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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest Event
Reported): July 29, 1999
Merrill Lynch Mortgage Investors, Inc. (as depositor under the
Pooling and Servicing Agreement, dated as of July 1, 1999,
providing for the issuance of the MLMI, INC. Mortgage Loan
Asset-Backed Certificates, Series 1999-NC1).
Merrill Lynch Mortgage Investors, Inc.
-----------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 333-81429 13-5674085
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
250 Vesey Street
World Financial Center, North Tower
New York, New York 10281
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(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code (212) 449-1000
--------------
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<PAGE>
Item 5. Other Events.
------------
Pooling and Servicing Agreement*
-------------------------------
On July 29, 1999, Merrill Lynch Mortgage Investors, Inc. (the
"Company") entered into a Pooling and Servicing Agreement dated as of July 1,
1999 (the "Pooling and Servicing Agreement"), by and among the Company, as
depositor, Litton Loan Servicing LP, as Servicer, and The Chase Manhattan Bank,
as trustee (the "Trustee"), providing for the issuance of the Company's Mortgage
Loan Asset-Backed Certificates, Series 1999-NC1 (the "Certificates"). The
Pooling and Servicing Agreement is annexed hereto as Exhibit 99.1.
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* Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Prospectus dated July 13, 1999 and the
Prospectus Supplement dated July 21, 1999, of MLMI, Inc., relating to
its Mortgage Loan Asset- Backed Certificates, Series 1999-NC1.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(a) Not applicable.
(b) Not applicable.
(c) Exhibits:
99.1. Pooling and Servicing Agreement, dated as of July 1, 1999, by
and among the Company, Litton Loan Servicing LP and the
Trustee.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
MERRILL LYNCH MORTGAGE
INVESTORS, INC.
By:/s/ Andrew Peisch
----------------------------
Andrew Peisch
Managing Director
Dated: August 12, 1999
<PAGE>
Exhibit Index
-------------
Exhibit Page
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99.1. Pooling and Servicing
Agreement, dated as of July
1, 1999, by and among, the
Company, Litton Loan
Servicing LP and the Trustee
<PAGE>
EXHIBIT 99.1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
MERRILL LYNCH MORTGAGE
INVESTORS, INC.
By:_________________________
Andrew Peisch
Managing Director
Dated: August 12, 1999
MERRILL LYNCH MORTGAGE INVESTORS, INC.,
Depositor
LITTON LOAN SERVICING LP,
Servicer
and
THE CHASE MANHATTAN BANK,
Trustee
-----------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of July 1, 1999
-----------------------------------
Mortgage Loan Asset Backed Certificates
Series 1999-NC1
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.........................................................2
SECTION 1.01. DEFINED TERMS.............................................2
Accrued Certificate Interest............................................2
Adjustable Rate Mortgage Loan...........................................2
Adjusted Overcollateralization Release Amount...........................3
Adjustment Date.........................................................3
Advance.................................................................3
Affiliate...............................................................3
Aggregate Loan Balance..................................................3
Agreement...............................................................3
Applied Realized Loss Amount............................................3
Assignment..............................................................3
Available Capped Interest...............................................3
Available Funds Pass-Through Rate.......................................4
Bankruptcy Code.........................................................4
Basis Risk Reserve Fund.................................................4
Basis Risk Shortfall....................................................4
Book-Entry Certificate..................................................4
Business Day............................................................4
Cash-Out Refinancing....................................................4
Certificate.............................................................4
Certificate Factor......................................................4
Certificate Owner.......................................................5
Certificate Principal Balance...........................................5
Certificate Register....................................................5
Certificate Registrar...................................................5
Certificateholder or Holder.............................................5
Class...................................................................5
Class A Certificate.....................................................5
Class A Interest........................................................5
Class A Interest Carry Forward Amount...................................5
Class A Principal Distribution Amount...................................5
Class B Applied Realized Loss Amount....................................6
Class B Certificate.....................................................6
Class B Interest........................................................6
Class B Interest Carry Forward Amount...................................6
Class B Principal Distribution Amount...................................6
Class B Realized Loss Amortization Amount...............................6
Class B Unpaid Realized Loss Amount.....................................7
Class BB Certificate....................................................7
Class BB Notional Amount................................................7
Class C Interest........................................................7
Class C Regular Interest Realized Loss Amount...........................7
Class Certificate Balance...............................................7
Class IO Component 1....................................................7
Class IO Component 2....................................................7
Class IO Component 3....................................................8
Class IO Component 4....................................................8
Class M Certificates....................................................8
Class M-1 Applied Realized Loss Amount..................................8
Class M-1 Certificate...................................................8
Class M-1 Interest......................................................8
Class M-1 Interest Carry Forward........................................8
Class M-1 Principal Distribution Amount.................................8
Class M-1 Realized Loss Amortization Amount.............................8
Class M-1 Unpaid Realized Loss Amount...................................9
Class M-2 Applied Realized Loss Amount..................................9
Class M-2 Certificate...................................................9
Class M-2 Interest......................................................9
Class M-2 Interest Carry Forward........................................9
Class M-2 Principal Distribution Amount.................................9
Class M-2 Realized Loss Amortization Amount.............................9
Class M-2 Unpaid Realized Loss Amount..................................10
Class R Certificate....................................................10
Class R1 Interest......................................................10
Class R2 Interest......................................................10
Class T1-1 Interest....................................................10
Class T1-2 Interest....................................................10
Class T1-3 Interest....................................................10
Class T1-4 Interest....................................................10
Class T1-5 Interest....................................................10
Class X Certificates...................................................10
Class X Distributable Amount...........................................10
Closing Date...........................................................11
Code...................................................................11
Collection Account.....................................................11
Collection Period......................................................11
Compensating Interest..................................................11
Corporate Trust Office.................................................11
Credit Bureau Risk Score...............................................11
Current Interest.......................................................11
Cut-off Date...........................................................11
Cut-off Date Pool Principal Balance....................................11
Debt Service Reduction.................................................11
Deficient Valuation....................................................12
Definitive Certificates................................................12
Delayed First Adjustment Date Loan.....................................12
Deleted Mortgage Loan..................................................12
Delinquency Percentage.................................................12
Delinquent.............................................................12
Depositor..............................................................12
Depository.............................................................12
Depository Institution.................................................12
Depository Participant.................................................13
Determination Date.....................................................13
Directly Operate.......................................................13
Disqualified Organization..............................................13
Distribution Account...................................................13
Distribution Date......................................................14
Due Date...............................................................14
Duff & Phelps..........................................................14
Eligible Account.......................................................14
Estate in Real Property................................................14
Expense Adjusted Maximum Mortgage Rate.................................14
Expense Fee Rate.......................................................14
Extra Principal Distribution Amount....................................14
Extraordinary Trust Fund Expenses......................................14
FDIC...................................................................14
FHLMC..................................................................14
Final Recovery Determination...........................................14
First Union............................................................15
FNMA...................................................................15
Gross Margin...........................................................15
Independent............................................................15
Independent Contractor.................................................15
Index..................................................................15
Initial Class BB Notional Amount.......................................15
Insurance Proceeds.....................................................16
Interest Accrual Period................................................16
Interest Carry Forward Amount..........................................16
Interest Determination Date............................................16
Interest Distribution Amount...........................................16
Interest Remittance Amount.............................................16
Late Collections.......................................................16
Latest Possible Maturity Date..........................................17
LIBOR Rate.............................................................17
Liquidation Event......................................................17
Liquidation Proceeds...................................................17
Loan-to-Value Ratio....................................................17
London Business Day....................................................17
Lost Note Affidavit....................................................17
Maximum Collateral Balance.............................................17
Maximum Mortgage Rate..................................................17
Minimum Mortgage Rate..................................................17
Monthly Excess Cash Flow Amount........................................17
Monthly Excess Interest Amount.........................................18
Monthly Payment........................................................18
Mortgage...............................................................18
Mortgage File..........................................................18
Mortgage Loan..........................................................18
Mortgage Loan Originator...............................................18
Mortgage Loan Purchase Agreement.......................................18
Mortgage Loan Schedule.................................................18
Mortgage Note..........................................................20
Mortgage Pool..........................................................20
Mortgage Rate..........................................................20
Mortgaged Property.....................................................20
Mortgagor..............................................................20
Net Excess Spread......................................................20
Net Liquidation Proceeds...............................................21
Net Mortgage Rate......................................................21
Net Prepayment Interest Shortfall......................................21
New Lease..............................................................21
Nonrecoverable Advance.................................................21
Non-United States Person...............................................21
Offered Certificates...................................................21
Officers' Certificate..................................................21
One-Month LIBOR........................................................21
Opinion of Counsel.....................................................22
Original Mortgage Loan.................................................22
Overcollateralization Amount...........................................22
Overcollateralization Deficiency.......................................22
Overcollateralization Release Amount...................................22
Ownership Interest.....................................................23
Pass-Through Margin....................................................23
Pass-Through Rate......................................................23
Percentage Interest....................................................23
Periodic Rate Cap......................................................23
Permitted Investments..................................................24
Permitted Transferee...................................................25
Person.................................................................25
Pool Principal Balance.................................................25
Prepayment Assumption..................................................25
Prepayment Excess......................................................25
Prepayment Interest Shortfall..........................................25
Principal Distribution Amount..........................................25
Principal Prepayment...................................................25
Principal Remittance Amount............................................25
Purchase Price.........................................................26
Qualified Substitute Mortgage Loan.....................................26
Rate/Term Refinancing..................................................27
Rating Agency or Rating Agencies.......................................27
Realized Loss..........................................................27
Record Date............................................................28
Reference Banks........................................................28
Refinanced Mortgage Loan...............................................28
Regular Certificate....................................................28
Regular Interest.......................................................29
Relief Act.............................................................29
Relief Act Interest Shortfall..........................................29
REMIC..................................................................29
REMIC Provisions.......................................................29
REMIC 1 Regular Interest...............................................29
REMIC 2 Regular Interest...............................................29
Remittance Report......................................................29
Rents from Real Property...............................................29
REO Account............................................................29
REO Disposition........................................................29
REO Imputed Interest...................................................29
REO Principal Amortization.............................................29
REO Property...........................................................30
Request for Release....................................................30
Required Reserve Fund Balance..........................................30
Required Reserve Fund Deposit..........................................30
Reserve Interest Rate..................................................30
Residential Dwelling...................................................30
Residual Certificate...................................................30
Residual Interest......................................................31
Responsible Officer....................................................31
Scheduled Principal Balance............................................31
Senior Enhancement Percentage..........................................31
Senior Specified Enhancement Percentage................................31
Servicer...............................................................31
Servicer Remittance Date...............................................31
Servicing Account......................................................31
Servicing Advances.....................................................31
Servicing Fee..........................................................32
Servicing Fee Rate.....................................................32
Servicing Officer......................................................32
Servicing Termination Event............................................32
Servicing Termination Trigger..........................................32
Single Certificate.....................................................32
60+ Day Delinquent Loan................................................33
S&P....................................................................33
Special Servicer Fee...................................................33
Standard Rate..........................................................33
Startup Day............................................................33
Stated Principal Balance...............................................33
Stayed Funds...........................................................34
Stepdown Date..........................................................34
Subordinated Certificates..............................................34
Subservicer............................................................34
Subservicing Agreement.................................................34
Substitution Shortfall Amount..........................................34
Targeted Overcollateralization Amount..................................34
Tax Returns............................................................34
Termination Price......................................................34
Terminator.............................................................35
Total Distribution Amount..............................................35
Transfer...............................................................35
Transferee.............................................................36
Transferor.............................................................36
Trigger Event..........................................................36
Trust Fund.............................................................36
Trustee................................................................37
Trustee's Fee..........................................................37
Trustee's Fee Rate.....................................................37
Uninsured Cause........................................................37
United States Person...................................................37
Unpaid Basis Risk Shortfall............................................37
Unpaid Realized Loss Amount............................................38
Value..................................................................38
Voting Rights..........................................................38
Weighted Average Net Mortgage Rate.....................................38
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES...38
SECTION 2.01. Conveyance of Mortgage Loans..............................38
SECTION 2.02. Acceptance by Trustee.....................................41
SECTION 2.03. Repurchase or Substitution of Mortgage Loans by the
Mortgage Loan Originator..................................42
SECTION 2.04. Representations and Warranties of the Depositor...........44
SECTION 2.05. Representations, Warranties and Covenants of the Servicer.45
SECTION 2.06. Issuance of Certificates..................................46
ARTICLE III ADMINISTRATION AND SERVICING OF THE TRUST FUND...................47
SECTION 3.01. Servicer to Act as Servicer...............................47
SECTION 3.02. Sub-Servicing Agreements Between Servicer and
Sub-Servicers.............................................49
SECTION 3.03. Successor Sub-Servicers...................................49
SECTION 3.04. No Contractual Relationship Between Sub-Servicer, Trustee
or the Certificateholders.................................50
SECTION 3.05. Assumption or Termination of Sub-Servicing Agreement
by Trustee................................................50
SECTION 3.06. [RESERVED]................................................50
SECTION 3.07. Collection of Certain Mortgage Loan Payments..............50
SECTION 3.08. [RESERVED]................................................51
SECTION 3.09. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts........................................51
SECTION 3.10. Collection Account and Distribution Account...............51
SECTION 3.11. Withdrawals from the Collection Account and
Distribution Account......................................53
SECTION 3.12. Investment of Funds in the Investment Accounts............55
SECTION 3.13. [intentionally omitted]...................................56
SECTION 3.14. Maintenance of Hazard Insurance and Errors and Omissions
and Fidelity Coverage.....................................56
SECTION 3.15. Enforcement of Due-On-Sale Clauses; Assumption
Agreements................................................57
SECTION 3.16. Realization Upon Defaulted Mortgage Loans.................58
SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files...........60
SECTION 3.18. Servicing Compensation....................................61
SECTION 3.19. Reports to the Trustee; Collection Account Statements.....62
SECTION 3.20. Statement as to Compliance................................62
SECTION 3.21. Independent Public Accountants' Servicing Report..........62
SECTION 3.22. Access to Certain Documentation...........................63
SECTION 3.23. Title, Management and Disposition of REO Property.........63
SECTION 3.24. Obligations of the Servicer in Respect of Prepayment
Interest Shortfalls.......................................66
SECTION 3.25. [Reserved]................................................66
SECTION 3.26. Obligations of the Servicer in Respect of Mortgage
Rates and Monthly Payments................................66
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS....................................66
SECTION 4.01. Distributions.............................................66
SECTION 4.02. Statements to Certificateholders..........................71
SECTION 4.03. Remittance Reports; Advances..............................74
SECTION 4.04. Allocation of Realized Losses.............................76
SECTION 4.05. Compliance with Withholding Requirements..................76
SECTION 4.06. 76
SECTION 4.07. SEC Reporting.............................................77
SECTION 4.08. Basis Risk Reserve Fund...................................77
ARTICLE V THE CERTIFICATES...................................................78
SECTION 5.01. The Certificates..........................................78
SECTION 5.02. Registration of Transfer and Exchange of Certificates.....79
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.........84
SECTION 5.04. Persons Deemed Owners.....................................85
SECTION 5.05. Certain Available Information.............................85
ARTICLE VI THE DEPOSITOR, AND THE SERVICER...................................85
SECTION 6.01. Liability of the Depositor and the Servicer...............85
SECTION 6.02. Merger or Consolidation of the Depositor or the Servicer..85
SECTION 6.03. Limitation on Liability of the Depositor,
the Servicer and Others...................................86
SECTION 6.04. Limitation on Resignation of the Servicer ................87
SECTION 6.05. Rights of the Depositor and Others in
Respect of the Servicer...................................87
ARTICLE VII DEFAULT..........................................................88
SECTION 7.01. Servicing Termination Events..............................88
SECTION 7.02. Trustee to Act; Appointment of Successor..................90
SECTION 7.03. Notification to Certificateholders........................91
SECTION 7.04. Waiver of Servicing Termination Events....................91
ARTICLE VIII CONCERNING THE TRUSTEE..........................................91
SECTION 8.01. Duties of Trustee.........................................91
SECTION 8.02. Certain Matters Affecting the Trustee.....................93
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans.....95
SECTION 8.04. Trustee May Own Certificates..............................96
SECTION 8.05. Trustee's Fees and Expenses...............................96
SECTION 8.06. Eligibility Requirements for Trustee......................96
SECTION 8.07. Resignation and Removal of the Trustee....................97
SECTION 8.08. Successor Trustee.........................................97
SECTION 8.09. Merger or Consolidation of Trustee........................98
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.............98
SECTION 8.11. Appointment of Office or Agency...........................99
SECTION 8.12. Representations and Warranties of the Trustee.............99
ARTICLE IX [Reserved].......................................................100
ARTICLE X TERMINATION.......................................................100
SECTION 10.01. Termination Upon Repurchase or Liquidation of
All Mortgage Loans................. .....................100
SECTION 10.02. Additional Termination Requirements......................102
ARTICLE XI REMIC PROVISIONS.................................................103
SECTION 11.01. Tax Administration.......................................103
SECTION 11.02. Prohibited Transactions and Activities...................106
SECTION 11.03. Tax Indemnification......................................106
ARTICLE XII MISCELLANEOUS PROVISIONS........................................107
SECTION 12.01. Amendment................................................107
SECTION 12.02. Recordation of Agreement; Counterparts...................108
SECTION 12.03. Limitation on Rights of Certificateholders...............108
SECTION 12.04. GOVERNING LAW............................................109
SECTION 12.05. Notices..................................................109
SECTION 12.06. Severability of Provisions...............................110
SECTION 12.07. Notice to Rating Agencies................................110
SECTION 12.08. Article and Section References...........................111
TABLE OF CONTENTS
EXHIBITS
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EXHIBIT A-1 FORM OF CLASS A CERTIFICATE
EXHIBIT A-2 FORM OF CLASS M-1 CERTIFICATE
EXHIBIT A-3 FORM OF CLASS M-2 CERTIFICATE
EXHIBIT A-4 FORM OF CLASS B CERTIFICATE
EXHIBIT A-5 FORM OF CLASS X CERTIFICATE
EXHIBIT A-6 FORM OF CLASS R CERTIFICATE
EXHIBIT A-7 FORM OF CLASS BB CERTIFICATE
EXHIBIT B-1 FORM OF TRUSTEE'S INITIAL CERTIFICATION
EXHIBIT B-2 FORM OF TRUSTEE FINAL CERTIFICATION
EXHIBIT C FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
EXHIBIT D-1 REQUEST FOR RELEASE (for Trustee/Custodian)
EXHIBIT D-2 REQUEST FOR RELEASE (Mortgage Loans Paid in Full)
EXHIBIT E FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
EXHIBIT F RESERVED
EXHIBIT G FORM OF LOST NOTE AFFIDAVIT
EXHIBIT H RESERVED
EXHIBIT I FORM OF REMITTANCE REPORT
SCHEDULES
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SCHEDULE 1 MORTGAGE LOAN SCHEDULE
<PAGE>
This Pooling and Servicing Agreement, is dated and effective
as of July 1, 1999 among MERRILL LYNCH MORTGAGE INVESTORS,
INC., as Depositor, LITTON LOAN SERVICING LP, as Servicer, and
THE CHASE MANHATTAN BANK, as Trustee.
PRELIMINARY STATEMENT:
The Depositor intends to sell pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest in
the Trust Fund created hereunder.
As provided herein, the Trustee shall elect that the Trust
Fund be treated for federal income tax purposes as two separate real estate
mortgage investment conduits (each a "REMIC" or, in the alternative, "REMIC 1"
and "REMIC 2"). The Class A, Class M-1, Class M-2 and Class B Certificates
(other than their contractual rights to receive certain payments in respect of
Basis Risk Shortfalls from the Basis Risk Reserve Fund) and the Class X
Certificates (which represent the beneficial ownership of the Class C and Class
IO Component 1, Component 2, Component 3, and Component 4 Regular Interests)
represent ownership of all of the "regular interests" in REMIC 2 and the Class
R2 Interest represents the sole class of "residual interest" in REMIC 2 for
purposes of the REMIC Provisions. The Class R1 Interest represents the sole
class of "residual interest" in REMIC 1 for purposes of the REMIC Provisions.
There are also five classes of uncertificated REMIC 1 Regular Interests issued
under this Agreement (the Class T1-1, Class T1-2, Class T1-3, Class T1-4 and
Class T1-5 Interests), each of which will constitute regular interests in REMIC
1. The REMIC 1 Regular Interests will be held as assets of REMIC 2.
The following table irrevocably sets forth the Pass-Through
Rate, initial Class Certificate Balance and "latest possible maturity date" for
the REMIC 2 Regular Interests.
<TABLE>
<CAPTION>
Initial Class Certificate Latest Possible
Description Pass-Through Rate Balance(1) Maturity Date(2)
----------- ----------------- ---------- ----------------
<S> <C> <C> <C>
Class A Variable (3)% $109,115,000 March 20, 2029
Class M-1 Variable (3)% $10,006,000 June 20, 2030
Class M-2 Variable (3)% $6,084,000 June 20, 2030
Class B Variable (3)% $5,408,000 June 20, 2030
Class C (5) (4) $4,597,191.20
Class IO Component 1 (5) N/A N/A
Class IO Component 2 (5) N/A N/A
Class IO Component 3 (5) N/A N/A
Class IO Component 4 (5) N/A N/A
Class R N/A N/A
</TABLE>
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(1) Plus or minus 5%.
(2) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date occurring one year and one month
after the maturity date for the Mortgage Loan with the latest maturity
date has been designated as the "latest possible maturity date" for the
Class A Certificates.
(3) Calculated in accordance with the definition of "Pass-Through Rate"
herein.
(4) The Class C Regular Interest bears interest at the Weighted Average
Net Mortgage Rate.
(5) Represented by the Class X Certificates.
As of the Cut-off Date, the Mortgage Loans had an aggregate principal
balance equal to $135,211,506.
In consideration of the mutual agreements herein contained, the
Depositor, the Servicer, and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.
Whenever used in this Agreement, including, without
limitation, in the Preliminary Statement hereto, the following words and
phrases, unless the context otherwise requires, shall have the meanings
specified in this Article. Unless otherwise specified, all calculations
described herein shall be made on the basis of a 360-day year consisting of
twelve 30-day months.
"Accrued Certificate Interest": With respect to each
Distribution Date and any Class of Offered Certificates, interest accrued during
the related Interest Accrual Period on the Class Certificate Balance of such
Class at the then-applicable Pass-Through Rate. Accrued Certificate Interest
with respect to each Distribution Date, as to any Offered Certificate, shall be
reduced by an amount equal to the portion allocable to such Certificate of the
aggregate amount of any Relief Act Interest Shortfall, if any, for such
Distribution Date. Such Relief Act Interest Shortfalls shall first be allocated
to the Class X Certificates and then to the other Classes in inverse order of
their priority of distributions.
"Adjustable Rate Mortgage Loan": A Mortgage Loan which
provides for the adjustment of the Mortgage Rate payable in respect thereto.
"Adjusted Overcollateralization Amount": With respect to any
Distribution Date, the amount, if any, by which (a) the Pool Principal Balance
as of the end of the related Collection Period (reduced to give effect to any
Realized Losses and Advances of principal) exceeds (b) the aggregate of the
balances of the Class A, Class M-1, Class M-2 and Class B Certificates as of
such Distribution Date (after giving effect to the distribution of principal on
such Regular Interests on such Distribution Date).
"Adjusted Overcollateralization Release Amount": With respect
to any Distribution Date, the lesser of (x) the Principal Remittance Amount for
such Distribution Date and (y) the amount, if any, by which (i) the Adjusted
Overcollateralization Amount for such date, calculated for this purpose on the
basis of the assumption that 100% of the Principal Remittance Amount for such
date is applied on such date in reduction of the principal balances of the Class
A, Class M-1, Class M-2, and Class B Certificates, exceeds (ii) the Targeted
Overcollateralization Amount for such date.
"Adjustment Date": With respect to each Adjustable Rate
Mortgage Loan, each Adjustment Date, on which the Mortgage Rate of an Adjustable
Rate Mortgage Loan is subject to adjustment pursuant to the related Mortgage
Note. The first Adjustment Date following the Cut-off Date as to each Adjustable
Rate Mortgage Loan is set forth in the Mortgage Loan Schedule.
"Advance": An advance of the aggregate of payments of
principal and interest (net of the Servicing Fee) on one or more Mortgage Loans
that were due on the Due Date in the related Collection Period and not received
as of the close of business on the related Servicer Remittance Date, required to
be made by or on behalf of the Servicer (or by the Trustee) pursuant to Section
4.03.
"Affiliate": With respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Aggregate Loan Balance": The aggregate of the Scheduled
Principal Balances for all Mortgage Loans at the date of determination.
"Agreement": This Pooling and Servicing Agreement and all
amendments hereof and supplements hereto.
"Applied Realized Loss Amount": has the meaning set forth in
Section 4.04(b).
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage.
"Available Capped Interest": With respect to any Distribution
Date, means the positive difference, if any, between (x) the sum of the amount
of interest accrued at the Available Funds Pass-Through Rate and (y) the sum of
the amount of interest accrued at the Pass-Through Rate on each Class of Offered
Certificates.
"Available Funds Pass-Through Rate": As to any Distribution
Date, the per annum rate equal to the percentage obtained by dividing (x) the
amount of interest that accrued on the Mortgage Loans in respect of the related
Collection Period at the weighted average of the related Mortgage Rates
applicable to Monthly Payments due on such Mortgage Loans during such Collection
Period, reduced by the Expense Fee Rate, by (y) the product of (i) the aggregate
Class Certificate Balance and (ii) the actual number of days elapsed during such
Interest Accrual Period divided by 360.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11
of the United States Code), as amended.
"Basis Risk Reserve Fund": A fund created as part of the Trust
Fund pursuant to Section 4.08 of this Agreement but which is not an asset of any
of the REMICs.
"Basis Risk Shortfall": With respect to any Distribution Date
and any Class of Offered Certificates, the excess, if any, of the Accrued
Certificate Interest (calculated without regard to the Available Funds
Pass-Through Rate for such date but not more than the Expense Adjusted Maximum
Mortgage Rate) over the product of (a) the Available Funds Pass-Through Rate on
such Distribution Date and (b) the Certificate Balance of such Class of
Certificates. The excess of the LIBOR Rate over the Weighted Average Net
Mortgage Rate shall be treated as the obligation of the Trust pursuant to the
cap agreement, and not as an obligation of REMIC 2.
"Book-Entry Certificate": The Class A Certificates, the Class
M-1 Certificates, the Class M-2 Certificates and the Class B Certificates for so
long as the Certificates of such Classes shall be registered in the name of the
Depository or its nominee.
"Business Day": Any day other than a Saturday, a Sunday or a
day on which banking or savings and loan institutions in the State of New York,
or in the city in which the Corporate Trust Office of the Trustee is located, is
authorized or obligated by law or executive order to be closed.
"Cash-Out Refinancing": A Refinanced Mortgage Loan the
proceeds of which were more than the lesser of (i) $1000, and (ii) 1% of the
principal balance of any existing first mortgage or subordinate mortgage being
refinanced on the related Mortgaged Property and related closing costs.
"Certificate": Any one of the Depositor's Mortgage Loan Asset
Backed Certificates, Series 1999-NC1, Class A, Class M-1, Class M-2, Class B,
Class BB, Class X or Class R, issued under this Agreement.
"Certificate Factor": With respect to any Class of Offered
Certificates as of any Distribution Date, a fraction, expressed as a decimal
carried to six places, the numerator of which is the Class Certificate Balance
of such Class of Certificates on such Distribution Date (after giving effect to
any distributions of principal and allocations of Realized Losses, in reduction
of the Class Certificate Balance of such Class of Certificates to be made on
such Distribution Date), and the denominator of which is the initial Class
Certificate Balance of such Class of Certificates as of the Closing Date.
"Certificate Owner": With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Certificate as reflected on the
books of the Depository or on the books of a Depository Participant or on the
books of an indirect participating brokerage firm for which a Depository
Participant acts as agent.
"Certificate Principal Balance": With respect to each Class of
Certificates as of any date of determination, the Certificate Principal Balance
of such Class on the Distribution Date immediately prior to such date of
determination, minus all distributions allocable to principal made thereon and
Applied Realized Loss Amounts allocated thereto pursuant to Section 4.04 hereof
on such immediately prior Distribution Date (or, in the case of any date of
determination up to and including the first Distribution Date, the initial
Certificate Principal Balance of such Class, as stated on the face thereof).
"Certificate Register" and "Certificate Registrar": The
register maintained and the registrar appointed pursuant to Section 5.02.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
"disqualified organization" (as defined in Section 860E(e)(5) of the Code) or a
Non-United States Person shall not be a Holder of a Residual Certificate for any
purposes hereof. All references herein to "Holders" or "Certificateholders"
shall reflect the rights of Certificate Owners as they may indirectly exercise
such rights through the Depository and participating members thereof, except as
otherwise specified herein; provided, however, that the Trustee shall be
required to recognize as a "Holder" or "Certificateholder" only the Person in
whose name a Certificate is registered in the Certificate Register.
"Class": Collectively, all of the Certificates bearing the
same class designation.
"Class A Certificate": Any one of the Class A Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-1 and
evidencing a Regular Interest in REMIC 2 for purposes of the REMIC Provisions.
"Class A Interest": A regular interest in REMIC 2 that has an
initial principal balance of $109,115,000 as of the Cut-off Date and bears
interest at a per annum rate equal to the lesser of (i) the Class A Pass-Through
Rate and (ii) the Weighted Average Net Mortgage Rate. Ownership of the Class A
Interest is evidenced by the Class A Certificates.
"Class A Interest Carry Forward Amount": With respect to any
Distribution Date, the Interest Carry Forward Amount applicable to the Class A
Certificates.
"Class A Principal Distribution Amount": With respect to any
Distribution Date (a) prior to the Stepdown Date or with respect to which a
Trigger Event is in effect, the lesser of (i) 100% of the Principal Distribution
Amount and (ii) the Class Certificate Balance of the Class A Certificates and
(b) on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the positive difference, if any, of the excess of (x) the Class
Certificate Balance of the Class A Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 61.4% and (ii)
the Pool Principal Balance as of the last day of the related Collection Period
and (B) the Pool Principal Balance as of the last day of the related Collection
Period minus the product of 0.50% and the Pool Principal Balance as of the
Closing Date.
"Class B Applied Realized Loss Amount" means, as to the Class
B Certificates and as of any Distribution Date, the lesser of (x) the Class
Certificate Balance thereof (after taking into account the distribution of the
Principal Distribution Amount on such Distribution Date, but prior to the
application of the Class B Applied Realized Loss Amount, if any, on such
Distribution Date) and (y) the Applied Realized Loss Amount as of such
Distribution Date.
"Class B Certificate": Any one of the Class B Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-4 and
evidencing a regular interest in REMIC 2 for purposes of the REMIC Provisions.
"Class B Interest": A regular interest in REMIC 2 that has an
initial principal balance of $5,408,000 as of the Cut-off Date and bears
interest at a per annum rate equal to the lesser of (i) the Class B Pass-Through
Rate and (ii) the Weighted Average Net Mortgage Rate. Ownership of the Class B
Interest is evidenced by the Class B Certificates.
"Class B Interest Carry Forward Amount": With respect to any
Distribution Date, the Interest Carry Forward Amount applicable to the Class B
Certificates.
"Class B Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and as long as a Trigger Event
is not in effect, the positive difference, if any, of the excess of (x) the sum
of (i) the Class Certificate Balance of the Class A Certificates (after taking
into account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the Class Certificate Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Class Certificate
Balance of the Class M-2 Certificates (after taking into account the payment of
the Class M-2 Principal Distribution Amount on such Distribution Date), and (iv)
the Class Certificate Balance of the Class B Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 93.20% and
(ii) the Pool Principal Balance as of the last day of the related Collection
Period and (B) the Pool Principal Balance as of the last day of the related
Collection Period minus the product of 0.50% and the Pool Principal Balance as
of the Closing Date.
"Class B Realized Loss Amortization Amount" means, as to the
Class B Certificates and as of any Distribution Date, the lesser of (x) the
Class B Unpaid Realized Loss Amount as of such Distribution Date and (y) the
excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum of the Class
A Interest Carry Forward Amount, the Class M-1 Realized Loss Amortization
Amount, the Class M-2 Realized Loss Amortization Amount, the Class M-1 Interest
Carry Forward Amount, the Class M-2 Interest Carry Forward Amount and the Class
B Interest Carry Forward Amount, in each case for such Distribution Date.
"Class B Unpaid Realized Loss Amount": With respect to any
Distribution Date, the Unpaid Realized Loss Amount applicable to the Class B
Certificates.
"Class BB Certificate": Any one of the Class BB Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-7 and
evidencing an obligation of the Class X Certificates.
"Class BB Notional Amount": As of any date of determination,
the Initial Class BB Notional Amount minus all distributions allocable to
principal made thereon on all prior Distribution Dates.
"Class C Interest": A regular interest in REMIC 2 that has a
principal balance equal to the principal balance of the Class T1-5 Interest and
bears interest at a per annum rate equal to the Weighted Average Net Mortgage
Rate. Ownership of the Class C Interest is represented by the Class X
Certificate.
"Class C Regular Interest Realized Loss Amount" means, as to
the Class C Regular Interests and as of any Distribution Date, the excess of (x)
the Pool Balance (after taking into account the distribution of the Principal
Distribution Amount on such Distribution Date, but prior to the application of
the Class C Regular Interest Realized Loss Amount, if any, on such Distribution
Date) over (y) the sum of the principal balances in respect of the Class A
Certificates, Class M-1 Certificates, Class M-2 Certificates, Class B
Certificates and the Class C Regular Interests as of such Distribution Date.
Recoveries of any Applied Realized Losses previously allocated to the Class C
Regular Interest will be distributed to the Class C Regular Interest and will
not result in any further reduction in principal balance to the extent they are
not required to be applied pursuant to the definitions of Class A Realized Loss
Amortization Amount, Class M-1 Realized Loss Amortization Amount, Class M-2
Realized Loss Amortization Amount or Class B Realized Loss Amortization Amount.
"Class Certificate Balance": As to any Class of Certificates
and any date of determination, the aggregate of the Certificate Principal
Balances of all Certificates of such Class as of such date of determination.
"Class IO Component 1": A regular interest in REMIC 2 that is
entitled to 100% of the interest accruals on the Class T1-1 Interest in excess
of the interest accruals on the Class A Regular Interest. The Class IO Component
1 Interest shall not have a principal balance. Ownership of the Class IO
Component 1 is evidenced by the Class X Certificate.
"Class IO Component 2": A regular interest in REMIC 2 that is
entitled to 100% of the interest accruals on the Class T1-2 Interest in excess
of the interest accruals on the Class M-1 Regular Interest. The Class IO
Component 2 shall not have a principal balance. Ownership of the Class IO
Component 2 is evidenced by the Class X Certificate.
"Class IO Component 3": A regular interest in REMIC 2 that is
entitled to 100% of the interest accruals on the Class T1-3 Interest in excess
of the interest accruals on the Class M-2 Regular Interest. The Class IO
Component 3 shall not have a principal balance. Ownership of the Class IO
Component 3 is evidenced by the Class X Certificate.
"Class IO Component 4": A regular interest in REMIC 2 that is
entitled to 100% of the interest accruals on the Class T1-4 Interest in excess
of the interest accruals on the Class B Regular Interest. The Class T1-4
Interest shall not have a principal balance. Ownership of the Class IO Component
4 is represented by the Class X Certificate.
"Class M Certificates": The Class M-1 Certificates and the
Class M-2 Certificates.
"Class M-1 Applied Realized Loss Amount": With respect to the
Class M-1 Certificates and as of any Distribution Date, the lesser of (x) the
Class Certificate Balance thereof (after taking into account the distribution of
the Principal Distribution Amount on such Distribution Date, but prior to the
application of the Class M-1 Applied Realized Loss Amount, if any on such
Distribution Date) and (y) the excess of (i) the Applied Realized Loss Amount as
of such Distribution Date over (ii) the sum of the Class M-2 Applied Realized
Loss Amount and the Class B Applied Realized Loss Amount, in each case as of
such Distribution Date.
"Class M-1 Certificate": Any one of the Class M-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-2 and
evidencing a Regular Interest in REMIC 2 for purposes of the REMIC Provisions.
"Class M-1 Interest": A regular interest in REMIC 2 that has
an initial principal balance of $10,006,000 as of the Cut-off Date and bears
interest at a per annum rate equal to the lesser of (i) the Class M-1
Pass-Through Rate and (ii) the Weighted Average Net Mortgage Rate. Ownership of
the Class M-1 Interest is evidenced by the Class M-1 Certificates.
"Class M-1 Interest Carry Forward": With respect to any
Distribution Date, the Interest Carry Forward applicable to the Class M-1
Certificates.
"Class M-1 Principal Distribution Amount": As of any
Distribution Date on or after the Stepdown Date and as long as a Trigger Event
is not in effect, the positive difference, if any, of the excess of (x) the sum
of (i) the Class Certificate Balance of the Class A Certificates (after taking
into account the payment of the Class A Principal Distribution Amount on such
Distribution Date), and (ii) the Class Certificate Balance of the Class M-1
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 76.2% and (ii) the Pool Principal Balance as of the last
day of the related Collection Period and (B) the Pool Principal Balance as of
the last day of the related Collection Period minus the product of 0.50% and the
Pool Principal Balance as of the Closing Date.
"Class M-1 Realized Loss Amortization Amount": With respect to
the Class M-1 Certificates and as of any Distribution Date, the lesser of (x)
the Class M-1 Unpaid Realized Loss Amount as of such Distribution Date and (y)
the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum of the
Class A Interest Carry Forward Amount and the Class M-1 Interest Carry Forward
Amount, in each case for such Distribution Date.
"Class M-1 Unpaid Realized Loss Amount": With respect to any
Distribution Date, the Unpaid Realized Loss Amount applicable to the Class M-1
Certificates.
"Class M-2 Applied Realized Loss Amount": With respect to the
Class M-2 Certificates and as of any Distribution Date, the lesser of (x) the
Class Certificate Balance thereof (after taking into account the distribution of
the Principal Distribution Amount on such Distribution Date, but prior to the
application of the Class M-2 Applied Realized Loss Amount, if any on such
Distribution Date) and (y) the excess of (i) the related Applied Realized Loss
Amount as of such Distribution Date over (ii) the Class B Applied Realized Loss
Amount as of such Distribution Date.
"Class M-2 Certificate": Any one of the Class M-2 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-3 and
evidencing a Regular Interest in REMIC 2 for purposes of the REMIC Provisions.
"Class M-2 Interest": A regular interest in REMIC 2 that has
an initial principal balance of $6,084,000 as of the Cut-off Date and bears
interest at a per annum rate equal to the lesser of (i) the Class M-2
Pass-Through Rate and (ii) the Weighted Average Net Mortgage Rate. Ownership of
the Class M-2 Interest is evidenced by the Class M-2 Certificates.
"Class M-2 Interest Carry Forward": With respect to any
Distribution Date, the Interest Carry Forward for the Class M-2 Certificates.
"Class M-2 Principal Distribution Amount": As of any
Distribution Date on or after the Stepdown Date and as long as a Trigger Event
is not in effect, the positive difference, if any, of the excess of (x) the sum
of (i) the Class Certificate Balance of the Class A Certificates (after taking
into account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the Class Certificate Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date) and (iii) the Class Certificate
Balance of the Class M-2 Certificates immediately prior to such Distribution
Date over (y) the lesser of (A) the product of (i) 85.20% and (ii) the Pool
Principal Balance as of the last day of the related Collection Period and (B)
the Pool Principal Balance as of the last day of the related Collection Period
minus the product of 0.50% and the Pool Principal Balance as of the Closing
Date.
"Class M-2 Realized Loss Amortization Amount": With respect to
the Class M-2 Certificates and as of any Distribution Date, the lesser of (x)
the Class M-2 Unpaid Realized Loss Amount as of such Distribution Date and (y)
the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum of the
Class A Interest Carry Forward Amount, the Class M-1 Interest Carry Forward
Amount, the Class M-1 Realized Loss Amortization Amount and the related Class
M-2 Interest Carry Forward Amount, in each case for such Distribution Date.
