<PAGE>
EXHIBIT 4.1
MERRILL LYNCH MORTGAGE INVESTORS, INC.
Depositor,
PHH MORTGAGE CORPORATION
Servicer,
and
WELLS FARGO BANK, N.A.
Trustee
---------------------------
POOLING AND SERVICING AGREEMENT
Dated as of May 1, 2005
---------------------------
MERRILL LYNCH MORTGAGE INVESTORS TRUST SERIES MLCC 2005-B
MORTGAGE PASS-THROUGH CERTIFICATES
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S>
<C>
<C>
ARTICLE I.
DEFINITIONS...........................................................6
Section
1.01.
Definitions.....................................................6
Section
1.02. Calculations
Respecting Mortgage Loans.........................36
ARTICLE II. DECLARATION OF TRUST;
ISSUANCE OF
CERTIFICATES......................36
Section
2.01. Creation and
Declaration of Trust Fund; Conveyance of
Mortgage
Loans.................................................36
Section
2.02. Acceptance of
Trust Fund by Trustee; Review of
Documentation for Trust
Fund...................................38
Section
2.03. Representations
and Warranties of the Depositor and the
Servicer.......................................................39
Section
2.04. Discovery of
Breach; Repurchase or Substitution of
Mortgage
Loans.................................................44
Section
2.05. Grant
Clause...................................................47
ARTICLE III. THE
CERTIFICATES.....................................................48
Section
3.01. The
Certificates...............................................48
Section
3.02.
Registration...................................................48
Section
3.03. Transfer and
Exchange of Certificates..........................49
Section
3.04. Cancellation of
Certificates...................................52
Section
3.05. Replacement of
Certificates....................................52
Section
3.06. Persons Deemed
Owners..........................................53
Section
3.07. Temporary
Certificates.........................................53
Section
3.08. Appointment of
Paying Agent....................................53
Section
3.09. Book-Entry
Certificates........................................54
ARTICLE IV. ADMINISTRATION OF THE
TRUST FUND.....................................55
Section
4.01. Custodial
Accounts; Distribution Account.......................55
Section
4.02. Reports to
Trustee and Certificateholders......................56
ARTICLE V. DISTRIBUTIONS TO
HOLDERS OF CERTIFICATES.............................59
Section
5.01. Distributions
Generally........................................59
Section
5.02. Distributions
from the Distribution Account....................59
Section
5.03. Allocation of
Losses...........................................63
Section
5.04.
Advances.......................................................63
ARTICLE VI. CONCERNING THE
TRUSTEE; EVENTS OF DEFAULT............................64
Section
6.01. Duties of
Trustee..............................................64
Section
6.02. Certain Matters
Affecting the Trustee..........................66
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Section
6.03. Trustee Not
Liable for Certificates............................67
Section
6.04. Trustee May Own
Certificates...................................68
Section
6.05. Eligibility
Requirements for Trustee...........................68
Section
6.06. Resignation and
Removal of Trustee.............................68
Section
6.07. Successor
Trustee..............................................69
Section
6.08. Merger or
Consolidation of Trustee.............................69
Section 6.09. Appointment of Co-Trustee,
Separate Trustee or Custodian.......70
Section
6.10. Authenticating
Agents..........................................71
Section
6.11. Indemnification
of Trustee.....................................72
Section
6.12. Fees and
Expenses of the Trustee...............................72
Section
6.13. Collection of
Monies...........................................73
Section
6.14. Events of
Default; Trustee To Act; Appointment of
Successor......................................................73
Section
6.15. Additional
Remedies of Trustee Upon Event of Default...........75
Section
6.16. Waiver of
Defaults.............................................75
Section
6.17. Notification to
Holders........................................75
Section
6.18. Directions by
Certificateholders and Duties of Trustee
During Event of
Default........................................76
Section 6.19.
Preparation of Tax
Returns and Other Reports...................76
Section
6.20. Annual
Certificate by Trustee..................................77
ARTICLE VII. PURCHASE OF MORTGAGE LOANS
AND TERMINATION OF THE TRUST FUND.........77
Section
7.01. Purchase of
Mortgage Loans; Termination of Trust Fund
Upon Purchase or Liquidation of All Mortgage
Loans.............77
Section
7.02. Procedure Upon
Termination of Trust Fund.......................78
Section
7.03. Additional Trust
Fund Termination Requirements.................79
ARTICLE VIII. RIGHTS OF
CERTIFICATEHOLDERS.........................................80
Section
8.01. Limitation on
Rights of Holders................................80
Section
8.02. Access to List
of Holders......................................80
Section
8.03. Acts of Holders
of Certificates................................81
ARTICLE IX. ADMINISTRATION AND
SERVICING OF THE MORTGAGE LOANS...................82
Section
9.01. Servicer to Act
as Servicer....................................82
Section
9.02. Title,
Management and Disposition of REO Property..............83
</TABLE>
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(continued)
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<C>
Section
9.03. Trustee and
Depositor's Right to Examine Servicer Records......84
Section
9.04. Legal
Proceedings Involving the Servicer and/or the
Mortgage
Loans.................................................85
Section
9.05. Material
Changes...............................................85
Section
9.06. Servicer Shall
Provide Information as Reasonably Required......86
Section
9.07. Servicer Not to
Resign.........................................86
Section
9.08. Custodial
Accounts and Escrow Accounts.........................86
Section
9.09. Assumption
Processing..........................................86
Section
9.10. Books and
Records..............................................87
Section
9.11. Annual Statement
as to Compliance..............................87
Section
9.12. Annual
Independent Certified Public Accountants' Servicing
Reports........................................................87
Section
9.13. Officer's
Certificate..........................................87
Section
9.14. Servicing
Compensation.........................................88
Section
9.15.
Indemnification................................................88
Section
9.16. Non
Solicitation...............................................89
Section
9.17. Successor to the
Servicer......................................89
Section
9.18. Statements to
the Trustee......................................90
Section
9.19. Merger or
Consolidation of the Servicer........................90
Section
9.20. Limitation on
Liability of the Servicer........................90
ARTICLE X. REMIC
ADMINISTRATION.................................................91
Section
10.01. REMIC
Administration...........................................91
Section
10.02. Prohibited Transactions and
Activities.........................93
Section
10.03. Indemnification with Respect to Prohibited Transactions
or
Loss of REMIC
Status...........................................94
Section
10.04. REO
Property...................................................94
ARTICLE XI. MISCELLANEOUS
PROVISIONS.............................................95
Section
11.01. Binding Nature of Agreement;
Assignment........................95
Section
11.02. Entire
Agreement...............................................95
Section 11.03.
Amendment......................................................95
Section
11.04. Voting
Rights..................................................96
Section
11.05. Provision of
Information.......................................96
Section
11.06. Governing
Law..................................................97
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Section
11.07.
Notices........................................................97
Section
11.08. Severability of
Provisions.....................................98
Section
11.09. Indulgences; No
Waivers........................................98
Section
11.10. Headings Not To Affect
Interpretation..........................98
Section
11.11. Benefits of
Agreement..........................................98
Section
11.12. Special Notices to the Rating
Agencies.........................98
Section
11.13.
[RESERVED].....................................................99
Section
11.14.
Counterparts...................................................99
Section
11.15. No
Petitions...................................................99
</TABLE>
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<PAGE>
This
POOLING AND SERVICING AGREEMENT, dated as of May 1, 2005 (the
"Agreement"), by and among MERRILL LYNCH
MORTGAGE INVESTORS, INC., a Delaware
corporation, as depositor (the
"Depositor"), PHH MORTGAGE CORPORATION, a New
Jersey corporation, as servicer (the
"Servicer") and WELLS FARGO BANK, N.A., as
Trustee (the "Trustee"), and acknowledged
by MERRILL LYNCH CREDIT CORPORATION a
Delaware corporation, as seller (the
"Seller"), for purposes of Section 2.04.
PRELIMINARY STATEMENT
The
Depositor has acquired the Mortgage Loans from the Seller and at
the
Closing Date is the owner of the Mortgage
Loans and the other property being
conveyed by the Depositor to the Trustee
hereunder for inclusion in the Trust
Fund. On the Closing Date, the Depositor
will acquire the Certificates from the
Trustee as consideration for the
Depositor's transfer to the Trust Fund of the
Mortgage Loans and the other property
constituting the Trust Fund. The Depositor
has duly authorized the execution and
delivery of this Agreement to provide for
the conveyance to the Trustee of the
Mortgage Loans and the other property
constituting the Trust Fund. All covenants
and agreements made by the Seller in
the Mortgage Loan Purchase and Sale
Agreement and in this Agreement and all
covenants and agreements made by the
Depositor, the Servicer 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. The Depositor, the Servicer
and the Trustee are entering into this
Agreement, and the Trustee is accepting the
Trust Fund created hereby, for good
and valuable consideration, the receipt and
sufficiency of which are hereby
acknowledged.
As
provided herein, the Trustee shall elect that the Trust Fund be
treated
for federal income tax purposes as
comprising three real estate mortgage
investment conduits (each a "REMIC" or, in
the alternative, "REMIC 1," "REMIC 2"
and the "Upper Tier REMIC," respectively)
in a tiered structure. The
Certificates, other than the Class A-R
Certificate, shall represent ownership of
regular interests in the Upper Tier REMIC.
For federal income tax purposes, in
addition to representing ownership of a
REMIC regular interest, (i) each of the
Class A-1 and Class A-2 Certificates
represents the right to receive payments in
respect of Basis Risk Shortfalls and Unpaid
Basis Risk Shortfalls as provided in
Section 5.02, and (ii) each of the Class
B-1, Class B-2 and Class B-3
Certificates represents the right to
receive payments in respect of Basis Risk
Shortfalls and Unpaid Basis Risk Shortfalls
as provided in Section 5.02. For
federal income tax purposes, (i) each Class
X-A Certificate will represent two
REMIC regular interests and the obligation
to make certain non-REMIC payments to
the holders of the Class A-1 and Class A-2
Certificates and (ii) each Class X-B
Certificate will represent three REMIC
regular interests and the obligation to
make certain non-REMIC payments to the
holders of the Class B-1, Class B-2 and
Class B-3 Certificates in respect of Basis
Risk Shortfalls and Unpaid Basis Risk
Shortfalls. The Class A-R Certificate
represents the sole class of residual
interest in each of REMIC 1, REMIC 2 and
the Upper Tier REMIC.
The Upper
Tier REMIC shall hold as its assets the several classes of
uncertificated REMIC 2 Regular Interests.
REMIC 2 shall hold as its assets the
several uncertificated classes of REMIC 1
Regular Interests. REMIC 1 shall hold
as its assets the property of the Trust
Fund other than the REMIC 1 Interests,
the REMIC 2 Interests and the interests in
the grantor trusts described herein.
Each Upper
Tier REMIC Regular Interest is hereby designated as a regular
interest in the Upper Tier REMIC for
purposes of the REMIC Provisions. Each
REMIC 2 Regular Interest is
1
<PAGE>
hereby designated as a regular interest in
REMIC 2 for purposes of the REMIC
provisions. Each REMIC 1 Regular Interest
is hereby designated as a regular
interest in REMIC 1 for purposes of the
REMIC Provisions.
The Class
LT1-R Interest is hereby designated as the sole class of
residual interest in REMIC 1 for purposes
of the REMIC Provisions. The Class
LT2-R Interest is hereby designated as the
sole class of residual interest in
REMIC 2 for purposes of the REMIC
provisions. The Class A-R Certificate, other
than the portion thereof representing the
right to receive payments in respect
of the Class LT1-R Interest or the Class
LT2-R Interest is hereby designated as
the sole class of residual interest in the
Upper Tier REMIC for purposes of the
REMIC provisions and will also represent
the Class LT1-R Interest and the Class
LT2-R Interest.
THE REMIC 1 INTERESTS
The following
table sets forth (or describes) the class designation,
interest rate, initial principal amount,
and related pool of Mortgage Loans for
each class of REMIC 1 Interests:
<TABLE>
<CAPTION>
Interest
Related Mortgage Pool
Class Designation Principal Amount
Rate or
Pools
----------------- ----------------
----
--------
<S>
<C>
<C>
<C>
LT11A
$120,526.5969
(2) Pool
1
LT11B
$3,544,777.5969
(3) Pool
1
LT12A
$49,489.2501
(2) Pool
2
LT12B
$1,455,279.2501
(4) Pool
2
LT1Z
$494,835,612.0060 (2) Pool
1 and Pool 2
LT1-R
(1)
(1)
N/A
</TABLE>
----------
(1) The Class LT1-R Interest
represents the sole class of residual interest in
REMIC 1
and has neither a principal amount nor an interest rate. The
Class
LT1-R
Interest shall be represented by the Class A-R Certificate.
(2) The Class LT11A Interest,
the Class LT12A Interest, and the Class LT1Z
Interest
shall have an interest rate for each Distribution Date (and the
related
Accrual Period) equal to the Net WAC.
(3) The Class LT11B Interest
shall have an interest rate for any Distribution
Date (and
the related Accrual Period) equal to the Pool 1 Net WAC.
(4) The Class LT12B Interest
shall have an interest rate for any Distribution
Date (and
the related Accrual Period) equal to the Pool 2 Net WAC.
On each
Distribution Date, the Trustee shall first pay or charge as an
expense of REMIC 1 all expenses of the
Trust for such Distribution Date.
Principal
distributions shall be deemed to be made on the REMIC 1
Interests first, so as to keep the
uncertificated principal balance of each
REMIC 1 Interest ending with the
designation "A" equal to 1% of the excess of
(x) the aggregate Principal Balance of the
Mortgage Loans in the related
Mortgage Pool over (y) the aggregate class
principal amounts of the Certificates
in the Certificate Group related to such
Mortgage Pool (except that if 1% of any
such excess is greater than the principal
amount of the corresponding REMIC 1
Interest ending with the designation "A",
the least amount of principal shall be
distributed to such REMIC 1 Interests such
that the REMIC 1 Subordinated Balance
Ratio is maintained); second, to each REMIC
1 Interest ending with the
designation "B" so as to keep the
uncertificated principal balance of each such
REMIC 1 Interest equal to 1% of the
aggregate Principal Balance of the Mortgage
Loans in the related
2
<PAGE>
Mortgage Pool and finally, all remaining
principal amounts shall be distributed
in respect of the Class LT1Z Interest.
Realized Losses with respect to principal
shall be allocated among the REMIC 1
Interests first, so as to keep the
uncertificated principal balance of each
REMIC 1 Interest ending with the
designation "A" equal to 1% of the excess
of (x) the aggregate Principal Balance
of the Mortgage Loans in the related
Mortgage Pool over (y) the aggregate class
principal amounts of the Certificates in
the Certificate Group related to such
Mortgage Pool (except that if 1% of any
such excess is greater than the
principal amount of the corresponding REMIC
1 Interest ending with the
designation "A", the least amount of losses
shall be allocated to such REMIC 1
Interests such that the REMIC 1
Subordinated Balance Ratio is maintained);
second, to each REMIC 1 Interest ending
with the designation "B" so as to keep
the uncertificated principal balance of
each such REMIC 1 Interest equal to 1%
of the aggregate Principal Balance of the
Mortgage Loans in the related Mortgage
Pool and finally, all remaining Realized
Losses with respect to principal shall
be distributed in respect of the Class LT1Z
Interest.
If on any
Distribution Date the Certificate Principal Amount of any Class
of Certificates is increased pursuant to
the penultimate sentence of the
definition of "Certificate Principal
Amount", then there shall be an equivalent
aggregate increase in the principal amounts
of the REMIC 1 Regular Interests,
with such increase allocated (before the
making of distributions and the
allocation of losses on the REMIC 1 Regular
Interests on such Distribution Date)
among the REMIC 1 Regular Interests as
follows: (i) first, to each REMIC 1
Interest ending with the designation "B" so
as to keep the uncertificated
principal balance of each such REMIC 1
Interest equal to 1% of the aggregate
Principal Balance of the Mortgage Loans in
the related Mortgage Pool, (ii)
second, to each REMIC 1 Regular Interest
ending with the designation "A", so
that the uncertificated principal balance
of each REMIC 1 Regular Interest
ending with the designation "A" is as close
as possible to (but does not exceed)
1% of the excess of (x) the aggregate
Principal Balance of the Mortgage Loans in
related Mortgage Pool over (y) the
aggregate class principal balance of the
Certificates in the Certificate Group
related to such Mortgage Pool; provided,
however, that (a) the REMIC 1 Subordinated
Balance Ratio is maintained and (b)
amounts allocated to any REMIC 1 Regular
Interest pursuant to this clause (ii)
shall not exceed the amount of any previous
realized losses allocated to such
REMIC 1 Regular Interest not previously
offset by distributions or increases in
the principal amount of such REMIC 1
Regular Interest and (iii) finally, all
remaining amounts to the Class LT1Z
Interest.
All
computations with respect to the REMIC 1 Interests shall be
computed
to eight decimal places.
THE REMIC 2 INTERESTS
The
following table sets forth (or describes) the class
designation,
interest rate, initial principal amount,
and corresponding class of certificates
or components for each class of REMIC 2
Interests:
<TABLE>
<CAPTION>
Interest Corresponding
Class of
Class Designation Principal Amount
Rate
Certificates or Components
----------------- ----------------
----
--------------------------
<S>
<C>
<C>
<C>
LT2A1
$342,425,000.00 (2)
Class A-1, X-A1 Component
LT2A2
$140,579,000.00 (3)
Class A-2, X-A2 Component
LT2B1
$ 7,000,000.00
(4)
Class B-1, Component XB1
LT2B2
$ 3,500,000.00
(4)
Class B-2, Component XB2
LT2B3
$ 2,000,000.00
(4)
Class B-3, Component XB3
LT2B4
$ 2,000,000.00
(4)
Class B-4
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Interest Corresponding
Class of
Class Designation Principal Amount
Rate
Certificates or Components
----------------- ----------------
----
--------------------------
<S>
<C>
<C>
<C>
LT2B5
$ 1,000,000.00
(4)
Class B-5
LT2B6
$ 1,501,584.70
(4)
Class B-6
LT2AR
$
100.00 (2)
Class A-R
LT2-R
(1)
(1)
N/A
</TABLE>
----------
(1) The Class LT2-R Interest
represents the sole class of residual interest in
REMIC 2
and has neither a principal amount nor an interest rate. The
Class
LT2-R
Interest shall be represented by the Class A-R Certificate.
(2) The Class LT2A1 and Class
LT2AR Interests shall have an interest rate for
each
Distribution Date (and the related Accrual Period) equal to the
Pool
1 Net
WAC.
(3) The Class LT2A2 Interest
shall have an interest rate for each
Distribution Date (and the related Accrual Period) equal to the
Pool 2
Net
WAC.
(4) Each of the Class LT2B1
Interest, the Class LT2B2 Interest, the Class
LT2B3
Interest, the Class LT2B4 Interest, the Class LT2B5 Interest
and
the Class
LT2B6 Interest shall have an interest rate for each
Distribution Date (and the related Accrual Period) equal to the
Subordinate Net WAC which is the numerical equivalent of the
weighted
average of
the interest rates on the Class LT11A Interest and the Class
LT12A
Interest (treating, for purposes of computing this weighted
average,
the Class LT11A Interest as subject to a cap and a floor equal
to the
interest rate on the Class LT11B Interest and the Class LT12A
Interest
as subject to a cap and a floor equal to the interest rate on
the Class
LT12B Interest).
Principal
payments shall be deemed made and Realized Losses with respect
to principal shall be allocated among the
REMIC 2 Interests in the same manner
as such payments are made or such Realized
Losses are allocated among the
Corresponding Classes of Certificates
(treating the initial Class Principal
Amount of the Class B-6 Certificates, for
purposes of this sentence, as being
$1,501,584.70, treating the first $.70 of
distributions to the Class A-R
Certificate under Section 5.02(a)(vi) from
principal payments on the Mortgage
Loans as distributed to the Class B-6
Certificates and disregarding Section
5.03(c)).
The
principal amount of each REMIC 2 Regular Interest shall be
increased
on any Distribution Date on which, and in
the amount by which, the Certificate
Principal Amount of any Corresponding Class
of Certificates is increased
pursuant to the penultimate sentence of
"Certificate Principal Amount."
THE CERTIFICATES
The
following table sets forth (or describes) the Class
designation,
Certificate Interest Rate, initial Class
Principal Amount (or initial Class
Notional Amount), and minimum denomination
for each Class of Certificates
comprising interests in the Trust Fund
created hereunder.
