of the Code.
Distribution Account: The trust account or accounts created and
maintained
pursuant to Section 4.04, which shall be denominated "Wells Fargo
Bank, National
Association, as Securities Administrator for HSBC Bank USA,
National
Association, as Trustee f/b/o holders of Merrill Lynch Mortgage
Backed
Securities Trust, Mortgage Pass-Through Certificates, MLMBS Series
2007-1 -
Distribution Account." The Distribution Account shall be an
Eligible Account.
Distribution Account Deposit Date: The Business Day prior to
each
Distribution Date.
Distribution Date: The 25th day of any month, beginning in April
2007, or,
if such 25th day is not a Business Day, the Business Day
immediately following.
Due
Date: With respect to each Mortgage Loan, the date in each month
on
which its Monthly Payment is due if such due date is the first day
of a month
and otherwise is deemed to be the first day of the following month
or such other
date specified in the related Servicing Agreement.
Due
Period: With respect to any Distribution Date and each Mortgage
Loan,
the period commencing on the second day of the month preceding the
month in
which the Distribution Date occurs and ending at the close of
business on the
first day of the month in which the Distribution Date occurs.
Eligible Account: Any of (i) a segregated account maintained with a
federal
or state chartered depository institution (A) the short-term
obligations of
which are rated A-1 or better by S&P and Fitch at the time of
any deposit
therein or (B) insured by the FDIC (to the limits established by
such
Corporation), the uninsured deposits (as evidenced in writing by
the Rating
Agencies that use of any such account as the Distribution Account
will not have
an adverse effect on the then-current ratings assigned to the
Classes of
Certificates then rated by the Rating Agencies) in which account
are otherwise
secured such that, as evidenced by an Opinion of Counsel (obtained
by the Person
requesting that the account be held pursuant to this clause (i))
delivered to
the Securities Administrator prior to the establishment of such
account, the
Certificateholders will have a claim with respect to the funds in
such account
and a perfected first priority security interest against any
collateral (which
shall be limited to Permitted Investments, each of which shall
mature not later
than the Business Day immediately preceding
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<PAGE>
the Distribution Date next following the date of investment in such
collateral
or the Distribution Date if such Permitted Investment is an
obligation of the
institution that maintains the Distribution Account) securing such
funds that is
superior to claims of any other depositors or general creditors of
the
depository institution with which such account is maintained, (ii)
a segregated
trust account or accounts maintained with a federal or state
chartered
depository institution or trust company with trust powers acting in
its
fiduciary capacity or (iii) a segregated account or accounts of a
depository
institution acceptable to the Rating Agencies (as evidenced in
writing by the
Rating Agencies that use of any such account as the Distribution
Account will
not have an adverse effect on the then-current ratings assigned to
the Classes
of the Certificates then rated by the Rating Agencies). Eligible
Accounts may
bear interest.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that would satisfy the
requirements of
Prohibited Transaction Exemption 90-29, Exemption Application No.
D-8012, 55
Fed. Reg. 21459 (1990), as amended, granted to the Underwriter by
the United
States Department of Labor (or any other applicable underwriter's
exemption
granted by the United States Department of Labor), except, in
relevant part, for
the requirement that the certificates have received a rating at the
time of
acquisition that is in one of the three (or four, in the case of a
"designated
transaction") highest generic rating categories by at least one of
the Rating
Agencies.
ERISA Restricted Certificates: Any of the Class B-1, Class B-2,
Class B-3
or Class P Certificates, and any other Certificate, as long as the
acquisition
and holding of such Certificate is not covered by and exempt under
an
underwriter's exemption.
Event of Default: An event of default described in Section
8.01.
Excess Liquidation Proceeds: To the extent that such amount is not
required
by law to be paid to the related Mortgagor, the amount, if any, by
which
Liquidation Proceeds with respect to a Liquidated Mortgage Loan
exceed the sum
of (i) the Outstanding Principal Balance of such Mortgage Loan and
accrued but
unpaid interest at the related Mortgage Interest Rate through the
last day of
the month in which the related Liquidation Date occurs, plus (ii)
related
Liquidation Expenses.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Extraordinary Loss: Any Realized Loss or portion thereof caused by
or
resulting from:
(i) nuclear or chemical reaction or nuclear radiation or
radioactive
or
chemical contamination, all whether controlled or uncontrolled
and
whether such loss be direct or indirect, proximate or remote;
(ii) hostile or warlike action in time of peace or war,
including
action in hindering, combating or defending against an actual,
impending or
expected attack by any government or sovereign power, de jure or de
facto,
or
by any authority maintaining or using military, naval or air
forces, or
by
military, naval or air forces, or by an agent of any such
government,
power, authority or forces;
-13-
<PAGE>
(iii) any weapon of war employing atomic fission or radioactive
forces
whether in time of peace or war, and
(iv) insurrection, rebellion, revolution, civil war, usurped power
or
action taken by governmental authority in hindering, combating or
defending
against such an occurrence, seizure or destruction under quarantine
or
customs regulations, confiscation by order of any government or
public
authority, or risks of contraband or illegal transactions or
trade.
Extraordinary Trust Fund Expenses: Any amounts reimbursable to the
Master
Servicer or the Depositor pursuant to this Agreement, including but
not limited
to Sections 4.03, 4.05 and 7.04, any amounts reimbursable to the
Trustee and the
Securities Administrator from the Trust Fund pursuant to this
Agreement,
including but not limited to Section 9.05, and any other costs,
expenses,
liabilities and losses borne by the Trust Fund (exclusive of any
cost, expense,
liability or loss that is specific to a particular Mortgage Loan or
REO Property
and is taken into account in calculating a Realized Loss in respect
thereof) for
which the Trust Fund has not and, in the reasonable good faith
judgment of the
Securities Administrator, shall not, obtain reimbursement or
indemnification
from any other Person.
Fannie Mae: Federal National Mortgage Association or any successor
thereto.
FDIC: Federal Deposit Insurance Corporation or any successor
thereto.
Final Certification: The certification substantially in the form of
Exhibit
Two to the Custodial Agreement.
Fitch: Fitch Ratings or its successor in interest.
Form
8-K Disclosure Information: As defined in Section 3.18(a).
Freddie Mac: Freddie Mac, formerly the Federal Home Loan
Mortgage
Corporation, or any successor thereto.
Global Certificate: Any Private Certificate registered in the name
of the
Depository or its nominee, beneficial interests in which are
reflected on the
books of the Depository or on the books of a Person maintaining an
account with
such Depository (directly or as an indirect participant in
accordance with the
rules of such depository).
Gross Margin: As to each Mortgage Loan, the fixed percentage set
forth in
the related Mortgage Note and indicated on the Mortgage Loan
Schedule which
percentage is added to the related Index on each Interest
Adjustment Date to
determine (subject to rounding, the minimum and maximum Mortgage
Interest Rate
and the Periodic Rate Cap) the Mortgage Interest Rate until the
next Interest
Adjustment Date.
Group I Available Funds: With respect to any Distribution Date and
the
Group I Mortgage Loans, an amount equal to the excess of (i) the
sum of (a) the
aggregate of the related Monthly Payments received on or prior to
the related
Determination Date, (b) Liquidation Proceeds, Insurance Proceeds,
Principal
Prepayments, Subsequent Recoveries and other
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<PAGE>
unscheduled recoveries of principal and interest in respect of the
Group I
Mortgage Loans during the related Prepayment Period, (c) the
aggregate of any
amounts received in respect of a related REO Property withdrawn
from any
Protected Account and deposited in the Master Servicer Collection
Account for
such Distribution Date, (d) the aggregate of any amounts deposited
in the Master
Servicer Collection Account by the related Servicer or the Master
Servicer in
respect of related Prepayment Interest Shortfalls for such
Distribution Date,
(e) the aggregate of any related Monthly Advances made by the
related Servicer
or the Master Servicer for such Distribution Date and (f)
Prepayment Penalties
received with respect to the related Mortgage Loans, over (ii) the
sum of (a)
related amounts reimbursable or payable to the related Servicer or
the Master
Servicer pursuant to Sections 4.03 and 4.05, (b) related amounts
deposited in
the Master Servicer Collection Account or the Distribution Account,
as the case
may be, in error and (c) any Extraordinary Trust Fund Expenses.
Group I Certificates: The Class I-A-1, Class I-A-2 and Class
A-R
Certificates.
Group I Mortgage Loans: The Mortgage Loans identified as such on
the
Mortgage Loan Schedule.
Group I Senior Accelerated Distribution Percentage: With respect to
any
Distribution Date, the percentage indicated below:
<TABLE>
<CAPTION>
Group I Senior Accelerated
Distribution Date
Distribution Percentage
-----------------
------------------------------------------
<S>
<C>
April 2007 through March 2014 100%
April 2014 through March 2015 Group I Senior Percentage,
plus 70% of the
Group I Subordinate Percentage
April 2015 through March 2016 Group I Senior Percentage,
plus 60% of the
Group I Subordinate Percentage
April 2016 through March 2017 Group I Senior Percentage,
plus 40% of the
Group I Subordinate Percentage
April 2017 through March 2018 Group I Senior Percentage,
plus 20% of the
Group I Subordinate Percentage
April 2018 and thereafter
Group I Senior Percentage
</TABLE>
provided, however, (i) that any scheduled reduction to the Group I
Senior
Accelerated Distribution Percentage described above shall not occur
as of any
Distribution Date unless either (a)(1)(x) the outstanding principal
balance of
Mortgage Loans delinquent 60 days or more (including foreclosure
and REO
Property) averaged over the last six months as a percentage of the
aggregate
outstanding Class Certificate Balance of the Class M Certificates
and the Class
B Certificates, is less than 50%, or (y) the outstanding principal
balance of
Mortgage Loans delinquent 60 days or more (including foreclosure
and REO
Property) averaged over the last six months, as a percentage of the
aggregate
outstanding principal balance of all Mortgage Loans averaged over
the last six
months, does not exceed 2% and (2) Realized Losses on the Mortgage
Loans to date
for such Distribution Date if occurring during the eighth, ninth,
tenth,
eleventh or
-15-
<PAGE>
twelfth year (or any year thereafter) after the Closing Date are
less than 30%,
35%, 40%, 45% or 50%, respectively, of the sum of the Initial Class
Certificate
Balances of the Class M Certificates and Class B Certificates or
(b) (1) the
aggregate outstanding principal balance of the Mortgage Loans
delinquent 60 days
or more (including foreclosure and REO Property) averaged over the
last six
months, as a percentage of the aggregate outstanding principal
balance of all
Mortgage Loans averaged over the last six months, does not exceed
4% and (2)
Realized Losses on the Mortgage Loans on or prior to such
Distribution Date if
occurring during the eighth, ninth, tenth, eleventh or twelfth year
(or any year
thereafter) after the Closing Date are less than 10%, 15%, 20%, 25%
or 30%,
respectively, of the sum of the Initial Class Certificate Balances
of the Class
M Certificates and Class B Certificates and (ii) that for any
Distribution Date
on which the Group I Senior Percentage is greater than the Original
Group I
Senior Percentage, the Group I Senior Accelerated Distribution
Percentage and
Group II Senior Accelerated Distribution Percentage for such
Distribution Date
shall be 100%. Notwithstanding the foregoing, upon the reduction of
the
aggregate Class Certificate Balance of the Class I-A-1 and Class
I-A-2
Certificates to zero, the Group I Senior Accelerated Distribution
Percentage
will equal 0%.
In
addition, on any Distribution Date on or after the Distribution
Date
occurring in April 2010, if the current weighted average of the
Subordinate
Percentages for the Certificates is equal to or greater than two
times the
initial weighted average of the Subordinate Percentages for the
Certificates,
and (a) the outstanding principal balance of the Mortgage Loans
delinquent 60
days or more (including for this purpose any such Mortgage Loans in
foreclosure
or bankruptcy and such Mortgage Loans with respect to which the
related
Mortgaged Property has been acquired by the Issuing Entity),
averaged over the
last six months, as a percentage of the Subordinate Percentage for
that
Distribution Date times the aggregate Stated Principal Balance of
the Mortgage
Loans, does not exceed 50% and (b) cumulative Realized Losses on
the Mortgage
Loans do not exceed 20% of the initial Subordinate Percentage times
the
aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date,
then, in each case, the Group I Senior Accelerated Distribution
Percentage for
such Distribution Date will be equal to, prior to the Distribution
Date
occurring in April 2010, the Group I Senior Percentage plus 50% of
the
Subordinate Percentage and, on or after the Distribution Date
occurring in April
2010, the Group I Senior Percentage.
Group I Senior Percentage: As of any Distribution Date, the lesser
of 100%
and a fraction, expressed as a percentage, the numerator of which
is the
aggregate Class Certificate Balance of the Class I-A Certificates
immediately
prior to such Distribution Date and the denominator of which is the
aggregate
Stated Principal Balance of all of the Group I Mortgage Loans or
related REO
Properties immediately prior to such Distribution Date.
Group I Senior Principal Distribution Amount: As to any
Distribution Date,
the lesser of (a) the balance of the Group I Available Funds
remaining after the
distribution of all amounts required to be distributed pursuant to
subclauses
first, second and third of Section 6.01(A) and (b) the sum of the
following:
(A) the Group I Senior Percentage for such Distribution Date
times the sum of the following:
(1) the principal portion of each Monthly Payment due during
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<PAGE>
the related Due Period on each Outstanding Mortgage Loan in Loan
Group
I, whether or not received on or prior to the related
Determination
Date,
minus the principal portion of any Debt Service Reduction;
(2) the Stated Principal Balance of any Group I Mortgage
Loan repurchased during the related Prepayment Period pursuant
to
Section 2.02 or 2.03 hereof or pursuant to the related
Servicing
Agreement; and
(3) the principal portion of all other unscheduled
collections, including Subsequent Recoveries (other than
Principal
Prepayments in Full and Curtailments and amounts received in
connection with the liquidation or disposition of a Group I
Mortgage
Loan, including without limitation Insurance Proceeds,
Liquidation
Proceeds and REO Proceeds) received during the related
Prepayment
Period to the extent applied by the related Servicer as recoveries
of
principal of the related Mortgage Loan pursuant to related
Servicing
Agreement;
(B) with respect to the liquidation or other disposition of a
Group I Mortgage Loan which occurred during the related Prepayment
Period
and
did not result in any Extraordinary Losses, an amount equal to
the
lesser of (a) the Group I Senior Percentage for such Distribution
Date
times the Stated Principal Balance of such Group I Mortgage Loan
and (b)
the
Group I Senior Accelerated Distribution Percentage for such
Distribution Date times the related unscheduled collections
(including
without limitation Insurance Proceeds, Liquidation Proceeds and
REO
Proceeds) to the extent applied by the related Servicer or the
Master
Servicer as recoveries of principal of the related Mortgage Loan
pursuant
to
the related Servicing Agreement or this Agreement;
(C) the Group I Senior Accelerated Distribution Percentage for
such
Distribution Date times the aggregate of all Principal Prepayments
in
Full
and Curtailments received in the related Prepayment Period with
respect to the Group I Mortgage Loans;
(D) any amounts described in clauses (A), (B) or (C) of this
definition, as determined for any previous Distribution Date, which
remain
unpaid after application of amounts previously distributed pursuant
to this
clause (D) to the extent that such amounts are not attributable to
Realized
Losses which have been allocated to the Class M Certificates or
Class B
Certificates;
Group II Available Funds: With respect to any Distribution Date and
the
Group II Mortgage Loans, an amount equal to the excess of (i) the
sum of (a) the
aggregate of the related Monthly Payments received on or prior to
the related
Determination Date, (b) Liquidation Proceeds, Insurance Proceeds,
Principal
Prepayments, Subsequent Recoveries and other unscheduled recoveries
of principal
and interest in respect of the Group II Mortgage Loans during the
related
Prepayment Period, (c) the aggregate of any amounts received in
respect of a
related REO Property withdrawn from any Protected Account and
deposited in the
Master Servicer Collection Account for such Distribution Date, (d)
the aggregate
of any amounts deposited in the Master Servicer Collection Account
by the
related Servicer or the Master Servicer in respect of related
Prepayment
Interest Shortfalls for such Distribution Date, (e) the
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<PAGE>
aggregate of any related Monthly Advances made by the related
Servicer or the
Master Servicer for such Distribution Date and (f) Prepayment
Penalties received
with respect to the related Mortgage Loans, over (ii) the sum of
(a) related
amounts reimbursable or payable to the related Servicer or the
Master Servicer
pursuant to Sections 4.03 and 4.05, (b) related amounts deposited
in the Master
Servicer Collection Account or the Distribution Account, as the
case may be, in
error and (c) any Extraordinary Trust Fund Expenses.
Group II Certificates: The Class II-A-1 Certificates and Class
II-A-2
Certificates.
Group II Mortgage Loans: The Mortgage Loans identified as such on
the
Mortgage Loan Schedule.
Group II Senior Accelerated Distribution Percentage: With respect
to any
Distribution Date, the percentage indicated below:
<TABLE>
<CAPTION>
Group II Senior Accelerated
Distribution Date
Distribution Percentage
-----------------
-------------------------------------------
<S>
<C>
April 2007 through March 2014 100%
April 2014 through March 2015 Group II Senior Percentage,
plus 70% of the
Group II Subordinate Percentage
April 2015 through March 2016 Group II Senior Percentage,
plus 60% of the
Group II Subordinate Percentage
April 2016 through March 2017 Group II Senior Percentage,
plus 40% of the
Group II Subordinate Percentage
April 2017 through March 2018 Group II Senior Percentage,
plus 20% of the
Group II Subordinate Percentage
April 2018 and thereafter
Group II Senior Percentage
</TABLE>
provided, however, (i) that any scheduled reduction to the Group II
Senior
Accelerated Distribution Percentage described above shall not occur
as of any
Distribution Date unless either (a)(1)(x) the outstanding principal
balance of
Mortgage Loans delinquent 60 days or more (including foreclosure
and REO
Property) averaged over the last six months as a percentage of the
aggregate
outstanding Class Certificate Balance of the Class M Certificates
and the Class
B Certificates, is less than 50%, or (y) the outstanding principal
balance of
Mortgage Loans delinquent 60 days or more (including foreclosure
and REO
Property) averaged over the last six months, as a percentage of the
aggregate
outstanding principal balance of all Mortgage Loans averaged over
the last six
months, does not exceed 2% and (2) Realized Losses on the Mortgage
Loans to date
for such Distribution Date if occurring during the eighth, ninth,
tenth,
eleventh or twelfth year (or any year thereafter) after the Closing
Date are
less than 30%, 35%, 40%, 45% or 50%, respectively, of the sum of
the Initial
Class Certificate Balances of the Class M Certificates and Class B
Certificates
or (b) (1) the aggregate outstanding principal balance of the
Mortgage Loans
delinquent 60 days or more (including foreclosure and REO Property)
averaged
over the last six months, as a percentage of the aggregate
outstanding principal
balance of all Mortgage Loans averaged over the last six months,
does not exceed
4% and (2) Realized Losses on the
-18-
<PAGE>
Mortgage Loans on or prior to such Distribution Date if occurring
during the
eighth, ninth, tenth, eleventh or twelfth year (or any year
thereafter) after
the Closing Date are less than 10%, 15%, 20%, 25% or 30%,
respectively, of the
sum of the Initial Class Certificate Balances of the Class M
Certificates and
Class B Certificates and (ii) that for any Distribution Date on
which the Group
II Senior Percentage is greater than the Original Group II Senior
Percentage,
the Group I Senior Accelerated Distribution Percentage and Group II
Senior
Accelerated Distribution Percentage for such Distribution Date
shall be 100%.
Notwithstanding the foregoing, upon the reduction of the aggregate
Class
Certificate Balance of the Class II-A-1 and Class II-A-2
Certificates to zero,
the Group II Senior Accelerated Distribution Percentage will equal
0%.
In
addition, on any Distribution Date on or after the Distribution
Date
occurring in April 2010, if the current weighted average of the
Subordinate
Percentages for the Certificates is equal to or greater than two
times the
initial weighted average of the Subordinate Percentages for the
Certificates,
and (a) the outstanding principal balance of the Mortgage Loans
delinquent 60
days or more (including for this purpose any such Mortgage Loans in
foreclosure
or bankruptcy and such Mortgage Loans with respect to which the
related
Mortgaged Property has been acquired by the Trust), averaged over
the last six
months, as a percentage of the Subordinate Percentage for that
Distribution Date
times the aggregate Stated Principal Balance of the Mortgage Loans,
does not
exceed 50% and (b) cumulative Realized Losses on the Mortgage Loans
do not
exceed 20% of the initial Subordinate Percentage times the
aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date,
then, in each
case, the Group II Senior Accelerated Distribution Percentage for
such
Distribution Date will be equal to, prior to the Distribution Date
occurring in
April 2010, the Group II Senior Percentage plus 50% of the
Subordinate
Percentage and, on or after the Distribution Date occurring in
April 2010, the
Group II Senior Percentage.
Group II Senior Percentage: As of any Distribution Date, the lesser
of 100%
and a fraction, expressed as a percentage, the numerator of which
is the
aggregate Class Certificate Balance of the Class II-A-1 and Class
II-A-2
Certificates immediately prior to such Distribution Date and the
denominator of
which is the aggregate Stated Principal Balance of all of the Group
II Mortgage
Loans or related REO Properties immediately prior to such
Distribution Date.
