|
<PAGE>
Exhibit 4.1
MERRILL LYNCH MORTGAGE INVESTORS, INC.,
Depositor
WELLS FARGO BANK, N.A.,
Master Servicer and Securities Administrator
WILSHIRE CREDIT CORPORATION,
Servicer
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
----------
POOLING AND SERVICING AGREEMENT
Dated as of February 1, 2005
----------
MERRILL LYNCH MORTGAGE INVESTORS TRUST,
MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2005-SL1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I
DEFINITIONS....................................................
1
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS
AND WARRANTIES................................................
43
SECTION 2.01. Conveyance of Mortgage
Loans......................... 43
SECTION 2.02. Acceptance by the Trustee of the Mortgage
Loans...... 46
SECTION 2.03. Representations, Warranties and Covenants of
the Depositor..................................... 47
SECTION 2.04. Representations and Warranties of the
Master Servicer; Representations and Warranties
of the Servicer; Representations and Warranties
of the Securities Administrator...................... 52
SECTION 2.05. Substitutions and Repurchases of Mortgage
Loans
which are not "Qualified Mortgages"............... 55
SECTION 2.06. Authentication and Delivery of
Certificates.......... 56
SECTION 2.07. REMIC
Elections...................................... 56
SECTION 2.08.
[RESERVED]........................................... 60
SECTION 2.09. Covenants of the
Servicer............................ 60
SECTION 2.10.
[RESERVED]........................................... 60
SECTION 2.11. Permitted Activities of the
Trust.................... 60
SECTION 2.12. Qualifying Special Purpose
Entity.................... 60
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS............... 60
SECTION 3.01. Servicer to Service Mortgage
Loans................... 60
SECTION 3.02. Servicing and Subservicing; Enforcement of the
Obligations of Servicer........................... 62
SECTION 3.03. Rights of the Depositor and the Trustee in
Respect
of the Servicer................................... 63
SECTION 3.04. Master Servicer to Act as
Servicer................... 63
SECTION 3.05. Collection of Mortgage Loan Payments;
Collection
Account; Certificate Account...................... 64
SECTION 3.06. Collection of Taxes, Assessments and Similar
Items; Escrow Accounts............................ 67
SECTION 3.07. Access to Certain Documentation and
Information
Regarding the Mortgage Loans...................... 68
</TABLE>
-i-
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 3.08. Permitted Withdrawals from the Collection
Account
and Certificate Account........................... 68
SECTION 3.09.
[RESERVED]........................................... 70
SECTION 3.10.
[RESERVED]........................................... 70
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption
Agreements........................................ 71
SECTION 3.12. Realization Upon Defaulted Mortgage Loans;
Determination of Excess Proceeds; Special
Loss Mitigation................................... 72
SECTION 3.13. Trustee and Custodian to Cooperate; Release of
Mortgage Files.................................... 76
SECTION 3.14. Documents, Records and Funds in Possession of
Servicer to be Held for the Trustee............... 77
SECTION 3.15. Servicing
Compensation............................... 77
SECTION 3.16. Access to Certain
Documentation...................... 78
SECTION 3.17. Annual Statement as to
Compliance.................... 78
SECTION 3.18. Annual Independent Public Accountants'
Servicing
Statement; Financial Statements................... 79
SECTION 3.19.
[RESERVED]........................................... 79
SECTION 3.20.
[RESERVED]........................................... 79
SECTION 3.21. Annual Certificate by Securities
Administrator....... 79
SECTION 3.22. Annual Certificate by
Servicer....................... 79
SECTION 3.23. Prepayment Charge Reporting
Requirements............. 80
SECTION 3.24. Information to the Securities
Administrator.......... 80
SECTION 3.25.
Indemnification...................................... 81
SECTION 3.26.
Nonsolicitation...................................... 82
SECTION 3.27. High Cost Mortgage
Loans............................. 83
ARTICLE IV
DISTRIBUTIONS.................................................
83
SECTION 4.01.
Advances............................................. 83
SECTION 4.02. Reduction of Servicing Compensation in
Connection
with Prepayment Interest Shortfalls............... 84
SECTION 4.03. Distributions on the REMIC
Interests................. 85
SECTION 4.04.
Distributions........................................ 85
</TABLE>
-ii-
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 4.05. Monthly Statements to
Certificateholders............. 89
ARTICLE V THE
CERTIFICATES............................................... 92
SECTION 5.01. The
Certificates..................................... 92
SECTION 5.02. Certificate Register; Registration of Transfer
and Exchange of Certificates...................... 93
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates.... 97
SECTION 5.04. Persons Deemed
Owners................................ 97
SECTION 5.05. Access to List of Certificateholders'
Names and Addresses............................... 97
SECTION 5.06. Book-Entry
Certificates.............................. 98
SECTION 5.07. Notices to
Depository................................ 99
SECTION 5.08. Definitive
Certificates.............................. 99
SECTION 5.09. Maintenance of Office or
Agency...................... 100
SECTION 5.10. Authenticating
Agents................................ 100
ARTICLE VI THE DEPOSITOR, THE MASTER SERVICER, THE SERVICER
AND
THE SECURITIES ADMINISTRATOR...............................
101
SECTION 6.01. Respective Liabilities of the Depositor, the
Master Servicer, the Servicer and the
Securities Administrator.......................... 101
SECTION 6.02. Merger or Consolidation of the Depositor, the
Master Servicer, the Servicer or the Securities
Administrator..................................... 101
SECTION 6.03. Limitation on Liability of the Depositor,
the Securities Administrator, the Master
Servicer, the Servicer and Others................. 101
SECTION 6.04. Limitation on Resignation of
Servicer................ 103
SECTION 6.05. Errors and Omissions Insurance; Fidelity
Bonds....... 103
SECTION 6.06. Limitation on Resignation of the Master
Servicer..... 103
SECTION 6.07. Assignment of Master
Servicing....................... 103
ARTICLE VII DEFAULT; TERMINATION OF
SERVICER............................. 104
SECTION 7.01. Events of
Default.................................... 104
SECTION 7.02. Master Servicer to Act; Appointment of
Successor..... 106
SECTION 7.03. Notification to
Certificateholders................... 107
ARTICLE VIII CONCERNING THE
TRUSTEE...................................... 107
SECTION 8.01. Duties of the Trustee and the Securities
Administrator..................................... 107
</TABLE>
-iii-
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 8.02. Certain Matters Affecting the Trustee and the
Securities Administrator.......................... 109
SECTION 8.03. Trustee and Securities Administrator Not
Liable
for Certificates or Mortgage Loans................ 110
SECTION 8.04. Trustee and Securities Administrator May Own
Certificates...................................... 110
SECTION 8.05. Trustee's Fees and
Expenses.......................... 111
SECTION 8.06. Indemnification and Expenses of
Trustee.............. 111
SECTION 8.07. Eligibility Requirements for
Trustee................. 112
SECTION 8.08. Resignation and Removal of
Trustee................... 112
SECTION 8.09. Successor
Trustee.................................... 113
SECTION 8.10. Merger or Consolidation of
Trustee................... 114
SECTION 8.11. Appointment of Co-Trustee or Separate
Trustee........ 114
SECTION 8.12. Tax
Matters.......................................... 115
ARTICLE IX
TERMINATION...................................................
117
SECTION 9.01. Termination upon Liquidation or Repurchase of
all Mortgage Loans................................ 117
SECTION 9.02. Final Distribution on the
Certificates............... 119
SECTION 9.03. Additional Termination
Requirements.................. 120
ARTICLE X MISCELLANEOUS
PROVISIONS....................................... 122
SECTION 10.01.
Amendment............................................ 122
SECTION 10.02.
Counterparts......................................... 123
SECTION 10.03. Governing
Law........................................ 123
SECTION 10.04. Intention of
Parties................................. 124
SECTION 10.05.
Notices.............................................. 124
SECTION 10.06. Severability of
Provisions........................... 125
SECTION 10.07.
Assignment........................................... 125
SECTION 10.08. Limitation on Rights of
Certificateholders........... 127
SECTION 10.09. Inspection and Audit
Rights.......................... 127
SECTION 10.10. Certificates Nonassessable and Fully
Paid............ 128
ARTICLE XI ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE
LOANS..... 128
</TABLE>
-iv-
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 11.01. Master
Servicer...................................... 128
SECTION 11.02. Monitoring of
Servicer............................... 129
SECTION 11.03. Fidelity
Bond........................................ 130
SECTION 11.04. Power to Act;
Procedures............................. 130
SECTION 11.05. Documents, Records and Funds in Possession of
Master Servicer To Be Held for Trustee............ 131
SECTION 11.06. Trustee to Retain Possession of Certain
Insurance Policies and Documents.................. 132
SECTION 11.07. Compensation for the Master Servicer and
the Securities Administrator...................... 132
SECTION 11.08. Annual Statement as to
Compliance.................... 132
SECTION 11.09. Periodic
Filings..................................... 133
SECTION 11.10. Obligation of the Master Servicer in Respect
of
Prepayment Interest Shortfalls.................... 134
</TABLE>
<TABLE>
<S> <C>
EXHIBIT A FORMS OF CERTIFICATES
EXHIBIT B MORTGAGE LOAN SCHEDULE
EXHIBIT C [RESERVED]
EXHIBIT D FORM OF CUSTODIAN CERTIFICATION
EXHIBIT E-1 FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
EXHIBIT E-2 FORM OF TRANSFEROR'S AFFIDAVIT
EXHIBIT F FORM OF TRANSFEROR CERTIFICATE
EXHIBIT G FORM OF INVESTMENT LETTER
EXHIBIT H FORM OF RULE 144A LETTER
EXHIBIT I FORM OF REQUEST FOR RELEASE
EXHIBIT J LIST OF TRANSFER AGREEMENTS AND BRING DOWN LETTERS
EXHIBIT K FORM OF OFFICER'S CERTIFICATE OF TRUSTEE
EXHIBIT L FORM OF OFFICER'S CERTIFICATE OF SERVICER
EXHIBIT M-1 FORM OF DELINQUENCY REPORT
EXHIBIT M-2 FORM OF MONTHLY REMITTANCE ADVICE
EXHIBIT M-3 FORM OF REALIZED LOSS REPORT
</TABLE>
-v-
<PAGE>
POOLING AND SERVICING AGREEMENT, dated as of February 1, 2005,
among
MERRILL LYNCH MORTGAGE INVESTORS, INC., a Delaware corporation,
as depositor
(the "Depositor"), WELLS FARGO BANK, N.A, a national banking
association, as
master servicer (the "Master Servicer") and securities
administrator (the
"Securities Administrator"), WILSHIRE CREDIT CORPORATION, a
Nevada corporation,
as servicer (the "Servicer") and DEUTSCHE BANK NATIONAL TRUST
COMPANY, a
national banking association, as trustee (the "Trustee").
The Depositor is the owner of the Trust Fund that is hereby
conveyed to the
Trustee in return for the Certificates. The Trust Fund for
federal income tax
purposes will consist of two (i) two real estate mortgage
investment conduits,
(ii) the right to receive payments distributable to the Class P
Certificates
pursuant to Section 4.04(b)(i) hereof and (iii) the grantor
trusts described in
Section 2.07 hereof. The Lower Tier REMIC will consist of all of
the assets
constituting the Trust Fund (other than the assets described in
clauses (ii) and
(iii) above and the Lower Tier REMIC Regular Interests) and will
be evidenced by
the Lower Tier REMIC Regular Interests (which will be
uncertificated and will
represent the "regular interests" in the Lower Tier REMIC) and
the Class LTR
Interest as the single "residual interest" in the Lower Tier
REMIC. The Trustee
will hold the Lower Tier REMIC Regular Interests. The Upper Tier
REMIC will
consist of the Lower Tier REMIC Regular Interests and will be
evidenced by the
REMIC Regular Interests (which will represent the "regular
interests" in the
Upper Tier REMIC) and the Residual Interest as the single
"residual interest" in
the Upper Tier REMIC. The Class R Certificate will represent
beneficial
ownership of the Class LTR Interest and the Residual Interest.
The "latest
possible maturity date" for federal income tax purposes of all
interests created
hereby will be the Latest Possible Maturity Date.
All covenants and agreements made by the Seller in the Sale
Agreement and
by the Depositor and the Trustee herein with respect to the
Mortgage Loans and
the other property constituting the Trust Fund are for the
benefit of the
Holders from time to time of the Certificates.
In consideration of the mutual agreements herein contained, the
Depositor,
the Master Servicer, the Securities Administrator, the Servicer
and the Trustee
hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and
phrases, unless
the context otherwise requires, shall have the following
meanings:
Accepted Master Servicing Practices: With respect to any
Mortgage Loan, as
applicable, either (x) those customary mortgage master servicing
practices of
prudent master 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 Master
Servicer (except in its capacity as successor to the Servicer),
or (y) as
provided in Section 11.01 hereof, but in no event below the
standard set forth
in clause (x) of this definition.
<PAGE>
Accepted Servicing Practices: The Servicer's normal servicing
practices,
which will conform to the mortgage servicing practices of
prudent mortgage
lending institutions which service for their own account
mortgage loans of the
same type as the Mortgages Loans in the jurisdictions in which
the related
Mortgaged Properties are located.
Accrual Period: With respect to each Class of Certificates and
the Lower
Tier REMIC Interests and any Distribution Date, the period
commencing on the
immediately preceding Distribution Date (or, in the case of the
first
Distribution Date, the Closing Date) and ending on the day
immediately preceding
such Distribution Date. All calculations of interest on each
Class of
Certificates and the Lower Tier REMIC Interests will be made on
the basis of the
actual number of days elapsed in the related Accrual Period and
a 360 day year.
Advance: The aggregate of the advances required to be made by
the Servicer
with respect to any Distribution Date pursuant to Section 4.01,
the amount of
any such advances being equal to the sum of the aggregate of
payments of
principal and interest (net of the Servicing Fees) on the
Mortgage Loans that
were due during the applicable Due Period and not received as of
the close of
business on the related Determination Date, less the aggregate
amount of any
such Delinquent payments that the Servicer has determined would
constitute a
Non-Recoverable Advance were an advance to be made with respect
thereto;
provided, however, that with respect to any Mortgage Loan that
is 150 days
delinquent or more (whether or not the Mortgage Loan has been
converted to an
REO Property), there will be no obligation to make advances and,
provided
further, however, that with respect to any Mortgage Loan that
has been converted
to an REO Property which is less than 150 days delinquent, the
obligation to
make Advances shall only be to payments of interest.
Advance Facility: A financing or other facility as described in
Section
10.07.
Advancing Person: The Person to whom the Servicer's rights under
this
Agreement to be reimbursed for any Advances or Servicing
Advances have been
assigned pursuant to Section 10.07.
Affiliate: With respect to any specified Person, any other
Person
controlling, controlled by or under common control with such
Person. For the
purposes of this definition, "control" means the power to direct
the management
and policies of a Person, directly or indirectly, whether
through ownership of
voting securities, by contract or otherwise; and the terms
"controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Certificate Principal Balance: For any date of
determination, the
sum of the Class A Certificate Principal Balance, the Class R
Certificate
Principal Balance, the Class M-1 Certificate Principal Balance,
the Class M-2
Certificate Principal Balance, the Class M-3 Certificate
Principal Balance, the
Class B-1 Certificate Principal Balance, the Class B-2
Certificate Principal
Balance, the Class B-3 Certificate Principal Balance, the Class
B-4 Certificate
Principal Balance and the Class B-5 Certificate Principal
Balance, in each case
as of such date of determination.
Agreement: This Pooling and Servicing Agreement and any and all
amendments
or supplements hereto made in accordance with the terms
herein.
-2-
<PAGE>
Applied Realized Loss Amount: With respect to any Distribution
Date, the
amount, if any, by which the sum of (i) the Aggregate
Certificate Principal
Balance and (ii) the Class C Certificate Principal Balance after
distributions
of principal on such Distribution Date exceeds the aggregate
Stated Principal
Balance of the Mortgage Loans as of such Distribution Date.
Appraised Value: With respect to a Mortgage Loan the proceeds of
which were
used to purchase the related Mortgaged Property, the "Appraised
Value" of a
Mortgaged Property is the lesser of (1) the appraised value
based on an
appraisal made for the Seller by an independent fee appraiser at
the time of the
origination of the related Mortgage Loan, and (2) the sales
price of such
Mortgaged Property at such time of origination. With respect to
a Mortgage Loan
the proceeds of which were used to refinance an existing
mortgage loan, the
"Appraised Value" is the appraised value of the Mortgaged
Property based upon
the appraisal obtained at the time of refinancing.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer
or equivalent instrument, in recordable form, sufficient under
the laws of the
jurisdiction where the related Mortgaged Property is located to
reflect of
record the sale and assignment of the Mortgage Loan to the
Trustee, which
assignment, notice of transfer or equivalent instrument may, if
permitted by
law, be in the form of one or more blanket assignments covering
Mortgages
secured by Mortgaged Properties located in the same county.
Auction: The one-time auction conducted by the Securities
Administrator, as
described in Section 9.01(b) hereof.
Auction Date: The date on which the Auction occurs.
Authenticating Agent: As defined in Section 5.10.
Available Funds Cap: As of any Distribution Date with respect to
the
Certificates, a per annum rate equal to 12 times the quotient of
(i) the total
scheduled interest on the Mortgage Loans based on the Net
Mortgage Rates in
effect on the related Due Date, divided by (ii) the Aggregate
Certificate
Principal Balance for such Distribution Date with such rate
being multiplied by
30 and divided by the actual number of days in the related
Accrual Period.
Balloon Loan: A Mortgage Loan having an original term to stated
maturity of
approximately 15 years or 20 years which provides for level
monthly payments of
principal and interest based on a 30-year amortization schedule,
with a balloon
payment of the remaining outstanding principal balance due on
such Mortgage Loan
at its stated maturity.
Book-Entry Certificates: Any of the Certificates that shall be
registered
in the name of the Depository or its nominee, the ownership of
which is
reflected on the books of the Depository or on the books of a
Person maintaining
an account with the Depository (directly, as a "Depository
Participant", or
indirectly, as an indirect participant in accordance with the
rules of the
Depository and as described in Section 5.06). As of the Closing
Date, each of
the Class A, Class M and Class B Certificates constitutes a
Class of Book-Entry
Certificates.
Book-Entry Regulation S Global Securities: As defined in Section
5.01.
-3-
<PAGE>
Bring Down Letters: Those certain letter agreements, dated as of
March 10,
2005 between the Seller and each Transferor set out on Exhibit J
hereto.
Business Day: Any day other than (1) a Saturday or a Sunday, or
(2) a day
on which banking institutions in the State of California, State
of Maryland,
State of Minnesota, State of Oregon and in the City of New York,
New York are
authorized or obligated by law or executive order to be
closed.
Certificate: Any one of the certificates of any Class executed
by the
Securities Administrator and authenticated by the Authenticating
Agent in
substantially the forms attached hereto as Exhibits A.
Certificate Account: The separate Eligible Account created and
maintained
by the Securities Administrator pursuant to Section 3.05(e) in
the name of the
Trustee for the benefit of the Certificateholders and designated
"Wells Fargo
Bank, N.A., as securities administrator for Deutsche Bank
National Trust
Company, as trustee, in trust for registered holders of Merrill
Lynch Mortgage
Investors Trust, Mortgage Loan Asset-Backed Certificates, Series
2005-SL1."
Funds in the Certificate Account shall be held in trust for
the
Certificateholders for the uses and purposes set forth in this
Agreement.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person
that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate and as of
any
Distribution Date, the Initial Certificate Principal Balance of
such Certificate
less the sum of (1) all amounts distributed with respect to such
Certificate in
reduction of the Certificate Principal Balance thereof on
previous Distribution
Dates pursuant to Section 4.04, and (2) any Applied Realized
Loss Amounts
allocated to such Certificate on previous Distribution Dates
pursuant to Section
4.04(i). On each Distribution Date, after all distributions of
principal on such
Distribution Date, a portion of the Class C Interest Carry
Forward Amount in an
amount equal to the excess of the Overcollateralization Amount
on such
Distribution Date over the Overcollateralization Amount as of
the preceding
Distribution Date (or, in the case of the first Distribution
Date, the initial
Overcollateralization Amount (based on the Stated Principal
Balance of the
Mortgage Loans as of the Cut-Off Date)) will be added to the
aggregate
Certificate Principal Balance of the Class C Certificates (on a
pro rata basis).
Notwithstanding the foregoing on any Distribution Date relating
to a Due Period
in which a Subsequent Recovery has been received by the
Servicer, the
Certificate Principal Balance of any Class of Certificates then
outstanding for
which any Applied Realized Loss Amount has been allocated will
be increased, in
order of seniority, by an amount equal to the lesser of (i) the
Unpaid Realized
Loss Amount for such Class of Certificates and (ii) the total of
any Subsequent
Recovery distributed on such date to the Certificateholders
(reduced by the
amount of the increase in the Certificate Principal Balance of
any more senior
Class of Certificates pursuant to this sentence on such
Distribution Date).
Certificate Register: The register maintained pursuant to
Section 5.02
hereof.
Certificateholder or Holder: The Person in whose name a
Certificate is
registered in the Certificate Register (initially, Cede &
Co., as nominee for
the Depository) in the case of any
-4-
<PAGE>
Class of Regular Certificates or the Class R Certificate, except
that solely for
the purpose of giving any consent pursuant to this Agreement,
any Certificate
registered in the name of the Depositor or any Affiliate of the
Depositor shall
be deemed not to be Outstanding and the Percentage Interest
evidenced thereby
shall not be taken into account in determining whether the
requisite amount of
Percentage Interests necessary to effect such consent has been
obtained;
provided, however, that if any such Person (including the
Depositor) owns 100%
of the Percentage Interests evidenced by a Class of
Certificates, such
Certificates shall be deemed to be Outstanding for purposes of
any provision
hereof that requires the consent of the Holders of Certificates
of a particular
Class as a condition to the taking of any action hereunder. The
Securities
Administrator and the Trustee are entitled to rely conclusively
on a
certification of the Depositor or any Affiliate of the Depositor
in determining
which Certificates are registered in the name of an Affiliate of
the Depositor.
Class: All Certificates bearing the same Class designation as
set forth in
Section 5.01 hereof.
Class A Certificate: Any Certificate designated as a "Class A
Certificate"
on the face thereof, in the form of Exhibit A hereto,
representing the right to
distributions as set forth herein.