<TABLE>
<CAPTION>
Related Class or
Initial Class
Classes of interests
Certificate
Principal Amount or
Minimum
Class
in
the Upper Tier
Interest
Class Notional Denominations
or
Designation
REMIC
Rate
Amount
Percentage Interest
-----------
-----
----
------
-------------------
<S>
<C>
<C>
<C>
<C>
Upper Tier
(1)
$342,425,000
$ 25,000.00
Class A-1
REMIC Class
A-1 Interest
Class A-2 Upper Tier
(2)
$140,579,000
$ 25,000.00
REMIC Class
A-2 Interest
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Related Class or
Initial Class
Classes of interests
Certificate
Principal Amount or
Minimum
Class
in
the Upper Tier
Interest
Class Notional Denominations
or
Designation
REMIC
Rate
Amount
Percentage Interest
-----------
-----
----
------
-------------------
<S>
<C>
<C>
<C>
<C>
Class X-A
X-A1 Component,
(3)
(3)
$ 25,000.00
X-A2 Component,
Class X-B
Component XB1,
(4)
(4)
$ 25,000.00
Component XB2
and Component
XB3
Class A-R
Class A-R
(5)
$100
100%
Class B-1
Upper Tier REMIC
(6)
$7,000,000
$ 25,000.00
Class B-1 Interest
Class B-2
Upper Tier REMIC
(7)
$3,500,000
$ 25,000.00
Class B-2 Interest
Class B-3
Upper Tier REMIC
(8)
$2,000,000
$ 25,000.00
Class B-3 Interest
Class B-4
Class B-4
(9)
$2,000,000
$ 100,000.00
Class B-5
Class B-5
(9)
$1,000,000
$ 100,000.00
Class B-6
Class B-6
(9)
$1,501,584.70
$ 100,000.00
</TABLE>
(1) The Certificate Interest
Rate with respect to any Distribution Date
(and the
related Accrual Period) for the Class A-1 Certificates will be
the least
of (i) LIBOR plus 0.210%; (ii) the Pool 1 Net WAC and (iii)
11.75%;
provided, however, if the Mortgage Loans and related property
are not
purchased pursuant to Section 7.01(c) on the Initial Optional
Purchase
Date, then with respect to each subsequent Distribution Date
the per
annum rate calculated pursuant to clause (i) above with respect
to the
Class A-1 Certificates will be LIBOR plus 0.420%.
(2) The Certificate Interest
Rate with respect to any Distribution Date
(and the
related Accrual Period) for the Class A-2 Certificates will be
the least
of (i) LIBOR plus 0.230%; (ii) the Pool 2 Net WAC and (iii)
11.75%;
provided, however, if the Mortgage Loans and related property
are not
purchased pursuant to Section 7.01(c) on the Initial Optional
Purchase
Date, then with respect to the Distribution Date occurring in
the month
in which the next LIBOR Determination Date with respect to
the Class
A-2 Certificates occurs and each subsequent Distribution Date
the per
annum rate calculated pursuant to clause (i) above with respect
to the
Class A-2 Certificates will be LIBOR plus 0.460%.
(3) The Class X-A Certificates
consist of two components, the X-A1 Component
and X-A2
Component. On any Distribution Date, the Class X-A Certificate
will have
a Class Notional Amount equal to the sum of the Component
Notional
Amount of such two Components. The Class X-A Certificates are
entitled
to receive on each Distribution Date the sum of the amount of
interest
accrued on such two Components.
(4) The Class X-B Certificates
will represent a 100% interest in each of
Component
XB1, Component XB2 and Component XB3. See the definitions of
"Component
XB1", "Component XB2" and "Component XB3" for the interest
rate and
notional balance of these Components. On any Distribution
Date, the
Class X-B Certificates will have a Class Notional Amount
equal to the sum of the
Component Notional Amount of Component XB1,
Component
XB2 and Component XB3.
(5) The Certificate Interest
Rate with respect to any Distribution Date (and
the
related Accrual Period) for the Class A-R Certificate will equal
the
Pool 1 Net
WAC.
5
<PAGE>
(6) The Certificate Interest
Rate with respect to any Distribution Date
(and the
related Accrual Period) for the Class B-1 Certificates will be
the least
of (i) LIBOR plus 0.400%; (ii) the Subordinate Net WAC and
(iii)
11.75%; provided, however, if the Mortgage Loans and related
property
are not purchased pursuant to Section 7.01(c) on the Initial
Optional
Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause
(i)
above with
respect to the Class B-1 Certificates will be LIBOR plus
0.600%.
(7) The Certificate Interest
Rate with respect to any Distribution Date
(and the related
Accrual Period) for the Class B-2 Certificates will be
the least
of (i) LIBOR plus 0.620%; (ii) the Subordinate Net WAC and
(iii)
11.75%; provided, however, if the Mortgage Loans and related
property
are not purchased pursuant to Section 7.01(c) on the Initial
Optional
Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause
(i)
above with
respect to the Class B-2 Certificates will be LIBOR plus
0.930%.
(8) The Certificate Interest
Rate with respect to any Distribution Date
(and the
related Accrual Period) for the Class B-3 Certificates will be
the least
of (i) LIBOR plus 1.100%; (ii) the Subordinate Net WAC and
(iii)
11.75%; provided, however, if the Mortgage Loans and related
property
are not purchased pursuant to Section 7.01(c) on the Initial
Optional
Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause
(i)
above with
respect to the Class B-3 Certificates will be LIBOR plus
1.650%.
(9) The Certificate Interest
Rates with respect to any Distribution Date (and
the
related Accrual Period) for the Class B-4, Class B-5 and Class
B-6
Certificates will be equal to the Subordinate Net WAC.
As of the
Cut-off Date, the Mortgage Loans had an aggregate Scheduled
Principal Balance of $500,005,684.70.
In
consideration of the mutual agreements herein contained, the
Depositor,
the Servicer and the Trustee hereby agree
as follows:
ARTICLE I.
DEFINITIONS
Section
1.01. Definitions.
The
following words and phrases, unless the context otherwise
requires,
shall have the following meanings:
Accepted
Servicing Practices: The Servicer's normal servicing practices,
which will conform to the mortgage
servicing practices of prudent mortgage
lending institutions which service for
their own account mortgage loans of the
same type as the Mortgage Loans in the
jurisdictions in which the related
Mortgaged Properties are located.
Accountant: A Person engaged in the practice of accounting who
(except
when this Agreement provides that an
Accountant must be Independent) may be
employed by or affiliated with the
Depositor or an Affiliate of the Depositor.
Accrual
Period: With respect to any Distribution Date and any Class of
LIBOR Certificates, the period commencing
on the 25th day of the month preceding
the month in which the Distribution Date
occurs and ending on the 24th day of
the month in which the Distribution
6
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Date occurs; provided, however, that the
first Accrual Period with respect to
the LIBOR Certificates shall be the period
beginning on the Closing Date and
ending on June 24, 2005. The Accrual Period
applicable to the Components, Class
A-R, Class B-4, Class B-5, Class B-6
Certificates and each Class of Lower Tier
REMIC Interests shall be the calendar month
immediately preceding the month in
which the related Distribution Date occurs.
Interest shall accrue on all Classes
of Certificates, all Components and on all
Lower Tier REMIC Interests on the
basis of a 360-day year consisting of
twelve 30-day months.
Act: The
Securities Act of 1933, as amended.
Additional
Collateral: With respect to any Additional Collateral Mortgage
Loan, the meaning assigned thereto in the
Mortgage Loan Purchase and Sale
Agreement.
Additional
Collateral Mortgage Loan: Each Mortgage Loan identified as such
in the Mortgage Loan Schedule.
Adjustment
Date: As to any Mortgage Loan, the date on which the related
Mortgage Rate adjusts in accordance with
the terms of the related Mortgage Note.
Advance:
With respect to a Mortgage Loan, the payments required to be
made
by the Trustee solely in its capacity as
successor servicer or by the Servicer
with respect to any Distribution Date
pursuant to this Agreement, the amount of
any such payment being equal to the
aggregate of the payments of principal and
interest (net of the applicable Servicing
Fee and net of any net income in the
case of any REO Property) on the Mortgage
Loans that were due on the related Due
Date and not received as of the close of
business on the related Determination
Date, less the aggregate amount of any such
delinquent payment that either the
Trustee or the Servicer has determined
would constitute Nonrecoverable Advances
if advanced.
Adverse
REMIC Event: As
defined in Section 10.01(f) hereof.
Affiliate:
With respect to any specified Person, any other Person
controlling or controlled by or under
common control with such specified Person.
For the purposes of this definition,
"control" when used with respect to any
specified Person means the power to direct
the management and policies of such
Person, directly or indirectly, whether
through the ownership of voting
securities, by contract or otherwise; and
the terms "controlling" and
"controlled" have meanings correlative to
the foregoing.
Aggregate
Senior Percentage: As to any Distribution Date, the percentage
equivalent of a fraction, the numerator of
which is the aggregate of the Class
Principal Amounts of the Class A-1, Class
A-2 and Class A-R Certificates and the
denominator of which is the Aggregate
Stated Principal Balance, but in no event
greater than 100%.
Aggregate
Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances
for all Mortgage Loans (and when such
term is used with respect to a particular
Mortgage Pool, the aggregate of the
Stated Principal Balances of the Mortgage
Loans in such Mortgage Pool) which
were outstanding on the Due Date in the
month preceding the month of such
Distribution Date.
Aggregate
Subordinate Percentage: As to any Distribution Date, the
difference between 100% and the Aggregate
Senior Percentage for such
Distribution Date, but in no event less
than zero.
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Aggregate
Voting Interests: The aggregate of the Voting Interests of all
the Certificates under this Agreement.
Agreement:
This Pooling and Servicing Agreement and all amendments and
supplements hereto.
Allocable
Share: With respect to each Class of Subordinate Certificates
and any Distribution Date, the percentage
equivalent of a fraction, the
numerator of which is the Class Principal
Amount of such Class and the
denominator of which is the aggregate of
the Class Principal Amounts of each
Class of Subordinate Certificates.
Ancillary
Fees: With respect to any Mortgage Loan, (i) all late charges,
(ii) all fees payable pursuant to PHH's
"Speed Pay" program, (iii) all
returned-item charges (e.g. insufficient
funds charges) and (iv) modification or
conversion fees.
Applicable
Credit Support Percentage: As to any Class of Subordinate
Certificates and any Distribution Date, the
sum of the Class Subordination
Percentages of such Class and the aggregate
Class Subordination Percentage of
all other Classes of Subordinate
Certificates having higher numerical Class
designations than such Class.
Apportioned Principal Balance: As to any Distribution Date and each
Class
of Subordinate Certificates and any
Mortgage Pool, the Class Principal Amount
thereof multiplied by a fraction, the
numerator of which is the applicable Pool
Subordinate Amount (i.e., the Pool 1
Subordinate Amount or the Pool 2
Subordinate Amount, as the case may
require), and the denominator of which is
the sum of such Pool Subordinate Amounts on
such date.
Appraised
Value: With respect to any Mortgage Loan, the Appraised Value
of
the related Mortgaged Property shall be:
(i) with respect to a Mortgage Loan
other than a Refinancing Mortgage Loan, the
lesser of (a) the value of the
Mortgaged Property based upon the appraisal
made at the time of the origination
of such Mortgage Loan and (b) the sales
price of the Mortgaged Property at the
time of the origination of such Mortgage
Loan; and (ii) with respect to a
Refinancing Mortgage Loan, the value of the
Mortgaged Property based upon the
appraisal made at the time of the
origination of such Refinancing Mortgage Loan.
Assignment
of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument, in recordable
form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged
Property is located to reflect the
sale of the Mortgage to the Trustee, which
assignment, notice of transfer or
equivalent instrument may be in the form of
one or more blanket assignments
covering the Mortgage Loans secured by
Mortgaged Properties located in the same
jurisdiction, if permitted by law;
provided, however, that the Trustee shall not
be responsible for determining whether any
such assignment is in recordable
form.
Authenticating Agent: The Trustee or any authenticating agent
appointed by
the Trustee pursuant to Section 6.10 until
any successor authenticating agent
for the Certificates is named, and
thereafter "Authenticating Agent" shall mean
any such successor.
Authorized
Officer: Any Person who may execute an Officer's Certificate on
behalf of the Depositor.
Available
Distribution Amount: With respect to any Distribution Date and
each Mortgage Pool, the total amount of all
cash received by the Trustee on the
Mortgage Loans in
8
<PAGE>
such Mortgage Pool from the Servicer or
otherwise through the Distribution
Account Deposit Date for deposit into the
Distribution Account in respect of
such Distribution Date, including (1) all
scheduled installments of interest
(net of the Servicing Fee) and principal
collected on the related Mortgage Loans
and due during the Due Period related to
such Distribution Date, together with
any Advances in respect thereof, (2) all
Insurance Proceeds, Liquidation
Proceeds, Subsequent Recoveries and the
proceeds of any Additional Collateral
from the related Mortgage Loans, in each
case for such Distribution Date, (3)
all partial or full Principal Prepayments,
together with any accrued interest
thereon, identified as having been received
from the related Mortgage Loans
during the related Prepayment Period, (4)
any amounts received from the Servicer
in respect of Prepayment Interest
Shortfalls with respect to the related
Mortgage Loans; and (5) the aggregate
Purchase Price of all Defective Mortgage
Loans and Converted Mortgage Loans (if any)
in such Mortgage Pool purchased from
the Trust Fund during the related
Prepayment Period, minus:
(A) all
related fees, charges and amounts payable or reimbursable to
the
Trustee under this Agreement, to the extent
that, if paid by the Trust Fund,
such fees, charges or other amounts would
constitute "unanticipated expenses"
(within the meaning of Treasury Regulations
Section 1.860G-1(b)(3)(ii)) of any
of the REMICs provided for herein and up to
an aggregate maximum amount equal to
$300,000 annually; provided, such annual
aggregate maximum amount shall exclude
(i) any Servicing Transfer Costs, or
amounts reimbursable to the Servicer under
this Agreement and (ii) any costs, damages
or expenses incurred by the Trustee
in connection with any "high cost" home
loans or any predatory or abusive
lending laws, which amounts shall in no
case be subject to any such limitation;
(B) in the case
of (2), (3), (4) and (5) above, any related unreimbursed
expenses incurred by the Servicer in
connection with a liquidation or
foreclosure and any unreimbursed Advances
or Servicing Advances due to the
Servicer (or, pursuant to Section 5.04, the
Trustee);
(C) any
related unreimbursed Nonrecoverable Advances due to the
Servicer
(or, pursuant to Section 5.04, the
Trustee); and
(D) in the
case of (1) through (4) above, any related amounts collected
which are determined to be attributable to
a subsequent Due Period or Prepayment
Period.
Bankruptcy: As to any Person, the making of an assignment for the
benefit
of creditors, the filing of a voluntary
petition in bankruptcy, adjudication as
a bankrupt or insolvent, the entry of an
order for relief in a bankruptcy or
insolvency proceeding, the seeking of
reorganization, arrangement, composition,
readjustment, liquidation, dissolution or
similar relief, or seeking, consenting
to or acquiescing in the appointment of a
trustee, receiver or liquidator,
dissolution, or termination, as the case
may be, of such Person pursuant to the
provisions of either the Bankruptcy Code or
any other similar state laws.
Bankruptcy
Code: The United
States Bankruptcy Code of 1986, as amended.
Basis Risk
Shortfall: With respect to any Distribution Date and any Class
of LIBOR Certificates, the excess, if any,
of (i) the amount of Current Interest
that would have been payable on such Class
for such Distribution Date if the
Certificate Interest Rate for such Class as
set forth in the Preliminary
Statement hereto were determined without
regard to clause (ii) in the definition
thereof, over (ii) the actual Current
Interest payable on such Class for such
Distribution Date.
BBA:
The British Banker's
Association.
9
<PAGE>
Book-Entry
Certificates: Beneficial interests in Certificates designated
as "Book-Entry Certificates" in this
Agreement, ownership and transfers of which
shall be evidenced or made through book
entries by a Clearing Agency as
described in Section 3.09; provided, that
after the occurrence of a Book-Entry
Termination whereupon book-entry
registration and transfer are no longer
permitted and Definitive Certificates are
to be issued to Certificate Owners,
such Book-Entry Certificates shall no
longer be "Book-Entry Certificates." As of
the Closing Date, the following Classes of
Certificates constitute Book-Entry
Certificates: Class A-1, Class A-2, Class
X-A, Class B-1, Class B-2, Class B-3,
Class B-4, Class B-5, Class B-6 and Class
X-B.
Book-Entry
Termination: The occurrence of any of the following events: (i)
the Clearing Agency is no longer willing or
able to properly discharge its
responsibilities with respect to the Book
Entry Certificates, and the Depositor
is unable to locate a qualified successor;
or (ii) the Depositor at its option
advises the Trustee and the Certificate
Registrar in writing that it elects to
terminate the book-entry system through the
Clearing Agency.
Business
Day: Any day other than (i) a Saturday or a Sunday or (ii) a
day
on which banking institutions in New York,
New York or, if other than New York,
any city in which the Corporate Trust
Office of the Trustee is located, or the
States of Maryland or Minnesota, are
authorized or obligated by law or executive
order to be closed.
Certificate: Any one of the certificates signed by the Trustee
and
authenticated by the Authenticating Agent
in substantially the forms attached
hereto as Exhibit A.
Certificate Group: Each of the Group 1 Certificates and the Group
2
Certificates.
Certificate Interest Rate: With respect to each Class of
Certificates and
any Distribution Date, the applicable per
annum rate described in the
Preliminary Statement hereto.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person
who is the owner of such Book-Entry
Certificate, as reflected on the books of
the Clearing Agency, or on the books of a
Person maintaining an account with
such Clearing Agency (directly or as an
indirect participant, in accordance with
the rules of such Clearing Agency).
Certificate Principal Amount: With respect to any Certificate
(other than
a Class X Certificate), at the time of
determination, the maximum specified
dollar amount of principal to which the
Holder thereof is then entitled
hereunder, such amount being equal to the
initial principal amount set forth on
the face of such Certificate, less (i) the
amount of all principal distributions
previously made with respect to such
Certificate; (ii) all Realized Losses
allocated to such Certificate; and (iii) in
the case of a Subordinate
Certificate, any Subordinate Certificate
Writedown Amount allocated to such
Certificates. Notwithstanding the
foregoing, on any Distribution Date relating
to a Due Period in which a Subsequent
Recovery has been received by the
Servicer, the Certificate Principal Amount
of any Class of Certificates then
outstanding for which any Realized Loss or
any Subordinate Certificate Writedown
Amount has been applied will be increased,
in order of seniority, by an amount
equal to the lesser of (i) the amount such
Class of Certificates has been
written down in respect of Realized Losses
or Subordinate Certificate Writedown
Amounts, to the extent not previously
offset by increases in Certificate
Principal Amount pursuant to this sentence
and (ii) the total of any Subsequent
Recovery distributed on such date to the
Certificateholders (reduced (x) by the
amount of the increase in the Certificate
Principal Amount of any more senior
Class of Certificates pursuant to this
sentence on such Distribution Date and
(y) to reflect a proportionate amount of
the increase in the Certificate
Principal Amount of any pari passu Class of
Certificates on such Distribution
Date pursuant to
10
<PAGE>
this sentence). For purposes of Article V
hereof, unless specifically provided
to the contrary, Certificate Principal
Amounts shall be determined as of the
close of business of the immediately
preceding Distribution Date, after giving
effect to all distributions made on such
date.
Certificate Register and Certificate Registrar: The register
maintained
and the registrar appointed pursuant to
Section 3.02.
Certificateholder: The meaning provided in the definition of
"Holder."
Civil
Relief Act: The Servicemembers Civil Relief Act.
Class:
Collectively, Certificates bearing the same class designation.
In
the case of the REMIC 1, REMIC 2 and the
Upper Tier REMIC, the term "Class"
refers to all REMIC Interests having the
same alphanumeric designation.
Class A
Certificates: Any Class A-1, Class A-2 or Class A-R
Certificate.
Class A-R
Certificate: The Class A-R Certificate executed by the Trustee,
and authenticated and delivered by the
Authenticating Agent, substantially in
the form annexed hereto as Exhibit A, and
evidencing the ownership of the Class
LT1-R Interest, the Class LT2-R Interest
and the residual interest in the Upper
Tier REMIC.
Class Excess Interest
Amount: For each Class of the LIBOR Certificates and
the Component related to such Class, the
product of (i) the initial Class
Principal Amount of such Class, (ii) the
initial Certificate Interest Rate of
such Class and (iii) a fraction, the
numerator of which is the excess of 30 over
of the number of days in the initial
Accrual Period for such Class and the
denominator of which is 360.
Class
Notional Amount: With respect to the Class X-A and Class X-B
Certificates, the class notional amount
calculated as provided in the
Preliminary Statement hereto.