Group II Senior Principal Distribution Amount: As to any
Distribution Date,
the lesser of (a) the balance of the Group II Available Funds
remaining after
the distribution of all amounts required to be distributed pursuant
to
subclauses first, second and third of Section 6.01(B) and (b) the
sum of the
following:
(A) the Group II Senior Percentage for such Distribution Date
times the sum of the following:
(1) the principal portion of each Monthly Payment due during
the related Due Period on each Outstanding Mortgage Loan in Loan
Group
II, whether or not received on or prior to the related
Determination
Date, minus the principal portion of any Debt Service
Reduction;
(2) the Stated Principal Balance of any Group II Mortgage
Loan repurchased during the related Prepayment Period pursuant
to
Section 2.02 or 2.03 hereof or the related Servicing Agreement;
and
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<PAGE>
(3) the principal portion of all other unscheduled
collections, including Subsequent Recoveries (other than
Principal
Prepayments in Full and Curtailments and amounts received in
connection with the liquidation or disposition of a Group II
Mortgage
Loan, including without limitation Insurance Proceeds,
Liquidation
Proceeds and REO Proceeds) received during the related
Prepayment
Period to the extent applied by the related Servicer as recoveries
of
principal of the related Mortgage Loan pursuant to related
Servicing
Agreement;
(B) with respect to the liquidation or other disposition of a
Group II Mortgage Loan which occurred during the related Prepayment
Period
and
did not result in any Extraordinary Losses, an amount equal to
the
lesser of (a) the Group II Senior Percentage for such Distribution
Date
times the Stated Principal Balance of such Group II Mortgage Loan
and (b)
the
Group II Senior Accelerated Distribution Percentage for such
Distribution Date times the related unscheduled collections
(including
without limitation Insurance Proceeds, Liquidation Proceeds and
REO
Proceeds) to the extent applied by the related Servicer or the
Master
Servicer as recoveries of principal of the related Mortgage Loan
pursuant
to
the related Servicing Agreement or this Agreement;
(C) the Group II Senior Accelerated Distribution Percentage for
such
Distribution Date times the aggregate of all Principal Prepayments
in
Full
and Curtailments received in the related Prepayment Period with
respect to the Group II Mortgage Loans;
(D) any amounts described in clauses (A), (B) or (C) of this
definition, as determined for any previous Distribution Date, which
remain
unpaid after application of amounts previously distributed pursuant
to this
clause (D) to the extent that such amounts are not attributable to
Realized
Losses which have been allocated to the Class M Certificates or
Class B
Certificates;
Highest Priority: As of any date of determination, the Class of
Subordinate
Certificates then outstanding with the earliest priority for
payments pursuant
to Section 6.01, in the following order: Class M-1, Class M-2,
Class M-3, Class
B-1, Class B-2 and Class B-3 Certificates.
Indemnified Persons: The Trustee, the Master Servicer, the
Depositor and
the Securities Administrator and their officers, directors, agents
and employees
and, with respect to the Trustee, any separate co-trustee and its
officers,
directors, agents and employees.
Independent: When used with respect to any specified Person, any
such
Person who (a) is in fact independent of the Depositor, the Master
Servicer and
their respective Affiliates, (b) does not have any direct financial
interest in
or any material indirect financial interest in the Depositor or the
Master
Servicer or any Affiliate thereof, and (c) is not connected with
the Depositor
or the Master Servicer or any Affiliate thereof as an officer,
employee,
promoter, underwriter, trustee, partner, director or Person
performing similar
functions; provided, however, that a Person shall not fail to be
Independent of
the Depositor or the Master Servicer or any Affiliate thereof
merely because
such Person is the beneficial owner of 1% or less of any class of
securities
issued by the Depositor or the Master Servicer or any Affiliate
thereof, as the
case may be.
-20-
<PAGE>
Index: The index, if
any, specified in a Mortgage Note by reference to
which the related Mortgage Interest Rate will be adjusted from time
to time.
Individual Certificate: Any Private Certificate registered in the
name of
the Holder other than the Depository or its nominee.
IndyMac: IndyMac Bank, F.S.B. or any successor thereto.
IndyMac Assignment Agreement: The Assignment, Assumption and
Recognition
Agreement, dated as of March 1, 2007, among the Seller, the
Depositor and
IndyMac, pursuant to which the IndyMac Servicing Agreement (other
than the
rights to enforce the representations and warranties with respect
to the IndyMac
Loans) were assigned to the Depositor for the benefit of the
Certificateholders.
IndyMac Loans: The Mortgage Loans serviced by IndyMac pursuant to
the
IndyMac Servicing Agreement.
IndyMac Servicing Agreement: The Master Seller's Warranties and
Servicing
Agreement, dated as of May 1, 2006, between IndyMac and the
Seller.
Initial Certification: The certification substantially in the form
of
Exhibit One to the Custodial Agreement.
Initial Class Certificate Balance: With respect to any Regular
Certificate,
the amount designated "Initial Class Certificate Balance" on the
face thereof.
Initial Optional Termination Date: The first Distribution Date
following
the date on which the aggregate Stated Principal Balance of the
Mortgage Loans
is less than 5% of the aggregate Stated Principal Balance of the
Mortgage Loans
as of the Cut-off Date.
Initial Subordinate Class Percentage: With respect to each Class
of
Subordinate Certificates, an amount which is equal to the initial
aggregate
Class Certificate Balance of such Class of Subordinate Certificates
divided by
the aggregate Stated Principal Balance of all the Mortgage Loans as
of the
Cut-off Date as follows:
<TABLE>
<S>
<C>
Class M-1: 2.00%
Class B-1: 0.40%
Class M-2: 0.75%
Class B-2: 0.25%
Class M-3: 0.55%
Class B-3: 0.30%
</TABLE>
Insurance Policy: With respect to any Mortgage Loan, any standard
hazard
insurance policy, flood insurance policy or title insurance
policy.
Insurance Proceeds: Amounts paid by the insurer under any Insurance
Policy
covering any Mortgage Loan or Mortgaged Property other than amounts
required to
be paid over to the Mortgagor pursuant to law or the related
Mortgage Note or
Security Instrument and other than amounts used to repair or
restore the
Mortgaged Property or to reimburse insured expenses.
-21-
<PAGE>
Interest 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 Adjustment Date: With respect to a Mortgage Loan, the
date, if
any, specified in the related Mortgage Note on which the Mortgage
Interest Rate
is subject to adjustment.
Investor Representation Letter: As defined in Section 5.02(b).
Issuing Entity: Merrill Lynch Mortgage Backed Securities Trust,
Series
2007-1.
Latest Possible Maturity Date: The Distribution Date in March
2037.
Liquidated Mortgage Loan: Any defaulted Mortgage Loan (including
any REO
Property) as to which the related Servicer has determined that all
amounts it
expects to recover from or on account of such Mortgage Loan have
been recovered.
Liquidation Date: With respect to any Liquidated Mortgage Loan, the
date on
which the related Servicer has certified that such Mortgage Loan
has become a
Liquidated Mortgage Loan.
Liquidation Expenses: With respect to a Mortgage Loan in
liquidation,
unreimbursed expenses paid or incurred by or for the account of the
Master
Servicer or the related Servicer in connection with the liquidation
of such
Mortgage Loan and the related Mortgaged Property, such expenses
including (a)
property protection expenses, (b) property sales expenses, (c)
foreclosure and
sale costs, including court costs and reasonable attorneys' fees,
and (d)
similar expenses reasonably paid or incurred in connection with
liquidation.
Liquidation Proceeds: With respect to any Mortgage Loan, cash
received in
connection with the liquidation of a defaulted Mortgage Loan,
whether through
trustee's sale, foreclosure sale or otherwise, and amounts received
through
Insurance Proceeds and condemnation proceeds.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the
fraction,
expressed as a percentage, the numerator of which is the original
principal
balance of the related Mortgage Loan and the denominator of which
is the
Original Value of the related Mortgaged Property.
Loan
Group: Loan Group I or Loan Group II, as applicable.
Loan
Group I: The group of Mortgage Loans designated as belonging to
Loan
Group I on the Mortgage Loan Schedule.
Loan
Group I Net WAC: The weighted average of the Net Mortgage Rates on
the
Group I 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 such Distribution Date.
Loan
Group II: The group of Mortgage Loans designated as belonging to
Loan
Group II on the Mortgage Loan Schedule.
-22-
<PAGE>
Loan
Group II Net WAC: The weighted average of the Net Mortgage Rates
on
the Group II 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 such Distribution Date.
Lower Priority: As of any date of determination and with respect to
any
Class of Subordinate Certificates, any other Class of Subordinate
Certificates
then outstanding with a later priority for payments pursuant to
Section 6.01.
Lower Tier Regular Interests: Any of the REMIC 1 Regular
Interests.
Lower Tier REMIC Interests: Any of the REMIC 1 Interests.
Lowest Priority: As of any date of determination, the Class of
Subordinate
Certificates then outstanding with the latest priority for payments
pursuant to
Section 6.01, in the following order: Class B-3, Class B-2, Class
B-1, Class
M-3, Class M-2 and Class M-1 Certificates.
Lost
Notes: The original Mortgage Notes that have been lost, as
indicated
on the Mortgage Loan Schedule.
Majority Certificateholders: The Holders of Certificates evidencing
at
least 51% of the Voting Rights.
Master Servicer: Wells Fargo Bank, N.A. including any successors
in
interest who meet the qualifications of the Servicing Agreements
and this
Agreement, and any successor master servicer appointed
hereunder.
Master Servicer Collection Account: The trust account or accounts
created
and maintained pursuant to Section 4.02, which shall be denominated
"Wells Fargo
Bank, National Association as Master Servicer for HSBC Bank USA,
National
Association, as Trustee f/b/o holders of Merrill Lynch Mortgage
Backed
Securities Trust, Mortgage Pass-Through Certificates, MLMBS Series
2007-1 -
Master Servicer Collection Account." The Master Servicer Collection
Account
shall be an Eligible Account.
Master Servicing Compensation: The meaning specified in Section
3.14.
Maximum Lifetime Mortgage Rate: The maximum level to which a
Mortgage
Interest Rate can adjust in accordance with its terms, regardless
of changes in
the applicable Index.
Minimum Lifetime Mortgage Rate: The minimum level to which a
Mortgage
Interest Rate can adjust in accordance with its terms, regardless
of changes in
the applicable Index.
MLBUSA: Merrill Lynch Bank, USA.
MLML: Merrill Lynch Mortgage Lending, Inc., a Delaware corporation,
or any
successor in interest.
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<PAGE>
Monthly Advance: An advance of principal or interest required to be
made by
the applicable Servicer pursuant to the related Servicing Agreement
or the
Master Servicer pursuant to Section 6.05.
Monthly Payment: With respect to any Mortgage Loan, the scheduled
monthly
payment of principal and interest on such Mortgage Loan which is
payable by the
related Mortgagor from time to time under the related Mortgage
Note, determined:
(a) after giving effect to (i) any Deficient Valuation and/or Debt
Service
Reduction with respect to such Mortgage Loan and (ii) any reduction
in the
amount of interest collectible from the related Mortgagor pursuant
to the Relief
Act; (b) without giving effect to any extension granted or agreed
to by the
related Servicer pursuant to related Servicing Agreement; and (c)
on the
assumption that all other amounts, if any, due under such Mortgage
Loan are paid
when due.
Monthly Principal: The principal portion of any Monthly
Payment.
Monthly Statement: The statement distributed to Certificateholders
pursuant
to Section 6.04.
Moody's: Moody's Investors Service, Inc. or its successor in
interest.
Mortgage: The mortgage, deed of trust or other instrument creating
a first
lien on, or first priority security interest in, a Mortgaged
Property securing a
Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01(b)
pertaining
to a particular Mortgage Loan and any additional documents required
to be added
to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate at which interest accrues
from time
to time on any Mortgage Loan pursuant to the related Mortgage Note,
which rate
is equal to the "Mortgage Interest Rate" set forth with respect
thereto on the
Mortgage Loan Schedule.
Mortgage Loan: A mortgage loan transferred and assigned to the
Trustee
pursuant to Section 2.01 or Section 2.04 and held as a part of the
Trust Fund,
as identified in the Mortgage Loan Schedule, including a mortgage
loan the
property securing which has become an REO Property.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase
Agreement
dated as of March 30, 2007, between the Seller and the Depositor,
as purchaser,
and all amendments thereof and supplements thereto, attached hereto
as Exhibit
J.
Mortgage Loan Schedule: The schedule, attached hereto as Exhibit B
with
respect to the Mortgage Loans and as amended from time to time to
reflect the
repurchase or substitution of Mortgage Loans pursuant to this
Agreement.
Mortgage Note: The originally executed note or other evidence of
the
indebtedness of a Mortgagor under the related Mortgage Loan.
-24-
<PAGE>
Mortgage Pool: The pool of Mortgage Loans, identified on Exhibit B
from
time to time, and any REO Properties acquired in respect
thereof.
Mortgaged Property: Land and improvements securing the indebtedness
of a
Mortgagor under the related Mortgage Loan or, in the case of REO
Property, such
REO Property.
Mortgagor: The obligor on a Mortgage Note.
National City: National City Mortgage Co., or any successor
thereto.
National City Assignment Agreement: The Assignment, Assumption
and
Recognition Agreement, dated as of March 1, 2007, among National
City, the
Depositor and the Seller pursuant to which the National City
Servicing Agreement
and the rights of the Seller thereunder (other than the rights to
enforce the
representations and warranties with respect to the National City
Loans) were
assigned to the Depositor for the benefit of the
Certificateholders.
National City Loans: The Mortgage Loans serviced by National City
pursuant
to the National City Servicing Agreement.
National City Servicing Agreement: The Master Seller's Warranties
and
Servicing Agreement, dated as of May 1, 2004, between Merrill Lynch
Bank, USA
and National City, as amended.
Net
Liquidation Proceeds: As to any Liquidated Mortgage Loan,
Liquidation
Proceeds net of (i) Liquidation Expenses which are payable
therefrom by the
related Servicer or the Master Servicer in accordance with the
related Servicing
Agreement or this Agreement and (ii) unreimbursed advances by the
related
Servicer or the Master Servicer and Monthly Advances.
Net
Mortgage Rate: With respect to each Mortgage Loan, the Mortgage
Interest Rate in effect from time to time less the Servicing Fee
Rate (expressed
as a per annum rate).
Net
WAC: The weighted average of the Net Mortgage Rates on 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
such Distribution Date.
Nonrecoverable Advance: With respect to any Mortgage Loan any
advance or
Monthly Advance (i) which was previously made or is proposed to be
made by the
applicable Servicer, or the Master Servicer as successor Servicer,
or the
Trustee as successor Master Servicer and (ii) which, in the good
faith judgment
of the Master Servicer, the Trustee or applicable Servicer, will
not or, in the
case of a proposed advance or Monthly Advance, would not, be
ultimately
recoverable by the Master Servicer, the Trustee (as successor
Master Servicer)
or applicable Servicer from Liquidation Proceeds, Insurance
Proceeds or future
payments on the Mortgage Loan for which such advance or Monthly
Advance was
made.
Offered Certificate: Any Senior Certificate or Offered
Subordinate
Certificate.
Offered Subordinate Certificates: The Class M-l, Class M-2 and
Class M-3
Certificates.
-25-
<PAGE>
Officer's Certificate: A certificate signed by the Chairman of the
Board,
the Vice Chairman of the Board, the President or a Vice President
or Assistant
Vice President or other authorized officer of the Master Servicer
or the
Depositor, as applicable, and delivered to the Trustee, as required
by this
Agreement.
Opinion of Counsel: A written opinion of counsel who is or are
acceptable
to the Trustee and who, unless required to be Independent (an
"Opinion of
Independent Counsel"), may be internal counsel for the Master
Servicer or the
Depositor.
Optional Termination: The termination of the Trust Fund hereunder
pursuant
to Section 10.01(a) hereof.
Optional Termination Amount: The amount received by the
Securities
Administrator in connection with any purchase of all of the
Mortgage Loans and
REO Properties pursuant to Section 10.01(b) hereof.
Optional Termination Price: On any date after the Initial
Optional
Termination Date, an amount equal to the sum of (A) the aggregate
Stated
Principal Balance of each Mortgage Loan (other than any Mortgage
Loan that has
become an REO Property) as of the Distribution Date on which the
proceeds of the
Optional Termination are distributed to the Certificateholders,
plus accrued
interest thereon at the applicable Mortgage Rate as of the Due Date
preceding
the Distribution Date on which the proceeds of the Optional
Termination are
distributed to Certificateholders and the fair market value of any
REO Property,
plus accrued interest thereon as of the Distribution Date on which
the proceeds
of the Optional Termination are distributed to Certificateholders,
(B) any
unreimbursed out-of-pocket costs and expenses owed to the Master
Servicer, the
Trustee or the Securities Administrator (including any amounts
incurred by the
Securities Administrator in connection with conducting the
Auction), a Servicer
or the Master Servicer and any unpaid or unreimbursed Servicing
Fees, Monthly
Advances and Servicing Advances, (C) any unreimbursed costs,
penalties and/or
damages incurred by the Trust Fund in connection with any violation
relating to
any of the Mortgage Loans of any predatory or abusive lending law
and (D) in the
event an Auction has been conducted, all reasonable fees and
expenses incurred
by the Securities Administrator to conduct the Auction.
Original Subordinate Principal Balance: The sum of the aggregate
Class
Certificate Balances of each Class of Subordinate Certificates as
of the Closing
Date.
Original Value: The lesser of (i) the Appraised Value or (ii) the
sales
price of a Mortgaged Property at the time of origination of a
Mortgage Loan,
except in instances where either clauses (i) or (ii) is
unavailable, the other
may be used to determine the Original Value, or if both clauses (i)
and (ii) are
unavailable, Original Value may be determined from other sources
reasonably
acceptable to the Depositor.
Outstanding Mortgage Loan: With respect to any Due Date, a Mortgage
Loan
which, prior to such Due Date, was not the subject of a Principal
Prepayment in
Full, did not become a Liquidated Mortgage Loan and was not
purchased or
replaced.
Outstanding Principal Balance: As of the time of any determination,
the
principal balance of a Mortgage Loan remaining to be paid by the
Mortgagor, or,
in the case of an REO
-26-
<PAGE>
Property, the principal balance of the related Mortgage Loan
remaining to be
paid by the Mortgagor at the time such property was acquired by the
Trust Fund
less any Net Liquidation Proceeds with respect thereto to the
extent applied to
principal.
Ownership Interest: As to any Certificate, any ownership or
security
interest in such Certificate, including any interest in such
Certificate as the
Holder thereof and any other interest therein, whether direct or
indirect, legal
or beneficial, as owner or as pledgee.
Pass-Through Rate: With respect to the Certificates and any
Distribution
Date, the following:
(i) For the Class I-A-1 Certificates, the Class I-A-2
Certificates and the Class A-R Certificate on each Distribution
Date,
a per annum rate equal to the Loan Group I Net WAC for such
Distribution Date.
(ii) For the Class II-A-1 Certificates and the Class II-A-2
Certificates on each Distribution Date, a per annum rate equal to
the
Loan Group II Net WAC for such Distribution Date.
(iii) For each class of Class M Certificates and Class B
Certificates on each Distribution Date a per annum rate equal to
the
Subordinate Net WAC.
Paying Agent: The Securities Administrator or any successor Paying
Agent
appointed by the Securities Administrator.
Percentage Interest: With respect to any Certificate (other than
the Class
A-R and Class P Certificates), a fraction, expressed as a
percentage, the
numerator of which is the Initial Class Certificate Balance
represented by such
Certificate and the denominator of which is the Initial Class
Certificate
Balance of the related Class. With respect to the Class A-R and
Class P
Certificates, the Percentage Interest evidenced thereby shall be as
specified on
the face thereof, or otherwise, be equal to 100%.
Periodic Rate Cap: With respect to each Mortgage Loan, the
maximum
adjustment that can be made to the Mortgage Interest Rate on each
Interest
Adjustment Date in accordance with its terms, regardless of changes
in the
applicable Index.
Permitted Investments: Any one or more of the following obligations
or
securities held in the name of the Trustee for the benefit of
the
Certificateholders (provided that such obligation or security must
be a
"permitted investment" within the meaning of such term as provided
for in
Section 860G(a)(5) of the Code):
(v) direct obligations of, and obligations the timely payment of
which
are
fully guaranteed by the United States of America or any agency
or
instrumentality of the United States of America the obligations of
which
are
backed by the full faith and credit of the United States of
America;
(vi) (a) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust
company
incorporated under the laws of the United
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<PAGE>
States of America or any state thereof (including the Trustee or
the Master
Servicer or its Affiliates acting in its commercial banking
capacity) and
subject to supervision and examination by federal and/or state
banking
authorities, provided that the commercial paper and/or the
short-term debt
rating and/or the long-term unsecured debt obligations of such
depository
institution or trust company at the time of such investment or
contractual
commitment providing for such investment have the Applicable Credit
Rating
or
better from each Rating Agency and (b) any other demand or time
deposit
or
certificate of deposit that is fully insured by the Federal
Deposit
Insurance Corporation;
(vii) repurchase obligations with respect to (a) any security
described in clause (i) above or (b) any other security issued
or
guaranteed by an agency or instrumentality of the United States of
America,
the
obligations of which are backed by the full faith and credit of
the
United States of America, in either case entered into with a
depository
institution or trust company (acting as principal) described in
clause
(ii)(a) above where the Trustee holds the security therefor;
(viii) securities bearing interest or sold at a discount issued by
any
corporation (including the Trustee or the Master Servicer or
its
Affiliates) incorporated under the laws of the United States of
America or
any
state thereof that have the Applicable Credit Rating or better
from
each
Rating Agency at the time of such investment or contractual
commitment
providing for such investment; provided, however, that securities
issued by
any
particular corporation will not be Permitted Investments to the
extent
that
investments therein will cause the then outstanding principal
amount
of
securities issued by such corporation and held as part of the
Issuing
Entity to exceed 10% of the aggregate Outstanding Principal
Balances of all
the
Mortgage Loans and Permitted Investments held as part of the
Issuing
Entity;
(ix) commercial paper (including both non-interest-bearing
discount
obligations and interest-bearing obligations payable on demand or
on a
specified date not more than one year after the date of issuance
thereof)
having the Applicable Credit Rating or better from each Rating
Agency at
the
time of such investment;
(x) a Reinvestment Agreement issued by any bank, insurance company
or
other corporation or entity;
(xi) any
other demand, money market or time deposit, obligation,
security or investment as may be acceptable to either Rating Agency
as
evidenced in writing by each Rating Agency to the Trustee or
Master
Servicer;
(xii) any money market or common trust fund having the
Applicable
Credit Rating or better from each Rating Agency (if such fund is
rated by
each
Rating Agency), including any such fund for which the Trustee
or
Master Servicer or any affiliate of the Trustee or Master Servicer
acts as
a
manager or an advisor; provided, however, that no instrument or
security
shall be a Permitted Investment if such instrument or security
evidences a
right to receive only interest payments with respect to the
obligations
underlying such instrument or if such security provides for payment
of both
principal and
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<PAGE>
interest with a yield to maturity in excess of 120% of the yield
to
maturity at par or if such instrument or security is purchased at a
price
greater than par; and
(xiii) units of a taxable money-market portfolio having the
highest
rating assigned by each Rating Agency (except if S&P is a
Rating Agency,
"AAAm" or "AAAM-G" by S&P) and restricted to obligations issued
or
guaranteed by the United States of America or entities whose
obligations
are
backed by the full faith and credit of the United States of America
and
repurchase agreements collateralized by such obligations.