"Class M-2 Unpaid Realized Loss Amount": With respect to any
Distribution Date, the Unpaid Realized Loss Amount applicable to the Class M-2
Certificates.
"Class R Certificate": The Class R Certificate executed by the
Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-3 and evidencing the
ownership of the Class R1 Interest and the Class R2 Interest.
"Class R1 Interest": The uncertificated Residual Interest in
REMIC 1.
"Class R2 Interest": The uncertificated Residual Interest in
REMIC 2.
"Class T1-1 Interest": A regular interest in REMIC 1 held as
an asset of REMIC 2 that has an initial principal balance of $109,115,000 as of
the Cut-off Date, and bears interest at the Weighted Average Net Mortgage Rate.
"Class T1-2 Interest": A regular interest in REMIC 1 held as
an asset of REMIC 2 that has an initial principal balance of $10,006,000 as of
the Cut-off Date, and bears interest at the Weighted Average Net Mortgage Rate.
"Class T1-3 Interest": A regular interest in REMIC 1 held as
an asset of REMIC 2 that has an initial principal balance of $6,084,000 as of
the Cut-off Date, and bears interest at the Weighted Average Net Mortgage Rate.
"Class T1-4 Interest": A regular interest in REMIC 1 held as
an asset of REMIC 2 that has an initial principal balance of $5,408,000 as of
the Cut-off Date, and bears interest at the Weighted Average Net Mortgage Rate.
"Class T1-5 Interest": A regular interest in REMIC 1 held as
an asset of REMIC 2 that has an initial principal balance equal to the
difference between the (i) the Pool Principal Balance and (ii) the aggregate
principal balances of the Class T1-1 Interest, Class T1-2 Interest, Class T1-3
Interest and Class T1-4 Interest, as of the Cut-off Date, and bears interest at
the Weighted Average Net Mortgage Rate.
"Class X Certificates": Any one of the Class X Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-5 and
evidencing a Regular Interest in the REMIC Trust for purposes of the REMIC
provisions. The Class X Certificates will have a Certificate Principal Balance
of $4,597,191.20.
"Class X Distributable Amount": With respect to any
Distribution Date, the excess of (i) the aggregate of amounts distributable on
the Class IO Component 1, Class IO Component 2, Class IO component 3, Class IO
Component 4 and the Class C Interest in respect of principal and interest at the
Weighted Average Net Mortgage Rate for such Distribution Date, over (ii) the
aggregate of amounts distributable to the Class BB Certificateholders pursuant
to Sections 4.01(a)(vi) and 4.01(c)(x).
"Closing Date": July 29, 1999.
"Code": The Internal Revenue Code of 1986.
"Collection Account": The account or accounts created and
maintained by the Servicer pursuant to Section 3.10(a), which shall be entitled
"[Servicer], as Servicer for The Chase Manhattan Bank, as Trustee, in trust for
registered holders of Merrill Lynch Mortgage Investors, Inc., Mortgage Loan
Asset Backed Certificates, Series 1999-NC1," and which must be an Eligible
Account.
"Collection Period": With respect to any Distribution Date,
the period from the day immediately following the Determination Date in the
calendar month preceding the calendar month in which such Distribution Date
occurs through the Determination Date in the calendar month in which such
Distribution Date occurs.
"Compensating Interest": On any Distribution Date, payments
made by the Servicer in satisfaction of its obligation to offset any Prepayment
Interest Shortfall on such Distribution Date pursuant to Section 3.24.
"Corporate Trust Office": The corporate trust office of the
Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is set forth in Section 12.05 hereof, or at
such other address as the Trustee may designate from time to time by notice to
the Certificateholders, the Depositor, and the Servicer.
"Credit Bureau Risk Score": As to any Mortgage Loan, the
statistical rating of likely future credit performance of such Mortgage Loan
determined on the basis of the methodology developed by Fair, Isaac & Company.
"Current Interest": With respect to each Class of Class A,
Class M-1, Class M-2 and Class B Certificates and any Distribution Date, the
aggregate amount of interest accrued during the related Accrual Period at the
applicable Pass-Through Rate on the Class Certificate Principal Balance of such
Class immediately prior to such Distribution Date
"Cut-off Date": With respect to each Original Mortgage Loan,
the close of business on July 1, 1999. With respect to all Qualified Substitute
Mortgage Loans, the close of business on the first day of the calendar month in
which the substitution occurs. References herein to the "Cut-off Date," when
used with respect to more than one Mortgage Loan, shall be to the respective
Cut-off Dates for such Mortgage Loans.
"Cut-off Date Pool Principal Balance": The sum of the Stated
Principal Balances of the Mortgage Loans as of their respective Cut-off Dates.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.
"Definitive Certificates": As defined in Section 5.01(b).
"Delayed First Adjustment Date Loan": Any Mortgage Loan as to
which the first Adjustment Date does not occur for 24 months or 36 months after
the origination date of such Mortgage Loan.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage Loan.
"Delinquency Percentage": As of the last day of any Collection
Period, the percentage equivalent of a fraction, the numerator of which equals
the aggregate Stated Principal Balances of all Mortgage Loans that are 60 or
more days Delinquent, in foreclosure or converted to REO Properties as of such
last day of such Collection Period, and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
such Collection Period.
"Delinquent": A Mortgage Loan is Delinquent if the Monthly
Payment due on a Due Date is not paid on or before the next succeeding Due Date,
at which time, such Mortgage Loan is 30 days Delinquent. If the Monthly Payment
due on a Due Date is not paid on or before the second or third succeeding Due
Date, such Mortgage Loan is 60 or 90 days Delinquent, respectively.
"Depositor": Merrill Lynch Mortgage Investors, Inc., a
Delaware corporation, or its successor in interest.
"Depository": The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository, for purposes
of registering those Certificates that are to be Book-Entry Certificates, is
CEDE & Co. 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 and a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934, as amended.
"Depository Institution": Any depository institution or trust
company, including the Trustee, that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations (or,
in the case of a depository institution that is the principal subsidiary of a
holding company, such holding company has unsecured commercial paper or other
short-term unsecured debt obligations) that are rated at least A-1 by S&P (or
comparable ratings if S&P are not the Rating Agencies).
"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.
"Determination Date": With respect to each Distribution Date,
the 10th day of the calendar month in which such Distribution Date occurs or, if
such 10th day is not a Business Day, the Business Day immediately following such
10th day.
"Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by the Trust Fund other
than through an Independent Contractor; provided, however, that the Trustee (or
the Servicer on behalf of the Trustee) shall not be considered to Directly
Operate an REO Property solely because the Trustee (or the Servicer on behalf of
the Trustee) establishes rental terms, chooses tenants, enters into or renews
leases, deals with taxes and insurance, or makes decisions as to repairs or
capital expenditures with respect to such REO Property.
"Disqualified Organization": Any of the following: (i) the
United States, any State or political subdivision thereof, any possession of the
United States, or any agency or instrumentality of any of the foregoing (other
than an instrumentality which is a corporation if all of its activities are
subject to tax and, except for the FHLMC, a majority of its board of directors
is not selected by such governmental unit), (ii) any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (iii) any organization (other than certain farmers' cooperatives
described in Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on
unrelated business taxable income), (iv) rural electric and telephone
cooperatives described in Section 1381(a)(2)(C) of the Code (v) an "electing
large partnership" within the meaning of Section 775 of the Code, and (vi) any
other Person so designated by the Trustee based upon an Opinion of Counsel that
the holding of an Ownership Interest in a Residual Certificate by such Person
may cause the Trust Fund or any Person having an Ownership Interest in any Class
of Certificates (other than such Person) to incur a liability for any federal
tax imposed under the Code that would not otherwise be imposed but for the
Transfer of an Ownership Interest in a Residual Certificate to such Person. The
terms "United States," "State" and "international organization" shall have the
meanings set forth in Section 7701 of the Code or successor provisions.
"Distribution Account": The trust account or accounts created
and maintained by the Trustee pursuant to Section 3.10(b) which shall be
entitled "The Chase Manhattan Bank, as Trustee, in trust for registered holders
of Merrill Lynch Mortgage Investors, Inc., Mortgage Loan Asset Backed
Certificates, Series 1999-NC1," which must be an Eligible Account.
"Distribution Date": The 20th day of any month, or if such
20th day is not a Business Day, the Business Day immediately following such 20th
day, commencing in August 1999.
"Due Date": With respect to each Distribution Date, the day of
the month on which the Monthly Payment is due on a Mortgage Loan during the
related Collection Period, exclusive of any days of grace.
"Duff & Phelps" Duff & Phelps Credit Rating Co.
"Eligible Account": Any of (i) an account or accounts
maintained with a federal or state chartered depository institution or trust
company the short-term unsecured debt obligations of which (or, in the case of a
depository institution or trust company that is the principal subsidiary of a
holding company, the short-term unsecured debt obligations of such holding
company) are rated at least A-1 by S&P (or comparable ratings if S&P are not the
Rating Agencies) at the time any amounts are held on deposit therein, (ii) an
account or accounts the deposits in which are fully insured by the FDIC or (iii)
a trust account or accounts maintained with the trust department of a federal or
state chartered depository institution or trust company acting in its fiduciary
capacity. Eligible Accounts may bear interest.
"Estate in Real Property": A fee simple estate in a parcel of
land.
"Expense Adjusted Maximum Mortgage Rate": With respect to any
Mortgage Loan, an amount equal to the Maximum Mortgage Rate thereon minus the
Expense Fee Rate.
"Expense Fee Rate": The sum of the Trustee Fee Rate and the
Servicing Fee Rate.
"Extra Principal Distribution Amount": With respect to any
Distribution Date, the lesser of (a) Monthly Excess Interest Amount for such
Distribution Date and (b) the Overcollateralization Deficiency for such date.
"Extraordinary Trust Fund Expenses": Any amounts reimbursable
to the Trustee, or any director, officer, employee or agent of the Trustee, from
the Trust Fund pursuant to Section 8.05, and any amounts payable from the
Distribution Account in respect of taxes pursuant to Section 11.01(g)(iv).
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"FHLMC": Federal Home Loan Mortgage Corporation or any
successor thereto.
"Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Mortgage Loan Originator, the Depositor or the Servicer
pursuant to or as contemplated by Section 2.03, 3.16(c) or 10.01), a
determination made by the Servicer that all Insurance Proceeds, Liquidation
Proceeds and other payments or recoveries which the Servicer, in its reasonable
good faith judgment, expects to be finally recoverable in respect thereof have
been so recovered. The Servicer shall maintain records, prepared by a Servicing
Officer of the Servicer, of each Final Recovery Determination made thereby.
"First Union": First Union National Bank or any successor
thereto.
"FNMA": Fannie Mae or any successor thereto.
"Gross Margin": With respect to each Adjustable Rate Mortgage
Loan, the fixed percentage set forth in the related Mortgage Note that is added
to the Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Rate for such Mortgage Loan.
"Independent": When used with respect to any specified Person,
any such Person who (a) is in fact independent of the Depositor, the Servicer
and their respective Affiliates, (b) does not have any direct financial interest
in or any material indirect financial interest in the Depositor, the Servicer or
any Affiliate thereof, and (c) is not connected with the Depositor, the Servicer
or any Affiliate thereof as an officer, employee, promoter, underwriter,
trustee, partner, director or Person performing similar functions; provided,
however, that a Person shall not fail to be Independent of the Depositor, the
Servicer or any Affiliate thereof merely because such Person is the beneficial
owner of 1% or less of any class of securities issued by the Depositor, the
Servicer or any Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than
the Servicer) that would be an "independent contractor" with respect to the
REMIC Trust within the meaning of Section 856(d)(3) of the Code if the REMIC
Trust were a real estate investment trust (except that the ownership tests set
forth in that section shall be considered to be met by any Person that owns,
directly or indirectly, 35 percent or more of any Class of Certificates), so
long as the REMIC Trust does not receive or derive any income from such Person
and provided that the relationship between such Person and the Trust Fund is at
arm's length, all within the meaning of Treasury Regulation Section
1.856-4(b)(5), or (ii) any other Person (including the Servicer) if the Trustee
has received an Opinion of Counsel to the effect that the taking of any action
in respect of any REO Property by such Person, subject to any conditions therein
specified, that is otherwise herein contemplated to be taken by an Independent
Contractor will not cause such REO Property to cease to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code (determined
without regard to the exception applicable for purposes of Section 860D(a) of
the Code), or cause any income realized in respect of such REO Property to fail
to qualify as Rents from Real Property.
"Index": With respect to each Adjustable Rate Mortgage Loan
and each related Adjustment Date, the average of the interbank offered rates for
six-month United States dollar deposits in the London market as published in The
Wall Street Journal and as most recently available as of the first Business Day
of the month preceding the month of such Adjustment Date, or as specified in the
related Mortgage Note.
"Initial Class BB Notional Amount": $9,750,000.
"Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy covering a Mortgage Loan, to the extent such
proceeds are not to be applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the procedures that the
Servicer would follow in servicing mortgage loans held for its own account,
subject to the terms and conditions of the related Mortgage Note and Mortgage.
"Interest Accrual Period": With respect to any Distribution
Date and the Certificates (other than the Class BB Certificates), the period
from the Distribution Date in the month immediately preceding the month in which
such Distribution Date occurs (or, in the case of the first Interest Accrual
Period, from the Closing Date) through the day before such Distribution Date
occurs; with respect to any Distribution Date and the Class BB Certificates, the
calendar month preceding the month in which such Distribution Date occurs.
"Interest Carry Forward Amount": With respect to the Offered
Certificates and any Distribution Date, the sum of (a) the excess, if any, of
the Accrued Certificate Interest calculated at the then applicable Pass-Through
Rate for a prior Distribution Date over the amount in respect of interest
actually distributed on such Class on such prior Distribution Date and (b)
interest on such excess at the applicable Pass-Through Rate for the actual
number of days elapsed since such prior Distribution Date.
"Interest Determination Date": With respect to the Offered
Certificates and any Interest Accrual Period therefor, the second London
Business Day preceding the commencement of such Interest Accrual Period.
"Interest Distribution Amount": With respect to any
Distribution Date and a Class of Certificates, the sum of (i) the aggregate
Accrued Certificate Interest on such Class of Certificates for such Distribution
Date and (ii) the aggregate Interest Carry Forward Amount for such Class of
Certificates for such Distribution Date.
"Interest Remittance Amount" means, as of any Determination
Date, the sum, without duplication, of (i) all interest due and collected or
advanced during the related Collection Period on the Mortgage Loans (less the
Servicing Fee, certain amounts available for reimbursement of Advances and
Servicing Advances and certain other reimbursable expenses payable pursuant to
this Agreement), (ii) all Compensating Interest paid by the Servicer on such
Determination Date, (iii) prepayment premiums and penalties and (iv) the portion
of any payment in connection with any substitution, Purchase Price or Net
Liquidation Proceeds relating to interest, provided that with respect to the
first Collection Period only the Interest Remittance Amount shall be reduced by
an amount equal to eight (8) days of interest at the Net Mortgage Rate due and
collected or advanced on the Mortgage Loans.
"Late Collections": With respect to any Mortgage Loan, all
amounts received subsequent to the Determination Date immediately following any
Collection Period, whether as late payments of Monthly Payments or as Insurance
Proceeds, Liquidation Proceeds or otherwise, which represent late payments or
collections of principal and/or interest due (without regard to any acceleration
of payments under the related Mortgage and Mortgage Note) but delinquent for
such Collection Period and not previously recovered.
"Latest Possible Maturity Date": The Distribution Date in June
20, 2030.
"LIBOR Rate": With respect to the Offered Certificates and any
Distribution Date, the sum of One-Month LIBOR plus the applicable Pass-Through
Margin.
"Liquidation Event": With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made as to such Mortgage Loan; or (iii) such Mortgage
Loan is removed from the Trust Fund by reason of its being purchased, sold or
replaced pursuant to or as contemplated by Section 2.03, Section 3.16(c) or
Section 10.01. With respect to any REO Property, either of the following events:
(i) a Final Recovery Determination is made as to such REO Property; or (ii) such
REO Property is removed from the Trust Fund by reason of its being purchased
pursuant to Section 10.01.
"Liquidation Proceeds": The amount (other than Insurance
Proceeds or amounts received in respect of the rental of any REO Property prior
to REO Disposition) received by the Servicer in connection with (i) the taking
of all or a part of a Mortgaged Property by exercise of the power of eminent
domain or condemnation, (ii) the liquidation of a defaulted Mortgage Loan by
means of a trustee's sale, foreclosure sale or otherwise, or (iii) the
repurchase, substitution or sale of a Mortgage Loan or an REO Property pursuant
to or as contemplated by Section 2.03, Section 3.16(c), Section 3.23 or Section
10.01.
"Loan-to-Value Ratio": As of any date of determination, the
fraction, expressed as a percentage, the numerator of which is the principal
balance of the related Mortgage Loan at such date and the denominator of which
is the Value of the related Mortgaged Property.
"London Business Day": Any day on which banks in the City of
London and New York City are open and conducting transactions in United States
dollars.
"Lost Note Affidavit": With respect to any Mortgage Loan as to
which the original Mortgage Note has been permanently lost or destroyed and has
not been replaced, an affidavit from the Mortgage Loan Originator certifying
that the original Mortgage Note has been lost, misplaced or destroyed (together
with a copy of the related Mortgage Note) in the form of Exhibit G hereto.
"Maximum Collateral Balance": $135,211,506.37.
"Maximum Mortgage Rate": With respect to each Adjustable Rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
maximum Mortgage Rate thereunder.
"Minimum Mortgage Rate": With respect to each Adjustable Rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
minimum Mortgage Rate thereunder.
"Monthly Excess Cash Flow Amount": With respect to any
Distribution Date, the sum of the Monthly Excess Interest Amount and the
Overcollateralization Release Amount.
"Monthly Excess Interest Amount": With respect to any
Distribution Date, such term has the meaning set forth in paragraph Sixth of
Section 4.01(a).
"Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction
in the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act; (b) without giving effect to any extension granted or agreed to by
the Servicer pursuant to Section 3.07; and (c) on the assumption that all other
amounts, if any, due under such Mortgage Loan are paid when due.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first lien on, or first priority security interest in, a Mortgaged
Property securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Loan": Each mortgage loan transferred and assigned
to the Trustee pursuant to Section 2.01 or Section 2.03(d) as from time to time
held as a part of the Trust Fund, the Mortgage Loans so held being identified in
the Mortgage Loan Schedule.
"Mortgage Loan Originator": New Century Mortgage Corporation,
or its successor in interest, in its capacity as seller under the Mortgage Loan
Purchase Agreement.
"Mortgage Loan Purchase Agreement": The agreement between the
Mortgage Loan Originator and Merrill Lynch Mortgage Capital Inc., an Affiliate
of the Depositor, regarding the transfer of the Mortgage Loans by the Mortgage
Loan Originator to Merrill Lynch Mortgage Capital Inc. in the form of Exhibit C
annexed hereto.
"Mortgage Loan Schedule": As of any date, the list of Mortgage
Loans included in the Trust Fund on such date. The Mortgage Loan Schedule shall
set forth the following information with respect to each Mortgage Loan:
1. the Mortgage Loan Originator's Mortgage Loan identifying
number;
2. the Mortgagor's name;
3. the street address of the Mortgaged Property including
the state and zip code;
4. a code indicating whether the Mortgaged Property is
owner-occupied;
5. the type of Residential Dwelling constituting the
Mortgaged Property;
6. the original months to maturity;
7. the remaining months to stated maturity from the
Cut-off Date based on the original amortization schedule;
8. the Loan-to-Value Ratio at origination;
9. the Mortgage Rate in effect immediately following the
Cut-off Date;
10. (A) the date on which the first Monthly Payment was due
on the Mortgage Loan and, (B) if such date is not consistent with
the Due Date currently in effect, such Due Date;
11. the stated maturity date;
12. the amount of the Monthly Payment due on the first Due
Date on or after the Cut-off Date;
13. the last Due Date on which a Monthly Payment was
actually applied to the unpaid Principal Balance;
14. the original principal amount of the Mortgage Loan;
15. the outstanding principal balance of the Mortgage
Loan as of the close of business on the Cut-off Date;
16. in the case of each Adjustable Rate Mortgage Loan, the
next Adjustment Date;
17. in the case of each Adjustable Rate Mortgage Loan, the
Gross Margin;
18. a code indicating the purpose of the Mortgage Loan
(i.e., purchase financing, Rate/Term Refinancing, Cash-Out Refinancing);
19. the Maximum Mortgage Rate;
20. the Minimum Mortgage Rate;
21. a code indicating the documentation style program;
22. the risk grade or Credit Bureau Risk Score;
23. the Value of the Mortgaged Property;
24. a code indicating whether the Mortgage Loan has a
prepayment penalty and
25. a code indicating whether the Mortgage Loan is a Delayed
First Adjustment Date Loan.
The Mortgage Loan Schedule shall set forth the following
information, as of the Cut-off Date with respect to the Mortgage Loans in the
aggregate: (1) the number of Mortgage Loans; (2) the current principal balance
of the Mortgage Loans; (3) the weighted average Mortgage Rate of the Mortgage
Loans; and (4) the weighted average maturity of the Mortgage Loans. The Mortgage
Loan Schedule shall be amended from time to time by the Depositor in accordance
with the provisions of this Agreement. With respect to any Qualified Substitute
Mortgage Loan, Cut-off Date shall refer to the related Cut-off Date for such
Mortgage Loan, determined in accordance with the definition of Cut-off Date
herein.
"Mortgage Note": The original executed note or other evidence
of indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage
Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on
Schedule 1 from time to time, and any REO Properties acquired in respect
thereof.
"Mortgage Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, which rate (A) as
of any date of determination until the first Adjustment Date following the
Cut-off Date shall be the rate set forth in the Mortgage Loan Schedule as the
Mortgage Rate in effect immediately following the Cut-off Date and (B) as of any
date of determination thereafter shall be the rate as adjusted on the most
recent Adjustment Date, to equal the sum, rounded to the nearest 0.125% as
provided in the Mortgage Note, of the Index, as most recently available as of a
date prior to the Adjustment Date as set forth in the related Mortgage Note,
plus the related Gross Margin; provided that the Mortgage Rate on such Mortgage
Loan on any Adjustment Date shall never be more than the lesser of (i) the sum
of the Mortgage Rate in effect immediately prior to the Adjustment Date plus the
related Periodic Rate Cap, if any, and (ii) the related Maximum Mortgage Rate,
and shall never be less than the greater of (i) the Mortgage Rate in effect
immediately prior to the Adjustment Date less the Periodic Rate Cap, if any, and
(ii) the related Minimum Mortgage Rate. With respect to each Mortgage Loan that
becomes an REO Property, as of any date of determination, the annual rate
determined in accordance with the immediately preceding sentence as of the date
such Mortgage Loan became an REO Property.
"Mortgaged Property": The underlying property securing a
Mortgage Loan, including any REO Property, consisting of an Estate in Real
Property improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Excess Spread": With respect to any Distribution Date,
the fraction, expressed as a percentage, the numerator of which is equal to the
amount, if any, by which (a) the product of (i) the Aggregate Loan Balance as of
the end of the related Collection Period and (ii) the Weighted Average Net
Mortgage Rates exceeds (b) the Interest Distribution Amount for such
Distribution Date, and the denominator of which is the product of (x) the
Aggregate Loan Balance and (y) the actual number of days in the related Accrual
Period divided by 360.
"Net Liquidation Proceeds": With respect to any Mortgage Loan,
the related Liquidation Proceeds received and retained in connection with the
liquidation of such Mortgage Loan, net of unreimbursed expenses incurred in
connection with liquidation or foreclosure and unreimbursed Advances and
Servicing Advances, if any.
"Net Mortgage Rate": With respect to any Mortgage Loan (or the
related REO Property), as of any date of determination, a per annum rate of
interest equal to the then applicable Mortgage Rate for such Mortgage Loan minus
the Expense Fee Rate.
"Net Prepayment Interest Shortfall": With respect to any
Distribution Date, the excess, if any, of any Prepayment Interest Shortfalls for
such date over the sum of any amounts paid by the Servicer with respect to such
shortfalls pursuant to this Agreement.
"New Lease": Any lease of REO Property entered into on behalf
of the Trust Fund, including any lease renewed or extended on behalf of the
Trust Fund if the Trust Fund has the right to renegotiate the terms of such
lease.
"Nonrecoverable Advance": Any Advance or Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the Servicer, will not or,
in the case of a proposed Advance or Servicing Advance, would not be ultimately
recoverable from related late payments, Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.
"Non-United States Person": Any Person other than a United
States Person.
"Offered Certificates": The Class A Certificates, the Class M
Certificates and the Class B Certificates.
"Officers' Certificate": A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Servicer, the Mortgage Loan
Originator, or the Depositor, as applicable.
"One-Month LIBOR": With respect to any Interest Accrual
Period, the London interbank offered rate for one-month U.S. dollar deposits for
a term equal to the relevant Interest Accrual Period as such rates appear on
Telerate Page 3750, as of 11:00 a.m. (London time) on such date. If such rate
does not appear on Telerate Page 3750, the rate for that day will be determined
on the basis of the rates at which deposits in United States dollars are offered
by the Reference Banks at approximately 11:00 a.m., London time, on that day to
banks in the London interbank market for a term equal to the relevant Interest
Accrual Period. The Trustee will request the principal London office of each of
the Reference Banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate for that day will be the arithmetic mean of
the quotations. If fewer than two quotations are provided as requested, the rate
for that day will be the arithmetic mean of the rates quoted by major banks in
New York City (over which the Trustee has no control), selected by the Trustee,
at approximately 11:00 a.m., New York City time on that day for loans in United
States dollars to leading European banks for a term equal to the relevant
Interest Accrual Period. If the Trustee is unable to determine One Month LIBOR
for an Interest Accrual Period, the rate for such Interest Accrual Period shall
be One Month LIBOR as determined for the previous Interest Accrual Period.
Notwithstanding the foregoing, however, One-Month LIBOR for an Accrual Period
shall not be based on One-Month LIBOR for the previous Interest Accrual Period
for three consecutive Interest Accrual Periods. If, under the priorities
described above, One-Month LIBOR for an Accrual Period would be based on
One-Month LIBOR for the previous Interest Accrual Period for the second
consecutive Interest Accrual Period, the Trustee shall select a comparable
alternative index (over which the Trustee has no control) used for determining
one-month Eurodollar lending rates that is calculated and published (or
otherwise made available) by an independent third party; provided, however, if,
under the priorities described above, LIBOR for a Distribution Date would be
based on LIBOR for the previous Distribution Date for the third consecutive
Distribution Date, the Trustee shall select an alternative comparable index
(over which the Trustee has no control), used for determining one-month
Eurodollar lending rates that is calculated and published (or otherwise made
available) by an independent party..
"Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be salaried counsel for the Depositor , or the Servicer
acceptable to the Trustee, except that any opinion of counsel relating to (a)
the qualification of the Trust Fund as a REMIC or (b) compliance with the REMIC
Provisions must be an opinion of Independent counsel.
"Original Mortgage Loan": Any of the Mortgage Loans included
in the Trust Fund as of the Closing Date.
"Overcollateralization Amount": As of any Distribution Date,
the excess, if any, of (x) the Pool Principal Balance as of the last day of the
immediately preceding Collection Period over (y) the aggregate Class Certificate
Balance of the Offered Certificates (after taking into account all distributions
of principal on such Distribution Date).
"Overcollateralization Deficiency": As of any Distribution
Date, the excess, if any, of (x) the Targeted Overcollateralization Amount for
such Distribution Date over (y) the Overcollateralization Amount for such
Distribution Date, calculated for this purpose after taking into account the
reduction on such Distribution Date of the Class Certificate Balances of the
Offered Certificates resulting from the distribution of the Principal Remittance
Amount (but not the Extra Principal Distribution Amount) on such Distribution
Date, but prior to taking into account any Applied Realized Loss Amounts on such
Distribution Date.
"Overcollateralization Release Amount": With respect to any
Distribution Date after the Stepdown Date on which a Trigger Event is not in
effect, the lesser of (x) the Principal Remittance Amount for such Distribution
Date and (y) the excess, if any, of (i) the Overcollateralization Amount for
such Distribution Date, assuming that 100% of the Principal Remittance Amount is
applied as a principal payment on the Offered Certificates on such Distribution
Date over (ii) the Targeted Overcollateralization Amount for such Distribution
Date.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.
"Pass-Through Margin": For each Class of Offered Certificates,
as set forth below; provided, however, that for each Interest Accrual Period
beginning after the Distribution Date on which the aggregate Stated Principal
Balance (as defined herein) of the Mortgage Loans is 10% or less of the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date (the "Cut-off
Date Pool Principal Balance"), each such Pass-Through Margin will be doubled for
the Class A Certificates and increased by 50% for the Subordinated Certificates:
Class Pass-Through Margin
----- -------------------
A 0.37%
M-1 0.57%
M-2 1.05%
B 2.90%
"Pass-Through Rate": With respect to the Class A, M-1, M-2 and
B Certificates and any Distribution Date, a rate per annum equal to the lesser
of (i) the LIBOR Rate, and (ii) the Available Funds Pass-Through Rate. With
respect to the Class BB Certificate, 8.00% per annum, and with respect to the
Class C Regular Interests, the Weighted Average Net Mortgage Rate. Except with
respect to the Class BB Certificate, all calculations of interest for purposes
of the Pass-Through Rate shall be based on a 360-day year and the actual number
of days in the applicable Interest Accrual Period; all calculations of interest
for purposes of the Pass-Through Rate for the Class BB Certificate shall be
based on an assumed 360-day year consisting of twelve 30-day months.
"Percentage Interest": With respect to each Class of
Certificates, the undivided percentage ownership in such Class evidenced by such
Certificate, expressed as a percentage, the numerator of which is the initial
Certificate Principal Balance represented by such Certificate and the
denominator of which is the initial Class Certificate Balance of such Class. The
Class A Certificates, Class M-1 Certificates, Class M-2 Certificates and Class B
Certificates are issuable only in minimum Percentage Interests corresponding to
minimum initial Certificate Principal Balances of $100,000 and increments of
$1,000 in excess thereof. The Class BB Certificates are issuable only in minimum
Percentage Interests corresponding to minimum initial Certificate Principal
Balances of $1,000,000 and increments of $1,000 in excess thereof. With respect
to any Class R or Class X Certificate, the undivided percentage ownership in
such Class evidenced by such Certificate, as set forth on the face of such Class
R or Class X Certificate. The Class R and Class X Certificates are issuable only
in minimum Percentage Interests of 25%.
"Periodic Rate Cap": With respect to each Adjustable Rate
Mortgage Loan and any Adjustment Date therefor, the fixed percentage set forth
in the related Mortgage Note, which is the maximum amount by which the Mortgage
Rate for such Mortgage Loan may increase or decrease (without regard to the
Maximum Mortgage Rate or the Minimum Mortgage Rate) on such Adjustment Date from
the Mortgage Rate in effect immediately prior to such Adjustment Date.
"Permitted Investments": Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
regardless of whether issued by the Depositor, the Servicer, the Trustee or any
of their respective Affiliates:
(i) direct obligations of, or obligations fully guaranteed as to timely
payment of principal and interest by, the United States or any agency
or instrumentality thereof, provided such obligations are backed by the
full faith and credit of the United States, provided, however, that any
obligation of, or guaranteed by, FHLMC or FNMA, other than a senior
debt or a mortgage participation or pass-through certificate guaranteed
by FHLMC or FNMA shall be a Permitted Investment.
(ii) demand and time deposits in, certificates of deposit of, or bankers'
acceptances issued by, any Depository Institution;
(iii) repurchase obligations with respect to any security described in clause
(i) above entered into with a Depository Institution (acting as
principal);
(iv) securities bearing interest or sold at a discount that are issued by
any corporation incorporated under the laws of the United States of
America or any State thereof and that are rated by each Rating Agency
in its highest long-term unsecured rating categories at the time of
such investment or contractual commitment providing for such
investment;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 30 days after the date of acquisition
thereof) that is rated by each Rating Agency in its highest short-term
unsecured debt rating available at the time of such investment;
(vi) units of money market funds that have been rated "AAA" by S&P,
including any such funds for which the Trustee or any Affiliate thereof
receives compensation with respect to such investment; and
(vii) if previously confirmed in writing to the Trustee, any other demand,
money market or time deposit, or any other obligation, security or
investment, as may be acceptable to the Rating Agencies as a permitted
investment of funds backing securities that have been rated "AAA" by
S&P;
provided that no instrument described hereunder shall evidence either the right
to receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provide a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations.
"Permitted Transferee": Any Transferee of a Residual
Certificate other than a Disqualified Organization or Non-United States Person.
"Person": Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Pool Principal Balance": As of any date of determination, the
sum of the Stated Principal Balances of all of the outstanding Mortgage Loans.
"Prepayment Assumption": A prepayment rate of 28% CPR. The
Prepayment Assumption is used solely for determining the accrual of original
issue discount on the Certificates for federal income tax purposes. A CPR (or
Constant Prepayment Rate) represents an annualized constant assumed rate of
prepayment each month of a pool of mortgage loans relative to its outstanding
principal balance for the life of such pool.
"Prepayment Excess": As to any Principal Prepayment received
by the Servicer from the first day of any calendar month, commencing in July
1999, through the Determination Date in such calendar month, all amounts paid by
the related Mortgagor in respect of interest on such Principal Prepayment. All
Prepayment Excess shall be paid to the Servicer as additional servicing
compensation.
"Prepayment Interest Shortfall": With respect to any
Distribution Date, for each Mortgage Loan that was the subject of a Principal
Prepayment in full that was received and applied by the Servicer to reduce the
outstanding principal balance of such loan, an amount equal to the interest
shortfalls attributable to such Principal Prepayments. The obligations of the
Servicer in respect of any Prepayment Interest Shortfall are set forth in
Section 3.24.
"Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Principal Remittance Amount (minus, for
Distribution Dates occurring on and after the Stepdown Date and for which a
Trigger Event is not in effect, the Overcollateralization Release Amount, if
any) and (ii) the Extra Principal Distribution Amount, if any.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the full
amount of scheduled interest due on any Due Date in any month or months
subsequent to the month of prepayment.
"Principal Remittance Amount": With respect to any
Distribution Date, the amount equal to the sum (less certain amounts available
for reimbursement of Advances and Servicing Advances and certain other
reimbursable expenses payable pursuant to this Agreement) of the following
amounts (without duplication) with respect to the immediately preceding
Collection Period: (i) each payment of principal on a Mortgage Loan received by
the Servicer during such Collection Period, including all full and partial
principal prepayments and any Advances with respect thereto, (ii) the Net
Liquidation Proceeds allocable to principal actually collected by the Servicer
during the related Collection Period, (iii) the portion of the Purchase Price
allocable to principal of all Mortgage Loans repurchased pursuant to Section
2.03(a) with respect to such Collection Period and (iv) any Substitution
Shortfall Amount received on or prior to the previous Determination Date and not
yet distributed.
"Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03, 3.16(c)
or 10.01, and as confirmed by certificate signed by a Servicing Officer from the
Servicer to the Trustee, an amount equal to the sum of (i) 100% of the Stated
Principal Balance thereof as of the date of purchase (or such other price as
provided in Section 10.01), (ii) in the case of (x) a Mortgage Loan, accrued
interest on such Stated Principal Balance at the applicable Mortgage Rate in
effect from time to time from the Due Date as to which interest was last covered
by a payment by the Mortgagor or an advance by the Servicer, which payment or
advance had as of the date of purchase been distributed pursuant to Section
4.01, through the end of the calendar month in which the purchase is to be
effected, and (y) an REO Property, the sum of (1) accrued interest on such
Stated Principal Balance at the applicable Mortgage Rate in effect from time to
time from the Due Date as to which interest was last covered by a payment by the
Mortgagor or an advance by the Servicer through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, plus (2) REO Imputed Interest for such REO Property for each calendar
month commencing with the calendar month in which such REO Property was acquired
and ending with the calendar month in which such purchase is to be effected, net
of the total of all net rental income, Insurance Proceeds, Liquidation Proceeds
and Advances that as of the date of purchase had been distributed as or to cover
REO Imputed Interest pursuant to Section 4.01, (iii) any unreimbursed Servicing
Advances and Advances and any unpaid Servicing Fees allocable to such Mortgage
Loan or REO Property, (iv) any amounts previously withdrawn from the Collection
Account in respect of such Mortgage Loan or REO Property pursuant to Sections
3.11(ix) and 3.16(b), and (v) in the case of a Mortgage Loan required to be
purchased pursuant to Section 2.03, expenses reasonably incurred or to be
incurred by the Servicer or the Trustee in respect of the breach or defect
giving rise to the purchase obligation.
"Qualified Substitute Mortgage Loan": A mortgage loan
substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement
which must, on the date of such substitution, (i) have a Stated Principal
Balance, after application of all scheduled payments of principal and interest
due during or prior to the month of substitution, not in excess of the
outstanding principal balance of the Deleted Mortgage Loan as of the Due Date in
the calendar month during which the substitution occurs, (ii) have a Mortgage
Rate not less than (and not more than one percentage point in excess of) the
Mortgage Rate of the Deleted Mortgage Loan, (iii) have a Maximum Mortgage Rate
not less than the Maximum Mortgage Rate on the Deleted Mortgage Loan, (iv) have
a Minimum Mortgage Rate not less than the Minimum Mortgage Rate of the Deleted
Mortgage Loan, (v) have a Gross Margin equal to the Gross Margin of the Deleted
Mortgage Loan, (vi) have a next Adjustment Date not more than two months later
than the next Adjustment Date on the Deleted Mortgage Loan, (vii) have a
remaining term to maturity not greater than (and not more than one year less
than) that of the Deleted Mortgage Loan, (viii) have the same Due Date as the
Due Date on the Deleted Mortgage Loan, (ix) have a Loan-to-Value Ratio as of the
date of substitution equal to or lower than the Loan-to-Value Ratio of the
Deleted Mortgage Loan as of such date, (x) have a risk grading or Credit Bureau
Risk Score determined by the Mortgage Loan Originator, at least equal to the
risk grading assigned on the Deleted Mortgage Loan, (xi) is a "qualified
mortgage" as defined in the REMIC Provisions and (xii) conform to each
representation and warranty set forth in Section 6 of the Mortgage Loan Purchase
Agreement applicable to the Deleted Mortgage Loan. In the event that one or more
mortgage loans are substituted for one or more Deleted Mortgage Loans, the
amounts described in clause (i) hereof shall be determined on the basis of
aggregate principal balances, the Mortgage Rates described in clause (ii) hereof
shall be determined on the basis of weighted average Mortgage Rates, the risk
gradings described in clause (x) hereof shall be satisfied as to each such
mortgage loan, the terms described in clause (vii) hereof shall be determined on
the basis of weighted average remaining term to maturity, the Loan-to-Value
Ratios described in clause (ix) hereof shall be satisfied as to each such
mortgage loan and, except to the extent otherwise provided in this sentence, the
representations and warranties described in clause (xii) hereof must be
satisfied as to each Qualified Substitute Mortgage Loan or in the aggregate, as
the case may be.
"Rate/Term Refinancing": A Refinanced Mortgage Loan, the
proceeds of which are not more than the lower of (i) $1000, and (ii) 1% of the
existing first mortgage loan and any subordinate mortgage loan on the related
Mortgaged Property and related closing costs, and were used exclusively (except
for up to the lower of (i) $1000, and (ii) 1%) to satisfy the then existing
first mortgage loan and any subordinate mortgage loan of the Mortgagor on the
related Mortgaged Property and to pay related closing costs.
"Rating Agency or Rating Agencies": S&P and Duff & Phelps or
their successors. If such agencies or their successors are no longer in
existence, "Rating Agencies" shall be such nationally recognized statistical
rating organizations, or other comparable Persons, designated by the Depositor,
notice of which designation shall be given to the Trustee and the Servicer.