Class
Principal Amount: With respect to each Class of Certificates
(other
than a Class X Certificate) the aggregate
of the Certificate Principal Amounts
of all Certificates of such Class at the
date of determination.
Class
Subordination Percentage: With respect to each Class of
Subordinate
Certificates, for each Distribution Date,
the percentage obtained by dividing
the Class Principal Amount of such Class
immediately prior to such Distribution
Date by the sum of the Class Principal
Amounts of all Classes of Certificates
immediately prior to such Distribution
Date.
Class X
Certificates: Any of the Class X-A or Class X-B Certificates.
Clearing
Agency: An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. As
of the Closing Date, the Clearing Agency
shall be The Depository Trust Company.
Clearing
Agency Participant: A broker, dealer, bank, other financial
institution or other Person for whom from
time to time a Clearing Agency effects
book-entry transfers and pledges of
securities deposited with the Clearing
Agency.
Closing
Date: May 31,
2005.
11
<PAGE>
Code: The
Internal Revenue Code of 1986, as amended, and as it may be
further amended from time to time, any
successor statutes thereto, and
applicable U.S. Department of Treasury
regulations issued pursuant thereto in
temporary or final form.
Compensating Interest Payment: As to any Distribution Date, the
lesser of
(1) the Servicing Fee for such date and (2)
any Prepayment Interest Shortfall
for such date.
Component
Interest Rate: With respect to the X-A1 Component and any
Distribution Date, the interest rate
specified in the definition of X-A1
Component. With respect to the X-A2
Component and any Distribution Date, the
interest rate specified in the definition
of X-A2 Component. With respect to
Component XB1 and any Distribution Date,
the interest rate specified in the
definition of Component XB1. With respect
to Component XB2 and any Distribution
Date, the interest rate specified in the
definition of Component XB2. With
respect to Component XB3 and any
Distribution Date, the interest rate specified
in the definition of Component XB3.
Component
Notional Amount: With respect to X-A1 Component and any
Distribution Date, the notional amount
specified in the definition of X-A1
Component. With respect to X-A2 Component
and any Distribution Date, the
notional amount specified in the definition
of X-A2 Component. With respect to
Component XB1 and any Distribution Date,
the notional amount specified in the
definition of Component XB1. With respect
to Component XB2 and any Distribution
Date, the notional amount specified in the
definition of Component XB2. With
respect to Component XB3 and any
Distribution Date, the notional amount
specified in the definition of Component
XB3.
Component
XB1: A regular interest in the Upper Tier REMIC having a
notional amount for any Distribution Date
equal to the Class Principal Amount of
the Class B-1 Certificates immediately
before such Distribution Date and having
an interest rate with respect to any
Distribution Date (and the related Accrual
Period) equal to the excess, if any, of (x)
the Subordinate Net WAC for such
Distribution Date over (y) the Certificate
Interest Rate on the Class B-1
Certificates for such Distribution Date.
For purposes of the definition of
"Class Excess Interest Amount", Component
XB1 shall be related to the Class B-1
Certificates.
Component
XB2: A regular interest in the Upper Tier REMIC having a
notional amount for any Distribution Date
equal to the Class Principal Amount of
the Class B-2 Certificates immediately
before such Distribution Date and having
an interest rate with respect to any
Distribution Date (and the related Accrual
Period) equal to the excess, if any, of (x)
the Subordinate Net WAC for such
Distribution Date over (y) the Certificate
Interest Rate on the Class B-2
Certificates for such Distribution Date.
For purposes of the definition of
"Class Excess Interest Amount", Component
XB2 shall be related to the Class B-2
Certificates.
Component
XB3: A regular interest in the Upper Tier REMIC having a
notional amount for any Distribution Date
equal to the Class Principal Amount of
the Class B-3 Certificates immediately
before such Distribution Date and having
an interest rate with respect to any
Distribution Date (and the related Accrual
Period) equal to the excess, if any, of (x)
the Subordinate Net WAC for such
Distribution Date over (y) the Certificate
Interest Rate on the Class B-3
Certificates for such Distribution Date.
For purposes of the definition of
"Class Excess Interest Amount", the
Component XB3 shall be related to the Class
B-3 Certificates.
Components: Each of the X-A1 Component, the X-A2 Component,
Component XB1,
Component XB2 and Component XB3.
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Cooperative Corporation: The entity that holds title (fee or an
acceptable
leasehold estate) to the real property and
improvements constituting the
Cooperative Property and which governs the
Cooperative Property, which
Cooperative Corporation must qualify as a
Cooperative Housing Corporation under
Section 216 of the Code.
Cooperative Loan: Any Mortgage Loan secured by Cooperative Shares
and a
Proprietary Lease.
Cooperative Property: The real property and improvements owned by
the
Cooperative Corporation, that includes the
allocation of individual dwelling
units to the holders of the shares of the
Cooperative Corporation.
Cooperative Shares:
Shares issued by a Cooperative Corporation.
Corporate
Trust Office: With respect to the presentment of Certificates
for registration of transfer, exchange or
final payment, Wells Fargo Bank, N.A.,
Sixth Street and Marquette Avenue,
Minneapolis, Minnesota 55479, Attention:
Corporate Trust Services - MLMI Series MLCC
2005-B and for all other purposes,
Wells Fargo Bank, N.A., 9062 Old Annapolis
Road, Columbia, Maryland 21045,
Attention: Corporate Trust Services - MLMI
Series MLCC 2005-B, or such other
address as the Trustee may designate from
time to time by notice to the
Certificateholders.
Corresponding Classes of Certificates or Components: With respect
to each
Lower Tier REMIC Interest, the Class or
Classes of Certificates or Components
appearing opposite such Lower Tier REMIC
Interest as described in the
Preliminary Statement hereto.
Credit
Support Depletion Date: The first Distribution Date, if any, on
which the aggregate Certificate Principal
Amounts of the Subordinate
Certificates have been reduced to zero.
Current
Interest: With respect to each Class of Certificates and each
Component on each Distribution Date, the
aggregate amount of interest accrued at
the applicable Certificate Interest Rate or
Component Interest Rate during the
related Accrual Period on the Class
Principal Amount or Component Notional
Amount of such Class or Component;
provided, however, that with respect to the
first Distribution Date only, the aggregate
Current Interest for each Component
will be increased by the related Class
Excess Interest Amount.
Custodial
Account: The separate trust account or accounts created and
maintained by the Servicer pursuant to the
Fannie Mae Servicing Guide which
shall be entitled "Wells Fargo Bank, N.A.,
in trust for the registered holders
for Merrill Lynch Mortgage Investors Trust
Series MLCC 2005-B Mortgage
Pass-Through Certificates." The Custodial
Account shall be an Eligible Account.
Custodial
Agreement: The Custodial Agreement, dated as of December 15,
2000, between Merrill Lynch Credit
Corporation and Wells Fargo Bank Minnesota,
N.A., as custodian, as amended by Amendment
No. 1, dated as of January 16, 2002
a copy of which (excluding all exhibits
thereto) is attached hereto as Exhibit
O.
Custodian:
Wells Fargo Bank, N.A., any successor in interest or any
successor custodian appointed pursuant to
the Custodial Agreement.
13
<PAGE>
Cut-off
Date: May 1, 2005.
Cut-off
Date Balance: With respect to the Mortgage Loans in the Trust
Fund
on the Closing Date, the Aggregate Stated
Principal Balance as of the Cut-off
Date.
Debt
Service Reduction: With respect to any Mortgage Loan, a reduction
by
a court of competent jurisdiction in a
proceeding under the Bankruptcy Code in
the Scheduled Payment for such Mortgage
Loan which became final and
non-appealable, except such a reduction
resulting from a Deficient Valuation or
any reduction that results in a permanent
forgiveness of principal.
Defective
Mortgage Loan: The
meaning specified in Section 2.04(a).
Deficient
Valuation: With respect to any Mortgage Loan, a valuation of
the
related Mortgaged Property by a court of
competent jurisdiction in an amount
less than the then outstanding indebtedness
under the Mortgage Loan, or any
reduction in the amount of principal to be
paid in connection with any Scheduled
Payment that results in a permanent
forgiveness of principal, which valuation or
reduction results from an order of such
court which is final and non-appealable
in a proceeding under the Bankruptcy
Code.
Definitive
Certificate: A Certificate of any Class issued in definitive,
fully registered, certificated form.
Deleted
Mortgage Loan: As
defined in Section 2.04(a).
Delinquent: Any Mortgage Loan with respect to which the Scheduled
Payment
due on a Due Date is not received.
Depositor: Merrill Lynch Mortgage
Investors, Inc., a Delaware corporation,
having its principal place of business at
250 Vesey Street, 4 World Financial
Center, 10th Floor, New York, New York
10080, or its successors in interest.
Determination Date: With respect to each Distribution Date, the
15th day
of the month in which such Distribution
Date occurs, or, if such 15th day is not
a Business Day, the next succeeding
Business Day.
Disqualified Organization: A "disqualified organization" as defined
in
Section 860E(e)(5) of the Code.
Distribution Account: The separate Eligible Account created and
maintained
by the Trustee pursuant to Section 4.01 in
the name of the Trustee for the
benefit of the Certificateholders and
designated "Wells Fargo Bank, N.A., in
trust for registered holders of Merrill
Lynch Mortgage Investors Trust Series
MLCC 2005-B, Mortgage Pass-Through
Certificates." Funds in the Distribution
Account (exclusive of any earnings on
investments made with funds deposited in
the Distribution Account) shall be held in
trust for the Trustee and the
Certificateholders for the uses and
purposes set forth in this Agreement.
Distribution Account Deposit Date: The 18th day of each calendar
month
after the initial issuance of the
Certificates or, if such 18th day is not a
Business Day, the immediately preceding
Business Day, commencing in June 2005.
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<PAGE>
Distribution Date: The 25th day of each month or, if such 25th day
is not
a Business Day, the next succeeding
Business Day, commencing in June 2005.
Due Date:
With respect to any Mortgage Loan, the date on which a
Scheduled
Payment is due under the related Mortgage
Note as indicated in the Mortgage
Note, which is the first day of the
calendar month.
Due
Period: As to any Distribution Date, the period beginning on
the
second day of the month preceding the month
of such Distribution Date, and
ending on the first day of the month of
such Distribution Date.
EDP: The
electronic data processing system used by the Seller and the
Servicer, which are licensees of ALLTEL
Information Services, Inc.
Effective
Loan-to-Value Ratio: A fraction, expressed as a percentage, the
numerator of which is the original Stated
Principal Balance of the Mortgage
Loan, less the amount of Additional
Collateral required to secure such Mortgage
Loan at the time of origination, if any,
and the denominator of which is the
Appraised Value of the related Mortgage
Property at such date.
Eligible
Account: Any of (i) an account or accounts maintained with a
federal or state chartered depository
institution or trust company the
short-term unsecured debt obligations of
which (or, in the case of a depository
institution or trust company that is the
principal subsidiary of a holding
company, the debt obligations of such
holding company) have the highest
short-term ratings of each Rating Agency at
the time any amounts are held on
deposit therein, or (ii) an account or
accounts in a depository institution or
trust company in which such accounts are
insured by the FDIC or the SAIF (to the
limits established by the FDIC or the SAIF)
and the uninsured deposits in which
accounts are otherwise secured such that,
as evidenced by an Opinion of Counsel
delivered to the Trustee and to each Rating
Agency, the Certificateholders have
a claim with respect to the funds in such
account or a perfected first priority
security interest against any collateral
(which shall be limited to Permitted
Investments) securing such funds that is
superior to claims of any other
depositors or creditors of the depository
institution or trust company in which
such account is maintained, or (iii) a
trust account or accounts maintained with
the trust department of a federal or state
chartered depository institution or
trust company, acting in its fiduciary
capacity or (iv) any other account
acceptable to each Rating Agency. Eligible
Accounts may bear interest, and may
include, if otherwise qualified under this
definition, accounts maintained with
the Trustee, any Paying Agent, or the
Servicer.
ERISA: The
Employee Retirement Income Security Act of 1974, as amended,
and as it may be further amended from time
to time, any successor statutes
thereto, and applicable U.S. Department of
Labor regulations issued pursuant
thereto in temporary or final form.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that
would satisfy the requirements of the
Underwriter's Exemption, except, in
relevant part, for the requirement that the
certificates have received a rating at the
time of acquisition that is in one of
the three (or four, in the case of a
"designated transaction") highest generic
rating categories by at least one of the
Rating Agencies.
ERISA
Restricted Certificate: The Class A-R, Class B-4, Class B-5 and
Class B-6 Certificates and any other
Certificate, unless the acquisition and
holding of such other Certificate is
covered by and exempt under the
Underwriter's Exemption.
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Escrow
Account: The separate trust account or accounts created and
maintained by the Servicer pursuant to the
Fannie Mae Servicing Guide which
shall be entitled "Wells Fargo Bank, N.A.,
in trust for the registered holders
for Merrill Lynch Mortgage Investors Trust
Series MLCC 2005-B Mortgage
Pass-Through Certificates." The Escrow
Account shall be an Eligible Account.
Event of
Default: As defined in Section 6.14.
Fannie
Mae: The entity formerly known as the Federal National Mortgage
Association, a federally chartered and
privately owned corporation organized and
existing under the Federal National
Mortgage Association Charter Act, or any
successor thereto.
FDIC:
The Federal Deposit
Insurance Corporation or any successor thereto.
FHA:
The Federal Housing
Administration or any successor thereto.
FHLMC: The
Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States
created and existing under Title III of the
Emergency Home Finance Act of 1970, as
amended, or any successor thereto.
Final
Certification: As referred to in Section 2.02(c), the form of
which
is set forth at Exhibit L.
Fitch
Ratings: Fitch, Inc.,
or any successor in interest.
GNMA: The
Government National Mortgage Association, or any successor
thereto.
Global
Securities: The global certificates representing the Book-Entry
Certificates.
Group 1:
All of the Group 1
Certificates.
Group 1
Certificate: Any Class
A-1 or Class A-R Certificate.
Group 2:
All of the Group 2
Certificates.
Group 2
Certificate: Any Class
A-2 Certificate.
Holder or
Certificateholder: The registered owner of any Certificate as
recorded on the books of the Certificate
Registrar except that, solely for the
purposes of taking any action or giving any
consent pursuant to this Agreement,
any Certificate registered in the name of
the Depositor, the Trustee or the
Servicer, or any Affiliate thereof shall be
deemed not to be outstanding in
determining whether the requisite
percentage necessary to effect any such
consent has been obtained, except that, in
determining whether the Trustee shall
be protected in relying upon any such
consent, only Certificates which a
Responsible Officer of the Trustee knows to
be so owned shall be disregarded.
The Trustee may request and conclusively
rely on certifications by the Depositor
and the Servicer in determining whether any
Certificates are registered to an
Affiliate of the Depositor or the
Servicer.
HUD: The
United States Department of Housing and Urban Development, or
any
successor thereto.
Indemnified Parties: As defined in Section 9.15.
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Independent: When used with respect to any Accountants, a Person
who is
"independent" within the meaning of Rule
2-01(b) of the Securities and Exchange
Commission's Regulation S-X. When used with
respect to any other Person, a
Person who (a) is in fact independent of
another specified Person and any
Affiliate of such other Person, (b) does
not have any material direct financial
interest in such other Person or any
Affiliate of such other Person, and (c) is
not connected with such other Person or any
Affiliate of such other Person as an
officer, employee, promoter, underwriter,
trustee, partner, director or Person
performing similar functions.
Index: As
to each Mortgage Loan, the index from time to time in effect
for
adjustment of the Mortgage Rate as set
forth as such on the related Mortgage
Note.
Initial
Certification: As referred to in Section 2.02(a), the form of
which is set forth at Exhibit K.
Initial
LIBOR Rate: 3.10063% with respect to the Class A-1, Class B-1,
Class B-2 and Class B-3 Certificates and
3.52% with respect to the Class A-2
Certificates.
Initial
Optional Purchase Date: The first Distribution Date following
the
date on which the Aggregate Stated
Principal Balance is less than 10.00% of the
Cut-off Date Balance.
Insurance
Policy: With respect to any Mortgage Loan, any insurance
policy,
including all names and endorsements
thereto in effect, including any
replacement policy or policies for any
Insurance Policies.
Insurance
Proceeds: Proceeds paid by any Insurance Policy (excluding
proceeds required to be applied to the
restoration and repair of the related
Mortgaged Property or released to the
Mortgagor), in each case other than any
amount included in such Insurance Proceeds
in respect of Insured Expenses and
the proceeds from any Limited Purpose
Surety Bond.
Insured
Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the
Mortgage Loans.
Interest
Distribution Amount: For each Class of Certificates or
Component,
on any Distribution Date, the Current
Interest for such Class or Component, as
reduced by such Class's or Component's
share of Net Prepayment Interest
Shortfalls and Relief Act Reductions. Any
such shortfalls and reductions shall
be allocated among (i) all Classes of
Certificates (other than the Class X
Certificates) of the related Certificate
Group from such Mortgage Pool, (ii) the
X-A1 Component (in the case of Net
Prepayment Interest Shortfalls or Relief Act
Reductions related to Pool 1) or the X-A2
Component (in the case of Net
Prepayment Interest Shortfalls or Relief
Act Reductions related to Pool 2), and
(iii) the Subordinate Certificates
proportionately on the basis of (1) in the
case of the Senior Certificates (other than
the Class X Certificates), Current
Interest otherwise distributable thereon on
such Distribution Date; (2) in the
case of the X-A1 Component and X-A2
Component, if applicable, the Current
Interest otherwise distributable thereon on
such Distribution Date and (3) in
the case of Subordinate Certificates,
interest accrued at the Net WAC of the
applicable Mortgage Pool on their
Apportioned Principal Balance before taking
into account any reductions in such amounts
from Net Interest Shortfalls for
that Distribution Date. Amounts so
allocated to the Class B-1, Class B-2 or
Class B-3 Certificates will be allocated
between the Class B-1 Certificate and
Component XB1, between the Class B-2
Certificates and Component XB2 or between
the Class B-3 Certificates and Component
XB3, as the case may be,
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proportionately, based on the Current
Interest otherwise distributable in
respect thereof on such Distribution
Date.
Interest
Shortfall: As to any Class of Certificates or Component and any
Distribution Date, (i) the amount by which
the Interest Distribution Amount
(exclusive of any payments to such Class in
respect of Basis Risk Shortfalls or
Unpaid Basis Risk Shortfalls) for such
Class or Component on such Distribution
Date and all prior Distribution Dates
exceeds (ii) amounts distributed in
respect thereof to such Class or Component
on prior Distribution Dates (as
determined without reduction for amounts
not paid to such Class or in respect of
such Component as a result of the provisos
set forth in Sections 5.02(a)(i) and
5.02(b) hereof).
Interest
Transfer Amount: For any Distribution Date and for any
Undercollateralized Group, an amount equal
to one month's interest on the
applicable Principal Transfer Amount at the
related Mortgage Pool's Net WAC,
plus any shortfall of interest on the
Senior Certificates related to such
Undercollateralized Group remaining unpaid
from prior Distribution Dates.
Intervening Assignments: The original intervening assignments of
the
Mortgage, notices of transfer or equivalent
instrument.
Latest
Possible Maturity Date: The Distribution Date in June
2030.
LIBOR:
With respect to the first Accrual Period, the Initial LIBOR
Rate.
With respect to each subsequent Accrual
Period, a per annum rate determined on
the LIBOR Determination Date in the
following manner by the Trustee on the basis
of the "Interest Settlement Rate" set by
the BBA for one-month (or six-month
with respect to the Class A-2 Certificates)
United States dollar deposits, as
such rates appear on the Telerate Page
3750, as of 11:00 a.m. (London time) on
such LIBOR Determination Date.
(a) If on
such a LIBOR Determination Date, the BBA's Interest Settlement
Rate does not appear on the Telerate Page
3750 as of 11:00 a.m. (London time),
or if the Telerate Page 3750 is not
available on such date, the Trustee will
obtain such rate from Reuters' "page LIBOR
01" or Bloomberg's page "BBAM." If
such rate is not published for such LIBOR
Determination Date, LIBOR for such
date will be the most recently published
Interest Settlement Rate. In the event
that the BBA no longer sets an Interest
Settlement Rate, the Trustee will
designate an alternative index that has
performed, or that the Trustee expects
to perform, in a manner substantially
similar to the BBA's Interest Settlement
Rate. The Trustee will select a particular
index as the alternative index only
if it receives an Opinion of Counsel, which
opinion shall be an expense
reimbursed from the Distribution Account,
that the selection of such index will
not cause any of the REMICs to lose their
classification as REMICs for federal
income tax purposes.