Permitted Transferee: Any Person other than a Disqualified
Organization or
an "electing large partnership" (as defined by Section 775 of the
Code).
Person: Any individual, corporation, partnership, joint
venture,
association, limited liability company, joint-stock company,
trust,
unincorporated organization or government or any agency or
political subdivision
thereof.
PHH:
PHH Mortgage Corporation, formerly known as Cendant Mortgage
Corporation, or any successor thereto.
PHH
Assignment Agreement: The Assignment, Assumption and
Recognition
Agreement, dated as of March 1, 2007, among the Seller, the
Depositor and PHH,
pursuant to which the PHH Servicing Agreement (other than the
rights to enforce
the representations and warranties with respect to the PHH Loans)
were assigned
to the Depositor for the benefit of the Certificateholders.
PHH
Loans: The Mortgage Loans serviced by PHH pursuant to the PHH
Servicing
Agreement.
PHH
Servicing Agreement: The Mortgage Loan Flow Purchase, Sale and
Servicing Agreement, dated as of March 27, 2001, among Merrill
Lynch Mortgage
Capital, Inc., PHH and Bishop's Gate Residential Mortgage
Trust.
Physical Certificate: The Residual Certificate.
Prepayment Assumption: A rate or rates of prepayment, as described
in the
Prospectus Supplement related to the Offered Certificates.
Prepayment Distribution Trigger: With respect to any Distribution
Date and
any Class of Subordinate Certificates (other than the Class M-1
Certificates), a
test that shall be satisfied if the fraction (expressed as a
percentage) equal
to the sum of the Class Certificate Balances of such Class and each
Class of
Subordinate Certificates with a Lower Priority than such Class
immediately prior
to such Distribution Date divided by the aggregate Stated Principal
Balance of
all of the Mortgage Loans (or related REO Properties) immediately
prior to such
Distribution Date is greater than or equal to the sum of the
related Initial
Subordinate Class Percentages of such Classes of Subordinate
Certificates.
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<PAGE>
Prepayment Interest Shortfall: As to any Distribution Date and any
Mortgage
Loan (other than a Mortgage Loan relating to an REO Property) that
was the
subject of (a) a Principal Prepayment in Full during the related
Prepayment
Period, an amount equal to the excess of one month's interest at
the Net
Mortgage Rate on the Stated Principal Balance of such Mortgage Loan
over the
amount of interest (adjusted to the Net Mortgage Rate) paid by the
Mortgagor for
such Prepayment Period to the date of such Principal Prepayment in
Full or (b) a
Curtailment during the prior calendar month, an amount equal to one
month's
interest at the Net Mortgage Rate on the amount of such
Curtailment. The
obligations of the Master Servicer in respect of any Prepayment
Interest
Shortfall are set forth in Section 6.06.
Prepayment Penalty: With respect to any Prepayment Period, any
prepayment
premium, charge or penalty payable by a Mortgagor in connection
with any
Principal Prepayment on the Prepayment Penalty Mortgage Loans.
Prepayment Penalty Mortgage Loans: Any of the Mortgage Loans set
forth on
Schedule I hereto that are subject to existing prepayment
premiums.
Prepayment Period: With respect to any Mortgage Loan and any
Distribution
Date, the calendar month preceding the month in which such
Distribution Date
occurs.
Primary Mortgage Insurance Policy: Any primary mortgage guaranty
insurance
policy issued in connection with a Mortgage Loan which provides
compensation to
a Mortgage Note holder in the event of default by the obligor under
such
Mortgage Note or the related Security Instrument, if any or any
replacement
policy therefor through the related Interest Accrual Period for
such Class
relating to a Distribution Date.
Principal Prepayment: Any Principal Prepayment in full or
Curtailment or
other recovery of principal on a Mortgage Loan which is received in
advance of
its scheduled Due Date to the extent that it is not accompanied by
an amount as
to interest representing scheduled interest due on any date or
dates in any
month or months subsequent to the month of prepayment, including
Insurance
Proceeds and Repurchase Proceeds, but excluding the principal
portion of Net
Liquidation Proceeds.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor
of the entire unpaid principal balance of the Mortgage Loan.
Private Certificates: Any of the Class B-1, Class B-2, and Class
B-3
Certificates.
Prospectus Supplement: The Prospectus Supplement dated March 28,
2007,
relating to the public offering of the Offered Certificates.
Protected Account: An account established and maintained for the
benefit of
Certificateholders by each Servicer with respect to the related
Mortgage Loans
and with respect to REO Property pursuant to the respective
Servicing Agreement.
The Protected Account shall be an Eligible Account.
Purchase Price: With respect to any Mortgage Loan or REO Property
to be
purchased pursuant to or as contemplated by Section 2.03 or 10.01,
and as
confirmed by an Officers'
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<PAGE>
Certificate from the Master Servicer to the Trustee, an amount
equal to the sum
of (i) 100% of the Stated Principal Balance thereof as of the date
of purchase
(or such other price as provided in Section 10.01), (ii) accrued
interest on
such Stated Principal Balance at the applicable Mortgage Interest
Rate in effect
from time to time from the Due Date as to which interest was last
covered by a
payment by the Mortgagor or an advance by the related Servicer or
Master
Servicer, which payment or advance had as of the date of purchase
been
distributed to Certificateholders, through the end of the calendar
month in
which the purchase is to be effected less any unreimbursed Monthly
Advances and
any unpaid Servicing Fees payable to the purchaser of the Mortgage
Loan and
(iii) any costs and damages incurred by the Issuing Entity in
connection with
any violation by such Mortgage Loan or REO Property of any
predatory or
abusive-lending law.
Qualified Insurer: Any insurance company duly qualified as such
under the
laws of the state or states in which the related Mortgaged Property
or Mortgaged
Properties is or are located, duly authorized and licensed in such
state or
states to transact the type of insurance business in which it is
engaged and
approved as an insurer by the Master Servicer, so long as the
claims paying
ability of which is acceptable to the Rating Agencies for
pass-through
certificates having the same rating as the Certificates rated by
the Rating
Agencies as of the Closing Date.
Rating Agencies: Fitch and S&P.
Realized Loss: With respect to a Liquidated Mortgage Loan, the
amount by
which the remaining unpaid principal balance of the Mortgage Loan
exceeds the
amount of Liquidation Proceeds applied to the principal balance of
the related
Mortgage Loan. To the extent the Master Servicer receives
Subsequent Recoveries
with respect to any Mortgage Loan, the amount of the Realized Loss
with respect
to that Mortgage Loan will be reduced to the extent such recoveries
are applied
to reduce the Class Certificate Balance of any Class of
Certificates on any
Distribution Date.
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.
Reference Banks: Those banks (i) with an established place of
business in
London, England, (ii) not controlling, under the control of or
under common
control with the Depositor or the Securities Administrator, (iii)
that have been
designated as such by the Securities Administrator and (iv) that
are engaged in
transactions in the London interbank market.
Refinanced Mortgage Loan: Any Mortgage Loan the proceeds of which
were not
used to purchase the related Mortgaged Property.
Regular Certificates: Any of the Class I-A-1, Class I-A-2, Class
II-A-1,
Class II-A-2, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2
or Class B-3
Certificates.
Regulation AB: Subpart 22.1100 - Asset Backed Securities
(Regulation AB),
17 C.F.R. Sections 229.1100-229.1123, as such may be amended from
time to time,
and subject to such clarification and interpretation as have been
provided by
the Commission in the adopting release (Asset-Backed Securities,
Securities Act
Release No. 33-8518, 70 Fed Reg. 1,506-1,631 (Jan. 7,
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<PAGE>
2005) or by the staff of the Commission, or as may be provided by
the Commission
or its staff from time to time.
Reinvestment Agreements: One or more reinvestment agreements,
acceptable to
each of the Rating Agencies, from a bank, insurance company or
other corporation
or entity (including the Trustee).
Related Class of Upper Tier REMIC Interest: With respect to any
Class of
Certificates, the interest in the Upper Tier REMIC appearing
opposite such Class
in the Preliminary Statement hereto.
Relevant Servicing Criteria: The Servicing Criteria applicable to
the
various parties, as set forth on Exhibit K hereto. For
clarification purposes,
multiple parties can have responsibility for the same Relevant
Servicing
Criteria. With respect to a Servicing Function Participant engaged
by the Master
Servicer, the Securities Administrator, the Trustee, the Custodian
or a
Servicer, the term "Relevant Servicing Criteria" may refer to one
or more
discrete functions specified in the Relevant Servicing Criteria
applicable to
such parties.
Relief Act: The Servicemembers Civil Relief Act, as amended.
Relief Act Mortgage Loan: Any Mortgage Loan as to which the Monthly
Payment
thereof has been reduced due to the application of the Relief
Act.
REMIC: Each pool of assets in the Trust Fund designated as a REMIC
as
described in the Preliminary Statement.
REMIC Interests: Any regular or residual interest in any of REMIC 1
or the
Upper Tier REMIC, as described in the Preliminary Statement.
REMIC Opinion: An Opinion of Counsel to the effect that a
contemplated
action will neither adversely affect the status as a REMIC of any
REMIC created
hereunder nor subject any such REMIC to any tax under the REMIC
Provisions.
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 1 Interest: Each class of interest in REMIC 1 as described in
the
Preliminary Statement.
REMIC 1 Regular Interest: Each of the REMIC 1 Interests other than
the
Class LT1-R Interest.
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<PAGE>
REMIC 1 Subordinate Balance Ratio: The ratio among the
uncertificated
principal balances of each of the REMIC 1 Interests ending with the
designation
"A" that is equal to the ratio among, with respect to each such
REMIC 1
Interest, the excess of (x) the aggregate Stated Principal Balance
of the
Mortgage Loans in the related Loan Group over (y) the aggregate
Class
Certificate Balance of the Certificates in the Certificate Group
related to such
Loan Group.
REO
Property: A Mortgaged Property acquired by the Servicer or
Master
Servicer on behalf of the Trust Fund through foreclosure or
deed-in-lieu of
foreclosure, as described in Section 3.15 in connection with a
defaulted
Mortgage Loan.
Reportable Event: As defined in Section 3.18(a).
Reporting Servicer: As defined in Section 3.18(h).
Repurchase Proceeds: The Repurchase Price in connection with any
repurchase
of a Mortgage Loan by the Seller and any cash deposit in connection
with the
substitution of a Mortgage Loan.
Request for Release: A request for release in the form attached
hereto as
Exhibit D.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance
policy which is required to be maintained from time to time under
this Agreement
with respect to such Mortgage Loan.
Reserve Account: The separate Eligible Account created and
maintained by
the Securities Administrator pursuant to Section 4.06 in the name
of the Trustee
for the benefit of the Trust Fund and designated "Wells Fargo Bank,
N.A., as
securities administrator, in trust for registered holders of the
Merrill Lynch
Mortgage Backed Securities Trust, Mortgage Pass-Through
Certificates, Series
2007-1." Funds in the Reserve Account shall be held in trust for
the Trust Fund
for the uses and purposes set forth in this Agreement.
Residual Certificate: The Class A-R Certificate.
Residual Interest: The Residual Certificate, other than the portion
thereof
representing the right to payments in respect of the Class LT1-R
Interest.
Responsible Officer: Any officer assigned to the Corporate Trust
Office (or
any successor thereto), including any Vice President, Assistant
Vice President,
Trust Officer, any Assistant Secretary, any trust officer or any
other officer
of the Trustee or Securities Administrator customarily performing
functions
similar to those performed by any of the above designated officers
and having
direct responsibility for the administration of this Agreement, and
any other
officer of the Trustee or Securities Administrator to whom a matter
arising
hereunder may be referred because of such officers familiarity with
the subject
matter thereof.
Rule
144A Letter: The certificate to be furnished by each purchaser of
a
Private Certificate (which is also a Physical Certificate) which is
a Qualified
Institutional Buyer as defined under Rule 144A promulgated under
the Securities
Act, substantially in the form set forth as Exhibit F-3 hereto.
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Sarbanes-Oxley Act: The Sarbanes-Oxley Act of 2002 and the rules
and
regulations of the Commission promulgated thereunder (including
any
interpretations thereof by the Commission's staff).
Sarbanes-Oxley Certification: A written certification signed by an
officer
of the Master Servicer that complies with (i) the Sarbanes-Oxley
Act, and (ii)
Exchange Act Rules 13a-14(d) and 15d-14(d), as in effect from time
to time;
provided that if, after the Closing Date (a) the Sarbanes-Oxley Act
is amended,
(b) the Rules referred to in clause (ii) are modified or superseded
by any
subsequent statement, rule or regulation of the Commission or any
statement of a
division thereof, or (c) any future releases, rules and regulations
are
published by the Commission from time to time pursuant to the
Sarbanes-Oxley
Act, which in any such case affects the form or substance of the
required
certification and results in the required certification being, in
the reasonable
judgment of the Master Servicer, materially more onerous that then
form of the
required certification as of the Closing Date, the Sarbanes-Oxley
Certification
shall be as agreed to by the Master Servicer and the Depositor
following a
negotiation in good faith to determine how to comply with any such
new
requirements.
S&P: Standard and Poor's, a division of The McGraw-Hill
Companies, Inc. or
its successor in interest.
Scheduled Payment: With respect to any Mortgage Loan and any month,
the
scheduled payment or payments of principal and interest due during
such month on
such Mortgage Loan which either is payable by a Mortgagor in such
month under
the related Mortgage Note or, in the case of REO Property, would
otherwise have
been payable under the related Mortgage Note.
Scheduled Principal: The principal portion of any Scheduled
Payment.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Wells Fargo Bank, N.A., or any successor
in
interest, or any successor securities administrator appointed as
herein
provided.
Security Agreement: With respect to a Cooperative Loan, the
agreement
creating a security interest in favor of the originator in the
related
Cooperative Stock.
Security Instrument: A written instrument creating a valid first
lien on a
Mortgaged Property securing a Mortgage Note, which may be any
applicable form of
mortgage, deed of trust, deed to secure debt or security deed,
including any
riders or addenda thereto.
Seller: Merrill Lynch Mortgage Lending, Inc., a Delaware
corporation, or
any successor in interest.
Senior Accelerated Distribution Percentage: The Group I or Group II
Senior
Accelerated Distribution Percentage, as applicable.
Senior Certificates: The Class I-A-1 Certificates, Class I-A-2
Certificates, Class II-A-1 Certificates, Class II-A-2 Certificates
and Class A-R
Certificates.
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<PAGE>
Senior Percentage: The Group I Senior Percentage or Group II
Senior
Percentage, as applicable.
Senior Principal Distribution Amount: The Group I Senior
Principal
Distribution Amount or Group II Senior Principal Distribution
Amount, as
applicable.
Servicer: With respect to each Mortgage Loan, IndyMac, PHH, Wells
Fargo,
ABN AMRO, Washington Mutual, Countrywide or National City, as
applicable and as
specified on the Mortgage Loan Schedule.
Servicer Remittance Date: With respect to each Mortgage Loan, the
date set
forth in the related Servicing Agreement.
Servicing Advances: With respect to any Mortgage Loan, all
customary,
reasonable and necessary "out-of-pocket" costs and expenses
incurred by the
Servicer in the performance of its servicing obligations,
including, but not
limited to, the cost of (i) preservation, restoration, protection
and repair of
a Mortgaged Property or Cooperative Unit, as applicable, (ii) any
enforcement or
judicial proceedings with respect to a Mortgage Loan, including
foreclosure
actions and (iii) the management and liquidation of REO
Property.
Servicing Agreements: The IndyMac Servicing Agreement, the PHH
Servicing
Agreement, the Wells Fargo Servicing Agreement, the ABN AMRO
Servicing
Agreement, the Washington Mutual Servicing Agreement, the
Countrywide Servicing
Agreement and the National City Servicing Agreement.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing Fee: As to any Mortgage Loan and Distribution Date, an
amount
equal to the product of (i) the Stated Principal Balance of such
Mortgage Loan
as of the Due Date in the preceding calendar month and (ii) the
applicable
Servicing Fee Rate. Such fee shall be payable monthly, computed on
the basis of
the same principal amount and period respectively which any related
interest
payment on a Mortgage Loan is computed. If the Index and/or Gross
Margin are
adjusted as provided in the related Mortgage Note, the Servicing
Fee shall be
the rate per annum in effect immediately prior to such
adjustment.
Servicing Fee Rate: As to any Mortgage Loan, a per annum rate as
set forth
in the Mortgage Loan Schedule.
Servicing Function Participant: Any Sub-Servicer, Subcontractor or
any
other Person, other than a Servicer, the Custodian, the Master
Servicer, the
Paying Agent, the Securities Administrator and the Trustee, that
is
participating in the servicing function within the meaning of
Regulation AB.
Servicing Officer: Any officer of the Master Servicer involved in,
or
responsible for, the administration and servicing of the Mortgage
Loans whose
names and specimen signatures appear on a list of servicing
officers furnished
to the Trustee by the Master Servicer, as such list may be amended
from time to
time.
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<PAGE>
Startup Day: The Closing Date.
Stated Principal Balance: With respect 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
partial prepayments
and Liquidation Proceeds received and to the payment of principal
due on such
Due date and irrespective of any delinquency in payment by the
related
Mortgagor.
Subcontractor: Any
vendor, subcontractor or other Person that is not
responsible for the overall servicing of Mortgage Loans but
performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with
respect to
Mortgage Loans under the direction or authority of any Servicer (or
a
Sub-Servicer of any Servicer), the Master Servicer, the Custodian
or the
Securities Administrator.
Subordinate Certificates: The Class M-1, Class M-2, Class M-3,
Class B-1,
Class B-2 and Class B-3 Certificates.
Subordinate Net WAC: For any Distribution Date, a per annum rate
equal to
the weighted average of the Loan Group I Net WAC and the Loan Group
II Net WAC,
weighted in proportion to the results of subtracting from the
aggregate Stated
Principal Balance of the Mortgage Loans of each Loan Group as of
the beginning
of the Due Period immediately preceding such Distribution Date, the
aggregate
Class Certificate Balance of the Senior Certificates related to
each such Loan
Group.
Subordinate Percentage: For any Distribution Date, the difference
between
100% and the Senior Percentage for such date.
Subordinate Prepayment Percentage: With respect to any Distribution
Date
and each Class of Subordinate Certificates, under the applicable
circumstances
set forth below, the respective percentages set forth below:
(i) For any Distribution Date prior to the Distribution Date in
April
2014
(unless the Class Certificate Balances of the Senior Certificates
have
been
reduced to zero), 0%.
(ii) For any Distribution Date for which clause (i) does not
apply,
and
on which any Class of Subordinate Certificates are outstanding:
(a) in the case of the Class of Subordinate Certificates then
outstanding with the Highest Priority and each other Class of
Subordinate Certificates for which the related Prepayment
Distribution
Trigger has been satisfied, a fraction, expressed as a percentage,
the
numerator of which is the Class Certificate Balance of such
Class
immediately prior to such date and the denominator of which is the
sum
of the Class Certificate Balances immediately prior to such date
of
(1) the Class of Subordinate Certificates then outstanding with
the
Highest Priority and (2) all other Classes of Subordinate
Certificates
for which the respective Prepayment Distribution Triggers have
been
satisfied; and
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<PAGE>
(b) in the case of each other Class of Subordinate Certificates
for which the Prepayment Distribution Triggers have not been
satisfied, 0%; and
(iii) Notwithstanding the foregoing, if the application of the
foregoing percentages on any Distribution Date as provided in
Section 6.01
of
this Agreement (determined without regard to the proviso in the
definition of "Subordinate Principal Distribution Amount") would
result in
a
distribution in respect of principal of any Class or Classes of
Subordinate Certificates in an amount greater than the remaining
Class
Certificate Balance thereof (any such class, a "Maturing Class"),
then: (a)
the
Subordinate Prepayment Percentage of each Maturing Class shall
be
reduced to a level that, when applied as described above, would
exactly
reduce the Class Certificate Balance of such Class to zero; (b)
the
Subordinate Prepayment Percentage of each other Class of
Subordinate
Certificates (any such Class, a "Non-Maturing Class") shall be
recalculated
in
accordance with the provisions in paragraph (ii) above, as if the
Class
Certificate Balance of each Maturing Class had been reduced to zero
(such
percentage as recalculated, the "Recalculated Percentage"); (c) the
total
amount of the reductions in the Subordinate Prepayment Percentages
of the
Maturing Class or Classes pursuant to clause (a) of this
sentence,
expressed as an aggregate percentage, shall be allocated among
the
Non-Maturing Classes in proportion to their respective
Recalculated
Percentages (the portion of such aggregate reduction so allocated
to any
Non-Maturing Class, the "Adjustment Percentage"); and (d) for
purposes of
such
Distribution Date, the Subordinate Prepayment Percentage of
each
Non-Maturing Class shall be equal to the sum of (1) the
Subordinate
Prepayment Percentage thereof, calculated in accordance with the
provisions
in
paragraph (ii) above as if the Class Certificate Balance of
each
Maturing Class had not been reduced to zero, plus (2) the
related
Adjustment Percentage.