Class A Certificate Principal Balance: As of any date of
determination, the
aggregate Certificate Principal Balance of the Class A
Certificates.
Class A Current Interest: As of any Distribution Date, the
interest accrued
during the related Accrual Period at the Class A Pass-Through
Rate on the Class
A Certificate Principal Balance as of such Distribution Date
plus the Current
Interest and Interest Carry Forward Amount portions of any
previous
distributions on such Class that are recovered as a voidable
preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall
allocated on
such Distribution Date to the Class A Certificates. For purposes
of calculating
interest, principal distributions on a Distribution Date will be
deemed to have
been made on the first day of the Accrual Period in which such
Distribution Date
occurs.
Class A Interest Carry Forward Amount: As of any Distribution
Date, the sum
of (1) the excess of (A) the Class A Current Interest with
respect to prior
Distribution Dates over (B) the amount actually distributed to
the Class A
Certificates with respect to interest on such prior Distribution
Dates and (2)
interest on such excess (to the extent permitted by applicable
law) at the Class
A Pass-Through Rate for the related Accrual Period.
Class A Margin: As of any Distribution Date up to and including
the Initial
Optional Termination Date, 0.200% per annum and, as of any
Distribution Date
after the Initial Optional Termination Date, 0.400% per
annum.
Class A Pass-Through Rate: For the first Distribution Date,
2.97% per
annum. As of any Distribution Date thereafter, the lesser of (1)
One-Month LIBOR
plus the Class A Margin and (2) the Available Funds Cap for such
Distribution
Date.
Class A Principal Distribution Amount: With respect to any
Distribution
Date (1) prior to the Stepdown Date or any Distribution Date on
which a Trigger
Event exists, 100% of the Principal Distribution Amount for such
Distribution
Date and (2) on or after the Stepdown Date
-5-
<PAGE>
where a Trigger Event does not exist, the excess of (A) the sum
of the Class A
Certificate Principal Balance and the Class R Certificate
Principal Balance
immediately prior to such Distribution Date over (B) the lesser
of (i) 23.30% of
the Stated Principal Balance of the Mortgage Loans as of the end
of the
immediately preceding Due Period and (ii) the excess of the
Stated Principal
Balance of the Mortgage Loans as of the end of the immediately
preceding Due
Period over the Minimum Required Overcollateralization Amount;
provided,
however, that in no event will the Class A Principal
Distribution Amount with
respect to any Distribution Date exceed the aggregate
Certificate Principal
Balance of the Class A and Class R Certificates.
Class B Certificates: The Class B-1 Certificates, Class B-2
Certificates,
Class B-3 Certificates, Class B-4 Certificates and Class B-5
Certificates.
Class B-1 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class B-1 Certificates.
Class B-1 Certificate: Any Certificate designated as a "Class
B-1
Certificate" on the face thereof, in the form of Exhibit A
hereto, representing
the right to distributions as set forth herein.
Class B-1 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class B-1
Certificates.
Class B-1 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class B-1
Pass-Through Rate on
the Class B-1 Certificate Principal Balance as of such
Distribution Date plus
the Current Interest and Interest Carry Forward Amount portions
of any previous
distributions on such Class that are recovered as a voidable
preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall
allocated on
such Distribution Date to the Class B-1 Certificates. For
purposes of
calculating interest, principal distributions on a Distribution
Date will be
deemed to have been made on the first day of the Accrual Period
in which such
Distribution Date occurs.
Class B-1 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class B-1 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually
distributed to the Class
B-1 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by
applicable law) at the
Class B-1 Pass-Through Rate for the related Accrual Period.
Class B-1 Margin: As of any Distribution Date up to and
including the
Initial Optional Termination Date, 0.850% per annum and, as of
any Distribution
Date after the Initial Optional Termination Date, 1.275% per
annum.
Class B-1 Pass-Through Rate: For the first Distribution Date
3.62% per
annum. As of any Distribution Date thereafter, the lesser of (1)
One-Month LIBOR
plus the Class B-1 Margin and (2) the Available Funds Cap for
such Distribution
Date.
Class B-1 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance, the
Class M-1 Certificate Principal Balance, the
-6-
<PAGE>
Class M-2 Certificate Principal Balance and the Class M-3
Certificate Principal
Balance have been reduced to zero and a Trigger Event exists, or
as long as a
Trigger Event does not exist, the excess of (1) the sum of (A)
the sum of the
Class A Certificate Principal Balance and the Class R
Certificate Principal
Balance (after taking into account distributions of the Class A
Principal
Distribution Amount on such Distribution Date), (B) the Class
M-1 Certificate
Principal Balance (after taking into account distributions of
the Class M-1
Principal Distribution Amount on such Distribution Date), (C)
the Class M-2
Certificate Principal Balance (after taking into account
distributions of the
Class M-2 Principal Distribution Amount on such Distribution
Date), (D) the
Class M-3 Certificate Principal Balance (after taking into
account distributions
of the Class M-3 Principal Distribution Amount on such
Distribution Date) and
(E) the Class B-1 Certificate Principal Balance immediately
prior to such
Distribution Date over (2) the lesser of (A) 62.90% of the
aggregate Stated
Principal Balances of the Mortgage Loans as of the end of the
immediately
preceding Due Period and (B) the excess of the Stated Principal
Balances of the
Mortgage Loans as of the end of the immediately preceding Due
Period over the
Minimum Required Overcollateralization Amount, provided,
however, that on any
Distribution Date prior to the Stepdown Date on which the Class
A Certificate
Principal Balance, the Class M-1 Certificate Principal Balance,
the Class M-2
Certificate Principal Balance and the Class M-3 Certificate
Principal Balance
have been reduced to zero, the Class B-1 Principal Distribution
Amount for such
Distribution Date will equal the lesser of (A) the outstanding
Class B-1
Certificate Principal Balance and (B) 100% of the Principal
Distribution Amount
remaining after any distributions on such Class A, Class R,
Class M-1, Class M-2
and Class M-3 Certificates; and provided further, however, that
in no event will
the Class B-1 Principal Distribution Amount with respect to any
Distribution
Date exceed the Class B-1 Certificate Principal Balance.
Class B-1 Unpaid Realized Loss Amount: As of any Distribution
Date, the
excess of (1) the Class B-1 Applied Realized Loss Amount over
(2) the sum of (x)
all distributions in reduction of the Class B-1 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class B-1 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class B-2 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class B-2 Certificates.
Class B-2 Certificate: Any Certificate designated as a "Class
B-2
Certificate" on the face thereof, in the form of Exhibit A
hereto, representing
the right to distributions as set forth herein.
Class B-2 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class B-2
Certificates.
Class B-2 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class B-2
Pass-Through Rate on
the Class B-2 Certificate Principal Balance as of such
Distribution Date plus
the Current Interest and Interest Carry Forward Amount portions
of any previous
distributions on such Class that are recovered as a voidable
preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall
allocated on
such Distribution Date to the Class B-2 Certificates. For
purposes of
calculating interest,
-7-
<PAGE>
principal distributions on a Distribution Date will be deemed to
have been made
on the first day of the Accrual Period in which such
Distribution Date occurs.
Class B-2 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class B-2 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually
distributed to the Class
B-2 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by
applicable law) at the
Class B-2 Pass-Through Rate for the related Accrual Period.
Class B-2 Margin: As of any Distribution Date up to and
including the
Initial Optional Termination Date, 1.300% per annum and, as of
any Distribution
Date after the Initial Optional Termination Date, 1.950% per
annum.
Class B-2 Pass-Through Rate: For the first Distribution Date,
4.07% per
annum. As of any Distribution Date thereafter, the lesser of (1)
One-Month LIBOR
plus the Class B-2 Margin and (2) the Available Funds Cap for
such Distribution
Date.
Class B-2 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance, the
Class R Certificate Principal Balance, the Class M-1 Certificate
Principal
Balance, the Class M-2 Certificate Principal Balance, the Class
M-3 Certificate
Balance and the Class B-1 Certificate Principal Balance have
been reduced to
zero and a Trigger Event exists, or as long as a Trigger Event
does not exist,
the excess of (1) the sum of (A) the sum of the Class A
Certificate Principal
Balance and the Class R Certificate Principal Balance (after
taking into account
distributions of the Class A Principal Distribution Amount on
such Distribution
Date), (B) the Class M-1 Certificate Principal Balance (after
taking into
account distributions of the Class M-1 Principal Distribution
Amount on such
Distribution Date), (C) the Class M-2 Certificate Principal
Balance (after
taking into account distributions of the Class M-2 Principal
Distribution Amount
on such Distribution Date), (D) the Class M-3 Certificate
Principal Balance
(after taking into account distributions of the Class M-3
Principal Distribution
Amount on such Distribution Date), (E) the Class B-1 Certificate
Principal
Balance (after taking into account distributions of the Class
B-1 Principal
Distribution Amount on such Distribution Date) and (F) the Class
B-2 Certificate
Principal Balance immediately prior to such Distribution Date
over (2) the
lesser of (A) 67.00% of the Stated Principal Balances of the
Mortgage Loans as
of the end of the immediately preceding Due Period and (B) the
excess of the
aggregate Stated Principal Balances of the Mortgage Loans as of
the end of the
immediately preceding Due Period over the Minimum Required
Overcollateralization
Amount; provided, however, that on any Distribution Date prior
to the Stepdown
Date on which the Class A Certificate Principal Balance, the
Class R Certificate
Principal Balance, the Class M-1 Certificate Principal Balance,
the Class M-2
Certificate Principal Balance, the Class M-3 Certificate
Principal Balance and
the Class B-1 Certificate Principal Balance have been reduced to
zero, the Class
B-2 Principal Distribution Amount for such Distribution Date
will equal the
lesser of (A) the outstanding Class B-2 Principal Distribution
Amount and (B)
100% of the Principal Distribution Amount remaining after any
distributions on
such Class A, Class R, Class M-1, Class M-2, Class M-3 and Class
B-1
Certificates; and provided further, however, that in no event
will the Class B-2
Principal Distribution Amount with respect to any Distribution
Date exceed the
Class B-2 Certificate Principal Balance.
-8-
<PAGE>
Class B-2 Unpaid Realized Loss Amount: As of any Distribution
Date, the
excess of (1) the Class B-2 Applied Realized Loss Amount over
(2) the sum of (x)
all distributions in reduction of the Class B-2 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class B-2 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance".
Class B-3 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class B-3 Certificates.
Class B-3 Certificate: Any Certificate designated as a "Class
B-3
Certificate" on the face thereof, in the form of Exhibit A
hereto, representing
the right to distributions as set forth herein.
Class B-3 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class B-3
Certificates.
Class B-3 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class B-3
Pass-Through Rate on
the Class B-3 Certificate Principal Balance as of such
Distribution Date plus
the Current Interest and Interest Carry Forward Amount portions
of any previous
distributions on such Class that are recovered as a voidable
preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall
allocated on
such Distribution Date to the Class B-3 Certificates. For
purposes of
calculating interest, principal distributions on a Distribution
Date will be
deemed to have been made on the first day of the Accrual Period
in which such
Distribution Date occurs.
Class B-3 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class B-3 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually
distributed to the Class
B-3 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by
applicable law) at the
Class B-3 Pass-Through Rate for the related Accrual Period.
Class B-3 Margin: As of any Distribution Date up to and
including the
Initial Optional Termination Date, 1.400% per annum and as of
any Distribution
Date thereafter, 2.100% per annum.
Class B-3 Pass-Through Rate: For the first Distribution Date,
4.17% per
annum. As of any Distribution Date thereafter, the lesser of (1)
One-Month LIBOR
plus the Class B-3 Margin and (2) the Available Funds Cap for
such Distribution
Date.
Class B-3 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance, the
Class R Certificate Principal Balance, the Class M-1 Certificate
Principal
Balance, the Class M-2 Certificate Principal Balance, the Class
M-3 Certificate
Principal Balance, the Class B-1 Certificate Principal Balance
and the Class B-2
Certificate Principal Balance have been reduced to zero and a
Trigger Event
exists, or as long as a Trigger Event does not exist, the excess
of (1) the sum
of (A) the sum of the Class A Certificate Principal Balance and
the Class R
Certificate Principal Balance (after taking into account
distributions of the
Class A Principal Distribution Amount on such Distribution
Date),
-9-
<PAGE>
(B) the Class M-1 Certificate Principal Balance (after taking
into account
distributions of the Class M-1 Principal Distribution Amount on
such
Distribution Date), (C) the Class M-2 Certificate Principal
Balance (after
taking into account distributions of the Class M-2 Principal
Distribution Amount
on such Distribution Date), (D) the Class M-3 Certificate
Principal Balance
(after taking into account distributions of the Class M-3
Principal Distribution
Amount on such Distribution Date), (E) the Class B-1 Certificate
Principal
Balance (after taking into account distributions of the Class
B-1 Principal
Distribution Amount on such Distribution Date), (F) the Class
B-2 Certificate
Principal Balance (after taking into account distributions of
the Class B-2
Principal Distribution Amount on such Distribution Date) and (G)
the Class B-3
Certificate Principal Balance immediately prior to such
Distribution Date over
(2) the lesser of (A) 72.50% of the aggregate Stated Principal
Balances of the
Mortgage Loans as of the end of the immediately preceding Due
Period and (B) the
excess of the Stated Principal Balances of the Mortgage Loans as
of the end of
the immediately preceding Due Period over the Minimum
Required
Overcollateralization Amount; provided, however, that on any
Distribution Date
prior to the Stepdown Date on which the Class A Certificate
Principal Balance,
the Class R Certificate Principal Balance, the Class M-1
Certificate Principal
Balance, the Class M-2 Certificate Principal Balance, the Class
M-3 Certificate
Principal Balance, the Class B-1 Certificate Principal Balance
and the Class B-2
Certificate Principal Balance have been reduced to zero, the
Class B-3 Principal
Distribution Amount for such Distribution Date will equal the
lesser of (A) the
outstanding Class B-3 Certificate Principal Balance and (B) 100%
of the
Principal Distribution Amount remaining after any distributions
on such Class A,
Class R, Class M-1, Class M-2, Class M-3, Class B-1 and Class
B-2 Certificates;
and provided further, however, that in no event will the Class
B-3 Principal
Distribution Amount with respect to any Distribution Date exceed
the Class B-3
Certificate Principal Balance.
Class B-3 Unpaid Realized Loss Amount: As of any Distribution
Date, the
excess of (1) the Class B-3 Applied Realized Loss Amount over
(2) the sum of (x)
all distributions in reduction of the Class B-3 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class B-3 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class B-4 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class B-4 Certificates.
Class B-4 Certificate: Any Certificate designated as a "Class
B-4
Certificate" on the face thereof, in the form of Exhibit A
hereto, representing
the right to distributions as set forth herein.
Class B-4 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class B-4
Certificates.
Class B-4 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class B-4
Pass-Through Rate on
the Class B-4 Certificate Principal Balance as of such
Distribution Date plus
the Current Interest and Interest Carry Forward Amount portions
of any previous
distributions on such Class that are recovered as a voidable
preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall
allocated on
such Distribution Date to the Class B-4 Certificates. For
purposes of
calculating interest,
-10-
<PAGE>
principal distributions on a Distribution Date will be deemed to
have been made
on the first day of the Accrual Period in which such
Distribution Date occurs.
Class B-4 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class B-4 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually
distributed to the Class
B-4 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by
applicable law) at the
Class B-4 Pass-Through Rate for the related Accrual Period.
Class B-4 Margin: As of any Distribution Date up to and
including the
Initial Optional Termination Date, 2.100% per annum and as of
any Distribution
Date thereafter, 3.150% per annum.
Class B-4 Pass-Through Rate: For the first Distribution Date,
4.87% per
annum. As of any Distribution Date thereafter, the lesser of (1)
One-Month LIBOR
plus the Class B-4 Margin and (2) the Available Funds Cap for
such Distribution
Date.
Class B-4 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance, the
Class R Certificate Principal Balance, the Class M-1 Certificate
Principal
Balance, the Class M-2 Certificate Principal Balance, the Class
M-3 Certificate
Principal Balance, the Class B-1 Certificate Principal Balance,
the Class B-2
Certificate Principal Balance and the Class B-3 Certificate
Principal Balance
have been reduced to zero and a Trigger Event exists, or as long
as a Trigger
Event does not exist, the excess of (1) the sum of (A) the Class
A Certificate
Principal Balance (after taking into account distributions of
the Class A
Principal Distribution Amount on such Distribution Date), (B)
the Class M-1
Certificate Principal Balance (after taking into account
distributions of the
Class M-1 Principal Distribution Amount on such Distribution
Date), (C) the
Class M-2 Certificate Principal Balance (after taking into
account distributions
of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into
account
distributions of the Class M-3 Principal Distribution Amount on
such
Distribution Date), (E) the Class B-1 Certificate Principal
Balance (after
taking into account distributions of the Class B-1 Principal
Distribution Amount
on such Distribution Date), (F) the Class B-2 Certificate
Principal Balance
(after taking into account distributions of the Class B-2
Principal Distribution
Amount on such Distribution Date), (G) the Class B-3 Certificate
Principal
Balance (after taking into account distributions of the Class
B-3 Principal
Distribution Amount on such Distribution Date) and (H) the Class
B-4 Certificate
Principal Balance immediately prior to such Distribution Date
over (2) the
lesser of (A) 77.00% of the aggregate Stated Principal Balances
of the Mortgage
Loans as of the end of the immediately preceding Due Period and
(B) the excess
of the Stated Principal Balances of the Mortgage Loans as of the
end of the
immediately preceding Due Period over the Minimum Required
Overcollateralization
Amount; provided, however, that on any Distribution Date prior
to the Stepdown
Date on which the Class A Certificate Principal Balance, the
Class R Certificate
Principal Balance, the Class M-1 Certificate Principal Balance,
the Class M-2
Certificate Principal Balance, the Class M-3 Certificate
Principal Balance, the
Class B-1 Certificate Principal Balance, the Class B-2
Certificate Principal
Balance and the Class B-3 Certificate Principal Balance have
been reduced to
zero, the Class B-4 Principal Distribution Amount for such
Distribution Date
will equal the lesser of (A) the outstanding Class B-4
-11-
<PAGE>
Certificate Principal Balance and (B) 100% of the Principal
Distribution Amount
remaining after any distributions on such Class A, Class R,
Class M-1, Class
M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates;
and provided
further, however, that in no event will the Class B-4 Principal
Distribution
Amount with respect to any Distribution Date exceed the Class
B-4 Certificate
Principal Balance.
Class B-4 Unpaid Realized Loss Amount: As of any Distribution
Date, the
excess of (1) the Class B-4 Applied Realized Loss Amount over
(2) the sum of (x)
all distributions in reduction of the Class B-4 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class B-4 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class B-5 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class B-5 Certificates.
Class B-5 Certificate: Any Certificate designated as a "Class
B-5
Certificate" on the face thereof, in the form of Exhibit A
hereto, representing
the right to distributions as set forth herein.
Class B-5 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class B-5
Certificates.
Class B-5 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class B-5
Pass-Through Rate on
the Class B-5 Certificate Principal Balance as of such
Distribution Date plus
the Current Interest and Interest Carry Forward Amount portions
of any previous
distributions on such Class that are recovered as a voidable
preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall
allocated on
such Distribution Date to the Class B-5 Certificates. For
purposes of
calculating interest, principal distributions on a Distribution
Date will be
deemed to have been made on the first day of the Accrual Period
in which such
Distribution Date occurs.
Class B-5 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class B-5 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually
distributed to the Class
B-5 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by
applicable law) at the
Class B-5 Pass-Through Rate for the related Accrual Period.
Class B-5 Margin: As of any Distribution Date up to and
including the
Initial Optional Termination Date, 3.500% per annum and as of
any Distribution
Date thereafter, 5.250% per annum.
Class B-5 Pass-Through Rate: For the first Distribution Date,
6.27% per
annum. As of any Distribution Date thereafter, the lesser of (1)
One-Month LIBOR
plus the Class B-5 Margin and (2) the Available Funds Cap for
such Distribution
Date.
Class B-5 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance, the
Class R Certificate Principal Balance, the Class
-12-
<PAGE>
M-1 Certificate Principal Balance, the Class M-2 Certificate
Principal Balance,
the Class M-3 Certificate Principal Balance, the Class B-1
Certificate Principal
Balance, the Class B-2 Certificate Principal Balance, the Class
B-3 Certificate
Principal Balance and the Class B-4 Certificate Principal
Balance have been
reduced to zero and a Trigger Event exists, or as long as a
Trigger Event does
not exist, the excess of (1) the sum of (A) the Class A
Certificate Principal
Balance (after taking into account distributions of the Class A
Principal
Distribution Amount on such Distribution Date), (B) the Class
M-1 Certificate
Principal Balance (after taking into account distributions of
the Class M-1
Principal Distribution Amount on such Distribution Date), (C)
the Class M-2
Certificate Principal Balance (after taking into account
distributions of the
Class M-2 Principal Distribution Amount on such Distribution
Date), (D) the
Class M-3 Certificate Principal Balance (after taking into
account distributions
of the Class M-3 Principal Distribution Amount on such
Distribution Date), (E)
the Class B-1 Certificate Principal Balance (after taking into
account
distributions of the Class B-1 Principal Distribution Amount on
such
Distribution Date), (F) the Class B-2 Certificate Principal
Balance (after
taking into account distributions of the Class B-2 Principal
Distribution Amount
on such Distribution Date), (G) the Class B-3 Certificate
Principal Balance
(after taking into account distributions of the Class B-3
Principal Distribution
Amount on such Distribution Date), (H) the Class B-4 Certificate
Principal
Balance (after taking into account distributions of the Class
B-4 Principal
Distribution Amount on such Distribution Date) and (I) the Class
B-5 Certificate
Principal Balance immediately prior to such Distribution Date
over (2) the
lesser of (A) 86.00% of the aggregate Stated Principal Balances
of the Mortgage
Loans as of the end of the immediately preceding Due Period and
(B) the excess
of the Stated Principal Balances of the Mortgage Loans as of the
end of the
immediately preceding Due Period over the Minimum Required
Overcollateralization
Amount; provided, however, that on any Distribution Date prior
to the Stepdown
Date on which the Class A Certificate Principal Balance, the
Class R Certificate
Principal Balance, the Class M-1 Certificate Principal Balance,
the Class M-2
Certificate Principal Balance, the Class M-3 Certificate
Principal Balance, the
Class B-1 Certificate Principal Balance, the Class B-2
Certificate Principal
Balance, the Class B-3 Certificate Principal Balance and the
Class B-4
Certificate Principal Balance have been reduced to zero, the
Class B-5 Principal
Distribution Amount for such Distribution Date will equal the
lesser of (A) the
outstanding Class B-5 Certificate Principal Balance and (B) 100%
of the
Principal Distribution Amount remaining after any distributions
on such Class A,
Class R, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2,
Class B-3 and
Class B-4 Certificates; and provided further, however, that in
no event will the
Class B-5 Principal Distribution Amount with respect to any
Distribution Date
exceed the Class B-5 Certificate Principal Balance.