"Realized Loss": With respect to each Mortgage Loan as to
which a Final Recovery Determination has been made an amount (not less than
zero) equal to (i) the unpaid principal balance of such Mortgage Loan as of the
commencement of the calendar month in which the Final Recovery Determination was
made, plus (ii) accrued interest from the Due Date as to which interest was last
paid by the Mortgagor through the end of the calendar month in which such Final
Recovery Determination was made, calculated in the case of each calendar month
during such period (A) at an annual rate equal to the annual rate at which
interest was then accruing on such Mortgage Loan and (B) on a principal amount
equal to the Stated Principal Balance of such Mortgage Loan as of the close of
business on the Distribution Date during such calendar month, plus (iii) any
amounts previously withdrawn from the Collection Account in respect of such
Mortgage Loan pursuant to Sections 3.11(ix) and 3.16(b), minus (iv) the
proceeds, if any, received in respect of such Mortgage Loan during the calendar
month in which such Final Recovery Determination was made, net of amounts that
are payable therefrom to the Servicer with respect to such Mortgage Loan
pursuant to clause (iii) of Section 3.11.
With respect to any REO Property as to which a Final Recovery
Determination has been made an amount (not less than zero) equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of the Trust Fund, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, calculated in the case of each calendar month during such period (A)
at an annual rate equal to the annual rate at which interest was then accruing
on the related Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of the related Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, plus (iii) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such Final Recovery Determination was made, plus (iv)
any amounts previously withdrawn from the Collection Account in respect of the
related Mortgage Loan pursuant to Sections 3.11(ix) and 3.16(b), minus (v) the
aggregate of all Advances and Servicing Advances in respect of such REO Property
or the related Mortgage Loan for which the Servicer (or Trustee) has been or, in
connection with such Final Recovery Determination, will be reimbursed pursuant
to Section 3.23 out of rental income, Insurance Proceeds and Liquidation
Proceeds received in respect of such REO Property, minus (vi) the total of all
net rental income, Insurance Proceeds and Liquidation Proceeds received in
respect of such REO Property that has been, or in connection with such Final
Recovery Determination, will be transferred to the Distribution Account pursuant
to Section 3.23.
With respect to each Mortgage Loan which has become the
subject of a Deficient Valuation, the difference between the principal balance
of the Mortgage Loan outstanding immediately prior to such Deficient Valuation
and the principal balance of the Mortgage Loan as reduced by the Deficient
Valuation.
With respect to each Mortgage Loan which has become the
subject of a Debt Service Reduction, the portion, if any, of the reduction in
each affected Monthly Payment attributable to a reduction in the Mortgage Rate
imposed by a court of competent jurisdiction. Each such Realized Loss shall be
deemed to have been incurred on the Due Date for each affected Monthly Payment.
"Record Date": With respect to each Distribution Date, the
close of business on the Business Day immediately preceding such Distribution
Date (or, if Definitive Certificates are issued, the close of business on the
last Business Day of the month preceding the month in which such Distribution
Date occurs).
"Reference Banks": Such leading banks selected by the Trustee
and engaged in transactions in Eurodollar deposits in the international
Eurocurrency market.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of
which were not used to purchase the related Mortgaged Property.
"Regular Certificate": Any of the Class A Certificates, the
Class M Certificates, the Class B Certificates and the Class X Certificates.
"Regular Interest": A "regular interest" in a REMIC within the
meaning of Section 860G(a)(1) of the Code.
"Relief Act": The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
"Relief Act Interest Shortfall": With respect to any
Distribution Date and any Mortgage Loan, any reduction in the amount of interest
collectible on such Mortgage Loan for the most recently ended calendar month as
a result of the application of the Relief Act.
"REMIC": Each pool of assets in the Trust Fund designated as a
REMIC pursuant to Section 11.01(a) hereof.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Section
860A-860G 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.
"REMIC 1 Regular Interest": Any of the Class T1-1, Class T1-2,
Class T1-3, Class T1-4 and Class T1-5 Interests.
"REMIC 2 Regular Interest": Any of the Class A, Class M-1,
Class M-2, Class B and Class C Regular Interests, Class IO Component 1, Class IO
Component 2, Class IO Component 3, and Class IO Component 4.
"Remittance Report": A report substantially in the form of
Exhibit I, with such additions, deletions and modifications as agreed to by the
Trustee and the Servicer.
"Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code as being
included in the term "rents from real property."
"REO Account": The account or accounts maintained by the
Servicer in respect of an REO Property pursuant to Section 3.23.
"REO Disposition": The sale or other disposition of an REO
Property on behalf of the Trust Fund.
"REO Imputed Interest": As to any REO Property, for any
calendar month during which such REO Property was at any time part of the Trust
Fund, one month's interest at the applicable Net Mortgage Rate on the Stated
Principal Balance of such REO Property (or, in the case of the first such
calendar month, of the related Mortgage Loan if appropriate) as of the close of
business on the Distribution Date in such calendar month.
"REO Principal Amortization": With respect to any REO
Property, for any calendar month, the excess, if any, of (a) the aggregate of
all amounts received in respect of such REO Property during such calendar month,
whether in the form of rental income, sale proceeds (including, without
limitation, that portion of the Termination Price paid in connection with a
purchase of all of the Mortgage Loans and REO Properties pursuant to Section
10.01 that is allocable to such REO Property) or otherwise, net of any portion
of such amounts (i) payable pursuant to Section 3.23(c) in respect of the proper
operation, management and maintenance of such REO Property or (ii) payable or
reimbursable to the Servicer pursuant to Section 3.23(d) for unpaid Servicing
Fees in respect of the related Mortgage Loan and unreimbursed Servicing Advances
and Advances in respect of such REO Property or the related Mortgage Loan, over
(b) the REO Imputed Interest in respect of such REO Property for such calendar
month.
"REO Property": A Mortgaged Property acquired by the Servicer
on behalf of the Trust Fund through foreclosure or deed-in-lieu of foreclosure,
as described in Section 3.23.
"Request for Release": A release signed by a Servicing
Officer, in the form of Exhibit D-1 or Exhibit D-2 attached hereto.
"Required Reserve Fund Balance": $5,000.
"Required Reserve Fund Deposit": With respect to any
Distribution Date occurring between the Closing Date and the Distribution Date
on which the amount on deposit in the Basis Risk Reserve Fund first equals the
Required Reserve Fund Balance, the amount, if any, by which (i) the Required
Reserve Fund Balance exceeds (ii) the amount on deposit in the Basis Risk
Reserve Fund immediately prior to such date. With respect to any Distribution
Date on which the Net Excess Spread is less than 0.25%, the amount, if any by
which (a) the product of 0.50% and the Aggregate Loan Balance for such date
exceeds (b) the amount on deposit in the Basis Risk Reserve Fund immediately
prior to such date. With respect to any Distribution Date on which the Net
Excess Spread is equal to or greater than 0.25%, the amount, if any, by which
(i) $5,000 exceeds (ii) the amount on deposit in the Basis Risk Reserve Fund
immediately prior to such date.
"Reserve Interest Rate": With respect to any Interest
Determination Date, the rate per annum that the Trustee determines to be either
(i) the arithmetic mean (rounded upwards if necessary to the nearest whole
multiple of 0.001%) of the one-month U.S. dollar lending rates which New York
City banks selected by the Trustee are quoting on the relevant Interest
Determination Date to the principal London offices of leading banks in the
London interbank market or (ii) in the event that the Trustee can determine no
such arithmetic mean, the lowest one-month U.S. dollar lending rate which New
York City banks selected by the Trustee are quoting on such Interest
Determination Date to leading European banks.
"Residential Dwelling": Any one of the following: (i) a
detached one-family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a one-family dwelling unit in a condominium project, (iv) a detached
one-family dwelling in a planned unit development, or (v) manufactured home
treated as real property under local law none of which is a co-operative or
mobile home (as defined in 42 United States Code, Section 5402(6)).
"Residual Certificate": The Class R Certificates.
"Residual Interest": The sole class of "residual interests" in
a REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee,
any officer assigned to the structured finance services department (or any
successor thereto), including any Vice President, Assistant Vice President,
Trust Officer, any Assistant Secretary, any trust officer or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and having direct responsibility for the
administration of this Agreement.
"Scheduled Principal Balance": With respect to (i) any
Mortgage Loan as of any Distribution Date, the principal balance of such
Mortgage Loan at the close of business on the Cut-off Date, after giving effect
to principal payments due on or before the Cut-off Date, whether or not
received, less an amount equal to principal payments due after the Cut-off Date
and on or before the Due Date in the related Collection Period, whether or not
received from the Mortgagor or advanced by the Servicer, and all amounts
allocable to unscheduled principal payments (including Principal Prepayments,
Liquidation Proceeds, Insurance Proceeds and condemnation proceeds, in each case
to the extent identified and applied prior to or during the related Prepayment
Period) and (ii) any REO Property as of any Distribution Date, the Scheduled
Principal Balance of the related Mortgage Loan on the Due Date immediately
preceding the date of acquisition of such REO Property by or on behalf of the
Trustee (reduced by any amount applied as a reduction of principal on the
Mortgage Loan). With respect to any Mortgage Loan and the Cut-off Date, as
specified in the Mortgage Loan Schedule.
"Senior Enhancement Percentage": With respect to any
Distribution Date, the percentage obtained by dividing (x) the sum of (i) the
aggregate Class Certificate Balance of the Subordinated Certificates and (ii)
the Overcollateralization Amount, in each case assuming that the Principal
Distribution Amount on such Distribution Date is paid entirely to the holders of
the Senior Certificates, by (y) the Pool Principal Balance as of the last day of
the related Collection Period.
"Senior Specified Enhancement Percentage": On any date of
determination thereof means 38.6%.
"Servicer": Litton Loan Servicing LP, or any successor
servicer appointed as herein provided, in its capacity as Servicer hereunder.
"Servicer Remittance Date": With respect to any Distribution
Date, 5:00 p.m. New York time on the Business Day prior to such Distribution
Date.
"Servicing Account": The account or accounts created and
maintained pursuant to Section 3.09.
"Servicing Advances": The reasonable "out-of-pocket" costs and
expenses incurred by the Servicer in connection with a default, delinquency or
other unanticipated event by the Servicer in the performance of its servicing
obligations, including, but not limited to, the cost of (i) the preservation,
restoration and protection of a Mortgaged Property, (ii) any enforcement or
judicial proceedings, including foreclosures, in respect of a particular
Mortgage Loan, (iii) the management (including reasonable fees in connection
therewith) and liquidation of any REO Property, and (iv) the performance of its
obligations under Sections 3.01, 3.09, 3.14, 3.16 and 3.23. The Servicer shall
not be required to make any Servicing Advance in respect of a Mortgage Loan or
REO Property that, in the good faith business judgment of the Servicer, would
not be ultimately recoverable from related Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.
"Servicing Fee": With respect to each Mortgage Loan (or REO
Property) and for any calendar month, an amount equal to one month's interest
(or in the event of any payment of interest which accompanies a Principal
Prepayment in full made by the Mortgagor during such calendar month, interest
for the number of days covered by such payment of interest) at the Servicing Fee
Rate on the Stated Principal Balance of such Mortgage Loan (or REO Property) as
of the preceding Distribution Date (or in the case of the initial Distribution
Date, as of the Cut-off Date).
"Servicing Fee Rate": 0.50% per annum.
"Servicing Officer": Any officer of the Servicer involved in,
or responsible for, the administration and servicing of Mortgage Loans, whose
name and specimen signature appear on a list of servicing officers furnished by
the Servicer to the Trustee and the Depositor on the Closing Date, as such list
may from time to time be amended.
"Servicing Termination Event": One or more of the events
described in Section 7.01(i)-(vii).
"Servicing Termination Trigger": A Servicing Termination
Trigger has occurred (i) with respect to a Distribution Date occurring between
the Cut-off Date and the fifth anniversary of the Cut-off Date if on such
Distribution Date (X) the sum of (a) the product of (1) the percentage obtained
by dividing the balance of 30 to 59 day Delinquent Mortgage Loans by the Pool
Principal Balance, (2) 25% and (3) 41.16%; plus (b) the product of (1) the
percentage obtained by dividing the balance of 60 to 89 day Delinquent Mortgage
Loans by the Pool Principal Balance, (2) 50% and (3) 41.16%; plus (c) the
product of (1) the percentage obtained by dividing the balance of 90 day or more
Delinquent Mortgage Loans by the Pool Principal Balance and (2) 41.16%; plus (d)
the percentage obtained by dividing the sum of Realized Losses as of such
Distribution Date by the aggregate initial Pool Principal Balance on the Cut-Off
Date, in each case as of the last day of the calendar month preceding such
Distribution Date, exceeds (Y) 7.75% and (ii) with respect to a Distribution
Date occurring after the fifth anniversary of the Cut-Off Date and on or before
the tenth anniversary of the Cut-Off Date if on such Distribution Date the sum
set forth in (X) above, in each case as of the last day of the calendar month
preceding such Distribution Date, exceeds 11.625%.
"Single Certificate": With respect to any Class of Offered
Certificates, a hypothetical Certificate of such Class evidencing a Percentage
Interest for such Class corresponding to an initial Certificate Principal
Balance of $1,000. With respect to the Class X Certificates or the Residual
Certificates, a hypothetical Certificate of such Class evidencing a 100%
Percentage Interest in such Class.
"60+ Day Delinquent Loan": With respect to any Determination
Date, all REO Properties, each Mortgage Loan with respect to which any portion
of a Monthly Payment is, as of the last day of the prior Collection Period, two
months or more past due (without giving effect to any grace period), each
Mortgage Loan in foreclosure and each Mortgage Loan for which the Mortgagor has
filed for bankruptcy.
"S&P": Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. or its successor in interest.
"Special Servicer Fee": With respect to each Mortgage Loan
Delinquent more than 90 days, $125 per month, which fee shall be payable until
the earlier to occur of (i) 18 consecutive months of such payment, and (ii) the
Delinquency status of such Mortgage Loan has been reduced to 90 days or less.
"Standard Rate": With respect to any Distribution Date, the
rate at which interest accrues on the Class B Certificates subject to the
Weighted Average Net Mortgage Rate, in each case during the related Interest
Accrual Period.
"Startup Day": The day designated as such pursuant to Section
11.01(b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan:
(a) as of any date of determination up to but not including the Distribution
Date on which the proceeds, if any, of a Liquidation Event with respect to such
Mortgage Loan would be distributed, the outstanding principal balance of such
Mortgage Loan as of the Cut-off Date, after giving effect to all Monthly
Payments due thereon on or before the Cut-off Date whether or not received and
as shown in the Mortgage Loan Schedule, minus the sum of (i) the principal
portion of each Monthly Payment due on a Due Date subsequent to the Cut-off
Date, to the extent received from the Mortgagor or included in a Advance and
distributed pursuant to Section 4.01 on or before such date of determination,
(ii) all Principal Prepayments received after the Cut-off Date, to the extent
distributed pursuant to Section 4.01 on or before such date of determination,
(iii) all Liquidation Proceeds and Insurance Proceeds applied by the Servicer as
recoveries of principal in accordance with the provisions of Section 3.16, to
the extent distributed pursuant to Section 4.01 on or before such date of
determination, and (iv) any Realized Loss incurred with respect thereto as a
result of a Deficient Valuation made during or prior to the Collection Period
for the most recent Distribution Date coinciding with or preceding such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such Mortgage Loan would be distributed, zero.
With respect to any REO Property: (a) as of any date of determination up to but
not including the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, an
amount (not less than zero) equal to the Stated Principal Balance of the related
Mortgage Loan as of the date on which such REO Property was acquired on behalf
of the Trust Fund, minus the aggregate amount of REO Principal Amortization in
respect of such REO Property for all previously ended calendar months, to the
extent distributed pursuant to Section 4.01 on or before such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, zero.
"Stayed Funds": Any payment required to be made under the
terms of the Certificates and this Agreement but which is not remitted by the
Servicer because the Servicer is the subject of a proceeding under the federal
Bankruptcy Code and the making of such remittance is prohibited by Section 362
of the federal Bankruptcy Code.
"Stepdown Date": The earlier to occur of (i) the later to
occur of (x) the Distribution Date in September 2002 and (y) the first
Distribution Date on which the Senior Enhancement Percentage (calculated for
this purpose only after taking into account principal payments received on the
Mortgage Loans that will be distributed on such Distribution Date, but prior to
the distribution of the Principal Distribution Amount to the Offered
Certificates) is greater than or equal to the Senior Specified Enhancement
Percentage and (ii) the Distribution Date on which the Class Certificate Balance
of the Class A Certificates has been reduced to zero.
"Subordinated Certificates": The Class M Certificates and the
Class B Certificates.
"Subservicer": As defined in Section 3.02.
"Subservicing Agreement": As defined in Section 3.02.
"Substitution Shortfall Amount": As defined in Section 2.03(d)
hereof.
"Targeted Overcollateralization Amount": As of any
Distribution Date, (x) prior to the Stepdown Date, 3.4% of the initial Pool
Principal Balance and (y) on and after the Stepdown Date and assuming a Trigger
Event is not in effect, the greater of (i) 6.8% of the Pool Principal Balance as
of the last day of the related Collection Period and (ii) $676,058. If a Trigger
Event is in effect on and after the Stepdown Date, the Targeted
Overcollateralization Amount shall be equal to the Targeted
Overcollateralization Amount for the immediately preceding Distribution Date.
"Tax Returns": The federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of the Trust Fund due to its classification as a REMIC
under the REMIC Provisions, together with any and all other information reports
or returns that may be required to be furnished to the Certificateholders or
filed with the Internal Revenue Service or any other governmental taxing
authority under any applicable provisions of federal, state or local tax laws.
"Termination Price": As defined in Section 10.01.
"Terminator": As defined in Section 10.01.
"Total Distribution Amount": With respect to any Distribution
Date, the sum of the Interest Remittance Amount for such date and the Principal
Remittance Amount for such date.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.
"Transferee": Any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer of any
Ownership Interest in a Certificate.
"Trigger Event": With respect to any Distribution Date, a
Distribution Date on which the three-month rolling average of 60+ Day Delinquent
Loans equals or exceeds 40% of the Senior Enhancement Percentage; provided, that
if the Class Certificate Balance of the Class A Certificates has been reduced to
zero, a Trigger Event will have occurred if the three-month rolling average of
60+ Day Delinquent Loans equals or exceeds 15.44%.
"Trust Fund": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
consisting of: (i) such Mortgage Loans as from time to time are subject to this
Agreement, together with the Mortgage Files relating thereto, and together with
all collections thereon and proceeds thereof, (ii) any REO Property, together
with all collections thereon and proceeds thereof, (iii) the Trustee's rights
with respect to the Mortgage Loans under all insurance policies required to be
maintained pursuant to this Agreement and any proceeds thereof, (iv) the
Depositor's rights under the Mortgage Loan Purchase Agreement (including any
security interest created thereby but excluding the rights under Section 17
thereof), (v) the Collection Account, the Distribution Account and any REO
Account and such assets that are deposited therein from time to time and any
investments thereof, together with any and all income, proceeds and payments
with respect thereto. Notwithstanding the foregoing, however, the Trust Fund
specifically excludes all payments and other collections of principal and
interest due on the Mortgage Loans on or before the Cut-off Date.
"Trustee": The Chase Manhattan Bank, a New York banking
corporation, or its successor in interest, or any successor trustee appointed as
herein provided.
"Trustee's Fee": The amount payable to the Trustee on each
Distribution Date pursuant to Section 8.05 as compensation for all services
rendered by it in the execution of the trust hereby created and in the exercise
and performance of any of the powers and duties of the Trustee hereunder, which
amount shall equal one twelfth of the product of (i) the Trustee's Fee Rate,
multiplied by (ii) the aggregate Stated Principal Balance of the Mortgage Loans
and any REO Properties as of the preceding Distribution Date (or, in the case of
the initial Distribution Date, as of the Cut-off Date).
"Trustee's Fee Rate": A rate per annum equal to the sum of (i)
0.0125% and (ii) the reasonable out-of-pocket expenses of the Trustee incurred
in connection with its duties as Trustee, expressed as a percentage of the
aggregate Stated Principal Balance of the Mortgage Loans and any REO Properties
as of the preceding Distribution Date (or, in the case of the initial
Distribution Date, as of the Cut-off Date).
"Uninsured Cause": Any cause of damage to a Mortgaged Property
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies required to be maintained pursuant to Section
3.14.
"United States Person": A citizen or resident of the United
States, a corporation or partnership (including an entity treated as a
corporation or partnership for United States federal income tax purposes)
created or organized in, or under the laws of, the United States, any state
thereof or the District of Columbia (unless, in the case of a partnership,
Treasury regulations are adopted that provide otherwise), an estate whose income
from sources without the United States is includible 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 United States Persons have the authority to control
all substantial decisions of the trust. The term "United States" shall have the
meaning set forth in Section 7701 of the Code.
"Unpaid Basis Risk Shortfall": With respect to any
Distribution Date and any Class of Offered Certificates, the aggregate of all
Basis Risk Shortfalls with respect to such Class remaining unpaid from previous
Distribution Dates, plus interest accrued thereon at the applicable LIBOR Rate.
"Unpaid Realized Loss Amount": For any Class of Subordinated
Certificates and as to any Distribution Date, the excess of (x) the aggregate
cumulative amount of related Applied Realized Loss Amounts with respect to such
Class for all prior Distribution Dates over (y) the aggregate, cumulative amount
of related Realized Loss Amortization Amounts with respect to such Class for all
prior Distribution Dates.
"Value": With respect to any Mortgaged Property, the lesser of
(i) the lesser of (a) the value thereof as determined by an appraisal made for
the originator of the Mortgage Loan at the time of origination of the Mortgage
Loan by an appraiser who met the minimum requirements of FNMA and FHLMC, and (b)
the value thereof as determined by a review appraisal conducted by the Mortgage
Loan Originator in the event any such review appraisal determines an appraised
value ten percent or more lower than the value thereof as determined by the
appraisal referred to in clause (i)(a) above and (ii) the purchase price paid
for the related Mortgaged Property by the Mortgagor with the proceeds of the
Mortgage Loan, provided, however, in the case of a Refinanced Mortgage Loan,
such value of the Mortgaged Property is based solely upon the lesser of (1) the
value determined by an appraisal made for the originator of such Refinanced
Mortgage Loan at the time of origination of such Refinanced Mortgage Loan by an
appraiser who met the minimum requirements of FNMA and FHLMC and (2) the value
thereof as determined by a review appraisal conducted by the Mortgage Loan
Originator in the event any such review appraisal determines an appraised value
ten percent or more lower than the value thereof as determined by the appraisal
referred to in clause (ii)(1) above.
"Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any Certificate. The percentage of the
voting rights allocated among Holders of the Offered Certificates will be 97%;
the percentage of the voting rights allocated among the Holders of the Class X
Certificate will be 2%; and the percentage of the voting rights allocated among
the Holders of the Class R Certificates will be 1%. The Voting Rights allocated
to each Class of Certificates will be allocated among all Holders of each such
Class in proportion to the outstanding Certificate Principal Balance (or
Percentage Interest) of such Certificates as of the most recent Distribution
Date.
"Weighted Average Net Mortgage Rate": The weighted average (by
Scheduled Principal Balance) of the Net Mortgage Rates of the Mortgage Loans as
of the first day of the related Interest Accrual Period.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey to
the Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, including any security interest
therein for the benefit of the Depositor, in and to the Mortgage Loans
identified on the Mortgage Loan Schedule prepared by the Depositor and attached
as Schedule I hereto, the rights of the Depositor under the Mortgage Loan
Purchase Agreement (other than the rights under Section 17 thereof), and all
other assets included or to be included in the Trust Fund. Such assignment
includes all interest and all principal received by the Depositor or the
Servicer after the Cut-off Date with respect to the Mortgage Loans (other than
payments due on or before the Cut-off Date) less an amount equal to eight (8)
days of interest at the Net Mortgage Rate due and collected or advanced on the
Mortgage Loans during the initial Collection Period. All remaining interest due
and received on the Mortgage Loans with respect to the first Collection Period
shall be remitted by the Servicer to the Mortgage Loan Originator.
In connection with such transfer and assignment, the Depositor
will cause the Mortgage Loan Originator to deliver to, and deposit with, the
Trustee the following documents or instruments with respect to each Mortgage
Loan (a "Mortgage File") so transferred and assigned:
(i) the original Mortgage Note, endorsed in the following form: "Pay to the
order of The Chase Manhattan Bank, as Trustee for the registered
holders of Merrill Lynch Mortgage Investors, Inc., Series 1999-NC1,
without recourse," with all prior and intervening endorsements showing
a complete chain of endorsement from the originator to the Person so
endorsing to the Trustee;
(ii) the original Mortgage with evidence of recording thereon, and the
original recorded power of attorney, if the Mortgage was executed
pursuant to a power of attorney, with evidence of recording thereon or,
if such Mortgage or power of attorney has been submitted for recording
but has not been returned from the applicable public recording office
or is not otherwise available, a copy of such Mortgage or power of
attorney, as the case may be, certified by the Mortgage Loan Originator
to be a true and complete copy of the original submitted for recording
with the recorded original to be delivered by the Mortgage Loan
Originator to the Trustee within 120 days of the Closing Date;
(iii) an original Assignment of the Mortgage executed in the following
form: "The Chase Manhattan Bank, as Trustee for the registered
holders of Merrill Lynch Mortgage Investors, Inc., Series 1999-NC1";
(iv) the original recorded Assignment or Assignments of the Mortgage showing
a complete chain of assignment from the originator to the Person
assigning the Mortgage to the Trustee as contemplated by the
immediately preceding clause (iii) or, if any such Assignment has been
submitted for recording but has not been returned from the applicable
public recording office or is not otherwise available, a copy of such
Assignment certified by the Mortgage Loan Originator to be a true and
complete copy of the original submitted for recording with the recorded
original to be delivered by the Mortgage Loan Originator to the Trustee
within 120 days of the Closing Date;
(v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any; and
(vi) the original lender's title insurance policy, together with all
endorsements or riders that were issued with or subsequent to the
issuance of such policy, insuring the priority of the Mortgage as a
first lien on the Mortgaged Property represented therein as a fee
interest vested in the Mortgagor, or in the event such original title
policy is unavailable, a written commitment or uniform binder or
preliminary report of title issued by the title insurance or escrow
company with the original title policy to be delivered by the Mortgage
Loan Originator to the Trustee within 120 days of the Closing Date.
(b) The Depositor shall cause the Mortgage Loan Originator to
promptly (and in no event later than five Business Days following the Closing
Date) submit or cause to be submitted for recording, at no expense to the Trust
Fund or the Trustee, in the appropriate public office for real property records,
each Assignment referred to in Sections 2.01(iii) and (iv) above. In the event
that any such Assignment is lost or returned unrecorded because of a defect
therein, the Depositor shall promptly prepare or cause to be prepared a
substitute Assignment or cure or cause to be cured such defect, as the case may
be, and thereafter cause each such Assignment to be duly recorded.
(c) If any original Mortgage Note referred to in Section
2.01(i) cannot be located, the obligations of the Depositor to cause the
Mortgage Loan Originator to deliver such documents shall be deemed to be
satisfied upon delivery to the Trustee of a photocopy of the original of such
Mortgage Note, with a Lost Note Affidavit to follow within one Business Day. If
any of the documents referred to in Sections 2.01(ii), (iii) or (iv) above has
as of the Closing Date been submitted for recording but either (x) has not been
returned from the applicable public recording office or (y) such public
recording office has retained the original of such document, the obligations of
the Depositor to cause the Mortgage Loan Originator to deliver such documents
shall be deemed to be satisfied upon (1) delivery to the Trustee of a copy of
each such document certified by the Mortgage Loan Originator in the case of (x)
above or the applicable public recording office in the case of (y) above to be a
true and complete copy of the original that was submitted for recording and (2)
if such copy is certified by the Mortgage Loan Originator, delivery to the
Trustee promptly upon receipt thereof of either the original or a copy of such
document certified by the applicable public recording office to be a true and
complete copy of the original. Notice shall be provided to the Trustee and the
Rating Agencies by the Mortgage Loan Originator if delivery pursuant to clause
(2) above will be made more than 180 days after the Closing Date. If the
original lender's title insurance policy was not delivered pursuant to Section
2.01(vi) above, the Depositor shall cause the Mortgage Loan Originator to
deliver to the Trustee, promptly after receipt thereof, the original lender's
title insurance policy. The Depositor shall cause the Mortgage Loan Originator
to deliver to the Trustee promptly upon receipt thereof any other original
documents constituting a part of a Mortgage File received with respect to any
Mortgage Loan, including, but not limited to, any original documents evidencing
an assumption or modification of any Mortgage Loan.
(d) All original documents relating to the Mortgage Loans that
are not delivered to the Trustee are and shall be held by or on behalf of the
Mortgage Loan Originator, the Depositor or the Servicer, as the case may be, in
trust for the benefit of the Trustee on behalf of the Certificateholders. In the
event that any such original document is required pursuant to the terms of this
Section to be a part of a Mortgage File, such document shall be delivered
promptly to the Trustee. Any such original document delivered to or held by the
Depositor or the Mortgage Loan Originator that is not required pursuant to the
terms of this Section to be a part of a Mortgage File, shall be delivered
promptly to the Servicer.
(e) The Depositor herewith delivers to the Trustee an executed
copy of the Mortgage Loan Purchase Agreement.
SECTION 2.02. Acceptance by Trustee.
(a) Subject to the provisions of Section 2.01 and subject to
the review described below and any exceptions noted on the exception report
described in the next paragraph below, the Trustee acknowledges receipt of the
documents referred to in Section 2.01 (other than such documents described in
Section 2.01(v)) above and all other assets included in the definition of "Trust
Fund" (to the extent of amounts deposited into the Distribution Account) and
declares that it holds and will hold such documents and the other documents
delivered to it constituting a Mortgage File, and that it holds or will hold all
such assets and such other assets included in the definition of "Trust Fund" in
trust for the exclusive use and benefit of all present and future
Certificateholders.
(b) The Trustee agrees, for the benefit of the
Certificateholders, to review each Mortgage File within 30 Business Days after
the Closing Date and to certify in substantially the form attached hereto as
Exhibit B-1 (with any applicable exceptions noted thereon) that, as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
which has been certified as having been paid in full or any Mortgage Loan
specifically identified in the exception report annexed thereto as not being
covered by such certification), (i) all documents constituting part of such
Mortgage File (other than such documents described in Section 2.01(v)) required
to be delivered to it pursuant to this Agreement are in its possession, (ii)
such documents have been reviewed by it and appear regular on their face and
relate to such Mortgage Loan, (iii) based on its examination and only as to the
foregoing, the information set forth in the Mortgage Loan Schedule delivered by
the Depositor on the Closing Date that corresponds to items (1) through (3),
(6), (9), (12) and (14) of the definition of "Mortgage Loan Schedule" accurately
reflects information set forth in the Mortgage File. It is herein acknowledged
that, in conducting such review, the Trustee was under no duty or obligation (i)
to inspect, review or examine any such documents, instruments, certificates or
other papers to determine that they are genuine, enforceable, or appropriate for
the represented purpose or that they have actually been recorded or that they
are other than what they purport to be on their face, or (ii) to determine
whether any Mortgage File should include any of the documents specified in
clause (v) of Section 2.01.
(c) Prior to the first anniversary date of this Agreement the
Trustee shall deliver to the Depositor and the Servicer a final certification in
the form annexed hereto as Exhibit B-2 evidencing the completeness of the
Mortgage Files, with any applicable exceptions noted thereon.
(d) If in the process of reviewing the Mortgage Files and
making or preparing, as the case may be, the certifications referred to above,
the Trustee finds any document or documents constituting a part of a Mortgage
File to be missing or defective in any material respect, at the conclusion of
its review the Trustee shall so notify the Depositor and the Servicer. In
addition, upon the discovery by the Depositor, the Servicer or the Trustee of a
breach of any of the representations and warranties made by the Mortgage Loan
Originator in the Mortgage Loan Purchase Agreement in respect of any Mortgage
Loan which materially adversely affects such Mortgage Loan or the interests of
the related Certificateholders in such Mortgage Loan, the party discovering such
breach shall give prompt written notice to the other parties. In performing any
such review pursuant to this Section 2.02, the Trustee may rely on the Depositor
as to the purported genuineness of any such document and any signature thereon.
The Trustee shall have no responsibility for determining whether any document is
valid and binding, whether the text of any assignment or endorsement is in
proper or recordable form, whether any document has been recorded in accordance
with the requirements of any applicable jurisdiction, or whether a blanket
assignment is permitted in any applicable jurisdiction.
SECTION 2.03. Repurchase or Substitution of Mortgage Loans
by the Mortgage Loan Originator.
(a) Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, a Mortgage File or of
the breach by the Mortgage Loan Originator of any representation, warranty or
covenant under the Mortgage Loan Purchase Agreement in respect of any Mortgage
Loan which materially adversely affects the value of such Mortgage Loan or the
interest therein of the Certificateholders, the Trustee shall promptly notify
the Mortgage Loan Originator, the Servicer and the Depositor of such defect,
missing document or breach and request that the Mortgage Loan Originator deliver
such missing document or cure such defect or breach within 60 days from the date
the Mortgage Loan Originator was notified of such missing document, defect or
breach, and if the Mortgage Loan Originator does not deliver such missing
document or cure such defect or breach in all material respects during such
period, the Servicer shall enforce the Mortgage Loan Originator's obligation
under the Mortgage Loan Purchase Agreement (i) in connection with any such
breach that could not reasonably have been cured within such 60 day period, if
the Mortgage Loan Originator shall have commenced to cure such breach within
such 60 day period, to proceed thereafter diligently and expeditiously to cure
the same within the additional period provided under the Mortgage Loan Purchase
Agreement and (ii) in connection with any such breach (subject to clause (i)
above) or in connection with any missing document or defect, to repurchase such
Mortgage Loan from the Trust Fund at the Purchase Price within 120 days after
the date on which the Mortgage Loan Originator was notified (subject to Section
2.03(e)) of such missing document, defect or breach, if and to the extent that
the Mortgage Loan Originator is obligated to do so under the Mortgage Loan
Purchase Agreement. The Purchase Price for the repurchased Mortgage Loan shall
be deposited in the Collection Account and the Trustee, upon receipt of written
certification from the Servicer of such deposit, shall release the related
Mortgage File to the Mortgage Loan Originator and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as the
Mortgage Loan Originator shall furnish to it and as shall be necessary to vest
in the Mortgage Loan Originator any Mortgage Loan released pursuant hereto and
the Trustee shall have no further responsibility with regard to such Mortgage
File. In lieu of repurchasing any such Mortgage Loan as provided above, if so
provided in the Mortgage Loan Purchase Agreement, the Mortgage Loan Originator
may cause such Mortgage Loan to be removed from the Trust Fund (in which case it
shall become a Deleted Mortgage Loan) and substitute one or more Qualified
Substitute Mortgage Loans in the manner and subject to the limitations set forth
in Section 2.03(d). It is understood and agreed that the obligation of the
Mortgage Loan Originator to cure or to repurchase (or to substitute for) any
Mortgage Loan as to which a document is missing, a material defect in a
constituent document exists or as to which such a breach has occurred and is
continuing shall constitute the sole remedy respecting such omission, defect or
breach available to the Trustee on behalf of the Certificateholders.
(b) [Reserved]
(c) [Reserved]
(d) Any substitution of Qualified Substitute Mortgage Loans
for Deleted Mortgage Loans made pursuant to Section 2.03(a), must be effected
prior to the date which is two years after the Startup Day for the Trust Fund.
As to any Deleted Mortgage Loan for which the Mortgage Loan
Originator substitutes a Qualified Substitute Mortgage Loan or Loans, such
substitution shall be effected by the Mortgage Loan Originator delivering to the
Trustee, for such Qualified Substitute Mortgage Loan or Loans, the Mortgage
Note, the Mortgage, the Assignment to the Trustee, and such other documents and
agreements, with all necessary endorsements thereon, as are required by Section
2.01, together with an Officers' Certificate providing that each such Qualified
Substitute Mortgage Loan satisfies the definition thereof and specifying the
Substitution Shortfall Amount (as described below), if any, in connection with
such substitution. The Trustee shall acknowledge receipt for such Qualified
Substitute Mortgage Loan or Loans and, within ten Business Days thereafter,
review such documents as specified in Section 2.02 and deliver to the Depositor
and the Servicer, with respect to such Qualified Substitute Mortgage Loan or
Loans, a certification substantially in the form attached hereto as Exhibit B-1,
with any applicable exceptions noted thereon. Within one year of the date of
substitution, the Trustee shall deliver to the Depositor and the Servicer a
certification substantially in the form of Exhibit B-2 hereto with respect to
such Qualified Substitute Mortgage Loan or Loans, with any applicable exceptions
noted thereon. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution are not part of the Trust Fund and
will be retained by the Mortgage Loan Originator. For the month of substitution,
distributions to Certificateholders will reflect the collections and recoveries
in respect of such Deleted Mortgage Loan in the Collection Period preceding the
month of substitution and the Mortgage Loan Originator shall thereafter be
entitled to retain all amounts subsequently received in respect of such Deleted
Mortgage Loan. The Mortgage Loan Originator shall provide the Servicer with the
information required to 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 Qualified Substitute Mortgage Loan or Loans and the Servicer
shall deliver a copy of such amended Mortgage Loan Schedule to the Trustee. Upon
such substitution, such Qualified Substitute Mortgage Loan or Loans shall
constitute part of the Mortgage Pool and shall be subject in all respects to the
terms of this Agreement and, in the case of a substitution effected by the
Mortgage Loan Originator, the Mortgage Loan Purchase Agreement, including, in
the case of a substitution effected by the Mortgage Loan Originator all
applicable representations and warranties thereof included in the Mortgage Loan
Purchase Agreement as of the date of substitution.
For any month in which the Mortgage Loan Originator
substitutes one or more Qualified Substitute Mortgage Loans for one or more
Deleted Mortgage Loans, the Servicer will determine the amount (the
"Substitution Shortfall Amount"), if any, by which the aggregate Purchase Price
of all such Deleted Mortgage Loans exceeds the aggregate, as to each such
Qualified Substitute Mortgage Loan, of the Stated Principal Balance thereof as
of the related Cut-Off Date, together with one month's interest on such
principal balance at the applicable Mortgage Rate. On the date of such
substitution, the Mortgage Loan Originator will deliver or cause to be delivered
to the Servicer for deposit in the Collection Account an amount equal to the
Substitution Shortfall Amount, if any, and the Trustee, upon receipt of the
related Qualified Substitute Mortgage Loan or Loans and certification by the
Servicer of such deposit, shall release to the Mortgage Loan Originator the
related Mortgage File or Files and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as the Mortgage Loan
Originator shall deliver to it and as shall be necessary to vest therein any
Deleted Mortgage Loan released pursuant hereto.
In addition, the Mortgage Loan Originator shall obtain at its
own expense and deliver to the Trustee an Opinion of Counsel to the effect that
such substitution will not cause (a) any federal tax to be imposed on any REMIC
created hereunder, including without limitation, any federal tax imposed on
"prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup date" under Section 860G(d)(1) of the Code, or
(b) any REMIC created hereunder to fail to qualify as a REMIC at any time that
any Certificate is outstanding.
(e) Upon discovery by the Depositor, the Servicer or the
Trustee that any Mortgage Loan does not constitute a "qualified mortgage" within
the meaning of Section 860G(a)(3) of the Code, the party discovering such fact
shall within two Business Days give written notice thereof to the other parties.
In connection therewith, the Mortgage Loan Originator shall repurchase or,
subject to the limitations set forth in Section 2.03(d), substitute one or more
Qualified Substitute Mortgage Loans for the affected Mortgage Loan within 90
days of the earlier of discovery or receipt of such notice with respect to such
affected Mortgage Loan. Any such repurchase or substitution shall be made in the
same manner as set forth in Sections 2.03(a). The Trustee shall reconvey to the
Mortgage Loan Originator 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.