Subordinate Principal Distribution Amount: With respect to any
Distribution
Date and each Class of Class M Certificates and Class B
Certificates, the sum of
the following:
(i) the product of (x) the related Class M Percentage or Class
B
Percentage for such Class and (y) the aggregate of the following
amounts:
(1) the principal portion of each Monthly Payment due during
the related Due Period on each Outstanding Mortgage Loan, whether
or
not received on or prior to the related Determination Date, minus
the
principal portion of any Debt Service Reduction;
(2) the Stated Principal Balance of any Mortgage Loan
repurchased during the related Prepayment Period pursuant to
Section
2.02 or 2.03; and
(3) the principal portion of all other unscheduled
collections (other than Principal Prepayments in Full and
Curtailments
and amounts received in connection with the liquidation or
other
disposition of a Mortgage Loan, including without limitation
Insurance
Proceeds, Liquidation Proceeds and REO Proceeds) received during
the
related Prepayment Period to the extent applied by the related
Servicer as recoveries of principal of the related Mortgage
Loan
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pursuant to the related Servicing Agreement;
(ii) such Class's pro rata share, based on the Class
Certificate
Balance of each Class of Class M Certificates and Class B
Certificates then
outstanding, of, with respect to each Mortgage Loan for which a
liquidation
or
other disposition occurred during the related Prepayment Period and
did
not
result in any Extraordinary Losses, an amount equal to the
related
unscheduled collections (including without limitation Insurance
Proceeds,
Liquidation Proceeds and REO Proceeds) to the extent applied by the
related
Servicer as recoveries of principal of the related Mortgage Loan
pursuant
to
the related Servicing Agreement, to the extent such collections are
not
otherwise distributed to the Senior Certificates;
(iii) the product of (x) the related Subordinate Prepayment
Percentage for such Distribution Date and (y) the aggregate of
all
Principal Prepayments in Full and Curtailments of the Mortgage
Loans
received in the related Prepayment Period, to the extent not
payable to the
Senior Certificates; and
(iv) any amounts described in clauses (i), (ii) and (iii) as
determined for any previous Distribution Date, that remain
undistributed to
the
extent that such amounts are not attributable to Realized Losses
which
have
been allocated to a Class of Subordinate Certificates;
provided, however, that such amount shall in no event exceed the
outstanding
Class Certificate Balance of such Class of Certificates immediately
prior to
such date.
Subsequent Recoveries: Any amount recovered by a Servicer or the
Master
Servicer (net of reimbursable expenses) with respect to a
Liquidated Mortgage
Loan with respect to which a Realized Loss was incurred after the
liquidation or
disposition of such Mortgage Loan.
Sub-Servicer: Any Person that services Mortgage Loans on behalf of
a
Servicer, and is responsible for the performance (whether directly
or through
sub-servicers or Subcontractors) of servicing functions required to
be performed
under this Agreement, any related Servicing Agreement or any
sub-servicing
agreement that are identified in Item 1122(d) of Regulation AB.
Substitute Mortgage Loan: With respect to any Mortgage Loan, which
is
tendered to the Trustee pursuant to the related Servicing
Agreement, the
Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement,
as
applicable, in each case, (i) which has an Outstanding Principal
Balance not
greater nor materially less than the Mortgage Loan for which it is
to be
substituted; (ii) which has a Mortgage Interest Rate and Net Rate
not less than,
and not materially greater than, such Mortgage Loan; (iii) which
has a maturity
date not materially earlier or later than such Mortgage Loan and
not later than
the latest maturity date of any Mortgage Loan; (iv) which is of the
same
property type and occupancy type as such Mortgage Loan; (v) which
has a
Loan-to-Value Ratio not greater than the Loan-to-Value Ratio of
such Mortgage
Loan; (vi) which is current in payment of principal and interest as
of the date
of substitution; (vii) as to which the payment terms do not vary in
any material
respect from the payment terms of the Mortgage Loan for which it is
to be
substituted and (viii) which has a Gross Margin, Periodic Rate Cap
and Maximum
Lifetime Mortgage Rate no less than those of
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such Mortgage Loan, has the same Index and interval between
Interest Adjustment
Dates as such Mortgage Loan, and a Minimum Lifetime Mortgage Rate
no lower than
that of such Mortgage Loan.
Tax
Matters Person: The Securities Administrator or any successor
thereto
or assignee thereof shall serve as tax administrator hereunder and
as agent for
the Tax Matters Person. The Holder of the Residual Certificates
shall be the Tax
Matters Person for the related REMIC, as more particularly set
forth in Section
9.12 hereof.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest
in a certificate.
Transferor Representation Letter: As defined in Section
5.02(b).
Trustee: HSBC Bank USA, National Association, or its successor in
interest,
or any successor trustee appointed as herein provided.
Trust Fund: The corpus of the Issuing Entity 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
Protected
Accounts, the Master Servicer Collection Account and the
Distribution Account
established with respect to the Mortgage Loans; (iii) all of the
Depositor's
rights under the Mortgage Loan Purchase Agreement, the Assignment
Agreements and
the Servicing Agreements; (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; and
(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 any
proceeds of the
foregoing.
Undercollateralized Amount: On any Distribution Date, the excess of
(x) the
aggregate Class Certificate Balance of any Class or Classes of
Senior
Certificates related to a Loan Group immediately prior to such
Distribution Date
over (y) the aggregate Stated Principal Balance of the Mortgage
Loans in its
related Loan Group as of the beginning of the related Due
Period.
Undercollateralized Senior Certificates: As defined in Section
6.01(E).
Underlying Seller: With respect to each Mortgage Loan, ABN
AMRO,
Countrywide Home Loans Inc., E-Loan, Inc., IndyMac, Market Street
Mortgage
Corporation, National City, Quicken Loans Inc., Silver State
Financial Services,
Inc., Wachovia Mortgage Corporation, Washington Mutual, Mortgage
Access Corp.
d/b/a Weichert Financial Services and ComUnity Lending,
Incorporated, as
indicated on the Mortgage Loan Schedule.
Uninsured Cause: Any cause of damage to a Mortgaged Property or
related REO
Property such that the complete restoration of such Mortgaged
Property or
related REO Property is not fully reimbursable by the hazard
insurance policies
required to be maintained pursuant the related Servicing Agreement,
without
regard to whether or not such policy is maintained.
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United States Person: A citizen or resident of the United States,
a
corporation or partnership (including an entity treated as a
corporation or
partnership for federal income tax purposes) created or organized
in, or under
the laws of, the United States or any state thereof or the District
of Columbia
(except, in the case of a partnership, to the extent provided in
regulations),
provided that, for purposes solely of the Class A-R Certificate, no
partnership
or other entity treated as a partnership for United States federal
income tax
purposes shall be treated as a United States Person unless all
persons that own
an interest in such partnership either directly or through any
entity that is
not a corporation for United States federal income tax purposes are
United
States Persons, or an estate whose income is subject to United
States federal
income tax regardless of its source, or a trust if a court within
the United
States is able to exercise primary supervision over the
administration of the
trust and one or more such United States Persons have the authority
to control
all substantial decisions of the trust. To the extent prescribed in
regulations
by the Secretary of the Treasury, which have not yet been issued, a
trust which
was in existence on August 20, 1996 (other than a trust treated as
owned by the
grantor under subpart E of part I of subchapter J of chapter 1 of
the Code), and
which was treated as a United States person on August 20, 1996 may
elect to
continue to be treated as a United States person notwithstanding
the previous
sentence.
Upper Tier REMIC: As described in the Preliminary Statement.
Upper Tier REMIC Regular Interest: Each of the Class I-A-1
Certificates,
Class I-A-2 Certificates, Class II-A-1 Certificates, Class II-A-2
Certificates,
Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates, Class
B-1 Certificates, Class B-2 Certificates and Class B-3
Certificates.
Voting Rights: 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 Class
Certificate Balance of
all the Certificates of such Class then outstanding and the
denominator of which
is the aggregate Class Certificate Balance of all the Certificates
then
outstanding (other than the Class A-R Certificate). 99.00% of all
Voting Rights
will be allocated among all holders of the Certificates (other than
the Class
A-R Certificate) in proportion to their then outstanding Class
Certificate
Balances, and 1.00% of the Voting Rights shall be allocated to the
Class A-R
Certificate; provided, however, that any Certificate registered in
the name of
the Master Servicer, the Depositor or the Securities Administrator
or any of
their respective affiliates shall not be included in the
calculation of Voting
Rights. The Class P Certificates shall have no voting rights.
Washington Mutual: Washington Mutual Bank, or any successor
thereto.
Washington Mutual Assignment Agreement: The Assignment, Assumption
and
Recognition Agreement, dated as of March 1, 2007, among Washington
Mutual,
Washington Mutual Mortgage Securities Corp., the Depositor and the
Seller
pursuant to which the Wells Fargo Servicing Agreement and the
rights of the
Seller thereunder (other than the rights to enforce the
representations and
warranties with respect to the Wells Fargo Mortgage Loans) were
assigned to the
Depositor for the benefit of the Certificateholders.
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Washington Mutual Mortgage Loans: The Mortgage Loans serviced by
Washington
Mutual pursuant to the Washington Mutual Servicing Agreement.
Washington Mutual Servicing Agreement: The Servicing Agreement,
dated as of
November 1, 2005, between Washington Mutual and the Seller, as
amended.
Wells Fargo: Wells Fargo Bank, N.A., or any successor thereto.
Wells Fargo Assignment Agreement: The Assignment, Assumption
and
Recognition Agreement, dated as of March 1, 2007, among Wells
Fargo, the
Depositor and the Seller pursuant to which the Wells Fargo
Servicing Agreement
and the rights of the Seller thereunder (other than the rights to
enforce the
representations and warranties with respect to the Wells Fargo
Mortgage Loans)
were assigned to the Depositor for the benefit of the
Certificateholders.
Wells Fargo Mortgage Loans: The Mortgage Loans serviced by Wells
Fargo
pursuant to the Wells Fargo Servicing Agreement.
Wells Fargo Servicing Agreement: The Seller's Warranties and
Servicing
Agreement (WFHM Mortgage Loans Series 2006-W90), dated as of
November 1, 2006,
between Merrill Lynch Bank, USA and Wells Fargo.
Section 1.02 Accounting.
Unless otherwise specified herein, for the purpose of any
definition or
calculation, whenever amounts are required to be netted, subtracted
or added or
any distributions are taken into account such definition or
calculation and any
related definitions or calculations shall be determined without
duplication of
such functions.
ARTICLE II
CONVEYANCE OF MORTGAGE
LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans to Trustee.
(a)
The Depositor concurrently with the execution and delivery of
this
Agreement, sells, transfers and assigns to the Issuing Entity
without recourse
all its right, title and interest in and to (i) the Mortgage Loans
identified in
the Mortgage Loan Schedule, including all interest and principal
due with
respect to the Mortgage Loans after the Cut-off Date, but excluding
any payments
of principal and interest due on or prior to the Cut-off Date; (ii)
such assets
as shall from time to time be credited or are required by the terms
of this
Agreement to be credited to the Master Servicer Collection Account,
(iii) such
assets relating to the Mortgage Loans as from time to time may be
held by the
Servicers in Protected Accounts, the Master Servicer in the Master
Servicer
Collection Account and the Securities Administrator in the
Distribution Account
for the benefit of the Trustee on behalf of the Certificateholders,
(iv) any REO
Property, (v) the Required Insurance Policies and any amounts paid
or payable by
the insurer under any Insurance Policy (to the extent the mortgagee
has a claim
thereto), (vi) the Mortgage Loan Purchase Agreement to the extent
provided in
Subsection 2.03(a), (vii) the rights with respect to the Servicing
Agreements as
assigned to the Depositor on behalf of the Certificateholders by
the
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Assignment Agreements and (viii) any proceeds of the foregoing.
Although it is
the intent of the parties to this Agreement that the conveyance of
the
Depositor's right, title and interest in and to the Mortgage Loans
and other
assets in the Trust Fund pursuant to this Agreement shall
constitute a purchase
and sale and not a loan, in the event that such conveyance is
deemed to be a
loan, it is the intent of the parties to this Agreement that the
Depositor shall
be deemed to have granted to the Trustee a first priority perfected
security
interest in all of the Depositor's right, title and interest in, to
and under
the Mortgage Loans and other assets in the Trust Fund, and that
this Agreement
shall constitute a security agreement under applicable law.
(b)
In connection with the above transfer and assignment, the
Depositor
hereby deposits with the Trustee or the Custodian, as its agent,
the following
documents or instruments
(I)
with respect to each Mortgage Loan, other than a Cooperative
Loan:
(i) the original Mortgage Note, endorsed in the following form:
"Pay
to
the order of HSBC Bank USA, National Association, as Trustee for
the
registered holders of the Merrill Lynch Mortgage Backed Securities
Trust,
Series 2007-1 Mortgage Pass-Through Certificates, without
recourse," with
all
prior and intervening endorsements showing a complete chain of
endorsement from the originator to the Person so endorsing to the
Trustee;
(ii) the original recorded Mortgage or a copy of the Mortgage
certified by the public recording office in which such Mortgage has
been
recorded;
(iii) an original Assignment of the Mortgage executed in the
following
form: "HSBC Bank USA, National Association, as Trustee for the
registered
holders of the Merrill Lynch Mortgage Backed Securities Trust,
Series
2007-1, Mortgage Pass-Through Certificates.
(iv) the original recorded Assignment or Assignments of the
Mortgage
showing a complete chain of assignment from the originator to the
Person
assigning the Mortgage to the Trustee as contemplated by the
immediately
preceding clause (iii), if applicable and only to the extent
available to
the
Depositor with evidence of recording thereon;
(v) the originals of all assumption, modification, consolidation
or
extension agreements, with evidence of recording thereon, if
any;
(vi) the original of any guarantee executed in connection with
the
Mortgage Note;
(vii) the original mortgagee title insurance policy;
(viii) the original of any security agreement, chattel mortgage
or
equivalent document executed in connection with the Mortgage;
and
(ix) the original power of attorney, if applicable.
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and (II) with respect to each Mortgage Loan that is a Cooperative
Loan:
(x) the original Mortgage Note, endorsed in the following form:
"Pay
to
the order of HSBC Bank USA, National Association, as Trustee for
the
registered holders of the Merrill Lynch Mortgage Backed Securities
Trust,
Series 2007-1 Mortgage Pass-Through Certificates, without
recourse," with
all
prior and intervening endorsements showing a complete chain of
endorsement from the originator to the Person so endorsing to the
Trustee;
(xi) the original duly executed assignment of Security Agreement
to
the
Trustee;
(xii) the acknowledgment copy of the original executed Form UCC-1
(or
certified copy thereof) with respect to the Security Agreement, and
any
required continuation statements;
(xiii) the acknowledgment copy of the original executed Form
UCC-3
with
respect to the Security Agreement, indicating the Trustee as
the
assignee of the secured party;
(xiv) the stock certificate representing the Cooperative Assets
allocated to the cooperative unit, with a stock power in blank
attached;
(xv) the original collateral assignment of the proprietary lease
by
Mortgagor to the originator;
(xvi) a copy of the recognition agreement;
(xvii) if applicable and to the extent available, the original
intervening assignments, including warehousing assignments, if
any,
showing, to the extent available, an unbroken chain of the related
Mortgage
Loan
to the Trustee, together with a copy of the related Form UCC-3
with
evidence of filing thereon; and
(xviii) the originals of each assumption, modification or
substitution
agreement, if any, relating to the Mortgage Loan;
provided, however, that in lieu of the foregoing, the Depositor may
deliver the
following documents, under the circumstances set forth below: (w)
the Depositor
may deliver a Mortgage Note pursuant to (a)(i) and (b)(i) endorsed
in blank,
provided that the endorsement is completed within 60 days of the
Closing Date;
(x) in lieu of the original Mortgage, assignments to the Trustee or
its
Custodian, as applicable, or intervening assignments thereof which
have been
delivered, are being delivered or will, upon receipt of recording
information
relating to the Mortgage required to be included thereon, be
delivered to
recording offices for recording and have not been returned to the
Depositor in
time to permit their delivery as specified above, the Depositor may
deliver a
true copy thereof with a certification by the Depositor on the face
of such
copy, substantially as follows: "Certified to be a true and correct
copy of the
original, which has been transmitted for recording"; and (y) in
lieu of the
Mortgage, assignment to the Trustee or intervening assignments
thereof, if the
applicable jurisdiction retains the originals of such
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documents (as evidenced by a certification from the Depositor or
the Master
Servicer, to such effect) the Depositor may deliver photocopies of
such
documents containing an original certification by the judicial or
other
governmental authority of the jurisdiction where such documents
were recorded;
and provided, further, however, that in the case of Mortgage Loans
which have
been prepaid in full after the Cut-off Date and prior to the
Closing Date, the
Depositor, in lieu of delivering the above documents, may deliver
to the Trustee
or its Custodian, as applicable, a certification to such effect and
shall
deposit all amounts paid in respect of such Mortgage Loans in the
Distribution
Account on the Closing Date. The Depositor shall deliver such
original documents
(including any original documents as to which certified copies had
previously
been delivered) to the Trustee or its Custodian, as applicable,
promptly after
they are received. As of the date hereof, recordation of the
assignment of the
Mortgage Loans to the Trustee or the Custodian, as applicable, is
not required
in any state by either Rating Agency to obtain the initial rating
on the
Certificates (upon which statement the Master Servicer, the Trustee
and the
Custodian may each conclusively rely).
If
any original Mortgage Note referred to in Section 2.01(b)(I)(i)
or
2.01(b)(II)(i) above cannot be located, the obligations of the
Depositor to
deliver such documents shall be deemed to be satisfied upon
delivery to the
Trustee or its Custodian, as applicable, of a photocopy of such
Mortgage Note,
if available, with a lost note affidavit. If any of the original
Mortgage Notes
for which a lost note affidavit was delivered to the Trustee or its
Custodian,
as applicable, is subsequently located, such original Mortgage Note
shall be
delivered to the Trustee or its Custodian, as applicable, within
three Business
Days.
(c)
The parties hereto agree that it is not intended that any mortgage
loan
be included in the Trust Fund that is, without limitation, a "High
Cost Loan" as
defined by the Home Ownership and Equity Protection Act of 1994 or
any other
applicable anti-predatory lending laws, including but not limited
to (i) a
"High-Cost Home Loan" as defined in the New Jersey Home Ownership
Act effective
November 27, 2003, (ii) a "High-Cost Home Loan" as defined in the
New Mexico
Home Loan Protection Act effective January 1, 2004, (iii) a "High
Cost Home
Mortgage Loan" as defined in the Massachusetts Predatory Home Loan
Practices Act
effective November 7, 2004 or (iv) a "High-Cost Home Loan" as
defined by the
Indiana High Cost Home Loan Law effective January 1, 2005.
(d)
Notwithstanding anything to the contrary contained herein, the
parties
hereto acknowledge that the functions of the Trustee with respect
to the
custody, acceptance, inspection and release of Mortgage Files,
including but not
limited to certain insurance policies and documents contemplated by
Section 3.12
of this Agreement, and preparation and delivery of the
certifications shall be
performed by the Custodian(s) pursuant to the terms and conditions
of the
Custodial Agreement(s).
Section 2.02 Acceptance of Mortgage Loans by Trustee.
(a)
The Trustee acknowledges the sale, transfer and assignment of the
Trust
Fund to it by the Depositor and its receipt thereof, subject to
further review
and the exceptions which may be noted pursuant to the procedures
described
below, and declares that it, or the Custodian on its behalf, holds
the documents
(or certified copies thereof) delivered to it pursuant to Section
2.01, and
declares that it will continue to hold those documents and any
amendments,
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replacements or supplements thereto and all other assets of the
Trust Fund
delivered to it as Trustee in trust for the use and benefit of all
present and
future Holders of the Certificates. On or before the Closing Date
(or, with
respect to any Substitute Mortgage Loan, within five Business Days
after the
receipt by the Trustee or Custodian thereof), the Trustee agrees,
for the
benefit of the Certificateholders, to review or cause to be
reviewed by the
Custodian on its behalf (under the Custodial Agreement), each
Mortgage File
delivered to it and to execute and deliver, or cause to be executed
and
delivered, to the Depositor on the Closing Date an Initial
Certification. In
conducting such review, the Trustee or Custodian will certify as to
each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan
paid in full or any Mortgage Loan specifically identified in the
exception
report annexed thereto as not being covered by such certification),
(i) all
documents constituting part of such Mortgage File (other than such
documents
described in Section 2.01(b)(I)(iii)) required to be delivered to
it pursuant to
this Agreement are in its possession, provided that with respect to
the
documents described in Section 2.01(b)(I)(v), (vi), (viii) and (ix)
and
2.01(b)(II)(viii) and (ix) to the extent the Trustee or the
Custodian on its
behalf has actual knowledge that such documents exist, (ii) such
documents have
been reviewed by it and are not torn, mutilated, defaced or
otherwise altered
(except if initialed by the obligor) and appear to relate on their
face to such
Mortgage Loan, (iii) based on its examination and only as to the
foregoing, the
information set forth in the Mortgage Loan Schedule corresponding
to the loan
number for the Mortgage Loan, the Mortgagor's name, including the
street address
but excluding the zip code, the Mortgage Interest Rate and the
original
principal balance of the Mortgage Loan accurately reflects
information set forth
in the Mortgage File and (iv) with respect to Mortgage Loans with a
Mortgage
Interest Rate subject to adjustment, the Gross Margin, the lifetime
cap and the
periodic cap for such Mortgage Loan. In performing any such review,
the Trustee,
or the Custodian, as its agent, may conclusively rely on the
purported due
execution and genuineness of any such document and on the purported
genuineness
of any signature thereon. Notwithstanding anything to the contrary
in this
Agreement, it is herein acknowledged that, in conducting such
review, the
Trustee or the Custodian on its behalf is under no duty or
obligation to
inspect, review or examine any such documents, instruments,
certificates or
other papers to determine whether they are genuine, enforceable, or
appropriate
for the represented purpose or whether they have actually been
recorded or that
they are other than what they purport to be on their face, or to
determine
whether any Person executing any documents is authorized to do so
or whether any
signature is genuine. If the Trustee or the Custodian, as its
agent, finds any
document constituting part of the Mortgage File not to have been
executed or
received, or to be unrelated to the Mortgage Loans identified in
Exhibit B or to
appear to be defective on its face, the Trustee or the Custodian,
as its agent,
shall promptly notify the Seller.