Class B-5 Unpaid Realized Loss Amount: As of any Distribution
Date, the
excess of (1) the Class B-5 Applied Realized Loss Amount over
(2) the sum of (x)
all distributions in reduction of the Class B-5 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class B-5 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class C Applied Realized Loss Amount: As of any Distribution
Date, the sum
of all Applied Realized Loss Amounts with respect to the
Mortgage Loans which
have been applied to the reduction of the Certificate Principal
Balance of the
Class C Certificates.
-13-
<PAGE>
Class C Certificate: Any Certificate designated as a "Class C
Certificate"
on the face thereof, in the form of Exhibit A hereto,
representing the right to
distributions as set forth herein.
Class C Certificate Principal Balance: As of any date of
determination, the
aggregate Certificate Principal Balance of the Class C
Certificates.
Class C Current Interest: As of any Distribution Date, the
interest accrued
during the related Accrual Period at the Class C Distributable
Interest Rate on
a notional amount equal to the aggregate principal balance of
the Lower Tier
REMIC Regular Interests immediately prior to such Distribution
Date, plus the
interest portion of any previous distributions on such Class
that is recovered
as a voidable preference by a trustee in bankruptcy, less any
Non-Supported
Interest Shortfall allocated on such Distribution Date to the
Class C
Certificates.
Class C Distributable Interest Rate: The excess, if any, of (a)
the
weighted average of the interest rates on the Lower Tier REMIC
Regular Interests
over (b) two times the weighted average of the interest rates on
the Lower Tier
REMIC Regular Interests (treating for purposes of this clause
(b) the interest
rate on each of the Lower Tier REMIC Marker Classes as being
capped at the
interest rate of its Related Certificates and treating the Class
LTX Interest as
being capped at zero). The averages described in the preceding
sentence shall be
weighted on the basis of the respective principal balances of
the Lower Tier
REMIC Regular Interests immediately prior to any date of
determination.
Class C Interest Carry Forward Amount: As of any Distribution
Date, the
excess of (A) the Class C Current Interest with respect to prior
Distribution
Dates over (B) the amount actually distributed to the Class C
Certificates with
respect to interest on such prior Distribution Dates or added to
the aggregate
Certificate Principal Balance of the Class C Certificates.
Class C Unpaid Realized Loss Amount: As of any Distribution
Date, the
excess of (1) the Class C Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class C Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class C Certificates pursuant to the
last sentence of
the definition of "Certificate Principal Balance."
Class LTA Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/2 of the
initial principal
balance of its Related Certificates and an interest rate equal
to the Net Rate.
Class LTB-1 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/2 of the
initial principal
balance of its Related Certificate and an interest rate equal to
the Net Rate.
Class LTB-2 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/2 of the
initial principal
balance of its Related Certificate and an interest rate equal to
the Net Rate.
Class LTB-3 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/2 of the
initial principal
balance of its Related Certificate and an interest rate equal to
the Net Rate.
-14-
<PAGE>
Class LTB-4 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/2 of the
initial principal
balance of its Related Certificate and an interest rate equal to
the Net Rate.
Class LTB-5 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/2 of the
initial principal
balance of its Related Certificate and an interest rate equal to
the Net Rate.
Class LTM-1 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/2 of the
initial principal
balance of its Related Certificate and an interest rate equal to
the Net Rate.
Class LTM-2 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/2 of the
initial principal
balance of its Related Certificate and an interest rate equal to
the Net Rate.
Class LTM-3 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/2 of the
initial principal
balance of its Related Certificate and an interest rate equal to
the Net Rate.
Class LTR Interest: The sole class of "residual interest" in the
Lower Tier
REMIC.
Class LTX Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to the excess of
(i) the aggregate
Cut-off Date Principal Balance of the Mortgage Loans over (ii)
the aggregate
initial principal balance of the Lower Tier REMIC Marker Classes
and an interest
rate equal to the Net Rate.
Class M Certificates: The Class M-1 Certificates, Class M-2
Certificates
and Class M-3 Certificates.
Class M-1 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class M-1 Certificates.
Class M-1 Certificate: Any Certificate designated as a "Class
M-1
Certificate" on the face thereof, in the form of Exhibit A
hereto, representing
the right to distributions as set forth herein.
Class M-1 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class M-1
Certificates.
Class M-1 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class M-1
Pass-Through Rate on
the Class M-1 Certificate Principal Balance as of such
Distribution Date plus
the Current Interest and Interest Carry Forward Amount portions
of any previous
distributions on such Class that are recovered as a voidable
preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall
allocated on
such Distribution Date to the Class M-1 Certificates. For
purposes of
calculating
-15-
<PAGE>
interest, principal distributions on a Distribution Date will be
deemed to have
been made on the first day of the Accrual Period in which such
Distribution Date
occurs.
Class M-1 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-1 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually
distributed to the Class
M-1 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by
applicable law) at the
Class M-1 Pass-Through Rate for the related Accrual Period.
Class M-1 Margin: As of any Distribution Date up to and
including the
Initial Optional Termination Date, 0.530% per annum and, as of
any Distribution
Date after the Initial Optional Termination Date, 0.795% per
annum.
Class M-1 Pass-Through Rate: For the first Distribution Date,
3.30% per
annum. As of any Distribution Date thereafter, the lesser of (1)
One-Month LIBOR
plus the Class M-1 Margin and (2) the Available Funds Cap for
such Distribution
Date.
Class M-1 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance and the
Class R Certificate Principal Balance has been reduced to zero
and a Trigger
Event exists, or as long as a Trigger Event does not exist, the
excess of (1)
the sum of (A) the sum of the Class A Certificate Principal
Balance and the
Class R Certificate Principal Balance (after taking into account
distributions
of the Class A Principal Distribution Amount on such
Distribution Date) and (B)
the Class M-1 Certificate Principal Balance immediately prior to
such
Distribution Date over (2) the lesser of (A) 42.20% of the
Stated Principal
Balances of the Mortgage Loans as of the end of the immediately
preceding Due
Period and (B) the excess of the aggregate Stated Principal
Balances for the
Mortgage Loans as of the end of the immediately preceding Due
Period over the
Minimum Required Overcollateralization Amount; provided,
however, that on any
Distribution Date prior to the Stepdown Date on which the Class
A Certificate
Principal Balance and the Class R Certificate Principal Balance
has been reduced
to zero, the Class M-1 Principal Distribution Amount will equal
the lesser of
(A) the outstanding Class M-1 Certificate Principal Balance and
(B) 100% of the
Principal Distribution Amount remaining after any distributions
on such Class A
and Class R Certificates; and, provided, further that in no
event will the Class
M-1 Principal Distribution Amount with respect to any
Distribution Date exceed
the Class M-1 Certificate Principal Balance.
Class M-1 Unpaid Realized Loss Amount: As of any Distribution
Date, the
excess of (1) the Class M-1 Applied Realized Loss Amount over
(2) the sum of (x)
all distributions in reduction of the Class M-1 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-1 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class M-2 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class M-2 Certificates.
-16-
<PAGE>
Class M-2 Certificate: Any Certificate designated as a "Class
M-2
Certificate" on the face thereof, in the form of Exhibit A
hereto, representing
the right to distributions as set forth herein.
Class M-2 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class M-2
Certificates.
Class M-2 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class M-2
Pass-Through Rate on
the Class M-2 Certificate Principal Balance as of such
Distribution Date plus
the Current Interest and Interest Carry Forward Amount portions
of any previous
distributions on such Class that are recovered as a voidable
preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall
allocated on
such Distribution Date to the Class M-2 Certificates. For
purposes of
calculating interest, principal distributions on a Distribution
Date will be
deemed to have been made on the first day of the Accrual Period
in which such
Distribution Date occurs.
Class M-2 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-2 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually
distributed to the Class
M-2 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by
applicable law) at the
Class M-2 Pass-Through Rate for the related Accrual Period.
Class M-2 Margin: As of any Distribution Date up to and
including the
Initial Optional Termination Date, 0.600% per annum and, as of
any Distribution
Date after the Initial Optional Termination Date, 0.900% per
annum.
Class M-2 Pass-Through Rate: For the first Distribution Date,
3.37% per
annum. As of any Distribution Date thereafter, the lesser of (1)
One-Month LIBOR
plus the Class M-2 Margin and (2) the Available Funds Cap for
such Distribution
Date.
Class M-2 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if each of the Class A Certificate
Principal Balance,
the Class R Certificate Principal Balance and the Class M-1
Certificate
Principal Balance has been reduced to zero and a Trigger Event
exists, or as
long as a Trigger Event does not exist, the excess of (1) the
sum of (A) the sum
of the Class A Certificate Principal Balance and the Class R
Certificate
Principal Balance (after taking into account distributions of
the Class A
Principal Distribution Amount on such Distribution Date), (B)
the Class M-1
Certificate Principal Balance (after taking into account
distributions of the
Class M-1 Principal Distribution Amount on such Distribution
Date) and (C) the
Class M-2 Certificate Principal Balance immediately prior to
such Distribution
Date over (2) the lesser of (A) 47.70% of the aggregate Stated
Principal
Balances of the Mortgage Loans as of the end of the immediately
preceding Due
Period and (B) the excess of the Stated Principal Balances of
the Mortgage Loans
as of the end of the immediately preceding Due Period over the
Minimum Required
Overcollateralization Amount; provided, however, that on any
Distribution Date
prior to the Stepdown Date on which the Class A Certificate
Principal Balance,
the Class R Certificate Principal Balance and the Class M-1
Certificate
Principal Balance have been reduced to zero, the Class M-2
Principal
Distribution Amount will equal the lesser of (A) the outstanding
Class M-2
-17-
<PAGE>
Certificate Principal Balance and (B) 100% of the Principal
Distribution Amount
remaining after any distributions on such Class A, Class R and
Class M-1
Certificates; provided, further, however, in no event will the
Class M-2
Principal Distribution Amount with respect to any Distribution
Date exceed the
Class M-2 Certificate Principal Balance.
Class M-2 Unpaid Realized Loss Amount: As of any Distribution
Date, the
excess of (1) the Class M-2 Applied Realized Loss Amount over
(2) the sum of (x)
all distributions in reduction of the Class M-2 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-2 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class M-3 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class M-3 Certificates.
Class M-3 Certificate: Any Certificate designated as a "Class
M-3
Certificate" on the face thereof, in the form of Exhibit A
hereto, representing
the right to distributions as set forth herein.
Class M-3 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class M-3
Certificates.
Class M-3 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class M-3
Pass-Through Rate on
the Class M-3 Certificate Principal Balance as of such
Distribution Date plus
the Current Interest and Interest Carry Forward Amount portions
of any previous
distributions on such Class that are recovered as a voidable
preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall
allocated on
such Distribution Date to the Class M-3 Certificates. For
purposes of
calculating interest, principal distributions on a Distribution
Date will be
deemed to have been made on the first day of the Accrual Period
in which such
Distribution Date occurs.
Class M-3 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-3 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually
distributed to the Class
M-3 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by
applicable law) at the
Class M-3 Pass-Through Rate for the related Accrual Period.
Class M-3 Margin: As of any Distribution Date up to and
including the
Initial Optional Termination Date, 0.800% per annum and, as of
any Distribution
Date after the Initial Optional Termination Date, 1.200% per
annum.
Class M-3 Pass-Through Rate: For the first Distribution Date,
3.57% per
annum. As of any Distribution Date thereafter, the lesser of (1)
One-Month LIBOR
plus the Class M-3 Margin and (2) the Available Funds Cap for
such Distribution
Date.
Class M-3 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if each of the Class A Certificate
Principal Balance,
the Class R Certificate Principal Balance,
-18-
<PAGE>
the Class M-1 Certificate Principal Balance and the Class M-2
Certificate
Principal Balance has been reduced to zero and a Trigger Event
exists, or as
long as a Trigger Event does not exist, the excess of (1) the
sum of (A) the sum
of the Class A Certificate Principal Balance and the Class R
Certificate
Principal Balance (after taking into account distributions of
the Class A
Principal Distribution Amount on such Distribution Date), (B)
the Class M-1
Certificate Principal Balance (after taking into account
distributions of the
Class M-1 Principal Distribution Amount on such Distribution
Date), (C) the
Class M-2 Certificate Principal Balance (after taking into
account distributions
of the Class M-2 Principal Distribution Amount on such
Distribution Date) and
(D) the Class M-3 Certificate Principal Balance immediately
prior to such
Distribution Date over (2) the lesser of (A) 57.90% of the
aggregate Stated
Principal Balances of the Mortgage Loans as of the end of the
immediately
preceding Due Period and (B) the excess of the Stated Principal
Balances of the
Mortgage Loans as of the end of the immediately preceding Due
Period over the
Minimum Required Overcollateralization Amount; provided,
however, that on any
Distribution Date prior to the Stepdown Date on which the Class
A Certificate
Principal Balance, the Class R Certificate Principal Balance,
the Class M-1
Certificate Principal Balance and the Class M-2 Certificate
Principal Balance
have been reduced to zero, the Class M-3 Principal Distribution
Amount will
equal the lesser of (A) the outstanding Class M-3 Certificate
Principal Balance
and (B) 100% of the Principal Distribution Amount remaining
after any
distributions on such Class A, Class R, Class M-1 and Class M-2
Certificates;
provided, further, however, in no event will the Class M-3
Principal
Distribution Amount with respect to any Distribution Date exceed
the Class M-3
Certificate Principal Balance.
Class M-3 Unpaid Realized Loss Amount: As of any Distribution
Date, the
excess of (1) the Class M-3 Applied Realized Loss Amount over
(2) the sum of (x)
all distributions in reduction of the Class M-3 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-3 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class P Certificate: Any Certificate designated as a "Class P
Certificate"
on the face thereof, in the form of Exhibit A hereto,
representing the right to
distributions as set forth herein.
Class R Certificate: Any Certificate designated as a "Class R
Certificate"
on the face thereof, in the form of Exhibit A hereto,
representing the right to
distributions as set forth herein.
Class R Certificate Principal Balance: As of any date of
determination, the
aggregate Certificate Principal Balance of the Class R
Certificate.
Class R Current Interest: As of any Distribution Date, the
interest accrued
during the related Accrual Period at the Class R Pass-Through
Rate on the Class
R Certificate Principal Balance as of such Distribution Date
plus the Current
Interest and Interest Carry Forward Amount portions of any
previous
distributions on such Class that are recovered as a voidable
preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall
allocated on
such Distribution Date to the Class R Certificate. For purposes
of calculating
interest, principal distributions on a Distribution Date will be
deemed to have
been made on the first day of the Accrual Period in which such
Distribution Date
occurs.
-19-
<PAGE>
Class R Interest Carry Forward Amount: As of any Distribution
Date, the sum
of (1) the excess of (A) the Class R Current Interest with
respect to prior
Distribution Dates over (B) the amount actually distributed to
the Class R
Certificate with respect to interest on such prior Distribution
Dates and (2)
interest on such excess (to the extent permitted by applicable
law) at the Class
R Pass-Through Rate for the related Accrual Period.
Class R Margin: As of any Distribution Date up to and including
the Initial
Optional Termination Date, 0.200% per annum and, as of any
Distribution Date
after the Initial Optional Termination Date, 0.400% per
annum.
Class R Pass-Through Rate: For the first Distribution Date,
2.97% per
annum. As of any Distribution Date thereafter, the lesser of (1)
One-Month LIBOR
plus the Class R Margin and (2) the Available Funds Cap for such
Distribution
Date.
Closing Date: March 10, 2005.
Code: The Internal Revenue Code of 1986, including any successor
or
amendatory provisions.
Collection Account: The separate Eligible Account created and
initially
maintained by the Servicer pursuant to Section 3.05(d) in the
name of the
Trustee for the benefit of the Certificateholders and designated
"Wilshire
Credit Corporation, as servicer for Deutsche Bank, National
Trust Company, as
trustee, in trust for registered holders of Merrill Lynch
Mortgage Investors
Trust, Mortgage Loan Asset-Backed Certificates, Series
2005-SL1". Funds in the
Collection Account shall be held in trust for the
Certificateholders for the
uses and purposes set forth in this Agreement.
Combined Loan-to-Value Ratio: The fraction, expressed as a
percentage, the
numerator of which is the sum of (1) the original principal
balance of the
related Mortgage Loan and (2) any outstanding principal balances
of Mortgage
Loans the liens on which are senior to the lien on such related
Mortgage Loan
(such sum calculated at the date of origination of such related
Mortgage Loan)
and the denominator of which is the lesser of (A) the Appraised
Value of the
related Mortgaged Property and (B) the sales price of the
related Mortgaged
Property at time of origination.
Compensating Interest: For any Distribution Date and all
Principal
Prepayments in full in respect of a Mortgage Loan that are
received during the
period from the first day of the related Prepayment Period
through the last day
of the calendar month preceding such Distribution Date, a
payment made by the
Servicer in an amount not to exceed the product of (a)
one-twelfth of 0.25% and
(b) the aggregate Stated Principal Balance of the Mortgage Loans
for such
Distribution Date, equal to the amount of interest at the Net
Mortgage Rate for
that Mortgage Loan from the date of prepayment through the 30th
day of such
preceding calendar month.
Current Interest: Any of the Class A Current Interest, the Class
R Current
Interest, the Class M-1 Current Interest, the Class M-2 Current
Interest, the
Class M-3 Current Interest, the Class B-1 Current Interest, the
Class B-2
Current Interest, the Class B-3 Current Interest, the Class B-4
Current
Interest, the Class B-5 Current Interest and the Class C Current
Interest.
-20-
<PAGE>
Custodian: The Master Servicer, in its role as Custodian.
Cut-off Date: February 1, 2005.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
unpaid
principal balance thereof as of the close of business on the
calendar day
immediately preceding the Cut-off Date after application of all
payments of
principal due on or prior to the Cut-off Date, whether or not
received, and all
Principal Prepayments received prior to the Cut-off Date, but
without giving
effect to any installments of principal received in respect of
Due Dates on and
after the Cut-off Date.
DBRS: Dominion Bond Rating Service, Inc. or any successor in
interest.
Definitive Certificates: As defined in Section 5.06.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be
replaced by a
Replacement Mortgage Loan.
Delinquent: A Mortgage Loan is "delinquent" if any payment due
thereon is
not made pursuant to the terms of such Mortgage Loan by the
close of business on
the day such payment is scheduled to be due. A Mortgage Loan is
"30 days
delinquent" if such payment has not been received by the close
of business on
the corresponding day of the month immediately succeeding the
month in which
such payment was due, or, if there is no such corresponding day
(e.g., as when a
30-day month follows a 31-day month in which a payment was due
on the 31st day
of such month), then on the last day of such immediately
succeeding month. With
respect to any Mortgage Loan due on any day other than the first
day of the
month, such Mortgage Loan shall be deemed to be due on the first
day of the
immediately succeeding month. Similarly for "60 days
delinquent," "90 days
delinquent" and so on.
Denomination: With respect to each Certificate, the amount set
forth on the
face thereof as the "Initial Principal Balance of this
Certificate."
Depositor: Merrill Lynch Mortgage Investors, Inc., a Delaware
corporation,
or any successor in interest.
Depository: The initial Depository shall be The Depository Trust
Company
("DTC"), the nominee of which is Cede & Co., or any other
organization
registered as a "clearing agency" pursuant to Section 17A of the
Securities
Exchange Act of 1934, as amended. The Depository shall initially
be the
registered Holder of the Book-Entry Certificates. The Depository
shall at all
times be a "clearing corporation" as defined in Section 8-102(3)
of the Uniform
Commercial Code of the State of New York.
Depository Agreement: With respect to Classes of Book-Entry
Certificates,
the agreement between the Securities Administrator and the
initial Depository.
Depository Participant: A broker, dealer, bank or other
financial
institution or other Person for whom from time to time a
Depository effects
book-entry transfers and pledges of securities deposited with
the Depository.
-21-
<PAGE>
Designated Transaction: A transaction in which the assets
underlying the
Certificates consist of single-family residential, multi-family
residential,
home equity, manufactured housing and/or commercial mortgage
obligations that
are secured by single-family residential, multi-family
residential, commercial
real property or leasehold interests therein.
Determination Date: With respect to any Distribution Date, the
15th day of
the month of such Distribution Date or, if such 15th day is not
a Business Day,
the immediately preceding Business Day.
Disqualified Organization: (1) the United States, any state or
political
subdivision thereof, any foreign government, any international
organization, or
any agency or instrumentality of any of the foregoing, (2) any
organization
(other than a cooperative described in Section 521 of the Code)
which is exempt
from tax under Chapter 1 of Subtitle A of the Code unless such
organization is
subject to the tax imposed by Section 511 of the Code and (3)
any organization
described in Section 1381(a)(2)(C) of the Code.
Distribution Date: The 25th day of each calendar month after the
initial
issuance of the Certificates, or if such 25th day is not a
Business Day, the
next succeeding Business Day, commencing in March 2005.
Due Date: With respect to any Distribution Date and any Mortgage
Loan, the
day during the related Due Period on which a Scheduled Payment
is due.
Due Period: With respect to any Distribution Date, the period
beginning on
the second day of the calendar month preceding the calendar
month in which such
Distribution Date occurs and ending on the first day of the
month in which such
Distribution Date occurs.