(b) The
establishment of LIBOR by the Trustee and the Trustee's
subsequent calculation of the Certificate
Interest Rate applicable to the LIBOR
Certificates for the relevant Accrual
Period, in the absence of manifest error,
will be final and binding.
LIBOR
Business Day: Any day on which banks in London, England and The
City
of New York are open and conducting
transactions in foreign currency and
exchange.
LIBOR
Certificate: Any Class A-1, Class A-2, Class B-1, Class B-2 and
Class B-3 Certificate.
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LIBOR
Determination Date: With respect to the Class A-1, Class B-1,
Class
B-2 and Class B-3 Certificates, the second
LIBOR Business Day immediately
preceding the commencement of each Accrual
Period and with respect to the Class
A-2 Certificates, the second LIBOR Business
Day immediately preceding every
sixth Accrual Period beginning with the
Accrual Period commencing during June
2005.
Limited
Purpose Surety Bond: Any Limited Purpose Surety Bond listed in
Exhibit F.
Liquidated
Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO
Property) which was liquidated in the
calendar month preceding the month of such
Distribution Date and as to which the
Servicer has certified (in accordance with
this Agreement) that it has received
all amounts it expects to receive in
connection with the liquidation of such
Mortgage Loan including the final
disposition of an REO Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in
connection with the partial or complete
liquidation of defaulted Mortgage Loans,
whether through trustee's sale, foreclosure
sale or otherwise or amounts
received in connection with any
condemnation or partial release of a Mortgaged
Property and any other proceeds received in
connection with an REO Property.
Loan-To-Value Ratio: With respect to any Mortgage Loan and as to
any date
of determination, the fraction (expressed
as a percentage) the numerator of
which is the principal balance of the
related Mortgage Loan at such date of
determination and the denominator of which
is the Appraised Value of the related
Mortgaged Property.
Loss: With
respect to any indemnification arising under Section 9.15 of
this Agreement, any and all losses, claims,
damages, penalties, liabilities,
obligations, judgments, settlements,
awards, demands, offsets, defenses,
counterclaims, actions or proceedings,
reasonable out-of-pocket costs, expenses
and attorneys' fees of an Indemnified Party
(including but not limited to, (a)
any reasonable costs, expenses and
attorneys' fees incurred by such Indemnified
Party in enforcing such right of
indemnification against any Indemnifying Party
or with respect to any appeal, and (b)
interest on any amount for which an
Indemnified Party is entitled to be
indemnified from the date such Indemnified
Party notifies the Servicer of the
expenditure or such amounts until such
amounts are paid by the Servicer; provided,
however, that in no event shall a
"Loss" include a claim for consequential
damages, indirect damages or lost
profits except when the Loss results from
the gross negligence, fraud or willful
misconduct of the Servicer.
Lower Tier
Regular Interests: Any of the REMIC 1 Regular Interests or the
REMIC 2 Regular Interests.
Lower Tier
REMIC Interests: Any of the REMIC 1 Interests or the REMIC 2
Interests.
Margin: As
to each Mortgage Loan, the percentage amount set forth on the
related Mortgage Note added to the Index in
calculating the Mortgage Rate
thereon.
Material
Defect: As defined in Section 2.02(b).
Maximum
Rate: As to any Mortgage Loan, the maximum rate set forth on
the
related Mortgage Note at which interest can
accrue on such Mortgage Loan.
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<PAGE>
MERS:
Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of
the State of Delaware or any successor
thereto.
MERS
Mortgage Loan: Any Mortgage Loan registered with MERS on the
MERS
System.
MERS
System: The system of recording transfers of mortgages
electronically
maintained by MERS.
Monthly
Statement: The statement delivered to the Certificateholders
pursuant to Section 4.02.
Moody's:
Moody's Investors Service, Inc., or any successor in interest.
Mortgage:
A mortgage, deed of trust or other instrument encumbering a fee
simple interest in real property securing a
Mortgage Note, together with
improvements thereto.
Mortgage
Documents: With respect to each Mortgage Loan, the mortgage
documents required to be delivered to the
Trustee pursuant to this Agreement.
Mortgage
Loan: A Mortgage and the related notes or other evidences of
indebtedness secured by each such Mortgage
conveyed, transferred, sold, assigned
to or deposited with the Trustee pursuant
to Section 2.01 (including any
Replacement Loan and REO Property),
including without limitation, each Mortgage
Loan listed on the Mortgage Loan Schedule,
as amended from time to time.
Mortgage
Loan Purchase and Sale Agreement: The Mortgage Loan Purchase
and
Sale Agreement, dated as of May 1, 2005,
between the Seller and the Depositor
with respect to the sale and purchase of
the Mortgage Loans.
Mortgage
Loan Schedule: The schedule attached hereto as Schedule A,
which
shall identify each Mortgage Loan, as such
schedule may be amended by the
Depositor or the Servicer from time to time
to reflect the addition of
Replacement Mortgage Loans to, or the
deletion of Deleted Mortgage Loans from,
the Trust Fund. Such schedule shall, among
other things (1) identify the
designated Mortgage Pool in which such
Mortgage Loan is included and (2)
separately identify One-Month LIBOR Loans,
Six-Month LIBOR Loans and Additional
Collateral Mortgage Loans.
Mortgage
Note: The original executed note or other evidence of the
indebtedness of a Mortgagor secured by a
Mortgage under a Mortgage Loan.
Mortgage
Pools: Any of Pool 1
and Pool 2.
Mortgaged
Property: The underlying property, including any Additional
Collateral, securing a Mortgage Loan which,
with respect to a Cooperative Loan,
is the related Cooperative Shares and
Property Lease.
Mortgage
Rate: As to any Mortgage Loan, the annual rate of interest
borne
by the related Mortgage Notes.
Mortgagor:
The obligor on a Mortgage Note.
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<PAGE>
Net
Interest Shortfalls: With respect to any Distribution Date, any
Net
Prepayment Interest Shortfalls for that
Distribution Date and the amount of
interest that would otherwise have been
received with respect to any Mortgage
Loan which was subject to (i) a Relief Act
Reduction or (ii) the interest
portion of any Debt Service Reduction or
Deficient Valuation, after exhaustion
of the respective amounts of coverage
provided by the Subordinate Certificates
for those type of losses.
Net
Liquidation Proceeds: With respect to any Liquidated Mortgage Loan
or
any other disposition of related Mortgaged
Property, the related Liquidation
Proceeds net of Advances, Servicer
Advances, related Servicing Fees and any
other accrued and unpaid fees received and
retained in connection with the
liquidation of such Mortgage Loan or
Mortgaged Property.
Net
Mortgage Rate: With respect to any Mortgage Loan and any
Distribution
Date, the related Mortgage Rate as of the
Due Date in the month preceding the
month of such Distribution Date reduced by
the Servicing Fee Rate for such
Mortgage Loan.
Net
Prepayment Interest Shortfall: With respect to any Mortgage Loan
and
any Distribution Date, the amount by which
any Prepayment Interest Shortfall for
such date exceeds the amount payable by the
Servicer in respect of such
shortfall.
Net WAC:
As to any Distribution Date, the weighted average of the Net
Mortgage Rates of the Mortgage Loans as of
the first day of the calendar month
immediately preceding the calendar month of
such Distribution Date, weighted on
the basis of their outstanding Stated
Principal Balances at such time. When the
term "Net WAC" is used herein with
reference to only the One-Month LIBOR Loans
or only the Six-Month LIBOR Loans, such
weighted average shall be computed with
reference solely to the Mortgage Loans in
the relevant group.
Non-Book-Entry Certificate: Any Certificate other than a
Book-Entry
Certificate.
Non-permitted Foreign Holder: As defined in Section 3.03(f).
Nonrecoverable
Advance: Any portion of an Advance or Servicer Advance
previously made or proposed to be made by
the Servicer (as certified in an
Officer's Certificate of the Servicer) or
by the Trustee pursuant to Section
5.04, which in the good faith judgment of
such party, shall not be ultimately
recoverable by such party from the related
Mortgagor, related Liquidation
Proceeds or otherwise.
Non-U.S.
Person: Any person other than a "United States person" within
the
meaning of Section 7701(a)(30) of the
Code.
Offering
Document: The Prospectus.
Officer's
Certificate: A certificate signed by the Chairman of the Board,
the Vice Chairman of the Board, the
President, a vice president (however
denominated), an Assistant Vice President,
the Treasurer, the Secretary, or one
of the assistant treasurers or assistant
secretaries (or any other officer
customarily performing functions similar to
those performed by any of the above
designated officers and also to whom, with
respect to a particular matter, such
matter is referred because of such
officer's knowledge of and familiarity with a
particular subject) of the Depositor or the
Trustee, as the case may be, and
delivered to the Depositor or the Trustee,
as the case may be, as required by
this Agreement.
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<PAGE>
Officer's
Certificate of the Servicer: A certificate (i) signed by the
Chairman of the Board, the Vice Chairman of
the Board, the President, a Managing
Director, a Vice President (however
denominated), an Assistant Vice President,
the Treasurer, the Secretary, or one of the
Assistant Treasurers or Assistant
Secretaries of the Servicer, or (ii) if
provided for herein, signed by a
Servicing Officer, as the case may be, and
delivered to the Trustee or the
Depositor, as the case may be.
One-Month
LIBOR Loan: Each Mortgage Loan bearing a Mortgage Rate that
adjusts in accordance with LIBOR for
one-month U.S. dollar deposits.
Opinion of
Counsel: A written opinion of counsel, who may be an employee
of the Depositor or the Servicer, that is
reasonably acceptable to each
addressee of such opinion; provided that
any Opinion of Counsel relating to (a)
qualification of the Mortgage Loans in a
REMIC or (b) compliance with the REMIC
Provisions, must be an opinion of counsel
reasonably acceptable to each
addressee of such opinion, who (i) is in
fact independent of the Servicer and
the Depositor, (ii) does not have any
material direct or indirect financial
interest in the Servicer or the Depositor
or in an affiliate of either and (iii)
is not connected with the Servicer or the
Depositor as an officer, employee,
director or person performing similar
functions.
Optional
Termination Price: An amount equal to the sum of (i) 100% of
the
Stated Principal Balance of the Mortgage
Loans (other than any Mortgage Loan
that has become an REO Property) plus
accrued interest thereon at the applicable
Mortgage Rate through the Due Date in the
month in which the Optional
Termination Price is to be distributed to
the Certificateholders and the fair
market value of any REO Property plus
accrued interest thereon; (ii) any
unreimbursed costs and damages incurred by
the Trust Fund (or the Trustee on
behalf of the Trust Fund) in connection
with the violation of any anti-predatory
or anti-abusive lending laws; and (iii) the
payment of all amounts (including,
without limitation, all previously
unreimbursed Advances and Servicing Advances
and accrued and unpaid Servicing Fees)
payable or reimbursable to the Servicer
or Trustee.
Original
Applicable Credit Support Percentage: With respect to each
Class
of Subordinate Certificates, the
corresponding percentage set forth opposite its
Class designation: Class B-1 - 3.40%; Class
B-2 - 2.00%; Class B-3 - 1.30%;
Class B-4 - 0.90%; Class B-5 - 0.50%; and
Class B-6 - 0.30%.
Original
Subordinate Principal Amount: The aggregate of the initial
Class
Principal Amounts of the Classes of
Subordinated Certificates.
Originator: With respect to any Mortgage Loan, the entity that (i)
took
the Mortgagor's loan application, (ii)
processed the Mortgagor's loan
application, and (iii) closed and/or funded
the Mortgagor's Mortgage Loan.
Overcollateralized Group: On any Distribution Date, any Certificate
Group
which is not an Undercollateralized
Group.
Parent
Power(R) Guaranty and Security Agreement: With respect to any
Additional Collateral Loan, as defined in
the Mortgage Loan Purchase and Sale
Agreement.
Paying
Agent: Any paying agent appointed by the Trustee pursuant to
Section 3.08.
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Percentage
Interest: With respect to any Certificate, its percentage
interest in the undivided beneficial
ownership interest in the Trust Fund
evidenced by all Certificates of the same
Class as such Certificate. With
respect to any Certificate other than a
Class X-A Certificate, a Class X-B
Certificate or the Class A-R Certificate,
the Percentage Interest evidenced
thereby shall equal the initial Certificate
Principal Amount thereof divided by
the initial Class Principal Amount of all
Certificates of the same Class. With
respect to the Class A-R Certificate, the
Percentage Interest evidenced thereby
shall be as specified on the face thereof,
or otherwise, be equal to 100%. With
respect to any Class X-A Certificate, the
Percentage Interest evidenced thereby
shall equal its initial Class Notional
Amount as set forth on the face thereof
divided by the initial Class Notional
Amount of such Class. With respect to any
Class X-B Certificate, the Percentage
Interest represented thereby shall equal
the initial Class Notional Amount thereof
divided by the initial Class Notional
Amount of all of the Certificates of the
same class.
Permitted
Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof,
provided that such obligations are backed by the full faith and
credit of the United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving
the
highest long-term debt rating of each Rating Agency, or such
lower
rating as shall not result in the downgrading or withdrawal of
the
ratings then assigned to the Certificates by the Rating Agencies,
as
evidenced by a signed writing delivered by each Rating Agency;
(iii) commercial or finance company paper which is then
receiving the highest commercial or finance company paper rating
of
each Rating Agency rating such paper, or such lower rating as
shall
not result in the downgrading or withdrawal of the ratings then
assigned to the Certificates by the Rating Agencies, as evidenced
by
a signed writing delivered by each Rating Agency;
(iv) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or
trust
company incorporated under the laws of the United States or of
any
state thereof and subject to supervision and examination by
federal
and/or state banking authorities, provided that the commercial
paper
and/or long-term unsecured debt obligations of such depository
institution or trust company (or in the case of the principal
depository institution in a holding company system, the
commercial
paper or long-term unsecured debt obligations of such holding
company, but only if Moody's is not the applicable Rating
Agency)
are then rated one of the two highest long-term and the highest
short-term ratings of each Rating Agency for such securities,
or
such lower ratings as shall not result in the downgrading or
withdrawal of the ratings then assigned to the Certificates by
the
Rating Agencies, as evidenced by a signed writing delivered by
each
Rating Agency;
(v) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation acceptable to the Rating
Agencies at the time of the issuance of such agreements, as
evidenced by a signed writing delivered by each Rating Agency;
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(vi) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered
into
with a depository institution or trust company (acting as
principal)
described in clause (iv) above;
(vii) securities (other than stripped bonds, stripped coupons
or instruments sold at a purchase price in excess of 115% of
the
face amount thereof) bearing interest or sold at a discount
issued
by any corporation incorporated under the laws of the United
States
or any state thereof which, at the time of such investment, have
one
of the two highest ratings of each Rating Agency (except if the
Rating Agency is Moody's, such rating shall be the highest
commercial paper rating of Moody's for any such series), or
such
lower rating as shall not result in the downgrading or withdrawal
of
the ratings then assigned to the Certificates by the Rating
Agencies, as evidenced by a signed writing delivered by each
Rating
Agency;
(viii) interests in any money market fund which at the date of
acquisition of the interests in such fund and throughout the
time
such interests are held in such fund has the highest applicable
rating by each Rating Agency rating such fund or such lower
rating
as shall not result in a change in the rating then assigned to
the
Certificates by each Rating Agency including funds for which
the
Trustee or any of its
Affiliates is investment manager or adviser;
(ix) short-term investment funds sponsored by any trust
company or national banking association incorporated under the
laws
of the United States or any state thereof which on the date of
acquisition has been rated by each applicable Rating Agency in
their
respective highest applicable rating category or such lower
rating
as shall not result in a change in the rating then specified
stated
maturity and bearing interest or sold at a discount acceptable
to
each Rating Agency as shall not result in the downgrading or
withdrawal of the ratings then assigned to the Certificates by
the
Rating Agencies; and
(x) such other investments having a specified stated maturity
and bearing interest or sold at a discount acceptable to the
Rating
Agencies as shall not result in the downgrading or withdrawal of
the
ratings then assigned to the Certificates by the Rating
Agencies;
provided,
that no such instrument shall be a Permitted Investment if (i)
such instrument evidences the right to
receive interest only payments with
respect to the obligations underlying such
instrument, (ii) such instrument
would require the Depositor to register as
an investment company under the
Investment Company Act of 1940, as amended,
or (iii) such instrument would not
be a "permitted investment" within the
meaning of such term as provided for in
Section 860G(a)(5) of the Code and the
Treasury Regulations thereunder.
Person:
Any individual, corporation, partnership, joint venture,
association, joint-stock company, limited
liability company, trust,
unincorporated organization or government
or any agency or political subdivision
thereof.
PHH: PHH
Mortgage Corporation or its successors in interest.
Pool Net
WAC: The Pool 1 Net WAC or Pool 2 Net WAC, as the context may
require.
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<PAGE>
Pool 1:
The aggregate of Mortgage Loans identified on the Mortgage Loan
Schedule as being included in Pool 1.
Pool 1
Mortgage Loans: Any
Mortgage Loan in Pool 1.
Pool 1 Net
WAC: With respect to any Distribution Date, the weighted
average of the Net Mortgage Rates of the
Pool 1 Mortgage Loans as of the first
day of the calendar month immediately
preceding the calendar month of such
Distribution Date, weighted on the basis of
their Stated Principal Balances at
such time.
Pool 1
Subordinate Amount: For any Distribution Date, the excess of
(a)
the Aggregate Stated Principal Balance of
the Pool 1 Mortgage Loans as of the
first day of the month preceding the month
in which such Distribution Date
occurs over (b) the sum of the Class
Principal Amounts of the Class A-1 and
Class A-R Certificates immediately before
such Distribution Date.
Pool 2:
The aggregate of Mortgage Loans identified on the Mortgage Loan
Schedule as being included in Pool 2.
Pool 2
Mortgage Loans: Any
Mortgage Loan in Pool 2.
Pool 2 Net
WAC: With respect to any Distribution Date, the weighted
average of the Net Mortgage Rates of the
Pool 2 Mortgage Loans as of the first
day of the calendar month immediately
preceding the calendar month of such
Distribution Date, weighted on the basis of
their Stated Principal Balances at
such time.
Pool 2
Subordinate Amount: For any Distribution Date, the excess of
(a)
the Aggregate Stated Principal Balance of
the Pool 2 Mortgage Loans as of the
first day of the month preceding the month
in which such Distribution Date
occurs over (b) the aggregate Class
Principal Amount of the Class A-2
Certificates immediately before such
Distribution Date.
Pool
Percentage: With respect to each Mortgage Pool and any
Distribution
Date, a fraction, expressed as a
percentage, the numerator of which is the
Aggregate Stated Principal Balance of such
Mortgage Pool and the denominator of
which is the Aggregate Stated Principal
Balance as of such Due Date.
Pool
Subordinate Amount: Any of the Pool 1 Subordinate Amount or the
Pool
2 Subordinate Amount.
Prepayment
Interest Shortfall: With respect to any full or partial
Principal Prepayment of a Mortgage Loan,
the excess, if any, of (i) one full
month's interest at the applicable Mortgage
Rate on the outstanding principal
balance of such Mortgage Loan immediately
prior to such Principal Prepayment
over (ii) the amount of interest actually
received with respect to such Mortgage
Loan in connection with such Principal
Prepayment.
Prepayment
Period: With respect to each Distribution Date, the calendar
month immediately preceding the month in
which the Distribution Date occurs.
Primary
Mortgage Insurance Policy: Each policy of primary mortgage
guaranty insurance or any replacement
policy therefor with respect to any
Mortgage Loan.
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<PAGE>
Principal
Distribution Amount: With respect to any Mortgage Pool and any
Distribution Date, the sum of (a) each
Scheduled Payment of principal collected
or advanced on the related Mortgage Loans
(before taking into account any
Deficient Valuations or Debt Service
Reductions) and due during the related Due
Period, (b) that portion of the Purchase
Price representing principal of any
Mortgage Loans in such Mortgage Pool
purchased in accordance with Section 2.04
hereof and received during the related
Prepayment Period, (c) the principal
portion of any related Substitution Amount
received during the related
Prepayment Period, (d) the principal
portion of all Insurance Proceeds received
during the related Prepayment Period with
respect to Mortgage Loans in such
Mortgage Pool that are not yet Liquidated
Mortgage Loans, (e) the principal
portion of all Net Liquidation Proceeds
received during the related Prepayment
Period with respect to Liquidated Mortgage
Loans in such Mortgage Pool, (f) all
Subsequent Recoveries received during the
related Prepayment Period with respect
to Liquidated Mortgage Loans in such
Mortgage Pool, (g) the principal portion of
the proceeds of any Additional Collateral
with respect to the Mortgage Loans in
such Mortgage Pool, (h) the principal
portion of all partial and full principal
prepayments of Mortgage Loans in such
Mortgage Pool applied by the Servicer
during the related Prepayment Period and
(i) on the Distribution Date on which
the Trust Fund is to be terminated pursuant
to Article VII hereof, that portion
of the Optional Termination Price in
respect of principal for such Mortgage
Pool.