In
accordance with the Mortgage Loan Purchase Agreement, the Seller
shall
correct or cure any such defect within ninety (90) days from the
date of notice
from the Trustee or the Custodian, as its agent, of the defect and
if the Seller
fails to correct or cure the defect within such period, and such
defect
materially and adversely affects the interests of the
Certificateholders in the
related Mortgage Loan, the Trustee, shall enforce the Seller's
obligation
pursuant to the Mortgage Loan Purchase Agreement, within 90 days
from the
Trustee's or the Custodian's notification, to purchase such
Mortgage Loan at the
Purchase Price; provided that, if such defect would cause the
Mortgage Loan to
be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the
Code, any such cure or repurchase must occur within 90 days from
the date such
breach was discovered; provided, however, that if such defect
relates solely to
the
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inability of the Seller to deliver the original Security Instrument
or
intervening assignments thereof, or a certified copy because the
originals of
such documents, or a certified copy have not been returned by the
applicable
jurisdiction, the Seller shall not be required to purchase such
Mortgage Loan if
the Seller delivers such original documents or certified copy
promptly upon
receipt, but in no event later than 360 days after the Closing
Date. The
foregoing repurchase obligation shall not apply in the event that
the Seller
cannot deliver such original or copy of any document submitted for
recording to
the appropriate recording office in the applicable jurisdiction
because such
document has not been returned by such office; provided that the
Seller shall
instead deliver a recording receipt of such recording office or, if
such receipt
is not available, a certificate confirming that such documents have
been
accepted for recording, and delivery to the Trustee or the
Custodian, as its
agent, shall be effected by the Seller within thirty days of its
receipt of the
original recorded document.
(b)
No later than 180 days after the Closing Date, the Trustee or
the
Custodian, as its agent, will review, for the benefit of the
Certificateholders,
the Mortgage Files delivered to it and will execute and deliver or
cause to be
executed and delivered to the Depositor a Final Certification. In
conducting
such review, the Trustee or the Custodian, as its agent, will
certify as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan
paid in full or any Mortgage Loan specifically identified in the
exception
report annexed thereto as not being covered by such certification),
that (i) all
documents constituting part of such Mortgage File (other than such
documents
described in Section 2.01(b)(I)(v) and (ix)) required to be
delivered to it
pursuant to this Agreement are in its possession, provided that
with respect to
the documents described in Section 2.01(b)(I)(v), (vi), (viii) and
(ix) and
2.01(b)(II)(viii) and (ix) to the extent the Trustee or the
Custodian on its
behalf has actual knowledge that such documents exist, (ii) such
documents have
been reviewed by it and are not torn, mutilated, defaced or
otherwise altered
(except if initialed by the obligor) and appear regular on their
face and relate
to such Mortgage Loan, (iii) based on its examination and only as
to the
foregoing, the information set forth in the Mortgage Loan Schedule
corresponding
to the loan number for the Mortgage Loan, the Mortgagor's name,
including the
street address but excluding the zip code, the Mortgage Interest
Rate and the
original principal balance of the Mortgage Loan accurately reflects
information
set forth in the Mortgage File. In performing any such review, the
Trustee, or
the Custodian, as its agent, may conclusively rely on the purported
due
execution and genuineness of any such document and on the purported
genuineness
of any signature thereon. Notwithstanding anything to the contrary
in this
Agreement, it is herein acknowledged that, in conducting such
review, the
Trustee or the Custodian on its behalf is under no duty or
obligation (i) to
inspect, review or examine any such documents, instruments,
certificates or
other papers to determine whether they are genuine, enforceable, or
appropriate
for the represented purpose or whether they have actually been
recorded or that
they are other than what they purport to be on their face, or to
determine
whether any Person executing any documents is authorized to do so
or whether any
signature is genuine. If the Trustee or the Custodian, as its
agent, finds any
document constituting part of the Mortgage File not to have been
executed or
received, or to be unrelated to the Mortgage Loans identified in
Exhibit B or to
appear to be defective on its face, the Trustee or the Custodian,
as its agent,
shall promptly notify the Seller. In accordance with the Mortgage
Loan Purchase
Agreement, the Seller shall correct or cure any such defect within
90 days from
the date of notice from the Trustee of the defect and if the Seller
is unable to
cure such defect within such period, and if such defect materially
and adversely
affects the interests of the Certificateholders in the related
Mortgage Loan,
the Trustee shall enforce the Seller's
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obligation under the Mortgage Loan Purchase Agreement to purchase
such Mortgage
Loan at the Purchase Price, provided, however, that if such defect
relates
solely to the inability of the Seller to deliver the original
Security
Instrument or intervening assignments thereof, or a certified copy,
because the
originals of such documents, or a certified copy, have not been
returned by the
applicable jurisdiction, the Seller shall not be required to
purchase such
Mortgage Loan, if the Seller delivers such original documents or
certified copy
promptly upon receipt, but in no event later than 360 days after
the Closing
Date.
(c)
In the event that a Mortgage Loan is purchased by the Seller in
accordance with Subsections 2.02(a) or (b) above, the Seller shall
remit to the
Master Servicer the Purchase Price for deposit in the Master
Servicer Collection
Account and the Seller shall provide to the Trustee written
notification
detailing the components of the Purchase Price. Upon deposit of the
Purchase
Price in the Master Servicer Collection Account, the Depositor
shall give
written notice thereof to the Trustee and the Custodian and the
Trustee or the
Custodian, as its agent (upon receipt of a Request for Release in
the form of
Exhibit D attached hereto with respect to such Mortgage Loan),
shall release to
the Seller the related Mortgage File and the Trustee shall execute
and deliver
all instruments of transfer or assignment, without recourse,
furnished to it by
the Seller as are necessary to vest in the Seller title to and
rights under the
Mortgage Loan. Such purchase shall be deemed to have occurred on
the date on
which the Purchase Price in available funds is received by the
Trustee. The
Depositor or Master Servicer shall amend the Mortgage Loan
Schedule, to reflect
such repurchase and shall promptly notify the Rating Agencies and
the Master
Servicer of such amendment. The obligation of the Seller to
repurchase any
Mortgage Loan as to which such a defect in a constituent document
exists shall
be the sole remedy respecting such defect available to the
Certificateholders or
to the Trustee on their behalf.
Section 2.03 Assignment of Interest in the Mortgage Loan
Purchase
Agreement.
(a)
The Depositor hereby assigns to the Trustee, on behalf of the
Certificateholders, all of its right, title and interest in the
Mortgage Loan
Purchase Agreement, including but not limited to Depositor's rights
pursuant to
the Servicing Agreements (noting that the Seller has retained the
right in the
event of breach of the representations, warranties and covenants,
if any, with
respect to the related Mortgage Loans of the related Servicer under
the related
Servicing Agreement to enforce the provisions thereof and to seek
all or any
available remedies). The obligations of the Seller to substitute or
repurchase,
as applicable, a Mortgage Loan shall be the Trustee's and the
Certificateholders' sole remedy for any breach thereof. At the
request of the
Trustee, the Depositor shall take such actions as may be necessary
to enforce
the above right, title and interest on behalf of the Trustee and
the
Certificateholders or shall execute such further documents as the
Trustee may
reasonably require in order to enable the Trustee to carry out such
enforcement.
With respect to the representations and warranties described in the
Mortgage
Loan Purchase Agreement that are made to the best of the Seller's
knowledge, if
it is discovered by any of the Depositor, the Seller, the Master
Servicer, the
Securities Administrator 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.
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(b)
If the Depositor, the Master Servicer, Securities Administrator or
the
Trustee discovers a breach of any of the representations and
warranties set
forth in the Mortgage Loan Purchase Agreement, which breach
materially and
adversely affects the value of the interests of Certificateholders
or the
Trustee in the related Mortgage Loan, the party discovering the
breach shall
give prompt written notice of the breach to the other parties. The
Seller,
within 90 days of its discovery or receipt of notice that such
breach has
occurred (whichever occurs earlier), shall cure the breach in all
material
respects or, subject to the Mortgage Loan Purchase Agreement or
Section 2.04 of
this Agreement, as applicable, shall purchase the Mortgage Loan or
any property
acquired with respect thereto from the Trustee; provided, however,
that if there
is a breach of any representation set forth in the Mortgage Loan
Purchase
Agreement or Section 2.04 of this Agreement, as applicable, and the
Mortgage
Loan or the related property acquired with respect thereto has been
sold, then
the Seller shall pay, in lieu of the Purchase Price, any excess of
the Purchase
Price over the Net Liquidation Proceeds received upon such sale.
(If the Net
Liquidation Proceeds exceed the Purchase Price, any excess shall be
paid to the
Seller to the extent not required by law to be paid to the
borrower.) Any such
purchase by the Seller shall be made by providing an amount equal
to the
Purchase Price to the Master Servicer for deposit in the Master
Servicer
Collection Account and written notification detailing the
components of such
Purchase Price. The Depositor shall notify the Trustee in writing
of the deposit
of the Purchase Price and submit to the Trustee or the Custodian,
as its agent,
a Request for Release, and the Trustee shall release, or the
Trustee shall cause
the Custodian to release, to the Seller the related Mortgage File
and the
Trustee shall execute and deliver all instruments of transfer or
assignment
furnished to it by the Seller, without recourse, as are necessary
to vest in the
Seller title to and rights under the Mortgage Loan or any property
acquired with
respect thereto. Such purchase shall be deemed to have occurred on
the date on
which the Purchase Price in available funds is received by the
Master Servicer.
The Depositor or the Master Servicer shall amend the Mortgage Loan
Schedule to
reflect such repurchase and shall promptly notify the Master
Servicer and the
Rating Agencies of such amendment. Enforcement of the obligation of
the Seller
to purchase (or substitute a Substitute Mortgage Loan for) any
Mortgage Loan or
any property acquired with respect thereto (or pay the Purchase
Price as set
forth in the above proviso) as to which a breach has occurred and
is continuing
shall constitute the sole remedy respecting such breach available
to the
Certificateholders or the Trustee on their behalf.
Section 2.04 Substitution of Mortgage Loans. Notwithstanding
anything to
the contrary in this Agreement, in lieu of purchasing a Mortgage
Loan pursuant
to the Mortgage Loan Purchase Agreement or Sections 2.02 or 2.03 of
this
Agreement, the Seller may, no later than the date by which such
purchase by the
Seller would otherwise be required, tender to the Trustee a
Substitute Mortgage
Loan accompanied by a certificate of an authorized officer of the
Seller that
such Substitute Mortgage Loan conforms to the requirements set
forth in the
definition of "Substitute Mortgage Loan" in the Mortgage Loan
Purchase Agreement
or this Agreement, as applicable; provided, however, that
substitution pursuant
to the Mortgage Loan Purchase Agreement or Section 2.04 of this
Agreement, as
applicable, in lieu of purchase shall not be permitted after the
termination of
the two-year period beginning on the Startup Day; provided,
further, that if the
breach would cause the Mortgage Loan to be other than a "qualified
mortgage" as
defined in Section 860G(a)(3) of the Code, any such cure or
substitution must
occur within 90 days from the date the breach was discovered. The
Trustee or the
Custodian, as its agent, shall examine the Mortgage File for any
Substitute
Mortgage Loan in the manner set forth in Section 2.02(a) and the
Trustee or the
Custodian, as its agent, shall notify the Seller, in
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writing, within five Business Days after receipt, whether or not
the documents
relating to the Substitute Mortgage Loan satisfy the requirements
of the fourth
sentence of Subsection 2.02(a). Within two Business Days after
such
notification, the Seller shall provide to the Securities
Administrator for
deposit in the Distribution Account the amount, if any, by which
the Outstanding
Principal Balance as of the next preceding Due Date of the Mortgage
Loan for
which substitution is being made, after giving effect to Scheduled
Principal due
on such date, exceeds the Outstanding Principal Balance as of such
date of the
Substitute Mortgage Loan, after giving effect to Scheduled
Principal due on such
date, which amount shall be treated for the purposes of this
Agreement as if it
were the payment by the Seller of the Purchase Price for the
purchase of a
Mortgage Loan by the Seller. After such notification to the Seller
and, if any
such excess exists, upon written notification of the receipt of
such deposit,
the Trustee shall accept such Substitute Mortgage Loan which shall
thereafter be
deemed to be a Mortgage Loan hereunder. In the event of such a
substitution,
accrued interest on the Substitute Mortgage Loan for the month in
which the
substitution occurs and any Principal Prepayments made thereon
during such month
shall be the property of the Issuing Entity and accrued interest
for such month
on the Mortgage Loan for which the substitution is made and any
Principal
Prepayments made thereon during such month shall be the property of
the Seller.
The Scheduled Principal on a Substitute Mortgage Loan due on the
Due Date in the
month of substitution shall be the property of the Seller and the
Scheduled
Principal on the Mortgage Loan for which the substitution is made
due on such
Due Date shall be the property of the Issuing Entity. Upon
acceptance of the
Substitute Mortgage Loan (and delivery to the Trustee or Custodian
of a Request
for Release for such Mortgage Loan), the Trustee shall release to
the Seller the
related Mortgage File related to any Mortgage Loan released
pursuant to the
Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement,
as
applicable, and shall execute and deliver all instruments of
transfer or
assignment, without recourse, in form as provided to it as are
necessary to vest
in the Seller title to and rights under any Mortgage Loan released
pursuant to
the Mortgage Loan Purchase Agreement or Section 2.04 of this
Agreement, as
applicable. The Seller shall deliver the documents related to the
Substitute
Mortgage Loan in accordance with the provisions of the Mortgage
Loan Purchase
Agreement or Subsections 2.01(b) and 2.02(b) of this Agreement, as
applicable,
with the date of acceptance of the Substitute Mortgage Loan deemed
to be the
Closing Date for purposes of the time periods set forth in those
Subsections.
The representations and warranties set forth in the Mortgage Loan
Purchase
Agreement shall be deemed to have been made by the Seller with
respect to each
Substitute Mortgage Loan as of the date of acceptance of such
Mortgage Loan by
the Trustee. The Master Servicer shall amend the Mortgage Loan
Schedule to
reflect such substitution and shall provide a copy of such amended
Mortgage Loan
Schedule to the Trustee and the Rating Agencies.
Notwithstanding any other provision of this Agreement, the right
to
substitute Mortgage Loans pursuant to this Article II shall be
subject to the
additional limitations that no substitution of a Mortgage Loan
shall be made
unless the Securities Administrator and the Trustee shall have
received an
Opinion of Counsel (at the expense of the party seeking to make
the
substitution) that, under current law, such substitution will not
(A) affect
adversely the status of any REMIC established hereunder as a REMIC,
or of the
related "regular interests" as "regular interests" in any such
REMIC, or (B)
cause any such REMIC to engage in a "prohibited transaction" or
prohibited
contribution pursuant to the REMIC provisions.
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Section 2.05 Issuance of Certificates. The Trustee acknowledges
the
assignment to it on behalf of the Issuing Entity of the Mortgage
Loans and the
other assets comprising the Trust Fund and, concurrently therewith,
the
Securities Administrator has signed, and countersigned and
delivered to the
Depositor, in exchange therefor, Certificates in such authorized
denominations
representing such Percentage Interests as the Depositor has
requested. The
Trustee agrees that it will hold the Mortgage Loans and such other
assets as may
from time to time be delivered to it segregated on the books of the
Trustee in
trust for the benefit of the Certificateholders.
Section 2.06 Representations and Warranties Concerning the
Depositor. The
Depositor hereby represents and warrants to the Trustee, the Master
Servicer and
the Securities Administrator as follows:
(i) the Depositor (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware and
(b)
is qualified and in good standing as a foreign corporation to
do
business in each jurisdiction where such qualification is
necessary, except
where the failure so to qualify would not reasonably be expected to
have a
material adverse effect on the Depositor's business as presently
conducted
or
on the Depositor's ability to enter into this Agreement and to
consummate the transactions contemplated hereby;
(ii) the
Depositor has full corporate power to own its property, to
carry on its business as presently conducted and to enter into and
perform
its
obligations under this Agreement;
(iii) 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; and 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 articles of incorporation or
by-laws of
the
Depositor, except those conflicts, breaches or defaults which would
not
reasonably be expected to have a material adverse effect on the
Depositor's
ability to enter into this Agreement and to consummate the
transactions
contemplated hereby;
(iv) 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
those
consents, approvals, notices, registrations or other actions as
have
already been obtained, given or made;
(v) this Agreement has been duly executed and delivered by the
Depositor and, assuming due authorization, execution and delivery
by the
other parties hereto, constitutes a valid and binding obligation of
the
Depositor enforceable against it in
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accordance with its terms (subject to applicable bankruptcy and
insolvency
laws
and other similar laws affecting the enforcement of the rights
of
creditors generally);
(vi) there are no actions, suits or proceedings pending or, to
the
knowledge of the Depositor, threatened against the Depositor,
before or by
any
court, administrative agency, arbitrator or governmental body (i)
with
respect to any of the transactions contemplated by this Agreement
or (ii)
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 the
Depositor's
ability to enter into this Agreement or perform its obligations
under this
Agreement; and the Depositor is not in default with respect to any
order of
any
court, administrative agency, arbitrator or governmental body so as
to
materially and adversely affect the transactions contemplated by
this
Agreement; and
(vii) immediately prior to the transfer and assignment to the
Trustee,
each
Mortgage Note and each Mortgage were not subject to an assignment
or
pledge, and the Depositor had good and marketable title to and was
the sole
owner thereof and had full right to transfer and sell such Mortgage
Loan to
the
Trustee free and clear of any encumbrance, equity, lien,
pledge,
charge, claim or security interest.
Section 2.07 Representations and Warranties Concerning the Master
Servicer
and Securities Administrator. Wells Fargo Bank, N.A., in its
capacity as Master
Servicer and Securities Administrator hereby represents and
warrants to the
Seller, the Depositor and the Trustee as follows, as of the Closing
Date:
(i) It is a national banking association duly formed, validly
existing
and
in good standing under the laws of the United States of America and
is
duly
authorized and qualified to transact any and all business
contemplated
by
this Agreement to be conducted by the Master Servicer and the
Securities
Administrator, to the extent necessary to ensure its ability to
master
service the Mortgage Loans in accordance with the terms of this
Agreement
and
to perform any of its other obligations under this Agreement in
accordance with the terms hereof;
(ii) It has the full corporate power and authority to execute,
deliver
and
perform, and to enter into and consummate the transactions
contemplated
by
this Agreement and has duly authorized by all necessary corporate
action
on
its part the execution, delivery and performance of this Agreement;
and
this
Agreement, assuming the due authorization, execution and
delivery
hereof by the other parties hereto, constitutes its legal, valid
and
binding obligation, enforceable against it in accordance with its
terms,
except that (a) the enforceability hereof may be limited by
bankruptcy,
insolvency, moratorium, receivership and other similar laws
relating to
creditors' rights generally and (b) the remedy of specific
performance and
injunctive and other forms of equitable relief may be subject to
equitable
defenses and to the discretion of the court before which any
proceeding
therefor may be brought.
(iii) The execution and delivery of this Agreement by it, the
consummation of any other of the transactions contemplated by
this
Agreement, and the fulfillment of or
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compliance with the terms hereof are in its ordinary course of
business and
will
not (A) result in a material breach of any term or provision of
its
charter or by-laws or (B) materially conflict with, result in a
material
breach, violation or acceleration of, or result in a material
default
under, the terms of any other material agreement or instrument to
which it
is a
party or by which it may be bound, or (C) constitute a material
violation of any statute, order or regulation applicable to it of
any
court, regulatory body, administrative agency or governmental body
having
jurisdiction over it; and it is not in breach or violation of any
material
indenture or other material agreement or instrument, or in
violation of any
statute, order or regulation of any court, regulatory body,
administrative
agency or governmental body
having jurisdiction over it which breach or
violation may materially impair its ability to perform or meet any
of its
obligations under this Agreement.
(iv) No litigation is pending or, to the best of its knowledge,
threatened, against it that would materially and adversely affect
the
execution, delivery or enforceability of this Agreement or its
ability to
perform any of its other obligations under this Agreement in
accordance
with
the terms hereof.
(v) No consent, approval, authorization or order of any court
or
governmental agency or body is required for its execution, delivery
and
performance of, or compliance with, this Agreement or the
consummation of
the
transactions contemplated hereby, or if any such consent,
approval,
authorization or order is required, it has obtained the same.