SECTION 2.04. Representations and Warranties of the
Depositor.
(a) The Depositor hereby represents and warrants to the
Trustee for the benefit of the Certificateholders that as of the Closing Date
the assignment of the Depositor's rights, but none of its obligations, under the
Mortgage Loan Purchase Agreement is valid, enforceable and effective to permit
the Trustee to enforce the obligations of the Mortgage Loan Originator
thereunder.
(b) It is understood and agreed that the representations and
warranties set forth in this Section 2.04 shall survive delivery of the Mortgage
Files to the Trustee and shall inure to the benefit of the Certificateholders
notwithstanding any restrictive or qualified endorsement or assignment.
Upon discovery by any of the Depositor, the Servicer or the
Trustee of a breach of any of the foregoing representations and warranties which
materially and adversely affects the value of any Mortgage Loan or the interests
therein of the Certificateholders, the party discovering such breach shall give
prompt written notice to the other parties, and in no event later than two
Business Days from the date of such discovery.
SECTION 2.05. Representations, Warranties and Covenants
of the Servicer.
(a) The Servicer hereby represents, warrants and covenants to
the Trustee, for the benefit of each of the Trustee, the Certificateholders and
to the Depositor that as of the Closing Date or as of such date specifically
provided herein:
(i) The Servicer is duly organized, validly existing and in
good standing as a limited partnership under the laws of the
State of Delaware and is and will remain duly licensed under and in
compliance with the laws of each state in which any Mortgaged Property is
located to the extent necessary to ensure the enforceability of each
Mortgage Loan and the servicing of the Mortgage Loan in accordance with the
terms of this Agreement;
(ii) The Servicer has the full power and authority to conduct
its business as presently conducted by it and to execute, deliver and
perform, and to enter into and consummate, all transactions contemplated by
this Agreement. The Servicer has duly authorized the execution, delivery
and performance of this Agreement, has duly executed and delivered this
Agreement, and this Agreement, assuming due authorization, execution and
delivery by the Depositor, and the Trustee, constitutes a legal, valid and
binding obligation of the Servicer, enforceable against it in accordance
with its terms except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity;
(iii) The execution and delivery of this Agreement by the
Servicer and the performance of and compliance with the terms of this
Agreement will not (a) violate the Servicer's limited partnership agreement
or any law, rule, regulation, order, judgment, award, administrative
interpretation, injunction, writ, decree or the like affecting the Servicer
or by which the Servicer is bound or (b) result in a breach of or
constitute a default under any indenture or other material agreement to
which the Servicer is a party or by which the Servicer is bound, which in
the case of either clause (a) or (b) will have a material adverse effect on
the Servicer's ability to perform its obligations under this Agreement;
(iv) The Servicer is an approved servicer for FHLMC or FNMA in
good standing and is a HUD approved mortgagee pursuant to Section 203 of
the National Housing Act; no event has occurred, including but not limited
to a change in insurance coverage, which would make the Servicer unable to
comply with FHLMC or FNMA or HUD eligibility requirements or which would
require notification to FHLMC or FNMA or HUD;
(v) The Servicer does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant of it
contained in this Agreement;
(vi) With respect to each Mortgage Loan, the Servicer is, or
will be within 30 days of the Closing Date, in possession of a complete
mortgage file, except for such documents as have been delivered to the
Trustee. To the extent the Servicer is not in possession of a complete
mortgage file within 30 days of the Closing Date, the Servicer shall so
notify the Trustee;
(vii) There are no actions or proceedings against,
investigations known to it of, the Servicer before any court,
administrative or other tribunal (A) that might prohibit its entering into
this Agreement, (B) seeking to prevent the consummation of the transactions
contemplated by this Agreement or (C) that might prohibit or materially and
adversely affect the performance by the Servicer of its obligations under,
or validity or enforceability of, this Agreement;
(viii) 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
by this Agreement, except for such consents, approvals, authorizations or
orders, if any, that have been obtained prior to the Closing Date; and
(ix) The Servicer (a) acknowledges that its performance under
this Agreement will be adversely affected if it is unable to become "Year
2000 Compliant" prior to January 1, 2000, (b) has made an assessment of the
microchip and computer-based systems, hardware, software and other
equipment used by the Servicer in connection with such performance
(collectively, "Systems") and (c) represents that its Systems will be Year
2000 Compliant by January 1, 2000. As used herein, "Year 2000 Compliant"
means (1) the Systems process, provide and/or receive (provided data
received from third party providers is Year 2000 Compliant), so as to avoid
the occurrence of a material adverse effect thereon, date data (including
without limitation calculating, comparing, and sequencing), within, from,
into, and between centuries (including without limitation the twentieth and
twenty-first centuries), including leap year calculations, and (2) neither
the performance nor the functionality nor the Servicer's performance under
this Agreement will be materially adversely affected by dates prior to, on
or after January 1, 2000.
It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.05 (c) shall survive
delivery of the Mortgage Files to the Trustee and shall inure to the benefit of
the Trustee, the Depositor and the Certificateholders. Upon discovery by any of
the Depositor, the Servicer or the Trustee of a breach of any of the foregoing
representations, warranties and covenants which materially and adversely affects
the value of any Mortgage Loan or the interests therein of the
Certificateholders, the party discovering such breach shall give prompt written
notice (but in no event later than two Business Days following such discovery)
to the Trustee.
SECTION 2.06. Issuance of Certificates.
The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to it of the Mortgage Files, subject to the provisions of
Sections 2.01 and 2.02, together with the assignment to it of all other assets
included in the Trust Fund, receipt of which is hereby acknowledged.
Concurrently with such assignment and delivery and in exchange therefor, the
Trustee, pursuant to the written request of the Depositor executed by an officer
of the Depositor, has executed, authenticated and delivered to or upon the order
of the Depositor, the Certificates in authorized denominations. The interests
evidenced by the Certificates constitute the entire beneficial ownership
interest in the Trust Fund.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
SECTION 3.01. Servicer to Act as Servicer.
The Servicer shall service and administer the Mortgage Loans
on behalf of the Trustee and in the best interests of and for the benefit of the
Certificateholders (as determined by the Servicer in its reasonable judgment) in
accordance with the terms of this Agreement and the respective Mortgage Loans
and, to the extent consistent with such terms, in the same manner in which it
services and administers similar mortgage loans for its own portfolio, giving
due consideration to customary and usual standards of practice of prudent
mortgage lenders and loan servicers administering similar mortgage loans but
without regard to:
(i) any relationship that the Servicer or any Affiliate of the
Servicer may have with the related Mortgagor;
(ii) the ownership of any Certificate by the Servicer or any
Affiliate of the Servicer;
(iii) the Servicer's obligation to make Advances or Servicing
Advances; or
(iv) the Servicer's right to receive compensation for its
services hereunder or with respect to any particular transaction.
To the extent consistent with the foregoing, the Servicer shall also seek to
maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and the
terms of this Agreement and of the respective Mortgage Loans, the Servicer shall
have full power and authority, to do or cause to be done any and all things in
connection with such servicing and administration which it may deem necessary or
desirable. Without limiting the generality of the foregoing, the Servicer in its
own name is hereby authorized and empowered by the Trustee when the Servicer
believes it appropriate in its best judgment, to execute and deliver, on behalf
of the Certificateholders and the Trustee or any of them, and upon notice to the
Trustee, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge, and all other comparable instruments, with respect
to the Mortgage Loans and the Mortgaged Properties and to institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure so as to convert the
ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Trustee and Certificateholders. The Servicer shall
service and administer the Mortgage Loans in accordance with applicable state
and federal law and shall provide to the Mortgagors any reports required to be
provided to them thereby. The Servicer shall also comply in the performance of
this Agreement with all reasonable rules and requirements of each insurer under
any standard hazard insurance policy. Subject to Section 3.17, the Trustee shall
execute, at the written request of the Servicer, and furnish to the Servicer any
special or limited powers of attorney and other documents necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties hereunder and the Trustee shall not be liable for the actions of the
Servicer under such powers of attorney.
In accordance with the standards of the preceding paragraph,
the Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.09, and further as
provided in Section 3.11. Any cost incurred by the Servicer in effecting the
payment of taxes and assessments on a Mortgaged Property shall not, for the
purpose of calculating the Stated Principal Balance of a Mortgage Loan or
distributions to Certificateholders, be added to the unpaid principal balance of
the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan
so permit.
Notwithstanding anything in this Agreement to the contrary,
the Servicer may not make any future advances with respect to a Mortgage Loan
and the Servicer shall not, except as provided in Section 3.07, permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Rate, reduce or increase the principal balance (except for reductions resulting
from actual payments of principal) or change the final maturity date on such
Mortgage Loan or any modification, waiver or amendment of any term of any
Mortgage Loan that would both (A) effect an exchange or reissuance of such
Mortgage Loan under Section 1001 of the Code (or final, temporary or proposed
Treasury regulations promulgated thereunder) and (B) cause any of the REMICs
created hereunder to fail to qualify as a REMIC under the Code or the imposition
of any tax on "prohibited transactions" or "contributions after the startup
date" under the REMIC Provisions.
Notwithstanding anything in this Agreement to the contrary, in
the event of a Principal Prepayment in full of a Mortgage Loan, the Servicer may
not waive any prepayment penalty or portion thereof required by the terms of the
related Mortgage Note unless (i) the Servicer determines that such waiver would
maximize recovery of Liquidation Proceeds for such Mortgage Loan, taking into
account the value of such prepayment penalty, or (ii) (A) the enforceability
thereof is limited (1) by bankruptcy, insolvency, moratorium, receivership, or
other similar law relating to creditors' rights generally or (2) due to
acceleration in connection with a foreclosure or other involuntary payment, or
(B) the enforceability is otherwise limited or prohibited by applicable law. In
the event that the Servicer does not collect a prepayment penalty required by
the terms of the related Mortgage Note, the Servicer shall (x) deliver to the
Trustee an Officer's Certificate certifying which circumstance described in the
immediately preceding sentence has occurred or (y) within 90 days of the date on
which the Principal Prepayment in full is remitted to the Trustee, deposit the
amount of such prepayment penalty into the Collection Account for distribution
to the holder of the Class X Certificates in accordance with Section 4.01.
With respect to each Mortgage Loan which is the subject of a
prepayment in full, which prepayment is not accompanied by the payment of a
prepayment penalty, the Trustee shall verify that such Mortgage Loan was
identified on the Mortgage Loan Schedule as not being subject to a prepayment
penalty. In the event that such Mortgage Loan is not so identified, the Trustee
shall provide notice that such event constitutes a breach under the Mortgage
Loan Purchase Agreement as provided in Section 2.04.
The Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release the Servicer
from the responsibilities or liabilities arising under this Agreement.
SECTION 3.02. Sub-Servicing Agreements Between Servicer and
Sub-Servicers.
The Servicer may arrange for the subservicing of any Mortgage
Loan by a subservicer (each, a "Subservicer") pursuant to a subservicing
agreement (each, a "Subservicing Agreement"); provided that such subservicing
arrangement and the terms of the related subservicing agreement must provide for
the servicing of such Mortgage Loans in a manner consistent with the servicing
arrangements contemplated hereunder. Notwithstanding the provisions of any
subservicing agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer or a subservicer or reference to
actions taken through a Servicer or otherwise, the Servicer shall remain
obligated and liable to the Depositor, the Trustee and the Certificateholders
for the servicing and administration of the Mortgage Loans in accordance with
the provisions of this Agreement without diminution of such obligation or
liability by virtue of such subservicing agreements or arrangements or by virtue
of indemnification from the subservicer and to the same extent and under the
same terms and conditions as if the Servicer alone were servicing and
administering the Mortgage Loans. Every subservicing agreement entered into by
the Servicer shall contain a provision giving the successor Servicer the option
to terminate such agreement in the event a successor Servicer is appointed. All
actions of each subservicer performed pursuant to the related subservicing
agreement shall be performed as an agent of the Servicer with the same force and
effect as if performed directly by the Servicer.
For purposes of this Agreement, the Servicer shall be deemed
to have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a subservicer regardless of whether such
payments are remitted by the subservicer to the Servicer.
SECTION 3.03. Successor Sub-Servicers.
The Servicer shall be entitled to terminate any Sub-Servicing
Agreement in accordance with the terms and conditions of such Sub-Servicing
Agreement and to either itself directly service the related Mortgage Loans or
enter into a Sub-Servicing Agreement with a successor Sub-Servicer which
qualifies under Section 8.03.
SECTION 3.04. No Contractual Relationship Between Sub-
Servicer, Trustee or the Certificateholders.
Any Sub-Servicing Agreement and any other transactions or
services relating to the Mortgage Loans involving a Sub-Servicer shall be deemed
to be between the Sub-Servicer and the Servicer alone and the Trustee and the
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to any Sub-Servicer
except as set forth in Section 3.05.
SECTION 3.05. Assumption or Termination of
Sub-Servicing Agreement by Trustee.
In connection with the assumption of the responsibilities,
duties and liabilities and of the authority, power and rights of the Servicer
hereunder by the Trustee pursuant to Section 7.02 or another successor Servicer,
it is understood and agreed that the Servicer's rights and obligations under any
Sub-Servicing Agreement then in force between the Servicer and a Sub-Servicer
shall be assumed simultaneously by the Trustee or another successor Servicer
without act or deed on part of the Trustee; provided, however, that the Trustee
(if acting as successor Servicer) or any other successor Servicer may terminate
the Sub-Servicer.
The Servicer shall, upon the reasonable request of the
Trustee, but at the expense of the Servicer, deliver to the assuming party
documents and records relating to each Sub-Servicing Agreement and an accounting
of amounts collected and held by it and otherwise use its best reasonable
efforts to effect the disorderly and efficient transfer of the Sub-Servicing
Agreements to the assuming party.
SECTION 3.06. [RESERVED]
SECTION 3.07. Collection of Certain Mortgage Loan Payments.
The Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement,
follow such collection procedures as it would follow with respect to mortgage
loans comparable to the Mortgage Loans and held for its own account. Consistent
with the foregoing, the Servicer may in its discretion (i) waive any late
payment charge or, if applicable, penalty interest or (ii) extend the due dates
for the Monthly Payments due on a Mortgage Note for a period of not greater than
90 days or (iii) extend the due dates for Monthly Payments due on a Mortgage
Loan for a period of not greater than 180 days; provided that any extension
pursuant to clause (ii) or clause (iii) above shall not affect the amortization
schedule of any Mortgage Loan for purposes of any computation hereunder.
Notwithstanding the foregoing, in the event that any Mortgage Loan is in default
or, in the judgment of the Servicer, such default is reasonably foreseeable, the
Servicer, consistent with the standards set forth in Section 3.01 may waive,
modify or vary any term of such Mortgage Loan (including modifications that
change the Mortgage Rate, forgive the payment of principal or interest or extend
the final maturity date of such Mortgage Loan), accept payment from the related
Mortgagor of an amount less than the Stated Principal Balance in final
satisfaction of such Mortgage Loan, or consent to the postponement of strict
compliance with any such term or otherwise grant indulgence to any Mortgagor if
in the Servicer's determination such waiver, modification, postponement or
indulgence is not materially adverse to the interests of the Certificateholders
(taking into account any estimated Realized Loss that might result absent such
action).
SECTION 3.08. [RESERVED]
SECTION 3.09. Collection of Taxes, Assessments and
Similar Items; Servicing Accounts.
The Servicer shall establish and maintain one or more accounts
(the "Servicing Accounts"), into which all collections from the Mortgagors (or
related advances from Sub-Servicers) for the payment of taxes, assessments,
fire, flood, and hazard insurance premiums, and comparable items for the account
of the Mortgagors ("Escrow Payments") shall be deposited and retained. Servicing
Accounts shall be Eligible Accounts. The Servicer shall deposit in the Servicing
Accounts on a daily basis and in no event later than the second Business Day
after receipt, and retain therein, all Escrow Payments collected on account of
the Mortgage Loans, for the purpose of effecting the timely payment of any such
items as required under the terms of this Agreement. Withdrawals of amounts from
a Servicing Account may be made only to (i) effect timely payment of taxes,
assessments, fire, flood, and hazard insurance premiums, and comparable items;
(ii) reimburse the Servicer out of related collections for any advances made
pursuant to Section 3.01 (with respect to taxes and assessments) and Section
3.14 (with respect to fire, flood and hazard insurance); (iii) refund to
Mortgagors any sums as may be determined to be overages; (iv) pay interest, if
required and as described below, to Mortgagors on balances in the Servicing
Account; or (v) clear and terminate the Servicing Account at the termination of
the Servicer's obligations and responsibilities in respect of the Mortgage Loans
under this Agreement in accordance with Article X. As part of its servicing
duties, the Servicer shall pay to the Mortgagors interest on funds in Servicing
Accounts, to the extent required by law and, to the extent that interest earned
on funds in the Servicing Accounts is insufficient, to pay such interest from
its or their own funds, without any reimbursement therefor. Notwithstanding the
foregoing, the Servicer shall not be obligated to collect Escrow Payments if the
related Mortgage Loan does not require such payments but the Servicer shall
nevertheless be obligated to make Servicing Advances as provided in Section
3.01.
SECTION 3.10. Collection Account and Distribution Account.
(a) On behalf of the Trust Fund, the Servicer shall establish
and maintain one or more accounts (such account or accounts, the
"Collection Account"), held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, the Servicer shall deposit
or cause to be deposited in the Collection Account on a daily basis and in
no event later than two Business Days after receipt, as and when received
or as otherwise required hereunder, the following payments and collections
received or made by it on or subsequent to the Cut-off Date:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Liquidation Proceeds (other
than proceeds collected in respect of any particular REO Property and
amounts paid by the Servicer in connection with a purchase of Mortgage
Loans and REO Properties pursuant to Section 10.01);
(iv) any amounts required to be deposited pursuant to Section
3.12 in connection with any losses realized on Permitted Investments with
respect to funds held in the Collection Account and the Distribution
Account;
(v) any amounts required to be deposited by the Servicer
pursuant to the second paragraph of Section 3.14(a) in respect of any
blanket policy deductibles;
(vi) any Purchase Price or Substitution Shortfall Amount
delivered to the Servicer; and
(vii) any prepayment penalties or amounts required to be
deposited in connection with the waiver of such prepayment penalties
pursuant to Section 3.01.
The foregoing requirements for deposit in the Collection
Accounts shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of late payment
charges, Prepayment Excess, prepayment charges that are not prepayment
penalties, assumption fees or other similar fees need not be deposited by the
Servicer in the Collection Account. In the event the Servicer shall deposit in
the Collection Account any amount not required to be deposited therein, it may
at any time withdraw such amount from the Collection Account, any provision
herein to the contrary notwithstanding.
(b) On behalf of the Trust Fund, the Trustee shall establish
and maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Certificateholders. On behalf of
the Trust Fund, the Servicer shall deliver to the Trustee in immediately
available funds for deposit in the Distribution Account on or before 5:00 p.m.
New York time (i) on the Servicer Remittance Date, that portion of the Available
Distribution Amount (calculated without regard to the references in clause (ii)
of the definition thereof to amounts that may be withdrawn from the Distribution
Account) for the related Distribution Date then on deposit in the Collection
Account, and (ii) on each Business Day as of the commencement of which the
balance on deposit in the Collection Account exceeds $75,000 following any
withdrawals pursuant to the next succeeding sentence, the amount of such excess,
but only if the Collection Account constitutes an Eligible Account solely
pursuant to clause (ii) of the definition of "Eligible Account." If the balance
on deposit in the Collection Account exceeds $75,000 as of the commencement of
business on any Business Day and the Collection Account constitutes an Eligible
Account solely pursuant to clause (ii) of the definition of "Eligible Account,"
the Servicer shall, on or before 5:00 p.m. New York time on such Business Day,
withdraw from the Collection Account any and all amounts payable or reimbursable
to the Depositor, the Servicer, the Trustee or the Mortgage Loan Originator
pursuant to Section 3.11 and shall pay such amounts to the Persons entitled
thereto.
(c) Funds in the Collection Account and the Distribution
Account may be invested in Permitted Investments in accordance with the
provisions set forth in Section 3.12. The Servicer shall give notice to the
Trustee of the location of the Collection Account maintained by it when
established and prior to any change thereof. The Trustee shall give notice to
the Servicer and the Depositor of the location of the Distribution Account when
established and prior to any change thereof.
(d) Funds held in the Collection Account at any time may be
delivered by the Servicer in immediately available funds to the Trustee for
deposit in the Distribution Account. In the event the Servicer shall deliver to
the Trustee for deposit in the Distribution Account any amount not required to
be deposited therein, it may at any time request that the Trustee withdraw such
amount from the Distribution Account and remit to it any such amount, any
provision herein to the contrary notwithstanding. In no event shall the Trustee
incur liability as a result of withdrawals from the Distribution Account at the
direction of the Servicer in accordance with the immediately preceding sentence.
In addition, the Servicer shall deliver to the Trustee from time to time for
deposit in the Distribution Account the amounts set forth in clauses (i) through
(v) below:
(i) any Advances, as required pursuant to Section 4.03;
(ii) any amounts required to be deposited pursuant to Section
3.23(d) or (f) in connection with any REO Property;
(iii) any amounts to be paid in connection with a purchase of
Mortgage Loans and REO Properties pursuant to Section 10.01;
(iv) any amounts required to be deposited pursuant to Section
3.24 in connection with any Prepayment Interest Shortfalls; and
(v) any Stayed Funds, as soon as permitted by the federal
bankruptcy court having jurisdiction in such matters.
(e) Promptly upon receipt of any Stayed Funds, whether from
the Servicer, a trustee in bankruptcy, or federal bankruptcy court or other
source, the Trustee shall deposit such funds in the Distribution Account. In
addition, the Servicer shall deposit in the Distribution Account any amounts
required to be deposited pursuant to Section 3.12 in connection with losses
realized on Permitted Investments with respect to funds held in the Distribution
Account.
SECTION 3.11. Withdrawals from the Collection Account and
Distribution Account.
The Servicer shall, from time to time, make withdrawals from
the Collection Account for any of the following purposes or as described in
Section 4.03:
(i) to remit to the Trustee for deposit in the Distribution
Account the amounts required to be so remitted pursuant to Section 3.10(b)
or permitted to be so remitted pursuant to the first sentence of Section
3.10(d);
(ii) subject to Section 3.16(d), to reimburse the Servicer for
Advances, but only to the extent of amounts received which represent Late
Collections (net of the related Servicing Fees) of Monthly Payments on
Mortgage Loans with respect to which such Advances were made in accordance
with the provisions of Section 4.03;
(iii) subject to Section 3.16(d), to pay the Servicer any
unpaid Servicing Fees and reimburse the Servicer any unreimbursed Servicing
Advances with respect to each Mortgage Loan, but only to the extent of any
Liquidation Proceeds and Insurance Proceeds received with respect to such
Mortgage Loan;
(iv) to pay to the Servicer as servicing compensation (in
addition to the Servicing Fee) on the Servicer Remittance Date any interest
or investment income earned on funds deposited in the Collection Account;
(v) to pay to the Servicer, the Depositor or the Mortgage Loan
Originator, as the case may be, with respect to each Mortgage Loan that has
previously been purchased or replaced pursuant to Section 2.03 or Section
3.16(c) all amounts received thereon not included in the Purchase Price or
the Substitution Shortfall Amount;
(vi) to reimburse the Servicer for any Advance or Servicing
Advance previously made which the Servicer, as applicable, has determined
to be a Nonrecoverable Advance in accordance with the provisions of Section
4.03;
(vii) to reimburse the Servicer, or the Depositor for expenses
incurred by or reimbursable to the Servicer, or the Depositor, as the case
may be, pursuant to Section 6.03;
(viii) to reimburse the Servicer, or the Trustee, as the case
may be, for expenses reasonably incurred in respect of the breach or defect
giving rise to the purchase obligation under Section 2.03 or Section 2.04
of this Agreement that were included in the Purchase Price of the Mortgage
Loan, including any expenses arising out of the enforcement of the purchase
obligation;
(ix) to pay, or to reimburse the Servicer for advances in
respect of, expenses incurred in connection with any Mortgage Loan pursuant
to Section 3.16(b); and
(x) to clear and terminate the Collection Account pursuant to
Section 10.01.
The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (ii), (iii), (v), (vi), (viii) and (ix) above. The
Servicer shall provide written notification to the Trustee, on or prior to the
next succeeding Servicer Remittance Date, upon making any withdrawals from the
Collection Account pursuant to subclauses (vi) and (vii) above.
SECTION 3.12. Investment of Funds in the Investment
Accounts.
(a) The Servicer may direct, by means of written directions
(which may be standing directions), any depository institution maintaining the
Collection Account to invest the funds in the Collection Account and the Trustee
may direct the investment of funds in the Distribution Account in one or more
Permitted Investments bearing interest or sold at a discount, and maturing,
unless payable on demand, (i) no later than the Business Day immediately
preceding the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement, if a Person other than the Trustee is the
obligor thereon, and (ii) no later than the date on which such funds are
required to be withdrawn from such account pursuant to this Agreement, if the
Trustee is the obligor thereon. All such Permitted Investments shall be held to
maturity, unless payable on demand. Any investment of funds shall be made in the
name of the Trustee (in its capacity as such) or in the name of a nominee of the
Trustee. The Trustee shall be entitled to sole possession over each such
investment and, subject to subsection (b) hereinbelow, the income thereon, and
any certificate or other instrument evidencing any such investment shall be
delivered directly to the Trustee or its agent, together with any document of
transfer necessary to transfer title to such investment to the Trustee or its
nominee. In the event amounts on deposit in the Collection Account are at any
time invested in a Permitted Investment payable on demand, the Trustee shall at
the direction of the Servicer:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on
the last day such Permitted Investment may otherwise
mature hereunder in an amount equal to the lesser of
(1) all amounts then payable thereunder and (2) the
amount required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder promptly
upon determination by a Responsible Officer of the
Trustee that such Permitted Investment would not
constitute a Permitted Investment in respect of funds
thereafter on deposit in the Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Collection Account held by or on behalf of the Servicer or the
Trustee, shall be for the benefit of the Servicer and shall be subject to its
withdrawal in accordance with Section 3.11. The Servicer shall deposit in the
Collection Account the amount of any loss incurred in respect of any such
Permitted Investment made with funds in such account immediately upon
realization of such loss. All income and gain realized from the investment of
funds deposited in the Distribution Account shall be for the benefit of the
Trustee. The Trustee shall deposit in the Distribution Account the amount of any
loss incurred in respect of any such Permitted Investment made with funds in
such account immediately upon realization of such loss.
(c) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee may and, subject to Section 8.01 and Section
8.02(v), shall, at the written direction of the Servicer, take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate proceedings.
(d) In the absence of written direction to the Trustee from
the Servicer, all funds on deposit in the Collection Account shall remain
uninvested.
SECTION 3.13. [intentionally omitted]
SECTION 3.14. Maintenance of Hazard Insurance and Errors
and Omissions and Fidelity Coverage.
(a) The terms of each Mortgage Note require the related
Mortgagor to maintain the fire, flood and hazard insurance policies. To the
extent such policies are not maintained, the Servicer shall cause to be
maintained for each Mortgaged Property fire and hazard insurance with extended
coverage as is customary in the area where the Mortgaged Property is located in
an amount which is at least equal to the lesser of the current principal balance
of such Mortgage Loan and the amount necessary to fully compensate for any
damage or loss to the improvements which are a part of such property on a
replacement cost basis, in each case in an amount not less than such amount as
is necessary to avoid the application of any coinsurance clause contained in the
related hazard insurance policy. The Servicer shall also cause to be maintained
fire and hazard insurance on each REO Property with extended coverage as is
customary in the area where the Mortgaged Property is located in an amount which
is at least equal to the lesser of (i) the maximum insurable value of the
improvements which are a part of such property and (ii) the outstanding
principal balance of the related Mortgage Loan at the time it became an REO
Property. The Servicer will comply in the performance of this Agreement with all
reasonable rules and requirements of each insurer under any such hazard
policies. Any amounts to be collected by the Servicer under any such policies
(other than amounts to be applied to the restoration or repair of the property
subject to the related Mortgage or amounts to be released to the Mortgagor in
accordance with the procedures that the Servicer would follow in servicing loans
held for its own account, subject to the terms and conditions of the related
Mortgage and Mortgage Note) shall be deposited in the Collection Account,
subject to withdrawal pursuant to Section 3.11, if received in respect of a
Mortgage Loan, or in the REO Account, subject to withdrawal pursuant to Section
3.23, if received in respect of an REO Property. Any cost incurred by the
Servicer in maintaining any such insurance shall not, for the purpose of
calculating distributions to Certificateholders, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit. It is understood and agreed that no earthquake
or other additional insurance is to be required of any Mortgagor other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. If the Mortgaged Property
or REO Property is at any time in an area identified in the Federal Register by
the Federal Emergency Management Agency as having special flood hazards, the
Servicer will cause to be maintained a flood insurance policy in respect
thereof. Such flood insurance shall be in an amount equal to the lesser of (i)
the unpaid principal balance of the related Mortgage Loan and (ii) the maximum
amount of such insurance available for the related Mortgaged Property under the
national flood insurance program (assuming that the area in which such Mortgaged
Property is located is participating in such program).
In the event that the Servicer shall obtain and maintain a
blanket policy with an insurer having a General Policy Rating of A:X or better
in Best's Key Rating Guide insuring against hazard losses on all of the Mortgage
Loans, it shall conclusively be deemed to have satisfied its obligations as set
forth in the first two sentences of this Section 3.14, it being understood and
agreed that such policy may contain a deductible clause, in which case the
Servicer shall, in the event that there shall not have been maintained on the
related Mortgaged Property or REO Property a policy complying with the first two
sentences of this Section 3.14, and there shall have been one or more losses
which would have been covered by such policy, deposit to the Collection Account
from its own funds the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Servicer agrees to prepare
and present, on behalf of itself, the Trustee and the Certificateholders, claims
under any such blanket policy in a timely fashion in accordance with the terms
of such policy.
(b) The Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of its respective obligations under this Agreement,
which policy or policies shall be in such form and amount that would meet the
requirements of FNMA or FHLMC if it were the purchaser of the Mortgage Loans,
unless the Servicer, has obtained a waiver of such requirements from FNMA or
FHLMC. The Servicer shall each also maintain a fidelity bond in the form and
amount that would meet the requirements of FNMA or FHLMC, unless the Servicer,
has obtained a waiver of such requirements from FNMA or FHLMC. The Servicer
shall be deemed to have complied with this provision if an Affiliate of the
Servicer, has such errors and omissions and fidelity bond coverage and, by the
terms of such insurance policy or fidelity bond, the coverage afforded
thereunder extends to the Servicer. Any such errors and omissions policy and
fidelity bond shall by its terms not be cancelable without thirty days' prior
written notice to the Trustee.
SECTION 3.15. Enforcement of Due-On-Sale Clauses;
Assumption Agreements.
The Servicer will, to the extent it has knowledge of any
conveyance or prospective conveyance of any Mortgaged Property by any Mortgagor
(whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains or is to remain liable under the Mortgage Note and/or the
Mortgage), exercise its rights to accelerate the maturity of such Mortgage Loan
under the "due-on-sale" clause, if any, applicable thereto; provided, however,
that the Servicer shall not exercise any such rights if prohibited by law from
doing so. If the Servicer reasonably believes it is unable under applicable law
to enforce such "due-on-sale" clause, or if any of the other conditions set
forth in the proviso to the preceding sentence apply, the Servicer will enter
into an assumption and modification agreement from or with the person to whom
such property has been conveyed or is proposed to be conveyed, pursuant to which
such person becomes liable under the Mortgage Note and, to the extent permitted
by applicable state law, the Mortgagor remains liable thereon. The Servicer is
also authorized to enter into a substitution of liability agreement with such
person, pursuant to which the original Mortgagor is released from liability and
such person is substituted as the Mortgagor and becomes liable under the
Mortgage Note, provided that no such substitution shall be effective unless such
person satisfies the then current underwriting criteria of the Servicer for
mortgage loans similar to the Mortgage Loans. In connection with any assumption
or substitution, the Servicer shall apply such underwriting standards and follow
such practices and procedures as shall be normal and usual in its general
mortgage servicing activities and as it applies to other mortgage loans owned
solely by it. The Servicer shall not take or enter into any assumption and
modification agreement, however, unless (to the extent practicable in the
circumstances) it shall have received confirmation, in writing, of the continued
effectiveness of any applicable hazard insurance policy. Any fee collected by
the Servicer in respect of an assumption or substitution of liability agreement
will be retained by the Servicer as additional servicing compensation. In
connection with any such assumption, no material term of the Mortgage Note
(including but not limited to the related Mortgage Rate and the amount of the
Monthly Payment) may be amended or modified, except as otherwise required
pursuant to the terms thereof. The Servicer shall notify the Trustee that any
such substitution or assumption agreement has been completed by forwarding to
the Trustee the executed original of such substitution or assumption agreement,
which document shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatever. For purposes of this Section 3.15, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
SECTION 3.16. Realization Upon Defaulted Mortgage Loans.
(a) The Servicer shall use its best efforts, consistent with
the servicing standard set forth in Section 3.01, to foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.07. The Servicer shall be responsible for all costs and expenses
incurred by it in any such proceedings; provided, however, that such costs and
expenses will be recoverable as Servicing Advances by the Servicer as
contemplated in Section 3.11 and 3.23. The foregoing is subject to the provision
that, in any case in which Mortgaged Property shall have suffered damage from an
Uninsured Cause, the Servicer shall not be required to expend its own funds
toward the restoration of such property unless it shall determine in its
discretion that such restoration will increase the proceeds of liquidation of
the related Mortgage Loan after reimbursement to itself for such expenses.
(b) Notwithstanding the foregoing provisions of this Section
3.16 or any other provision of this Agreement, with respect to any Mortgage Loan
as to which the Servicer has received actual notice of, or has actual knowledge
of, the presence of any toxic or hazardous substance on the related Mortgaged
Property, the Servicer shall not, on behalf of the Trustee, either (i) obtain
title to such Mortgaged Property as a result of or in lieu of foreclosure or
otherwise, or (ii) otherwise acquire possession of, or take any other action
with respect to, such Mortgaged Property, if, as a result of any such action,
the Trustee or the Certificateholders would be considered to hold title to, to
be a "mortgagee-in-possession" of, or to be an "owner" or "operator" of such
Mortgaged Property within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to time,
or any comparable law, unless the Servicer has also previously determined and
received the consent of the Class X Certificateholder, based on its reasonable
judgment and a prudent report prepared by a Person who regularly conducts
environmental audits using customary industry standards, that:
(1) such Mortgaged Property is in compliance with
applicable environmental laws or, if not, that it would
be in the best economic interest of the Trust Fund to
take such actions as are necessary to bring the Mortgaged
Property into compliance therewith; and
(2) there are no circumstances present at such
Mortgaged Property relating to the use, management
or disposal of any hazardous substances, hazardous
materials, hazardous wastes or petroleum-based
materials for which investigation, testing, monitoring,
containment, clean-up or remediation could be required
under any federal, state or local law or regulation,
or that if any such materials are present for which
such action could be required, that it would be in the
best economic interest of the Trust Fund to take
such actions with respect to the affected Mortgaged
Property.
The cost of the environmental audit report contemplated by
this Section 3.16 shall be advanced by the Servicer, subject to the Servicer's
right to be reimbursed therefor from the Collection Account as provided in
Section 3.11(ix), such right of reimbursement being prior to the rights of
Certificateholders to receive any amount in the Collection Account received in
respect of the affected Mortgage Loan or other Mortgage Loans.
If the Servicer determines, as described above, that it is in
the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes, or petroleum-based materials affecting any such Mortgaged Property, then
the Servicer shall take such action as it deems to be in the best economic
interest of such Trust Fund. The cost of any such compliance, containment,
cleanup or remediation shall be advanced by the Servicer, subject to the
Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.11(ix), such right of reimbursement being prior to the
rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.
(c) The Servicer shall have the right to purchase from the
Trust Fund any defaulted Mortgage Loan that is 60 days or more delinquent, which
the Servicer determines in good faith will otherwise become subject to
foreclosure proceedings (evidence of such determination to be delivered in
writing to the Trustee, in form and substance satisfactory to the Servicer and
the Trustee prior to purchase), at a price equal to the Purchase Price. The
Purchase Price for any Mortgage Loan purchased hereunder shall be deposited in
the Collection Account, and the Trustee, upon receipt of written certification
from the Servicer of such deposit, shall release or cause to be released to the
Servicer, as applicable, the related Mortgage File and shall execute and deliver
such instruments of transfer or assignment, in each case without recourse, as
the Servicer shall furnish and as shall be necessary to vest in the Servicer, as
applicable, title to any Mortgage Loan released pursuant hereto.
(d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: first, to reimburse the
Servicer for any related unreimbursed Servicing Advances and Advances, pursuant
to Section 3.11(ii) or (iii); second, to accrued and unpaid interest on the
Mortgage Loan, to the date of the Final Recovery Determination, or to the Due
Date prior to the Distribution Date on which such amounts are to be distributed
if not in connection with a Final Recovery Determination; and third, as a
recovery of principal of the Mortgage Loan. If the amount of the recovery so
allocated to interest is less than the full amount of accrued and unpaid
interest due on such Mortgage Loan, the amount of such recovery will be
allocated by the Servicer as follows: first, concurrently and on a pro rata
basis to unpaid Servicing Fees; and second, to the balance of the interest then
due and owing. The portion of the recovery so allocated to unpaid Servicing Fees
shall be reimbursed to the Servicer pursuant to Section 3.11(iii). The portion
of the recovery allocated to interest (net of unpaid Servicing Fees) and the
portion of the recovery allocated to principal of the Mortgage Loan shall be
applied as follows: first, to reimburse the Servicer for any related
unreimbursed Advances in accordance with Section 3.11(ii) and any other amounts
reimbursable to the Servicer pursuant to Section 3.11, and second, as part of
the amounts to be transferred to the Distribution Account in accordance with
Section 3.10(b).
SECTION 3.17. Trustee to Cooperate; Release of Mortgage
Files.
Upon the payment in full of any Mortgage Loan, or the receipt
by the Servicer of a notification that payment in full shall be escrowed in a
manner customary for such purposes, the Servicer will notify the Trustee by a
certification in the form of Exhibit D-2 (which certification shall include a
statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.10 have been or will be so deposited)
of a Servicing Officer and shall request delivery to it of the Mortgage File.
Upon receipt of such certification and request, the Trustee shall promptly
release the related Mortgage File to the Servicer. No expenses incurred in
connection with any instrument of satisfaction or deed of reconveyance shall be
chargeable to the Collection Account or the Distribution Account.
From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the Mortgage Loans, the Trustee shall, upon
request of the Servicer and delivery to the Trustee of a Request for Release in
the form of Exhibit D-l, release the related Mortgage File to the Servicer, and
the Trustee or the Servicer as attorney-in-fact of the Trustee shall, at the
direction of the Servicer, execute such documents as shall be necessary to the
prosecution of any such proceedings. Such Request for Release shall obligate the
Servicer to return each and every document previously requested from the
Mortgage File to the Trustee when the need therefor by the Servicer no longer
exists, unless the Mortgage Loan has been liquidated and the Liquidation
Proceeds relating to the Mortgage Loan have been deposited in the Collection
Account or the Mortgage File or such document has been delivered to an attorney,
or to a public trustee or other public official as required by law, for purposes
of initiating or pursuing legal action or other proceedings for the foreclosure
of the Mortgaged Property either judicially or non-judicially, and the Servicer
has delivered to the Trustee a certificate of a Servicing Officer of the
Servicer certifying as to the name and address of the Person to which such
Mortgage File or such document was delivered and the purpose or purposes of such
delivery. Upon receipt of a certificate of a Servicing Officer of the Servicer
stating that such Mortgage Loan was liquidated and that all amounts received or
to be received in connection with such liquidation that are required to be
deposited into the Collection Account have been so deposited, or that such
Mortgage Loan has become an REO Property, a copy of the Request for Release
shall be released by the Trustee to the Servicer.
