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