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master Servicer. The Master Servicer shall supervise,
monitor
and oversee the obligation of the Servicers to service and
administer their
respective Mortgage Loans in accordance with the terms of the
applicable
Servicing Agreement and shall have full power and authority to do
any and all
things which it may deem necessary or desirable in connection with
such master
servicing and administration. In performing its obligations
hereunder, the
Master Servicer shall act in a manner consistent with Accepted
Master Servicing
Practices. Furthermore, the Master Servicer shall oversee and
consult with each
Servicer as necessary from time-to-time to carry out the Master
Servicer's
obligations hereunder, shall receive, review and evaluate all
reports,
information and other data provided to the Master Servicer by each
Servicer and
shall cause each Servicer to perform and observe the covenants,
obligations and
conditions to be performed or observed by such Servicer under the
applicable
Servicing Agreement. The Master Servicer shall independently and
separately
monitor each Servicer's servicing activities with respect to each
related
Mortgage Loan, reconcile the results of such monitoring with such
information
provided in the previous sentence on a monthly basis and coordinate
corrective
adjustments to the Servicers' and Master Servicer's records, and
based on such
reconciled and corrected information, the Master Servicer shall
provide such
information to the Securities Administrator as shall be necessary
in order for
it to prepare the statements specified in Section 6.04, and prepare
any other
information and statements required to be forwarded by the Master
Servicer
hereunder. The Master Servicer shall reconcile the results of its
monitoring
with the actual remittances of the Servicers to the Master Servicer
Collection
Account pursuant to the applicable Servicing Agreements.
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If
the Master Servicer and the Securities Administrator are the
same
entity, then at any time the Master Servicer is terminated as
Master Servicer,
the Securities Administrator shall likewise be removed as
securities
administrator.
The
Trustee shall furnish the Servicers and the Master Servicer with
any
limited powers of attorney and other documents in form acceptable
to it
necessary or appropriate to enable the Servicers and the Master
Servicer to
service and administer the related Mortgage Loans and REO Property.
The Trustee
shall have no liability with respect to the use of any such limited
power of
attorney.
The
Trustee or the Custodian shall provide access to the records
and
documentation in possession of the Trustee or the Custodian
regarding the
related Mortgage Loans and REO Property and the servicing thereof
to the
Certificateholders, the FDIC, and the supervisory agents and
examiners of the
FDIC, such access being afforded only upon reasonable prior written
request and
during normal business hours at the office of the Trustee or the
Custodian;
provided, however, that, unless otherwise required by law, the
Trustee or the
Custodian shall not be required to provide access to such records
and
documentation if the provision thereof would violate the legal
right to privacy
of any Mortgagor. The Trustee or the Custodian shall allow
representatives of
the above entities to photocopy any of the records and
documentation and shall
provide equipment for that purpose at a charge that covers the
Trustee's or the
Custodian's actual costs.
The
Trustee shall execute and deliver to the related Servicer and
the
Master Servicer upon request any court pleadings, requests for
trustee's sale or
other documents necessary or desirable to (i) the foreclosure or
trustee's sale
with respect to a Mortgaged Property; (ii) any legal action brought
to obtain
judgment against any Mortgagor on the Mortgage Note or Security
Instrument;
(iii) obtain a deficiency judgment against the Mortgagor; or (iv)
enforce any
other rights or remedies provided by the Mortgage Note or Security
Instrument or
otherwise available at law or equity.
Section 3.02 REMIC-Related Covenants. For as long as each REMIC
shall
exist, the Trustee and the Securities Administrator shall act in
accordance
herewith to assure continuing treatment of such REMIC as a REMIC,
and the
Trustee and the Securities Administrator shall comply with any
directions of the
Depositor, the related Servicer or the Master Servicer to assure
such continuing
treatment. In particular, the Trustee shall not (a) sell or permit
the sale of
all or any portion of the Mortgage Loans or of any investment of
deposits in an
Account unless such sale is as a result of a repurchase of the
Mortgage Loans
pursuant to this Agreement or the Trustee has received a REMIC
Opinion prepared
at the expense of the Issuing Entity; and (b) other than with
respect to a
substitution pursuant to the Mortgage Loan Purchase Agreement or
Section 2.04 of
this Agreement, as applicable, accept any contribution to any REMIC
after the
Startup Day without receipt of a REMIC Opinion.
Section 3.03 Monitoring of Servicers.
(a)
The Master Servicer shall be responsible for reporting to the
Trustee
and the Depositor the compliance by each Servicer with its duties
under the
related Servicing Agreement. In the review of each Servicer's
activities, the
Master Servicer may rely upon an
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officer's certificate of the Servicer with regard to such
Servicer's compliance
with the terms of its Servicing Agreement. In the event that the
Master
Servicer, in its judgment, determines that a Servicer should be
terminated in
accordance with its Servicing Agreement, or that a notice should be
sent
pursuant to such Servicing Agreement with respect to the occurrence
of an event
that, unless cured, would constitute grounds for such termination,
the Master
Servicer shall notify the Depositor and the Trustee thereof and the
Master
Servicer shall issue such notice or take such other action as it
deems
appropriate.
(b)
The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer
under the
related Servicing Agreement, and shall, in the event that a
Servicer fails to
perform its obligations in accordance with the related Servicing
Agreement,
subject to the preceding paragraph, terminate the rights and
obligations of such
Servicer thereunder and act as servicer of the related Mortgage
Loans or, if the
Master Servicer is unwilling or unable to act as a Servicer, the
Master Servicer
shall cause the Trustee to enter in to a new Servicing Agreement
with a
successor Servicer selected by the Master Servicer that is eligible
in
accordance with the criteria specified in this Agreement; provided,
however, it
is understood and acknowledged by the parties hereto that there
will be a period
of transition (not to exceed 90 days) before the actual servicing
functions can
be fully transferred to such successor servicer. In either event,
such
enforcement, including, without limitation, the legal prosecution
of claims,
termination of the Servicing Agreements and the pursuit of other
appropriate
remedies, shall be in such form and carried out to such an extent
and at such
time as the Master Servicer, in its good faith business judgment,
would require
were it the owner of the related Mortgage Loans. The Master
Servicer shall pay
the costs of such enforcement at its own expense subject to Section
3.03(c),
provided that the Master Servicer shall not be required to
prosecute or defend
any legal action except to the extent that the Master Servicer
shall have
received reasonable indemnity for its costs and expenses in
pursuing such
action.
(c)
To the extent that the costs and expenses of the Master
Servicer
related to any termination of a Servicer, appointment of a
successor Servicer or
the transfer and assumption of servicing by the Master Servicer
with respect to
any Servicing Agreement (including, without limitation, (i) all
legal costs and
expenses and all due diligence costs and expenses associated with
an evaluation
of the potential termination of a Servicer as a result of an event
of default by
such Servicer and (ii) all costs and expenses associated with the
complete
transfer of servicing, including all servicing files and all
servicing data and
the completion, correction or manipulation of such servicing data
as may be
required by the successor servicer to correct any errors or
insufficiencies in
the servicing data or otherwise to enable the successor service to
service the
Mortgage Loans in accordance with the related Servicing Agreement)
are not fully
and timely reimbursed by the terminated Servicer, the Master
Servicer shall be
entitled to reimbursement of such costs and expenses from the
Master Servicer
Collection Account pursuant to Section 4.03(b).
(d)
The Master Servicer shall require each Servicer to comply with
the
remittance requirements and other obligations set forth in the
related Servicing
Agreement.
(e)
If the Master Servicer acts as Servicer, it will not assume
liability
for the representations and warranties of such Servicer, if any,
that it
replaces.
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Section 3.04 Fidelity Bond. The Master Servicer, at its expense,
shall
maintain in effect a blanket fidelity bond and an errors and
omissions insurance
policy, affording coverage with respect to all directors, officers,
employees
and other Persons acting on such Master Servicer's behalf, and
covering errors
and omissions in the performance of the Master Servicer's
obligations hereunder.
The errors and omissions insurance policy and the fidelity bond
shall be in such
form and amount generally acceptable for entities serving as master
servicers or
trustees.
Section 3.05 Power to Act; Procedures. The Master Servicer shall
master
service the Mortgage Loans and shall have full power and authority,
subject to
the REMIC Provisions and the provisions of Article X hereof, to do
any and all
things that it may deem necessary or desirable in connection with
the master
servicing and administration of the Mortgage Loans, including but
not limited to
the power and authority (i) to execute and deliver, on behalf of
the
Certificateholders and the Trustee, customary consents or waivers
and other
instruments and documents, (ii) to consent to transfers of any
Mortgaged
Property and assumptions of the Mortgage Notes and related
Mortgages, (iii) to
collect any Insurance Proceeds and Liquidation Proceeds, and (iv)
to effectuate
foreclosure or other conversion of the ownership of the Mortgaged
Property
securing any Mortgage Loan, in each case, in accordance with the
provisions of
this Agreement and the related Servicing Agreement, as applicable;
provided,
however, that the Master Servicer shall not (and, consistent with
its
responsibilities under Section 3.03, shall not permit any Servicer
to) knowingly
or intentionally take any action, or fail to take (or fail to cause
to be taken)
any action reasonably within its control and the scope of duties
more
specifically set forth herein, that, under the REMIC Provisions, if
taken or not
taken, as the case may be, would cause any REMIC created hereunder
to fail to
qualify as a REMIC or result in the imposition of a tax upon the
Issuing Entity
(including but not limited to the tax on prohibited transactions as
defined in
Section 860F(a)(2) of the Code and the tax on contributions to a
REMIC set forth
in Section 860G(d) of the Code) unless the Master Servicer has
received an
Opinion of Counsel (but not at the expense of the Master Servicer)
to the effect
that the contemplated action will not would cause any REMIC created
hereunder to
fail to qualify as a REMIC or result in the imposition of a tax
upon any REMIC
created hereunder. The Trustee shall furnish the Master Servicer,
upon written
request from a Servicing Officer, with any limited powers of
attorney (in form
acceptable to the Trustee) empowering the Master Servicer or any
Servicer to
execute and deliver instruments of satisfaction or cancellation, or
of partial
or full release or discharge, and to foreclose upon or otherwise
liquidate
Mortgaged Property, and to appeal, prosecute or defend in any court
action
relating to the Mortgage Loans or the Mortgaged Property, in
accordance with the
applicable Servicing Agreement and this Agreement, and the Trustee
shall execute
and deliver such other documents, as the Master Servicer may
request, to enable
the Master Servicer to master service and administer the Mortgage
Loans and
carry out its duties hereunder, in each case in accordance with
Accepted Master
Servicing Practices (and the Trustee shall have no liability for
misuse of any
such powers of attorney by the Master Servicer or any Servicer). If
the Master
Servicer or the Trustee has been advised that it is likely that the
laws of the
state in which action is to be taken prohibit such action if taken
in the name
of the Trustee or that the Trustee would be adversely affected
under the "doing
business" or tax laws of such state if such action is taken in its
name, the
Master Servicer shall join with the Trustee in the appointment of a
co-trustee
pursuant to Section 9.11 hereof. In the performance of its duties
hereunder, the
Master Servicer shall be an independent contractor and shall not,
except in
those instances where it is taking action in the name of the
Trustee, be deemed
to be the agent of the Trustee.
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Section 3.06 Due-on-Sale Clauses; Assumption Agreements. To the
extent
provided in the applicable Servicing Agreement, to the extent
Mortgage Loans
contain enforceable due-on-sale clauses, the Master Servicer shall
cause the
Servicers to enforce such clauses in accordance with the applicable
Servicing
Agreement. If applicable law prohibits the enforcement of a
due-on-sale clause
or such clause is otherwise not enforced in accordance with the
applicable
Servicing Agreement, and, as a consequence, a Mortgage Loan is
assumed, the
original Mortgagor may be released from liability in accordance
with the
applicable Servicing Agreement.
Section 3.07 Release of Mortgage Files.
(a)
Upon becoming aware of the payment in full of any Mortgage Loan, or
the
receipt by any Servicer of a notification that payment in full has
been escrowed
in a manner customary for such purposes for payment to
Certificateholders on the
next Distribution Date, the Servicers or the Master Servicer will,
if required
under the applicable Servicing Agreement, promptly furnish to the
Custodian, on
behalf of the Trustee, two copies of a certification substantially
in the form
of Exhibit D hereto signed by a Servicing Officer or in a mutually
agreeable
electronic format which will, in lieu of a signature on its face,
originate from
a Servicing Officer (which certification shall include a statement
to the effect
that all amounts received in connection with such payment that are
required to
be deposited in the Protected Account maintained by the applicable
Servicer
pursuant to its Servicing Agreement have been or will be so
deposited) and shall
request that the Custodian, on behalf of the Trustee, deliver to
the applicable
Servicer the related Mortgage File. Upon receipt of such
certification and
request, the Custodian, on behalf of the Trustee, shall no later
than five
Business Days (or, to the extent that the applicable Servicer
notifies the
Seller that a document is not in the Servicer's possession as part
of the
Servicing File which is needed for purposes of the Servicer
complying with any
applicable law, within such shorter period as may be necessary to
enable the
Servicer to comply with such law), release the related Mortgage
File to the
applicable Servicer and the Trustee and Custodian shall have no
further
responsibility with regard to such Mortgage File. Upon any such
payment in full,
each Servicer is authorized, to give, as agent for the Trustee, as
the mortgagee
under the Mortgage that secured the Mortgage Loan, an instrument of
satisfaction
(or assignment of mortgage without recourse) regarding the
Mortgaged Property
subject to the Mortgage, which instrument of satisfaction or
assignment, as the
case may be, shall be delivered to the Person or Persons entitled
thereto
against receipt therefor of such payment, it being understood and
agreed that no
expenses incurred in connection with such instrument of
satisfaction or
assignment, as the case may be, shall be chargeable to the
Protected Account.
(b)
From time to time and as appropriate for the servicing or
foreclosure
of any Mortgage Loan and in accordance with the applicable
Servicing Agreement,
the Trustee shall execute such documents as requested and as shall
be prepared
and furnished to the Trustee by a Servicer or the Master Servicer
and as are
necessary to the prosecution of any such proceedings. In connection
with the
foregoing, the Custodian, on behalf of the Trustee, shall, upon the
request of a
Servicer or the Master Servicer, and delivery to the Custodian, on
behalf of the
Trustee, of two copies of a Request for Release signed by a
Servicing Officer
substantially in the form of Exhibit D (or in a mutually agreeable
electronic
format which will, in lieu of a signature on its face, originate
from a
Servicing Officer), release the related Mortgage File held in its
possession or
control to the related Servicer or the Master Servicer, as
applicable. Such
trust receipt shall
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obligate the related Servicer or the Master Servicer to return the
Mortgage File
to the Custodian on behalf of the Trustee, when the need therefor
by the
Servicer or the Master Servicer no longer exists unless the
Mortgage Loan shall
be liquidated, in which case, upon receipt of a certificate of a
Servicing
Officer similar to that hereinabove specified, the Mortgage File
shall be
released by the Custodian, on behalf of the Trustee, to the related
Servicer or
the Master Servicer.
Section 3.08 Documents, Records and Funds in Possession of Master
Servicer
To Be Held for Trustee.
(a)
The Master Servicer shall transmit and each Servicer (to the
extent
required by the related Servicing Agreement) shall transmit to the
Trustee or
Custodian such documents and instruments coming into the possession
of the
Master Servicer or such Servicer from time to time as are required
by the terms
hereof, or in the case of the Servicers, the applicable Servicing
Agreement, to
be delivered to the Trustee or Custodian. Any funds received by the
Master
Servicer or by a Servicer in respect of any Mortgage Loan or which
otherwise are
collected by the Master Servicer or by a Servicer as Liquidation
Proceeds or
Insurance Proceeds in respect of any Mortgage Loan shall be held
for the benefit
of the Trustee and the Certificateholders subject to the Master
Servicer's right
to retain or withdraw from the Master Servicer Collection Account
the Master
Servicing Compensation and other amounts provided in this
Agreement, and to the
right of each Servicer to retain its Servicing Fee and other
amounts as provided
in the applicable Servicing Agreement. The Master Servicer shall,
and (to the
extent provided in the applicable Servicing Agreement) shall cause
each Servicer
to, provide access to information and documentation regarding the
Mortgage Loans
to the Trustee, its agents and accountants at any time upon
reasonable request
and during normal business hours, and to Certificateholders that
are savings and
loan associations, banks or insurance companies, the Office of
Thrift
Supervision, the FDIC and the supervisory agents and examiners of
such Office
and Corporation or examiners of any other federal or state banking
or insurance
regulatory authority if so required by applicable regulations of
the Office of
Thrift Supervision or other regulatory authority, such access to be
afforded
without charge but only upon reasonable request in writing and
during normal
business hours at the offices of the Master Servicer designated by
it. In
fulfilling such a request, the Master Servicer shall not be
responsible for
determining the sufficiency of such information.
(b)
All Mortgage Files and funds collected or held by, or under the
control
of, the Master Servicer, in respect of any Mortgage Loans, whether
from the
collection of principal and interest payments or from Liquidation
Proceeds or
Insurance Proceeds, shall be held by the Master Servicer for and on
behalf of
the Trustee and the Certificateholders and shall be and remain the
sole and
exclusive property of the Trustee; provided, however, that the
Master Servicer
and each Servicer shall be entitled to setoff against, and deduct
from, any such
funds any amounts that are properly due and payable to the Master
Servicer or
such Servicer under this Agreement or the applicable Servicing
Agreement.
Section 3.09 Standard Hazard Insurance and Flood Insurance
Policies.
(a)
For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Servicers under the related Servicing Agreements
to maintain
or cause to be maintained standard fire and casualty insurance and,
where
applicable, flood insurance, all in accordance with the
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provisions of the related Servicing Agreements. It is understood
and agreed that
such insurance shall be with insurers meeting the eligibility
requirements set
forth in the applicable Servicing Agreement and that no earthquake
or other
additional insurance is to be required of any Mortgagor or to be
maintained on
property acquired in respect of a defaulted loan, other than
pursuant to such
applicable laws and regulations as shall at any time be in force
and as shall
require such additional insurance.
(b)
Pursuant to Sections 4.01 and 4.02, any amounts collected by
the
Servicers or the Master Servicer, under any insurance policies
(other than
amounts to be applied to the restoration or repair of the property
subject to
the related Mortgage or released to the Mortgagor in accordance
with the
applicable Servicing Agreement) shall be deposited into the Master
Servicer
Collection Account, subject to withdrawal pursuant to Sections 4.02
and 4.03 in
accordance with the terms and conditions of the related Servicing
Agreement. Any
cost incurred by the Master Servicer or any Servicer in maintaining
any such
insurance if the Mortgagor defaults in its obligation to do so
shall be added to
the amount owing under the Mortgage Loan where the terms of the
Mortgage Loan so
permit; provided, however, that the addition of any such cost shall
not be taken
into account for purposes of calculating the distributions to be
made to
Certificateholders and shall be recoverable by the Master Servicer
or such
Servicer pursuant to Sections 4.02 and 4.03.
Section 3.10 Presentment of Claims and Collection of Proceeds. The
Master
Servicer shall (to the extent provided in the applicable Servicing
Agreement)
cause the related Servicer to, prepare and present on behalf of the
Trustee and
the Certificateholders all claims under the Insurance Policies and
take such
actions (including the negotiation, settlement, compromise or
enforcement of the
insured's claim) as shall be necessary to realize recovery under
such policies.
Any proceeds disbursed to the Master Servicer (or disbursed to a
Servicer and
remitted to the Master Servicer) in respect of such policies, bonds
or contracts
shall be promptly deposited in the Master Servicer Collection
Account upon
receipt, except that any amounts realized that are to be applied to
the repair
or restoration of the related Mortgaged Property as a condition
precedent to the
presentation of claims on the related Mortgage Loan to the insurer
under any
applicable Insurance Policy need not be so deposited (or
remitted).
Section 3.11 Maintenance of the Primary Mortgage Insurance
Policies.
(a)
The Master Servicer shall not take, or permit any Servicer (to
the
extent such action is prohibited under the applicable Servicing
Agreement) to
take, any action that would result in noncoverage under any
applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of
such Master
Servicer or Servicer, would have been covered thereunder. The
Master Servicer
shall use its best reasonable efforts to cause each Servicer (to
the extent
required under the related Servicing Agreement) to keep in force
and effect (to
the extent that the Mortgage Loan requires the Mortgagor to
maintain such
insurance), primary mortgage insurance applicable to each Mortgage
Loan in
accordance with the provisions of this Agreement and the related
Servicing
Agreement, as applicable. The Master Servicer shall not, and shall
not permit
any Servicer (to the extent required under the related Servicing
Agreement) to,
cancel or refuse to renew any such Primary Mortgage Insurance
Policy that is in
effect at the date of the initial issuance of the Mortgage Note and
is required
to be kept in force hereunder
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except in accordance with the provisions of this Agreement and the
related
Servicing Agreement, as applicable.
(b)
The Master Servicer agrees to present, or to cause each Servicer
(to
the extent required under the related Servicing Agreement) to
present, on behalf
of the Trustee and the Certificateholders, claims to the insurer
under any
Primary Mortgage Insurance Policies and, in this regard, to take
such reasonable
action as shall be necessary to permit recovery under any Primary
Mortgage
Insurance Policies respecting defaulted Mortgage Loans. Pursuant to
Section 4.01
and 4.02, any amounts collected by the Master Servicer or any
Servicer under any
Primary Mortgage Insurance Policies shall be deposited in the
Master Servicer
Collection Account, subject to withdrawal pursuant to Section
4.03.