Upon written certification of a Servicing Officer of the
Servicer, the Trustee shall execute and deliver to the Servicer, any court
pleadings, requests for trustee's sale or other documents necessary to the
foreclosure or trustee's sale in respect of a Mortgaged Property or to any legal
action brought to obtain judgment against any Mortgagor on the Mortgage Note or
Mortgage or to obtain a deficiency judgment, or to enforce any other remedies or
rights provided by the Mortgage Note or Mortgage or otherwise available at law
or in equity. Each such certification shall include a request that such
pleadings or documents be executed by the Trustee and a statement as to the
reason such documents or pleadings are required and that the execution and
delivery thereof by the Trustee will not invalidate or otherwise affect the lien
of the Mortgage, except for the termination of such a lien upon completion of
the foreclosure or trustee's sale. So long as no Servicing Termination Event
shall have occurred and be continuing, the Servicer shall have the right to
execute any and all such court pleadings, requests and other documents as
attorney-in-fact for, and on behalf of the Trustee.
SECTION 3.18. Servicing Compensation.
As compensation for the activities of the Servicer, hereunder,
the Servicer shall be entitled to the Servicing Fee with respect to each
Mortgage Loan payable solely from payments of interest in respect of such
Mortgage Loan, subject to Section 3.24. In addition, the Servicer shall be
entitled to recover unpaid Servicing Fees out of Insurance Proceeds or
Liquidation Proceeds to the extent permitted by Section 3.11(iii) and out of
amounts derived from the operation and sale of an REO Property to the extent
permitted by Section 3.23. The right to receive the Servicing Fee may not be
transferred in whole or in part except in connection with the transfer of all of
the Servicer's responsibilities and obligations under this Agreement to the
extent permitted herein. In addition, the Servicer shall be enitled to the
Special Servicer Fee pursuant to Section 4.01(c)(x), if applicable.
Additional servicing compensation in the form of assumption
fees, late payment charges, Prepayment Excess, prepayment charges (other than
prepayment penalties) and other miscellaneous fees shall be retained by the
Servicer only to the extent such fees or charges are received by the Servicer.
The Servicer shall also be entitled pursuant to Section 3.11(iv) to withdraw
from the Collection Account and pursuant to Section 3.23(b) to withdraw from any
REO Account, as additional servicing compensation, interest or other income
earned on deposits therein, subject to Section 3.12. The Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder (including premiums for the insurance required by Section
3.14, to the extent such premiums are not paid by the related Mortgagors) and
shall not be entitled to reimbursement therefor except as specifically provided
herein.
SECTION 3.19. Reports to the Trustee; Collection Account
Statements.
Not later than fifteen days after each Distribution Date, the
Servicer shall forward to the Trustee and the Depositor a statement prepared by
the institution at which the Collection Account is maintained setting forth the
status of the Collection Account as of the close of business on such
Distribution Date and showing, for the period covered by such statement, the
aggregate amount of deposits into and withdrawals from the Collection Account of
each category of deposit specified in Section 3.10(a) and each category of
withdrawal specified in Section 3.11. Copies of such statement shall be provided
by the Trustee to any Certificateholder and to any Person identified to the
Trustee as a prospective transferee of a Certificate, upon request at the
expense of the requesting party, provided such statement is delivered by the
Servicer to the Trustee.
SECTION 3.20. Statement as to Compliance.
The Servicer will deliver to, the Trustee and the Depositor
not later than 120 days following the end of the fiscal year of the Servicer,
which as of the Closing Date ends on the last day in December, an Officers'
Certificate stating, as to each signatory thereof, that (i) a review of the
activities of the Servicer during the preceding year and of performance under
this Agreement has been made under such officers' supervision and (ii) to the
best of such officers' knowledge, based on such review, the Servicer has
fulfilled all of its obligations under this Agreement throughout such year, or,
if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof. Copies of any such statement shall be provided by the Trustee to any
Certificateholder and to any Person identified to the Trustee as a prospective
transferee of a Certificate, upon request at the expense of the requesting
party, provided such statement is delivered by the Servicer to the Trustee.
SECTION 3.21. Independent Public Accountants' Servicing
Report.
Not later than 120 days following the end of each fiscal year
of the Servicer, the Servicer, at its expense, shall cause a nationally
recognized firm of independent certified public accountants to furnish to the
Servicer a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Servicer which includes an
assertion that the Servicer has complied with certain minimum residential
mortgage loan servicing standards, identified in the Uniform Single Attestation
Program for Mortgage Bankers established by the Mortgage Bankers Association of
America, with respect to the servicing of residential mortgage loans during the
most recently completed fiscal year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the American
Institute of Certified Public Accountants, such representation is fairly stated
in all material respects, subject to such exceptions and other qualifications
that may be appropriate. Immediately upon receipt of such report, the Servicer
shall furnish a copy of such report to the Trustee and each Rating Agency.
Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Servicer's expense, provided that such
statement is delivered by the Servicer to the Trustee.
SECTION 3.22. Access to Certain Documentation.
The Servicer shall provide to the Office of Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificateholder,
access to the documentation regarding the Mortgage Loans required by applicable
laws and regulations. Such access shall be afforded without charge, but only
upon reasonable request and during normal business hours at the offices of the
Servicer designated by it. In addition, access to the documentation regarding
the Mortgage Loans will be provided to any Certificateholder, the Trustee and to
any Person identified to the Servicer, as a prospective transferee of a
Certificate, upon reasonable request during normal business hours at the offices
of the Servicer designated by it at the expense of the Person requesting such
access.
SECTION 3.23. Title, Management and Disposition of REO
Property.
(a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Trustee, or its nominee, on behalf of the
Certificateholders. The Servicer, on behalf of the Trust Fund, shall either sell
any REO Property by the close of the third calendar year following the calendar
year in which the Trust Fund acquires ownership of such REO Property for
purposes of Section 860(a)(8) of the Code or request from the Internal Revenue
Service, more than 60 days before the day on which the three-year grace period
would otherwise expire an extension of the three-year grace period, unless the
Servicer had delivered to the Trustee an Opinion of Counsel, addressed to the
Trustee and the Depositor, to the effect that the holding by the Trust Fund of
such REO Property subsequent to three years after its acquisition will not
result in the imposition on any REMIC created hereunder of taxes on "prohibited
transactions" thereof, as defined in Section 860F of the Code, or cause any
REMIC hereunder to fail to qualify as a REMIC under Federal law at any time that
any Certificates are outstanding. The Servicer shall manage, conserve, protect
and operate each REO Property for the Certificateholders solely for the purpose
of its prompt disposition and sale in a manner which does not cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or result in the receipt by any REMIC created
hereunder of any "income from non-permitted assets" within the meaning of
Section 860F(a)(2)(B) of the Code, or any "net income from foreclosure property"
which is subject to taxation under the REMIC Provisions.
(b) The Servicer shall segregate and hold all funds collected
and received in connection with the operation of any REO Property separate and
apart from its own funds and general assets and shall establish and maintain
with respect to REO Properties an account held in trust for the Trustee for the
benefit of the Certificateholders (the "REO Account"), which shall be an
Eligible Account. The Servicer shall be permitted to allow the Collection
Account to serve as the REO Account, subject to separate ledgers for each REO
Property. The Servicer shall be entitled to retain or withdraw any interest
income paid on funds deposited in the REO Account.
(c) The Servicer shall have full power and authority, subject
only to the specific requirements and prohibitions of this Agreement, to do any
and all things in connection with any REO Property as are consistent with the
manner in which the Servicer manages and operates similar property owned by the
Servicer or any of its Affiliates, all on such terms and for such period as the
Servicer deems to be in the best interests of Certificateholders. In connection
therewith, the Servicer shall deposit, or cause to be deposited, on a daily
basis in the REO Account all revenues received by it with respect to an REO
Property and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of such REO Property including, without limitation:
(i) all insurance premiums due and payable in respect of such
REO Property;
(ii) all real estate taxes and assessments in respect of such
REO Property that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO
Property.
To the extent that amounts on deposit in the REO Account with respect to an REO
Property are insufficient for the purposes set forth in clauses (i) through
(iii) above with respect to such REO Property, the Servicer shall advance from
its own funds such amount as is necessary for such purposes if, but only if, the
Servicer would make such advances if the Servicer owned the REO Property and if
in the Servicer's judgment, the payment of such amounts will be recoverable from
the rental or sale of the REO Property.
Notwithstanding the foregoing, the Servicer shall not:
(i) permit the Trust Fund to enter into, renew or extend any
New Lease with respect to any REO Property, if the New Lease by its terms
will give rise to any income that does not constitute Rents from Real
Property;
(ii) permit any amount to be received or accrued under any New
Lease other than amounts that will constitute Rents from Real Property;
(iii) authorize or permit any construction on any REO
Property, other than the completion of a building or other improvement
thereon, and then only if more than ten percent of the construction of such
building or other improvement was completed before default on the related
Mortgage Loan became imminent, all within the meaning of Section
856(e)(4)(B) of the Code; or
(iv) allow any Person to Directly Operate any REO Property on
any date more than 90 days after its date of acquisition by the Trust Fund;
unless, in any such case, the Servicer has obtained an Opinion of Counsel,
provided to the Servicer and the Trustee, to the effect that such action will
not cause such REO Property to fail to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code at any time that it is held by the
Trust Fund, in which case the Servicer may take such actions as are specified in
such Opinion of Counsel.
The Servicer may contract with any Independent Contractor for
the operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract shall not be
inconsistent herewith;
(ii) any such contract shall require, or shall be administered
to require, that the Independent Contractor pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, including those listed above and remit all related revenues (net
of such costs and expenses) to the Servicer as soon as practicable, but in
no event later than thirty days following the receipt thereof by such
Independent Contractor;
(iii) none of the provisions of this Section 3.23(c) relating
to any such contract or to actions taken through any such Independent
Contractor shall be deemed to relieve the Servicer of any of its duties and
obligations to the Trustee on behalf of the Certificateholders with respect
to the operation and management of any such REO Property; and
(iv) the Servicer shall be obligated with respect thereto to
the same extent as if it alone were performing all duties and obligations
in connection with the operation and management of such REO Property.
The Servicer shall be entitled to enter into any agreement with any Independent
Contractor performing services for it related to its duties and obligations
hereunder for indemnification of the Servicer by such Independent Contractor,
and nothing in this Agreement shall be deemed to limit or modify such
indemnification. The Servicer shall be solely liable for all fees owed by it to
any such Independent Contractor, irrespective of whether the Servicer's
compensation pursuant to Section 3.18 is sufficient to pay such fees.
(d) In addition to the withdrawals permitted under Section
3.23(c), the Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself unpaid Servicing Fees in respect
of the related Mortgage Loan; and (ii) to reimburse itself or the Servicer for
unreimbursed Servicing Advances and Advances made in respect of such REO
Property or the related Mortgage Loan. On the Servicer Remittance Date, the
Servicer shall withdraw from each REO Account maintained by it and deposit into
the Distribution Account in accordance with Section 3.10(d)(ii), for
distribution on the related Distribution Date in accordance with Section 4.01,
the income from the related REO Property received during the prior calendar
month, net of any withdrawals made pursuant to Section 3.23(c) or this Section
3.23(d).
(e) Subject to the time constraints set forth in Section
3.23(a), each REO Disposition shall be carried out by the Servicer at such price
and upon such terms and conditions as the Servicer shall deem necessary or
advisable, as shall be normal and usual in its general servicing activities.
(f) The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Mortgage Loan
and net of any payment or reimbursement to the Servicer as provided above, shall
be deposited in the Distribution Account in accordance with Section 3.10(d)(ii)
on the Servicer Remittance Date in the month following the receipt thereof for
distribution on the related Distribution Date in accordance with Section 4.01.
Any REO Disposition shall be for cash only (unless changes in the REMIC
Provisions made subsequent to the Startup Day allow a sale for other
consideration).
(g) The Servicer shall file information returns with respect
to the receipt of mortgage interest received in a trade or business, reports of
foreclosures and abandonments of any Mortgaged Property and cancellation of
indebtedness income with respect to any Mortgaged Property as required by
Sections 6050H, 6050J and 6050P of the Code, respectively. Such reports shall be
in form and substance sufficient to meet the reporting requirements imposed by
such Sections 6050H, 6050J and 6050P of the Code.
SECTION 3.24. Obligations of the Servicer in Respect of
Prepayment Interest Shortfalls.
The Servicer shall deliver to the Trustee for deposit into the
Distribution Account on or before 5:00 p.m. New York time on the Servicer
Remittance Date from its own funds an amount equal to the lesser of (i) the
aggregate of the Prepayment Interest Shortfalls attributable to prepayments in
full for the related Distribution Date resulting solely from Principal
Prepayments received by the Servicer during the related Collection Period and
(ii) to the extent of 50% of its aggregate Servicing Fee for the most recently
ended Collection Period. The Servicer shall not have the right to reimbursement
for any amounts remitted to the Trustee in respect of Compensating Interest. The
Servicer shall not be obligated to pay Compensating Interest with respect to
Relief Act Interest Shortfalls.
SECTION 3.25. [Reserved].
SECTION 3.26. Obligations of the Servicer in Respect of
Mortgage Rates and Monthly Payments.
In the event that a shortfall in any collection on or
liability with respect to any Mortgage Loan results from or is attributable to
adjustments to Mortgage Rates, Monthly Payments or Stated Principal Balances
that were made by the Servicer in a manner not consistent with the terms of the
related Mortgage Note and this Agreement, the Servicer, upon discovery or
receipt of notice thereof, immediately shall deliver to the Trustee for deposit
in the Distribution Account from its own funds the amount of any such shortfall
and shall indemnify and hold harmless the Trust Fund, the Trustee, the Depositor
and any successor servicer in respect of any such liability. Such indemnities
shall survive the termination or discharge of this Agreement.
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01. Distributions.
(a) On each Distribution Date, based on information provided
by the Servicer, the Trustee (or the Paying Agent on behalf of the Trustee)
shall withdraw from the Distribution Account to the extent funds are available
therein the Total Distribution Amount for such date, shall allocate such amount
to the interests issued in respect of REMIC 1 and REMIC 2, and shall distribute
such amount as specified in this Section. Such distributions shall be made by
check mailed to each Certificateholder's address as it appears on the
Certificate Register of the Certificate Registrar (which shall initially be the
Trustee) or, upon written request made to the Trustee at least three Business
Days prior to the related Record Date by any Certificateholder owning an
aggregate initial Certificate Principal Amount of at least $2,500,000, or, in
the case of a Class X Certificate, a Percentage Interest of 100%, by wire
transfer in immediately available funds to an account specified in the request
and at the expense of such Certificateholder; provided, however, that the final
distribution in respect of any Certificate shall be made only upon presentation
and surrender of such Certificate at the Corporate Trust Office. Wire transfers
will be made at the expense of the Holder requesting such wire transfer by
deducting a wire transfer fee from the related distribution.
The Interest Remittance Amount shall be distributed in the
following order of priority:
(i) First, to the Trustee, the Trustee Fee, any amounts owed
to the Trustee pursuant to Section 8.05 and any amounts reimbursable to the
Trustee pursuant to Section 11.01(c);
(ii) Second, to the Holders of the Class A Certificates, the
related Accrued Certificate Interest plus the Class A Carry Forward Amount;
(iii) Third, to the extent of the Interest Remittance Amount
then remaining, to the Holders of the Class M-1 Certificates, the related
Accrued Certificate Interest;
(iv) Fourth, to the extent of the Interest Remittance Amount
then remaining, to the Holders of the Class M-2 Certificates, the related
Accrued Certificate Interest;
(v) Fifth, to the extent of the Interest Remittance Amount
then remaining, to the Holders of the Class B Certificates, the related
Accrued Certificate Interest;
(vi) Sixth, the amount, if any, of the Interest Remittance
Amount remaining after application of such amount in accordance with the
priorities set forth above is the "Monthly Excess Interest Amount" for such
Distribution Date and such Monthly Excess Interest Amount will be included
as part of the Monthly Excess Cash Flow Amount and shall be applied as set
forth in Section 4.01 (c).
(b) The Principal Remittance Amount for such Distribution Date
shall be distributed in the following order of priority:
(i) On each Distribution Date (a) before the Stepdown Date or
(b) with respect to which a Trigger Event is in effect, Holders of the
Class A Certificates will be entitled to receive payment of 100% of the
Principal Distribution Amount until the Class Certificate Balance for the
Class A Certificates has been reduced to zero.
(ii) Notwithstanding the provisions of Section 4.01(b)(i), in
the event that, on any Distribution Date on or after the Stepdown Date in
which a Trigger Event is in effect: (a), the Holders of the Class A
Certificates will be entitled to receive pro rata payment of 100% of the
Principal Distribution Amount until the Class Certificate Balance of the
Class A Certificates has been reduced to zero; (b) thereafter, if the
Certificate Principal Balance of the Class A Certificates is reduced to
zero, the Holders of the Class M-1 Certificates will be entitled to receive
pro rata payment of 100% of the Principal Distribution Amount until the
Class Certificate Balance of the Class M-1 Certificates has been reduced to
zero; (c) thereafter, if the Class M-1 Certificate Principal Balance is
reduced to zero, the Holders of the Class M-2 Certificates will be entitled
to receive payments of 100% of the Principal Distribution Amount until the
Class Certificate Balance of the Class M-2 Certificates has been reduced to
zero; (d) if the Class M-2 Certificate Principal Balance is reduced to
zero, the Holders of the Class B Certificates will be entitled to receive
100% of the Principal Distribution Amount until the Class Certificate
Balance of the Class B Certificates has been reduced to zero; and (e) if
the Class B Certificate Principal Balance is reduced to zero, the Holders
of the Class X Certificates will be entitled to receive 100% of the
Principal Distribution Amount until the Class Certificate Balance of the
Class X Certificates has been reduced to zero.
(iii) On each Distribution Date (a) on or after the Stepdown
Date and (b) as long as a Trigger Event is not in effect, the Holders of
the Offered Certificates will be entitled to receive payments of principal,
in the order of priority, in the amounts set forth below and to the extent
of the Principal Distribution Amount as follows:
(A) First, the lesser of (x) the Principal
Distribution Amount and (y) the Class A Principal
Distribution amount will be distributed to the
Class A Certificates until the Class Certificate
Balance thereof has been reduced to zero;
(B) Second, the lesser of (x) the excess of (i) the
Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause
First above and (y) the Class M-1 Principal
Distribution Amount will be distributed to the
Class M-1 Certificates, until the Class
Certificate Balance thereof has been reduced to
zero;
(C) Third, the lesser of (x) the excess of (i) the
Principal Distribution Amount over (ii) the sum of
the amount distributed to the Class A Certificates
in clause First above and the amount distributed
to the Class M-1 Certificates in clause Second
above and (y) the Class M-2 Principal Distribution
Amount will be distributed to the Class M-2
Certificates, until the Class Certificate Balance
thereof has been reduced to zero;
(D) Fourth, the lesser of (x) the excess of (i) the
Principal Distribution Amount over (ii) the sum of
the amount distributed to the Class A Certificates
pursuant to clause First above, the amount
distributed to the Class M-1 Certificates pursuant
to clause Second above and the amount distributed
to the Class M-2 Certificates pursuant to
clause Third above and (y) the Class B Principal
Distribution Amount will be distributed to
the Class B Certificates, until the Class
Certificate Balance thereof has been reduced to
zero; and
(E) Fifth, any amount of the Principal Remittance
Amount remaining after making all of the
distributions in clauses First, Second, Third and
Fourth above will be included as part of the
Monthly Excess Cashflow Amount and will be applied
as set forth in Section 4.01(c).
(c) On any Distribution Date, Monthly Excess Cashflow Amount
is required to be applied in the following order of priority on such
Distribution Date:
(i) to fund the Class A Interest Carry Forward Amount, if any;
(ii) to fund the Extra Principal Distribution Amount, if any,
for such Distribution Date;
(iii) to fund the Class M-1 Interest Carry Forward Amount, if
any;
(iv) to fund the Class M-1 Realized Loss Amortization Amount
for such Distribution Date;
(v) to fund the Class M-2 Interest Carry Forward Amount, if
any.
(vi) to fund the Class M-2 Realized Loss Amortization Amount
for such Distribution Date;
(vii) to fund the Class B Interest Carry Forward Amount, if
any;
(viii) to fund the Class B Realized Loss Amortization Amount
for such Distribution Date;
(ix) to the Basis Risk Reserve Fund, and then from the Basis
Risk Reserve Fund to the Class A, Class M-1, Class M-2 and Class B
Certificates, in that order, from the Basis Risk Reserve Fund, in an amount
equal to the unpaid amount of any Basis Risk Shortfall for such date and
any Unpaid Basis Risk Shortfall for such date; notwithstanding any
provision herein to the contrary, no amounts received in respect of
prepayment premiums and penalties shall be distributed in respect of this
Section 4.01(c)(ix);
(x) to pay to the Servicer the Special Servicer Fee;
(xi) to the Basis Risk Reserve Fund, an amount equal to the
Required Reserve Fund Deposit;
(xii) to the Basis Risk Reserve Fund, and then from the Basis
Risk Reserve Fund to the Class BB Certificates, (A) an amount equal to one
month's interest at the Pass-through Rate for such Class on the Class BB
Notional Amount and (B) any remaining Monthly Excess Cashflow Amount to
reduce the Class BB Notional Amount, until the Class BB Notional Amount has
been reduced to zero;
(xiii) to the Class X Certificate, the Class X Distributable
Amount for such Distribution Date, together with any amounts withdrawn from
the Basis Risk Reserve Fund for distribution to the Class X Certificates
pursuant to Section 4.08(c) and (d) on such date;
(xiv) to the Holders of the Class R Certificates, any amount
remaining on such date after application pursuant to clauses (i) through
(xiii) above.
In the case of the distributions described in clauses (ix),
(xi) and (xii) above, the Trustee shall account for such distributions as having
been made first to the Class X Certificates and then paid by the Class X
Certificateholders to the Basis Risk Reserve Fund.
(d) On each Distribution Date, Net Prepayment Interest
Shortfalls shall be allocated ratably among the Class A, Class M-1 and the Class
M-2 and Class B Certificates and the Class C Regular Interests in proportion to
their rights to receive interest on such Distribution Date, and prepayment
premiums and penalties shall be allocated to the Class X Certificates and
treated as additional interest distributable with respect to the Class X
Certificates on such Distribution Date; provided however that prepayment
premiums and penalties will be deposited in the Basis Risk Reserve Fund to the
extent necessary to fulfill the Trust Fund's obligations under Section
4.01(c)(xi) above. Prepayment premiums and penalties will not be deposited in
the Basis Risk Reserve Fund to fulfill the Trust Fund's obligations under
Sections 4.01(c)(ix) and (x) above.
(e) Principal payments, Realized Losses and Prepayment
Interest Shortfalls not covered by Compensating Interest shall be allocated to
the Class T1-1 Interest in the same amount as principal payments, Realized
Losses and Prepayment Interest Shortfalls not covered by Compensating Interest
are allocated to the Class A Certificates. Principal payments, Realized Losses
and Prepayment Interest Shortfalls not covered by Compensating Interest shall be
allocated to the Class T1-2 Interest in the same amount as principal payments,
Realized Losses and Prepayment Interest Shortfalls not covered by Compensating
Interest are allocated to the Class M-1 Certificates. Principal payments,
Realized Losses and Prepayment Interest Shortfalls not covered by Compensating
Interest shall be allocated to the Class T1-3 Interest in the same amount as
principal payments, Realized Losses and Prepayment Interest Shortfalls not
covered by Compensating Interest are allocated to the Class M-2 Certificates.
Principal payments, Realized Losses and Prepayment Interest Shortfalls not
covered by Compensating Interest shall be allocated to the Class T1-4 Interest
in the same amount as principal payments, Realized Losses and Prepayment
Interest Shortfalls not covered by Compensating Interest are allocated to the
Class B Certificates. Principal payments, Realized Losses and Prepayment
Interest Shortfalls not covered by Compensating Interest shall be allocated to
the Class T1-5 Interest in the same amount as principal payments, Realized
Losses and Prepayment Interest Shortfalls not covered by Compensating Interest
are allocated to the Class C Interests.
SECTION 4.02. Statements to Certificateholders.
On each Distribution Date, based on information provided by
the Servicer, the Trustee shall prepare and forward by mail to each Holder of
the Offered Certificates, a statement as to the distributions made on such
Distribution Date setting forth:
1. The amount of the distribution made on such Distribution Date
to the Holders of the Class A Certificates allocable to
principal and to interest.
2. The Class A Interest Carry Forward Amount and the Basis Risk
Shortfall for such Class and Distribution Date.
3. The amount of the distribution made on such Distribution Date
to the Holders of the Class M-1 Certificates allocable to
principal and to interest.
4. The Class M-1 Interest Carry Forward Amount and the Basis Risk
Shortfall for such Class and Distribution Date.
5. The Class M-1 Unpaid Realized Loss Amount for such
Distribution Date.
6. The Class M-1 Applied Realized Loss Amount for such
Distribution Date.
7. The Class M-1 Applied Realized Loss Amortization Amount for
such Distribution Date.
8. The amount of the distribution made on such Distribution Date
to the Holders of the Class M-2 Certificates allocable to
principal and to interest.
9. The Class M-2 Interest Carry Forward Amount and the Basis Risk
Shortfall for such Class and Distribution Date.
10. The Class M-2 Unpaid Realized Loss Amount for such
Distribution Date.
11. The Class M-2 Applied Realized Loss Amount for such
Distribution Date.
12. The Class M-2 Applied Realized Loss Amortization Amount for
such Distribution Date.
13. The amount of the distribution made on such Distribution Date
to the Holders of the Class B Certificates allocable to
principal and to interest.
14. The Class B Interest Carry Forward Amount and the Basis Risk
Shortfall for such Class and Distribution Date.
15. The Class B Unpaid Realized Loss Amount for such Distribution
Date.
16. The amount of the distribution made on such Distribution Date
to the Holders of the Class BB Certificates allocable to
principal and to interest.
17. The Class B Applied Realized Amortization Amount for such
Distribution Date.
18. The Class X Distributable Amount for such Distribution Date.
19. The Unpaid Realized Loss Amount for each applicable Class of
Certificates for such Distribution Date.
20. The Applied Realized Loss Amount for each applicable Class of
Certificates for such Distribution Date.
21. The Interest Remittance Amount for such Distribution Date.
22. The Principal Remittance Amount for such Distribution Date.
23. The Monthly Excess Cash Flow Amount for such Distribution
Date.
24. The Extra Principal Distribution Flow Amount for such
Distribution Date.
25. The Monthly Excess Interest Amount for such Distribution Date.
26. The Targeted Overcollateralization for such Distribution Date.
27. The Overcollateralization Amount for such Distribution Date.
28. The Overcollateralization Deficiency for such Distribution
Date.
29. The Overcollateralization Release Amounts for such
Distribution Date.
30. The aggregate amount of servicing compensation received by the
Servicer during the related Collection Period and such other
customary information as the Trustee deems necessary or
desirable, or which a Certificateholder reasonably requests,
to enable Certificateholders to prepare their tax returns
31. The aggregate amount of Advances for such Distribution Date.
32. The aggregate Stated Principal Balance of the Mortgage Loans
and any REO Properties at the close of business on such
Distribution Date.
33. The number, aggregate principal balance, weighted average
remaining term to maturity and weighted average Mortgage Rate
of the Mortgage Loans as of the related Due Date.
34. The number and aggregate unpaid principal balance of Mortgage
Loans (a) 30 days past due, (b) 60 days past due, (c) 90 or
more days past due, (d) as to which foreclosure proceedings
have been commenced and (e) as to which the related Mortgagor
has filed for bankruptcy.
35. With respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number of such
Mortgage Loan from the Mortgage Loan Schedule, the unpaid
principal balance and the Stated Principal Balance of such
Mortgage Loan as of the date it became an REO Property.
36. The book value of any REO Property as of the close of business
on the last Business Day of the calendar month preceding the
Distribution Date.
37. The aggregate amount of prepayment penalties collected during
the related Collection Period.
38. The aggregate amount of Principal Prepayments made during the
related Collection Period.
39. The aggregate amount of Realized Losses incurred during the
related Collection Period.
40. The aggregate amount of Extraordinary Trust Fund Expenses
withdrawn from the Collection Account or the Distribution
Account for such Distribution Date.
41. The Class Certificate Balance of each Class of Certificates,
after giving effect to the distributions, and allocations of
Applied Realized Losses, made on such Distribution Date.
42. The Certificate Factor for each such Class of Certificates
applicable to such Distribution Date.
43. The aggregate amount of any Prepayment Interest Shortfalls for
such Distribution Date, to the extent not covered by payments
by the Servicer pursuant to Section 3.24.
44. The aggregate amount of Relief Act Interest Shortfalls for
such Distribution Date.
45. The Pass-Through Rate applicable for each Class of the Offered
Certificates for such Distribution Date and the immediately
succeeding Distribution Date.
46. The three-month rolling average of 60+ Day Delinquent Loans.
47. The unpaid principal balance of each Mortgage Loan (a) which
has been substituted pursuant to Section 2.03, (b) purchased
pursuant to Section 2.03, 3.16 or 10.01 or (c) for which a
Liquidation Event has occurred.
48. Whether a Servicing Termination Trigger has occurred.
49. The balance of the Basis Risk Reserve Fund prior to the
deposit or withdrawal of any amounts on such Distribution
Date.
50. The amount of any Required Reserve Fund Deposit on such
Distribution Date.
51. The amount of any withdrawal from the Basis Risk Reserve Fund
pursuant to Section 4.01(c)(ix) and (xii).
52. The balance of the Basis Risk Reserve Fund after all deposits
and withdrawals on such Distribution Date.
In the case of information furnished pursuant to subclauses 1
through 19 above, the amounts shall be expressed as a dollar amount per Single
Certificate of the relevant Class.
Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to each Person who at any time during
the calendar year was a Holder of a Regular Certificate a statement containing
the information relating to monthly distributions above for the related
Certificate as applicable, aggregated for such calendar year or applicable
portion thereof during which such person was a Certificateholder. Such
obligation of the Trustee shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Trustee or
the Servicer pursuant to any requirements of the Code as from time to time are
in force.
On each Distribution Date, the Trustee shall forward to the
Depositor, to each Holder of a Residual Certificate and to the Servicer, a copy
of the reports forwarded to each Class of Certificateholder on such Distribution
Date and a statement setting forth the amounts, if any, actually distributed
with respect to the Residual Certificates, respectively, on such Distribution
Date.
Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to each Person who at any time during
the calendar year was a Holder of a Residual Certificate a statement setting
forth the amount, if any, actually distributed with respect to the Residual
Certificates, as appropriate, aggregated for such calendar year or applicable
portion thereof during which such Person was a Certificateholder.
The Trustee shall, upon request, furnish to each
Certificateholder, during the term of this Agreement, such periodic, special, or
other reports or information, whether or not provided for herein, as shall be
reasonable with respect to the Certificateholder, or otherwise with respect to
the purposes of this Agreement, all such reports or information to be provided
at the expense of the Certificateholder in accordance with such reasonable and
explicit instructions and directions as the Certificateholder may provide. For
purposes of this Section 4.02, the Trustee's duties are limited to the extent
that the Trustee receives timely reports as required from the Servicer.
On each Distribution Date, the Trustee shall provide Bloomberg
Financial Markets, L.P. ("Bloomberg") Cusip Level Factors for each Class of
Offered Certificates and loan-level information with respect to the Mortgage
Pool, in each case as of such Distribution Date, using a format and media
mutually acceptable to the Trustee and Bloomberg. In connection with providing
the information specified in this Section 4.02 to Bloomberg, the Trustee and any
director, officer, employee or agent of the Trustee shall be indemnified and
held harmless by the Servicer, to the extent and in the manner provided in
Section 8.05.
SECTION 4.03. Remittance Reports; Advances.
(a) No later than the third Business Day following the
Determination Date, the Servicer shall deliver to the Trustee by overnight mail
a computer readable magnetic tape or diskette (or by such other means as the
Servicer or the Trustee, as the case may be, may agree from time to time) a
Remittance Report with respect to the related Distribution Date. The Trustee
shall not be responsible to recompute, recalculate or verify any information
provided to it by the Servicer.
(b) The amount of Advances to be made by the Servicer for any
Distribution Date shall equal, subject to Section 4.03(d), the sum of (i) the
aggregate amount of Monthly Payments (with each interest portion thereof net of,
the related Servicing Fee), due during the related Collection Period in respect
of the Mortgage Loans, which Monthly Payments were delinquent as of the close of
business on the related Servicer Remittance Date and (ii) with respect to each
REO Property, which REO Property was acquired during or prior to the related
Collection Period and as to which REO Property an REO Disposition did not occur
during the related Collection Period, an amount equal to the excess, if any, of
the REO Imputed Interest on such REO Property for the most recently ended
calendar month, over the net income from such REO Property transferred to the
Distribution Account pursuant to Section 3.23 for distribution on such
Distribution Date.
On or before 5:00 p.m. New York time on the Servicer
Remittance Date, the Servicer shall remit in immediately available funds to the
Trustee for deposit in the Distribution Account an amount equal to the aggregate
amount of Advances, if any, to be made in respect of the Mortgage Loans and REO
Properties for the related Distribution Date from its own funds. The Trustee
will provide notice to the Servicer by telecopy by the close of business on any
Servicer Remittance Date in the event that the amount remitted by the Servicer
to the Trustee on such date is less than the Advances required to be made by the
Servicer for the related Distribution Date.
In the event that the Servicer fails for any reason to make an
Advance required to be made pursuant to Section 4.03 on or before the Servicer
Remittance Date, the Trustee shall, on or before the related Distribution Date,
deposit in the Distribution Account an amount equal to the excess of (a)
Advances required to be made by the Servicer that would have been deposited in
such Distribution Account over (b) the amount of any Advances made by the
Servicer with respect to such Distribution Date; provided, however, that the
Trustee shall be required to make such Advance only if it is not prohibited by
law from doing so and it has determined that such Advance would be recoverable
from amounts to be received with respect to such Mortgage Loan, including late
payments, Liquidation Proceeds, Insurance Proceeds, or otherwise. The Trustee
shall be entitled to be reimbursed from the Distribution Account for Advances
made by it pursuant to this Section 4.03 as if it were the Servicer.
(c) The obligation of the Servicer to make such Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan or REO Property, shall
continue until a Final Recovery Determination in connection therewith or the
removal thereof from the Trust Fund pursuant to any applicable provision of this
Agreement, except as otherwise provided in this Section.
(d) Notwithstanding anything herein to the contrary, no
Advance or Servicing Advance shall be required to be made hereunder by the
Servicer if such Advance or Servicing Advance would, if made, constitute a
Nonrecoverable Advance. The determination by the Servicer that it has made a
Nonrecoverable Advance or that any proposed Advance or Servicing Advance, if
made, would constitute a Nonrecoverable Advance, shall be evidenced by an
Officers' Certificate of the Servicer, as applicable, delivered to the Depositor
and the Trustee.
SECTION 4.04. Allocation of Realized Losses.
(a) Prior to each Determination Date, the Servicer shall
determine as to each Mortgage Loan and REO Property: (i) the total amount of
Realized Losses, if any, incurred in connection with any Final Recovery
Determinations made during the related Collection Period; and (ii) the
respective portions of such Realized Losses allocable to interest and allocable
to principal. Prior to each Determination Date, the Servicer shall also
determine as to each Mortgage Loan: (i) the total amount of Realized Losses, if
any, incurred in connection with any Deficient Valuations made during the
related Collection Period; and (ii) the total amount of Realized Losses, if any,
incurred in connection with Debt Service Reductions in respect of Monthly
Payments due during the related Collection Period. The information described in
the two preceding sentences that is to be supplied by the Servicer shall be set
forth in the related Remittance Report.
(b) If, after giving effect to the distribution of the
Principal Distribution Amount on any Distribution Date the aggregate Class
Certificate Balance of the Offered Certificates exceeds the Pool Principal
Balance as of the end of the related Collection Period, such excess will be
allocated against the Class B, Class M-2 and Class M-1 Certificates, in that
order and until the respective Class Certificate Balances thereof are reduced to
zero. Any allocation of such excess in reduction of a Class Certificate Balance
is referred to as an "Applied Realized Loss Amount." Any such reduction of a
Class Certificate Balance will not be reversed or reinstated. However, on future
Distribution Dates, Certificateholders of the related Class may receive amounts
in respect of prior reductions in the related Class Certificate Balances as set
forth in Section 4.01(c).
All Realized Losses and all other losses allocated to a Class
of Certificates hereunder will be allocated among the Certificates of such Class
in proportion to the Percentage Interests evidenced thereby.
SECTION 4.05. Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the
Trustee shall comply with all federal withholding requirements respecting
payments to Certificateholders of interest or original issue discount that the
Trustee reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee does withhold any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall indicate the amount withheld to such
Certificateholders.
SECTION 4.06.
[Reserved]
SECTION 4.07. SEC Reporting.
Within 15 days after each Distribution Date, the Trustee shall
file with the Securities Exchange Commission, via the Electronic Data Gathering
and Retrieval System, a Form 8-K with a copy of the statement to
Certificateholders for such Distribution Date delivered pursuant to Section 4.02
included as an exhibit thereto. Prior to March 30, 2000, the Trustee shall file
a Form 10-K in substance conforming to the Depositor's no-action letter and Form
15D (if applicable) with respect to the Trust Fund. The Depositor hereby grants
to the Trustee a limited power of attorney to execute and file each such Form
8-K on behalf of the Depositor. Such power of attorney shall continue until the
earlier of (i) receipt by the Trustee from the Depositor of written termination
of such power of attorney and (ii) the termination of the Trust Fund. At least
one Business Day prior to filing any Form 8-K or Form 10-K pursuant to this
Section 4.07, the Trustee shall deliver a copy of such Form 8-K or Form 10-K, as
the case may be, to the Depositor.
SECTION 4.08. Basis Risk Reserve Fund.
(a) On the Closing Date, the Trustee shall establish and
maintain in its name, in trust for the benefit of the holders of the Class A,
Class M-1, Class M-2 and Class B Certificates, the Basis Risk Reserve Fund. The
Basis Risk Reserve Fund shall be an Eligible Account, and funds on deposit
therein shall be held separate and apart from, and shall not be commingled with,
any other moneys, including, without limitation, other moneys of the Trustee
held pursuant to this Agreement.
(b) On each Distribution Date, the Trustee shall transfer the
Required Reserve Fund Deposit from the Distribution Account to the Basis Risk
Reserve Fund pursuant to Section 4.01(c)(xi). The Trustee shall make withdrawals
from the Basis Risk Reserve Fund to make distributions pursuant to Sections
4.01(c)(ix) and (xii).
(c) Funds in the Basis Risk Reserve Fund may be invested in
Permitted Investments. Any earnings on such amounts shall be distributed to the
Class X Certificate pursuant to Section 4.01(c)(xiii). The Class X Certificate
shall evidence ownership of the Basis Risk Reserve Fund for federal income tax
purposes and the Holder thereof shall direct the Trustee, in writing, as to
investment of amounts on deposit therein. In the absence of written direction to
the Trustee from the Holder of the Class X Certificate, all funds in the Basis
Risk Reserve Fund shall remain uninvested.
(d) Upon termination of the Trust Fund, any amounts remaining
in the Basis Risk Reserve Fund shall be distributed to the Class X
Certificateholder pursuant to Section 4.01(c)(xiii).
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
(a) The Certificates in the aggregate will represent the
entire beneficial ownership interest in the Mortgage Loans and all other assets
included in the Trust Fund. At the Closing Date, the Class Certificate Balance
of the Offered Certificates will equal 100% of the aggregate principal balance
of the Mortgage Loans in the Mortgage Pool as of the Cut-off Date.
The Certificates will be substantially in the forms annexed
hereto as Exhibits A-1 through A-7. The Certificates of each Class will be
issuable in registered form only, in denominations of authorized Percentage
Interests as described in the definition thereof. Each Certificate will share
ratably in all rights of the related Class.