Eligible Account: An account that is (1) maintained with a
depository
institution the long-term unsecured debt obligations of which
are rated by each
Rating Agency in one of its two highest rating categories, or
(2) maintained
with the corporate trust department of a bank which (A) has a
rating of at least
Baa3 or P-3 by Moody's and (B) is either the Depositor or the
corporate trust
department of a national bank or banking corporation which has a
rating of at
least A-1 by S&P or F1 by Fitch, or (iii) an account or
accounts the deposits in
which are fully insured by the FDIC, or (iv) an account or
accounts, acceptable
to each Rating Agency without reduction or withdrawal of the
rating of any Class
of Certificates, as evidenced in writing, by a depository
institution in which
such accounts are insured by the FDIC (to the limit established
by the FDIC),
the uninsured deposits in which accounts are otherwise secured
such that, as
evidenced by an Opinion of Counsel delivered to and acceptable
to the Securities
Administrator, the Trustee and each Rating Agency, the
Certificateholders have a
claim with respect to the funds in such account and a perfected
first security
interest against any collateral (which shall be limited to
Permitted
Investments) securing such funds that is superior to claims of
any other
depositors or creditors of the depository institution with which
such account is
maintained, or (v) maintained at an eligible institution whose
commercial paper,
short-term debt or other short-term deposits are rated at least
A-1+ by S&P and
F-1+ by Fitch, or (vi) maintained with a federal or state
chartered depository
institution the deposits in which are insured by the FDIC to the
applicable
limits and the short-term unsecured debt obligations of which
(or, in the case
of a depository institution that is a subsidiary of a holding
company, the
short-term unsecured debt
-22-
<PAGE>
obligations of such holding company) are rated A-1 by S&P or
Prime-1 by Moody's
at the time any deposits are held on deposit therein, or (vii)
otherwise
acceptable to each Rating Agency, as evidenced by a letter from
each Rating
Agency to the Securities Administrator and the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974,
including any
successor or amendatory provisions.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that would satisfy the
requirements would
satisfy the requirements of Prohibited Transaction Exemption
90-29, Exemption
Application No. D-8012, 55 Fed. Reg. 21459 (1990), as amended,
granted by the
United States Department of Labor (or any other applicable
underwriter's
exemption granted by the United States Department of Labor),
except, in relevant
part, for the requirement that the certificates have received a
rating at the
time of acquisition that is in one of the three (or four, in the
case of a
"designated transaction") highest generic rating categories by
at least one of
S&P, Moody's or Fitch.
ERISA Restricted Certificates: The Class C Certificates, Class
P
Certificates and Class R Certificate and any other Certificate,
unless the
acquisition and holding of such other Certificate is covered by
and exempt under
an underwriter's exemption.
Event of Default: As defined in Section 7.01 hereof.
Excess Interest: On any Distribution Date, for the Class A
Certificates,
Class R Certificate, Class M-1 Certificates, Class M-2
Certificates, Class M-3
Certificates, Class B-1 Certificates, Class B-2 Certificates,
Class B-3
Certificates, Class B-4 Certificates and Class B-5 Certificates,
the excess, if
any, of (1) the amount of interest such Class of Certificates is
entitled to
receive on such Distribution Date at its Pass-Through Rate over
(2) the amount
of interest such Class of Certificates would have been entitled
to receive on
such Distribution Date had the Pass-Through Rate for such Class
been the REMIC
Pass-Through Rate.
Excess Proceeds: With respect to any Liquidated Loan, any
Liquidation
Proceeds that are in excess of the sum of (1) the unpaid
principal balance of
such Liquidated Loan as of the date of such liquidation plus (2)
interest at the
Mortgage Rate from the Due Date as to which interest was last
paid or advanced
to Certificateholders (and not reimbursed to the Servicer) up to
the Due Date in
the month in which such Liquidation Proceeds are required to be
distributed on
the unpaid principal balance of such Liquidated Loan outstanding
during each Due
Period as to which such interest was not paid or advanced.
Exchange Act: The Securities Exchange Act of 1934, as
amended.
Extra Principal Distribution Amount: With respect to any
Distribution Date,
(1) prior to the Stepdown Date, the excess of (A) the sum of (i)
the Aggregate
Certificate Principal Balance immediately preceding such
Distribution Date
reduced by the Principal Funds with respect to such Distribution
Date and (ii)
$39,883,883 over (B) the Pool Stated Principal Balance of the
Mortgage Loans as
of such Distribution Date and (2) on and after the Stepdown
Date, (A) the sum of
(x) the Aggregate Certificate Principal Balance immediately
preceding such
Distribution Date, reduced by the Principal Funds with respect
to such
Distribution Date and (y) the greater of (a) 14.00% of the Pool
Stated Principal
Balance of the Mortgage Loans and (b) the Minimum
-23-
<PAGE>
Required Overcollateralization Amount less (B) the Pool Stated
Principal Balance
of the Mortgage Loans as of such Distribution Date; provided,
however, that if
on any Distribution Date a Trigger Event is in effect, the Extra
Principal
Distribution Amount will not be reduced to the applicable
percentage of the
then-current Pool Stated Principal Balance of the Mortgage Loans
(and will
remain fixed at the applicable percentage of the aggregate
Stated Principal
Balance of the Mortgage Loans as of the Due Date immediately
prior to the
Trigger Event) until the next Distribution Date on which the
Trigger Event is
not in effect.
Fannie Mae: A federally chartered and privately owned
corporation organized
and existing under the Federal National Mortgage Association
Charter Act, or any
successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
Fitch: Fitch, Inc., or any successor in interest.
Floating Rate Certificate Carryover: With respect to a
Distribution Date,
in the event that the Pass-Through Rate for a Class of the Class
A, Class R,
Class M or Class B Certificates is based upon the Available
Funds Cap, the
excess of (x) the amount of interest that such Class would have
been entitled to
receive on such Distribution Date had the Pass-Through Rate for
that Class not
been calculated based on the Available Funds Cap over (y) the
amount of interest
payable on such Class on such Distribution Date based on the
Available Funds
Cap, together with (i) the unpaid portion of any such excess
from prior
Distribution Dates (and interest accrued thereon at the then
applicable
Pass-Through Rate for such Class, without giving effect to the
Available Funds
Cap) and (ii) any amount previously distributed with respect to
Floating Rate
Certificate Carryover for such Class that is recovered as a
voidable preference
by a trustee in bankruptcy.
Freddie Mac: A corporate instrumentality of the United States
created and
existing under Title III of the Emergency Home Finance Act of
1970, as amended,
or any successor thereto.
Grantor Trusts: The grantor trusts described in Section 2.07
hereof.
Initial Certificate Principal Balance: With respect to any Class
A, Class
M, Class B, Class C or Class R Certificate, the Certificate
Principal Balance of
such Certificate or any predecessor Certificate on the Closing
Date as set forth
in Section 5.01 hereof.
Initial Optional Termination Date: The Distribution Date on
which the
aggregate Stated Principal Balance of the Mortgage Loans is
equal to or less
than 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of
the Cut-off Date.
Insurance Policy: With respect to any Mortgage Loan included in
the Trust
Fund, any insurance policy, including all riders and
endorsements thereto in
effect with respect to such Mortgage Loan, including any
replacement policy or
policies for any insurance policies.
Insurance Proceeds: Proceeds paid in respect of the Mortgage
Loans pursuant
to any Insurance Policy or any other insurance policy covering a
Mortgage Loan,
to the extent such proceeds are payable to the mortgagee under
the Mortgage, the
Servicer or the Trustee under the deed of trust and are not
applied to the
restoration of the related Mortgaged Property or released
-24-
<PAGE>
to the Mortgagor in accordance with the procedures that the
Servicer would
follow in servicing mortgage loans held for its own account, in
each case other
than any amount included in such Insurance Proceeds in respect
of Insured
Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or any
other
insurance policy with respect to the Mortgage Loans.
Interest Carry Forward Amount: Any of the Class A Interest Carry
Forward
Amount, the Class R Interest Carry Forward Amount, the Class M-1
Interest Carry
Forward Amount, the Class M-2 Interest Carry Forward Amount, the
Class M-3
Interest Carry Forward Amount, the Class B-1 Interest Carry
Forward Amount, the
Class B-2 Interest Carry Forward Amount, the Class B-3 Interest
Carry Forward
Amount, the Class B-4 Interest Carry Forward Amount, the Class
B-5 Interest
Carry Forward Amount or the Class C Interest Carry Forward
Amount, as the case
may be.
Interest Determination Date: With respect to the Certificates,
(i) for any
Accrual Period other than the first Accrual Period, the second
LIBOR Business
Day preceding the commencement of such Accrual Period and (ii)
for the first
Accrual Period, March 8, 2005.
Interest Funds: With respect to any Distribution Date, the sum,
without
duplication, of (1) all scheduled interest due during the
related Due Period and
received before the related Servicer Remittance Date or advanced
on or before
the related Servicer Remittance Date less the Servicing Fee and
the Securities
Administrator Fee, (2) all Advances relating to interest with
respect to the
Mortgage Loans, (3) all Compensating Interest with respect to
the Mortgage
Loans, (4) Liquidation Proceeds with respect to the Mortgage
Loans (to the
extent such Liquidation Proceeds relate to interest) collected
during the
related Prepayment Period, (5) all proceeds of any purchase
pursuant to Section
2.02 or 2.03 during the related Prepayment Period or pursuant to
Section 9.01
not later than the related Determination Date (to the extent
that such proceeds
relate to interest) less the Servicing Fee and (6) all
Prepayment Charges
received with respect to the Mortgage Loans during the related
Prepayment
Period, less (A) all Non-Recoverable Advances relating to
interest and (B) other
amounts reimbursable to the Servicer, the Master Servicer, the
Securities
Administrator and the Trustee pursuant to this Agreement.
Latest Possible Maturity Date: The latest maturity date for any
Mortgage
Loan in the Trust Fund plus one year.
LIBOR Business Day: Any day on which banks in the City of
London, England
and New York City, U.S.A. are open and conducting transactions
in foreign
currency and exchange.
Liquidated Loan: With respect to any Distribution Date, a
defaulted
Mortgage Loan that either (a) has been liquidated through
deed-in-lieu of
foreclosure, foreclosure sale, trustee's sale or other
realization as provided
by applicable law governing the real property subject to the
related Mortgage
and any security agreements and as to which the Servicer has
certified (in
accordance with Section 3.12) in the related Prepayment Period
that it has
received all amounts it expects to receive in connection with
such liquidation
or (b) is delinquent 180 days or longer, as to which the
Servicer has certified
in a certificate of an officer of the Servicer delivered to the
Securities
Administrator and the Trustee that it does not believe that
there is a
reasonable
-25-
<PAGE>
likelihood that any further net proceeds will be received or
recovered with
respect to such Mortgage Loan.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in
connection with the partial or complete liquidation of Mortgage
Loans, whether
through trustee's sale, foreclosure sale, sale by the Servicer
pursuant to this
Agreement or otherwise or amounts received in connection with
any condemnation
or partial release of a Mortgaged Property and any other
proceeds received in
connection with an REO Property, less the sum of related
unreimbursed Advances,
Servicing Fees, Servicing Advances and any other expenses
related to such
Mortgage Loan.
Losses: Any losses, claims, damages, liabilities or expenses
collectively.
Lower Tier REMIC: As described in the Preliminary Statement and
Section
2.07.
Lower Tier REMIC Interests: Each of the Class LTA Interest, the
Class LTM-1
Interest, the Class LTM-2 Interest, the Class LTM-3 Interest,
the Class LTB-1
Interest, the Class LTB-2 Interest, the Class LTB-3 Interest,
the Class LTB-4
Interest, the Class LTB-5 Interest, the Class LTX Interest and
the Class LTR
Interest.
Lower Tier REMIC Marker Classes: Each of the classes of Lower
Tier REMIC
Regular Interests other than the Class LTX Interest.
Lower Tier REMIC Regular Interests: Each of the Lower Tier REMIC
Interests
other than the Class LTR Interest.
Master Servicer: Wells Fargo Bank, N.A., a national banking
association, or
any successor in interest.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation
organized and existing under the laws of the State of Delaware,
or any successor
thereto.
MERS Loan: Any Mortgage Loan registered with MERS on the MERS
System.
MERS System: The system of recording transfers of mortgage
electronically
maintained by MERS.
Minimum Required Overcollateralization Amount: An amount equal
to the
product of (x) 0.50% and (y) the Stated Principal Balance of the
Mortgage Loans
as of the Cut-off Date.
MIN: The loan number for any MERS Loan.
MOM Loan: Any Mortgage Loan as to which MERS is acting as
mortgagee, solely
as nominee for the originator of such Mortgage Loan and its
successors and
assigns.
Monthly Statement: The statement delivered to the
Certificateholders
pursuant to Section 4.05.
-26-
<PAGE>
Moody's: Moody's Investors Service, Inc. or any successor in
interest.
Mortgage: With respect to a Mortgage Loan, the mortgage, deed of
trust or
other instrument creating a second lien or a second priority
ownership interest
in an estate in fee simple in real property securing a Mortgage
Note.
Mortgage File: The mortgage documents listed in Section 2.01
hereof
pertaining to a particular Mortgage Loan and any additional
documents delivered
to the Custodian to be added to the Mortgage File pursuant to
this Agreement.
Mortgage Loans: Such of the mortgage loans transferred and
assigned to the
Trustee pursuant to the provisions hereof as from time to time
are held as a
part of the Trust Fund (including any REO Property), the
mortgage loans so held
being identified in the Mortgage Loan Schedule, notwithstanding
foreclosure or
other acquisition of title of the related Mortgaged Property.
Any mortgage loan
that was intended by the parties hereto to be transferred to the
Trust Fund as
indicated by such Mortgage Loan Schedule which is in fact not so
transferred for
any reason shall continue to be a Mortgage Loan hereunder until
the Purchase
Price with respect thereto has been paid to the Trust Fund.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time
to time
amended by the Trustee to reflect the deletion of Deleted
Mortgage Loans and the
addition of Replacement Mortgage Loans pursuant to the
provisions of this
Agreement) transferred to the Trustee as part of the Trust Fund
(for
clarification purposes, the Custodian has physical possession of
the Mortgage
Files) and from time to time subject to this Agreement, attached
hereto as
Exhibit B, setting forth the following information with respect
to each Mortgage
Loan:
(i) the loan number;
(ii) borrower name and address;
(iii) the unpaid principal balance of the Mortgage Loans;
(iv) the initial Mortgage Rate;
(v) the original maturity date and the months remaining
before
maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the first payment due date of the Mortgage Loan;
(ix) the Combined Loan-to-Value Ratio
(x) a code indicating whether the residential dwelling at
the
time of origination was represented to be owner-occupied;
(xi) a code indicating the property type;
-27-
<PAGE>
(xii) location of the related Mortgaged Property;
(xiii) a code indicating whether a Prepayment Charge is
applicable and, if so,
(A) the period during which such Prepayment Charge is in
effect;
(B) the amount of such Prepayment Charge;
(C) any limitations or other conditions on the
enforceability of such Prepayment Charge; and
(D) any other information pertaining to the Prepayment
Charge specified in the related Mortgage Note; and
(xiv) the Credit Score and date obtained.
Mortgage Note: The original executed note or other evidence of
indebtedness
evidencing the indebtedness of a Mortgagor under a Mortgage Loan
and all
amendments, modifications and attachments thereto.
Mortgage Pool: The aggregate of the Mortgage Loans identified in
the
Mortgage Loan Schedule.
Mortgaged Property: The underlying property securing a Mortgage
Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage
Note from
time to time.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Rate: As to each Mortgage Loan, and at any time,
the per annum
rate equal to the then current Mortgage Rate less the Servicing
Fee Rate and the
Securities Administrator Fee Rate.
Net Rate: With respect to any Distribution Date, the product of
(x) the
weighted average Net Mortgage Rate for the Mortgage Loans
calculated based on
the respective Net Mortgage Rates and the Stated Principal
Balances of such
Mortgage Loans as of the preceding Distribution Date (or, in the
case of the
first Distribution Date, as of the Cut-off Date) and (y) a
fraction, the
numerator of which is 30 and the denominator of which is the
actual number of
days in the related Accrual Period.
Non-Recoverable Advance: Any portion of an Advance previously
made or
proposed to be made by the Servicer that, in the good faith
judgment of the
Servicer, will not or, in the case of a current delinquency,
would not, be
ultimately recoverable by the Servicer from the related
Mortgagor, related
Liquidation Proceeds or otherwise related to the Mortgage
Loans.
Non-Recoverable Servicing Advance: Any portion of a Servicing
Advance
previously made or proposed to be made by the Servicer that, in
the good faith
judgment of the Servicer, will not or, in the case of a current
Servicing
Advance, would not, be ultimately recoverable by
-28-
<PAGE>
the Servicer from the related Mortgagor, related Liquidation
Proceeds or
otherwise related to the Mortgage Loans.
Non-Supported Interest Shortfall: As defined in Section
4.02.
Offered Certificates: The Class A, Class M-1, Class M-2, Class
M-3, Class
B-1, Class B-2, Class B-3, Class B-4 and Class R
Certificates.
Officer's Certificate: A certificate (1) signed by the Chairman
of the
Board, the Vice Chairman of the Board, the President, a vice
president (however
denominated), an Assistant Vice President, the Treasurer, the
Secretary, or one
of the assistant treasurers or assistant secretaries of the
Depositor, the
Master Servicer, the Servicer or the Securities Administrator
(or any other
officer customarily performing functions similar to those
performed by any of
the above designated officers and to whom, with respect to a
particular matter,
such matter is referred because of such officer's knowledge of
and familiarity
with a particular subject) or (2), if provided for in this
Agreement, signed by
a Servicing Officer, as the case may be, and delivered to the
Depositor, the
Master Servicer, the Servicer, the Securities Administrator or
the Trustee, as
the case may be, as required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period, the rate
determined by
the Securities Administrator on the related Interest
Determination Date on the
basis of (a) the offered rates for one-month United States
dollar deposits, as
such rates appear on Telerate page 3750, as of 11:00 a.m.
(London time) on such
Interest Determination Date or (b) if such rate does not appear
on Telerate Page
3750 as of 11:00 a.m. (London time), the offered rates of the
Reference Banks
for one-month United States dollar deposits, as such rates
appear on the Reuters
Screen LIBO Page, as of 11:00 a.m. (London time) on such
Interest Determination
Date. If One-Month LIBOR is determined pursuant to clause (b)
above, on each
Interest Determination Date, One-Month LIBOR for the related
Accrual Period will
be established by the Securities Administrator as follows:
(i) If on such Interest Determination Date two or more
Reference
Banks provide such offered quotations, One-Month LIBOR for the
related Accrual
Period shall be the arithmetic mean of such offered quotations
(rounded upwards
if necessary to the nearest whole multiple of 0.03125%).
(ii) If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations, One-Month LIBOR
for the related
Accrual Period shall be the higher of (i) One-Month LIBOR as
determined on the
previous Interest Determination Date and (ii) the Reserve
Interest Rate.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for
the Depositor, the Master Servicer, the Servicer or the
Securities Administrator
reasonably acceptable to each addressee of such opinion;
provided, however, that
with respect to Section 6.04 or 10.01, or the interpretation or
application of
the REMIC Provisions, such counsel must (1) in fact be
independent of the
Depositor, the Master Servicer, the Servicer or the
Securities
-29-
<PAGE>
Administrator, (2) not have any direct financial interest in the
Depositor, the
Master Servicer, the Servicer or the Securities Administrator or
in any
affiliate of any such party, and (3) not be connected with the
Depositor, the
Master Servicer, the Servicer or the Securities Administrator as
an officer,
employee, promoter, underwriter, trustee, partner, director or
person performing
similar functions.
Optional Termination: The termination of the trust hereunder
pursuant to
clause (a) of Section 9.01 hereof.
Optional Termination Amount: The repurchase price received by
the
Securities Administrator in connection with any repurchase of
all of the
Mortgage Loans pursuant to Section 9.01.
Optional Termination Price: On any date after the Initial
Optional
Termination Date, an amount equal to the sum of (A) the
aggregate Stated
Principal Balance of each Mortgage Loan (other than any Mortgage
Loan that has
become an REO Property) as of the Distribution Date on which the
proceeds of the
Optional Termination are distributed to the Certificateholders,
plus accrued
interest thereon at the applicable Mortgage Rate as of the Due
Date preceding
the Distribution Date on which the proceeds of the Optional
Termination are
distributed to Certificateholders and the fair market value of
any REO Property,
plus accrued interest thereon as of the Distribution Date on
which the proceeds
of the Optional Termination are distributed to
Certificateholders, (B) any
unreimbursed out-of-pocket costs and expenses owed to the
Trustee, the
Securities Administrator (including any amounts incurred by the
Securities
Administrator in connection with conducting the Auction), the
Master Servicer or
the Servicer and any unpaid or unreimbursed Servicing Fees,
Advances and
Servicing Advances, (C) any unreimbursed costs, penalties and/or
damages
incurred by the Trust Fund in connection with any violation
relating to any of
the Mortgage Loans of any predatory or abusive lending law and
(D) in the event
an Auction has been conducted, all reasonable fees and expenses
incurred by the
Securities Administrator to conduct such Auction.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date
of
determination, all Certificates theretofore executed and
authenticated under
this Agreement except: (1) Certificates theretofore canceled by
the Securities
Administrator or delivered to the Securities Administrator for
cancellation; and
(2) Certificates in exchange for which or in lieu of which other
Certificates
have been executed by the Securities Administrator and delivered
by the
Securities Administrator pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a
Mortgage Loan
with a Stated Principal Balance greater than zero that was not
the subject of a
Principal Prepayment in full, and that did not become a
Liquidated Loan, prior
to the end of the related Due Period.
Overcollateralization Amount: As of any date of determination,
the excess
of (1) the Stated Principal Balance of the Mortgage Loans over
(2) the
Certificate Principal Balance of the Certificates (other than
the Class P
Certificates and the Class C Certificates).
-30-
<PAGE>
Ownership Interest: As to any Certificate, any ownership
interest in such
Certificate including any interest in such Certificate as the
Holder thereof and
any other interest therein, whether direct or indirect, legal or
beneficial.
Pass-Through Rate: With respect to the Class A Certificates, the
Class A
Pass-Through Rate; with respect to the Class M-1 Certificates,
the Class M-1
Pass-Through Rate; with respect to the Class M-2 Certificates,
the Class M-2
Pass-Through Rate; with respect to the Class M-3 Certificates,
the Class M-3
Pass-Through Rate; with respect to the Class B-1 Certificates,
the Class B-1
Pass-Through Rate; with respect to the Class B-2 Certificates,
the Class B-2
Pass-Through Rate; with respect to the Class B-3 Certificates,
the Class B-3
Pass-Through Rate; with respect to the Class B-4 Certificates,
the Class B-4
Pass-Through Rate; with respect to the Class B-5 Certificates,
the Class B-5
Pass-Through Rate; and with respect to the Class R Certificate,
the Class R
Pass-Through Rate.