Section 3.12 Trustee to Retain Possession of Certain Insurance
Policies and
Documents. The Trustee or the Custodian shall retain possession and
custody of
the originals (to the extent available) of any Primary Mortgage
Insurance
Policies, or certificate of insurance if applicable, and any
certificates of
renewal as to the foregoing as may be issued from time to time as
contemplated
by this Agreement. Until all amounts distributable in respect of
the
Certificates have been distributed in full and the Master Servicer
otherwise has
fulfilled its obligations under this Agreement, the Trustee or its
Custodian
shall also retain possession and custody of each Mortgage File in
accordance
with and subject to the terms and conditions of this Agreement. The
Master
Servicer shall promptly deliver or cause to be delivered to the
Trustee or the
Custodian upon the execution or receipt thereof the originals of
any Primary
Mortgage Insurance Policies, any certificates of renewal, and such
other
documents or instruments that constitute portions of the Mortgage
File that come
into the possession of the Master Servicer from time to time.
Section 3.13 Realization Upon Defaulted Mortgage Loans. The Master
Servicer
shall cause each Servicer (to the extent required under the related
Servicing
Agreement) to foreclose upon, repossess or otherwise comparably
convert the
ownership of Mortgaged Properties securing such of the Mortgage
Loans as come
into and continue in default and as to which no satisfactory
arrangements can be
made for collection of delinquent payments, all in accordance with
the terms and
conditions of the applicable Servicing Agreement.
Section 3.14 Compensation for the Master Servicer. The Master
Servicer will
be entitled to all income and gain realized from any investment of
funds in the
Master Servicer Collection Account, pursuant to Article IV, for the
performance
of its activities hereunder. Servicing compensation in the form of
assumption
fees, if any, late payment charges, as collected, if any, or
otherwise (but not
including any prepayment premium or penalty) shall be retained by
the applicable
Servicer and shall not be deposited in the Protected Account. The
Master
Servicer shall be required to pay all expenses incurred by it in
connection with
its activities hereunder and shall not be entitled to reimbursement
therefor
except as provided in this Agreement.
Section 3.15 REO Property.
(a)
In the event the Issuing Entity acquires ownership of any REO
Property
in respect of any related Mortgage Loan, the deed or certificate of
sale shall
be issued to the Trustee, or to
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its nominee, on behalf of the related Certificateholders. The
Master Servicer
shall, to the extent provided in the applicable Servicing
Agreement, cause the
applicable Servicer to sell, any REO Property as expeditiously as
possible and
in accordance with the provisions of this Agreement and the related
Servicing
Agreement, as applicable. Pursuant to its efforts to sell such REO
Property, the
Master Servicer shall cause the applicable Servicer to protect and
conserve,
such REO Property in the manner and to the extent required by the
applicable
Servicing Agreement, in accordance with the REMIC Provisions and in
a manner
that does not result in a tax on "net income from foreclosure
property" or cause
such REO Property to fail to qualify as "foreclosure property"
within the
meaning of Section 860G(a)(8) of the Code.
(b)
The Master Servicer shall, to the extent required by the
related
Servicing Agreement, cause the applicable Servicer to deposit all
funds
collected and received in connection with the operation of any REO
Property in
the Protected Account.
(c)
The Master Servicer and the applicable Servicer, upon the final
disposition of any REO Property, shall be entitled to reimbursement
for any
related unreimbursed Monthly Advances and other unreimbursed
advances as well as
any unpaid Servicing Fees from Liquidation Proceeds received in
connection with
the final disposition of such REO Property; provided, that any such
unreimbursed
Monthly Advances as well as any unpaid Servicing Fees may be
reimbursed or paid,
as the case may be, prior to final disposition, out of any net
rental income or
other net amounts derived from such REO Property.
(d)
To the extent provided in the related Servicing Agreement, the
Liquidation Proceeds from the final disposition of the REO
Property, net of any
payment to the Master Servicer and the applicable Servicer as
provided above
shall be deposited in the Protected Account on or prior to the
Determination
Date in the month following receipt thereof and be remitted by wire
transfer in
immediately available funds to the Master Servicer for deposit into
the related
Master Servicer Collection Account on the next succeeding Servicer
Remittance
Date.
Section 3.16 Annual Statement as to Compliance.
Not
later than March 1 of each calendar year (other than the calendar
year
during which the Closing Date occurs), each Servicer shall deliver
(or otherwise
make available) and each Servicer shall cause any Servicing
Function Participant
engaged by it to deliver to the Master Servicer, the Securities
Administrator
and the Depositor, an Officer's Certificate in the form attached
hereto as
Exhibit P stating, as to each signatory thereof, that (i) a review
of the
activities of such signatory during the preceding calendar year, or
portion
thereof, and of the performance of such signatory under the related
Servicing
Agreement or such other applicable agreement in the case of a
Servicing Function
Participant has been made under such officer's supervision, and
(ii) to the best
of such officer's knowledge, based on such review, such signatory
has fulfilled
all its obligations under this Agreement, the related Servicing
Agreement or
such other applicable agreement in all material respects throughout
such year or
a portion thereof, or, if there has been a failure to fulfill any
such
obligation in any material respect, specifying each such failure
known to such
officer and the nature and status thereof.
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The
Master Servicer and the Securities Administrator shall deliver
(or
otherwise make available) (and the Master Servicer and Securities
Administrator
shall cause any Servicing Function Participant engaged by it to
deliver) to the
Depositor and the Securities Administrator on or before March 1
(with a
ten-calendar day cure period) of each year, commencing in March
2008, an
Officer's Certificate stating, as to the signer thereof, that (A) a
review of
such party's activities during the preceding calendar year or
portion thereof
and of such party's performance under this Agreement, or such other
applicable
agreement in the case of a Servicing Function Participant, has been
made under
such officer's supervision and (B) to the best of such officer's
knowledge,
based on such review, such party has fulfilled all its obligations
under this
Agreement, or such other applicable agreement in the case of a
Servicing
Function Participant, in all material respects throughout such year
or portion
thereof, or, if there has been a failure to fulfill any such
obligation in any
material respect, specifying each such failure known to such
officer and the
nature and status thereof.
The
Master Servicer shall include all annual statements of
compliance
received by it from each Servicer with its own annual statement of
compliance to
be submitted to the Securities Administrator pursuant to this
Section.
In the event the
Master Servicer, the Securities Administrator or any
Servicing Function Participant engaged by any such party is
terminated, assigns
its rights and obligations under or resigns pursuant to the terms
of this
Agreement, or such other applicable agreement in the case of a
Servicing
Function Participant, as the case may be, such party shall provide,
an annual
statement of compliance pursuant to this Section 3.16 or to such
applicable
agreement, as the case may be, notwithstanding any such
termination, assignment
or resignation.
Section 3.17 Reports on Assessment of Compliance and
Attestation.
(a)
Not later than March 1 of each calendar year (other than the
calendar
year during which the Closing Date occurs) each Servicer at its own
expense,
shall furnish, and shall cause any Servicing Function Participant
engaged by it
to furnish (unless in the case of a Subcontractor, such Servicer
has notified
the Depositor and the Master Servicer in writing that such
compliance statement
is not required for the Subcontractor) to the Master Servicer, the
Securities
Administrator and the Depositor an officer's assessment of its
compliance with
the Relevant Servicing Criteria during the preceding calendar year
as required
by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of
Regulation AB
(the "Assessment of Compliance"), which assessment shall contain
(A) a statement
by such party of its responsibility for assessing compliance with
the Relevant
Servicing Criteria, (B) a statement that such party used the
Relevant Servicing
Criteria to assess compliance with the Relevant Servicing Criteria,
(C) such
party's assessment of compliance with the Relevant Servicing
Criteria as of and
for the fiscal year covered by the Form 10-K required to be filed
pursuant to
Section 3.18, including, if there has been any material instance
of
noncompliance with the Relevant Servicing Criteria, a discussion of
each such
failure and the nature and status thereof, which assessment shall
be based on
the activities it performs with respect to asset-backed securities
transactions
taken as a whole involving such party that are backed by the same
asset type as
the Mortgage Loans, and (D) a statement that a registered public
accounting firm
has issued an attestation report on such party's assessment of
compliance with
the Relevant Servicing Criteria as of and for such period.
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By
March 1 (with a ten-calendar day cure period) of each year,
commencing
in March 2008, the Master Servicer, the Securities Administrator
and the
Custodian each at its own expense, shall furnish or otherwise make
available,
and each such party shall cause any Servicing Function Participant
engaged by it
to furnish, each at its own expense, to the Securities
Administrator and the
Depositor, a report on an assessment of compliance with the
Relevant Servicing
Criteria that contains (A) a statement by such party of its
responsibility for
assessing compliance with the Relevant Servicing Criteria, (B) a
statement that
such party used the Relevant Servicing Criteria to assess
compliance with the
Relevant Servicing Criteria, (C) such party's assessment of
compliance with the
Relevant Servicing Criteria as of and for the fiscal year covered
by the Form
10-K required to be filed pursuant to Sections 3.18(h), (i), (j)
and (k),
including, if there has been any material instance of noncompliance
with the
Relevant Servicing Criteria, a discussion of each such failure and
the nature
and status thereof, and (D) a statement that a registered public
accounting firm
has issued an attestation report on such party's assessment of
compliance with
the Relevant Servicing Criteria as of and for such period.
No
later than the end of each fiscal year for the Trust for which a
10-K is
required to be filed, the Master Servicer, the Custodian shall each
forward to
the Securities Administrator and the Depositor the name of each
Servicing
Function Participant engaged by it and what Relevant Servicing
Criteria will be
addressed in the report on assessment of compliance prepared by
such Servicing
Function Participant (provided, however, that the Master Servicer
need not
provide such information to the Securities Administrator so long as
the Master
Servicer and the Securities Administrator are the same Person).
When the Master
Servicer, and the Securities Administrator (or any Servicing
Function
Participant engaged by them) submit their assessments to the
Securities
Administrator, such parties will also at such time include the
assessment and
attestation pursuant to this Section 3.17 of each Servicing
Function Participant
engaged by it.
Promptly after receipt of each report on assessment of compliance,
(i) the
Depositor shall review each such report and, if applicable, consult
with such
Servicer, the Master Servicer, the Securities Administrator and any
Servicing
Function Participant engaged by any such party as to the nature of
any material
instance of noncompliance with the Relevant Servicing Criteria by
such Servicer
by each such party, and (ii) the Securities Administrator shall
confirm that the
assessments individually address the Relevant Servicing Criteria
for each party
as set forth on Exhibit K or any similar exhibit set forth in each
Servicing
Agreement in respect of each Servicer and notify the Depositor of
any
exceptions.
The
Master Servicer shall include all annual reports on assessment
of
compliance received by it from the Servicers with its own
assessment of
compliance to be submitted to the Securities Administrator pursuant
to this
Section.
In
the event the Master Servicer, the Securities Administrator or
any
Servicing Function Participant engaged by any such party is
terminated, assigns
its rights and obligations under or resigns pursuant to the terms
of this
Agreement, or any other applicable agreement, as the case may be,
such party
shall provide, an assessment of compliance pursuant to this Section
3.17,
coupled with an attestation as required in this Section 3.17, or
such applicable
agreement notwithstanding any such termination, assignment or
resignation.
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(b)
Not later than March 1 of each calendar year (other than the
calendar
year during which the Closing Date occurs) each Servicer at its own
expense,
shall cause, and shall cause any Servicing Function Participant
engaged by it to
cause (unless in the case of a Subcontractor, such Servicer has
notified the
Depositor and the Master Servicer in writing that such report is
not required
for the Subcontractor) a nationally or regionally recognized firm
of independent
registered public accountants (who may also render other services
to such
Servicer, the Master Servicer or any affiliate thereof) which is a
member of the
American Institute of Certified Public Accountants to furnish a
report (the
"Accountant's Attestation") to the Master Servicer, the Securities
Administrator
and the Depositor to the effect that (i) it has obtained a
representation
regarding certain matters from the management of such party, which
includes an
assertion that such party has complied with the Relevant Servicing
Criteria, and
(ii) on the basis of an examination conducted by such firm in
accordance with
standards for attestation engagements issued or adopted by the
Public Company
Accounting Oversight Board, it is expressing an opinion as to
whether such
party's compliance with the Relevant Servicing Criteria was fairly
stated in all
material respects, or it cannot express an overall opinion
regarding such
party's assessment of compliance with the Relevant Servicing
Criteria. In the
event that an overall opinion cannot be expressed, such registered
public
accounting firm shall state in such report why it was unable to
express such an
opinion. Such report must be available for general use and not
contain
restricted use language. Such Accountant's Attestation shall be in
accordance
with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the
Securities Act and
the Exchange Act.
By
March 1 (with a ten-calendar day cure period) of each year,
commencing
in March 2007, the Master Servicer, the Securities Administrator
and the
Custodian, each at its own expense, shall cause, and each such
party shall cause
any Servicing Function Participant engaged by it to cause, each at
its own
expense, a registered public accounting firm (which may also render
other
services to the Master Servicer, the Securities Administrator, or
such other
Servicing Function Participants, as the case may be) and that is a
member of the
American Institute of Certified Public Accountants to furnish an
attestation
report to the Securities Administrator and the Depositor, to the
effect that (i)
it has obtained a representation regarding certain matters from the
management
of such party, which includes an assertion that such party has
complied with the
Relevant Servicing Criteria, and (ii) on the basis of an
examination conducted
by such firm in accordance with standards for attestation
engagements issued or
adopted by the Public Company Accounting Oversight Board, it is
expressing an
opinion as to whether such party's compliance with the Relevant
Servicing
Criteria was fairly stated in all material respects, or it cannot
express an
overall opinion regarding such party's assessment of compliance
with the
Relevant Servicing Criteria. In the event that an overall opinion
cannot be
expressed, such registered public accounting firm shall state in
such report why
it was unable to express such an opinion. Such report must be
available for
general use and not contain restricted use language.
(c)
Promptly after receipt of each assessment of compliance and
attestation
report, the Securities Administrator shall confirm that each
assessment
submitted pursuant to Section 3.17(a) is coupled with an
attestation meeting the
requirements of Section 3.17(b) and notify the Depositor of any
exceptions.
The
Master Servicer shall include each such attestation furnished to it
by
the Servicers with its own attestation to be submitted to the
Securities
Administrator pursuant to this Section.
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In
the event the Master Servicer, the Securities Administrator,
the
Custodian, any Servicer or any Servicing Function Participant
engaged by any
such party, is terminated, assigns its rights and duties under, or
resigns
pursuant to the terms of, this Agreement, or any applicable
Custodial Agreement,
Servicing Agreement or sub-servicing agreement, as the case may be,
such party
shall cause a registered public accounting firm to provide an
attestation
pursuant to this Section 3.17, or such other applicable
agreement,
notwithstanding any such termination, assignment or
resignation.
Section 3.18 Periodic Filings.
(a)
Within four (4) Business Days after the occurrence of an event
requiring disclosure on Form 8-K (each such event, a "Reportable
Event"), and if
requested by the Depositor, the Securities Administrator shall
prepare and file
on behalf of the Issuing Entity a Form 8-K, as required by the
Exchange Act,
provided that the Depositor shall file the initial Form 8-K in
connection with
the issuance of the Certificates. Any disclosure or information
related to a
Reportable Event or that is otherwise required to be included on
Form 8-K (other
than the initial Form 8-K) ("Form 8-K Disclosure Information")
shall be reported
by the parties set forth on Exhibit Q-3 to the Depositor and the
Securities
Administrator and directed and approved by the Depositor, and the
Securities
Administrator will have no duty or liability for any failure
hereunder to
determine or prepare any Form 8-K Disclosure Information or any
Form 8-K except
as set forth in the next paragraph.
(b)
For so long as the Issuing Entity is subject to the reporting
requirements of the Exchange Act, following the occurrence of a
Reportable Event
(A) each party listed on Exhibit Q-3 hereto shall use commercially
reasonable
best efforts to provide immediate notice to the Master Servicer,
the Securities
Administrator and the Depositor, by fax and by phone or by e-mail
and by phone,
(B) each such party shall be required to provide to the Securities
Administrator
and the Depositor, to the extent known, in EDGAR-compatible format
or in such
other format as agreed upon by the Securities Administrator and
such party, the
form and substance of any Form 8-K Disclosure Information if
applicable,
together with the form set forth on Exhibit O (the "Additional
Disclosure
Notification") by the close of business New York City time on the
2nd Business
Day following the occurrence of such Reportable Event and (C) the
Depositor,
shall approve, as to form and substance, or disapprove, as the case
may be, the
inclusion of the Form 8-K Disclosure Information on Form 8-K. The
Securities
Administrator has no duty under this Agreement to monitor or
enforce the
performance by the parties listed on Exhibit Q-3 of their duties
under this
paragraph or proactively solicit or procure from such parties any
Form 8-K
Disclosure Information. The Depositor will be responsible for any
reasonable
fees and expenses assessed or incurred by the Securities
Administrator in
connection with including any Form 8-K Disclosure Information on
Form 8-K
pursuant to this paragraph.
(c)
After preparing the Form 8-K, the Securities Administrator shall,
upon
request, forward electronically a copy of the Form 8-K to the
Depositor.
Promptly, but no later than the close of business on the third
Business Day
after the Reportable Event, the Depositor shall notify the
Securities
Administrator in writing (which may be furnished electronically) of
any changes
to or approval of such Form 8-K. In the absence of receipt of any
written
changes or approval, or if the Depositor does not request a copy of
a Form 8-K,
the Securities Administrator shall be entitled to assume that such
Form 8-K is
in final form and the Securities Administrator may
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proceed with the process for execution and filing of the Form 8-K.
A duly
authorized representative of the Master Servicer shall sign each
Form 8-K. If a
Form 8-K cannot be filed on time or if a previously filed Form 8-K
needs to be
amended, the Securities Administrator will follow the procedures
set forth in
Section 3.18(n).
(d)
Promptly (but no later than one Business Day) after filing with
the
Commission, the Securities Administrator will make available on its
internet
website a final executed copy of each Form 8-K prepared and filed
by the
Securities Administrator. The parties to this Agreement acknowledge
that the
performance by the Master Servicer and the Securities Administrator
of its
duties under this Section 3.18 related to the timely preparation,
execution and
filing of Form 8-K is contingent upon the other parties hereto
strictly
observing all applicable deadlines in the performance of their
duties under this
Section 3.18. The Depositor acknowledges that the performance by
the Master
Servicer and the Securities Administrator of its duties under this
Section 3.18
related to the timely preparation, execution and filing of Form 8-K
is also
contingent upon the Servicers, the Custodian and any Servicing
Function
Participant strictly observing deadlines no later than those set
forth in this
paragraph that are applicable to the parties to this Agreement in
the delivery
to the Securities Administrator of any necessary Form 8-K
Disclosure Information
pursuant to the related Servicing Agreements, the Custodial
Agreement or any
other applicable agreement. Neither the Master Servicer nor the
Securities
Administrator shall have any liability for any loss, expense,
damage or claim
arising out of or with respect to any failure to properly prepare,
execute
and/or timely file such Form 8-K, where such failure results from
the Securities
Administrator's inability or failure to obtain or receive, on a
timely basis,
any information from any other party hereto or any Servicer,
Custodian or
Servicing Function Participant needed to prepare, arrange for
execution or file
such Form 8-K.
(e)
Within fifteen (15) days after each Distribution Date (subject
to
permitted extensions under the Exchange Act), the Securities
Administrator
shall, on behalf of the Issuing Entity and in accordance with
industry
standards, prepare and file with the Commission via the Electronic
Data
Gathering and Retrieval System (EDGAR), a Form 10-D with a copy of
the Monthly
Statement for such Distribution Date as an exhibit thereto. Any
disclosure in
addition to the Monthly Statement that is required to be included
on Form 10-D
("Additional Form 10-D Disclosure") shall be reported by the
parties set forth
on Exhibit Q-1 to the Depositor and the Securities Administrator
and directed
and approved by the Depositor pursuant to the following paragraph,
and the
Securities Administrator will have no duty or liability for any
failure
hereunder to determine or prepare any Additional Form 10-D
Disclosure except as
set forth in the next paragraph.
(f)
As set forth in Exhibit Q-1 hereto, for so long as the Issuing
Entity
is subject to the reporting requirements of the Exchange Act,
within five (5)
calendar days after the related Distribution Date (i) each party
listed on
Exhibit Q-1 hereto shall be required to provide to the Depositor
and the
Securities Administrator, to the extent known, in EDGAR-compatible
format or in
such other format as agreed upon by the Securities Administrator
and such party,
the form and substance of any Additional Form 10-D Disclosure if
applicable
together with an Additional Disclosure Notification, and (ii) the
Depositor will
approve, as to form and substance, or disapprove, as the case may
be, the
inclusion of the Additional Form 10-D Disclosure on Form 10-D. The
Securities
Administrator has no duty under this Agreement to monitor or
enforce the
performance by the parties listed on Exhibit Q-1 of their duties
under this
paragraph or
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proactively solicit or procure from such parties any Additional
Form 10-D
Disclosure Information. The Depositor will be responsible for any
reasonable
fees and expenses incurred by the Securities Administrator in
connection with
including any Additional Form 10-D Disclosure on Form 10-D pursuant
to this
paragraph.
(g)
After preparing the Form 10-D, the Securities Administrator shall,
upon
request, forward electronically a copy of the Form 10-D to the
Depositor
(provided that such Form 10-D includes any Additional Form 10-D
Disclosure).