Upon original issue, the Certificates shall be executed and
delivered by the Trustee and the Trustee shall cause the Certificates to be
authenticated by the Certificate Registrar to or upon the order of the
Depositor. The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized signatory. Certificates bearing the
manual or facsimile signatures of individuals who were at any time the proper
officers of the Trustee shall bind the Trustee, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of such Certificates. No Certificate shall be entitled to any benefit
under this Agreement or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form provided
herein executed by the Certificate Registrar by manual signature, and such
certificate of authentication shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
(b) Each Class of Offered Certificates shall initially be
issued as one or more Certificates registered in the name of the Depository or
its nominee and, except as provided below, registration of such Certificates may
not be transferred by the Trustee except to another Depository that agrees to
hold such Certificates for the respective Certificate Owners with Ownership
Interests therein. The Certificate Owners shall hold their respective Ownership
Interests in and to such Certificates through the book-entry facilities of the
Depository and, except as provided below, shall not be entitled to definitive,
fully registered Certificates ("Definitive Certificates") in respect of such
Ownership Interests. All transfers by Certificate Owners of their respective
Ownership Interests in the Book-Entry Certificates shall be made in accordance
with the procedures established by the Depository Participant or brokerage firm
representing such Certificate Owner. Each Depository Participant shall only
transfer the Ownership Interests in the Book-Entry Certificates of Certificate
Owners it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures.
The Trustee, the Servicer, and the Depositor may for all
purposes (including the making of payments due on the Book-Entry Certificates)
deal with the Depository as the authorized representative of the Certificate
Owners with respect to the Book-Entry Certificates for the purposes of
exercising the rights of Certificateholders hereunder. The rights of Certificate
Owners with respect to the Book-Entry Certificates shall be limited to those
established by law and agreements between such Certificate Owners and the
Depository Participants and brokerage firms representing such Certificate
Owners. Multiple requests and directions from, and votes of, the Depository as
Holder of the Book-Entry Certificates with respect to any particular matter
shall not be deemed inconsistent if they are made with respect to different
Certificate Owners. The Trustee may establish a reasonable record date in
connection with solicitations of consents from or voting by Certificateholders
and shall give notice to the Depository of such record date.
If (i)(A) the Depositor or the Depository advises the Trustee
in writing that the Depository is no longer willing or able to properly
discharge its responsibilities as Depository, and (B) the Depositor is unable to
locate a qualified successor, (ii) the Depositor at its option advises the
Trustee in writing that it elects to terminate the book-entry system through the
Depository or (iii) after the occurrence of a Servicing Termination Event,
Certificate Owners representing in the aggregate not less than 51% of the
Ownership Interests of the Book-Entry Certificates advise the Trustee through
the Depository, in writing, that the continuation of a book-entry system through
the Depository is no longer in the best interests of the Certificate Owners, the
Trustee shall notify all Certificate Owners, through the Depository, of the
occurrence of any such event and of the availability of Definitive Certificates
to Certificate Owners requesting the same. Upon surrender to the Trustee of the
Book-Entry Certificates by the Depository, accompanied by registration
instructions from the Depository for registration of transfer, the Trustee shall
issue the Definitive Certificates. Such Definitive Certificates will be issued
in minimum denominations of $100,000, except that any beneficial ownership that
was represented by a Book-Entry Certificate in an amount less than $100,000
immediately prior to the issuance of a Definitive Certificate shall be issued in
a minimum denomination equal to the amount represented by such Book-Entry
Certificate. None of the Depositor, the Servicer or the Trustee shall be liable
for any delay in the delivery of such instructions and may conclusively rely on,
and shall be protected in relying on, such instructions. Upon the issuance of
Definitive Certificates all references herein to obligations imposed upon or to
be performed by the Depository shall be deemed to be imposed upon and performed
by the Trustee, to the extent applicable with respect to such Definitive
Certificates, and the Trustee shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder.
SECTION 5.02. Registration of Transfer and Exchange
of Certificates.
(a) The Trustee shall cause to be kept at one of the offices
or agencies to be appointed by the Trustee in accordance with the provisions of
Section 8.11 a Certificate Register for the Certificates in which, subject to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of transfers and exchanges of Certificates
as herein provided. The Trustee will initially serve as Certificate Registrar
for the purpose of registering Certificates and transfers and exchanges of
Certificates as herein provided. The Certificate Registrar may appoint, by a
written instrument delivered to the Servicer and the Depositor, any other bank
or trust company to act as Certificate Registrar under such conditions as the
predecessor Certificate Registrar may prescribe, provided that the predecessor
Certificate Registrar shall not be relieved of any of its duties or
responsibilities hereunder by reason of such appointment. If the Trustee shall
at any time not be the Certificate Registrar, the Trustee shall have and
maintain the right to inspect the Certificate Register or to obtain a copy
thereof at all reasonable times, and to rely conclusively upon a certificate of
the Certificate Registrar as to the information set forth in the Certificate
Register.
(b) No transfer of a Class BB Certificate shall be made to a
non-United States person and no transfer of any Class BB Certificate, Class X
Certificate or Residual Certificate shall be made unless that transfer is made
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and effective registration or qualification
under applicable state securities laws, or is made in a transaction that does
not require such registration or qualification. In the event that such a
transfer of a Class BB Certificate, a Class X Certificate or a Residual
Certificate is to be made without registration or qualification, the Trustee and
the Certificate Registrar shall each require receipt of: (i) if such transfer is
purportedly being made in reliance upon Rule 144A under the 1933 Act, written
certifications from the Certificateholder desiring to effect the transfer and
from such Certificateholder's prospective transferee, substantially in the forms
attached hereto as Exhibit E; and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration
under the 1933 Act (which Opinion of Counsel shall not be an expense of the
Trust Fund or of the Depositor or the Trustee in its capacity as such), together
with copies of the written certification(s) of the Certificateholder desiring to
effect the transfer and/or such Certificateholder's prospective transferee upon
which such Opinion of Counsel is based, if any; provided, however, that no such
opinion shall be required in connection with the transfers effected on the
Closing Date. None of the Depositor, the Certificate Registrar or the Trustee is
obligated to register or qualify the Residual Certificates under the 1933 Act or
any other securities laws or to take any action not otherwise required under
this Agreement to permit the transfer of such Certificates without registration
or qualification. Any Certificateholder desiring to effect the transfer of a
Class BB Certificate, a Class X or a Residual Certificate shall, and does hereby
agree to, indemnify the Trustee, the Depositor, the Certificate Registrar and
the Servicer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.
(c) No transfer of a Residual Certificate or any interest
therein shall be made to (i) any employee benefit plan or other retirement
arrangement, including individual retirement accounts and annuities, Keogh plans
and collective investment funds and separate accounts in which such plans,
accounts or arrangements are invested, that is subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the Code (each,
a "Plan") or (ii) any Person who is directly or indirectly purchasing the
Residual Certificate or interest therein on behalf of, as named fiduciary of, as
trustee of, or with assets of a Plan, unless the Trustee and the Certificate
Registrar are provided with a certification of facts or an Opinion of Counsel
which establishes to the satisfaction of each that such transfer will not result
in a violation of Section 406 of ERISA or Section 4975 of the Code or cause any
of the Trustee, the Certificate Registrar or the Servicer to be deemed a
fiduciary of such Plan or result in the imposition of an excise tax under
Section 4975 of the Code. In the absence of its having received the
certification of facts or Opinion of Counsel contemplated by the preceding
sentence, the Trustee and the Certificate Registrar shall require the
prospective transferee of any Residual Certificate to certify either (a) it is
not a Plan, (b) that it is neither (i) a Plan nor (ii) a Person who is directly
or indirectly purchasing the Residual Certificate on behalf of, as named
fiduciary of, as trustee of, or with assets of a Plan (including any insurance
company using funds in its general or separate accounts that may constitute
"plan assets") or (c) that (i) it is an insurance company and (ii) all of the
funds to be used by it to purchase the Certificates to be purchased by it are
held in an "insurance company general account" (as such term is defined in
Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and
that the purchase and holding of such Certificates are covered by PTCE 95-60.
(d) (i) Each Person who has or who acquires any Ownership
Interest in a Residual Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by the
following provisions and to have irrevocably authorized the Trustee or its
designee under clause (iii)(A) below to deliver payments to a Person other than
such Person and to negotiate the terms of any mandatory sale under clause
(iii)(B) below and to execute all instruments of Transfer and to do all other
things necessary in connection with any such sale. The rights of each Person
acquiring any Ownership Interest in a Residual Certificate are expressly subject
to the following provisions:
(A) Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall be a
Permitted Transferee and shall promptly notify
the Trustee of any change or impending change in
its status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any
Ownership Interest in a Residual Certificate,
the Trustee shall require delivery to it, and
shall not register the Transfer of any Residual
Certificate until its receipt of, an affidavit
and agreement (a "Transfer Affidavit and
Agreement" attached hereto as Exhibit E) from
the proposed Transferee, in form and substance
satisfactory to the Trustee, representing and
warranting, among other things, that such
Transferee is a Permitted Transferee, that it is
not acquiring its Ownership Interest in the
Residual Certificate that is the subject of the
proposed Transfer as a nominee, trustee or agent
for any Person that is not a Permitted
Transferee, that for so long as it retains its
Ownership Interest in a Residual Certificate, it
will endeavor to remain a Permitted Transferee,
and that it has reviewed the provisions of this
Section 5.02(d) and agrees to be bound by them.
(C) Notwithstanding the delivery of a Transfer
Affidavit and Agreement by a proposed Transferee
under clause (B) above, if a Responsible Officer
of the Trustee who is assigned to this
transaction has actual knowledge that the
proposed Transferee is not a Permitted
Transferee, no Transfer of an Ownership Interest
in a Residual Certificate to such proposed
Transferee shall be effected.
(D) Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall agree
(x) to require a Transfer Affidavit and
Agreement (in the form attached hereto as
Exhibit E) from any other Person to whom such
Person attempts to transfer its Ownership
Interest in a Residual Certificate and (y) not
to transfer its Ownership Interest unless it
provides a Transferor Affidavit (in the form
attached hereto as Exhibit E) to the Trustee
stating that, among other things, it has no
actual knowledge that such other Person is not a
Permitted Transferee.
(E) Each Person holding or acquiring an Ownership
Interest in a Residual Certificate, by
purchasing an Ownership Interest in such
Certificate, agrees to give the Trustee written
notice that it is a "pass-through interest
holder" within the meaning of temporary Treasury
regulation Section 1.67-3T(a)(2)(i)(A)
immediately upon acquiring an Ownership Interest
in a Residual Certificate, if it is, or is
holding an Ownership Interest in a Residual
Certificate on behalf of, a "pass-through
interest holder."
(ii) The Trustee will register the Transfer of any Residual
Certificate only if it shall have received the Transfer Affidavit and
Agreement and all of such other documents as shall have been reasonably
required by the Trustee as a condition to such registration. In addition,
no Transfer of a Residual Certificate shall be made unless the Trustee
shall have received a representation letter from the Transferee of such
Certificate to the effect that such Transferee is a Permitted Transferee.
(iii) (A) If any purported Transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
5.02(d), then the last preceding Permitted Transferee shall be restored, to
the extent permitted by law, to all rights as holder thereof retroactive to
the date of registration of such Transfer of such Residual Certificate. The
Trustee shall be under no liability to any Person for any registration of
Transfer of a Residual Certificate that is in fact not permitted by this
Section 5.02(d) or for making any payments due on such Certificate to the
holder thereof or for taking any other action with respect to such holder
under the provisions of this Agreement.
(B) If any purported Transferee shall become a
holder of a Residual Certificate in violation of
the restrictions in this Section 5.02(d) and to
the extent that the retroactive restoration of
the rights of the holder of such Residual
Certificate as described in clause (iii)(A)
above shall be invalid, illegal or
unenforceable, then the Trustee shall have the
right, without notice to the holder or any prior
holder of such Residual Certificate, to sell
such Residual Certificate to a purchaser
selected by the Trustee on such terms as the
Trustee may choose. Such purported Transferee
shall promptly endorse and deliver each Residual
Certificate in accordance with the instructions
of the Trustee. Such purchaser may be the
Trustee itself or any Affiliate of the Trustee.
The proceeds of such sale, net of the
commissions (which may include commissions
payable to the Trustee or its Affiliates),
expenses and taxes due, if any, will be remitted
by the Trustee to such purported Transferee. The
terms and conditions of any sale under this
clause (iii)(B) shall be determined in the sole
discretion of the Trustee, and the Trustee shall
not be liable to any Person having an Ownership
Interest in a Residual Certificate as a result
of its exercise of such discretion.
(iv) The Trustee shall make available to the Internal Revenue
Service and those Persons specified by the REMIC Provisions all information
necessary to compute any tax imposed (A) as a result of the Transfer of an
Ownership Interest in a Residual Certificate to any Person who is a
Disqualified Organization, including the information described in Treasury
regulations sections 1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to the
"excess inclusions" of such Residual Certificate and (B) as a result of any
regulated investment company, real estate investment trust, common trust
fund, partnership, trust, estate or organization described in Section 1381
of the Code that holds an Ownership Interest in a Residual Certificate
having as among its record holders at any time any Person which is a
Disqualified Organization. Reasonable compensation for providing such
information may be accepted by the Trustee. (v) The provisions of this
Section 5.02(d) set forth prior to this subsection (v) may be modified,
added to or eliminated, provided that there shall have been delivered to
the Trustee at the expense of the party seeking to modify, add to or
eliminate any such provision the following:
(A) written notification from each Rating Agency to
the effect that the modification, addition to or
elimination of such provisions will not cause
such Rating Agency to downgrade its then-current
ratings of any Class of Certificates; and
(B) an Opinion of Counsel, in form and substance
satisfactory to the Trustee, to the effect that
such modification of, addition to or elimination
of such provisions will not cause any REMIC
created hereunder to cease to qualify as a REMIC
and will not cause any REMIC created hereunder
to be subject to an entity-level tax caused by
the Transfer of any Residual Certificate to a
Person that is not a Permitted Transferee or (y)
a Person other than the prospective transferee
to be subject to a REMIC-tax caused by the
Transfer of a Residual Certificate to a Person
that is not a Permitted Transferee.
(e) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at any office or agency of the
Trustee maintained for such purpose pursuant to Section 8.11, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in the
name of the designated Transferee or Transferees, one or more new Certificates
of the same Class of a like aggregate Percentage Interest.
(f) At the option of the Holder thereof, any Certificate may
be exchanged for other Certificates of the same Class with authorized
denominations and a like aggregate Percentage Interest, upon surrender of such
Certificate to be exchanged at any office or agency of the Trustee maintained
for such purpose pursuant to Section 8.11. Whenever any Certificates are so
surrendered for exchange the Trustee shall execute and cause the Certificate
Registrar to authenticate and deliver the Certificates which the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for transfer or exchange shall (if so required by the
Trustee) be duly endorsed by, or be accompanied by a written instrument of
transfer in the form satisfactory to the Trustee and the Certificate Registrar
duly executed by, the Holder thereof or his attorney duly authorized in writing.
(g) No service charge to the Certificateholders shall be made
for any transfer or exchange of Certificates, but the Trustee may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
(h) All Certificates surrendered for transfer and exchange
shall be canceled and destroyed by the Certificate Registrar in accordance with
its customary procedures.
(i) The Trustee will cause the Certificate Registrar (unless
the Trustee is acting as Certificate Registrar) to provide notice to the Trustee
of each transfer of a Certificate and to provide the Trustee with an updated
copy of the Certificate Register on the first Business Day in January and June
of each year, commencing January 2000.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates.
If (i) any mutilated Certificate is surrendered to the Trustee
or the Certificate Registrar, or the Trustee and the Certificate Registrar
receive evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee and the Certificate
Registrar such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of actual knowledge by the Trustee or the
Certificate Registrar that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
the same Class and of like denomination and Percentage Interest. Upon the
issuance of any new Certificate under this Section, the Trustee may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Certificate Registrar) connected therewith. Any replacement
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the Trust Fund created hereunder, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
If, after the delivery of such replacement Certificate, a bona
fide purchaser of the original Certificate in lieu of which such replacement
Certificate was issued presents for payment or registration such original
Certificate, the Trustee or the Certificate Registrar shall be entitled to
recover such replacement Certificate from the person to whom it was delivered or
any person taking therefrom, except a bona fide purchaser, and shall be entitled
to recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expenses incurred by the Trustee or the Certificate
Registrar in connection therewith.
SECTION 5.04. Persons Deemed Owners.
The Depositor, the Servicer, the Trustee, the Certificate
Registrar and any agent of any of them may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 4.01 and for all other purposes
whatsoever, and none of the Depositor, the Servicer, the Trustee, the
Certificate Registrar or any agent of any of them shall be affected by notice to
the contrary.
SECTION 5.05. Certain Available Information.
The Trustee shall maintain at its Corporate Trust Office and
shall make available free of charge during normal business hours for review by
any Holder of a Certificate or any Person identified to the Trustee as a
prospective transferee of a Certificate, originals or copies of the following
items: (A) this Agreement and any amendments hereof entered into pursuant to
Section 12.01, (B) all monthly statements required to be delivered to
Certificateholders of the relevant Class pursuant to Section 4.02 since the
Closing Date, and all other notices, reports, statements and written
communications delivered to the Certificateholders of the relevant Class
pursuant to this Agreement since the Closing Date and (C) all certifications
delivered by a Responsible Officer of the Trustee since the Closing Date
pursuant to Section 11.01(h). Copies and mailing of any and all of the foregoing
items will be available from the Trustee upon request at the expense of the
Person requesting the same.
ARTICLE VI
THE DEPOSITOR, AND THE SERVICER
SECTION 6.01. Liability of the Depositor and the Servicer.
The Depositor and the Servicer each shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
by this Agreement and undertaken hereunder by the Depositor and the Servicer
herein.
SECTION 6.02. Merger or Consolidation of the Depositor
or the Servicer.
Subject to the following paragraph, the Depositor will keep in
full effect its existence, rights and franchises as a corporation under the laws
of the jurisdiction of its incorporation. Subject to the following paragraph,
the Servicer will keep in full effect its existence, rights and franchises as a
corporation under the laws of the jurisdiction of its incorporation and its
qualification as an approved conventional seller/servicer for FNMA or FHLMC in
good standing. The Depositor and the Servicer each will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement.
The Depositor or the Servicer may be merged or consolidated
with or into any Person, or transfer all or substantially all of its assets to
any Person, in which case any Person resulting from any merger or consolidation
to which the Depositor or the Servicer shall be a party, or any Person
succeeding to the business of the Depositor or the Servicer, shall be the
successor of the Depositor or the Servicer, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that (i) the successor or surviving Person to the Servicer
shall be qualified to service mortgage loans on behalf of FNMA or FHLMC; and
(ii) the Rating Agencies' ratings and shadow ratings of the Offered Certificates
in effect immediately prior to such merger or consolidation will not be
qualified, reduced or withdrawn as a result thereof (as evidenced by a letter to
such effect from the Rating Agencies).
SECTION 6.03. Limitation on Liability of the Depositor,
the Servicer and Others.
None of the Depositor, the Servicer or any of the directors,
officers, employees or agents of the Depositor or the Servicer shall be under
any liability to the Trust Fund or the Certificateholders for any action taken
or for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor, the Servicer or any such person against any
material breach of warranties, representations or covenants made herein, or
against any specific liability imposed on the Servicer pursuant hereto, or
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. The Depositor,
the Servicer and any director, officer, employee or agent of the Depositor or
the Servicer may rely in good faith on any document of any kind which, prima
facie, is properly executed and submitted by any Person respecting any matters
arising hereunder. The Depositor, the Servicer, and any director, officer,
employee or agent of the Depositor, or the Servicer shall be indemnified and
held harmless by the Trust Fund against any loss, liability or expense incurred
in connection with any legal action relating to this Agreement or the
Certificates, other than any loss, liability or expense relating to any specific
Mortgage Loan or Mortgage Loans (except as any such loss, liability or expense
shall be otherwise reimbursable pursuant to this Agreement) or any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
gross negligence in the performance of their respective duties hereunder or by
reason of reckless disregard of obligations and duties hereunder. Neither the
Depositor nor the Servicer shall be under any obligation to appear in, prosecute
or defend any legal action unless such action is related to its respective
duties under this Agreement and, in its opinion, does not involve it in any
expense or liability; provided, however, that each of the Depositor and the
Servicer may in its discretion undertake any such action which it may deem
necessary or desirable with respect to this Agreement and the rights and duties
of the parties hereto and the interests of the Certificateholders hereunder. In
such event, unless the Depositor or the Servicer acts without the consent of the
Holders of Certificates entitled to at least 51% of the Voting Rights, the legal
expenses and costs of such action and any liability resulting therefrom (except
any loss, liability or expense incurred by reason of willful misfeasance, bad
faith or gross negligence in the performance of their respective duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder) shall be expenses, costs and liabilities of the Trust Fund, and the
Depositor and the Servicer shall be entitled to be reimbursed therefor from the
Collection Account as and to the extent provided in Section 3.11, any such right
of reimbursement being prior to the rights of the Certificateholders to receive
any amount in the Collection Account.
SECTION 6.04. Limitation on Resignation of the Servicer .
Except as otherwise provided herein, the Servicer shall not
resign from the obligations and duties hereby imposed on it except upon
determination that its duties hereunder are no longer permissible under
applicable law. Any such determination pursuant to the preceding sentence
permitting the resignation of the Servicer shall be evidenced by an Opinion of
Counsel to such effect obtained at the expense of the Servicer and delivered to
the Trustee. No resignation of the Servicer shall become effective until the
Trustee or a successor servicer shall have assumed the Servicer's
responsibilities, duties, liabilities (other than those liabilities arising
prior to the appointment of such successor) and obligations under this
Agreement.
Except as expressly provided herein, the Servicer shall not
assign or transfer any of its rights, benefits or privileges hereunder to any
other Person, or delegate to or subcontract with, or authorize or appoint any
other Person to perform any of the duties, covenants or obligations to be
performed by the Servicer hereunder. The Trustee and the Depositor hereby
specifically (i) consent to the pledge and assignment by the Servicer of all of
the Servicer's right, title and interest in, to and under this Agreement to
First Union, for the benefit of certain lenders, and (ii) provided that no
Servicing Termination Event exists, agree that upon delivery to the Trustee by
First Union of a letter signed by the Servicer whereunder the Servicer shall
resign as Servicer under this Agreement, the Trustee shall appoint First Union
or its designee as successor Servicer, provided that at the time of such
appointment, First Union or such designee meets the requirements of a successor
Servicer pursuant to Section 7.02(a) hereof and agrees to be subject to the
terms of this Agreement. If, pursuant to any provision hereof, the duties of the
Servicer are transferred to a successor, the entire amount of the Servicing Fee
and other compensation payable to the Servicer pursuant hereto shall thereafter
be payable to such successor.
SECTION 6.05. Rights of the Depositor and Others in
Respect of the Servicer.
The Servicer shall afford the Depositor and the Trustee, upon
reasonable notice and at the expense of the requesting party, during normal
business hours, access to all records maintained by the Servicer in respect of
its rights and obligations hereunder and access to officers of the Servicer
responsible for such obligations. Upon request, the Servicer shall furnish to
the Depositor and the Trustee its most recent financial statements and such
other information relating to its capacity to perform its obligations under this
Agreement it possesses. To the extent such information is not otherwise
available to the public, the Depositor and the Trustee shall not disseminate any
information obtained pursuant to the preceding two sentences without the
Servicer's written consent, except as required pursuant to this Agreement or to
the extent that it is appropriate to do so (i) in working with legal counsel,
auditors, taxing authorities or other governmental agencies or (ii) pursuant to
any law, rule, regulation, order, judgment, writ, injunction or decree of any
court or governmental authority having jurisdiction over the Depositor, the
Trustee or the Trust Fund, and in either case, the Depositor or the Trustee, as
the case may be, shall use its best efforts to assure the confidentiality of any
such disseminated non-public information. The Depositor may, but is not
obligated to, enforce the obligations of the Servicer under this Agreement and
may, but is not obligated to, perform, or cause a designee to perform, any
defaulted obligation of the Servicer under this Agreement or exercise the rights
of the Servicer under this Agreement; provided that the Servicer shall not be
relieved of any of its obligations under this Agreement by virtue of such
performance by the Depositor or its designee. The Depositor shall not have any
responsibility or liability for any action or failure to act by the Servicer and
is not obligated to supervise the performance of the Servicer under this
Agreement or otherwise.
ARTICLE VII
DEFAULT
SECTION 7.01. Servicing Termination Events.
"Servicing Termination Events" wherever used herein, means any
one of the following events:
(i) any failure by the Servicer to remit to the Trustee for
distribution to the Certificateholders any payment (other than a Advance
required to be made from its own funds on any Servicer Remittance Date
pursuant to Section 4.03) required to be made under the terms of the
Certificates and this Agreement which continues unremedied for a period of
one Business Day after the date upon which written notice of such failure,
requiring the same to be remedied, shall have been given to the Servicer by
the Depositor or the Trustee (in which case notice shall be provided by
telecopy), or to the Servicer, the Depositor and the Trustee by the Holders
of Certificates entitled to at least 25% of the Voting Rights; or
(ii) any failure (other than a failure identified in clause
(vi) below) on the part of the Servicer duly to observe or perform in any
material respect any other of the covenants or agreements on the part of
the Servicer contained in the Certificates or in this Agreement which
continues unremedied for a period of 30 days after the earlier of (a) the
date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by the Depositor or the
Trustee, or to the Servicer, the Depositor and the Trustee by the Holders
of Certificates entitled to at least 25% of the Voting Rights and (b)
actual knowledge of such failure by a Servicing Officer of the Servicer; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case under
any present or future federal or state bankruptcy, insolvency or similar
law or the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceeding, or for the winding-up or liquidation of its affairs,
shall have been entered against the Servicer and such decree or order shall
have remained in force undischarged or unstayed for a period of 90 days; or
(iv) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings of or
relating to it or of or relating to all or substantially all of its
property; or
(v) the Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage
of any applicable insolvency or reorganization statute, make an assignment
for the benefit of its creditors, or voluntarily suspend payment of its
obligations; or
(vi) any failure of the Servicer to make any Advance required
to be made from its own funds pursuant to Section 4.03 or failure to make
any payment required pursuant to Section 3.24 which continues unremedied
until 5:00 p.m. New York time on the Business Day immediately following the
date on which such Advance or payment is required to be made; or
(vii) a Servicing Termination Trigger has occurred and is
continuing.
Subject to Article IX, if a Servicing Termination Event
described in clauses (ii) through (v) of this Section shall occur, then, and in
each and every such case, so long as such Servicing Termination Event shall not
have been remedied, the Depositor or the Trustee may, and at the written
direction of the Holders of Certificates entitled to at least 51% of Voting
Rights, the Trustee shall, by notice in writing to the Servicer, (and to the
Depositor if given by the Trustee or to the Trustee if given by the Depositor),
terminate all of the rights and obligations of the Servicer, in its capacity as
the Servicer, under this Agreement, to the extent permitted by law, and in and
to the Mortgage Loans and the proceeds thereof. If a Servicing Termination Event
described in clause (i), (vi) or (vii) hereof shall occur, the Trustee shall, by
notice in writing to the Servicer, and the Depositor, terminate all of the
rights and obligations of the Servicer in its capacity as Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof. On or after
the receipt by the Servicer of such written notice, all authority and power of
the Servicer under this Agreement, whether with respect to the Certificates
(other than as a Holder of any Certificate) or the Mortgage Loans or otherwise,
shall pass to and be vested in the Trustee pursuant to and under this Section,
and, without limitation, the Trustee is hereby authorized and empowered, as
attorney-in-fact or otherwise, to execute and deliver, on behalf of and at the
expense of the Servicer any and all documents and other instruments and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. The Servicer agrees promptly (and in any event no later than ten
Business Days subsequent to such notice) to provide the Trustee with all
documents and records requested by it to enable it to assume the Servicer's
functions under this Agreement, and to cooperate with the Trustee in effecting
the termination of the Servicer's responsibilities and rights under this
Agreement, including, without limitation, the transfer within one Business Day
to the Trustee for administration by it of all cash amounts which at the time
shall be or should have been credited by the Servicer to the Collection Account
held by or on behalf of the Servicer, the Distribution Account or any REO
Account or Servicing Account held by or on behalf of the Servicer or thereafter
be received with respect to the Mortgage Loans or any REO Property serviced by
the Servicer (provided, however, that the Servicer, shall continue to be
entitled to receive all amounts accrued or owing to it under this Agreement on
or prior to the date of such termination, whether in respect of Advances or
otherwise, and shall continue to be entitled to the benefits of Section 6.03
notwithstanding any such termination). For purposes of this Section 7.01, the
Trustee shall not be deemed to have knowledge of a Servicing Termination Event
(except for clause (vi) above) unless a Responsible Officer of the Trustee
assigned to and working in the Trustee's Corporate Trust Office has actual
knowledge thereof or unless written notice of any event which is in fact such a
Servicing Termination Event is received by the Trustee and such notice
references the Certificates, the Trust Fund or this Agreement.
Furthermore, the Trustee may by written notice to the
Servicer, terminate all rights and obligations of the Servicer as and with the
effect set forth in the second preceding paragraph, provided the Rating
Agencies' ratings of the Offered Certificates in effect immediately prior to
such termination will not be qualified, reduced or withdrawn as a result thereof
(as evidenced by a letter to such effect from the Rating Agencies).
SECTION 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of
termination, the Trustee shall be the successor in all respects to the Servicer
in its capacity as Servicer under this Agreement and the transactions set forth
or provided for herein and shall be subject to all the responsibilities, duties
and liabilities relating thereto and arising thereafter placed on the Servicer
(except for any representations or warranties of the Servicer under this
Agreement, the responsibilities, duties and liabilities contained in Section
2.03(c) and its obligation to deposit amounts in respect of losses pursuant to
Section 3.12), by the terms and provisions hereof including, without limitation,
the Servicer's obligations to make Advances pursuant to Section 4.03 and to make
payments in respect of Prepayment Interest Shortfalls pursuant to Section 3.24;
provided, however, that if the Trustee is prohibited by law or regulation from
obligating itself to make advances regarding delinquent mortgage loans, then the
Trustee shall not be obligated to make Advances pursuant to Section 4.03; and
provided further, that any failure to perform such duties or responsibilities
caused by the Servicer's failure to provide information required by Section 7.01
shall not be considered a default by the Trustee as successor to the Servicer
hereunder. As compensation therefor, the Trustee shall be entitled to the
Servicing Fees and all funds relating to the Mortgage Loans to which the
Servicer would have been entitled if it had continued to act hereunder.
Notwithstanding the above, the Trustee may, if it shall be unwilling to so act,
or shall, if it is unable to so act or if it is prohibited by law from making
advances regarding delinquent mortgage loans or if the Holders of Certificates
entitled to at least 51% of the Voting Rights so request in writing to the
Trustee, promptly appoint, or petition a court of competent jurisdiction to
appoint, an established mortgage loan servicing institution acceptable to each
Rating Agency and having a net worth of not less than $15,000,000, as the
successor to the Servicer under this Agreement in the assumption of all or any
part of the responsibilities, duties or liabilities of the Servicer under this
Agreement. No appointment of a successor to the Servicer under this Agreement
shall be effective until the assumption by the successor of all of the
Servicer's responsibilities, duties and liabilities hereunder. In connection
with such appointment and assumption described herein, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Servicer as such
hereunder. The Depositor, the Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. Pending appointment of a successor to the Servicer under this
Agreement, the Trustee shall act in such capacity as hereinabove provided.
In the event of a Servicing Termination Event, notwithstanding
anything to the contrary above, the Trustee and the Depositor hereby agree that
upon delivery to the Trustee by First Union of a letter signed by the Servicer
within ten Business Days of when notification of such event shall have been
provided to the Trustee, whereunder the Servicer shall resign as Servicer under
this Agreement, the Trustee shall appoint First Union or its designee as
successor Servicer, provided that at the time of such appointment, First Union
or such designee meets the requirements of a successor servicer set forth above
and First Union or such designee agrees to be subject to the terms of this
Agreement.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any termination of the Servicer pursuant to Section
7.01 above or any appointment of a successor to the Servicer pursuant to Section
7.02 above, the Trustee shall give prompt written notice thereof to
Certificateholders at their respective addresses appearing in the Certificate
Register.
(b) Not later than the later of 60 days after the occurrence
of any event which constitutes or which, with notice or lapse of time or both,
would constitute a Servicing Termination Event or five days after a Responsible
Officer of the Trustee has actual knowledge of the occurrence of such an event,
the Trustee shall transmit by mail to all Holders of Certificates notice of each
such occurrence, unless such default or Servicing Termination Event shall have
been cured or waived.
SECTION 7.04. Waiver of Servicing Termination Events.
The Holders representing at least 66% of the Voting Rights
evidenced by all Classes of Certificates affected by any default or Servicing
Termination Event hereunder may waive such default or Servicing Termination
Event; provided, however, that a default or Servicing Termination Event under
clause (i) or (vi) of Section 7.01 may be waived only by all of the Holders of
the Regular Certificates. Upon any such waiver of a default or Servicing
Termination Event, such default or Servicing Termination Event shall cease to
exist and shall be deemed to have been remedied for every purpose hereunder. No
such waiver shall extend to any subsequent or other default or Servicing
Termination Event or impair any right consequent thereon except to the extent
expressly so waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of a Servicing
Termination Event of which a Responsible Officer of the Trustee has actual
knowledge and after the curing of all Servicing Termination Events which may
have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. During a Servicing Termination Event,
the Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs. Any permissive right of the Trustee enumerated in
this Agreement shall not be construed as a duty.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement; provided, however, that the
Trustee shall not be responsible for the accuracy or content of any resolution,
certificate, statement, opinion, report, document, order or other instrument
furnished by any party to this Agreement and, provided, further, the Trustee
shall not be responsible for the accuracy or verification of any calculation
provided to it pursuant to this Agreement. If any such instrument is found not
to conform to the requirements of this Agreement in a material manner, the
Trustee shall take such action as it deems appropriate to have the instrument
corrected, and if the instrument is not corrected to the Trustee's satisfaction,
the Trustee will provide notice thereof to the Certificateholders.
No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own gross negligent action, its own gross
negligent failure to act or its own misconduct; provided, however, that:
(i) Prior to the occurrence of a Servicing Termination Event
of which a Responsible Officer of the Trustee shall have actual knowledge,
and after the curing of all such Servicing Termination Events which may
have occurred, the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement, the Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Agreement, no implied
covenants or obligations shall be read into this Agreement against the
Trustee and, in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee that conform to the requirements of this
Agreement;
(ii) The Trustee shall not be personally liable for an error
of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
grossly negligent in ascertaining the pertinent facts;
(iii) The Trustee shall not be personally liable with respect
to any action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Certificates entitled to at
least 25% of the Voting Rights relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement;
(iv) None of the provisions contained in this Agreement shall
in any event require the Trustee to perform, or be responsible for the
manner of performance of, any of the obligations of the Servicer under this
Agreement except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges
of the Servicer in accordance with the terms of this Agreement; and
(v) Subject to the other provisions of this Agreement and
without limiting the generality of this Section 8.01, the Trustee shall
have no duty (A) to see any recording, filing, or depositing of this
Agreement or any agreement referred to herein or any financing statement or
continuation statement evidencing a security interest, or to see the
maintenance of any such recording or filing or depositing or to any
rerecording, refiling or redepositing or any thereof, (B) to see to any
insurance, (C) to see the payment or discharge of any tax, assessment, or
other governmental charge or any lien or encumbrance of any kind owing with
respect to, assessed or levied against, any part of the Trust Fund other
than from funds available in the Certificate Account or (D) to confirm or
verify the contents of any reports or certificates of the Servicer
delivered to the Trustee pursuant to this Agreement believed by the Trustee
to be genuine and to have been signed or presented by the proper party or
parties.
Whether or not expressly so provided, every provision of this
Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustee is subject to the provisions of this Section.
SECTION 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) The Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officers' Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document reasonably believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(ii) The Trustee may consult with counsel and any written
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of Counsel;
(iii) The Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders, pursuant to
the provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee security or indemnity reasonably satisfactory to the
Trustee against the costs, expenses and liabilities which may be incurred
therein or thereby; nothing contained herein shall, however, relieve the
Trustee of the obligation, upon the occurrence of a Servicing Termination
Event (which has not been cured or waived), to exercise such of the rights
and powers vested in it by this Agreement, and to use the same degree of
care and skill in their exercise as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs;
(iv) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Agreement;
(v) Prior to the occurrence of a Servicing Termination Event
hereunder of which a Responsible Officer of the Trustee shall have actual
knowledge and after the curing of all Servicing Termination Events which
may have occurred, the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing to do so by
Holders of Certificates entitled to at least 25% of the Voting Rights;
provided, however, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it
in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by such Certificateholders, the Trustee
may require reasonable indemnity against such expense, or liability from
such Certificateholders as a condition to taking any such action;
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, attorneys, or custodians, and the Trustee shall not be responsible
for the misconduct or negligence of any agent, attorney or custodian
appointed with due care;
(vii) The Trustee shall not be personally liable for any loss
resulting from the investment of funds held in the Collection Account at
the direction of the Servicer pursuant to Section 3.12, for any loss
resulting from the investment of funds held in the Basis Risk Reserve Fund
at the direction of the Holder of the Class X Certificate or for any loss
resulting from the redemption or sale of any such investment as therein
authorized;
(viii) The Trustee is not required to expend or risk its own
funds or otherwise incur any financial liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights or powers,
if it has reasonable grounds for believing that the repayment of such funds
or adequate indemnity against such risk or liability or the payment of its
fees and expenses is not reasonably assured to it;
(ix) The Trustee is not required to take notice or deemed to
have notice of any Servicing Termination Event hereunder, except Servicing
Termination Events under Section 7.01(i) and 7.01(vi) hereof, unless a
Responsible Officer of the Trustee has received notice in writing of such
Servicing Termination Event from the Depositor or from the Holders of
Certificates entitled to at least 25% of the Voting Rights, and in the
absence of any such notice, the Trustee may conclusively assume that no
such Servicing Termination Event exists;
(x) The Trustee is not required to give any bond or surety
with respect to the performance of its duties or the exercise of its powers
under this Agreement;
(xi) In the event the Trustee receives inconsistent or
conflicting requests and indemnity from two or more groups of Holders of
Certificates, each representing less than a majority in Voting Rights for
the Certificates outstanding, the Trustee, shall be entitled to refrain
from acting hereunder and its sole obligation shall be to keep safe funds
held in the trust accounts until receipt of a written direction signed by
each group of Holders of Certificates requesting the Trustee to take action
or as otherwise ordered by a court of competent jurisdiction;
(xii) The Trustee's immunities and protections from liability
and its right compensation in connection with the performance of its duties
under this Agreement shall extend to the Trustee's officers, directors,
agents and employees, and shall survive the Trustee's resignation or
removal and final payment of the Certificates;
(xiii) Except for information provided by the Trustee
concerning the Trustee, the Trustee shall have no responsibility for any
information in any offering memorandum or other disclosure material
distributed with respect to the Certificates, and the Trustee shall have no
responsibility for compliance with any state or federal securities laws in
connection with the Certificates;
(xiv) The right of the Trustee to perform any discretionary
act enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its gross negligence or
willful misconduct in the performance of such act; and
(xv) Notwithstanding anything in this Agreement to the
contrary, in no event shall the Trustee be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of action.
(b) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, may be enforced against third parties or
otherwise, and any such suit, action or proceeding instituted by the Trustee
shall be brought in its name for the benefit of all the Holders of such
Certificates, subject to the provisions of this Agreement.
SECTION 8.03. Trustee Not Liable for Certificates or
Mortgage Loans.