Percentage Interest: With respect to:
(i) any Class, the percentage interest in the undivided
beneficial ownership interest evidenced by such Class which
shall be equal to
the Certificate Principal Balance of such Class divided by the
aggregate
Certificate Principal Balance of all Classes; and
(ii) any Certificate, the Percentage Interest evidenced
thereby
of the related Class shall equal the percentage obtained by
dividing the
Denomination of such Certificate by the aggregate of the
Denominations of all
Certificates of such Class; except that in the case of any Class
P Certificates,
the Percentage Interest with respect to such Certificate shown
on the face of
such Certificate.
Permitted Activities: The primary activities of the trust
created pursuant
to this Agreement which shall be:
(i) holding Mortgage Loans transferred from the Depositor
and
other assets of the Trust Fund, including any credit enhancement
and passive
derivative financial instruments that pertain to beneficial
interests issued or
sold to parties other than the Depositor, its Affiliates, or its
agents;
(ii) issuing Certificates and other interests in the assets
of
the Trust Fund;
(iii) receiving collections on the Mortgage Loans and making
payments on such Certificates and interests in accordance with
the terms of this
Agreement; and
(iv) engaging in other activities that are necessary or
incidental to accomplish these limited purposes, which
activities cannot be
contrary to the status of the Trust Fund as a qualified special
purpose entity
under existing accounting literature.
-31-
<PAGE>
Permitted Investments: At any time, any one or more of the
following
obligations and securities:
(i) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and
credit of the United
States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving
the highest
long-term debt rating of each Rating Agency rating the
Certificates;
(iii) commercial or finance company paper, other than
commercial
or finance company paper issued by the Depositor, the Securities
Administrator
or any of its Affiliates, which is then receiving the highest
commercial or
finance company paper rating of each such Rating Agency;
(iv) certificates of deposit, demand or time deposits, or
bankers' acceptances (other than banker's acceptances issued by
the Securities
Administrator or any of its Affiliates) issued by any depository
institution or
trust company incorporated under the laws of the United States
or of any state
thereof and subject to supervision and examination by federal
and/or state
banking authorities, provided that the commercial paper and/or
long term
unsecured debt obligations of such depository institution or
trust company are
then rated one of the two highest long-term and the highest
short-term ratings
of each such Rating Agency for such securities;
(v) demand or time deposits or certificates of deposit issued
by
any bank or trust company or savings institution to the extent
that such
deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation rated in the two highest
long-term or the
highest short-term ratings of each Rating Agency containing, at
the time of the
issuance of such agreements, such terms and conditions as will
not result in the
downgrading or withdrawal of the rating then assigned to the
Certificates by any
such Rating Agency as evidenced by a letter from each Rating
Agency;
(vii) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered
into with a
depository institution or trust company (acting as principal)
described in
clause (v) above;
(viii) securities (other than stripped bonds, stripped coupons
or
instruments sold at a purchase price in excess of 115% of the
face amount
thereof) bearing interest or sold at a discount issued by any
corporation, other
than the Securities Administrator or any of its Affiliates,
incorporated under
the laws of the United States or any state thereof which, at the
time of such
investment, have one of the two highest long term ratings of
each Rating Agency;
-32-
<PAGE>
(ix) interests in any money market fund (including those
managed
or advised by the Securities Administrator, the Trustee or their
respective
affiliates) which at the date of acquisition of the interests in
such fund and
throughout the time such interests are held in such fund has the
highest
applicable long term rating by each Rating Agency rating such
fund; and
(x) short term investment funds sponsored by any trust company
or
national banking association incorporated under the laws of the
United States or
any state thereof, other than the Securities Administrator or
any of its
Affiliates, which on the date of acquisition has been rated by
each such Rating
Agency in their respective highest applicable rating
category;
provided, that no such instrument shall be a Permitted
Investment if such
instrument (i) evidences the right to receive interest only
payments with
respect to the obligations underlying such instrument, (ii) is
purchased at a
premium or above par or (iii) is purchased at a deep discount;
provided,
further, that no such instrument shall be a Permitted Investment
(A) if such
instrument evidences principal and interest payments derived
from obligations
underlying such instrument and the interest payments with
respect to such
instrument provide a yield to maturity of greater than 120% of
the yield to
maturity at par of such underlying obligations, or (B) if it may
be redeemed at
a price below the purchase price (the foregoing clause (B) not
to apply to
investments in units of money market funds pursuant to clause
(ix) above); and
provided, further, (I) that no amount beneficially owned by any
REMIC
(including, without limitation, any amounts collected by the
Servicer but not
yet deposited in the Collection Account) may be invested in
investments (other
than money market funds) treated as equity interests for Federal
income tax
purposes, unless the Servicer shall receive an Opinion of
Counsel, at the
expense of the party requesting that such investment be made, to
the effect that
such investment will not adversely affect the status of the any
REMIC provided
for herein as a REMIC under the Code or result in imposition of
a tax on the
Trust Fund or any REMIC provided for herein and (II) each such
investment must
be a "permitted investment" within the meaning of Section
860G(a)(5) of the
Code. Permitted Investments that are subject to prepayment or
call may not be
purchased at a price in excess of par.
Permitted Transferee: Any Person other than (i) the United
States, any
State or political subdivision thereof, or any agency or
instrumentality of any
of the foregoing, (ii) a foreign government, International
Organization or any
agency or instrumentality of either of the foregoing, (iii) an
organization
(except certain farmers' cooperatives described in section 521
of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including
the tax imposed
by section 511 of the Code on unrelated business taxable income)
on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with
respect to a
Certificate, (iv) rural electric and telephone cooperatives
described in section
1381(a)(2)(C) of the Code, and (v) a Person that is not a
citizen or resident of
the United States, a corporation or partnership (or other entity
treated as a
corporation or partnership for United States federal income tax
purposes)
created or organized in or under the laws of the United States
or any State
thereof or the District of Columbia or an estate whose income
from sources
without the United States is includable in gross income for
United States
federal income tax purposes regardless of its connection with
the conduct of a
trade or business within the United States, or a trust if a
court within the
United States is able to exercise primary supervision over the
administration of
the trust and one or more
-33-
<PAGE>
United States persons have authority to control all substantial
decisions of the
trust, unless, in the case of this clause (v), such Person has
furnished the
transferor and the Securities Administrator with a duly
completed Internal
Revenue Service Form W-8ECI or applicable successor form. The
terms "United
States," "State" and "International Organization" shall have the
meanings set
forth in section 7701 of the Code. A corporation will not be
treated as an
instrumentality of the United States or of any State thereof for
these purposes
if all of its activities are subject to tax and, with the
exception of the
Federal Home Loan Mortgage Corporation, a majority of its board
of directors is
not selected by such government unit.
Person: Any individual, corporation, partnership, limited
liability
company, joint venture, association, joint-stock company, trust,
unincorporated
organization or government, or any agency or political
subdivision thereof.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate
of the Stated Principal Balances, as of such Distribution Date,
of the Mortgage
Loans that were Outstanding Mortgage Loans as of such date.
Prepayment Assumption: A rate of prepayment, as described in the
Prospectus
Supplement in the definition of "Modeling Assumptions," relating
to the Offered
Certificates.
Prepayment Charges: Any prepayment premium or charge payable by
a Mortgagor
in connection with any Principal Prepayment on a Mortgage Loan
pursuant to the
terms of the related Mortgage Note or Mortgage, as
applicable.
Prepayment Interest Excess: With respect to any Servicer
Remittance Date,
for each Mortgage Loan that was the subject of a Principal
Prepayment in full
during the portion of the related Prepayment Period occurring
between the first
day of the calendar month in which such Servicer Remittance Date
occurs and the
last day of the related Prepayment Period, an amount equal to
interest (to the
extent received) at the applicable Net Mortgage Rate on the
amount of such
Principal Prepayment for the number of days commencing on the
first day of the
calendar month in which such Servicer Remittance Date occurs and
ending on the
date on which such Principal Prepayment is so applied.
Prepayment Interest Shortfall: With respect to any Distribution
Date, for
each Mortgage Loan that was the subject of a Principal
Prepayment in full (other
than a Principal Prepayment in full resulting from the purchase
of a Mortgage
Loan pursuant to Section 2.02, 2.03 or 9.01 hereof and other
than a Principal
Prepayment in full on a Mortgage Loan received during the period
from and
including the first day to and including the 14th day of the
month of such
Distribution Date), the amount, if any, by which (i) one month's
interest at the
applicable Net Mortgage Rate on the Stated Principal Balance of
such Mortgage
Loan as of the preceding Distribution Date exceeds (ii) the
amount of interest
paid or collected in connection with such Principal
Prepayment.
Prepayment Period: As to any Distribution Date, the period
beginning with
the opening of business on the 15th day of the calendar month
preceding the
month in which such Distribution Date occurs (or in the case of
the first
Distribution Date, beginning with the opening
-34-
<PAGE>
of business on the Cut-off Date) and ending on the close of
business on the 14th
day of the month in which such Distribution Date occurs.
Principal Distribution Amount: With respect to each Distribution
Date, the
sum of (i) the Principal Funds for such Distribution Date and
(ii) any Extra
Principal Distribution Amount for such Distribution Date.
Principal Funds: With respect to the Mortgage Loans and any
Distribution
Date, the sum, without duplication, of (1) the scheduled
principal due during
the related Due Period and received before the related Servicer
Remittance Date
or advanced on or before the related Servicer Remittance Date,
(2) prepayments
collected in the related Prepayment Period, (3) the Stated
Principal Balance of
each Mortgage Loan that was purchased by the Depositor or the
Servicer during
the related Prepayment Period or, in the case of a purchase
pursuant to Section
9.01, on the Business Day prior to such Distribution Date, (4)
the amount, if
any, by which the aggregate unpaid principal balance of any
Replacement Mortgage
Loan is less than the aggregate unpaid principal of the related
Deleted Mortgage
Loans delivered by the Seller in connection with a substitution
of a Mortgage
Loan pursuant to Section 2.03(c), (5) all Liquidation Proceeds
collected during
the related Prepayment Period (to the extent such Liquidation
Proceeds related
to principal), (6) all Subsequent Recoveries received during the
related Due
Period and (7) all other collections and recoveries in respect
of principal
during the related Prepayment Period less (A) all
Non-Recoverable Advances
relating to principal with respect to the Mortgage Loans and (B)
other amounts
reimbursable to the Servicer, the Master Servicer, the
Securities Administrator
and the Trustee pursuant to this Agreement allocable to
principal.
Principal Prepayment: Any Mortgagor payment or other recovery of
(or
proceeds with respect to) principal on a Mortgage Loan
(including Mortgage Loans
purchased or repurchased under Sections 2.02, 2.03 and 9.01
hereof) that is
received or recovered in advance of its scheduled Due Date and
is not
accompanied by an amount as to interest representing scheduled
interest due on
any date or dates in any month or months subsequent to the month
of prepayment.
Partial Principal Prepayments shall be applied by the Servicer
in accordance
with the terms of the related Mortgage Note.
Prospectus Supplement: The Prospectus Supplement dated March 7,
2005
relating to the public offering of the Offered Certificates.
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan required to
be
repurchased by the Seller or the applicable Transferor pursuant
to Section 2.02
or 2.03 hereof, an amount equal to the sum of (i) 100% of the
unpaid principal
balance of the Mortgage Loan as of the date of such purchase
together with any
unreimbursed Servicing Advances, (ii) accrued interest thereon
at the applicable
Mortgage Rate from (a) the date through which interest was last
paid by the
Mortgagor to (b) the Due Date in the month in which the Purchase
Price is to be
distributed to Certificateholders and (iii) any unreimbursed
costs, penalties
and/or damages incurred by the Trust Fund in connection with any
violation
relating to such Mortgage Loan of any predatory or abusive
lending law.
-35-
<PAGE>
Rating Agency: Any of Fitch, DBRS or Moody's. If any such
organization or
its successor is no longer in existence, "Rating Agency" shall
be a nationally
recognized statistical rating organization, or other comparable
Person,
designated by the Depositor, notice of which designation shall
be given to the
Trustee. References herein to a given rating category of a
Rating Agency shall
mean such rating category without giving effect to any
modifiers.
Realized Loss: With respect to (1) a Liquidated Loan, the
amount, if any,
by which the Stated Principal Balance and accrued interest
thereon at the Net
Mortgage Rate exceeds the amount actually recovered by the
Servicer with respect
thereto (net of reimbursement of Advances and Servicing
Advances) at the time
such Mortgage Loan became a Liquidated Loan or (2) with respect
to a Mortgage
Loan which is not a Liquidated Loan, any amount of principal
that the Mortgagor
is no longer legally required to pay (except for the
extinguishment of debt that
results from the exercise of remedies due to default by the
Mortgagor).
Record Date: With respect to any Distribution Date, the close of
business
on the last Business Day of the month preceding the month in
which the
applicable Distribution Date occurs (or, in the case of the
first Distribution
Date, the Closing Date).
Reference Banks: Barclays Bank PLC, JPMorgan Chase Bank, N.A.,
Citibank,
N.A., Wells Fargo Bank, N.A. and NatWest, N.A.; provided that if
any of the
foregoing banks are not suitable to serve as a Reference Bank,
then any leading
banks selected by the Securities Administrator which are engaged
in transactions
in Eurodollar deposits in the international Eurocurrency market
(i) with an
established place of business in London, England, (ii) whose
quotations appear
on the Reuters Screen LIBO Page on the relevant Interest
Determination Date and
(iii) which have been designated as such by the Securities
Administrator.
Regular Certificate: Any one of the Class A, Class M, and Class
B
Certificates.
Regulation S: Regulation S promulgated under the Securities Act
or any
successor provision thereto, in each case as the same may be
amended from time
to time; and all references to any rule, section or subsection
of, or definition
or term contained in, Regulation S means such rule, section,
subsection,
definition or term, as the case may be, or any successor
thereto, in each case
as the same may be amended from time to time.
Regulation S Global Securities: The Book-Entry Regulation S
Global
Securities and the Definitive Regulation S Global
Securities.
Related Certificates: With respect to the Class LTA Interest,
the Class A
and Class R Certificates. With respect to the Class LTB-1
Interest, the Class
B-1 Certificates. With respect to the Class LTB-2 Interest, the
Class B-2
Certificates. With respect to the Class LTB-3 Interest, the
Class B-3
Certificates. With respect to the Class LTB-4 Interest, the
Class B-4
Certificates. With respect to the Class LTB-5 Interest, the
Class B-5
Certificates. With respect to the Class LTM-1 Interest, the
Class M-1
Certificates. With respect to the Class LTM-2 Interest, the
Class M-2
Certificates. With respect to the Class LTM-3 Interest, the
Class M-3
Certificates.
Relief Act: The Servicemembers Civil Relief Act or any similar
state or
local law.
-36-
<PAGE>
Relief Act Shortfall: With respect to any Distribution Date and
any
Mortgage Loan, any reduction in the amount of interest or
principal collectible
on such Mortgage Loan for the most recently ended calendar month
as a result of
the application of the Relief Act.
REMIC: A "real estate mortgage investment conduit" within the
meaning of
section 860D of the Code. References herein to "the REMICs" or
"a REMIC" shall
mean any of (or, as the context requires, all of) the Lower Tier
REMIC and the
Upper Tier REMIC.
REMIC Pass-Through Rate: The Pass-Through Rate for a Class of
Related
Certificates calculated by replacing "Available Funds Cap" in
such definition
with "Net Rate."
REMIC Provisions: Provisions of the federal income tax law
relating to real
estate mortgage investment conduits, which appear at sections
860A through 860G
of Subchapter M of Chapter 1 of the Code, and related
provisions, and proposed,
temporary and final regulations and published rulings, notices
and announcements
promulgated thereunder, as the foregoing may be in effect from
time to time as
well as provisions of applicable state laws.
REMIC Regular Interests: (i) any of the rights under any of
the
Certificates (other than the Class P Certificates, the Class R
Certificate and
the Class C Certificates) other than the rights in interest rate
cap contracts
described in Section 2.07 and (ii) the Uncertificated Class C
Interest.
Remittance Report: As defined in Section 4.04(j) hereof.
REO Property: A Mortgaged Property acquired by the Servicer
through
foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted
Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by the
Seller for a
Deleted Mortgage Loan, which must, on the date of such
substitution, as
confirmed in a Request for Release, substantially in the form of
Exhibit I (1)
have a Stated Principal Balance, after deduction of the
principal portion of the
Scheduled Payment due in the month of substitution, not in
excess of, and not
less than 90% of the Stated Principal Balance of the Deleted
Mortgage Loan; (2)
with respect to any Mortgage Loan, have a Mortgage Rate not less
than or no more
than 1% per annum higher than the Mortgage Rate of the Deleted
Mortgage Loan;
(3) have a similar or higher FICO score or credit grade than
that of the Deleted
Mortgage Loan; (4) have a Combined Loan-to-Value Ratio no higher
than that of
the Deleted Mortgage Loan; (5) have a remaining term to maturity
no greater than
(and not more than one year less than) that of the Deleted
Mortgage Loan; (6)
provide for a Prepayment Charge on terms substantially similar
to those of the
Prepayment Charge, if any, of the Deleted Mortgage Loan; (7)
have the same lien
priority as the Deleted Mortgage Loan; (8) constitute the same
occupancy type as
the Deleted Mortgage Loan; and (9) comply with each
representation and warranty
set forth in Section 2.03 hereof.
Request for Release: The Request for Release of Documents
submitted by the
Servicer to the Custodian, substantially in the form of Exhibit
I hereto.
Required Insurance Policy: With respect to any Mortgage Loan,
any insurance
policy that is required to be maintained from time to time under
this Agreement.
-37-
<PAGE>
Required Loss Percentage: For any Distribution Date, the
applicable
percentage for such Distribution Date set forth in the following
table:
<TABLE>
<CAPTION>
DISTRIBUTION DATE OCCURRING IN REQUIRED LOSS PERCENTAGE
------------------------------ ------------------------
<S> <C>
March 2008 - February 2009 5.00% with respect to March 2008,
plus an
additional 1/12th of 3.25% for each month
thereafter
March 2009 - February 2010 8.25% with respect to March 2009,
plus an
additional 1/12th of 2.00% for each month
thereafter
March 2010 - February 2011 10.25% with respect to March 2010,
plus
an additional 1/12th of 1.50% for each
month thereafter
March 2011 - February 2012 11.75% with respect to March 2011,
plus
an additional 1/12th of 0.75% for each
month thereafter
March 2012 - February 2013 12.50% with respect to March 2012,
plus
an additional 1/12th of 0.75% for each
month thereafter
</TABLE>
Required Percentage: As of any Distribution Date following a
Stepdown Date,
the quotient of (1) the excess of (A) the Stated Principal
Balances of the
Mortgage Loans as of such Distribution Date, over (B) the
Certificate Principal
Balance of the most senior Class of Certificates outstanding,
prior to giving
effect to distributions to be made on such Distribution Date and
(2) the Stated
Principal Balance of the Mortgage Loans as of such Distribution
Date.
Reserve Interest Rate: With respect to any Interest
Determination Date, the
rate per annum that the Securities Administrator determines to
be (1) the
arithmetic mean (rounded upwards if necessary to the nearest
whole multiple of
0.03125%) of the one-month United States dollar lending rates
which New York
City banks selected by the Securities Administrator are quoting
on the relevant
Interest Determination Date to the principal London offices of
leading banks in
the London interbank market or (2) in the event that the
Securities
Administrator can determine no such arithmetic mean, the lowest
one-month United
States dollar lending rate which New York City banks selected by
the Securities
Administrator are quoting on such Interest Determination Date to
leading
European banks.
Residual Interest: An interest in the Upper Tier REMIC that is
entitled to
all distributions of principal and interest on the Class R
Certificate other
than distributions in respect of the Class LTR Interest and
distributions to the
extent attributable to an interest rate in excess of the Net
Rate.
Responsible Officer: When used with respect to the Securities
Administrator
or the Servicer, any officer of the Securities Administrator or
the Servicer
with direct responsibility for the administration of this
Agreement and also
means any other officer to whom, with respect to a particular
matter, such
matter is referred because of such officer's knowledge of and
familiarity with
the particular subject. When used with respect to the Trustee,
any Managing
Director, any
-38-
<PAGE>
Director, Vice President, any Assistant Vice President, any
Associate, any
Assistant Secretary, or any other officer of the Trustee
customarily performing
functions similar to those performed by any of the above
designated officers who
at such time shall be officers to whom, with respect to a
particular matter, the
matter is referred because of the officer's knowledge of and
familiarity with
the particular subject and who has direct responsibility for the
administration
of this Agreement.
Reuters Screen LIBO Page: The display designated as page "LIBO"
on the
Reuters Monitor Money Rates Service (or such other page as may
replace such LIBO
page on that service for the purpose of displaying London
interbank offered
rates of major banks.
S&P: Standard & Poor's, a division of The McGraw-Hill
Companies, Inc., or
any successor in interest.
Sale Agreement: The Mortgage Loan Sale and Assignment Agreement
dated as of
February 1, 2005 between the Depositor and the Seller.
Scheduled Payment: The scheduled monthly payment on a Mortgage
Loan due on
any Due Date allocable to principal and/or interest on such
Mortgage Loan.
Section 302 Requirements: Any rules or regulations promulgated
pursuant to
the Sarbanes-Oxley Act of 2002 (as such may be amended from time
to time).
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Wells Fargo Bank, N.A., a national
banking
association, or any successor in interest.
Securities Administrator Fee: A fee paid monthly to the
Securities
Administrator from interest collected with respect to each
Mortgage Loan equal
to the product of (a) one-twelfth of the Securities
Administrator Fee Rate and
(b) the Stated Principal Balance of such Mortgage Loan.
Securities Administrator Fee Rate: 0.015% per annum for each
Mortgage Loan.
Seller: Merrill Lynch Mortgage Capital, Inc., a Delaware
corporation, or
its successors in interest.
Servicer: Wilshire Credit Corporation, a Nevada corporation, or
its
successor in interest.
Servicer Advance Date: As to any Distribution Date, the related
Servicer
Remittance Date.