Principal
Prepayment: Any Mortgagor payment of principal or other
recovery
of principal on a Mortgage Loan that is
recognized as having been received or
recovered in advance of its scheduled Due
Date and applied to reduce the
principal balance of the Mortgage Loan in
accordance with the terms of the
Mortgage Note or this Agreement.
Principal
Prepayment In Full: Any Principal Prepayment of the entire
principal balance of the Mortgage
Loans.
Principal
Transfer Amount: For any Distribution Date and for any
Undercollateralized Group, the excess, if
any, of the aggregate Class Principal
Amount of such Undercollateralized Group
immediately prior to such Distribution
Date over the Aggregate Stated Principal
Balance of the related Mortgage Pool
immediately prior to such Distribution
Date.
Proceeding: Any suit in equity, action at law or other judicial
or
administrative proceeding.
Proprietary Lease: With respect to any Cooperative Property, a
lease or
occupancy agreement between a Cooperative
Corporation and a holder of related
Cooperative Shares.
Pro Rata
Senior Percentage: With respect to each Distribution Date and
each Mortgage Pool, the percentage
equivalent of a fraction the numerator of
which is the aggregate Class Principal
Amount of the Class or Classes of the
Related Certificate Group immediately prior
to such Distribution Date and the
denominator of which is the Aggregate
Stated Principal Balance of the related
Mortgage Pool for such Distribution
Date.
Prospectus: The prospectus supplement dated May 26, 2005, together
with
the accompanying prospectus dated January
19, 2005, relating to the initial sale
of the Class A-1, Class A-2, Class A-R,
Class X-A, Class B-1, Class B-2 and
Class B-3 Certificates.
Purchase
Date: Any Distribution Date on which Certificates may be
repurchased pursuant to Section
7.01(c).
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<PAGE>
Purchase
Price: With respect to any Mortgage Loan required or permitted
to
be purchased by the Depositor pursuant to
this Agreement, by the Servicer
pursuant to this Agreement, or by the
Seller pursuant to the Mortgage Loan
Purchase Agreement, an amount equal to the
sum of (i) 100% of the unpaid
principal balance of the Mortgage Loan on
the date of such purchase, (ii)
accrued interest thereon at the applicable
Net Mortgage Rate from the date
through which interest was last paid by the
Mortgagor to the Due Date in the
month in which the Purchase Price is to be
distributed to Certificateholders and
(iii) any unreimbursed costs, penalties
and/or damages incurred by the Trust
Fund in connection with any violation
relating to such Mortgage Loan of any
predatory or abusive lending law.
Rapid
Prepayment Conditions: As to any Distribution Date either of
the
following conditions: if (1) the Aggregate
Subordinate Percentage on such date
is less than 200% of the Aggregate
Subordinate Percentage on the Closing Date or
(2) the outstanding Stated Principal
Balance of the Mortgage Loans in any
Mortgage Pool delinquent 60 days or months,
as a percentage of such Mortgage
Pool's Pool Subordinate Amount, is greater
than or equal to 50%.
Rating
Agency: Each of
Moody's, S&P and Fitch Ratings.
Realized
Loss: With respect to each Liquidated Mortgage Loan, an amount
(not less than zero or more than the Stated
Principal Balance of the Mortgage
Loan) as of the date of such liquidation,
equal to (i) the Stated Principal
Balance of the Liquidated Mortgage Loan as
of the date of such liquidation, plus
(ii) interest at the Net Mortgage Rate from
the Due Date as to which interest
was last paid or advanced (and not
reimbursed) to Certificateholders up to the
Due Date in the month in which Liquidation
Proceeds are required to be
distributed on the Stated Principal Balance
of such Liquidated Mortgage Loan
from time to time, minus (iii) the Net
Liquidation Proceeds and the proceeds of
any Additional Collateral, if any, received
during the month in which such
liquidation occurred, to the extent applied
as recoveries of interest at the Net
Mortgage Rate and to principal of the
Liquidated Mortgage Loan. With respect to
each Mortgage Loan which has become the
subject of a Deficient Valuation, if the
principal amount due under the related
Mortgage Note has been reduced, the
difference between the principal balance of
the Mortgage Loan outstanding
immediately prior to such Deficient
Valuation and the principal balance of the
Mortgage Loan as reduced by the Deficient
Valuation.
Record
Date: As to any Distribution Date (i) with respect to the LIBOR
Certificates, the last Business Day
preceding such Distribution Date (or the
Closing Date, in the case of the first
Distribution Date) unless such
Certificates shall no longer be Book-Entry
Certificates, in which case the
Record Date shall be the last Business Day
of the month preceding the month of
such Distribution Date and (ii) in the case
of all other Certificates (including
LIBOR Certificates that are subsequently
reissued as Definitive Certificates),
the last Business Day of the month
preceding the month of each Distribution
Date.
Refinancing Mortgage Loan: Any Mortgage Loan originated in
connection with
the refinancing of an existing mortgage
loan.
Related
Certificate Group: The Certificate Group related to a
particular
Mortgage Pool as indicated by the same
numerical designation (i.e., Group 1
Certificates are related to Pool 1 and
Group 2 Certificates are related to Pool
2).
Related
Class of Upper Tier REMIC Interest: With respect to any Class
of
Certificates, the interest in the Upper
Tier REMIC appearing opposite such Class
in the Preliminary Statement hereto.
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<PAGE>
Relief Act
Reductions: With respect to any Distribution Date and any
Mortgage Loan as to which there has been a
reduction in the amount of interest
collectible thereon for the most recently
ended calendar month as a result of
the application of the Civil Relief Act,
the amount, if any, by which (i)
interest collectible on such Mortgage Loan
for the most recently ended calendar
month is less than (ii) interest accrued
thereon for such month pursuant to the
Mortgage Note.
REMIC:
Each pool of assets in the Trust Fund designated as a REMIC as
described in the Preliminary Statement.
REMIC
Components: Each of the X-A1 Component, the X-A2 Component,
Component XB1, Component XB2 and Component
XB3.
REMIC
Interests: Any regular or residual interest in any of REMIC 1,
REMIC
2 or the Upper Tier REMIC, as described in
the Preliminary Statement.
REMIC
Provisions: The provisions of the federal income tax law relating
to
real estate mortgage investment conduits,
which appear at Sections 860A through
860G of Subchapter M of Chapter 1 of the
Code, and related provisions, and
regulations, including proposed regulations
and rulings, and administrative
pronouncements promulgated thereunder, as
the foregoing may be in effect from
time to time.
REMIC 1:
As described in the
Preliminary Statement.
REMIC 1
Interest: Each class of interest in REMIC 1 as described in the
Preliminary Statement.
REMIC 1
Regular Interest: Each of the REMIC 1 Interests other than the
Class LT1-R Interest.
REMIC 1
Subordinated Balance Ratio: The ratio among the uncertificated
principal balances of each of the REMIC 1
Interests ending with the designation
"A" that is equal to the ratio among, with
respect to each such REMIC 1
Interest, the excess of (x) the aggregate
Scheduled Principal Balance of the
Mortgage Loans in the related Mortgage Pool
over (y) the aggregate Class
Principal Amount of the Certificates in the
Certificate Group related to such
Mortgage Pool.
REMIC 2:
As described in the
Preliminary Statement.
REMIC 2
Interest: Each class of interest in REMIC 2 as described in the
Preliminary Statement.
REMIC 2
Regular Interest: Each of the REMIC 2 Interests other than the
Class LT2-R Interest.
REO
Disposition: The final sale by the Servicer of an REO Property.
REO
Property: A Mortgaged Property acquired by the Trust Fund
through
foreclosure or deed-in-lieu of foreclosure
in connection with a defaulted
Mortgage Loan or otherwise treated as
having been acquired pursuant to the REMIC
Provisions.
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<PAGE>
Replacement Mortgage Loan: A mortgage loan substituted by the
Seller for a
Deleted Mortgage Loan which must, on the
date of such substitution, as confirmed
in a Request for Release substantially in
the form attached to this Agreement,
(i) have a Stated Principal Balance, after
deduction of the principal portion of
the Scheduled Payment due in the month of
substitution, not in excess of, and
not more than 10% less than, the Stated
Principal Balance of the Deleted
Mortgage Loan; (ii) have a Maximum Rate not
less than (and not more than two
percentage points greater than) the Maximum
Rate of the Deleted Mortgage Loan;
(iii) have a gross margin not less than
that of the Deleted Mortgage Loan and,
if Mortgage Loans equal to 1% or more of
the balance of the related Mortgage
Pool as of the Cut-off Date have become
Deleted Mortgage Loans, not more than
two percentage points more than that of the
Deleted Mortgage Loan; (iv) have an
Effective Loan-to-Value Ratio no higher
than that of the Deleted Mortgage Loan;
(v) have Adjustment Dates that are no more
or less frequent than the Deleted
Mortgage Loan; (vi) have a remaining term
to maturity no greater than (and not
more than one year less than that of) the
Deleted Mortgage Loan; (vii) not
permit conversion of the related Mortgage
Rate to a permanent fixed Mortgage
Rate; (viii) not be a Cooperative Loan
unless the Deleted Mortgage Loan was a
Cooperative Loan; (ix) have the same or
better FICO credit score; (x) have an
initial interest adjustment date no earlier
than five months before (and no
later than five months after) the initial
adjustment date of the Deleted
Mortgage Loan, (xi) comply with each
representation and warranty set forth in
Schedule B of this Agreement; and (xii)
shall be accompanied by an Opinion of
Counsel that such Replacement Mortgage Loan
would not adversely affect the REMIC
status of any of the REMICs formed pursuant
to this Pooling and Servicing
Agreement or would not otherwise be
prohibited by this Pooling and Servicing
Agreement.
Request for
Release: A request for release, substantially in the form of
Exhibit N attached hereto, properly
completed and signed by a Servicing Officer
(or, if delivered on behalf of the Seller
or Depositor, an Authorized Officer
thereof).
Residual
Certificate: The Class
A-R Certificate.
Residual
Interest: The Residual Certificate, other than the portion
thereof representing the right to payments
in respect of the Class LT1-R
Interest and the Class LT2-R Interest.
RESPA: The
Real Estate Settlement Procedures Act, 12 U.S.C Section 2601 et
seq., and Regulation X, 24 C.F.R. Section
3500.21, thereunder, as the foregoing
may be amended from time to time.
Responsible Officer: With respect to the Trustee, any officer in
the
corporate trust department or similar group
of the Trustee with direct
responsibility for the administration of
this Agreement and also, with respect
to a particular corporate trust matter, any
other officer to whom such matter is
referred because of his or her knowledge of
and familiarity with the particular
subject.
Restricted
Certificate: Any Class X-B, Class B-4, Class B-5 or Class B-6
Certificate.
Restricted
Global Security: As
defined in Section 3.01(c).
S&P:
Standard & Poor's, a division of The McGraw-Hill Companies,
Inc., or
any successor in interest.
SAIF: The
Saving's Association Insurance Fund, or any successor thereto.
29
<PAGE>
Schedule
of Exceptions: As
defined in Section 2.02(a) of this Agreement.
Scheduled
Payment: The scheduled monthly payment on a Mortgage Loan due
on
any Due Date allocable to principal and/or
interest on such Mortgage Loan which,
unless otherwise specified in this
Agreement, shall give effect to any related
Debt Service Reduction and any Deficient
Valuation that affects the amount of
the monthly payment due on such Mortgage
Loan.
Section
302 Requirements: Any rules or regulations promulgated pursuant
to
the Sarbanes-Oxley Act of 2002 (as such may
be amended from time to time).
Seller:
Merrill Lynch Credit
Corporation, a Delaware corporation.
Senior
Certificate: Any one of the Class A-1, Class A-2, Class X-A,
Class
X-B or Class A-R Certificates.
Senior
Percentage: Except as provided in this definition, for each
Mortgage Pool with respect to any
Distribution Date before June 2015, 100%. The
Senior Percentage for each Mortgage Pool
for any Distribution Date occurring (i)
before the Distribution Date in June 2015,
but in or after June 2008 on which
the Two Times Test is satisfied, or (ii) in
or after June 2015, is the related
Pro Rata Senior Percentage. If the Two
Times Test is satisfied with respect to
any Distribution Date prior to the
Distribution Date in June 2008, the Senior
Percentage for such Mortgage Pool is the
Pro Rata Senior Percentage plus 50% of
an amount equal to 100% minus the related
Pro Rata Senior Percentage. With
respect to any Distribution Date after the
Senior Termination Date, the Senior
Percentage for such Mortgage Pool will
equal zero. If on any Distribution Date
the allocation to the Senior Certificates
of the related Certificate Group then
entitled to distributions of principal of
full and partial principal prepayments
and other amounts in the percentage
required above would reduce the sum of the
Class Principal Amounts of those
Certificates to below zero, the Senior
Percentage for such Distribution Date shall
be limited to the percentage
necessary to reduce such Class Principal
Amounts to zero.
Senior
Prepayment Percentage: With respect to any Distribution Date,
during the ten years beginning on the first
Distribution Date, 100%. Except as
provided herein, the related Senior
Prepayment Percentage for each Mortgage Pool
and any Distribution Date occurring on or
after the tenth anniversary of the
first Distribution Date shall be as
follows: (i) from June 2015 through May
2016, the Senior Percentage plus 70% of the
Subordinate Percentage for that
Distribution Date; (ii) from June 2016
through May 2017, the Senior Percentage
plus 60% of the Subordinate Percentage for
that Distribution Date; (iii) from
June 2017 through May 2018, the Senior
Percentage plus 40% of the Subordinate
Percentage for that Distribution Date; (iv)
from June 2018 through May 2019, the
related Senior Percentage plus 20% of the
Subordinate Percentage for that
Distribution Date; and (v) from and after
June 2019, the Senior Percentage for
that Distribution Date; provided, however,
that there shall be no reduction in
the Senior Prepayment Percentage for a
Mortgage Pool unless both Step Down
Conditions are satisfied; and provided,
further, that if on any such
Distribution Date the Pro Rata Senior
Percentage exceeds the initial Pro Rata
Senior Percentage, the Senior Prepayment
Percentage for a Mortgage Pool for that
Distribution Date shall again equal
100%.
Notwithstanding the above, if on any Distribution Date the Two
Times Test
is satisfied, the Senior Prepayment
Percentage for a Mortgage Pool shall equal
the related Senior Percentage for such
Distribution Date. In addition, if on any
Distribution Date the allocation to the
Senior Certificates of the related
Certificate Group then entitled to
distributions of principal of full and
partial principal prepayments and other
amounts in the percentage required above
would reduce
30
<PAGE>
the sum of the Class Principal Amounts of
those Certificates to below zero, the
Senior Prepayment Percentage for a Mortgage
Pool for such Distribution Date
shall be limited to the percentage
necessary to reduce the related Class
Principal Amounts to zero.
Senior
Principal Distribution Amount: With respect to any Mortgage
Pool
and Distribution Date, the sum of:
(1) the related Senior Percentage of all amounts described in
clause
(a) of the
definition of "Principal Distribution Amount" for that
Distribution Date;
(2) with respect to each Mortgage Loan in the related Mortgage
Pool
which
became a Liquidated Mortgage Loan during the related Prepayment
Period,
the lesser of
(x) the related Senior Percentage of the Stated Principal
Balance of that Mortgage Loan and
(y) the related Senior Prepayment Percentage of the amount of
the Net Liquidation Proceeds allocable to principal received
with
respect to that Mortgage Loan; and
(3) the related Senior Prepayment Percentage of the amounts
described
in clauses (b), (c), (d), (f), (g), (h) and (i) of the
definition
of "Principal Distribution Amount".
Senior
Termination Date: For each Certificate Group, the Distribution
Date
when the aggregate of the Class Certificate
Principal Balances of that Group has
been reduced to zero.
Servicer:
PHH and its successors
and assigns.
Servicer
Advance: The outstanding moneys that have been advanced by the
Servicer from its funds in connection with
its servicing of a Mortgage Loan
(including, but not limited to, taxes,
ground rents, assessments, insurance
premiums, release fees, foreclosure and
bankruptcy fees and expenses, and other
expenses) (i) that have been made by the
Servicer in accordance with the terms
and provisions herein, (ii) that are
recoverable through Liquidation Proceeds
and/or Insurance Proceeds, or that are made
at the direction of the Seller or to
preserve its security interest in the
related Mortgaged Property and (iii) for
which the Servicer has a right of
reimbursement.
Servicing
Fee: As to any Distribution Date and each Mortgage Loan, an
amount equal to the product of (a)
one-twelfth of the Servicing Fee Rate and (b)
the outstanding principal balance of such
Mortgage Loan as of the first day of
the related Due Period.
Servicing
Fee Rate: With respect to each Mortgage Loan and any
Distribution Date, 0.25% per annum.
Servicing
Officer: Any officer of the Servicer involved in, or
responsible
for, the administration and servicing of
the Mortgage Loans whose name and
facsimile signature appear on a list of
servicing officers furnished to the
Trustee by the Servicer on the Closing Date
and attached hereto as Exhibit M, as
such list may from time to time be
amended.
Servicing
Transfer Costs: As
defined in Section 6.14(b).
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<PAGE>
Six-Month
LIBOR Loan: Each Mortgage Loan bearing a Mortgage Rate that
adjusts in accordance with LIBOR for
six-month U.S. dollar deposits.
Startup
Day: The day designated as such pursuant to Section 10.01(b)
hereof.
Stated
Principal Balance: As to any Mortgage Loan and Due Date, the
unpaid
principal balance of such Mortgage Loan as
of such Due Date as specified in the
amortization schedule at the time relating
thereto (before any adjustment to
such amortization schedule by reason of any
moratorium or similar waiver or
grace period) after giving effect to any
previous Principal Prepayments and
Liquidation Proceeds allocable to principal
and to the payment of principal due
on such Due Date and irrespective of any
delinquency in payment by the related
Mortgagor.
Step Down
Conditions: As of the first Distribution Date as to which any
decrease in any Senior Prepayment
Percentage applies, (i) the outstanding Stated
Principal Balance of all Mortgage Loans 60
days or more Delinquent (including
Mortgage Loans in bankruptcy, REO and
foreclosure) (averaged over the preceding
six month period), as a percentage of the
aggregate of the Class Principal
Amounts of the Classes of Subordinate
Certificates on such Distribution Date,
does not equal or exceed 50% and (ii)
cumulative Realized Losses with respect to
the Mortgage Loans do not exceed (a) with
respect to each Distribution Date from
June 2015 through May 2016, 30% of the
Original Subordinate Principal Amount,
(b) with respect to each Distribution Date
from June 2016 through May 2017, 35%
of the Original Subordinate Principal
Amount, (c) with respect to each
Distribution Date from June 2017 through
May 2018, 40% of the Original
Subordinate Principal Amount, (d) with
respect to each Distribution Date from
June 2018 through May 2019, 45% of the
Original Subordinate Principal Amount and
(e) with respect to each Distribution Date
from and after March 2019, 50% of the
Original Subordinate Principal Amount.
Subordinate Certificate: Any of the Class B-1, Class B-2, Class
B-3, Class
B-4, Class B-5 or Class B-6
Certificates.
Subordinate Certificate Writedown Amount: The amount described in
Section
5.03(b)(iii).
Subordinate Class Percentage: As to any Distribution Date and any
Class of
Subordinate Certificates, a fraction,
expressed as a percentage, the numerator
of which is the Class Principal Amount of
such Class on such date, and the
denominator of which is the aggregate Class
Principal Amount of all Classes of
Subordinate Certificates on such date.
Subordinate Net WAC: For any Distribution Date, the weighted
average of
the Pool 1 Net WAC and the Pool 2 Net WAC,
weighted on the basis of the Pool
Subordinate Amounts for Pool 1 and Pool 2,
respectively, for such Distribution
Date.
Subordinate Percentage: With respect to each Mortgage Pool and
any
Distribution Date, the difference between
100% and the related Senior Percentage
for such Mortgage Pool for such
Distribution Date.
Subordinate Prepayment Percentage: With respect to any Distribution
Date
and for any Mortgage Pool, the difference
between 100% and the related Senior
Prepayment Percentage for such Mortgage
Pool for that Distribution Date.