Within two Business Days after receipt of such copy, but no later
than the 12th
calendar day after the Distribution Date, the Depositor shall
notify the
Securities Administrator in writing (which may be furnished
electronically) of
any changes to or approval of such Form 10-D. In the absence of
receipt of any
written changes or approval, or if the Depositor does not request a
copy of a
Form 10-D, the Securities Administrator shall be entitled to assume
that such
Form 10-D is in final form and the Securities Administrator may
proceed with the
process for execution and filing of the Form 10-D. A duly
authorized
representative of the Master Servicer shall sign each Form 10-D. If
a Form 10-D
cannot be filed on time or if a previously filed Form 10-D needs to
be amended,
the Securities Administrator will follow the procedures set forth
in Section
3.18(n). Promptly (but not later than one Business Day) after
filing with the
Commission, the Securities Administrator will make available on its
internet
website a final executed copy of each Form 10-D prepared and filed
by the
Securities Administrator. Form 10-D requires the registrant to
indicate (by
checking "yes" or "no") that it "(1) has filed all reports required
to be filed
by Section 13 or 15(d) of the Exchange Act during the preceding 12
months (or
for such shorter period that the registrant was required to file
such reports),
and (2) has been subject to such filing requirements for the past
90 days." The
Depositor hereby instructs the Securities Administrator, with
respect to each
Form 10-D, to check "yes" for each item unless the Securities
Administrator has
received timely prior written notice from the Depositor that the
answer should
be "no" for an item. The parties to this Agreement acknowledge that
the
performance by the Master Servicer and the Securities Administrator
of its
respective duties under this Section 3.18 related to the timely
preparation,
execution and filing of Form 10-D is contingent upon the other
parties hereto
strictly observing all applicable deadlines in the performance of
their duties
under this Section 3.18. The Depositor acknowledges that the
performance by the
Master Servicer and the Securities Administrator of its duties
under this
Section 3.18 related to the timely preparation, execution and
filing of Form
10-D is also contingent upon the Servicers, the Custodian and any
Servicing
Function Participant strictly observing deadlines no later than
those set forth
in this paragraph that are applicable to the parties to this
Agreement in the
delivery to the Securities Administrator of any necessary
Additional Form 10-D
Disclosure pursuant to the related Servicing Agreements, the
Custodial Agreement
or any other applicable agreement. Neither the Master Servicer nor
the
Securities Administrator will have any liability for any loss,
expense, damage
or claim arising out of or with respect to any failure to properly
prepare,
execute and/or timely file such Form 10-D resulting from the
Securities
Administrator's inability or failure to obtain or receive any
information needed
to prepare, arrange for execution or file such Form 10-D on a
timely basis.
(h)
On or prior to the 90th calendar day after the end of the fiscal
year
for the Issuing Entity or such earlier date as may be required by
the Exchange
Act (the "10-K Filing Deadline") (it being understood that the
fiscal year for
the Issuing Entity ends on December 31st of each year) commencing
in March 2008,
the Securities Administrator shall, on behalf of the Issuing Entity
and in
accordance with industry standards, prepare and file with the
Commission via
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EDGAR a Form 10-K with respect to the Issuing Entity. Such Form
10-K shall
include the following items, in each case, as applicable, to the
extent they
have been delivered to the Securities Administrator within the
applicable time
frames set forth in this Agreement, the related Servicing
Agreements and
Custodial Agreement: (i) an annual compliance statement for the
Master Servicer,
each Servicer, the Securities Administrator and any Servicing
Function
Participant engaged by any such party (together with the Custodian,
each a
"Reporting Servicer"), as described in Section 3.16 of this
Agreement, the
related Servicing Agreement and the Custodial Agreement; provided,
however, that
the Securities Administrator, at its discretion, may omit from the
Form 10-K any
annual compliance statement that is not required to be filed with
such Form 10-K
pursuant to Regulation AB; (ii)(A) the annual reports on assessment
of
compliance with Servicing Criteria for each Reporting Servicer
(unless the
Depositor has determined that such compliance statement is not
required by
Regulation AB), as described in Section 3.17 of this Agreement, the
related
Servicing Agreement and the Custodial Agreement, and (B) if any
Reporting
Servicer's report on assessment of compliance with Servicing
Criteria described
in Section 3.17 identifies any material instance of noncompliance,
disclosure
identifying such instance of noncompliance, or if any Reporting
Servicer's
report on assessment of compliance with Servicing Criteria
described in Section
3.17 of this Agreement is not included as an exhibit to such Form
10-K,
disclosure that such report is not included and an explanation why
such report
is not included; provided, however, that the Securities
Administrator, at its
discretion, may omit from the Form 10-K any assessment of
compliance or
attestation report described in clause (iii) below that is not
required to be
filed with such Form 10-K pursuant to Regulation AB; (iii)(A) the
registered
public accounting firm attestation report for each Reporting
Servicer, as
described in Section 3.17 of this Agreement, the related Servicing
Agreement and
the Custodial Agreement, and (B) if any registered public
accounting firm
attestation report described under Section 3.17 of this Agreement
identifies any
material instance of noncompliance, disclosure identifying such
instance of
noncompliance, or if any such registered public accounting firm
attestation
report is not included as an exhibit to such Form 10-K, disclosure
that such
report is not included and an explanation why such report is not
included, and
(iv) a Sarbanes-Oxley Certification in the form attached hereto as
Exhibit L,
executed by the senior officer in charge of the master servicing
functions. Any
disclosure or information in addition to (i) through (iv) above
that is required
to be included on Form 10-K ("Additional Form 10-K Disclosure")
shall be
reported by the parties as set forth in Exhibit Q-2 to the
Depositor and the
Securities Administrator and directed and approved by the Depositor
pursuant to
the following paragraph and the Securities Administrator will have
no duty or
liability for any failure hereunder to determine or prepare any
Additional Form
10-K Disclosure except or set forth in the next paragraph.
(i)
As set forth in Exhibit Q-2 hereto, no later than March 1 (with a
ten
calendar day cure period) of each year that the Issuing Entity is
subject to the
Exchange Act reporting requirements, commencing in March 2008, (i)
the parties
listed on Exhibit Q-2 hereto shall be required to provide to the
Depositor and
the Securities Administrator, to the extent known, in
EDGAR-compatible format or
in such other format as agreed upon by the Securities Administrator
and such
party, the form and substance of any Additional Form 10-K
Disclosure, if
applicable together with an Additional Disclosure Notification, and
(ii) the
Depositor will approve, as to form and substance, or disapprove, as
the case may
be, the inclusion of the Additional Form 10-K Disclosure. The
Securities
Administrator has no duty under this Agreement to monitor or
enforce the
performance by the parties listed on Exhibit Q-2 of their
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duties under this paragraph or proactively solicit or procure from
such parties
any Additional Form 10-K Disclosure Information. The Depositor will
be
responsible for any reasonable fees and expenses incurred by the
Securities
Administrator in connection with including any Additional Form 10-K
Disclosure
on Form 10-K pursuant to this paragraph.
(j)
After preparing the Form 10-K, the Securities Administrator shall,
upon
request, forward electronically a copy of the Form 10-K to the
Depositor. Within
three Business Days after receipt of such copy, but no later than
March 25th,
the Depositor shall notify the Securities Administrator in writing
(which may be
furnished electronically) of any changes to or approval of such
Form 10-K. In
the absence of receipt of any written changes or approval, or if
the Depositor
does not request a copy of a Form 10-K, the Securities
Administrator shall be
entitled to assume that such Form 10-K is in final form and the
Securities
Administrator may proceed with the process for execution and filing
of the Form
10-K. A senior officer of the Master Servicer in charge of the
master servicing
function shall sign the Form 10-K. If a Form 10-K cannot be filed
on time or if
a previously filed Form 10-K needs to be amended, the Securities
Administrator
will follow the procedures set forth in Section 3.18(n). Promptly
(but no later
than one Business Day) after filing with the Commission, the
Securities
Administrator will make available on its internet website a final
executed copy
of each Form 10-K prepared and filed by the Securities
Administrator. Form 10-K
requires the registrant to indicate (by checking "yes" or "no")
that it "(1) has
filed all reports required to be filed by Section 13 or 15(d) of
the Exchange
Act during the preceding 12 months (or for such shorter period that
the
registrant was required to file such reports), and (2) has been
subject to such
filing requirements for the past 90 days." The Depositor hereby
instructs the
Securities Administrator, with respect to each Form 10-K, to check
"yes" for
each item unless the Securities Administrator has received timely
prior written
notice from the Depositor that the answer should be "no" for an
item. The
parties to this Agreement acknowledge that the performance by the
Master
Servicer and the Securities Administrator of its duties under this
Section 3.18
related to the timely preparation, execution and filing of Form
10-K is
contingent upon such parties (and any Servicing Function
Participant) strictly
observing all applicable deadlines in the performance of their
duties under this
Section 3.18, Section 3.16 and Section 3.17. The Depositor
acknowledges that the
performance by the Master Servicer and the Securities Administrator
of its
duties under this Section 3.18 related to the timely preparation,
execution and
filing of Form 10-K is also contingent upon the Servicers, the
Custodian and any
Servicing Function Participant strictly observing deadlines no
later than those
set forth in this paragraph that are applicable to the parties to
this Agreement
in the delivery to the Securities Administrator of any necessary
Additional Form
10-K Disclosure, any annual statement of compliance and any
assessment of
compliance and attestation pursuant to the related Servicing
Agreement, the
Custodial Agreement or any other applicable agreement. Neither the
Master
Servicer nor the Securities Administrator shall have any liability
for any loss,
expense, damage or claim arising out of or with respect to any
failure to
properly prepare, execute and/or timely file such Form 10-K
resulting from the
Securities Administrator's inability or failure to obtain or
receive any
information from any other party hereto or any Servicer, Custodian
or Servicing
Function Participant needed to prepare, execute or file such Form
10-K.
(k)
Each Form 10-K shall include a Sarbanes-Oxley Certification,
which
shall be in the form attached hereto as Exhibit L. Each Servicer
shall sign and
provide, and each of the Servicers, the Master Servicer and the
Securities
Administrator shall cause any Servicing Function Participant
engaged by it to
sign and provide, to the person who signs the Sarbanes-
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Oxley Certification (the "Certifying Person") by March 1 (with a
ten day cure
period) of each year in which the Issuing Entity is subject to the
reporting
requirements of the Exchange Act and otherwise within a reasonable
period of
time upon request, a certification (a "Back-Up Certification") (in
the form
attached hereto as Exhibit M) upon which the Certifying Person, the
entity for
which the Certifying Person acts as an officer and such entity's
officers,
directors and affiliates (collectively, with the Certifying Person,
the
"Certification Parties") can reasonably rely. The senior officer of
the Master
Servicer in charge of the master servicing function shall serve as
the
Certifying Person on behalf of the Trust. Such officer of the
Certifying Person
can be contacted by e-mail at cts.sec.notifications@wellsfargo.com
or by
facsimile at 410-715-2380. In the event any such party or Servicing
Function
Participant engaged by any such party is terminated or resigns
pursuant to the
terms of this Agreement, or any other applicable agreement, as the
case may be,
such party shall provide a Back-Up Certification to the Master
Servicer pursuant
to this Section 3.18 with respect to the period of time it was
subject to this
Agreement or any other applicable agreement, as the case may be.
Notwithstanding
the foregoing, (i) the Master Servicer and the Securities
Administrator shall
not be required to deliver a Back-Up Certification to each other if
both are the
same Person and the Master Servicer is the Certifying Person and
(ii) the Master
Servicer shall not be obligated to sign the Sarbanes-Oxley
Certification in the
event that it does not receive any Back-Up Certification required
to be
furnished to it pursuant to this section or any Servicing Agreement
or Custodial
Agreement.
(l)
The Securities Administrator shall have no responsibility to file
any
items with the Commission other than those specified in this
section and the
Master Servicer shall execute any and all Form 10-Ds, 8-Ks and
10-Ks required
hereunder.
(m)
On or prior to January 30 of the first year in which the
Securities
Administrator is able to do so under applicable law, the
Securities
Administrator shall prepare and file a Form 15 Suspension
Notification relating
to the automatic suspension of reporting in respect of the Issuing
Entity under
the Exchange Act.
(n)
In the event that the Securities Administrator is unable to timely
file
with the Commission all or any required portion of any Form 8-K,
10-D or 10-K
required to be filed by this Agreement because required disclosure
information
was either not delivered to it or delivered to it after the
delivery deadlines
set forth in this Agreement or for any other reason, the
Securities
Administrator will promptly notify electronically the Depositor of
such
inability to make a timely filing with the Commission. In the case
of Form 10-D
and 10-K, the parties to this Agreement will cooperate to prepare
and file a
Form 12b-25 and a 10-D/A and 10K/A, as applicable, pursuant to Rule
12b-25 of
the Exchange Act. In the case of Form 8-K, the Securities
Administrator will,
upon receipt of all required Form 8-K Disclosure Information and
upon the
approval and direction of the Depositor, include such disclosure
information on
the next succeeding Form 10-D to be filed for the Issuing Entity.
In the event
that any previously filed Form 8-K, 10-D or 10-K needs to be
amended, in
connection with any Additional Form 10-D Disclosure (other than, in
the case of
Form 10-D, for the purpose of restating any Monthly Statement),
Additional Form
10-K Disclosure or Form 8-K Disclosure Information, the Securities
Administrator
will electronically notify the Depositor and such other parties to
the
transaction as are affected by such amendment, and such parties
will cooperate
to prepare any necessary 8-K/A, 10-D/A or 10-K/A. Any Form 15, Form
12b-25 or
any amendment to Form 8-K, 10-D or 10-K shall be signed by duly
authorized
representative or a senior officer in charge of
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master servicing, as applicable, of the Master Servicer. The
parties to this
Agreement acknowledge that the performance by the Master Servicer
of its duties
under this Section 3.18 related to the timely preparation,
execution and filing
of Form 15, a Form 12b-25 or any amendment to Form 8-K, 10-D or
10-K is
contingent upon each such party performing its duties under this
Section.
Neither the Master Servicer nor the Securities Administrator shall
have any
liability for any loss, expense, damage or claim arising out of or
with respect
to any failure to properly prepare, execute and/or timely file any
such Form 15,
Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K, where
such failure
results from the Securities Administrator's inability or failure to
receive, on
a timely basis, any information from any other party hereto or any
Servicer, any
Custodian or any Servicing Function Participant needed to prepare,
arrange for
execution or file such Form 15, Form 12b-25 or any amendments to
Forms 8-K, 10-D
or 10-K.
(o)
The Depositor and the Securities Administrator agree to use their
good
faith efforts to cooperate in complying with the requirements of
this Section
3.18.
(p)
Each of the parties agrees to provide to the Securities
Administrator
such additional information related to such party as the
Securities
Administrator may reasonably request, including evidence of the
authorization of
the person signing any certificate or statement, financial
information and
reports, and such other information related to such party or its
performance
hereunder.
(q)
Any notice or notification required to be delivered by the
Securities
Administrator or Master Servicer to the Depositor pursuant to this
Section 3.18,
may be delivered via facsimile to (212) 449-2700, via email to
paul_park@ml.com
or telephonically by calling Paul Park at (212) 449-6380.
Section 3.19 Compliance with Regulation AB. Each of the parties
hereto
acknowledges and agrees that the purpose of Sections 3.16, 3.17 and
3.18 is to
facilitate compliance by the Depositor with the provisions of
Regulation AB, as
such may be amended or clarified from time to time. Therefore, each
of the
parties agrees that the parties' obligations hereunder will be
supplemented and
modified as necessary to be consistent with any such amendments,
interpretive
advice or guidance, convention or consensus among active
participants in the
asset-backed securities markets, advice of counsel, or otherwise in
respect of
the requirements of Regulation AB and the parties shall comply with
requests
made by the Depositor for delivery of additional or different
information as the
Depositor may determine in good faith is necessary to comply with
the provisions
of Regulation AB. Any such supplementation or modification shall be
made in
accordance with Section 11.02 without the consent of the
Certificateholders, and
may result in a change in the reports filed by the Securities
Administrator on
behalf of the Issuing Entity under the Exchange Act.
ARTICLE IV
ACCOUNTS
Section 4.01 Protected Accounts.
(a)
The Master Servicer shall enforce the obligation of each Servicer
to
establish and maintain a Protected Account in accordance with the
applicable
Servicing Agreement, with
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records to be kept with respect thereto on a Mortgage Loan by
Mortgage Loan
basis, into which accounts shall be deposited within two Business
Days (or as of
such other time specified in the related Servicing Agreement) of
receipt all
collections of principal and interest on any Mortgage Loan and with
respect to
any REO Property received by a Servicer, including Principal
Prepayments,
Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries and
advances
made from the Servicer's own funds (less servicing compensation as
permitted by
the applicable Servicing Agreement in the case of the Servicer) and
all other
amounts to be deposited in the Protected Account. The Servicer is
hereby
authorized to make withdrawals from and deposits to the related
Protected
Account for purposes required or permitted by this Agreement. To
the extent
provided in the related Servicing Agreement, the Protected Account
shall be held
in a Designated Depository Institution and segregated on the books
of such
institution in the name of the Trustee for the benefit of
Certificateholders.
(b)
To the extent provided in the related Servicing Agreement, amounts
on
deposit in a Protected Account may be invested in Permitted
Investments in the
name of the Trustee for the benefit of Certificateholders and,
except as
provided in the preceding paragraph, not commingled with any other
funds, such
Permitted Investments to mature, or to be subject to redemption or
withdrawal,
no later than the date on which such funds are required to be
withdrawn for
deposit in the Master Servicer Collection Account, and shall be
held until
required for such deposit. The income earned from Permitted
Investments made
pursuant to this Section 4.01 shall be paid to the related Servicer
under the
applicable Servicing Agreement, and the risk of loss of moneys
required to be
distributed to the Certificateholders resulting from such
investments shall be
borne by and be the risk of the related Servicer, as set forth in
the applicable
Servicing Agreement. The related Servicer (to the extent provided
in the related
Servicing Agreement) shall deposit the amount of any such loss in
the Protected
Account within two Business Days of receipt of notification of such
loss but not
later than the second Business Day prior to the Distribution Date
on which the
moneys so invested are required to be distributed to the
Certificateholders.
(c)
To the extent provided in the related Servicing Agreement and
subject
to this Article IV, on or before each Servicer Remittance Date, the
related
Servicer shall withdraw or shall cause to be withdrawn from the
Protected
Accounts and shall immediately deposit or cause to be deposited in
the Master
Servicer Collection Account amounts representing the following
collections and
payments (other than with respect to principal of or interest on
the Mortgage
Loans due on or before the Cut-off Date) with respect to each Loan
Group:
(i) Monthly Payments on the Mortgage Loans received or any
related
portion thereof advanced by such Servicer pursuant to the related
Servicing
Agreement which were due on or before the related Due Date, net of
the
amount thereof comprising the Servicing Fees;
(ii) Principal Prepayments in Full and any Liquidation Proceeds
received by such Servicer with respect to such Mortgage Loans in
the
related Prepayment Period, with interest to the date of prepayment
or
liquidation, net of the amount thereof comprising the Servicing
Fees;
(iii) Curtailments received by such Servicer for such Mortgage
Loans
in
the related Prepayment Period; and
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(iv) Any amount to be used as a Monthly Advance.
(d)
Withdrawals by the Master Servicer may be made from an Account only
to
make remittances as provided in Section 4.01(c), 4.02 and 4.03; to
reimburse the
Master Servicer or a Servicer for Monthly Advances which have been
recovered by
subsequent collection from the related Mortgagor; to remove amounts
deposited in
error; to remove fees, charges or other such amounts deposited on a
temporary
basis; or to clear and terminate the account at the termination of
this
Agreement in accordance with Section 10.01. As provided in Sections
4.01(c) and
4.02(b) certain amounts otherwise due to the Servicers may be
retained by them
as set forth in the related Servicing Agreements and need not be
deposited in
the Master Servicer Collection Account.
Section 4.02 Master Servicer Collection Account.
(a)
The Master Servicer shall establish and maintain in the name of
the
Trustee, for the benefit of the Certificateholders, the Master
Servicer
Collection Account as a segregated trust account or accounts. The
Master
Servicer Collection Account may be a sub-account of the
Distribution Account.
The Master Servicer will deposit in the Master Servicer Collection
Account as
identified by the Master Servicer and as received by the Master
Servicer, the
following amounts:
(i) Any amounts withdrawn from a Protected Account or other
permitted
account;
(ii) Any Monthly Advance and any Compensating Interest
Payments;
(iii) Any Insurance Proceeds, Liquidation Proceeds or
Subsequent
Recoveries received by or on behalf of the Master Servicer or which
were
not
deposited in a Protected Account or other permitted account;
(iv) The repurchase price with respect to any Mortgage Loans
repurchased and all proceeds of any Mortgage Loans or property
acquired in
connection with the optional termination of the trust;
(v) Any amounts required to be deposited with respect to losses
on
investments of deposits in an Account; and
(vi) Any other amounts received by or on behalf of the Master
Servicer
and
required to be deposited in the Master Servicer Collection
Account
pursuant to this Agreement.
(b)
All amounts deposited to the Master Servicer Collection Account
shall
be held by the Master Servicer in the name of the Trustee in trust
for the
benefit of the Certificateholders in accordance with the terms and
provisions of
this Agreement. The requirements for crediting the Master Servicer
Collection
Account or the Distribution Account shall be exclusive, it being
understood and
agreed that, without limiting the generality of the foregoing,
payments in the
nature of (i) prepayment or late payment charges or assumption, tax
service,
statement account or payoff, substitution, satisfaction, release
and other like
fees and charges and (ii) the items enumerated in Subsections
4.05(a)(i), (ii),
(iii), (iv), (vi), (vii), (viii), (ix), (xi) and (xii) with
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respect to the Securities Administrator, need not be credited by
the Master
Servicer or the related Servicer to the Distribution Account or the
Master
Servicer Collection Account, as applicable. In the event that the
Master
Servicer shall deposit or cause to be deposited to the Distribution
Account any
amount not required to be credited thereto, the Securities
Administrator, upon
receipt of a written request therefor signed by a Servicing Officer
of the
Master Servicer, shall promptly transfer such amount to the Master
Servicer from
the Distribution Account, any provision herein to the contrary
notwithstanding.
(c)
The amount at any time credited to the Master Servicer
Collection
Account shall be invested, in the name of the Trustee, or its
nominee, for the
benefit of the Certificateholders, in Permitted Investments as
directed by
Master Servicer. All Permitted Investments shall mature or be
subject to
redemption or withdrawal on or before,