Servicer Remittance Date: With respect to any Distribution Date,
the later
of two Business Days after the 15th day of the month in which
such Distribution
Date occurs and the 18th day (or if such day is not a Business
Day, the next
preceding Business Day) of the month in which such Distribution
Date occurs.
-39-
<PAGE>
Servicing Advances: All customary, reasonable and necessary "out
of pocket"
costs and expenses incurred in the performance by the Servicer
of its servicing
obligations hereunder, including, but not limited to, the cost
of (1) the
preservation, inspection, restoration and protection of a
Mortgaged Property,
including without limitation advances in respect of real estate
taxes and
assessments, (2) any collection, enforcement or judicial
proceedings, including
without limitation foreclosures, collections and liquidations,
(3) the
conservation, management, sale and liquidation of any REO
Property, (4)
executing and recording instruments of satisfaction, deeds of
reconveyance or
Assignments of Mortgage to the extent not otherwise recovered
from the related
Mortgages or payable under this Agreement, (5) correcting errors
of prior
servicers; costs and expenses charged to the Servicer by the
Trustee or the
Securities Administrator; tax tracking; title research; flood
certifications;
lender paid mortgage insurance, (6) obtaining or correcting any
legal
documentation required to be included in the Mortgage Files and
reasonably
necessary for the Servicer to perform its obligations under this
Agreement and
(7) compliance with the obligations under Sections 3.01 and
3.10.
Servicing Fee: As to each Mortgage Loan and any Distribution
Date, an
amount equal to the product of (x) the Servicing Fee Rate and
(y) the Stated
Principal Balance of such Mortgage Loan as of the preceding
Distribution Date
or, in the event of any payment of interest that accompanies a
Principal
Prepayment in full made by the Mortgagor, interest at the
Servicing Fee Rate on
the Stated Principal Balance of such Mortgage Loan as of the
preceding
Distribution Date for the period covered by such payment of
interest.
Servicing Fee Rate: 0.50% per annum.
Servicing Officer: Any officer of the Servicer involved in, or
responsible
for, the administration and servicing of the Mortgage Loans
whose name and
facsimile signature appear on a list of servicing officers
furnished to the
Master Servicer, the Securities Administrator and the Trustee by
the Servicer on
the Closing Date pursuant to this Agreement, as such lists may
from time to time
be amended.
Servicing Transfer Costs: In the event that the Servicer does
not reimburse
the Master Servicer or the Trustee under this Agreement, all
costs associated
with the transfer of servicing from the predecessor Servicer,
including, without
limitation, any costs or expenses associated with the
termination of the
predecessor Servicer, the appointment of a successor servicer,
the complete
transfer of all servicing data and the completion, correction or
manipulation of
such servicing data as may be required by the Master Servicer or
any successor
servicer to correct any errors or insufficiencies in the
servicing data or
otherwise to enable the Master Servicer or successor servicer to
service the
Mortgage Loans properly and effectively.
SFAS 140: Statement of Financial Accounting Standard No. 140,
Accounting
for Transfers and Servicing of Financial Assets and
Extinguishments of
Liabilities dated September 2000, published by the Financial
Accounting
Standards Board of the Financial Accounting Foundation.
Startup Day: As defined in Section 2.07 hereof.
-40-
<PAGE>
Stated Principal Balance: With respect to any Mortgage Loan or
related REO
Property (1) as of the Cut-off Date, the Cut-off Date Principal
Balance thereof,
and (2) as of any Distribution Date, such Cut-off Date Principal
Balance, minus
the sum of (A) the principal portion of the Scheduled Payments
(x) due with
respect to such Mortgage Loan during each Due Period ending
prior to such
Distribution Date and (y) that were received by the Servicer as
of the close of
business on the Determination Date related to such Distribution
Date or with
respect to which Advances were made on the Servicer Advance Date
prior to such
Distribution Date and (B) all Principal Prepayments with respect
to such
Mortgage Loan received on or prior to the last day of the
related Prepayment
Period, and all Liquidation Proceeds to the extent applied by
the Servicer as
recoveries of principal in accordance with Section 3.12 with
respect to such
Mortgage Loan, that were received by the Servicer as of the
close of business on
the last day of the related Due Period. Notwithstanding the
foregoing, the
Stated Principal Balance of a Liquidated Loan shall be deemed to
be zero.
Stepdown Date: The later to occur of (1) the Distribution Date
in March
2008 or (2) the first Distribution Date on which (A) the sum of
the Class A
Certificate Principal Balance and the Class R Certificate
Principal Balance
(reduced by the Principal Funds with respect to such
Distribution Date) is less
than or equal to (B) 23.30% of the Stated Principal Balances of
the Mortgage
Loans as of such Distribution Date.
Subordinated Certificates: The Class M and Class B
Certificates.
Subsequent Recovery: Any amount received on a Mortgage Loan (net
of amounts
reimbursed to the Servicer related to Liquidated Mortgage Loans)
subsequent to
such Mortgage Loan being determined to be a Liquidated Mortgage
Loan.
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to such
term pursuant
to Section 2.03(c).
Tax Matters Person: The Person designated as "tax matters
person" in the
manner provided under Treasury regulation Section 1.860F-4(d)
and Treasury
regulation Section 301.6231(a)(7)-1.
Transfer: Any direct or indirect transfer or sale of any
Ownership Interest
in a Certificate.
Transfer Agreement: Each document set out on Exhibit J hereto
pursuant to
which the Seller acquired any Mortgage Loan from the Transferor
of such Mortgage
Loan.
Transferor: Any originator of a Mortgage Loan.
Trigger Event: With respect to the Certificates on or after the
Stepdown
Date, a Distribution Date on which (1) the quotient of (A) the
aggregate Stated
Principal Balance of all Mortgage Loans which are 60 or more
days Delinquent
measured on a rolling three month basis (including, for the
purposes of this
calculation, Mortgage Loans in foreclosure and REO Properties)
and (B) the
Stated Principal Balance of the Mortgage Loans as of the last
day of the
-41-
<PAGE>
preceding calendar month, equals or exceeds the product of (i)
8.00% and (ii)
Required Percentage or (2) the quotient (expressed as a
percentage) of (A) the
aggregate Realized Losses incurred from the Cut-off Date through
the last day of
the calendar month preceding such Distribution Date and (B) the
aggregate
principal balance of the Mortgage Loans as of the Cut-off Date
exceeds the
Required Loss Percentage.
Trust Fund: The corpus of the trust (the "Merrill Lynch Mortgage
Investors
Trust, Series 2005-SL1") created hereunder consisting of (i) the
Mortgage Loans
and all interest and principal received on or with respect
thereto on and after
the Cut-off Date to the extent not applied in computing the
Cut-off Date
Principal Balance thereof, exclusive of interest not required to
be deposited in
the Collection Account; (ii) the Collection Account and the
Certificate Account
and all amounts deposited therein pursuant to the applicable
provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has
been acquired by
foreclosure, deed in lieu of foreclosure or otherwise; (iv) the
mortgagee's
rights under the Insurance Policies with respect to the Mortgage
Loans; and (v)
all proceeds of the conversion, voluntary or involuntary, of any
of the
foregoing into cash or other liquid property.
Trustee: Deutsche Bank National Trust Company, a national
banking
association, not in its individual capacity, but solely in its
capacity as
trustee for the benefit of the Certificateholders under this
Agreement, and any
successor thereto, and any corporation or national banking
association resulting
from or surviving any consolidation or merger to which it or its
successors may
be a party and any successor trustee as may from time to time be
serving as
successor trustee hereunder.
Trustee Fee: The fee payable to the Trustee by the Securities
Administrator
pursuant to a separate agreement.
Uncertificated Class C Interest: An uncertificated interest
having (i) the
same rights to payments as the Class C Certificates, and (ii)
the rights to the
payments treated as distributed to the Class C Certificates
under Section
2.07(d), provided, however, that such interest shall have no
obligation to make
any payments treated as paid by the Class C Certificates
pursuant to interest
rate cap agreements under Section 2.07(d).
United States Person: (i) A citizen or resident of the United
States, (ii)
a corporation, partnership or other entity treated as a
corporation or
partnership for federal income tax purposes organized in or
under the laws of
the United States or any state thereof or the District of
Columbia (unless, in
the case of a partnership, Treasury regulations provide
otherwise), (iii) an
estate the income of which is includible in gross income for
United States tax
purposes regardless of its source or (iv) a trust if a court
within the United
States is able to exercise primary supervision over the
administration of the
trust and one or more United States persons have authority to
control all
substantial decisions of the trust. Notwithstanding the
preceding sentence, to
the extent provided in Treasury regulations, certain trusts in
existence on
August 20, 1996, and treated as United States persons prior to
such date, that
elect to continue to be treated as United States persons will
also be United
States Persons.
Unpaid Realized Loss Amount: The Class M-1 Unpaid Realized Loss
Amount,
Class M-2 Unpaid Realized Loss Amount, Class M-3 Unpaid Realized
Loss Amount,
Class B-1 Unpaid
-42-
<PAGE>
Realized Loss Amount, Class B-2 Unpaid Realized Loss Amount,
Class B-3 Unpaid
Realized Loss Amount, Class B-4 Realized Loss Amount, Class B-5
Realized Loss
Amount and Class C Unpaid Realized Loss Amount,
collectively.
Upper Tier REMIC: As described in the Preliminary Statement and
Section
2.07.
USAP Report: A report in compliance with the Uniform Single
Attestation
Program for Mortgage Bankers delivered in accordance with
Section 3.18.
Voting Rights: The portion of the voting rights of all the
Certificates
that is allocated to any of the Certificates for purposes of the
voting
provisions hereunder. Voting Rights allocated to each Class of
Certificates
shall be allocated as follows: (1) 98% to the Class A, Class
M-1, Class M-2,
Class M-3, Class R, Class B-1, Class B-2, Class B-3, Class B-4
and Class B-5
Certificates, with the allocation among such Certificates to be
in proportion to
the Class Certificate Principal Balance of each Class relative
to the Class
Certificate Principal Balance of all other Classes and (2) each
Class of the
Class C and Class P will be allocated 1% of the Voting Rights
Certificates.
Voting Rights will be allocated among the Certificates of each
such Class in
accordance with their respective Percentage Interests.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery
hereof, does
hereby sell, transfer, assign, set over and convey to the
Trustee without
recourse all the right, title and interest of the Depositor in
and to the assets
of the Trust Fund. Such assignment includes all interest and
principal received
on or with respect to the Mortgage Loans on or after the Cut-off
Date (other
than Scheduled Payments due on the Mortgage Loans on or before
the Cut-off
Date).
It is agreed and understood by the Depositor, the Master
Servicer, the
Servicer, the Securities Administrator and the Trustee that it
is not intended
that any Mortgage Loan be included in the Trust that is, without
limitation,
either (i) a "High-Cost Home Loan" as defined in the New Jersey
Home Ownership
Act effective November 27, 2003; (ii) a "High-Cost Home Loan" as
defined in the
New Mexico Home Loan Protection Act effective January 1, 2004;
(iii) a
"High-Cost Home Mortgage Loan" as defined in the Massachusetts
Predatory Home
Loan Practices Act effective November 7, 2004; (iv) a "High-Cost
Home Loan" as
defined by the Indiana High Cost Home Loan Law effective January
1, 2005 or (v)
a "High-Cost Home Loan" as defined by the Illinois High Risk
Home Loan Act
effective January 1, 2004.
The Master Servicer is hereby appointed as the initial
Custodian. The
Master Servicer in its capacity as Custodian shall be entitled
to all the
rights, benefits and protections afforded the Master Servicer
under this
Agreement, including without limitation its rights pursuant to
Section 6.03.
-43-
<PAGE>
In connection with such assignment, the Depositor does hereby
deliver to,
and deposit with, the Custodian, the following documents or
instruments with
respect to each Mortgage Loan:
(A) The Original Mortgage Note endorsed in blank or, "Pay to the
order
of Deutsche Bank National Trust Company, as trustee, without
recourse"
together with all riders thereto. The Mortgage Note shall
include all
intervening endorsements showing a complete chain of the title
from the
Transferor to [_____________________].
(B) Except as provided below and for each Mortgage Loan that is
not a
MERS Loan, the original recorded Mortgage together with all
riders thereto,
with evidence of recording thereon, or, if the original Mortgage
has not
yet been returned from the recording office, a copy of the
original
Mortgage together with all riders thereto certified to be a true
copy of
the original of the Mortgage that has been delivered for
recording in the
appropriate recording office of the jurisdiction in which the
Mortgaged
Property is located and in the case of each MERS Loan, the
original
Mortgage together with all riders thereto, noting the presence
of the MIN
of the Loan and either language indicating that the Mortgage
Loan is a MOM
Loan or if the Mortgage Loan was not a MOM Loan at origination,
the
original Mortgage and the assignment thereof to MERS, with
evidence of
recording indicated thereon, or a copy of the Mortgage certified
by the
public recording office in which such Mortgage has been
recorded.
(C) In the case of each Mortgage Loan that is not a MERS Loan,
the
original Assignment of each Mortgage in blank or, to "Deutsche
Bank
National Trust Company, as trustee."
(D) The original policy of title insurance (or a preliminary
title
report, commitment or binder if the original title insurance
policy has not
been received from the title insurance company).
(E) Originals of any intervening assignments of the Mortgage,
with
evidence of recording thereon or, if the original intervening
assignment
has not yet been returned from the recording office, a copy of
such
assignment certified to be a true copy of the original of the
assignment
which has been sent for recording in the appropriate
jurisdiction in which
the Mortgaged Property is located.
(F) Originals of all assumption and modification agreements, if
any.
(G) If in connection with any Mortgage Loan, the Depositor
cannot
deliver the Mortgage, Assignments of Mortgage or assumption,
consolidation
or modification, as the case may be, with evidence of recording
thereon, if
applicable, concurrently with the execution and delivery of this
Agreement
solely because of a delay caused by the public recording office
where such
Mortgage, Assignments of Mortgage or assumption, consolidation
or
modification, as the case may be, has been delivered for
recordation, the
Depositor shall deliver or cause to be delivered to the Trustee
written
notice stating that such Mortgage or assumption, consolidation
or
modification, as the case may be, has been delivered to the
appropriate
public recording office for recordation. Thereafter, the
-44-
<PAGE>
Depositor shall deliver or cause to be delivered to the Trustee
such
Mortgage, Assignments of Mortgage or assumption, consolidation
or
modification, as the case may be, with evidence of recording
indicated
thereon, if applicable, upon receipt thereof from the public
recording
office. To the extent any required endorsement is not contained
on a
Mortgage Note or an Assignment of Mortgage, the Depositor shall
make or
cause to be made such endorsement.
(H) With respect to any Mortgage Loan, none of the Depositor,
the
Master Servicer, the Servicer, the Securities Administrator or
the Trustee
shall be obligated to cause to be recorded the Assignment of
Mortgage
referred to in this Section 2.01. In the event an Assignment of
Mortgage is
not recorded, the Master Servicer or the Servicer, as
applicable, shall
have no liability for its failure to receive and act on notices
related to
such Assignment of Mortgage.
The ownership of each Mortgage Note, the Mortgage and the
contents of the
related Mortgage File is vested in the Trustee on behalf of
the
Certificateholders. None of the Depositor, the Master Servicer,
the Servicer or
the Securities Administrator shall take any action inconsistent
with such
ownership and shall not claim any ownership interest therein.
The Depositor, the
Master Servicer, the Servicer and the Securities Administrator
shall respond to
any third party inquiries with respect to ownership of the
Mortgage Loans by
stating that such ownership is held by the Trustee on behalf of
the
Certificateholders. Mortgage documents relating to the Mortgage
Loans not
delivered to the Custodian are and shall be held in trust by the
Servicer, for
the benefit of the Trustee as the owner thereof, and the
Servicer's possession
of the contents of each Mortgage File so retained is for the
sole purpose of
servicing the related Mortgage Loan, and such retention and
possession by the
Servicer, is in a custodial capacity only. The Depositor agrees
to take no
action inconsistent with the Trustee's ownership of the Mortgage
Loans, to
promptly indicate to all inquiring parties that the Mortgage
Loans have been
sold and to claim no ownership interest in the Mortgage
Loans.
It is the intention of this Agreement that the conveyance of
the
Depositor's right, title and interest in and to the Trust Fund
pursuant to this
Agreement shall constitute a purchase and sale and not a loan.
If a conveyance
of Mortgage Loans from the Seller to the Depositor is
characterized as a pledge
and not a sale, then the Depositor shall be deemed to have
transferred to the
Trustee all of the Depositor's right, title and interest in, to
and under the
obligations of the Seller deemed to be secured by said pledge;
and it is the
intention of this Agreement that the Depositor shall also be
deemed to have
granted to the Trustee a first priority security interest in all
of the
Depositor's right, title, and interest in, to and under the
obligations of the
Seller to the Depositor deemed to be secured by said pledge and
that the
Custodian shall be deemed to be an independent custodian for
purposes of
perfection of the security interest granted to the Trustee. If
the conveyance of
the Mortgage Loans from the Depositor to the Trustee is
characterized as a
pledge, it is the intention of this Agreement that this
Agreement shall
constitute a security agreement under applicable law, and that
the Depositor
shall be deemed to have granted to the Trustee a first priority
security
interest in all of the Depositor's right, title and interest in,
to and under
the Mortgage Loans, all payments of principal of or interest on
such Mortgage
Loans, all other rights relating to and payments made in respect
of the Trust
Fund, and all proceeds of any thereof. If the trust created by
this Agreement
terminates prior to the satisfaction of the claims of
-45-
<PAGE>
any Person in any Certificates, the security interest created
hereby shall
continue in full force and effect and the Trustee shall be
deemed to be the
collateral agent for the benefit of such Person.
In addition to the conveyance made in the first paragraph of
this Section
2.01, the Depositor does hereby convey, assign and set over to
the Trustee for
the benefit of the Certificateholders its rights and interests
under the Sale
Agreement, including the Depositor's right, title and interest
in the
representations and warranties contained in the Sale Agreement,
the rights in
the Transfer Agreements described therein, and the benefit of
the repurchase
obligations and the obligation of the Seller contained in the
Sale Agreement to
take, at the request of the Depositor or the Trustee, all action
on its part
which is reasonably necessary to ensure the enforceability of a
Mortgage Loan.
The Trustee hereby accepts such assignment, and shall be
entitled to exercise
all rights of the Depositor under the Sale Agreement as if, for
such purpose, it
were the Depositor. The foregoing sale, transfer, assignment,
set-over, deposit
and conveyance does not and is not intended to result in
creation or assumption
by the Trustee of any obligation of the Depositor, the Seller,
or any other
Person in connection with the Mortgage Loans or any other
agreement or
instrument relating thereto.
SECTION 2.02. Acceptance by the Trustee of the Mortgage
Loans.
Except as set forth in the exception report delivered
contemporaneously
herewith (the "Exception Report"), the Custodian acknowledges
receipt of the
Mortgage Note for each Mortgage Loan and delivery of a Mortgage
File (but does
not acknowledge receipt of all documents required to be included
in such
Mortgage File) with respect to each Mortgage Loan and declares
that it holds and
will hold such documents and any other documents constituting a
part of the
Mortgage Files delivered to it in trust for the use and benefit
of all present
and future Certificateholders. The Depositor will cause the
Seller to repurchase
any Mortgage Loan to which a material exception was taken in the
Exception
Report unless such exception is cured to the satisfaction of the
Trustee within
45 Business Days of the Closing Date.
The Custodian agrees, for the benefit of Certificateholders, to
review each
Mortgage File delivered to it within 60 days after the Closing
Date to ascertain
and to certify, within 70 days of the Closing Date, to the
Depositor, the Master
Servicer and the Servicer that all documents required by Section
2.01 (A)-(B),
(C) (if applicable), and (D)-(E), and the documents if actually
received by it,
under Section 2.01(F), have been executed and received, and that
such documents
relate to the Mortgage Loans identified in Exhibit B-1 that have
been conveyed
to it. The Custodian shall have no obligation to verify whether
the documents
under Section 2.01(F) exist. If the Custodian finds any document
or documents
constituting a part of a Mortgage File to be missing or
defective (that is,
mutilated, damaged, defaced or unexecuted) in any material
respect, the
Custodian shall promptly (and in any event within no more than
five Business
Days) after such finding so notify the Trustee, the Master
Servicer, the
Servicer, the Seller and the Depositor. In addition, the
Custodian shall also
notify the Trustee, the Master Servicer, the Servicer, the
Seller and the
Depositor if the original Mortgage with evidence of recording
thereon with
respect to a Mortgage Loan is not received within 70 days of the
Closing Date;
if it has not been received because of a delay caused by the
public recording
office where such Mortgage has been delivered for recordation,
the Depositor
shall deliver or cause to be delivered to the Custodian and the
Trustee written
notice stating that such Mortgage has been delivered to the
appropriate public
recording office for recordation and thereafter the Depositor
shall deliver
-46-
<PAGE>
or cause to be delivered such Mortgage with evidence of
recording thereon upon
receipt thereof from the public recording office. The Trustee
shall request that
the Seller correct or cure such omission, defect or other
irregularity, or
substitute a Mortgage Loan pursuant to the provisions of Section
2.03(c), within
90 days from the date the Seller was notified of such omission
or defect and, if
the Seller does not correct or cure such omission or defect
within such period,
that the Seller purchase such Mortgage Loan from the Trust Fund
within 90 days
from the date the Trustee notified the Seller of such omission,
defect or other
irregularity at the Purchase Price of such Mortgage Loan. The
Purchase Price for
any Mortgage Loan purchased pursuant to this Section 2.02 shall
be paid to the
Servicer and deposited by the Servicer in the Certificate
Account or Collection
Account, as appropriate, promptly upon receipt, and the
Custodian, upon receipt
of a Request for Release, shall promptly release to the Seller
the related
Mortgage File and the Trustee shall execute and deliver such
instruments of
transfer or assignment, without recourse, as shall be requested
by the Seller
and necessary to vest in the Seller or its designee, as the case
may be, any
Mortgage Loan released pursuant hereto, and the Trustee and the
Custodian shall
have no further responsibility with regard to such Mortgage
Loan. It is
understood and agreed that the obligation of the Seller to
purchase, cure or
substitute any Mortgage Loan as to which a material defect in or
omission of a
constituent document exists shall constitute the sole remedy
respecting such
defect or omission available to the Trustee on behalf of
Certificateholders. The
preceding sentence shall not, however, limit any remedies
available to the
Certificateholders, the Depositor or the Trustee pursuant to the
Sale Agreement,
Transfer Agreement or any Bring Down Letter. The Trustee and the
Custodian shall
be under no duty or obligation to inspect, review and examine
such documents,
instruments, certificates or other papers to determine that they
are genuine,
enforceable, recordable, duly authorized, sufficient, legal,
valid or
appropriate to the represented purpose, or that they have
actually been
recorded, or that they are other than what they purport to be on
their face. The
Servicer, the Master Servicer, the Securities Administrator, the
Custodian and
the Trustee shall keep confidential the name of each Mortgagor
except as
required by this Agreement and the Servicer, the Master
Servicer, the Securities
Administrator, the Custodian and the Trustee shall not solicit
any such
Mortgagor for the purpose of refinancing the related Mortgage
Loan;
notwithstanding anything herein to the contrary, the foregoing
shall not be
construed to prohibit (i) disclosure of any and all information
that is or
becomes publicly known, or information obtained by the Trustee,
the Servicer,
the Master Servicer, the Securities Administrator or the
Custodian from sources
other than the other parties hereto, (ii) disclosure of any and
all information
(A) if required to do so by any applicable law, rule or
regulation, (B) to any
government agency or regulatory body having or claiming
authority to regulate or
oversee any aspects of the business of the Trustee, the
Servicer, the Master
Servicer, the Securities Administrator or the Custodian or that
of any
affiliate, (C) pursuant to any subpoena, civil investigation
demand or similar
demand or request of any court, regulatory authority, arbitrator
or arbitration
to which the Trustee, the Servicer, the Master Servicer, the
Securities
Administrator or the Custodian or any affiliate or an officer,
director,
employer or shareholder thereof is a party or (D) to any
affiliate, independent
or internal auditor, agent, employee or attorney of the Trustee,
the Servicer,
the Master Servicer, the Securities Administrator or the
Custodian having a need
to know the same, provided that the Trustee, the Servicer, the
Master Servicer,
the Securities Administrator or the Custodian, as applicable,
advises such
recipient of the confidential nature of the information being
disclosed, or
(iii) any other disclosure authorized by the Depositor.