32
<PAGE>
Subordinate Principal Distribution Amount: With respect to any
Distribution Date and each Mortgage Pool,
an amount equal to the sum of:
(1) the related Subordinate Percentage of all amounts described
in
clause (a)
of the definition of "Principal Distribution Amount" for that
Distribution Date;
(2) with respect to each Mortgage Loan in the related Mortgage
Pool
that
became a Liquidated Mortgage Loan during the related Prepayment
Period the
amount of the Net Liquidation Proceeds allocated to principal
received
with respect thereto remaining after application thereof
pursuant
to clause
(2) of the definition of "Senior Principal Distribution Amount"
for that
Distribution Date, up to the Subordinate Percentage of the
Stated
Principal
Balance of such Mortgage Loan; and
(3) the related Subordinate Prepayment Percentage of all
amounts
described
in clauses (b), (c), (d), (f), (g), (h) and (i) of the
definition
of "Principal Distribution Amount" for that Mortgage Pool and
that
Distribution Date;
minus the sum of:
any Principal Transfer Amount paid from the Available
Distribution
Amount of
the Related Certificate Group to an Undercollateralized Group;
and
the amount of principal distributions made to the Senior
Certificates pursuant to Section 5.02(h);
Subsequent
Recovery: The amount, if any, recovered by the Servicer with
respect to a Liquidated Mortgage Loan with
respect to which a Realized Loss has
been incurred after liquidation and
disposition of such Mortgage Loan.
Substitution Amount: As defined in the second paragraph of
Section
2.04(b).
Tax
Matters Person: The "tax matters person" as specified in the
REMIC
Provisions which shall initially be the
Holder of the Class A-R Certificate.
Telerate
Page 3750: The display currently so designated as "Page 3750"
on
the Bridge Telerate Service (or such other
page selected by the Trustee as may
replace Page 3750 on that service for the
purpose of displaying daily comparable
rates on prices).
Trust
Fund: The corpus of the trust created pursuant to this
Agreement,
consisting of (i) the Mortgage Loans,
including the right to all payments of
principal and interest received on or with
respect to the Mortgage Loans on and
after the Cut-off Date (other than
Scheduled Payments due on or before such
date), and all such payments due after such
date but received prior to such date
and intended by the related Mortgagors to
be applied after such date; (ii) all
of the Depositor's right, title and
interest in and to all amounts from time to
time credited to and the proceeds of the
Distribution Account, any Custodial
Accounts or any Escrow Accounts established
with respect to the Mortgage Loans;
(iii) all of the Depositor's rights under
the Mortgage Loan Purchase and Sale
Agreement and the Mortgage Loan Purchase
Agreement; (iv) all of the Depositor's
right, title or interest in REO Property
and the proceeds thereof; (v) all of
the Depositor's rights under any Insurance
Policies relating to the Mortgage
Loans; (vi) all proceeds of the conversion,
voluntary or involuntary, of any of
the foregoing into cash or other liquid
assets, including without limitation,
all Insurance Proceeds, Liquidation
Proceeds and
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condemnation awards; and (vii) the
Depositor's security interest in any
collateral pledged to secure the Mortgage
Loans, including the Mortgaged
Properties and any Additional Collateral
relating to the Additional Collateral
Mortgage Loans, including, but not limited
to, any pledge, control and guaranty
agreements and the Limited Purpose Surety
Bond and any proceeds of the
foregoing.
Trustee:
Wells Fargo Bank, N.A. and any Person succeeding the Trustee
hereunder, or if any separate trustee or
any co-trustee shall be appointed as
herein provided, then such separate trustee
and such co-trustee, as the case may
be.
Trustee
Mortgage Files: With respect to each Mortgage Loan, the
Mortgage
Documents to be retained in the custody and
possession of the Trustee.
Two Times
Test: As to any Distribution Date, (i) the Aggregate
Subordinate
Percentage is at least two times the
Aggregate Subordinate Percentage as of the
Closing Date; (ii) the aggregate of the
Stated Principal Balances of all
Mortgage Loans Delinquent 60 days or more
(including Mortgage Loans in
bankruptcy, REO and foreclosure) (averaged
over the preceding six-month period),
as a percentage of the aggregate of the
Class Principal Amount of the
Subordinate Certificates on such
Distribution Date, does not equal or exceed
50%; and (iii) cumulative Realized Losses
with respect to the Mortgage Loans do
not exceed 20% of the Original Subordinate
Principal Amount.
UCC:
The Uniform Commercial
Code as enacted in the relevant jurisdiction.
Undercollateralized Group: With respect to any Distribution Date,
and any
Certificate Group, the aggregate Class
Principal Amount of such Certificate
Group is greater than the aggregate Stated
Principal Balance of the Mortgage
Loans in the related Mortgage Pool
immediately prior to such Distribution Date.
Underwriters: Merrill Lynch, Pierce, Fenner & Smith
Incorporated and WaMu
Capital Corporation.
Underwriter's Exemption: Prohibited Transaction Exemption ("PTE")
90-29
(Exemption Application No. D-8019, 55 Fed.
Reg. 21459 (1990)) as amended, or any
substantially similar administrative
exemption granted by the U.S. Department of
Labor to an Underwriter.
Underwriting Agreement: The underwriting agreement, dated February
28,
2003 and the terms agreement, dated May 25,
2005, each between the Depositor and
the Underwriters, referred to
collectively.
Underwriting Standards: As to each Mortgage Loan, the Seller's
or
Originator's written underwriting
guidelines in effect as of the origination
date of such Mortgage Loan.
Uniform
Commercial Code: The Uniform Commercial Code as in effect in
any
applicable jurisdiction from time to
time.
Unpaid
Basis Risk Shortfall: With respect to any Distribution Date and
any
Class of LIBOR Certificates, the aggregate
of all Basis Risk Shortfalls with
respect to such Certificate remaining
unpaid from previous Distribution Dates,
plus interest accrued thereon at the
applicable Certificate Interest Rate
determined without regard to clause (ii) of
the definition therefor to the
extent not paid on prior Distribution
Dates.
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Upper Tier
REMIC: As described in
the Preliminary Statement.
Upper Tier
REMIC Class A-1 Interest: An uncertificated interest in the
Upper Tier REMIC having the same
characteristics as the Class A-1 Certificates,
but without the right to receive payments
in respect of Basis Risk Shortfalls
and Unpaid Basis Risk Shortfalls.
Upper Tier
REMIC Class A-2 Interest: An uncertificated interest in the
Upper Tier REMIC having the same
characteristics as the Class A-2 Certificates,
but without the right to receive payments
in respect of Basis Risk Shortfalls
and Unpaid Basis Risk Shortfalls.
Upper Tier
REMIC Class B-1 Interest: An uncertificated interest in the
Upper Tier REMIC having the same
characteristics as the Class B-1 Certificates,
but without the right to receive payments
in respect of Basis Risk Shortfalls
and Unpaid Basis Risk Shortfalls.
Upper Tier
REMIC Class B-2 Interest: An uncertificated interest in the
Upper Tier REMIC having the same
characteristics as the Class B-2 Certificates,
but without the right to receive payments
in respect of Basis Risk Shortfalls
and Unpaid Basis Risk Shortfalls.
Upper Tier
REMIC Class B-3 Interest: An uncertificated interest in the
Upper Tier REMIC having the same
characteristics as the Class B-3 Certificates,
but without the right to receive payments
in respect of Basis Risk Shortfalls
and Unpaid Basis Risk Shortfalls.
Upper Tier
REMIC Regular Interest: Each of the REMIC Components, the Upper
Tier REMIC Class A-1 Interest, the
Upper-Tier REMIC Class A-2 Interest, the
Upper Tier REMIC Class B-1 Interest, the
Upper-Tier REMIC Class B-2 Interest,
the Upper-Tier REMIC Class B-3 Interest,
the Class B-4 Certificates, the Class
B-5 Certificates and the Class B-6
Certificates.
USAP
Report: A report in compliance with the Uniform Single
Attestation
Program for Mortgage Bankers delivered in
accordance with Section 9.13.
Voting
Interests: The portion of the voting rights of all the
Certificates
that is allocated to any Certificate for
purposes of the voting provisions of
this Agreement. At all times during the
term of this Agreement, 98.00% of all
Voting Interests shall be allocated to the
Class A-1, Class A-2, Class A-R,
Class B-1, Class B-2, Class B-3, Class B-4,
Class B-5 and Class B-6
Certificates. Voting Interests shall be
allocated among such Certificates (other
than the Class A-R Certificates) based on
the product of (i) 98.00% and (ii) the
fraction, expressed as a percentage, the
numerator of which is the aggregate
Class Principal Amounts for each Class then
outstanding and the denominator of
which is the Aggregate Stated Principal
Balance outstanding, and the remainder
of such percentage of Voting Interests
shall be allocated to the Class A-R
Certificates. At all times during the term
of this Agreement, 2.00% of all
Voting Interests shall be allocated among
the Class X-A and Class X-B
Certificates, while they remain
outstanding, in proportion to their relative
Class Notional Amounts. Voting Interests
shall be allocated among the
Certificates within each such Class in
proportion to their Certificate Principal
Amounts or Percentage Interests.
X-A1
Component: An interest only Component represented by the Class
X-A
Certificates which has a notional amount
for any Distribution Date equal to the
Class Principal Amount of the Class A-1
Certificates immediately prior to such
Distribution Date and having an interest
rate with respect to any Distribution
Date (and the related Accrual Period) equal
to the excess, if any, of (i) the
Pool 1 Net WAC for such Distribution Date
over (ii) the Certificate Interest
Rate of the Class A-1 Certificates for such
Distribution Date. For purposes of
Section
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5.02(h), the X-A1 Component shall be
related to the Group 1 Certificates. For
purposes of the definition of "Class Excess
Interest Amount", the X-A1 Component
shall be related to the Class A-1
Certificates.
X-A2
Component: An interest-only Component represented by the Class
X-A
Certificates which has a notional amount
for any Distribution Date equal to the
Class Principal Amount of the Class A-2
Certificates immediately prior to such
Distribution Date and having an interest
rate with respect to any Distribution
Date (and the related Accrual Period) equal
to the excess, if any, of (i) the
Pool 2 Net WAC for such Distribution Date
over (ii) the Certificate Interest
Rate of the Class A-2 Certificates for such
Distribution Date. For purposes of
Section 5.02(h), the X-A2 Component shall
be related to the Group 2
Certificates. For purposes of the
definition of "Class Excess Interest Amount",
the X-A2 Component shall be related to the
Class A-2 Certificates.
Section
1.02. Calculations Respecting Mortgage Loans.
Calculations required to be made pursuant to this Agreement with
respect
to any Mortgage Loan in the Trust Fund
shall be made based upon current
information as to the terms of the Mortgage
Loans and reports of payments
received from the Mortgagor on such
Mortgage Loans and payments to be made to
the Trustee as provided by the Servicer.
The Trustee shall not be required to
recompute, verify or recalculate the
information supplied to it by the Servicer.
ARTICLE II.
DECLARATION OF TRUST;
ISSUANCE OF CERTIFICATES
Section
2.01. Creation and Declaration of Trust Fund; Conveyance of
Mortgage Loans.
(a) Concurrently with the execution and delivery of this
Agreement, the Depositor does hereby
establish the Trust Fund and transfer,
assign, set over, deposit with and
otherwise convey to the Trustee, without
recourse, subject to Sections 2.02 and
2.04, in trust, all the right, title and
interest of the Depositor in and to the
Trust Fund. Such conveyance includes,
without limitation, (i) the Mortgage Loans,
including the right to all payments
of principal and interest received on or
with respect to the Mortgage Loans on
and after the Cut-off Date (other than
Scheduled Payments due on or before such
date), and all such payments due after such
date but received prior to such date
and intended by the related Mortgagors to
be applied after such date; (ii) all
of the Depositor's right, title and
interest in and to all amounts from time to
time credited to and the proceeds of the
Distribution Account, any Custodial
Accounts or any Escrow Account established
with respect to the Mortgage Loans;
(iii) all of the Depositor's rights under
the Mortgage Loan Purchase and Sale
Agreement; (iv) all of the Depositor's
right, title or interest in REO Property
and the proceeds thereof; (v) all of the
Depositor's rights under any Insurance
Policies relating to the Mortgage Loans;
(vi) all proceeds of the conversion,
voluntary or involuntary, of any of the
foregoing into cash or other liquid
assets, including, without limitation, all
Insurance Proceeds, Liquidation
Proceeds and condemnation awards; and (vii)
the Depositor's security interest in
any collateral pledged to secure the
Mortgage Loans, including the Mortgaged
Properties and any Additional Collateral
relating to the Additional Collateral
Mortgage Loans, including, but not limited
to, any pledge, control and guaranty
agreements and the Limited Purpose Surety
Bond and any proceeds of the
foregoing, to have and to hold, in trust;
and the Trustee declares that, subject
to the review provided for in Section 2.02,
it has received and shall hold the
Trust Fund, as trustee, in trust, for the
benefit and use of the Holders of the
Certificates
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and for the purposes and subject to the
terms and conditions set forth in this
Agreement, and, concurrently with such
receipt, has caused to be executed,
authenticated and delivered to or upon the
order of the Depositor, in exchange
for the Trust Fund, Certificates in the
authorized denominations evidencing the
entire ownership of the Trust Fund.
Notwithstanding anything to the contrary in
this Agreement, the Trust Fund shall not
obtain title to or beneficial ownership
of any Additional Collateral as a result of
or in lieu of the disposition
thereof or otherwise.
The
foregoing sale, transfer, assignment, set-over, deposit and
conveyance
does not and is not intended to result in
the creation or assumption by the
Trustee of any obligation of the Depositor,
the Seller or any other Person in
connection with the Mortgage Loans or any
other agreement or instrument relating
thereto except as specifically set forth
therein.
It is
agreed and understood by the parties hereto that it is not
intended
that any Mortgage Loan be included in the
Trust Fund that is a "High-Cost Home
Loan" as defined in the New Jersey Home
Ownership Act, effective November 27,
2003, the New Mexico Home Loan Protection
Act, effective January 1, 2004, the
Massachusetts Predatory Home Loan Practices
Act, effective November 7, 2004, and
the Indiana High Cost Home Loan Law,
effective January 1, 2005.
In
connection with such transfer and assignment of the Mortgage Loans,
the
Depositor shall deliver to, and deposit
with, or cause to be delivered to and
deposited with, the Trustee, the documents
or instruments described in Section 2
of the Custodial Agreement with respect to
each Mortgage Loan; provided that in
Section 2a thereof, a lost note affidavit
(including a copy of the original
Mortgage Note) may be delivered in lieu of
the original Mortgage Note (each a
"Trustee Mortgage File") (the Custodial
Agreement to be deemed modified by the
foregoing) so transferred and assigned.
(b) The Depositor shall cause the Mortgage Notes with respect
to each Mortgage Loan to be completed
either (A) in blank, without recourse, or
(B) endorsed to "Wells Fargo Bank, N.A., as
Trustee of the Merrill Lynch
Mortgage Investors Trust Series MLCC
2005-B, Mortgage Pass-Through Certificates,
without recourse" and the Depositor shall
cause Assignments of Mortgage with
respect to each Mortgage Loan other than a
Cooperative Mortgage Loan to be
completed either (A) in blank or (B) to
"Wells Fargo Bank, N.A., as Trustee of
the Merrill Lynch Mortgage Investors Trust
Series MLCC 2005-B, Mortgage
Pass-Through Certificates," within 30 days
of the Closing Date for purpose of
their recording; provided, however, that
such Assignments of Mortgage need not
be recorded unless required in writing by
the Rating Agencies; provided,
further, that with respect to each MERS
Mortgage Loan where MERS is not the
Mortgagee of record, the original
Assignment of Mortgage showing MERS as the
assignee of the Mortgage, with the evidence
of recording thereon or copies
thereof certified by an officer of the
Depositor to have been submitted for
recordation, shall be delivered to the
Trustee.
If any
Mortgage has been recorded in the name of MERS or its designee,
no
Assignment of Mortgage in favor of the
Trustee will be required to be prepared
or delivered and instead, the Servicer
shall take all actions as are necessary
to cause the Trustee to be shown as the
owner of the related Mortgage Loan on
the records of MERS for the purpose of the
system of recording transfer of
beneficial ownership of mortgages
maintained by MERS.
(c) In instances where a title insurance policy is required to
be delivered to the Trustee and is not so
delivered, the Depositor will provide
a copy of such title
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insurance policy to the Trustee, as
promptly as practicable after the execution
and delivery hereof, but in any case within
270 days of the Closing Date.
(d) For Mortgage Loans (if any) that have been prepaid in full
after the Cut-off Date and prior to the
Closing Date, the Depositor, in lieu of
delivering the above Trustee Mortgage File,
shall deliver to the Trustee an
Officer's Certificate which shall include a
statement to the effect that all
amounts received in connection with such
prepayment that are required to be
deposited in the Distribution Account
pursuant to Section 4.01 have been so
deposited. All original documents that are
not delivered to the Trustee shall be
held by the Servicer in trust for the
benefit of the Trustee and the
Certificateholders.
Section
2.02. Acceptance of Trust Fund by Trustee; Review of
Documentation
for Trust Fund.
(a) The Trustee, by execution and delivery hereof,
acknowledges receipt by it of the Trustee
Mortgage Files pertaining to the
Mortgage Loans listed on the Mortgage Loan
Schedule, subject to review thereof
as provided herein. Upon receipt by the
Trustee of each Trustee Mortgage File,
the Trustee shall review each Trustee
Mortgage File in accordance with the
review procedures set forth in Section 2 of
Amendment No. 1 to the Custodial
Agreement; provided, however, that
notwithstanding anything to the contrary
contained herein or within the Custodial
Agreement the Trustee shall not be
required to confirm the information
contained in item (viii) of the Mortgage
Loan Schedule with respect to any Mortgage
Loan.
In making
such verifications, the Trustee may rely conclusively on the
Mortgage Loan Schedule and the documents
constituting the Trustee Mortgage File,
and the Trustee shall have no obligation to
independently verify the validity,
enforceability, recordability, sufficiency,
due authorization or genuineness of
any document in any Trustee Mortgage File
or any Mortgage Loan hereunder, nor
the collectibility, insurability,
effectiveness or suitability of any Mortgage
Loan hereunder. The Trustee shall prepare
an initial certification to be
delivered to the Depositor, the Seller and
the Servicer on the Closing Date in
the form annexed hereto as Exhibit K (the
"Initial Certification") with respect
to the Mortgage Loans (other than any
Mortgage Loan paid in full or any Mortgage
Loan specifically identified on the
Schedule of Exceptions attached to the
Initial Certification (the "Schedule of
Exceptions") as not covered by such
Initial Certification) listed on the
Mortgage Loan Schedule. If the Trustee
determines from such verification that any
discrepancy or deficiency exists with
respect to a Trustee Mortgage File, the
Trustee shall note such omission,
discrepancy or deficiency on the Schedule
of Exceptions attached to the Initial
Certification, and shall deliver a copy
(which shall be electronic, if
requested) of the Schedule of Exceptions to
the Depositor on the Closing Date.
During the life of the Mortgage Loans
(while subject to this Agreement), in the
event the Trustee discovers any defect with
respect to any Trustee Mortgage
File, the Trustee shall give written
specification of such defect to the
Depositor. Except as specifically provided
above, the Trustee shall be under no
duty to review, inspect or examine such
documents to determine that any of them
are enforceable or appropriate for their
prescribed purpose.
(b) If in the course of the review described in paragraph (a)
of this Section 2.02 the Trustee discovers
any document or documents
constituting a part of a Trustee Mortgage
File that is missing, does not appear
regular on its face (i.e., is mutilated,
damaged, defaced, torn or otherwise
physically altered) or appears to be
unrelated to the Mortgage Loans identified
in the Mortgage Loan Schedule (each, a
"Material Defect"), the Trustee, upon
discovering such Material Defect shall
promptly identify the Mortgage Loan to
which such
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<PAGE>
Material Defect relates to the Depositor,
the Seller and the Servicer. Within 90
days of its receipt of such notice (but in
no case prior to the 270th day
following the Closing Date), the Depositor
shall be required to cure such
Material Defect (and, in such event, the
Depositor shall provide the Trustee
with an Officer's Certificate confirming
that such cure has been effected). If
the Servicer notifies the Depositor and the
Trustee in writing that (i) a loss
has occurred and (ii) such loss relates to
a Mortgage Loan for which the Trustee
previously identified a Material Defect or
for which the Servicer has identified
a Material Defect and the Depositor has not
cured such Material Defect, then the
Depositor shall repurchase such Mortgage
Loan at the Purchase Price therefor in
the event that such loss would, if such
Mortgage Loan is not repurchased by the
Depositor, constitute a Realized Loss and
such loss is attributable to the
failure of the Depositor to have cured such
Material Defect. A loss shall be
deemed to be attributable to the failure of
the Depositor to cure a Material
Defect if, as determined by the Depositor,
upon mutual agreement with the
Trustee each acting in good faith, absent
such Material Defect, such loss would
not have been incurred. Within the two-year
period following the Closing Date,
the Depositor may, in lieu of repurchasing
a Mortgage Loan pursuant to this
Section 2.02(b), substitute for such
Mortgage Loan a Replacement Mortgage Loan
subject to the provisions of Section
2.04.