The recitals contained herein and in the Certificates (other
than the signature of the Trustee, the authentication of the Certificate
Registrar on the Certificates, the acknowledgments of the Trustee contained in
Article II and the representations and warranties of the Trustee in Section
8.12) shall be taken as the statements of the Depositor and the Trustee assumes
no responsibility for their correctness. The Trustee makes no representations or
warranties as to the validity or sufficiency of this Agreement (other than as
specifically set forth in Section 8.12) or of the Certificates (other than the
signature of the Trustee and authentication of the Certificate Registrar on the
Certificates) or of any Mortgage Loan or related document. The Trustee shall not
be accountable for the use or application by the Depositor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor or the Servicer in respect of the
Mortgage Loans or deposited in or withdrawn from the Collection Account by the
Servicer, other than any funds held by or on behalf of the Trustee in accordance
with Section 3.10.
SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual capacity or any other capacity
may become the owner or pledgee of Certificates with the same rights it would
have if it were not Trustee.
SECTION 8.05. Trustee's Fees and Expenses.
The Trustee shall be entitled to the Trustee Fee (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by the Trustee in the
exercise and performance of any of the powers and duties hereunder. The Trustee
shall withdraw from the Distribution Account on each Distribution Date and pay
to itself the Trustee Fee. The Trustee and any director, officer, employee or
agent of the Trustee shall be indemnified by the Trust Fund and held harmless
against any loss, liability or expense (not including the compensation and the
expenses and disbursements of any agents or custodians by or through which the
Trustee has chosen to execute any of the trusts or powers hereunder or perform
any of the duties hereunder) incurred by the Trustee arising out of or in
connection with the acceptance or administration of its obligations and duties
under this Agreement, other than any loss, liability or expense (i) that
constitutes a specific liability of the Trustee pursuant to Section 11.01(c) or
(ii) any loss, liability or expense incurred by reason of willful misfeasance,
bad faith or gross negligence in the performance of duties hereunder or by
reason of reckless disregard of obligations and duties hereunder. In the event
the Trustee incurs expenses or renders services in any proceedings which result
from the occurrence or continuance of a Servicing Termination Event under
Section 7.01(iii), (iv) or (v) hereof, or from the occurrence of any event
which, by virtue of the passage of time, would become such a Servicing
Termination Event, the expenses so incurred and compensation for services so
rendered shall be paid by the Trust Fund in accordance with Section 4.01(a)(i).
The Servicer agrees to indemnify the Trustee from, and hold it harmless against,
any loss, liability or expense arising in respect of such Servicer's acts or
omissions in connection with this Agreement and the Mortgage Loans serviced by
such Servicer to the extent such acts or omissions are not consistent with the
performance of the Servicer's obligations under this Agreement. Such indemnities
shall survive the termination or discharge of this Agreement and the resignation
or removal of the Trustee. Any indemnity payment hereunder made by the Servicer
to the Trustee shall be from the Servicer's own funds, without reimbursement
from the Trust Fund therefor.
SECTION 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or
an association organized and doing business under the laws of any state or the
United States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authority. If such
corporation or association publishes reports of conditions at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section the combined capital and
surplus of such corporation or association shall be deemed to be its combined
capital and surplus as set forth in its most recent report of conditions so
published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07.
SECTION 8.07. Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the
trust hereby created by giving written notice thereof to the Depositor, the
Servicer and to the Certificateholders. Upon receiving such notice of
resignation, the Depositor shall promptly appoint a successor trustee by written
instrument, in duplicate, which instrument shall be delivered to the resigning
Trustee and to the successor trustee. A copy of such instrument shall be
delivered to the Certificateholders and the Servicer by the Depositor. If no
successor trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Depositor, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor may remove the Trustee and appoint a successor trustee by written
instrument, in duplicate, which instrument shall be delivered to the Trustee so
removed and to the successor trustee. A copy of such instrument shall be
delivered to the Certificateholders and the Servicer by the Depositor.
The Holders of Certificates entitled to at least 51% of the
Voting Rights, may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in triplicate, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of which
instruments shall be delivered to the Depositor, one complete set to the Trustee
so removed and one complete set to the successor so appointed. A copy of such
instrument shall be delivered to the Certificateholders and the Servicer by the
Depositor.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 8.08.
SECTION 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Depositor and to its predecessor
trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as trustee
herein. The predecessor trustee shall deliver to the successor trustee all
Mortgage Files and related documents and statements, as well as all moneys, held
by it hereunder, and the Depositor and the predecessor trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for more fully and certainly vesting and confirming in the successor trustee all
such rights, powers, duties and obligations.
No successor trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 and the appointment of such
successor trustee shall not result in a downgrading of any Class of Certificates
(including any shadow rating thereof) by either Rating Agency, as evidenced by a
letter from each Rating Agency.
Upon acceptance of appointment by a successor trustee as
provided in this Section, the Depositor shall mail notice of the succession of
such trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register. If the Depositor fails to mail such notice
within 10 days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Depositor.
SECTION 8.09. Merger or Consolidation of Trustee.
Any corporation or association into which the Trustee may be
merged or converted or with which it may be consolidated or any corporation or
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or association succeeding to all or
substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation or association
shall be eligible under the provisions of Section 8.06, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or Separate
Trustee.
Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing the same may at the time be located,
the Servicer and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust Fund, and
to vest in such Person or Persons, in such capacity, such title to the Trust
Fund, or any part thereof, and, subject to the other provisions of this Section
8.10, such powers, duties, obligations, rights and trusts as the Servicer and
the Trustee may consider necessary or desirable. If the Servicer shall not have
joined in such appointment within 15 days after the receipt by it of a request
so to do, or in case a Servicing Termination Event shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 hereunder and no notice to
Holders of Certificates of the appointment of co-trustee(s) or separate
trustee(s) shall be required under Section 8.08 hereof.
In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to the defaulting Servicer hereunder), the
Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding
of title to the Trust Fund or any portion thereof in any such jurisdiction)
shall be exercised and performed by such separate trustee or co-trustee at the
direction of the Trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trust conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 8.11. Appointment of Office or Agency.
The Trustee will maintain or appoint an office or agency in
the City of New York where the Certificates may be surrendered for registration
of transfer or exchange, and presented for final distribution, and where notices
and demands to or upon the Trustee in respect of the Certificates and this
Agreement may be served.
SECTION 8.12. Representations and Warranties of the
Trustee.
The Trustee hereby represents and warrants to the Servicer and
the Depositor as of the Closing Date, that:
(i) The Trustee is a banking corporation duly organized,
validly existing and in good standing under the laws of the State of New
York.
(ii) The execution and delivery of this Agreement by the
Trustee, and the performance and compliance with the terms of this
Agreement by the Trustee, will not violate the Trustee's charter or bylaws
or constitute a default (or an event which, with notice or lapse of time,
or both, would constitute a default) under, or result in the breach of, any
material agreement or other instrument to which it is a party or which is
applicable to it or any of its assets.
(iii) The Trustee has the full power and authority to enter
into and consummate all transactions contemplated by this Agreement, has
duly authorized the execution, delivery and performance of this Agreement,
and has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the Servicer and the Depositor, constitutes a valid, legal and
binding obligation of the Trustee, enforceable against the Trustee in
accordance with the terms hereof, subject to (A) applicable bankruptcy,
insolvency, receivership, reorganization, moratorium and other laws
affecting the enforcement of creditors' rights generally, and (B) general
principles of equity, regardless of whether such enforcement is considered
in a proceeding in equity or at law.
(v) The Trustee is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law, any
order or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority, which
violation, in the Trustee's good faith and reasonable judgment, is likely
to affect materially and adversely either the ability of the Trustee to
perform its obligations under this Agreement or the financial condition of
the Trustee.
(vi) No litigation is pending or, to the best of the Trustee's
knowledge, threatened against the Trustee which would prohibit the Trustee
from entering into this Agreement or, in the Trustee's good faith
reasonable judgment, is likely to materially and adversely affect either
the ability of the Trustee to perform its obligations under this Agreement
or the financial condition of the Trustee.
ARTICLE IX
[Reserved]
ARTICLE X
TERMINATION
SECTION 10.01. Termination Upon Repurchase or Liquidation of
All Mortgage Loans.
Subject to Section 10.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Servicer and the
Trustee (other than the obligations of the Servicer to the Trustee pursuant to
Section 8.05 and of the Servicer to provide for and the Trustee to make payments
to Certificateholders as hereafter set forth) shall terminate upon payment to
the Certificateholders and the deposit of all amounts held by or on behalf of
the Trustee and required hereunder to be so paid or deposited on the
Distribution Date coinciding with or following the earlier to occur (i) the
purchase by the Terminator (as defined below) of all Mortgage Loans and each REO
Property remaining in the Trust Fund at a price equal to the greater of (A) the
aggregate Purchase Price of all the Mortgage Loans included in the Trust Fund,
plus the appraised value of each REO Property, if any, included in the Trust
Fund, such appraisal to be conducted by an appraiser mutually agreed upon by the
Terminator and the Trustee in their reasonable discretion and (B) the aggregate
fair market value of all of the assets of the Trust Fund (as determined by the
Terminator and the Trustee, as of the close of business on the third Business
Day next preceding the date upon which notice of any such termination is
furnished to Certificateholders pursuant to the third paragraph of this Section
10.01) and (ii) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund; provided, however, that clauses (i) and (ii) of this paragraph will
be paid only to the extent that there is enough cash to make such payments;
provided, further, that in no event shall the trust created hereby continue
beyond the earlier of (a) the Latest Possible Maturity Date and (b) the
expiration of 21 years from the death of the last survivor of the descendants of
Joseph P. Kennedy, the late ambassador of the United States to the Court of St.
James, living on the date hereof.
The majority Holder of the Class X Certificate shall have the
right, or if it chooses not to exercise such right, the Servicer shall have the
right (the party exercising such right, the "Terminator"), to purchase all of
the Mortgage Loans and each REO Property remaining in the Trust Fund pursuant to
clause (i) of the preceding paragraph no later than the Determination Date in
the month immediately preceding the Distribution Date on which the Certificates
will be retired; provided, however, that the Terminator may elect to purchase
all of the Mortgage Loans and each REO Property remaining in the Trust Fund
pursuant to clause (i) above only if the aggregate Stated Principal Balance of
the Mortgage Loans and each REO Property remaining in the Trust Fund at the time
of such election is equal to or less than 10% of the Cut-off Date Pool Principal
Balance.
Notice of any termination shall be given promptly by the
Trustee by letter to Certificateholders mailed (a) in the event such notice is
given in connection with the purchase of the Mortgage Loans and each REO
Property by the Terminator, not earlier than the 15th day and not later than the
25th day of the month next preceding the month of the final distribution on the
Certificates or (b) otherwise during the month of such final distribution on or
before the Determination Date in such month, in each case specifying (i) the
Distribution Date upon which the Trust Fund will terminate and final payment of
the Certificates will be made upon presentation and surrender of Certificates at
the office of the Trustee therein designated, (ii) the amount of any such final
payment, (iii) that no interest shall accrue in respect of the Certificates from
and after the Interest Accrual Period relating to the final Distribution Date
therefor and (iv) that the Record Date otherwise applicable to such Distribution
Date is not applicable, payments being made only upon presentation and surrender
of the Certificates at the office of the Trustee. The Trustee shall give such
notice to the Certificate Registrar at the time such notice is given to
Certificateholders. In the event such notice is given in connection with the
purchase of all of the Mortgage Loans and each REO Property remaining in the
Trust Fund by the Terminator, the Terminator shall deliver to the Trustee for
deposit in the Distribution Account not later than the last Business Day of the
month next preceding the month of the final distribution on the Certificates an
amount in immediately available funds equal to the above-described purchase
price. Upon certification to the Trustee by a Servicing Officer of the making of
such final deposit, the Trustee shall promptly release to the Terminator the
Mortgage Files for the remaining Mortgage Loans, and the Trustee shall execute
all assignments, endorsements and other instruments necessary to effectuate such
transfer.
Upon presentation of the Certificates by the
Certificateholders on the final Distribution Date, the Trustee shall distribute
to each Certificateholder so presenting and surrendering its Certificates the
amount otherwise distributable on such Distribution Date in accordance with
Section 4.01 in respect of the Certificates so presented and surrendered. Any
funds not distributed to any Holder or Holders of Certificates being retired on
such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held in trust
and credited to the account of the appropriate non-tendering Holder or Holders.
If any Certificates as to which notice has been given pursuant to this Section
10.01 shall not have been surrendered for cancellation within six months after
the time specified in such notice, the Trustee shall mail a second notice to the
remaining non-tendering Certificateholders to surrender their Certificates for
cancellation in order to receive the final distribution with respect thereto. If
within one year after the second notice all such Certificates shall not have
been surrendered for cancellation, the Trustee shall, directly or through an
agent, contact the remaining related non-tendering Certificateholders concerning
surrender of their Certificates. The costs and expenses of maintaining the funds
in trust and of contacting such Certificateholders shall be paid out of the
assets remaining in trust for such Certificateholders. If within two years after
the second notice any such Certificates shall not have been surrendered for
cancellation, the Trustee shall take appropriate steps, or may appoint an agent
to take appropriate steps, to contact the remaining Certificateholders
concerning the surrender of their Certificates, and the cost thereof shall be
paid out of the funds held in trust. If after a reasonable period of time, any
such Certificates which have not been surrendered for cancellation continue to
remain outstanding, the Trustee shall pay to the Depositor all amounts
distributable to the Holders thereof, and the Depositor shall thereafter hold
such amounts for the benefit of such Holders. No interest shall accrue or be
payable to any Certificateholder on any amount held in trust as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 10.01.
Immediately following the deposit of funds in trust hereunder
in respect of the Certificates, the Trust Fund shall terminate.
SECTION 10.02. Additional Termination Requirements
(a) In the event that the Terminator purchases all the
Mortgage Loans and each REO Property or the final payment on or other
liquidation of the last Mortgage Loan or REO Property remaining in the Trust
Fund pursuant to Section 10.01, the Trust Fund shall be terminated in accordance
with the following additional requirements:
(i) The Trustee shall specify the first day in the 90-day
liquidation period in a statement attached to the final Tax Return of each
REMIC created hereunder pursuant to Treasury regulation Section 1.860F-1
and shall satisfy all requirements of a qualified liquidation under Section
860F of the Code and any regulations thereunder, as evidenced by an Opinion
of Counsel obtained at the expense of the Terminator;
(ii) During such 90-day liquidation period, and at or prior to
the time of making of the final payment on the Certificates, the Trustee
shall sell all of the assets of the Trust Fund to the Terminator for cash;
and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Holders of the Residual Certificates all
cash on hand in the Trust Fund (other than cash retained to meet claims),
and the Trust Fund shall terminate at that time.
(b) At the Terminator's expense, the Trustee shall prepare the
documentation required in connection with the adoption of a plan of liquidation
of a each REMIC created hereunder pursuant to this Section 10.02.
(c) By their acceptance of Certificates, the Holders thereof
hereby agree to authorize the Trustee to specify the 90-day liquidation period
for each REMIC created hereunder, which authorization shall be binding upon all
successor Certificateholders.
ARTICLE XI
REMIC PROVISIONS
SECTION 11.01. Tax Administration.
(a) The Trustee shall make REMIC elections as set forth in the
Preliminary Statement under the Code and, if necessary, under applicable state
law. Such elections will be made on Form 1066 or other appropriate federal tax
or information return or any appropriate state return for the taxable year
ending on the last day of the calendar year in which the Certificates are
issued. The regular interests and the residual interest in each REMIC shall be
as designated in the Preliminary Statement. The Trustee shall not permit the
creation of any "interests" in any of REMIC 1 or REMIC 2 (within the meaning of
Section 860G of the Code) other than the interests designated in the Preliminary
Statement.
(b) The Closing Date is hereby designated as the "Startup Day"
of each of REMIC 1 and REMIC 2 within the meaning of Section 860G(a)(9) of the
Code.
(c) The Trustee shall be reimbursed for any and all expenses
relating to any tax audit of any REMIC created hereunder (including, but not
limited to, any professional fees or any administrative or judicial proceedings
with respect to any REMIC created hereunder that involve the Internal Revenue
Service or state tax authorities) including the expense of obtaining any
tax-related Opinion of Counsel, except as specified herein. The Trustee's right
of reimbursement shall not apply to expenses incurred as a result of the
Trustee's gross negligence in performing its duties pursuant to this Article XI.
The Trustee, as agent for the tax matters person of each REMIC created
hereunder, shall (i) act on behalf of each REMIC created hereunder in relation
to any tax matter or controversy involving each REMIC created hereunder and (ii)
represent the Trust Fund in any administrative or judicial proceeding relating
to an examination or audit by any governmental taxing authority with respect
thereto. The holder of the largest Percentage Interest of the Residual
Certificates shall be designated, in the manner provided under Treasury
regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-1, as the tax matters person of each REMIC created hereunder. By
their acceptance thereof, the holder of the largest Percentage Interest of the
Residual Certificates hereby agrees to irrevocably appoint the Trustee or an
Affiliate as its agent to perform all of the duties of the tax matters person
for each REMIC created hereunder.
(d) The Trustee shall prepare, sign and file all of the Tax
Returns in respect of each REMIC created hereunder. The expenses of preparing
and filing such returns shall be borne by the Trustee without any right of
reimbursement therefor. The Servicer shall provide on a timely basis to the
Trustee or its designee such information with respect to the assets of each
REMIC created hereunder as is in its possession and reasonably required by the
Trustee to enable it to perform its obligations under this Article.
(e) The Trustee shall perform on behalf of each REMIC created
hereunder all reporting and other tax compliance duties that are the
responsibility of each REMIC under the Code, the REMIC Provisions or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, as required by the Code, the REMIC
Provisions or other such compliance guidance, the Trustee shall provide (i) to
any Transferor of a Residual Certificate such information as is necessary for
the application of any tax relating to the transfer of a Residual Certificate to
any Person who is not a Permitted Transferee, (ii) to the Certificateholders
such information or reports as are required by the Code or the REMIC Provisions
including reports relating to interest, original issue discount and market
discount or premium (using the Prepayment Assumption as required) and (iii) to
the Internal Revenue Service the name, title, address and telephone number of
the person who will serve as the representative of each REMIC created hereunder.
The Servicer shall provide on a timely basis to the Trustee such information
with respect to the assets of each REMIC created hereunder, including, without
limitation, the Mortgage Loans, as is in its possession and reasonably required
by the Trustee to enable it to perform its obligations under this subsection. In
addition, the Depositor shall provide or cause to be provided to the Trustee,
within ten (10) days after the Closing Date, all information or data that the
Trustee reasonably determines to be relevant for tax purposes as to the
valuations and issue prices of the Certificates, including, without limitation,
the price, yield, prepayment assumption and projected cash flow of the
Certificates.
(f) The Trustee shall take such action and shall cause each
REMIC created hereunder to take such action as shall be necessary to create or
maintain the status thereof as a REMIC under the REMIC Provisions (and the
Servicer shall assist it, to the extent reasonably requested by it). The Trustee
shall not take any action, cause any REMIC created hereunder to take any action
or fail to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of any of REMIC 1 or REMIC 2 as a REMIC or (ii) result in the imposition
of a tax upon any REMIC created hereunder (including but not limited to the tax
on prohibited transactions as defined in Section 860F(a)(2) of the Code and the
tax on contributions to a REMIC set forth in Section 860G(d) of the Code)
(either such event, an "Adverse REMIC Event") unless the Trustee has received an
Opinion of Counsel, addressed to the Trustee (at the expense of the party
seeking to take such action but in no event at the expense of the Trustee) to
the effect that the contemplated action will not, with respect to each REMIC
created hereunder, endanger such status or result in the imposition of such a
tax, nor shall the Servicer take or fail to take any action (whether or not
authorized hereunder) as to which the Trustee has advised it in writing that it
has received an Opinion of Counsel to the effect that an Adverse REMIC Event
could occur with respect to such action. In addition, prior to taking any action
with respect to the Trust Fund or the assets of the Trust Fund, or causing the
Trust Fund to take any action, which is not expressly permitted under the terms
of this Agreement, the Servicer will consult with the Trustee or its designee,
in writing, with respect to whether such action could cause an Adverse REMIC
Event to occur with respect to any REMIC created hereunder, and the Servicer
shall not take any such action or cause the Trust Fund to take any such action
as to which the Trustee has advised it in writing that an Adverse REMIC Event
could occur. The Trustee may consult with counsel to make such written advice,
and the cost of same shall be borne by the party seeking to take the action not
permitted by this Agreement, but in no event shall such cost be an expense of
the Trustee. At all times as may be required by the Code, the Trustee will
ensure that substantially all of the assets of each REMIC created hereunder will
consist of "qualified mortgages" as defined in Section 860G(a)(3) of the Code
and "permitted investments" as defined in Section 860G(a)(5) of the Code.
(g) In the event that any tax is imposed on "prohibited
transactions" of any REMIC created hereunder created hereunder as defined in
Section 860F(a)(2) of the Code, on the "net income from foreclosure property" of
any REMIC created hereunder as defined in Section 860G(c) of the Code, on any
contributions to any REMIC created hereunder after the Startup Day therefor
pursuant to Section 860G(d) of the Code, or any other tax is imposed by the Code
or any applicable provisions of state or local tax laws, such tax shall be
charged (i) to the Trustee pursuant to Section 11.03 hereof, if such tax arises
out of or results from a breach by the Trustee of any of its obligations under
this Article XI, (ii) to the Servicer pursuant to Section 11.03 hereof, if such
tax arises out of or results from a breach by the Servicer of any of its
obligations under Article III or this Article XI, or otherwise, and (iii) if
clauses (i) and (ii) do not apply, against amounts on deposit in the
Distribution Account and shall be paid by withdrawal therefrom.
(h) On or before April 15 of each calendar year, commencing
April 15, 2000, the Trustee shall deliver to the Servicer and each Rating Agency
an Officers' Certificate stating the Trustee's compliance with this Article XI.
(i) The Trustee and the Servicer shall, for federal income tax
purposes, maintain books and records with respect to each REMIC created
hereunder on a calendar year and on an accrual basis.
(j) Following the Startup Day, the Trustee shall not accept
any contributions of assets to any REMIC created hereunder other than in
connection with any Qualified Substitute Mortgage Loan delivered in accordance
with Section 2.03 unless it shall have received an Opinion of Counsel to the
effect that the inclusion of such assets in any such REMIC will not cause any
REMIC created hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding or subject any REMIC created hereunder to any tax
under the REMIC Provisions or other applicable provisions of federal, state and
local law or ordinances.
(k) Neither the Trustee nor the Servicer shall enter into any
arrangement by which any REMIC created hereunder will receive a fee or other
compensation for services nor permit any REMIC created hereunder to receive any
income from assets other than "qualified mortgages" as defined in Section
860G(a)(3) of the Code or "permitted investments" as defined in Section
860G(a)(5) of the Code.
(l) The Trustee shall treat the Basis Risk Reserve Fund as an
outside reserve fund within the meaning of Treasury Regulation Section
1.860G-2(h) that is owned by the Class X Certificateholder and that is not an
asset of any REMIC created hereunder. The Trustee shall treat the rights of the
Class A, Class M-1, Class M-2, and Class B Certificateholders to receive
payments from the Basis Risk Reserve Fund in the event of a Basis Risk Shortfall
as rights in an interest rate cap contract written by the Class X
Certificateholder in favor of the Class A, Class M-1, Class M-2, and Class B
Certificateholders. Thus, each Class A, Class M-1, Class M-2, and Class B
Certificate shall be treated as representing not only ownership of regular
interests in REMIC 2, but also ownership of an interest in an interest rate cap
contract. For purposes of determining the issue prices of the REMIC 2 regular
interests, the Trustee shall assume that the interest rate cap contract has a
value of $5,000. In the event that the beneficial ownership of the Class BB
Certificates and the Class X Certificates is held by separate entities for tax
purposes, the Trustee shall treat the Class BB Certificates as debt of the Class
X Certificateholders for federal income tax purposes and shall not treat such
class of Certificates as an interest in either REMIC created hereunder. By
acquiring the Class BB Certificates and the Class X Certificates, the respective
Holders will agree to treat the Class BB Certificates as debt of the Class X
Certificateholders for federal income tax purposes in the event that the
beneficial ownership of the Class BB Certificates and the Class X Certificates
is separated. Notwithstanding anything to the contrary in this Pooling and
Servicing Agreement, the Trustee shall account for interest accruing on the
Certificates in excess of the Weighted Average Net Mortgage Rate as paid first
to the Class X Certificateholders and then to the Offered Certificates pursuant
to the cap agreement.
SECTION 11.02. Prohibited Transactions and Activities.
None of the Depositor, the Servicer or the Trustee shall sell,
dispose of or substitute for any of the Mortgage Loans (except in connection
with (i) the foreclosure of a Mortgage Loan, including but not limited to, the
acquisition or sale of a Mortgaged Property acquired by deed in lieu of
foreclosure, (ii) the bankruptcy of the Trust Fund (iii) the termination of the
Trust Fund pursuant to Article X of this Agreement, (iv) a substitution pursuant
to Article II of this Agreement or (v) a purchase of Mortgage Loans pursuant to
Article II or III of this Agreement), nor acquire any assets for the Trust Fund
(other than a REO Property acquired in respect of a defaulted Mortgage Loan),
nor sell or dispose of any investments in the Collection Account or the
Distribution Account for gain, nor accept any contributions to the Trust Fund
after the Closing Date (other than a Qualified Substitute Mortgage Loan
delivered in accordance with Section 2.03), unless it has received an Opinion of
Counsel, addressed to the Trustee (at the expense of the party seeking to cause
such sale, disposition, substitution, acquisition or contribution but in no
event at the expense of the Trustee) that such sale, disposition, substitution,
acquisition or contribution will not (a) affect adversely the status of any
REMIC created hereunder as a REMIC or (b) cause any REMIC created hereunder to
be subject to a tax on "prohibited transactions" or "contributions" pursuant to
the REMIC Provisions.
SECTION 11.03. Tax Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the
Depositor and the Servicer for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by the Trust
Fund, the Depositor or the Servicer, as a result of a breach of the Trustee's
covenants set forth in this Article XI.
(b) The Servicer agrees to indemnify the Trust Fund, the
Depositor and the Trustee for any taxes and costs, including without limitation,
any reasonable attorneys fees imposed on or incurred by the Trust Fund, the
Depositor or the Trustee, as a result of the breach of the Servicer's covenants
set forth in Article III or this Article XI.
ARTICLE XII
MISCELLANEOUS PROVISIONS
SECTION 12.01. Amendment.
This Agreement may be amended from time to time by the
Depositor, the Servicer and the Trustee without the consent of any of the
Certificateholders, (i) to cure any ambiguity, to correct any defect or to give
effect to the expectations of Holders, (ii) to correct, modify or supplement any
provisions herein, or (iii) to make any other provisions with respect to matters
or questions arising under this Agreement which shall not be inconsistent with
the provisions of this Agreement, provided that such action shall not, as
evidenced by an Opinion of Counsel delivered to the Trustee, adversely affect in
any material respect the interests of any Certificateholder , provided, further,
that if the Person requesting such amendment delivers to the Trustee written
confirmation from each Rating Agency that such amendment will not cause such
Rating Agency to revise or withdraw its then current rating or shadow rating of
the Class A Certificates, such amendment will be deemed to not adversely affect
in any material respect the interests of the Certificateholders and no such
Opinion of Counsel shall be required.
This Agreement may also be amended from time to time by the
Depositor, the Servicer and the Trustee with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interests of the Holders of any Class of Certificates in a
manner, other than as described in (i), without the consent of the Holders of
Certificates of such Class evidencing at least 66% of the Voting Rights
allocated to such Class, or (iii) modify the consents required by the
immediately preceding clauses (i) and (ii) without the consent of the Holders of
all Certificates then outstanding. Notwithstanding any other provision of this
Agreement, for purposes of the giving or withholding of consents pursuant to
this Section 12.01, Certificates registered in the name of the Depositor, or the
Servicer or any Affiliate thereof shall be entitled to Voting Rights with
respect to matters affecting such Certificates.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel to the effect that such amendment will
not result in the imposition of any tax on any REMIC created hereunder pursuant
to the REMIC Provisions or cause any REMIC created hereunder to fail to qualify
as a REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any such amendment with the
consent of Holders the Trustee shall furnish a copy of such amendment to each
Certificateholder.
It shall not be necessary for the consent of
Certificateholders under this Section 12.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
The cost of any Opinion of Counsel to be delivered pursuant to
this Section 12.01 shall be borne by the Person seeking the related amendment,
but in no event shall such Opinion of Counsel be an expense of the Trustee.
The Trustee may, but shall not be obligated to enter into any
amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise.
SECTION 12.02. Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Servicer and at the expense of the Certificateholders, if the
Servicer determines that such recordation materially and beneficially affects
the interests of the Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
SECTION 12.03. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of any of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates entitled to at least 25% of the Voting Rights shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.
SECTION 12.04. GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 12.05. Notices.
All directions, demands instructions, requests and notices
hereunder shall be in writing and shall be deemed to have been duly given when
received if personally delivered at or mailed by first class mail, postage
prepaid, or by express delivery service or delivered in any other manner
specified herein, addressed as follows:
To the Depositor: Merrill Lynch Mortgage Investors, Inc.
World Financial Center
New York, NY 10281
Attention: General Counsel's Office
Telephone: (212) 449-1000
Telecopier: (212) 449-5559
To the Servicer: Litton Loan Servicing LP,
5373 West Alabama,
Suite 600
Houston, TX 77056
Attention: Janice McClure
Telephone: (800) 888-9646
Telecopier: (713)960-0539
To the Trustee: The Chase Manhattan Bank
450 West 33rd Street, 14th Floor
New York, New York 10001
Attention: Capital Markets Fiduciary
Services; New Century Series 1999-NC1
for payment, registration, transfer, exchange and tender of the Certificates:
BY HAND BY MAIL
The Chase Manhattan Bank, The Chase Manhattan Bank,
450 West 33rd Street 450 West 33rd Street
New York, New York 10001 New York, New York 10001
Attention: Capital Markets Fiduciary Services; Attention: Capital Markets
New Century Series 1999-NC1 Fiduciary Services;
Telephone: (212) 946-3200 New Century Series 1999-NC1
Telecopier: (212) 946-8191
For other communications relating to the Certificates:
Any party hereto may change the address, telephone number or
telecopier number by notice to the other parties hereto in accordance with the
terms hereof. Any notice required or permitted to be given to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder also shall be mailed to the appropriate party in the manner
set forth above.
SECTION 12.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 12.07. Notice to Rating Agencies.
The Trustee shall use its best efforts promptly to provide
notice to the Rating Agencies with respect to each of the following of which it
has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Servicing Termination Event that has
not been cured or waived;
3. The resignation or termination of the Servicer or the
Trustee;
4. The repurchase or substitution of Mortgage Loans pursuant to
or as contemplated by Section 2.03;
5. The final payment to the Holders of any Class of
Certificates;
6. Any change in the location of the Collection Account or the
Distribution Account; and
7. Any event that would result in the inability of the Trustee
to make advances regarding delinquent mortgage loans.
In addition, the Trustee shall promptly furnish to each Rating
Agency copies of each report to Certificateholders described in Section 4.02 and
the Servicer shall promptly furnish to each Rating Agency copies of the
following:
1. Each annual statement as to compliance described in Section
3.20; and
2. Each annual independent public accountants' servicing report
described in Section 3.21.
Any such notice pursuant to this Section 12.07 shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, or by express delivery service
to Duff & Phelps Credit Rating Company, 17 State Street Plaza, New York, New
York 10004 and to Standard & Poor's Ratings Services, 55 Water Street, New York,
New York 10021, or such other addresses as the Rating Agencies may designate in
writing to the parties hereto.
SECTION 12.08. Article and Section References.
All article and section references used in this Agreement,
unless otherwise provided, are to articles and sections in this Agreement.
<PAGE>
IN WITNESS WHEREOF, the Depositor, the Servicer and the
Trustee have caused their names to be signed hereto by their respective officers
thereunto duly authorized, in each case as of the day and year first above
written.
MERRILL LYNCH MORTGAGE INVESTORS, INC.,
as Depositor
By:________________________________________
Name:______________________________________
Title:_____________________________________
LITTON LOAN SERVICING LP,
as Servicer
By:_______________________________________
Name:_____________________________________
Title:____________________________________
THE CHASE MANHATTAN BANK
as Trustee
By:_______________________________________
Name:_____________________________________
Title:____________________________________
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ___ day of July 1999, before me, a notary public in and
for said State, personally appeared ____________________, known to me to be a[n]
___________ of Merrill Lynch Mortgage Investors, Inc., one of the corporations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
------------------------------------------
Notary Public
[Notarial Seal]
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ___ day of July 1999, before me, a notary public in and
for said State, personally appeared _____________________, known to me to be the
__________________________________________ of _____________________________, the
general partner of Litton Loan Servicing LP, the limited partnership that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
------------------------------------------
Notary Public
[Notarial Seal]
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ___ day of July 1999, before me, a notary public in and
for said State, personally appeared _________, known to me to be a _________ of
The Chase Manhattan Bank, one of the corporations that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
------------------------------------------
Notary Public
[Notarial Seal]
<PAGE>
EXHIBIT A-1
-----------
MORTGAGE LOAN ASSET BACKED CERTIFICATES
SERIES 1999-NC1, CLASS A
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE
"CODE").
Series 1999-NC1, Class A Class Certificate Balance of the Class A
Certificates as of the Issue Date:
Pass-Through Rate: Variable $____________
Date of Pooling and Servicing Denomination: $______________
Agreement and Cut-off
Date: July 1, 1999
Servicer: Litton Loan Servicing LP
First Distribution
Date: August 20, 1999
Trustee: The Chase Manhattan Bank
No. 1
Issue Date:
CUSIP:
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN BELOW.
<PAGE>
MORTGAGE LOAN ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional one- to four-family first
mortgage loans formed and sold by
MERRILL LYNCH MORTGAGE INVESTORS, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
MERRILL LYNCH MORTGAGE INVESTORS, INC., THE SERVICER, THE TRUSTEE OR
ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the Class Certificate Balance of the Class A Certificates) in that certain
beneficial ownership interest evidenced by all the Class A Certificates in the
Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among Merrill Lynch Mortgage Investors, Inc.
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement), the Servicer and the Trustee, a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 20th day of each month or, if such 20th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"), from funds in the
Distribution Account in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to the Holders of Class A Certificates on such Distribution Date pursuant to the
Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class A Certificates the
aggregate initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Trustee may deduct a reasonable wire transfer fee
from any payment made by wire transfer. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee for that
purpose as provided in the Agreement.
The Pass-Through Rate on the Class A Certificates on each
Distribution Date after the first Distribution Date will be a rate per annum
equal to the lesser of (i) One-Month LIBOR plus the applicable Pass-Through
Margin and (ii) the Available Funds Pass-Through Rate for such Distribution
Date.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Loan Asset Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class A Certificates.
The Class A Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, any Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Loans at the time of
purchase being 10% or less of the Maximum Collateral Balance.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated:
THE CHASE MANHATTAN BANK, as Trustee
By:____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK,
as Certificate Registrar
By:_______________________________
Authorized Signatory
Date of authentication:_______________
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right -----------------
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
_______________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within Asset-Backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
_______________________________________________________________________________
Dated:____________________________
Signature by or on behalf of assignor
__________________________________
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to__________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
for the account of ____________________________, account number ___________,
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to ____________________________________
This information is provided by _______________________________________________,
the assignee named above, or_______________________________, as its agent.
<PAGE>
EXHIBIT A-2
-----------
MORTGAGE LOAN ASSET BACKED CERTIFICATES
SERIES 1999-NC1, CLASS M-1
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENT
OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G
AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
Series 1999-NC1, Class M-1 Class Certificate Balance of the
Class M-1 Certificates as of the
Issue Date:
Pass-Through Rate: Variable $____________
Date of Pooling and Servicing Agreement Denomination: $______________
and Cut-off Date: July 1, 1999
Servicer: Litton Loan Servicing LP
First Distribution Date: August 20, 1999
Trustee: The Chase Manhattan Bank
No. 1
Issue Date:
CUSIP:
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN BELOW.
<PAGE>
MORTGAGE LOAN ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional one- to four-family first
mortgage loans formed and sold by
MERRILL LYNCH MORTGAGE INVESTORS, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
MERRILL LYNCH MORTGAGE INVESTORS, INC., THE SERVICER, THE TRUSTEE OR
ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the Class Certificate Balance of the Class M-1 Certificates) in that certain
beneficial ownership interest evidenced by all the Class M-1 Certificates in the
Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among Merrill Lynch Mortgage Investors, Inc.
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement), the Servicer and the Trustee, a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 20th day of each month or, if such 20th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"), from funds in the
Distribution Account in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to the Holders of Class M-1 Certificates on such Distribution Date pursuant to
the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class M-1 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Trustee may deduct a reasonable wire transfer fee
from any payment made by wire transfer. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee for that
purpose as provided in the Agreement.
The Pass-Through Rate on the Class M-1 Certificates on each
Distribution Date after the first Distribution Date will be a rate per annum
equal to the lesser of (i) One-Month LIBOR plus the applicable Pass-Through
Margin and (ii) the Available Funds Pass-Through Rate for such Distribution
Date.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Loan Asset Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class M-1 Certificates.
The Class M-1 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, any Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Loans at the time of
purchase being 10% or less of the Maximum Collateral Balance.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated:
THE CHASE MANHATTAN BANK, as Trustee
By:____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class M-1 Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK, as
Certificate Registrar
By:_______________________________
Authorized Signatory
Date of authentication:_______________
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right -----------------
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto___________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee).
- -------------------------------------------------------------------------------
a Percentage Interest equal to ____% evidenced by the within Asset-Backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
_______________________________________________________________________________
Dated:
______________________________________
Signature by or on behalf of assignor
______________________________________
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
for the account of __________________________, account number ________________,
or, if mailed by check, to ____________________________________________________
_______________________________________________________________________________
Applicable statements should be mailed to ___________________
_______________________________________________________________________________
This information is provided by ____________________________,
the assignee named above, or ________________________________________, as its
agent.
<PAGE>
EXHIBIT A-3
-----------
MORTGAGE LOAN ASSET BACKED CERTIFICATES
SERIES 1999-NC1, CLASS M-2
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE
"CODE").
Series 1999-NC1, Class M-2 Class Certificate Balance of
the Class M-2 Certificates
as of the Issue Date:
Pass-Through Rate: Variable $____________
Date of Pooling and Servicing Agreement Denomination: $______________
and Cut-off Date: July 1, 1999
Servicer: Litton Loan
Servicing LP
First Distribution Date: August 20, 1999
Trustee: The Chase Manhattan
Bank
No. 1
Issue Date:
CUSIP:
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN BELOW.
<PAGE>
MORTGAGE LOAN ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional one- to four-family first
mortgage loans formed and sold by
MERRILL LYNCH MORTGAGE INVESTORS, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
MERRILL LYNCH MORTGAGE INVESTORS, INC., THE SERVICER, THE TRUSTEE OR
ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the Class Certificate Balance of the Class M-2 Certificates) in that certain
beneficial ownership interest evidenced by all the Class M-2 Certificates in the
Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among Merrill Lynch Mortgage Investors, Inc.
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement), the Servicer and the Trustee, a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 20th day of each month or, if such 20th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"), from funds in the
Distribution Account in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to the Holders of Class M-2 Certificates on such Distribution Date pursuant to
the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class M-2 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Trustee may deduct a reasonable wire transfer fee
from any payment made by wire transfer. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee for that
purpose as provided in the Agreement.
The Pass-Through Rate on the Class M-2 Certificates on each
Distribution Date after the first Distribution Date will be a rate per annum
equal to the lesser of (i) One-Month LIBOR plus the applicable Pass-Through
Margin and (ii) the Available Funds Pass-Through Rate for such Distribution
Date.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Loan Asset Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class M-2 Certificates.