-47-
<PAGE>
Within 70 days of the Closing Date, the Custodian shall deliver
to the
Depositor, the Master Servicer and the Servicer the Custodian
Certification,
substantially in the form of Exhibit D attached hereto,
evidencing the
completeness of the Mortgage Files, with any exceptions noted
thereto.
SECTION 2.03. Representations, Warranties and Covenants of the
Depositor.
(a) The Depositor hereby represents and warrants to the
Servicer, the
Master Servicer, the Securities Administrator and the Trustee as
follows, as of
the date hereof:
(i) The Depositor is duly organized and is validly existing as
a
corporation in good standing under the laws of the State of
Delaware and has
full power and authority (corporate and other) necessary to own
or hold its
properties and to conduct its business as now conducted by it
and to enter into
and perform its obligations under this Agreement and the Sale
Agreement.
(ii) The Depositor has the full corporate power and authority
to
execute, deliver and perform, and to enter into and consummate
the transactions
contemplated by, this Agreement and the Sale Agreement and has
duly authorized,
by all necessary corporate action on its part, the execution,
delivery and
performance of this Agreement and the Sale Agreement; and this
Agreement and the
Sale Agreement, assuming the due authorization, execution and
delivery hereof by
the other parties hereto, constitutes a legal, valid and binding
obligation of
the Depositor, enforceable against the Depositor in accordance
with its terms,
subject, as to enforceability, to (i) bankruptcy, insolvency,
reorganization,
moratorium and other similar laws affecting creditors' rights
generally and (ii)
general principles of equity, regardless of whether enforcement
is sought in a
proceeding in equity or at law.
(iii) The execution and delivery of this Agreement and the
Sale
Agreement by the Depositor, the consummation of the transactions
contemplated by
this Agreement and the Sale Agreement, and the fulfillment of or
compliance with
the terms hereof are in the ordinary course of business of the
Depositor and
will not (A) result in a material breach of any term or
provision of the charter
or by-laws of the Depositor or (B) materially conflict with,
result in a
violation or acceleration of, or result in a material default
under, the terms
of any other material agreement or instrument to which the
Depositor is a party
or by which it may be bound or (C) constitute a material
violation of any
statute, order or regulation applicable to the Depositor of any
court,
regulatory body, administrative agency or governmental body
having jurisdiction
over the Depositor; and the Depositor is not in breach or
violation of any
material indenture or other material agreement or instrument, or
in violation of
any statute, order or regulation of any court, regulatory body,
administrative
agency or governmental body having jurisdiction over it which
breach or
violation may materially impair the Depositor's ability to
perform or meet any
of its obligations under this Agreement.
(iv) No litigation is pending, or, to the best of the
Depositor's
knowledge, threatened, against the Depositor that would
materially and adversely
affect the execution, delivery or enforceability of this
Agreement and the Sale
Agreement or the
-48-
<PAGE>
ability of the Depositor to perform its obligations under this
Agreement and the
Sale Agreement in accordance with the terms hereof.
(v) No consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution,
delivery and
performance by the Depositor of, or compliance by the Depositor
with, this
Agreement and the Sale Agreement or the consummation of the
transactions
contemplated hereby, or if any such consent, approval,
authorization or order is
required, the Depositor has obtained the same. The Depositor
hereby represents
and warrants to the Trustee with respect to each Mortgage Loan
as of the Closing
Date, and following the transfer of the Mortgage Loans to it by
the Seller, the
Depositor had good title to the Mortgage Loans and the Mortgage
Notes were
subject to no offsets, claims, liens, mortgage, pledge, charge,
security
interest, defenses or counterclaims.
(b) The representations and warranties of each Transferor with
respect
to the related Mortgage Loans in the applicable Transfer
Agreement, which have
been assigned to the Trustee hereunder, were made as of the date
specified in
the applicable Transfer Agreement and brought forward to the
Closing Date
pursuant to the related Bring Down Letter. The representations
and warranties of
each Transferor with respect to the Mortgage Loans contained in
the Bring Down
Letter were made as of the Closing Date. The representations and
warranties of
the Seller with respect to the Mortgage Loans contained in the
Sale Agreement
were made as of the Closing Date. To the extent that any fact,
condition or
event with respect to a Mortgage Loan constitutes a breach of
both (i) a
representation or warranty of the applicable Transferor under
the applicable
Transfer Agreement and (ii) a representation or warranty of the
Seller under the
Sale Agreement, the obligations of the Seller under the Sale
Agreement shall be
enforced against the Transferor or the Seller, as applicable, as
set forth in
the Sale Agreement. The Trustee acknowledges that the Seller
shall have no
obligation or liability with respect to any breach of a
representation or
warranty made by it with respect to the Mortgage Loans, except
as otherwise set
forth in the Sale Agreement, if the fact, condition or event
constituting such
breach also constitutes a breach of a representation or warranty
made by the
related Transferor in the related Transfer Agreement, without
regard to whether
the related Transferor fulfills its contractual obligations in
respect of such
representation or warranty. The Trustee also acknowledges that
the Seller shall
have no obligation or liability with respect to any breach of a
representation
or warranty made solely by the Transferors with respect to the
Mortgage Loans,
without regard to whether the related Transferor fulfills its
contractual
obligations in respect of such representation or warranty. The
Trustee further
acknowledges that the Depositor shall have no obligation or
liability with
respect to any breach of any representation or warranty with
respect to the
Mortgage Loans (except as set forth in Section 2.03(a)(v)) under
any
circumstances.
In addition to the representations and warranties of the
Transferors in the
Transfer Agreements that were brought forward to the Closing
Date pursuant to
the Bring Down Letter, with respect to each Mortgage Loan, each
Transferor made
certain additional covenants regarding such Mortgage Loan, as
set forth in the
related Transfer Agreement. With respect to any breach of such
additional
covenants that materially and adversely affects the interests of
the
Certificateholders in such Mortgage Loan, the Seller shall (1)
use reasonable
efforts to enforce such covenant against the related Transferor
and (2) if the
Seller successfully enforces any
-49-
<PAGE>
obligation of the related Transferor to repurchase such Mortgage
Loan, the
Seller shall repurchase such Mortgage Loan in accordance with
this Section 2.03.
If the Seller does not successfully enforce the obligation, if
any, of the
Transferor to repurchase a Mortgage Loan with respect to any
breach of any such
additional covenants, the Seller shall have no obligation or
right to repurchase
or cure such Mortgage Loan.
(c) Upon discovery by any of the Depositor, the Master Servicer,
the
Securities Administrator, the Servicer or the Trustee of a
breach of any of such
representations and warranties that adversely and materially
affects the value
of the related Mortgage Loan, Prepayment Charges or the
interests of the
Certificateholders, the party discovering such breach shall give
prompt written
notice to the other parties. Within 90 days of the discovery of
such breach of
any representation or warranty, the applicable Transferor or the
Seller, as
applicable, shall either (a) cure such breach in all material
respects, (b)
repurchase such Mortgage Loan or any property acquired in
respect thereof from
the Trustee at the Purchase Price or (c) within the two year
period following
the Closing Date, substitute a Replacement Mortgage Loan for the
affected
Mortgage Loan. In the event of discovery of a breach of any
representation and
warranty of any Transferor or the Seller, the Trustee's rights
shall be enforced
under the applicable Transfer Agreement and the Sale Agreement
for the benefit
of Certificateholders. If a breach of the representations and
warranties set
forth in the Transfer Agreement hereof exists solely due to the
unenforceability
of a Prepayment Charge, the Trustee or the other party having
notice thereof
shall notify the Servicer thereof and not seek to enforce the
repurchase remedy
provided for herein unless such Mortgage Loan is not current. In
the event of a
breach of the representations and warranties with respect to the
Mortgage Loans
set forth in a Transfer Agreement, the Trustee shall enforce the
right of the
Trust Fund to be indemnified for such breach of representation
and warranty. In
the event that such breach relates solely to the
unenforceability of a
Prepayment Charge, amounts received in respect of such indemnity
up to the
amount of such Prepayment Charge shall be distributed pursuant
to Section
4.04(b)(i). As provided in the Sale Agreement, if the Seller
substitutes for a
Mortgage Loan for which there is a breach of any representations
and warranties
in the related Transfer Agreement which adversely and materially
affects the
value of such Mortgage Loan and such substitute mortgage loan is
not a
Replacement Mortgage Loan, under the terms of the Sale
Agreement, the Seller
will, in exchange for such substitute Mortgage Loan, (i) provide
the applicable
Purchase Price for the affected Mortgage Loan or (ii) within two
years of the
Closing Date, substitute such affected Mortgage Loan with a
Replacement Mortgage
Loan. Any such substitution shall not be effected prior to the
additional
delivery to the Custodian of a Request for Release substantially
in the form of
Exhibit I and shall not be effected unless it is within two
years of the Startup
Day. The Seller indemnifies and holds the Trust Fund, the
Trustee, the
Depositor, the Master Servicer, the Securities Administrator,
the Servicer and
each Certificateholder harmless against any and all taxes,
claims, losses,
penalties, fines, forfeitures, reasonable legal fees and related
costs,
judgments, and any other costs, fees and expenses that the Trust
Fund, the
Trustee, the Depositor, the Master Servicer, the Securities
Administrator, the
Servicer and any Certificateholder may sustain in connection
with any actions of
the Seller relating to a repurchase of a Mortgage Loan other
than in compliance
with the terms of this Section 2.03 and the Sale Agreement, to
the extent that
any such action causes (i) any federal or state tax to be
imposed on the Trust
Fund or any REMIC provided for herein, including without
limitation, any federal
tax imposed on "prohibited transactions" under Section
860F(a)(1) of the Code or
on "contributions after the startup day" under Section
860G(d)(1) of the Code,
or (ii) any
-50-
<PAGE>
REMIC created hereunder to fail to qualify as a REMIC at any
time that any
Certificate is outstanding. In furtherance of the foregoing, if
the Transferor
or the Seller, as applicable, is not a member of MERS and
repurchases a Mortgage
Loan which is registered on the MERS System, the Transferor or
the Seller, as
applicable, at its own expense and without any right of
reimbursement, shall
cause MERS to execute and deliver an assignment of the Mortgage
in recordable
form to transfer the Mortgage from MERS to the Transferor or the
Seller, as
applicable, and shall cause such Mortgage to be removed from
registration on the
MERS System in accordance with MERS' rules and regulations.
With respect to any Mortgage Loan repurchased by the Seller
pursuant to the
Sale Agreement or by any Transferor pursuant to the applicable
Transfer
Agreement, the principal portion of the funds received by the
Securities
Administrator in respect of such repurchase of a Mortgage Loan
will be
considered a Principal Prepayment and shall be deposited in the
Certificate
Account pursuant to Section 3.05. Upon receipt by the Custodian
of notice from
the Securities Administrator of receipt by the Securities
Administrator of the
full amount of the Purchase Price for a Deleted Mortgage Loan,
and upon receipt
by the Custodian of the Mortgage File for a Replacement Mortgage
Loan
substituted for a Deleted Mortgage Loan, the Custodian shall
release and the
Trustee shall reassign to the Seller or the applicable
Transferor, as
applicable, the related Mortgage File for the Deleted Mortgage
Loan and the
Trustee shall execute and deliver such instruments of transfer
or assignment, in
each case without recourse, representation or warranty, as shall
be necessary to
vest in such party or its designee or assignee title to any
Deleted Mortgage
Loan released pursuant hereto, free and clear of all security
interests, liens
and other encumbrances created by this Agreement, which
instruments shall be
prepared by the Depositor, the Seller or the related Transferor,
and the
Trustee, the Securities Administrator and the Custodian shall
have no further
responsibility with respect to the Mortgage File relating to
such Deleted
Mortgage Loan.
With respect to each Replacement Mortgage Loan to be delivered
to the
Custodian pursuant to the terms of this Article II in exchange
for a Deleted
Mortgage Loan: (i) the applicable Transferor or the Seller, as
applicable, must
deliver to the Custodian the Mortgage File for the Replacement
Mortgage Loan
containing the documents set forth in Section 2.01 along with a
written
certification certifying as to the Mortgage Loan satisfying all
requirements
under the definition of Replacement Mortgage Loan and the
delivery of such
Mortgage File and containing the granting language set forth in
Section 2.01;
and (ii) the Depositor will be deemed to have made, with respect
to such
Replacement Mortgage Loan, each of the representations and
warranties made by it
with respect to the related Deleted Mortgage Loan. The Custodian
shall review
the Mortgage File with respect to each Replacement Mortgage Loan
and certify to
the Depositor that all documents required by Section
2.01(A)-(B), (C) (if
applicable), and (D)-(E) have been executed and received.
For any month in which the Seller substitutes one or more
Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the
Seller will determine
the amount (if any) by which the aggregate principal balance of
all such
Replacement Mortgage Loans as of the date of substitution and
the aggregate
Prepayment Charges with respect to such Replacement Mortgage
Loans is less than
the aggregate Stated Principal Balance (after application of the
principal
portion of the Scheduled Payment due in the month of
substitution) and aggregate
Prepayment Charges of all such Deleted Mortgage Loans. An amount
equal to the
aggregate of the
-51-
<PAGE>
deficiencies described in the preceding sentence (such amount,
the "Substitution
Adjustment Amount") plus an amount equal to any unreimbursed
costs, penalties
and/or damages incurred by the Trust Fund in connection with any
violation
relating to such Deleted Mortgage Loan of any predatory or
abusive lending law
shall be remitted by the Seller to the Securities Administrator
for deposit into
the Certificate Account by the Seller on the Determination Date
for the
Distribution Date relating to the Prepayment Period during which
the related
Mortgage Loan became required to be purchased or replaced
hereunder.
Notwithstanding any other provision of this Agreement, the right
to
substitute Mortgage Loans pursuant to this Article II shall be
subject to the
additional limitations that no substitution of a Replacement
Mortgage Loan for a
Deleted Mortgage Loan shall be made unless the Trustee and the
Securities
Administrator shall have received an Opinion of Counsel (at the
expense of the
party seeking to make the substitution) that, under current law,
such
substitution will not (A) affect adversely the status of any
REMIC established
hereunder as a REMIC, or of the related "regular interests" as
"regular
interests" in any such REMIC, or (B) cause any such REMIC to
engage in a
"prohibited transaction" or prohibited contribution pursuant to
the REMIC
Provisions.
The Depositor shall amend the Mortgage Loan Schedule to reflect
the removal
of such Deleted Mortgage Loan from the terms of this Agreement
and the
substitution of the Replacement Mortgage Loan or Replacement
Mortgage Loans.
Upon such substitution by the Seller, such Replacement Mortgage
Loan or
Replacement Mortgage Loans shall constitute part of the Mortgage
Pool and shall
be subject in all respects to the terms of this Agreement and
the Sale
Agreement, including all applicable representations and
warranties thereof
included in the Sale Agreement as of the date of
substitution.
(d) It is understood and agreed that the representations,
warranties
and indemnification (i) set forth in this Section 2.03, (ii) of
the Seller and
the Depositor set forth in the Sale Agreement and assigned to
the Trustee by the
Depositor hereunder and (iii) of each Transferor, assigned by
the Seller to the
Depositor pursuant to the Sale Agreement and assigned to the
Trustee by the
Depositor hereunder shall each survive delivery of the Mortgage
Files and the
Assignment of Mortgage of each Mortgage Loan to the Trustee and
shall continue
throughout the term of this Agreement.
(e) The Depositor shall deliver a copy of the Mortgage Loan
Schedule
to the Servicer on the Closing Date.
SECTION 2.04. Representations and Warranties of the Master
Servicer;
Representations and Warranties of the Servicer; Representations
and Warranties
of the Securities Administrator.
(a) The Master Servicer hereby represents and warrants to
the
Depositor, the Servicer and the Trustee as follows, as of the
date hereof:
(i) The Master Servicer is duly organized and is validly
existing
as a national banking association and is duly authorized and
qualified to
transact any and all business contemplated by this Agreement to
be conducted by
the Master Servicer.
-52-
<PAGE>
(ii) The Master Servicer has the power and authority to
master
service each Mortgage Loan, and to execute, deliver and perform,
and to enter
into and consummate, the transactions contemplated by this
Agreement and has
duly authorized by all necessary action on the part of the
Master Servicer the
execution, delivery and performance of this Agreement; and this
Agreement,
assuming the due authorization, execution and delivery hereof by
the other
parties hereto, constitutes a legal, valid and binding
obligation of the Master
Servicer, enforceable against the Master Servicer in accordance
with its terms,
except that (A) the enforceability hereof may be limited by
bankruptcy,
insolvency, moratorium, receivership and other similar laws
relating to
creditors' rights generally and (B) the remedy of specific
performance and
injunctive and other forms of equitable relief may be subject to
equitable
defenses and to the discretion of the court before which any
proceeding
hereunder may be brought.
(iii) The execution and delivery of this Agreement by the
Master
Servicer, the master servicing of the Mortgage Loans under this
Agreement, the
consummation of any other of the transactions contemplated by
this Agreement,
and the fulfillment of or compliance with the terms hereof are
in the ordinary
course of business of the Master Servicer and will not (A)
result in a material
breach of any term or provision of the charter or by-laws of the
Master Servicer
or (B) materially conflict with, result in a material breach,
violation or
acceleration of, or result in a material default under, the
terms of any other
material agreement or instrument to which the Master Servicer is
a party or by
which it may be bound, or (C) constitute a material violation of
any statute,
order or regulation applicable to the Master Servicer of any
court, regulatory
body, administrative agency or governmental body having
jurisdiction over the
Master Servicer; and the Master Servicer is not in breach or
violation of any
material indenture or other material agreement or instrument, or
in violation of
any statute, order or regulation of any court, regulatory body,
administrative
agency or governmental body having jurisdiction over it which
breach or
violation may materially impair the Master Servicer's ability to
perform or meet
any of its obligations under this Agreement.
(iv) The Master Servicer, or an affiliate thereof, is an
approved
servicer of mortgage loans for Fannie Mae and for Freddie
Mac.
(v) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened, against the Master Servicer
that would
materially and adversely affect the execution, delivery or
enforceability of
this Agreement or its performance of any of its other
obligations under this
Agreement in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution,
delivery and
performance by the Master Servicer of, or compliance by the
Master Servicer
with, this Agreement or the consummation of the transactions
contemplated
hereby, or if any such consent, approval, authorization or order
is required,
the Master Servicer has obtained the same.
(b) The Servicer hereby represents and warrants to the
Depositor, the
Master Servicer, the Securities Administrator and the Trustee as
follows, as of
the date hereof:
-53-
<PAGE>
(i) The Servicer is duly organized and is validly existing as
a
corporation in good standing under the laws of the State of
Nevada and is duly
authorized and qualified to transact any and all business
contemplated by this
Agreement to be conducted by the Servicer in any state in which
a Mortgaged
Property is located or is otherwise not required under
applicable law to effect
such qualification and, in any event, is in compliance with the
doing business
laws of any such state, to the extent necessary to ensure its
ability to enforce
each Mortgage Loan, to service the Mortgage Loans in accordance
with the terms
of this Agreement and to perform any of its other obligations
under this
Agreement in accordance with the terms hereof.
(ii) The Servicer has the corporate power and authority and
to
service each Mortgage Loan, and to execute, deliver and perform,
and to enter
into and consummate the transactions contemplated by this
Agreement and has duly
authorized by all necessary corporate action on the part of the
Servicer the
execution, delivery and performance of this Agreement; and this
Agreement,
assuming the due authorization, execution and delivery hereof by
the other
parties hereto, constitutes a legal, valid and binding
obligation of the
Servicer, enforceable against the Servicer in accordance with
its terms, except
that (a) the enforceability hereof may be limited by bankruptcy,
insolvency,
moratorium, receivership and other similar laws relating to
creditors' rights
generally and (b) the remedy of specific performance and
injunctive and other
forms of equitable relief may be subject to equitable defenses
and to the
discretion of the court before which any proceeding therefor may
be brought.