(c) Within 270 days following the Closing Date, the Trustee
shall deliver to the Depositor, the Seller
and the Servicer, a final
certification substantially in the form
attached as Exhibit L (the "Final
Certification") evidencing the completeness
of the Trustee Mortgage Files in its
possession or control, with any exceptions
noted on the Schedule of Exceptions
attached to the Final Certification.
(d) Nothing in this Agreement shall be construed to constitute
an assumption by the Trust Fund, the
Trustee or the Certificateholders of any
unsatisfied duty, claim or other liability
on any Mortgage Loan or to any
Mortgagor.
(e) Upon execution of this Agreement, the Depositor hereby
delivers to the Trustee and the Trustee
acknowledges receipt of the Mortgage
Loan Purchase and Sale Agreement.
Section
2.03. Representations and Warranties of the Depositor and the
Servicer.
(a) The Depositor hereby represents and warrants to the
Servicer and to the Trustee , for the
benefit of the Certificateholders as of
the Closing Date or such other date as is
specified, that:
(i) the Depositor is a corporation duly organized, validly
existing and in good standing under the laws governing its
creation
and existence and has full corporate power and authority to own
its
property, to carry on its business as presently conducted, to
enter
into and perform its obligations under this Agreement, and to
create
the trust pursuant hereto;
(ii) the execution and delivery by the Depositor of this
Agreement have been duly authorized by all necessary corporate
action on the part of the Depositor; neither the execution and
delivery of this Agreement, nor the consummation of the
transactions
herein contemplated, nor compliance with the provisions hereof,
will
conflict with or result in a breach of, or constitute a default
under, any of the provisions of any law, governmental rule,
regulation, judgment, decree or order binding on the Depositor
or
its properties or the certificate of incorporation or bylaws of
the
Depositor;
39
<PAGE>
(iii) the execution, delivery and performance by the Depositor
of this Agreement and the consummation of the transactions
contemplated hereby do not require the consent or approval of,
the
giving of notice to, the registration with, or the taking of
any
other action in respect of, any state, federal or other
governmental
authority or agency, except such as has been obtained, given,
effected or taken prior to the date hereof;
(iv) this Agreement has been duly executed and delivered by
the Depositor and, assuming due authorization, execution and
delivery by the Trustee, constitutes a valid and binding
obligation
of the Depositor enforceable against it in accordance with its
terms
except as such enforceability may be subject to (A) applicable
bankruptcy and insolvency laws and other similar laws affecting
the
enforcement of the rights of creditors generally and (B)
general
principles of equity regardless of whether such enforcement is
considered in a proceeding in equity or at law;
(v) there are no actions, suits or proceedings pending or, to
the knowledge of the Depositor, threatened or likely to be
asserted
against or affecting the Depositor, before or by any court,
administrative agency, arbitrator or governmental body (A) with
respect to any of the transactions contemplated by this Agreement
or
(B) with respect to any other matter which in the judgment of
the
Depositor will be determined adversely to the Depositor and will
if
determined adversely to the Depositor materially and adversely
affect it or its business, assets, operations or condition,
financial or otherwise, or adversely affect its ability to
perform
its obligations under this Agreement;
(vi) immediately prior to the transfer and assignment of the
Mortgage Loans to the Trustee, the Depositor was the sole owner
of
record and holder of each Mortgage Loan, and the Depositor had
good
and marketable title thereto, and had full right to transfer
and
sell each Mortgage Loan to the Trustee free and clear, subject
only
to (1) liens of current real property taxes and assessments not
yet
due and payable and, if the related Mortgaged Property is a
condominium unit, any lien for common charges permitted by
statute,
(2) covenants, conditions and restrictions, rights of way,
easements
and other matters of public record as of the date of recording
of
such Mortgage acceptable to mortgage lending institutions in
the
area in which the related Mortgaged Property is located and
specifically referred
to in the lender's title insurance policy or
attorney's opinion of title and abstract of title delivered to
the
Originator of such Mortgage Loan, and (3) such other matters to
which like properties are commonly subject which do not,
individually or in the aggregate, materially interfere with the
benefits of the security intended to be provided by the Mortgage,
of
any encumbrance, equity, participation interest, lien, pledge,
charge, claim or security interest, and had full right and
authority, subject to no interest or participation of, or
agreement
with, any other party, to sell and assign each Mortgage Loan
pursuant to this Agreement;
(vii) This Agreement creates a valid and continuing security
interest (as defined in the applicable Uniform Commercial Code
(the
"UCC"), in the Mortgage Loans in favor of the Trustee, which
security interest is prior to all other liens, and is enforceable
as
such against creditors of and purchasers from the Depositor;
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<PAGE>
(viii) The Mortgage Loans constitute "instruments" within the
meaning of the applicable UCC;
(ix) Other than the security interest granted to the Trustee
pursuant to this Agreement, the Depositor has not pledged,
assigned,
sold, granted a security interest in, or otherwise conveyed any
of
the Mortgage Loans. The Depositor has not authorized the filing
of
and is not aware of any financing statement against the
Depositor
that includes a description of the collateral covering the
Mortgage
Loans other than a financing statement relating to the security
interest granted to the Trustee hereunder or that has been
terminated. The Depositor is not aware of any judgment or tax
lien
filings against the Depositor;
(x) None of the Mortgage Loans have any marks or notations
indicating that such Mortgage Loans have been pledged, assigned
or
otherwise conveyed to any Person other than the Trustee; and
(xi) The Depositor has received all consents and approvals
required by the terms of the Mortgage Loans to convey the
Mortgage
Loans hereunder to the Trustee;
(xii) As of the Closing Date, each Mortgage Loan is a
"qualified mortgage" within the meaning of Section 860G(a)(3) of
the
Code (without regard to Treasury Regulations Section 1.860G-2(f))
or
any similar rule that provides that a defective obligation is a
qualified mortgage for a temporary period);
(xiii) As of the Closing Date, no Mortgage Loan provides for
interest other than at either (x) a single fixed rate in effect
throughout the term of the Mortgage Loan or (y) a single
"variable
rate" (within the meaning of Treasury Regulations Section
1.860G-1(a)(3)) in effect throughout the term of the Mortgage
Loan;
(xiv) As of the Closing Date, no Mortgage is the subject of
pending or final foreclosure proceedings; and
(xv) As of the Closing Date, the Depositor would not initiate
foreclosure proceedings with respect to any Mortgage Loan based
on
such
Mortgage Loan's delinquency status prior to the next scheduled
payment date for such Mortgage Loan.
The
foregoing representations made in this Section 2.03 by the
Depositor
shall survive the termination of this
Agreement and shall not be waived by any
party hereto
(b) The Servicer hereby represents, warrants, and covenants to
the Depositor and to the Trustee, for the
benefit of the Certificateholders as
of the Closing Date that:
(i) The Servicer is a corporation duly organized, validly
existing and in good standing under the laws of the State of
New
Jersey. The Servicer has in full force and effect (without notice
of
possible suspension, revocation or impairment) all required
qualifications, permits, approvals, licenses, and registrations,
or
exemption therefrom, to conduct all activities in all
jurisdictions
41
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in which its activities with respect to the Mortgage Loans
require
it to be qualified or licensed;
(ii) The Servicer has all requisite corporate power, authority
and capacity to carry on its business as it is now being
conducted,
to execute and deliver this Agreement, and to perform all of
its
obligations hereunder. The Servicer does not believe, nor does
it
have any cause or reason to believe, that it cannot perform each
and
every covenant contained in this Agreement;
(iii) The execution, delivery and performance of this
Agreement by the Servicer and consummation of the transactions
contemplated hereby have been duly and validly authorized by
all
necessary corporate, shareholder or other action by the
Servicer;
this Agreement has been duly and validly executed and delivered
by
the Servicer; and this Agreement is a valid and legally binding
agreement of the Servicer, enforceable against the Servicer in
accordance with its respective terms, subject to bankruptcy,
insolvency and similar laws affecting generally the enforcement
of
creditors' rights and the discretion of a court to grant
specific
performance of contracts;
(iv) Neither the execution and delivery of this Agreement, nor
the consummation of the transactions contemplated hereby, nor
compliance with their respective terms and conditions shall (a)
violate, conflict with, result in the breach of, constitute a
default under, be prohibited by or require any additional
approval
under any terms, conditions or provisions of the Servicer's
articles
of incorporation or by-laws or any other similar corporate or
organizational document of the Servicer; any mortgage,
indenture,
deed of trust, loan or credit agreement or other agreement or
instrument to which the Servicer is now a party or by which it
is
bound; or any law, ordinance, rule, regulation, order, judgment
or
decree of any governmental authority applicable to the Servicer;
or
(b) result in the creation or imposition of any lien, charge or
encumbrance of any material nature upon any of the properties
or
assets of the Servicer;
(v) The Servicer holds all licenses, approvals, permits and
other authorizations, or exemptions therefrom, required under
applicable law to assume responsibility for servicing the
Mortgage
Loans;
(vi) There is no litigation, claim, demand, proceeding or
governmental investigation existing or pending, or to the
knowledge
of the Servicer, threatened, nor is there any order, injunction
or
decree outstanding against or relating to the Servicer that
could
(i) have a material adverse effect upon the performance by the
Servicer of its obligations under this Agreement or (ii) to the
Servicer's knowledge, result in any material loss or liability
to
Depositor, the Trustee, the Trust Fund or the Seller. Further,
to
the Servicer's knowledge, there is no meritorious basis for any
such
litigation, claim, demand, proceeding, or governmental
investigation;
(vii) The Servicer has been approved by GNMA, Fannie Mae and
FHLMC and will remain approved as an "eligible seller/servicer"
of
residential mortgage loans as provided in GNMA, Fannie Mae, or
FHLMC
guidelines and in good standing. The Servicer has not received
any
notification from GNMA, Fannie Mae or FHLMC that the Servicer is
not
in compliance with the
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requirements of the approved "seller/servicer" status. The
Servicer
is a mortgagee approved by the Secretary of HUD pursuant to
Section
203 and 211 of the National Housing Act. The Servicer has not
received any notification from HUD that the Servicer is not in
compliance with the requirements of the approved mortgagee
status;
(viii) The servicing practices to be used by the Servicer
under this Agreement are, and shall remain, in all material
respects
in compliance with Accepted Servicing Practices, including
without
limitation, all federal, state and local laws, rules, all
regulations and requirements in connection therewith, and Fannie
Mae
guidelines, as applicable;
(ix) The Servicer has not received written notice from or on
behalf of FHA, HUD, FDIC, Fannie Mae, FHLMC or GNMA, advising
the
Servicer of its failure to comply with applicable servicing or
claims procedures, or resulted in a request for repurchase of
mortgage loans or indemnification in connection with any
mortgage
loans;
(x) The Servicer has in place a contingency plan that will
enable it to perform its obligations under this Agreement in
all
material respects, at another location within five (5) Business
Days
in the event its primary location is rendered inoperative as a
result of a natural or other disaster or emergency;
(xi) The Servicer maintains and shall maintain, in good
standing, all licenses and approvals necessary to service the
Mortgage Loans and maintains and shall at all times maintain
the
capital requirements imposed by the licensing or approving
entities
having jurisdiction over the Servicer. The Servicer has filed
applications for all applicable licenses and qualifications to
do
business and to service the Mortgage Loans in the U.S. Virgin
Islands;
(xii) The Servicer maintains and shall at all times maintain
error and omissions and fidelity insurance coverage of the type
and
in the amounts required by Fannie Mae;
(xiii) The Servicer has, and shall at all times maintain
during the term of this Agreement, sufficient systems, including
but
not limited to the Servicer's EDP, and trained and experienced
personnel in place to perform its obligations under this
Agreement;
(xiv) For so long as, and to the extent that, the Servicer
services the Mortgage Loans, the Servicer will continue to
comply
with each applicable federal, state, or local, law, statute,
and
ordinance, and any rule, regulation, or order issued
thereunder,
pertaining to the subject matter of this Agreement, including,
but
not limited to, usury, RESPA, Consumer Credit Reporting Act,
Equal
Credit Opportunity Act, Federal Deposit Insurance Corporation
Improvement Act, Regulation B, Fair Credit Reporting Act, Fair
Debt
Collection Practices Act, Fair Housing Act, Truth in Lending Act
and
Regulation Z, Flood Disaster Protection Act of 1973, and any
applicable regulations related thereto, and such other fair
housing,
anti-redlining, equal credit opportunity, truth-in-lending,
real
estate settlement procedures, fair credit reporting, and every
other
prohibition against unlawful discrimination in residential
mortgage
lending or
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governing consumer credit, and all state consumer credit
statutes
and regulations, as amended. In the event the Depositor or the
Trustee has a reasonable good faith belief in the Servicer's
non-compliance with this representation and warranty and upon
the
Depositor's or the Trustee's written request, the Servicer
shall
deliver to the Depositor or the Trustee reasonable evidence of
compliance with any of the requirements of this representation
and
warranty; and
(xv) Neither the Servicer, its parent, nor any of its
subsidiaries is in bankruptcy, receivership or conservatorship.
The
Servicer has the requisite financial resources and ability to
meet
its obligations under this Agreement, including, but not limited
to,
any and all indemnification obligations,
Within 60
days of the earlier of either discovery by or notice to the
Servicer of any breach of a representation
or warranty set forth in this Section
2.03(B) which materially and adversely
affects the ability of the Servicer to
perform its duties and obligations under
this Agreement or otherwise materially
and adversely affects the value of the
Mortgage Loans, the Mortgaged Property or
the priority of the security interest on
such Mortgaged Property, the Servicer
shall use its best efforts promptly to cure
such breach in all material respects
and, if such breach cannot be cured, the
Servicer shall, at the Trustee's
option, assign the Servicer's rights and
obligations under this Agreement (or
respecting the affected Mortgage Loans) to
a successor servicer selected by the
Depositor with the prior consent and
approval of the Trustee. Such assignment
shall be made in accordance with this
Agreement.
Section
2.04. Discovery of Breach; Repurchase or Substitution of
Mortgage
Loans.
(a) Pursuant to Sections 3(a) and 3(b) of the Mortgage Loan
Purchase and Sale Agreement, the Seller has
made certain representations and
warranties as to the characteristics of the
Mortgage Loans (such representations
and warranties are set out in full in
Schedule B of this Agreement) as of the
Closing Date and the conveyance thereof
from the Seller to the Depositor, for
the benefit of the Trustee and the
Certificateholders, and the Seller has agreed
to comply with the provisions of this
Section 2.04 in respect of a breach of any
of such representations and warranties.
It is
understood and agreed that (i) the representations and warranties
of
the Depositor and the Servicer set forth in
Section 2.03 and (ii) the
representations and warranties of the
Seller set forth in Sections 3(a) and 3(b)
of the Mortgage Loan Purchase and Sale
Agreement shall survive delivery of the
Trustee Mortgage Files and the Assignment
of Mortgage of each Mortgage Loan to
the Trustee and shall continue throughout
the term of this Agreement. Upon
discovery (i) by the Depositor, the Seller,
the Servicer or the Trustee of a
breach of any representation or warranty
made by the Depositor under Section
2.03 which materially adversely affects the
value of a Mortgage Loan or the
interest therein of the Certificateholder
(a "Defective Mortgage Loan"), or (ii)
by the Depositor or the Seller of the
breach by the Seller of any representation
or warranty under the Mortgage Loan
Purchase and Sale Agreement in respect of
any Mortgage Loan, which breach results in
the Mortgage Loan being a "Defective
Mortgage Loan" (each of such parties hereby
agreeing to give written notice of
such breach to the Trustee and the other of
such parties), the Trustee, or its
designee, shall promptly notify the
Depositor in writing of such breach and
request that the Depositor cure or cause
the cure of such breach within 90 days
from the date that the Depositor discovered
or was notified of such breach, and
if the Depositor does not cure such breach
in all material respects during such
period, the Trustee shall (i) in the case
of an uncured breach under Section
2.03, cause the Depositor to repurchase
such Defective Mortgage Loan at the
Purchase Price and (ii) in the case of an
uncured breach by the
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Seller under the Mortgage Loan Purchase and
Sale Agreement, cause the Depositor
to enforce the Seller's obligation under
the Mortgage Loan Purchase and Sale
Agreement to repurchase that Defective
Mortgage Loan from the Trust Fund at the
Purchase Price, in each case on or prior to
the Determination Date following the
expiration of such 90-day period (subject
to Section 2.04(b) below); provided,
however, that, in connection with any such
breach under clause (ii) above that
could not reasonably have been cured within
such 90-day period, if the Seller
shall have commenced to cure such breach
within such 90-day period and, if the
defective Mortgage Loan qualifies as a
"qualified mortgage" within the meaning
of Section 860G(a)(3) of the Code following
such 90-day period, the Seller shall
be permitted to proceed thereafter
diligently and expeditiously to cure the same
within an additional 90-day period. The
Purchase Price for the repurchased
Defective Mortgage Loan shall be deposited
in the related Distribution Account,
and the Trustee, or its designee, upon
receipt of such deposit and two copies of
a Request for Release with respect to such
Defective Mortgage Loan, shall
release to the Seller or the Depositor, as
applicable, the related Trustee
Mortgage File and shall execute and deliver
such instruments of transfer or
assignment, in each case without recourse,
representation or warranties, as
either party shall furnish to it and as
shall be necessary to vest in such party
any Defective Mortgage Loan released
pursuant hereto and the Trustee, or its
designee, shall have no further
responsibility with regard to such Trustee
Mortgage File (it being understood that the
Trustee shall have no responsibility
for determining the sufficiency of such
assignment for its intended purpose). In
lieu of repurchasing any such Defective
Mortgage Loan as provided above, the
Seller may cause such Defective Mortgage
Loan to be removed from the Trust Fund
(in which case it shall become a Deleted
Mortgage Loan) and substitute one or
more Replacement Mortgage Loans in the
manner and subject to the limitations set
forth in Section 2.04(b) below. It is
understood and agreed that the obligation
of the Seller (or the Depositor, if
applicable) to cure or to repurchase (or to
substitute for) any Mortgage Loan as to
which a breach has occurred and is
continuing shall constitute the sole remedy
against the Seller (or the
Depositor, if applicable) respecting such
breach available to the Trustee on
behalf of the Certificateholders. With
respect to the representations and
warranties described in Schedule B which
are made to the best of the Seller's
knowledge, if it is discovered by any of
the Depositor, the Seller or the
Trustee that the substance of such
representation and warranty is inaccurate and
such inaccuracy materially and adversely
affects the value of the related
Mortgage Loan, then notwithstanding the
Seller's lack of knowledge with respect
to the substance of such representation and
warranty, such inaccuracy shall be
deemed a breach of the applicable
representation or warranty.
(b) Any substitution of Replacement Mortgage Loans for Deleted
Mortgage Loans made pursuant to Section
2.04(a) above must be effected prior to
the last Business Day that is within two
years after the Closing Date. As to any
Deleted Mortgage Loan for which the Seller
substitutes a Replacement Mortgage
Loan or Loans, such substitution shall be
effected by delivering to the Trustee
for such Replacement Mortgage Loan or
Loans, the Mortgage Note, the Mortgage,
the Assignment to the Trustee, and such
other documents and agreements, with all
necessary endorsements thereon, together
with an Officers' Certificate stating
that each such Replacement Mortgage Loan
satisfies the definition thereof and
specifying the Substitution Amount (as
described below), if any, in connection
with such substitution. The Trustee shall
acknowledge receipt for such
Replacement Mortgage Loan and, within 45
days thereafter, shall review such
Mortgage Documents as specified in this
Agreement under Section 2.02(a) and
deliver to the Depositor, with respect to
such Replacement Mortgage Loans, a
certification substantially in the form of
a revised Initial Certification, with
any exceptions noted thereon. Within one
year of the date of substitution, the
Trustee shall deliver to the Depositor a
certification substantially in the form
of a revised Final Certification, with
respect to such Replacement Mortgage
Loans, with any exceptions noted thereon.