The Class M-2 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, any Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Loans at the time of
purchase being 10% or less of the Maximum Collateral Balance.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated:
THE CHASE MANHATTAN BANK, as Trustee
By:____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class M-2 Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK,
as Certificate Registrar
By:_______________________________
Authorized Signatory
Date of authentication:_______________
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right -----------------
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto _________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
______________________________________________________________________________
______________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within Asset-Backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
_____________________________________________________________________________
_____________________________________________________________________________
Dated:
_____________________________________
Signature by or on behalf of assignor
____________________
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
for the account of __________________________, account number _________________
or, if mailed by check, to ____________________________________________________
Applicable statements should be mailed to _____________________________________
This information is provided by _____________________________
______________________________________________________________________________,
the assignee named above, or ___________________________________, as its agent.
<PAGE>
EXHIBIT A-4
-----------
MORTGAGE LOAN ASSET BACKED CERTIFICATES
SERIES 1999-NC1, CLASS B
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE
"CODE").
Series 1999-NC1, Class B Class Certificate Balance of
the Class B Certificates
as of the Issue Date:
Pass-Through Rate: Variable $____________
Date of Pooling and Servicing Agreement Denomination: $______________
and Cut-off Date: July 1, 1999
Servicer: Litton Loan
Servicing LP
First Distribution Date: August 20, 1999
Trustee: The Chase Manhattan
Bank
No. 1
Issue Date:
CUSIP:
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN BELOW.
<PAGE>
MORTGAGE LOAN ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional one- to four-family first
mortgage loans formed and sold by
MERRILL LYNCH MORTGAGE INVESTORS, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
MERRILL LYNCH MORTGAGE INVESTORS, INC., THE SERVICER, THE TRUSTEE OR
ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES.
This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the Class Certificate Balance of the Class B Certificates) in that certain
beneficial ownership interest evidenced by all the Class B Certificates in the
Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among Merrill Lynch Mortgage Investors, Inc.
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement), the Servicer and the Trustee, a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 20th day of each month or, if such 20th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"), from funds in the
Distribution Account in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to the Holders of Class B Certificates on such Distribution Date pursuant to the
Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class B Certificates the
aggregate initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Trustee may deduct a reasonable wire transfer fee
from any payment made by wire transfer. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee for that
purpose as provided in the Agreement.
The Pass-Through Rate on the Class B Certificates on each
Distribution Date after the first Distribution Date will be a rate per annum
equal to the lesser of (i) One-Month LIBOR plus the applicable Pass-Through
Margin and (ii) the Available Funds Pass-Through Rate for such Distribution
Date.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Loan Asset Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class B Certificates.
The Class B Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, any Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Loans at the time of
purchase being 10% or less of the Maximum Collateral Balance.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated:
THE CHASE MANHATTAN BANK, as Trustee
By:______________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class B Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK,
as Certificate Registrar
By:_______________________________
Authorized Signatory
Date of authentication:_______________
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right -----------------
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within Asset-Backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
for the account of __________________________, account number _________________
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ___________________
_______________________________________________________________________________
_______________________________________________________________________________
This information is provided by ____________________________________ ,
the assignee named above, or ___________________________, as its agent.
<PAGE>
EXHIBIT A-5
-----------
MORTGAGE LOAN ASSET BACKED CERTIFICATES
SERIES 1999-NC1, CLASS X
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CLASS X CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES OF
THIS SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS X CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH
TIME AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
THIS CLASS X CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY
IN A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR
QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS X CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (1) AN AFFIDAVIT
TO THE CERTIFICATE REGISTRAR AND THE TRUSTEE THAT SUCH TRANSFEREE IS
NOT (A) 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, (B) ANY ORGANIZATION (OTHER
THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS
EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE,
(C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE
(ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C)
BEING HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR (D)
AN AGENT OF A DISQUALIFIED ORGANIZATION AND (2) NO PURPOSE OF SUCH
TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (3) SUCH
TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE
FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
REGISTRATION IN THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER
DISPOSITION OF THIS CLASS X CERTIFICATE TO A DISQUALIFIED ORGANIZATION
OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE
DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON
SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS
ON THIS CERTIFICATE. EACH HOLDER OF A CLASS X CERTIFICATE BY ACCEPTANCE
OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS
OF THIS PARAGRAPH AND THE PROVISIONS OF SECTION 5.02(d) OF THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A
DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL
OWNERSHIP OF THIS CLASS X CERTIFICATE.
<PAGE>
Series 1999-NC1, Class X
Date of Pooling and Servicing Agreement Servicer: Litton Loan Servicing LP
July 1, 1999
Trustee: The Chase Manhattan Bank
Cut-off Date: July 1, 1999
First Distribution Date: August 20, 1999 Issue Date: July 29, 1999
No. 1
Percentage Interest: 100%
<PAGE>
MORTGAGE LOAN ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional one- to four-family first
mortgage loans formed and sold by
MERRILL LYNCH MORTGAGE INVESTORS, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
MERRILL LYNCH MORTGAGE INVESTORS, INC., THE SERVICER, THE TRUSTEE OR
ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES.
This certifies that Merrill Lynch, Pierce Fenner Smith
Incorporated is the registered owner of a Percentage Interest set forth above in
that certain beneficial ownership interest evidenced by all the Class X
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Merrill Lynch
Mortgage Investors, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 20th day of each month or, if such 20th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"), from funds in the
Distribution Account in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to the Holders of Class X Certificates on such Distribution Date pursuant to the
Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class X Certificates the
aggregate Percentage Interest of which is 100% of the Class X Certificates, or
by check mailed by first class mail to the address of the Person entitled
thereto, as such name and address shall appear on the Certificate Register,
provided that the Trustee may deduct a reasonable wire transfer fee from any
payment made by wire transfer. Notwithstanding the above, the final distribution
on this Certificate will be made after due notice by the Trustee of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Trustee for that purpose as
provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Loan Asset Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
the Percentage Interest specified on the face hereof.
The Class X Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that
transfer is made pursuant to an effective registration statement under the 1933
Act and effective registration or qualification under applicable state
securities laws, or is made in a transaction that does not require such
registration or qualification. In the event that a transfer is to be made
without registration or qualification, the Trustee and the Certificate Registrar
shall require, in order to assure compliance with such laws, either (i) that the
Certificateholder desiring to effect the transfer and such Certificateholder's
prospective transferee each execute a representation letter in the form
described by the Agreement certifying to the Trustee and the Certificate
Registrar the facts surrounding the transfer, or (ii) that the Trustee and the
Certificate Registrar shall require an Opinion of Counsel satisfactory to them
that such transfer may be made without such registration or qualification, which
Opinion of Counsel shall not be an expense of the Depositor, the Trustee or the
Certificate Registrar, in their respective capacities as such. None of the
Depositor, the Certificate Registrar nor the Trustee is obligated to register or
qualify the Class of Certificates specified on the face hereof under the 1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any such Certificateholder desiring to effect
such transfer shall, and does hereby agree to, indemnify the Trustee, the
Depositor, the Certificate Registrar, any Master Servicer and any Servicer
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
Except as otherwise set forth in the next succeeding
paragraph, no transfer of a Certificate or any interest therein may be made to
employee benefit plans and certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Keogh plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested that are subject to the fiduciary responsibility
provisions of ERISA and Section 4975 of the Code ("Plans") or any person who is
directly or indirectly purchasing the Certificate or interest therein on behalf
of, as named fiduciary of, as trustee of, or with assets of a Plan, unless the
prospective transferee provides the Trustee with an opinion of counsel which
establish to the satisfaction of the Trustee that such transfer will not result
in a violation of Section 406 of ERISA or Section 4975 of the Code or cause the
Master Servicer or Trustee to be deemed a fiduciary of such Plan or result in
the imposition of an excise tax under Section 4975 of the Code. In the absence
of its having received the opinion of counsel contemplated by the preceding
sentence, the Trustee shall (unless the next succeeding paragraph applies)
require the prospective transferee of any Certificate to certify that it is
neither (i) a Plan nor (ii) a Person who is directly or indirectly purchasing
such Certificate on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan (including any insurance company using funds in its general or
separate accounts that may constitute "plan assets").
The Holder of this Certificate, by its acceptance hereof,
shall be deemed for all purposes to have consented to the provisions of Section
5.02 of the Agreement and to any amendment of the Agreement deemed necessary by
counsel of the Depositor to ensure that the transfer of this Certificate to any
Person other than a Permitted Transferee or any other Person will not cause the
REMIC Trust to cease to qualify as a REMIC or cause the imposition of a tax upon
the REMIC Trust.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, any Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Loans at the time of
purchase being 10% or less of the Maximum Collateral Balance.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: July 29, 1999
THE CHASE MANHATTAN BANK
as Trustee
By:____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class X Certificates referred to in the
within-mentioned Agreement.
Dated: July 29, 1999
THE CHASE MANHATTAN BANK,
as Certificate Registrar
By:_______________________________
Authorized Signatory
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right -----------------
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto___________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within Asset-Backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:_________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
for the account of _______________________________, account number ____________
or, if mailed by check, to ___________________________________________________.
Applicable statements should be mailed to _____________________________________
This information is provided by _____________________________
_______________________________________________________________________________
the assignee named above, or ___________________________________, as its agent.
<PAGE>
EXHIBIT A-6
-----------
MORTGAGE LOAN ASSET BACKED CERTIFICATES
SERIES 1999-NC1, CLASS R
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS OWNERSHIP OF "RESIDUAL INTERESTS" IN TWO SEPARATE "REAL
ESTATE MORTGAGE INVESTMENT CONDUITS" (THE MASTER REMIC AND THE
SUBSIDIARY REMIC, EACH A "REMIC"), AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986 (THE "CODE").
THIS CLASS R CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES OF
THIS SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS R CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH
TIME AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
THIS CLASS R CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY
IN A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR
QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (1) AN AFFIDAVIT
TO THE CERTIFICATE REGISTRAR AND THE TRUSTEE THAT SUCH TRANSFEREE IS
NOT (A) 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, (B) ANY ORGANIZATION (OTHER
THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS
EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE,
(C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE
(ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C)
BEING HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR (D)
AN AGENT OF A DISQUALIFIED ORGANIZATION AND (2) NO PURPOSE OF SUCH
TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (3) SUCH
TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE
FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
REGISTRATION IN THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER
DISPOSITION OF THIS CLASS R CERTIFICATE TO A DISQUALIFIED ORGANIZATION
OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE
DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON
SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS
ON THIS CERTIFICATE. EACH HOLDER OF A CLASS R CERTIFICATE BY ACCEPTANCE
OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS
OF THIS PARAGRAPH AND THE PROVISIONS OF SECTION 5.02(d) OF THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A
DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL
OWNERSHIP OF THIS CLASS R CERTIFICATE.
Series 1999-NC1, Class R Class Certificate Balance of the Class R
Certificates as of the Issue Date:
Date of Pooling and Servicing
Agreement and Cut-off $___________
Date: July 1, 1999
Servicer: Litton Loan Servicing LP
First Distribution
Date: January 20, 1999
Trustee: The Chase Manhattan Bank
No. 1
Issue Date:
Percentage Interest: 100%
<PAGE>
MORTGAGE LOAN ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional one- to four-family first
mortgage loans formed and sold by
MERRILL LYNCH MORTGAGE INVESTORS, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
MERRILL LYNCH MORTGAGE INVESTORS, INC., THE SERVICER, THE TRUSTEE OR
ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES.
This certifies that _____________ is the registered owner of a
Percentage Interest set forth above in that certain beneficial ownership
interest evidenced by all the Class R Certificates in the Trust Fund created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Merrill Lynch Mortgage Investors, Inc. (hereinafter called
the "Depositor," which term includes any successor entity under the Agreement),
the Servicer and the Trustee, a summary of certain of the pertinent provisions
of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 20th day of each month or, if such 20th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"), from funds in the
Distribution Account in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to the Holders of Class R Certificates on such Distribution Date pursuant to the
Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class R Certificates the
aggregate Percentage Interest of which is in excess of a 66% Percentage Interest
of the Class R Certificates, or by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register, provided that the Trustee may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Loan Asset Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
the Percentage Interest specified on the face hereof.
The Class R Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that
transfer is made pursuant to an effective registration statement under the 1933
Act and effective registration or qualification under applicable state
securities laws, or is made in a transaction that does not require such
registration or qualification. In the event that a transfer is to be made
without registration or qualification, the Trustee and the Certificate Registrar
shall require, in order to assure compliance with such laws, either (i) that the
Certificateholder desiring to effect the transfer and such Certificateholder's
prospective transferee each execute a representation letter in the form
described by the Agreement certifying to the Trustee and the Certificate
Registrar the facts surrounding the transfer, or (ii) that the Trustee and the
Certificate Registrar shall require an Opinion of Counsel satisfactory to them
that such transfer may be made without such registration or qualification, which
Opinion of Counsel shall not be an expense of the Depositor, the Trustee or the
Certificate Registrar, in their respective capacities as such. None of the
Depositor, the Certificate Registrar nor the Trustee is obligated to register or
qualify the Class of Certificates specified on the face hereof under the 1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any such Certificateholder desiring to effect
such transfer shall, and does hereby agree to, indemnify the Trustee, the
Depositor, the Certificate Registrar and any Servicer against any liability that
may result if the transfer is not so exempt or is not made in accordance with
such federal and state laws.
Except as otherwise set forth in the next succeeding
paragraph, no transfer of a Certificate or any interest therein may be made to
employee benefit plans and certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Keogh plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested that are subject to the fiduciary responsibility
provisions of ERISA and Section 4975 of the Code ("Plans") or any person who is
directly or indirectly purchasing the Certificate or interest therein on behalf
of, as named fiduciary of, as trustee of, or with assets of a Plan, unless the
prospective transferee provides the Trustee with an opinion of counsel which
establish to the satisfaction of the Trustee that such transfer will not result
in a violation of Section 406 of ERISA or Section 4975 of the Code or cause the
Servicer or Trustee to be deemed a fiduciary of such Plan or result in the
imposition of an excise tax under Section 4975 of the Code. In the absence of
its having received the opinion of counsel contemplated by the preceding
sentence, the Trustee shall (unless the next succeeding paragraph applies)
require the prospective transferee of any Certificate to certify that it is
neither (i) a Plan nor (ii) a Person who is directly or indirectly purchasing
such Certificate on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan (including any insurance company using funds in its general or
separate accounts that may constitute "plan assets").
The Holder of this Certificate, by its acceptance hereof,
shall be deemed for all purposes to have consented to the provisions of Section
5.02 of the Agreement and to any amendment of the Agreement deemed necessary by
counsel of the Depositor to ensure that the transfer of this Certificate to any
Person other than a Permitted Transferee or any other Person will not cause the
REMIC Trust to cease to qualify as a REMIC or cause the imposition of a tax upon
the REMIC Trust.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, any Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Loans at the time of
purchase being 10% or less of the Maximum Collateral Balance.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated:
THE CHASE MANHATTAN BANK,
as Trustee
By:______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class R Certificates referred to in the within-mentioned
Agreement.
THE CHASE MANHATTAN BANK,
as Certificate Registrar
By:______________________________
Authorized Signatory
Date of authentication:_______________
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right -----------------
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
- -------------------------------------------------------------------------------
- -----------------------------------------------------------------------------
a Percentage Interest equal to ____% evidenced by the within Asset Backed
Floating Rate Certificate and hereby authorize(s) the registration of transfer
of such interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
for the account of _______________________________, account number ____________
or, if mailed by check, to ____________________________________________________
Applicable statements should be mailed to _____________________________________
This information is provided by _____________________________
______________________________________________________________________________,
the assignee named above, or __________________________________, as its agent.
<PAGE>
MORTGAGE LOAN ASSET BACKED CERTIFICATES
SERIES 1999-NC1, CLASS BB
THIS CERTIFICATE REPRESENTS AN OBLIGATION OF THE CLASS X CERTIFICATE
AND DOES NOT REPRESENT AN INTEREST IN THE REMIC.
THIS CLASS BB CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES OF
THIS SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS BB CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH
TIME AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
THIS CLASS BB CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE
SECURITIES LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION
OF THIS CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE
MADE ONLY IN A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR
QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS BB CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (1) AN AFFIDAVIT
TO THE CERTIFICATE REGISTRAR AND THE TRUSTEE THAT SUCH TRANSFEREE IS
NOT (A) 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, (B) ANY ORGANIZATION (OTHER
THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS
EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE,
(C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE
(ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C)
BEING HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR (D)
AN AGENT OF A DISQUALIFIED ORGANIZATION AND (2) NO PURPOSE OF SUCH
TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (3) SUCH
TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE
FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
REGISTRATION IN THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER
DISPOSITION OF THIS CLASS X CERTIFICATE TO A DISQUALIFIED ORGANIZATION
OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE
DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON
SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS
ON THIS CERTIFICATE. EACH HOLDER OF A CLASS BB CERTIFICATE BY
ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE
PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS OF SECTION 5.02(d) OF
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT
IS A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL
OWNERSHIP OF THIS CLASS BB CERTIFICATE.
<PAGE>
Series 1999-NC1, Class BB Notional Amount of the Class BB
Certificates as of the Issue Date:
Pass-Through Rate: 5.50%
Servicer: Litton Loan Servicing LP
Date of Pooling and Servicing
Agreement July 1, 1999
Trustee: The Chase Manhattan Bank
Cut-off Date: July 1, 1999
Issue Date: July 29, 1999
First Distribution Date: January 20, 1999
No. 1
<PAGE>
MORTGAGE LOAN ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional one- to four-family first
mortgage loans formed and sold by
MERRILL LYNCH MORTGAGE INVESTORS, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
MERRILL LYNCH MORTGAGE INVESTORS, INC., THE SERVICER, THE TRUSTEE OR
ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES.
This certifies that Merrill Lynch, Pierce Fenner Smith
Incorporated is the registered owner of a Percentage Interest set forth above in
that certain beneficial ownership interest evidenced by all the Class BB
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Merrill Lynch
Mortgage Investors, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 20th day of each month or, if such 20th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"), from funds in the
Distribution Account in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to the Holders of Class BB Certificates on such Distribution Date pursuant to
the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class BB Certificates the
aggregate initial Certificate Principal Balance of which is in excess of
$2,500,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Trustee may deduct a reasonable wire transfer fee
from any payment made by wire transfer. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee for that
purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Loan Asset Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
the Percentage Interest specified on the face hereof.
The Class BB Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that
transfer is made pursuant to an effective registration statement under the 1933
Act and effective registration or qualification under applicable state
securities laws, or is made in a transaction that does not require such
registration or qualification. In the event that a transfer is to be made
without registration or qualification, the Trustee and the Certificate Registrar
shall require, in order to assure compliance with such laws, either (i) that the
Certificateholder desiring to effect the transfer and such Certificateholder's
prospective transferee each execute a representation letter in the form
described by the Agreement certifying to the Trustee and the Certificate
Registrar the facts surrounding the transfer, or (ii) that the Trustee and the
Certificate Registrar shall require an Opinion of Counsel satisfactory to them
that such transfer may be made without such registration or qualification, which
Opinion of Counsel shall not be an expense of the Depositor, the Trustee or the
Certificate Registrar, in their respective capacities as such. None of the
Depositor, the Certificate Registrar nor the Trustee is obligated to register or
qualify the Class of Certificates specified on the face hereof under the 1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any such Certificateholder desiring to effect
such transfer shall, and does hereby agree to, indemnify the Trustee, the
Depositor, the Certificate Registrar, any Master Servicer and any Servicer
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
Except as otherwise set forth in the next succeeding
paragraph, no transfer of a Certificate or any interest therein may be made to
employee benefit plans and certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Keogh plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested that are subject to the fiduciary responsibility
provisions of ERISA and Section 4975 of the Code ("Plans") or any person who is
directly or indirectly purchasing the Certificate or interest therein on behalf
of, as named fiduciary of, as trustee of, or with assets of a Plan, unless the
prospective transferee provides the Trustee with an opinion of counsel which
establish to the satisfaction of the Trustee that such transfer will not result
in a violation of Section 406 of ERISA or Section 4975 of the Code or cause the
Master Servicer or Trustee to be deemed a fiduciary of such Plan or result in
the imposition of an excise tax under Section 4975 of the Code. In the absence
of its having received the opinion of counsel contemplated by the preceding
sentence, the Trustee shall (unless the next succeeding paragraph applies)
require the prospective transferee of any Certificate to certify that it is
neither (i) a Plan nor (ii) a Person who is directly or indirectly purchasing
such Certificate on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan (including any insurance company using funds in its general or
separate accounts that may constitute "plan assets").
The Holder of this Certificate, by its acceptance hereof,
shall be deemed for all purposes to have consented to the provisions of Section
5.02 of the Agreement in so far as they relate to the Class BB Certificates
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, any Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Trustee, the Certificate Registrar nor any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Loans at the time of
purchase being 10% or less of the Maximum Collateral Balance.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: July 29, 1999
THE CHASE MANHATTAN BANK
as Trustee
By:_________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class BB Certificates referred to in the
within-mentioned Agreement.
Dated: July 29, 1999
THE CHASE MANHATTAN BANK,
as Certificate Registrar
By:___________________________________
Authorized Signatory
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right -----------------
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto___________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within Asset-Backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
for the account of _______________________________, account number ___________,
or, if mailed by check, to ___________________________________________________.
Applicable statements should be mailed to __________________
_______________________________________________________________________________
_______________________________________________________________________________
This information is provided by _____________________________________,
the assignee named above, or ___________________________, as its agent.
<PAGE>
EXHIBIT B-1
-----------
FORM OF TRUSTEE'S INITIAL CERTIFICATION
_______________________, 1999
Merrill Lynch Mortgage Investors, Inc.
North Tower
World Financial Center
New York, New York 10281
Litton Loan Servicing LP
5373 West Alabama,
Suite 600
Houston, TX 77056
Re: Pooling and Servicing Agreement, dated as of
July 1, 1999, among Merrill Lynch Mortgage
Investors, Inc., Litton Loan Servicing LP and The
Chase Manhattan Bank - Mortgage Loan Asset Backed
Certificates, Series 1999-NC1
--------------------------------------------------------
Ladies and Gentlemen:
Pursuant to Section 2.02 of the Agreement, we certify that, as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan specifically identified in the
exception report annexed hereto as not being covered by this certification), (i)
the Mortgage Note included in each Mortgage File required to be delivered to us
pursuant to the Agreement is in our possession and (ii) such Mortgage Note has
been reviewed by us and appears regular on its face and relates to such Mortgage
Loan.
Attached is the Trustee's preliminary exceptions in accordance
with Section 2.02 of the Agreement. Capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to them in the Agreement.
<PAGE>
The Trustee has made no independent examination of any documents contained in
each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
due authorization, recordability or genuineness of any of the documents
contained in the Mortgage File of any of the Mortgage Loans identified on the
Mortgage Loan Schedule, or (ii) the collectability, insurability, effectiveness
or suitability of any such Mortgage Loan.
THE CHASE MANHATTAN BANK,
as Trustee
By:__________________________________
Name:_____________________________
Title:____________________________
<PAGE>
EXHIBIT B-2
-----------
FORM OF TRUSTEE FINAL CERTIFICATION
_____________________, 1999
Merrill Lynch Mortgage Investors, Inc.
North Tower
World Financial Center
New York, New York 10281
Litton Loan Servicing LP
5373 West Alabama,
Suite 600
Houston, TX 77056
Re: Pooling and Servicing Agreement, dated as of
July 1, 1999, among Merrill Lynch Mortgage Investors,
Inc., Litton Loan Servicing LP and The Chase Manhattan
Bank, - Mortgage Loan Asset Backed Certificates, Series
1999-NC1
-----------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement, the undersigned, as Trustee, hereby certifies that as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed on the attachment hereto), it or a
Custodian on its behalf has received:
(i) the original recorded Mortgage, and the original recorded
power of attorney, if the Mortgage was executed pursuant to a power of
attorney, or a certified copy thereof in those instances where the
public recording office retains the original or where the original has
been lost;
(ii) an original recorded Assignment of the Mortgage to the
Trustee together with the original recorded Assignment or Assignments
of the Mortgage showing a complete chain of assignment from the
originator, or a certified copy of such Assignments in those instances
where the public recording retains the original or where original has
been lost; and
(iii) the original lender's title insurance policy.
The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Pooling and Servicing Agreement. The Trustee
makes no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in the Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Pooling and
Servicing Agreement.
THE CHASE MANHATTAN BANK,
as Trustee
By:______________________________
Name:____________________________
Title:___________________________
<PAGE>
EXHIBIT C
---------
MORTGAGE LOAN PURCHASE AGREEMENT
<PAGE>
EXHIBIT D-1
-----------
REQUEST FOR RELEASE
(for Trustee/Custodian)
Loan Information
- ----------------
Name of Mortgagor: _______________________
Servicer
Loan No.: _______________________
Trustee/Custodian
- -----------------
Name: The Chase Manhattan Bank
Address:
Trustee/Custodian
Mortgage File No.: _______________________
Depositor
- ---------
Name: MERRILL LYNCH MORTGAGE INVESTORS, INC.
Address: _______________________________________
Certificates: Mortgage Loan Asset Backed
Certificates, Series 1999-NC1
<PAGE>
The undersigned Servicer hereby acknowledges that it has
received from The Chase Manhattan Bank, as Trustee for the Holders of Mortgage
Loan Asset Backed Certificates, Series 1999-NC1, the documents referred to below
(the "Documents"). All capitalized terms not otherwise defined in this Request
for Release shall have the meanings given them in the Pooling and Servicing
Agreement, dated as of July 1, 1999, among the Trustee, the Depositor and the
Servicer (the "Pooling and Servicing Agreement").
( ) Promissory Note dated _______________, 19__, in the original
principal sum of $__________, made by _____________________, payable
to, or endorsed to the order of, the Trustee.
( ) Mortgage recorded on _________________________ as instrument no.
____________________ in the County Recorder's Office of the County of
_________________, State of __________________ in book/reel/docket
_________________ of official records at page/image _____________.
( ) Deed of Trust recorded on ___________________ as instrument no.
________________ in the County Recorder's Office of the County of
_________________, State of ____________________ in book/reel/docket
_________________ of official records at page/image ______________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
___________________ as instrument no. _________ in the County
Recorder's Office of the County of _______________, State of
_______________________ in book/reel/docket ____________ of official
records at page/image ____________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( ) ---------------------------------------------
( ) ---------------------------------------------
( ) ---------------------------------------------
( ) ---------------------------------------------
The undersigned Servicer hereby acknowledges and agrees as
follows:
(1) The Servicer shall hold and retain possession of the
Documents in trust for the benefit of the Trustee, solely for the
purposes provided in the Agreement.
(2) The Servicer shall not cause or permit the Documents to
become subject to, or encumbered by, any claim, liens, security
interest, charges, writs of attachment or other impositions nor shall
the Servicer assert or seek to assert any claims or rights of setoff to
or against the Documents or any proceeds thereof.
(3) The Servicer shall return each and every Document
previously requested from the Mortgage File to the Trustee when the
need therefor no longer exists, unless the Mortgage Loan relating to
the Documents has been liquidated and the proceeds thereof have been
remitted to the Collection Account and except as expressly provided in
the Agreement.
(4) The Documents and any proceeds thereof, including any
proceeds of proceeds, coming into the possession or control of the
Servicer shall at all times be earmarked for the account of the
Trustee, and the Servicer shall keep the Documents and any proceeds
separate and distinct from all other property in the Servicer's
possession, custody or control.
Dated:
[SERVICER]
By: ____________________________________
Name: _________________________________
Title: ___________________________________
<PAGE>
EXHIBIT D-2
-----------
REQUEST FOR RELEASE
[Mortgage Loans Paid in Full]
OFFICERS' CERTIFICATE AND TRUST RECEIPT
MORTGAGE LOAN ASSET BACKED CERTIFICATES
SERIES 1999-NC1
____________________________________________________ HEREBY CERTIFIES THAT
HE/SHE IS AN OFFICER OF THE SERVICER, HOLDING THE OFFICE SET FORTH BENEATH
HIS/HER SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN MADE.
LOAN NUMBER:__________________________ BORROWER'S NAME:
COUNTY: _________________________
WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE COLLECTION ACCOUNT PURSUANT TO SECTION
3.10 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.
DATED:
/ / VICE PRESIDENT
/ / ASSISTANT VICE PRESIDENT
<PAGE>
EXHIBIT E
---------
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
________________________, being duly sworn, deposes,
represents and warrants as follows:
1. I am a ______________________ of
____________________________ (the "Owner") a corporation duly organized and
existing under the laws of ______________, the record owner of Merrill Lynch
Mortgage Investors, Inc., Mortgage Asset Backed Certificates, Series 1999-NC1,
Class R (the "Class R Certificates"), on behalf of whom I make this affidavit
and agreement. Capitalized terms used but not defined herein have the respective
meanings assigned thereto in the Pooling and Servicing Agreement pursuant to
which the Class R Certificates were issued.
2. (a) The Owner understands that the Certificate is not being
registered under the Securities Act of 1933, as amended (the "Act"), or any
state securities laws and is being transferred to it in a transaction that is
exempt from the registration requirements of the Act and any such laws, (b) the
Owner is an "accredited investor," as defined in Regulation D under the Act, and
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of investments in the Certificate,
(c) the Owner has had the opportunity to ask questions of and receive answers
from the Depositor concerning the purchase of the Certificate and all matters
relating to its decision to purchase the Certificate, (d) the Owner is not an
employee benefit plan that is subject to the Employee Retirement Income Security
Act of 1974, as amended, nor a plan subject to Section 4975 of the Internal
Revenue Code of 1986 (each of the foregoing, a "Plan"), nor is it acting on
behalf of any Plan, (e) the Owner is acquiring the Certificate for investment
for its own account and not with a view to any distribution of such Certificate
(but without prejudice to its right at all times to sell or otherwise dispose of
the Certificate in accordance with clause (g) below), (f) the Owner has not
offered or sold any Certificate to, or solicited offers to buy any Certificate
from, any person, or otherwise approached or negotiated with any person with
respect thereto, or taken any other action that would result in a violation of
Section 5 of the Act, and (g) the Owner will not sell, transfer or otherwise
dispose of any Certificates unless such sale, transfer or other disposition is
made pursuant to an effective registration statement under the Act or is exempt
from such registration requirements.
3. The Owner (i) is and will be a "Permitted Transferee" as of
____________________, 199___ and (ii) is acquiring the Class R Certificates for
its own account or for the account of another Owner from which it has received
an affidavit in substantially the same form as this affidavit. A "Permitted
Transferee" is any person other than a "disqualified organization" or a
possession of the United States. For this purpose, a "disqualified organization"
means the United States, any state or political subdivision thereof, any agency
or instrumentality of any of the foregoing (other than an instrumentality all of
the activities of which are subject to tax and, except for the Federal Home Loan
Mortgage Corporation, a majority of whose board of directors is not selected by
any such governmental entity) or any foreign government, international
organization or any agency or instrumentality of such foreign government or
organization, any rural electric or telephone cooperative, or any organization
(other than certain farmers' cooperatives) that is generally exempt from federal
income tax unless such organization is subject to the tax on unrelated business
taxable income.
4. The Owner is aware (i) of the tax that would be imposed on
transfers of the Class R Certificates to disqualified organizations under the
Internal Revenue Code of 1986 that applies to all transfers of the Class R
Certificates after March 31, 1988; (ii) that such tax would be on the transferor
or, if such transfer is through an agent (which person includes a broker,
nominee or middleman) for a non-Permitted Transferee, on the agent; (iii) that
the person otherwise liable for the tax shall be relieved of liability for the
tax if the transferee furnishes to such person an affidavit that the transferee
is a Permitted Transferee and, at the time of transfer, such person does not
have actual knowledge that the affidavit is false; and (iv) that each of the
Class R Certificates may be a "noneconomic residual interest" within the meaning
of proposed Treasury regulations promulgated under the Code and that the
transferor of a "noneconomic residual interest" will remain liable for any taxes
due with respect to the income on such residual interest, unless no significant
purpose of the transfer is to impede the assessment or collection of tax.
5. The Owner is aware of the tax imposed on a "pass-through
entity" holding the Class R Certificates if, at any time during the taxable year
of the pass-through entity, a non-Permitted Transferee is the record holder of
an interest in such entity. (For this purpose, a "pass-through entity" includes
a regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)
6. The Owner is aware that the Trustee will not register the
transfer of any Class R Certificate unless the transferee, or the transferee's
agent, delivers to the Trustee, among other things, an affidavit in
substantially the same form as this affidavit. The Owner expressly agrees that
it will not consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.
7. The Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Class R Certificates will only be
owned, directly or indirectly, by an Owner that is a Permitted Transferee.
8. The Owner's taxpayer identification number is
___________________.
9. The Owner has reviewed the restrictions set forth on the
face of the Class R Certificates and the provisions of Section 5.02(d) of the
Pooling and Servicing Agreement under which the Class R Certificates were issued
(in particular, clauses (iii)(A) and (iii)(B) of Section 5.02(d) which authorize
the Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event that the Owner holds such Certificate
in violation of Section 5.02(d)); and that the Owner expressly agrees to be
bound by and to comply with such restrictions and provisions.
10. The Owner is not acquiring and will not transfer the Class
R Certificates in order to impede the assessment or collection of any tax.
11. The Owner anticipates that it will, so long as it holds
the Class R Certificates, have sufficient assets to pay any taxes owed by the
holder of such Class R Certificates, and hereby represents to and for the
benefit of the person from whom it acquired the Class R Certificates that the
Owner intends to pay taxes associated with holding such Class R Certificates as
they become due, fully understanding that it may incur tax liabilities in excess
of any cash flows generated by the Class R Certificates.
12. The Owner has no present knowledge that it may become
insolvent or subject to a bankruptcy proceeding for so long as it holds the
Class R Certificates.
13. The Owner has no present knowledge or expectation that it
will be unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding.
14. The Owner is not acquiring the Class R Certificates with
the intent to transfer the Class R Certificates to any person or entity that
will not have sufficient assets to pay any taxes owed by the holder of such
Class R Certificates, or that may become insolvent or subject to a bankruptcy
proceeding, for so long as the Class R Certificates remain outstanding.
15. The Owner will, in connection with any transfer that it
makes of the Class R Certificates, obtain from its transferee the
representations required by Section 5.02(d) of the Pooling and Servicing
Agreement under which the Class R Certificate were issued and will not
consummate any such transfer if it knows, or knows facts that should lead it to
believe, that any such representations are false.
16. The Owner will, in connection with any transfer that it
makes of the Class R Certificates, deliver to the Trustee an affidavit, which
represents and warrants that it is not transferring the Class R Certificates to
impede the assessment or collection of any tax and that it has no actual
knowledge that the proposed transferee: (i) has insufficient assets to pay any
taxes owed by such transferee as holder of the Class R Certificates; (ii) may
become insolvent or subject to a bankruptcy proceeding for so long as the Class
R Certificates remains outstanding; and (iii) is not a "Permitted Transferee".
17. The Owner is a citizen or resident of the United States, a
corporation or partnership (including an 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, any state thereof or the District
of Columbia (unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise), an estate whose income from sources without the
United States may be included 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 United States persons have the authority to control all substantial
decisions of the trust.
18. The Owner is not an "electing large partnership" within
the meaning of Section 775 of the Code.
<PAGE>
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
__________, 199___.
[OWNER]
By: _____________________________
Name: ___________________________
Title: [Vice] President
Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.
Subscribed and sworn before me this ____ day of __________,
199___.
Notary Public
County of ______________________
State of ________________________
My Commission expires:
<PAGE>
FORM OF TRANSFEROR AFFIDAVIT
STATE OF NEW YORK )
) ss. :
COUNTY OF NEW YORK )
______________________, being duly sworn, deposes, represents
and warrants as follows:
1. I am a ____________________ of
_____________________________ (the "Owner"), a corporation duly organized and
existing under the laws of ______________, on behalf of whom I make this
affidavit.
2. The Owner is not transferring the Residual Certificates to
impede the assessment or collection of any tax.
3. The Owner has no actual knowledge that the Person that is
the proposed transferee (the "Purchaser") of the Class R Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Class R Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Class R Certificates remain
outstanding; and (iii) is not both a United States and a Permitted Transferee.
4. The Owner understands that the Purchaser has delivered to
the Trustee a transfer affidavit and agreement in the form attached to the
Pooling and Servicing Agreement as Exhibit E. The Owner does not know or believe
that any representation contained therein is false.
5. At the time of transfer, the Owner has conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Owner has determined that the Purchaser has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Owner understands that the transfer of a
Residual Certificate may not be respected for United States income tax purposes
(and the Owner may continue to be liable for United States income taxes
associated therewith) unless the Owner has conducted such an investigation.
6. Neither the Owner nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Certificate,
any interest in the Certificate or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Certificate, any interest in the Certificate or any other similar security with,
any person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action which would
constitute a distribution of the Certificate under the Securities Act of 1933,
as amended (the "1933 Act"), or which would render the disposition of the
Certificate a violation of Section 5 of the 1933 Act or require registration
pursuant thereto.
7. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Pooling and Servicing Agreement
<PAGE>
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, this ____ day of ___________, 199___.
[OWNER]
By: _____________________________
Name: ___________________________
Title: [Vice] President
Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.
Subscribed and sworn before me this ____ day of __________,
199___.
Notary Public
County of _____________________
State of _______________________
My Commission expires:
<PAGE>
EXHIBIT F
---------
[RESERVED]
<PAGE>
EXHIBIT G
---------
FORM OF LOST NOTE AFFIDAVIT
New Century Mortage Corporation, a Delaware corporation (the
"Mortgage Loan Originator"), by its undersigned authorized representative,
hereby certifies:
Pursuant to the Mortgage Loan Purchase Agreement, dated
___________ __, 1999, between the Mortgage Loan Originator and Merrill Lynch
Mortgage Investors, Inc. (the "Depositor"), the Mortgage Loan Originator is
granting all of its right, title and interest in and to the Mortgage Loan
identified below to the Depositor. Terms used but not defined herein have the
respective meanings assigned to them in the Mortgage Loan Purchase Agreement.
Mortgage Loan Number:
Maker:
Original Principal Amount:
Original Mortgage Note Date:
Maturity Date:
The Mortgage Loan Originator is the current owner and holder
of the indebtedness evidenced by the original Mortgage Note.
After diligent search, the Mortgage Loan Originator has been
unable to locate the original Mortgage Note and believes it to be lost or
misplaced.
A true, complete and correct photocopy of the original
Mortgage Note is attached hereto.
If at any time the Mortgage Loan Originator locates the
original Mortgage Note, the Mortgage Loan Originator shall endorse such original
Mortgage Note in the following form: "Pay to the order of The Chase Manhattan
Bank, as Trustee for the registered holders of Merrill Lynch Mortgage Investors,
Inc., Mortgage Loan Asset Backed Certificates, Series 1999-NC1, without
recourse," and shall promptly deliver to the Trustee the original Mortgage Note
so endorsed, with all prior and intervening endorsements showing a complete
chain of endorsement from the originator to the Mortgage Loan Originator.
The Mortgage Loan Originator hereby indemnifies the Depositor,
the Trustee and the Certificateholders from and against any and all losses,
liabilities, damages, claims or expenses of whatever kind (including without
limitation attorneys' fees and disbursements) arising from or in connection with
the Mortgage Loan Originator's failure to have delivered the original Mortgage
Note (as required under the Mortgage Loan Purchase Agreement) to the Trustee as
designee of the Depositor, including without limitation any such losses,
liabilities, damages, claims or expenses arising from or in connection with any
claim by any third party who is the holder of such indebtedness by virtue of its
possession of such original Mortgage Note.
This Lost Note Affidavit shall inure to the benefit of the
Depositor, the Trustee and the Certificateholders and their respective
successors and permitted assigns.
Dated:
NEW CENTURY MORTAGE CORPORATION
By:______________________________
Name:____________________________
Title:_____________________________
<PAGE>
Schedule 1
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MORTGAGE LOAN SCHEDULE
<PAGE>
EXHIBIT H
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RESERVED
[RESERVED]
<PAGE>
EXHIBIT I
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FORM OF REMITTANCE REPORT
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