(iii) The execution and delivery of this Agreement by the
Servicer, the servicing of the Mortgage Loans under this
Agreement, the
consummation of any other of the transactions contemplated by
this Agreement,
and the fulfillment of or compliance with the terms hereof are
in the ordinary
course of business of the Servicer and will not (A) result in a
material breach
of any term or provision of the charter or by-laws of the
Servicer or (B)
materially conflict with, result in a material breach, violation
or acceleration
of, or result in a material default under, the terms of any
other material
agreement or instrument to which the Servicer is a party or by
which it may be
bound, or (C) constitute a material violation of any statute,
order or
regulation applicable to the Servicer of any court, regulatory
body,
administrative agency or governmental body having jurisdiction
over the
Servicer; and the Servicer is not in breach or violation of any
material
indenture or other material agreement or instrument, or in
violation of any
statute, order or regulation of any court, regulatory body,
administrative
agency or governmental body having jurisdiction over it which
breach or
violation may materially impair the Servicer's ability to
perform or meet any of
its obligations under this Agreement.
(iv) The Servicer is an approved servicer of mortgage loans
for
Fannie Mae and is an approved servicer of mortgage loans for
Freddie Mac.
(v) No litigation is pending or, to the best of the
Servicer's
knowledge, threatened, against the Servicer that would
materially and adversely
affect the execution, delivery or enforceability of this
Agreement or the
ability of the Servicer to service the Mortgage Loans or to
perform any of its
other obligations under this Agreement in accordance with the
terms hereof.
-54-
<PAGE>
(vi) No consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution,
delivery and
performance by the Servicer of, or compliance by the Servicer
with, this
Agreement or the consummation of the transactions contemplated
hereby, or if any
such consent, approval, authorization or order is required, the
Servicer has
obtained the same.
(vii) The Servicer has fully furnished and will fully
furnish
(for the period it serviced the Mortgage Loans), in accordance
with the Fair
Credit Reporting Act and its implementing regulations, accurate
and complete
information (e.g., favorable and unfavorable) on its borrower
credit files to
Equifax, Experian and Trans Union Credit Information Company on
a monthly basis.
(c) The Securities Administrator hereby represents and warrants
to the
Depositor, the Master Servicer, the Servicer and the Trustee as
of the date
hereof:
(i) The Securities Administrator is duly organized and is
validly
existing as a national banking association and is duly
authorized and qualified
to transact any and all business contemplated by this Agreement
to be conducted
by the Securities Administrator.
(ii) The Securities Administrator 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 the part of the Securities
Administrator the
execution, delivery and performance of this Agreement; and this
Agreement,
assuming the due authorization, execution and delivery hereof by
the other
parties hereto, constitutes a legal, valid and binding
obligation of the
Securities Administrator, enforceable against the Securities
Administrator in
accordance with its terms, except that (a) the enforceability
hereof may be
limited by bankruptcy, insolvency, moratorium, receivership and
other similar
laws relating to creditors' rights generally and (b) the remedy
of specific
performance and injunctive and other forms of equitable relief
may be subject to
equitable defenses and to the discretion of the court before
which any
proceeding hereunder may be brought.
(iii) The execution and delivery of this Agreement by the
Securities Administrator, the consummation of any other of the
transactions
contemplated by this Agreement, and the fulfillment of or
compliance with the
terms hereof are in the ordinary course of business of the
Securities
Administrator and will not (A) result in a material breach of
any term or
provision of the charter or by-laws of the Securities
Administrator or (B)
materially conflict with, result in a material breach, violation
or acceleration
of, or result in a material default under, the terms of any
other material
agreement or instrument to which the Securities Administrator is
a party or by
which it may be bound, or (C) constitute a material violation of
any statute,
order or regulation applicable to the Securities Administrator
of any court,
regulatory body, administrative agency or governmental body
having jurisdiction
over the Securities Administrator; and the Securities
Administrator is not in
breach or violation of any material indenture or other material
agreement or
instrument, or in violation of any statute, order or regulation
of any court,
regulatory body, administrative agency or governmental body
having jurisdiction
over it which breach or violation may materially impair the
Securities
Administrator's ability to perform or meet any of its
obligations under this
Agreement.
-55-
<PAGE>
(iv) No litigation is pending or, to the best of the
Securities
Administrator's knowledge, threatened, against the Securities
Administrator that
would materially and adversely affect the execution, delivery or
enforceability
of this Agreement or the ability of the Securities Administrator
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 the execution,
delivery and
performance by the Securities Administrator of, or compliance by
the Securities
Administrator with, this Agreement or the consummation of the
transactions
contemplated hereby, or if any such consent, approval,
authorization or order is
required, the Securities Administrator has obtained the
same.
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans
which are not
"Qualified Mortgages".
Upon discovery by the Depositor, the Master Servicer, the
Servicer, the
Securities Administrator or the Trustee that any Mortgage Loan
does not
constitute a "qualified mortgage" within the meaning of section
860G(a)(3) of
the Code, the party discovering such fact shall promptly (and in
any event
within 5 Business Days of discovery) give written notice thereof
to the other
parties. In connection therewith, the Depositor shall, at the
Depositor's
option, either (i) substitute, if the conditions in Section
2.03(c) with respect
to substitutions are satisfied, a Replacement Mortgage Loan for
the affected
Mortgage Loan, or (ii) repurchase the affected Mortgage Loan
within 90 days of
such discovery in the same manner as it would a Mortgage Loan
for a breach of
representation or warranty contained in Section 2.03. The
Trustee, upon the
written direction of the Depositor, shall reconvey to the
Depositor the Mortgage
Loan to be released pursuant hereto in the same manner, and on
the same terms
and conditions, as it would a Mortgage Loan repurchased for
breach of a
representation or warranty contained in Section 2.03.
SECTION 2.06. Authentication and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of
the Trust
Fund and, concurrently with such transfer and assignment, the
Securities
Administrator has caused to be authenticated and delivered to or
upon the order
of the Depositor, in exchange for the Mortgage Loans,
Certificates duly
authenticated by the Authenticating Agent in authorized
denominations evidencing
ownership of the entire Trust Fund. The Trustee agrees to hold
the Trust Fund
and exercise the rights referred to above for the benefit of all
present and
future Holders of the Certificates and to perform its duties set
forth in this
Agreement in accordance with the provisions hereof.
SECTION 2.07. REMIC Elections.
(a) The Depositor hereby instructs and authorizes the
Securities
Administrator to make an appropriate election to treat each of
the Upper Tier
REMIC and the Lower Tier REMIC as a REMIC. The Trustee, upon
written direction
of, and submission of such returns to the Trustee by the
Securities
Administrator, shall sign the returns providing for such
elections and such
other tax or information returns which are required to be signed
by the Trustee
under applicable law. This Agreement shall be construed so as to
carry out the
-56-
<PAGE>
intention of the parties that each of the Upper Tier REMIC and
the Lower Tier
REMIC be treated as a REMIC at all times prior to the date on
which the Trust
Fund is terminated.
(b) The Preliminary Statement sets forth the designations and
"latest
possible maturity date" for federal income tax purposes of all
interests created
hereby. The "Startup Day" for purposes of the REMIC Provisions
shall be the
Closing Date. Each REMIC's fiscal year shall be the calendar
year.
The Lower Tier REMIC shall consist of all of the assets of the
Trust
Fund (other than (i) amounts distributable to the Class P
Certificates pursuant
to Section 4.04(b)(i) hereof, (ii) the interests issued by the
Lower Tier REMIC
and (iii) the grantor trusts described in Section 2.07 hereof.
The Lower Tier
REMIC shall issue the Class LTA Interest, Class LTB-1 Interest,
Class LTB-2
Interest, Class LTB-3 Interest, Class LTB-4 Interest, Class
LTB-5 Interest,
Class LTM-1 Interest, Class LTM-2 Interest, Class LTM-3 Interest
and Class LTX
Interest which shall be designated as regular interests of such
REMIC and shall
issue the Class LTR Interest that shall be designated as the
sole class of
residual interest in the Lower Tier REMIC. Each of the Lower
Tier REMIC Regular
Interests shall have the characteristics set forth in its
definition.
The assets of the Upper Tier REMIC shall be the Lower Tier
REMIC
Regular Interests. The REMIC Regular Interests shall be
designated as the
regular interests in the Upper Tier REMIC and the Residual
Interest shall be
designated as the sole class of residual interest in the Upper
Tier REMIC. For
federal income tax purposes, the pass-through rate on each REMIC
Regular
Interest (other than the Uncertificated Class C Interest) and on
the sole class
of residual interest in the Upper Tier REMIC shall be subject to
a cap equal to
the Net Rate.
The beneficial ownership of the Class LTR Interest and the
Residual
Interest shall be represented by the Class R Certificate. The
Class LTR Interest
shall not have a principal balance or bear interest.
(c) The "tax matters person" with respect to each REMIC for
purposes
of the REMIC Provisions shall be the beneficial owner of the
Class R
Certificate; provided, however, that the Holder of a Class R
Certificate, by its
acceptance thereof, irrevocably appoints the Securities
Administrator as its
agent and attorney-in-fact to act as "tax matters person" with
respect to each
REMIC for purposes of the REMIC Provisions. If there is more
than one beneficial
owner of the Class R Certificate, the "tax matters person" shall
be the Person
with the greatest percentage interest in the Class R Certificate
and, if there
is more than one such Person, shall be determined under Treasury
regulation
Section 1.860F-4(d) and Treasury regulation Section
301.6231(a)(7)-1.
(d) It is intended that the rights of each Class of the Class A,
Class
R, Class M and Class B Certificates to receive payments in
respect of Excess
Interest shall be treated as a right in interest rate cap
contracts written by
the Class C Certificateholders in favor of the holders of each
Class of the
Class A, Class R, Class M and Class B Certificates and such
shall be accounted
for as property held separate and apart from the regular
interests in the Upper
Tier REMIC held by the holders of the Class A (other than the
Class R
Certificate), Class M and Class B Certificates and the residual
interest in the
Upper Tier REMIC held by the holder of the Class R Certificate.
For information
reporting requirements, the rights of the Class A, Class R,
-57-
<PAGE>
Class M and Class B Certificates to receive payments in respect
of Excess
Interest shall be assumed to have zero value or a de minimis
value. This
provision is intended to satisfy the requirements of Treasury
Regulations
Section 1.860G-2(i) for the treatment of property rights coupled
with REMIC
interests to be separately respected and shall be interpreted
consistently with
such regulation. On each Distribution Date, to the extent that
any of the Class
A, Class R, Class M and Class B Certificates receive payments of
Excess
Interest, such amounts will be treated as distributed by the
Upper-Tier REMIC to
the Class C Certificates pro rata in payment of the amounts
specified in Section
4.04(g) and then paid to the relevant Class of Certificates
pursuant to the
related interest rate cap agreement.
(e) The parties intend that the portion of the Trust Fund
consisting
of the Uncertificated Class C Interest and the obligation of the
holders of the
Class C Certificates to pay amounts of Excess Interest to the
holders of the
Class A, Class R, Class M and Class B Certificates shall be
treated as a
"grantor trust" under the Code, and the provisions hereof shall
be interpreted
consistently with this intention. In furtherance of such
intention, the
Securities Administrator shall (i) furnish or cause to be
furnished to the
holders of the Class C Certificates information regarding their
allocable share,
if any, of the income with respect to such grantor trust, (ii)
file or cause to
be filed with the Internal Revenue Service Form 1041 (together
with any
necessary attachments) and such other forms as may be applicable
and (iii)
comply with such information reporting obligations with respect
to payments from
such grantor trust to the holders of Class A, Class R, Class M,
Class B and
Class C Certificates as may be applicable under the Code.
(f) The parties intend that the portion of the Trust Fund
consisting
of the right to receive payments distributable to the Class P
Certificates
pursuant to Section 4.04(b)(i) hereof shall be treated as a
"grantor trust"
under the Code, and the provisions hereof shall be interpreted
consistently with
this intention. In furtherance of such intention, the Securities
Administrator
shall (i) furnish or cause to be furnished to the holders of the
Class P
Certificates information regarding their allocable share of the
income with
respect to such grantor trust and (ii) file or cause to be filed
with the
Internal Revenue Service Form 1041 (together with any necessary
attachments) and
such other forms as may be applicable.
(g) [RESERVED]
(h) All payments of principal and interest at the Net Mortgage
Rate on
each of the Mortgage Loans (other than payments distributable to
the Class P
Certificates pursuant to Section 4.04(b)(i) hereof) received
from the Mortgage
Loans shall be paid to the Lower Tier REMIC Regular Interests
until the
principal balance of all such interests have been reduced to
zero and any losses
allocated to such interests have been reimbursed. Any excess
amounts shall be
distributed to the Class LTR Interest. On each Distribution
Date, an amount
equal to 50% of the increase in the Overcollateralization Amount
shall be
payable as a reduction of the principal amounts of the Lower
Tier REMIC Marker
Classes (with such amount allocated among the Lower Tier REMIC
Marker Classes so
that each Lower Tier REMIC Marker Class will have its principal
reduced by an
amount equal to 50% of any increase in the Overcollateralization
Amount that
results in a reduction in the principal balance of its Related
Certificates) and
will be accrued and added to the principal balance of the Class
LTX Interest.
All payments of scheduled principal and prepayments of principal
on the Mortgage
Loans shall
-58-
<PAGE>
be allocated 50% to the Class LTX Interest and 50% to the Lower
Tier REMIC
Marker Classes (with principal payments allocated to each of the
Lower Tier
REMIC Marker Classes in an amount equal to 50% of the principal
amounts
distributed to the Related Certificates in reduction of their
principal
amounts). Notwithstanding the preceding sentence, an amount
equal to the
principal payments that result in a reduction in the
Overcollateralization
Amount shall be treated as payable entirely to the Class LTX
Interest. Realized
Losses that are allocated to the Certificates shall be applied
to the Lower Tier
REMIC Marker Classes and the Class LTX Interest so that after
all distributions
have been made on each Distribution Date (i) the principal
balance of each of
the Lower Tier REMIC Marker Classes is equal to 50% of the
principal balance of
the Related Certificates and (ii) the principal balance of the
Class LTX
Interest is equal to the sum of (x) 50% of the aggregate Stated
Principal
Balance of the Mortgage Loans and (y) 50% of the
Overcollateralization Amount.
Each Lower Tier REMIC Marker Class shall be entitled to receive
an amount equal
to 50% of all amounts distributed to the Related Certificates in
respect of
unreimbursed amounts of Realized Losses. The Class LTX Interest
shall be
entitled to receive all other amounts distributed to the
Certificates in respect
of unreimbursed amounts of Realized Losses.
If on any Distribution Date the Certificate Principal Balance of
any
Class of Certificates is increased pursuant to the last sentence
of the
definition of "Certificate Principal Balance", then there shall
be an equivalent
increase in the principal amounts of the Lower Tier REMIC
Regular Interests,
with such increase allocated (before the making of distributions
and the
allocation of losses on the Lower Tier REMIC Regular Interests
on such
Distribution Date) among the Lower Tier REMIC Regular Interests
so that (i) each
of the Lower Tier Marker Classes has a principal balance equal
to 50% of the
principal balance of the Related Certificates, (ii) the Class
LTX Interest has a
principal balance equal to the sum of (x) 50% of the aggregate
Stated Principal
Balance of the Mortgage Loans and (y) 50% of the
Overcollateralization Amount.
(i) In the event that any REMIC provided for herein fails to
qualify
as a REMIC, loses its status as a REMIC or incurs federal, state
or local taxes
as a result of a prohibited transaction or prohibited
contribution under the
REMIC Provisions due to the negligent performance by the
Servicer of its duties
and obligations set forth herein, the Servicer shall indemnify
the Trustee, the
Securities Administrator, the Master Servicer and the Trust Fund
against any and
all Losses resulting from such negligence; provided, however,
that the Servicer
shall not be liable for any such Losses attributable to the
action or inaction
of the Trustee, the Securities Administrator, the Master
Servicer, the Depositor
or the Holder of a Class R Certificate, as applicable, nor for
any such Losses
resulting from misinformation provided by the Holder of such
Class R Certificate
on which the Servicer has relied. The foregoing shall not be
deemed to limit or
restrict the rights and remedies of the Holder of such Class R
Certificate now
or hereafter existing at law or in equity. Notwithstanding the
foregoing,
however, in no event shall the Servicer have any liability (1)
for any action or
omission that is taken in accordance with and in compliance with
the express
terms of, or which is expressly permitted by the terms of, this
Agreement, (2)
for any Losses other than those arising out of a negligent
performance by the
Servicer of its duties and obligations set forth herein, and (3)
for any special
or consequential damages to Certificateholders (in addition to
payment of
principal and interest on the Certificates).
-59-
<PAGE>
(j) In the event that any REMIC provided for herein fails to
qualify
as a REMIC, loses its status as a REMIC or incurs federal, state
or local taxes
as a result of a prohibited transaction or prohibited
contribution under the
REMIC Provisions due to the negligent performance by the
Securities
Administrator of its duties and obligations set forth herein,
the Securities
Administrator shall indemnify the Servicer and the Trust Fund
against any and
all Losses resulting from such negligence; provided, however,
that the
Securities Administrator shall not be liable for any such Losses
attributable to
the action or inaction of the Servicer, the Master Servicer, the
Depositor, the
Trustee or the Holder of a Class R Certificate, as applicable,
nor for any such
Losses resulting from misinformation provided by the Holder of
such Class R
Certificate on which the Securities Administrator has relied.
The foregoing
shall not be deemed to limit or restrict the rights and remedies
of the Holder
of such Class R Certificate now or hereafter existing at law or
in equity.
Notwithstanding the foregoing, however, in no event shall the
Securities
Administrator have any liability (1) for any action or omission
that is taken in
accordance with and in compliance with the express terms of, or
which is
expressly permitted by the terms of, this Agreement, (2) for any
Losses other
than those arising out of a negligent performance by the
Securities
Administrator of its duties and obligations set forth herein,
and (3) for any
special or consequential damages to Certificateholders (in
addition to payment
of principal and interest on the Certificates).
SECTION 2.08. [RESERVED]
SECTION 2.09. Covenants of the Servicer.
The Servicer hereby covenants to each of the other parties to
this
Agreement as follows:
(a) the Servicer shall comply in the performance of its
obligations
under this Agreement with all reasonable rules and requirements
of the insurer
under each Required Insurance Policy;
(b) no written information, certificate of an officer,
statement
furnished in writing or written report delivered to the
Depositor, the Master
Servicer, the Securities Administrator or the Trustee, any
affiliate of the
Depositor, the Master Servicer, the Securities Administrator, or
the Trustee and
prepared by the Servicer pursuant to this Agreement will be
inaccurate in any
material respect, provided, however, that the Servicer shall not
be responsible
for inaccurate information provided to it by third parties.
SECTION 2.10. [RESERVED]
SECTION 2.11. Permitted Activities of the Trust. The Trust is
created for
the object and purpose of engaging in the Permitted
Activities.
SECTION 2.12. Qualifying Special Purpose Entity. For purposes of
SFAS 140,
the parties hereto intend that the Trust Fund shall be treated
as a "qualifying
special purpose entity" as such term is used in SFAS 140 and any
successor rule
thereto and its power and authority as stated in Section 2.11 of
this Agreement
shall be limited in accordance with paragraph 35 or SFAS
140.
-60-
<PAGE>
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01. Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Servicer shall
service and
administer the Mortgage Loans in accordance with Accepted
Servicing Practices.
In connection with such servicing and administration, the
Servicer shall have
full power and authority, acting alone and/or through
subservicers as provided
in Section 3.02 hereof, to do or cause to be done any and all
things that it may
deem necessary or desirable in connection with such servicing
and
administration, including but not limited to, the power and
authority, subject
to the terms hereof (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 (but only
in the manner provided in this Agreement), (iii) to collect any
Insurance
Proceeds and other Liquidation Proceeds and (iv) subject to
Section 3.12(a), to
effectuate foreclosure or other conversion of the ownership of
the Mortgaged
Property securing any Mortgage Loan; provided that, subject to
Section 6.03, the
Servicer shall not take any action that is inconsistent with or
prejudices the
interests of the Trust Fund or the Certificateholders in any
Mortgage Loan
serviced by it under this Agreement or the rights and interests
of the other
parties to this Agreement except as otherwise required by this
Agreement or by
law. Notwithstanding anything in this Agreement to the contrary,
the Servicer
shall not make or permit any modification, waiver or amendment
of any term of
any Mortgage Loan which would cause any of the REMICs provided
for herein to
fail to qualify as a REMIC or result in the imposition of any
tax under Section
860G(a) or 860G(d) of the Code. The Servicer shall represent and
protect the
interest of the Trust Fund in the same manner as it currently
protects its own
interest in mortgage loans in its own portfolio in any claim,
proceeding or
litigation regarding a Mortgage Loan, but in any case not in any
manner that is
a lesser standard than that provided in the first sentence of
this Section 3.01.
Without limiting the generality of the foregoing, the Servicer,
in its own name
or in the name of the Depositor and the Trustee, is hereby
authorized and
empowered by the Depositor and the Trustee, when the Servicer
believes it
appropriate in its reasonable judgment, to execute and deliver,
on behalf of the
Trustee, the Depositor, the Certificateholders or any of them,
any and all
instruments of satisfaction or cancellation, or of partial or
full release or
discharge, subordinations and all other comparable instruments,
with respect to
the Mortgage Loans, and with respect to the Mortgaged Properties
held for the
benefit of the Certificateholders. The Servicer shall prepare
and deliver to the
Depositor, the Securities Administrator and/or the Trustee such
documents
requiring execution and delivery by any or all of them as are
necessary or
appropriate to enable the Servicer to service and administer the
Mortgage Loans,
to the extent that the Servicer is not permitted to execute and
deliver such
documents pursuant to the preceding sentence. Upon receipt of
such documents,
the Depositor, the Securities Administrator and/or the Trustee
shall execute
such documents and deliver them to the Servicer. For purposes of
this Section
3.01, the Trustee hereby grants to the Servicer a limited power
of attorney to
execute and file any and all documents necessary to fulfill the
obligations of
the Servicer under this Section 3.01.
-61-
<PAGE>
The Servicer shall not be required to make any Servicing Advance
with
respect to a Mortgage Loan that is 150 days or more
delinquent.
The Servicer shall deliver a list of Servicing Officers to the
Master
Servicer and the Trustee by the Closing Date.
The Servicer will transmit full-file credit reporting data for
each
Mortgage Loan pursuant to Fannie Mae Guide Announcement 97-02
and that for each
Mortgage Loan, the Servicer agrees that it shall report one of
the following
statuses each month as follows: current, delinquent (30-, 60-,
90-days, etc.),
foreclosed or charged-off.
The Servicer further is authorized and empowered by th
| 