Monthly Payments due with respect to
Replacement Mortgage Loans in the month of
substitution shall not be included as
part
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of the Trust Fund and shall be retained by
the Seller. For the month of
substitution, distributions to
Certificateholders shall reflect the collections
and recoveries in respect of such Deleted
Mortgage in the Due Period preceding
the month of substitution and the Seller
shall thereafter be entitled to retain
all amounts subsequently received in
respect of such Deleted Mortgage Loan. Upon
such substitution, such Replacement
Mortgage Loan shall constitute part of the
Trust Fund and shall be subject in all
respects to the terms of this Agreement
and the Mortgage Loan Purchase and Sale
Agreement, including all representations
and warranties thereof included in the
Mortgage Loan Purchase and Sale
Agreement, in each case as of the date of
substitution.
For any
month in which the Seller substitutes one or more Replacement
Mortgage Loans for one or more Deleted
Mortgage Loans, the Trustee, based upon
information provided by the Servicer, shall
determine the excess (each, a
"Substitution Amount"), if any, by which
the aggregate Purchase Price of all
such Deleted Mortgage Loans exceeds the
aggregate Stated Principal Balance of
the Replacement Mortgage Loans replacing
such Deleted Mortgage Loans, together
with one month's interest on such excess
amount at the applicable Net Mortgage
Rate. On the date of such substitution, the
Seller shall deliver or cause to be
delivered to the Servicer for deposit in
the Custodial Account an amount equal
to the related Substitution Amount, if any,
and the Trustee, upon receipt of the
related Replacement Mortgage Loan or Loans
and two copies of a Request for
Release with respect to the Deleted
Mortgage Loan or Loans, shall release to the
Seller the related Trustee Mortgage File or
Files and shall execute and deliver
such instruments of transfer or assignment,
in each case without recourse, as
the Seller shall deliver to it and as shall
be necessary to vest therein any
Deleted Mortgage Loan released pursuant
hereto.
In
addition, the Seller shall obtain at its own expense and deliver to
the
Trustee an Opinion of Counsel to the effect
that such substitution (either
specifically or as a class of transactions)
shall not cause (a) any federal tax
to be imposed on the Trust Fund, including
without limitation, any federal tax
imposed on "prohibited transactions" under
Section 860F(a)(l) of the Code or on
"contributions after the startup date"
under Section 860G(d)(l) of the Code, or
(b) any REMIC created hereunder to fail to
qualify as a REMIC at any time that
any Certificate is outstanding. If such
Opinion of Counsel can not be delivered,
then such substitution may only be effected
at such time as the required Opinion
of Counsel can be given.
(c) Upon discovery by the Seller, the Depositor, the Servicer
or the Trustee that any Mortgage Loan does
not constitute a "qualified mortgage"
within the meaning of Section 860G(a)(3) of
the Code, the party discovering such
fact shall within two Business Days give
written notice thereof to the other
parties. In connection therewith, the
Seller or Depositor, as applicable, shall
repurchase, or the Seller, subject to the
limitations set forth in Section
2.04(b), shall substitute one or more
Replacement Mortgage Loans for the
affected Mortgage Loan within 90 days of
the earlier of discovery or receipt of
such notice with respect to such affected
Mortgage Loan. Any such repurchase or
substitution shall be made in the same
manner as set forth in Sections 2.04(a)
and 2.04(b) above. The Trustee shall
re-convey to the Seller the Mortgage Loan
to be released pursuant hereto in the same
manner, and on the same terms and
conditions, as it would a Mortgage Loan
repurchased for breach of a
representation or warranty.
The Seller
indemnifies and holds the Trust Fund, the Trustee, the
Depositor, the Servicer and each
Certificateholder harmless against any and all
taxes, claims, losses, penalties, fines,
forfeitures, reasonable legal fees and
related costs, judgments, and any other
costs, fees and expenses that the Trust
Fund, the Trustee, the Depositor, the
Servicer and any Certificateholder may
sustain in connection with any actions of
such party relating to a repurchase of
a Mortgage Loan other than in compliance
with the terms of this Section 2.04 and
the Mortgage Loan Purchase and Sale
Agreement, to the extent that any such
action causes (i) any federal or state
tax
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to be imposed on the Trust Fund, including
without limitation, any federal tax
imposed on "prohibited transactions" under
Section 860F(a)(1) of the Code or on
"contributions after the startup date"
under Section 860G(d)(1) of the Code, or
(ii) any REMIC formed hereby to fail to
qualify as a REMIC at any time that any
Certificate is outstanding.
(d) Notwithstanding anything to the contrary in this
Agreement, Seller shall service and
administer the Additional Collateral, it
being understood and agreed that only
Seller shall service and administer the
related securities accounts, lines of
credit and guarantees with respect to
Additional Collateral.
Section
2.05. Grant Clause.
(a) It is intended that the conveyance of the Depositor's
right, title and interest in and to
property constituting the Trust Fund
pursuant to this Agreement shall
constitute, and shall be construed as, a sale
of such property and not a grant of a
security interest to secure a loan.
However, if such conveyance is deemed to be
in respect of a loan, it is intended
that: (1) the rights and obligations of the
parties shall be established
pursuant to the terms of this Agreement;
(2) the Depositor hereby grants to the
Trustee for the benefit of the Holders of
the Certificates a first priority
security interest in all of the Depositor's
right, title and interest in, to and
under, whether now owned or hereafter
acquired, the Trust Fund and all proceeds
of any and all property constituting the
Trust Fund to secure payment of the
Certificates; and (3) this Agreement shall
constitute a security agreement under
applicable law. If such conveyance is
deemed to be in respect of a loan and the
trust created by this Agreement terminates
prior to the satisfaction of the
claims of any Person holding any
Certificate, the security interest created
hereby shall continue in full force and
effect and the Trustee shall be deemed
to be the collateral agent for the benefit
of such Person, and all proceeds
shall be distributed as herein
provided.
(b) The Depositor shall, to the extent consistent with this
Agreement, take such reasonable actions as
may be necessary to ensure that, if
this Agreement were deemed to create a
security interest in the Mortgage Loans
and the other property described above,
such security interest would be deemed
to be a perfected security interest of
first priority under applicable law and
will be maintained as such throughout the
term of this Agreement. The Depositor
will, at its own expense, make all initial
filings on or about the Closing Date
and shall forward a copy of such filing or
filings to the Trustee. Without
limiting the generality of the foregoing,
the Depositor shall prepare and
forward for filing, or shall cause to be
forwarded for filing, at the expense of
the Depositor, all filings necessary to
maintain the effectiveness of any
original filings necessary under the
relevant UCC to perfect the Trustee's
security interest in or lien on the
Mortgage Loans and the other property
described above, including without
limitation (x) continuation statements, and
(y) such other statements as may be
occasioned by (1) any change of name of
Seller, the Depositor or the Trustee, (2)
any change of location of the place of
business or the chief executive office of
the Seller or the Depositor, (3) any
transfer of any interest of the Depositor
in any Mortgage Loan or (4) any change
under the relevant UCC or other applicable
laws. The Depositor shall not
organize under the law of any jurisdiction
other than the State under which each
is organized as of the Closing Date
(whether changing its jurisdiction of
organization or organizing under an
additional jurisdiction) without giving 30
days prior written notice of such action to
its immediate and intermediate
transferee, including the Trustee. Before
effecting such change, the Depositor
proposing to change its jurisdiction of
organization shall prepare and file in
the appropriate filing office any financing
statements or other statements
necessary to continue the perfection of the
interests of its immediate and
mediate transferees, including the Trustee,
in the Mortgage Loans and the other
property described above. In connection
with the transactions contemplated by
this Agreement, the Depositor authorizes
its
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immediate or mediate transferee to file in
any filing office any initial
financing statements, any amendments to
financing statements, any continuation
statements, or any other statements or
filings described in this paragraph (b).
ARTICLE III.
THE CERTIFICATES
Section
3.01. The Certificates.
(a) The Certificates shall be issuable in registered form only
and shall be securities governed by Article
8 of the New York Uniform Commercial
Code. The Book-Entry Certificates will be
evidenced by one or more certificates,
beneficial ownership of which will be held
in the dollar denominations in
Certificate Principal Amount, or Class
Notional Amount, as applicable, or in the
Percentage Interests, specified herein.
Each Class of Book-Entry Certificates
will be issued in the minimum denominations
in Certificate Principal Amount (or
Class Notional Amount) specified in the
Preliminary Statement hereto and in
integral multiples of $1 in excess thereof.
Each Class of Non-Book-Entry
Certificates other than the Residual
Certificates shall be issued in definitive,
fully registered form in the minimum
denominations in Certificate Principal
Amount specified in the Preliminary
Statement hereto and in integral multiples
of $1 in excess thereof. The Residual
Certificates shall be issued as single
Certificates and maintained in definitive,
fully registered form in a
denomination equal to 100% of the
Percentage Interest of each such Class.
(b) The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an
authorized officer. Each Certificate
shall, on original issue, be authenticated
by the Trustee or an Authenticating
Agent upon the order of the Depositor upon
receipt by the Trustee of the Trustee
Mortgage Files described in Section 2.01.
No Certificate shall be entitled to
any benefit under this Agreement, or be
valid for any purpose, unless there
appears on such Certificate a certificate
of authentication substantially in the
form provided for herein, executed by an
authorized officer of the Trustee or of
an Authenticating Agent, by manual
signature, and such certification upon any
Certificate shall be conclusive evidence,
and the only evidence, that such
Certificate has been duly authenticated and
delivered hereunder. All
Certificates shall be dated the date of
their authentication. At any time and
from time to time after the execution and
delivery of this Agreement, the
Depositor may deliver Certificates executed
by the Trustee to the Trustee or the
Authenticating Agent for authentication and
the Trustee or the Authenticating
Agent shall authenticate and deliver such
Certificates as in this Agreement
provided and not otherwise.
(c) The Class X-B, Class B-4, Class B-5 and Class B-6
certificates offered and sold in reliance
on the exemption from registration
under Rule 144A under the Act shall be
issued initially in the form of one or
more permanent global Certificates in
definitive, fully registered form without
interest coupons with the applicable
legends set forth in Exhibit A added to the
forms of such Certificates (each, a
"Restricted Global Security").
Section
3.02. Registration.
The
Trustee is hereby appointed, and the Trustee hereby accepts its
appointment as, initial Certificate
Registrar in respect of the Certificates and
shall maintain books for the registration
and for the transfer of Certificates
(the "Certificate Register"). The Trustee
may appoint a bank or trust company to
act as successor Certificate Registrar. A
registration book
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<PAGE>
shall be maintained for the Certificates
collectively. The Certificate Registrar
may resign or be discharged or removed and
a new successor may be appointed in
accordance with the procedures and
requirements set forth in Sections 6.06 and
6.07 hereof with respect to the
resignation, discharge or removal of the Trustee
and the appointment of a successor Trustee.
The Certificate Registrar may
appoint, by a written instrument delivered
to the Holders, any bank or trust
company to act as co-registrar under such
conditions as the Certificate
Registrar may prescribe; provided, however,
that the Certificate Registrar shall
not be relieved of any of its duties or
responsibilities hereunder by reason of
such appointment.
Section
3.03. Transfer and Exchange of Certificates.
(a) A Certificate (other than Book-Entry Certificates which
shall be subject to Section 3.09 hereof)
may be transferred by the Holder
thereof only upon presentation and
surrender of such Certificate at the office
of the Certificate Registrar duly endorsed
or accompanied by an assignment duly
executed by such Holder or his duly
authorized attorney in such form as shall be
satisfactory to the Certificate Registrar.
Upon the transfer of any Certificate
in accordance with the preceding sentence,
the Trustee shall execute, and the
Authenticating Agent shall authenticate and
deliver to the transferee, one or
more new Certificates of the same Class and
evidencing, in the aggregate, the
same aggregate Certificate Principal Amount
(or Notional Amount) as the
Certificate being transferred. No service
charge shall be made to a
Certificateholder for any registration of
transfer of Certificates, but the
Certificate Registrar may require payment
of a sum sufficient to cover any tax
or governmental charge that may be imposed
in connection with any registration
of transfer of Certificates.
(b) A Certificate may be exchanged by the Holder thereof for
any number of new Certificates of the same
Class, in authorized denominations,
representing in the aggregate the same
Certificate Principal Amount (or Notional
Amount) as the Certificate surrendered,
upon surrender of the Certificate to be
exchanged at the office of the Certificate
Registrar duly endorsed or
accompanied by a written instrument of
transfer duly executed by such Holder or
his duly authorized attorney in such form
as is satisfactory to the Certificate
Registrar. Certificates delivered upon any
such exchange will evidence the same
obligations, and will be entitled to the
same rights and privileges, as the
Certificates surrendered. No service charge
shall be made to a Certificateholder
for any exchange of Certificates, but the
Certificate Registrar may require
payment of a sum sufficient to cover any
tax or governmental charge that may be
imposed in connection with any exchange of
Certificates. Whenever any
Certificates are so surrendered for
exchange, the Trustee shall execute, and the
Authenticating Agent shall authenticate,
date and deliver the Certificates which
the Certificateholder making the exchange
is entitled to receive.
(c) By acceptance of a Restricted Certificate, whether upon
original issuance or subsequent transfer,
each Holder of such a Certificate
acknowledges the restrictions on the
transfer of such Certificate set forth
thereon and agrees that it will transfer
such a Certificate only as provided
herein.
The
following restrictions shall apply with respect to the transfer
and
registration of transfer of a Restricted
Certificate to a transferee that takes
delivery in the form of a Definitive
Certificate:
(i) The Certificate Registrar shall register the transfer of a
Restricted Certificate if the requested transfer is (x) to the
Depositor or an affiliate (as defined in Rule 405 under the
1933
Act) of the Depositor or (y) being made to a "qualified
institutional buyer" (a "QIB") as defined in Rule 144A
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under the Securities Act of 1933, as amended (the "Act") by a
transferor that has provided the Certificate Registrar with a
certificate in the form of Exhibit G hereto; and
(ii) The
Certificate Registrar shall register the transfer of
a Restricted Certificate if the requested transfer is being made
to
an "accredited investor" under Rule 501(a)(1), (2), (3) or (7)
under
the Act, or to any Person all of the equity owners in which are
such
accredited investors, by a transferor who furnishes to the
Certificate Registrar a letter of the transferee substantially
in
the form of Exhibit H hereto.
(d)(i) No transfer of an ERISA Restricted Certificate that is
a Class A-R Certificate shall be made
unless the prospective transferee provides
the Trustee and the Depositor with a
representation as set forth in Exhibit B to
the effect that such transferee is not an
employee benefit plan subject to Title
I of ERISA, a plan subject to Section 4975
of the Code or a plan or arrangement
subject to any provisions under any
federal, state, local, non-U.S. or other
laws or regulations that are substantively
similar to the foregoing provisions
of ERISA or the Code ("Similar Law")
(collectively, a "Plan"), or to any Person
directly or indirectly acquiring a Class
A-R Certificate for, on behalf of or
with any assets of any such Plan. Each
Person to whom a Class A-R Certificate is
to be transferred shall be required or
deemed to represent that it is not a
Plan, as set forth in Exhibit B.
(ii) No transfer of an ERISA-Restricted Certificate other than
a Class A-R Certificate shall be made
unless the prospective transferee provides
the Trustee and the Depositor with (A) a
representation as set forth in Exhibit
I to the effect that such transferee is not
a Plan and is not directly or
indirectly acquiring the Certificate for,
on behalf of or with any assets of any
such Plan, (B) if the Certificate has been
the subject of an ERISA-Qualifying
Underwriting, a representation as set forth
in Exhibit I that such transferee is
an insurance company that is acquiring the
ERISA-Restricted Certificate with
assets contained in an "insurance company
general account," as defined in
Section V(E) of Prohibited Transaction
Class Exemption ("PTCE") 95-60, and the
acquisition and holding of the Certificate
are covered and exempt under Sections
I and III of PTCE 95-60, or (C) solely in
the case of a Definitive Certificate,
an Opinion of Counsel satisfactory to the
Trustee and the Depositor to the
effect that the acquisition and holding of
such Certificate will not constitute
or result in a nonexempt prohibited
transaction under ERISA or the Code, or a
violation of Similar Law, and will not
subject the Certificate Registrar, the
Depositor, the Servicer or the Trustee to
any obligation in addition to those
expressly undertaken in this Agreement,
which Opinion of Counsel shall not be an
expense of the Certificate Registrar, the
Depositor, the Servicer or the
Trustee.
(iii) For purposes of paragraphs (i) and (ii) of this
Subsection 3.03(d), other than subparagraph
(ii)(C), the representation as set
forth in Exhibit B or Exhibit I, as
applicable, shall be deemed to have been
made to the Trustee or the Depositor by the
transferee's acceptance of an ERISA
Restricted Certificate (or the acceptance
by a Certificate Owner of the
beneficial interest in any Class of ERISA
Restricted Certificates).
Notwithstanding any other provision herein
to the contrary, any purported
transfer of an ERISA Restricted Certificate
to or on behalf of a Plan without
the delivery to the Trustee or the
Depositor of a representation or an Opinion
of Counsel satisfactory to the Trustee or
the Depositor as described above shall
be void and of no effect. None of the
Certificate Registrar, the Depositor, the
Servicer or the Trustee shall be under any
liability to any Person for any
registration or transfer of any ERISA
Restricted Certificate that is in fact not
permitted by this Section 3.03(d) nor shall
the Paying Agent be under any
liability for making any payments due on
such Certificate to the Holder thereof
or taking any
50
<PAGE>
other action with respect to such Holder
under the provisions of this Agreement
so long as the transfer was registered by
the Certificate Registrar in
accordance with the foregoing requirements.
The Certificate Registrar,
Depositor, Servicer, Paying Agent and/or
Trustee shall be entitled, but not
obligated, to recover from any Holder of
any ERISA Restricted Certificate that
was in fact a Plan and that held such
Certificate in violation of this Section
3.03(d) all payments made on such ERISA
Restricted Certificate at and after the
time it commenced such holding. Any such
payments so recovered shall be paid and
delivered to the last preceding Holder of
such Certificate that is not a Plan.
(iv) Notwithstanding the foregoing, no representation or
Opinion of Counsel shall be required for
the initial issuance of the ERISA
Restricted Certificates.
(e) As a condition of the registration of transfer or exchange
of any Certificate, the Certificate
Registrar may require the certified taxpayer
identification number of the owner of the
Certificate and the payment of a sum
sufficient to cover any tax or other
governmental charge imposed in connection
therewith; provided, however, that the
Certificate Registrar shall have no
obligation to require such payment or to
determine whether or not any such tax
or charge may be applicable. No service
charge shall be made to the
Certificateholder for any registration,
transfer or exchange of a Certificate.
(f)
Notwithstanding anything to the contrary contained herein,
no Residual Certificate or beneficial
interest therein may be owned, pledged or
transferred, directly or indirectly, by or
to (i) a Disqualified Organization or
(ii) an individual, corporation or
partnership or other person unless, in the
case of clause (ii), such person is (A) not
a Non-U.S. Person or (B) is a
Non-U.S. Person that holds a Residual
Certificate in connection with the conduct
of a trade or business within the United
States and has furnished the transferor
and the Certificate Registrar with an
effective Internal Revenue Service Form
W-8ECI or successor form at the time and in
the manner required by the Code (any
such person who is not covered by clause
(A) or (B) above is referred to herein
as a "Non-permitted Foreign Holder").
Prior to
and as a condition of the registration of any transfer, sale or
other disposition of a Residual Certificate
or a beneficial interest therein,
the proposed transferee shall deliver to
the Trustee and the Certificate
Registrar an affidavit in substantially the
form attached hereto as Exhibit B
representing and warranting, among other
things, that such transferee is neither
a Disqualified Organization, an agent or
nominee acting on behalf of a
Disqualified Organization, nor a
Non-permitted Foreign Holder (any such
transferee, a "Permitted Transferee"), and
the proposed transferor shall deliver
to the Trustee and the Certificate
Registrar an affidavit in substantially the
form attached hereto as Exhibit C. In
addition, the Trustee or the Certificate
Registrar may (but shall have no obligation
to) require, prior to and as a
condition of any such transfer, the
delivery by the proposed transferee of an
Opinion of Counsel, addressed to the
Trustee and the Certificate Registrar, that
such proposed transferee or, if the
proposed transferee is an agent or nominee,
the proposed beneficial owner, is not a
Disqualified Organization, agent or
nominee thereof, or a Non-permitted Foreign
Holder. Notwithstanding the
registration in the Certificate Register of
any transfer, sale, or other
disposition of a Residual Certificate to a
Disqualified Organization, an agent
or nominee thereof, or Non-permitted
Foreign Holder, such registration shall be
deemed to be of no legal force or effect
whatsoever and such Disqualified
Organization, agent or nominee thereof, or
Non-permitted Foreign Holder shall
not be deemed to be a Certificateholder for
any purpose hereunder, including,
but not limited to, the receipt of
