POOLING AND SERVICING AGREEMENT

EXHIBIT 4.1

 

 

 

 

 

 

MERRILL LYNCH MORTGAGE INVESTORS, INC.,

Depositor

 

WELLS FARGO BANK, N.A.

Master Servicer and Securities Administrator

and

WACHOVIA BANK, NATIONAL ASSOCIATION,

Trustee

 

POOLING AND SERVICING AGREEMENT

 

Dated as of October 1, 2005

 

_________________________________

 

Mortgage Pass-Through Certificates, Series MLCC 2005-3

 

 

 

TABLE OF CONTENTS

 

ARTICLE I

DEFINITIONS

 

	Section 1.01		Accounting
ARTICLE II		CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF

CERTIFICATES

 

	Section 2.01		Conveyance of Mortgage Loans to Trustee
	Section 2.02		Acceptance of Mortgage Loans by Trustee
	Section 2.03		Assignment of Interest in the Mortgage Loan Purchase Agreements
	Section 2.04		Substitution of Mortgage Loans
	Section 2.05		Issuance of Certificates
	Section 2.06		Representations and Warranties Concerning the Depositor
ARTICLE III		ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

 

Section 3.01	Master Servicer
Section 3.02	REMIC-Related Covenants
Section 3.03	Monitoring of Servicers
Section 3.04	Fidelity Bond
Section 3.05	Power to Act; Procedures
Section 3.06	Due-on-Sale Clauses; Assumption Agreements
Section 3.07	Release of Mortgage Files
Section 3.08	Documents, Records and Funds in Possession of Master Servicer

To Be Held for Trustee

Section 3.09	Standard Hazard Insurance and Flood Insurance Policies
Section 3.10	Presentment of Claims and Collection of Proceeds
Section 3.11	Maintenance of the Primary Mortgage Insurance Policies
Section 3.12	Trustee to Retain Possession of Certain Insurance Policies

and Documents

	Section 3.13		Realization Upon Defaulted Mortgage Loans
	Section 3.14		Compensation for the Master Servicer
	Section 3.15		REO Property
	Section 3.16		Annual Officer's Certificate as to Compliance
	Section 3.17		Annual Independent Accountant's Servicing Report
	Section 3.18		Reports Filed with Securities and Exchange Commission
	Section 3.19		Foreclosure Proceedings
	Section 3.20		Additional Collateral Mortgage Loans
ARTICLE IV		ACCOUNTS

 

Section 4.01	Protected Accounts
Section 4.02	Master Servicer Collection Account

 

 

 

 

Section 4.03

Permitted Withdrawals and Transfers from the Master

Servicer Collection Account

	Section 4.04		Distribution Account
	Section 4.05		Permitted Withdrawals and Transfers from the Distribution Account
	Section 4.06		Derivative Contracts
ARTICLE V		CERTIFICATES

 

	Section 5.01		The Certificates.
	Section 5.02		Registration of Transfer and Exchange of Certificates
	Section 5.03		Mutilated, Destroyed, Lost or Stolen Certificates
	Section 5.04		Persons Deemed Owners
ARTICLE VI		PAYMENTS TO CERTIFICATEHOLDERS

 

Section 6.01	Distributions on the Certificates
Section 6.02	Allocation of Losses
Section 6.03	Payments
Section 6.04	Statements to Certificateholders
Section 6.05	Monthly Advances
Section 6.06	Compensating Interest Payments
Section 6.07	Distributions and Allocation of Losses on the Uncertificated REMIC

Regular Interests

ARTICLE VII

THE MASTER SERVICER AND THE DEPOSITOR

 

Section 7.01	Liabilities of the Master Servicer
Section 7.02	Merger or Consolidation of the Master Servicer
Section 7.03	Indemnification of the Trustee, the Master Servicer and the

Securities Administrator

	Section 7.04		Limitations on Liability of the Master Servicer and Others
	Section 7.05		Master Servicer Not to Resign
	Section 7.06		Successor Master Servicer
	Section 7.07		Sale and Assignment of Master Servicing
ARTICLE VIII		DEFAULT

 

Section 8.01	Events of Default
Section 8.02	Trustee to Act; Appointment of Successor
Section 8.03	Notification to Certificateholders
Section 8.04	Waiver of Defaults
Section 8.05	List of Certificateholders

 

ARTICLE IX

CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR

 

Section 9.01

Duties of Trustee

 

 

 

 

Section 9.02	Certain Matters Affecting the Trustee and the Securities Administrator
Section 9.03	Trustee and Securities Administrator Not Liable for Certificates or

Mortgage Loans

Section 9.04	Trustee and Securities Administrator May Own Certificates
Section 9.05	Trustee's and Securities Administrator's Fees and Expenses
Section 9.06	Eligibility Requirements for Trustee and Securities Administrator
Section 9.07	Insurance
Section 9.08	Resignation and Removal of the Trustee and Securities

Administrator

Section 9.09	Successor Trustee and Successor Securities Administrator
Section 9.10	Merger or Consolidation of Trustee or Securities Administrator
Section 9.11	Appointment of Co-Trustee or Separate Trustee

 

Section 9.12

Federal Information Returns and Reports to Certificateholders; REMIC Administration; Grantor Trust Administration

 

ARTICLE X

TERMINATION

 

	Section 10.01		Termination.
	Section 10.02		Additional Termination Requirements
ARTICLE XI		MISCELLANEOUS PROVISIONS

 

Section 11.01

Intent of Parties

Section 11.02

Amendment

Section 11.03

Recordation of Agreement

Section 11.04

Limitation on Rights of Certificateholders

Section 11.05

Acts of Certificateholders

Section 11.06

Governing Law

Section 11.07

Notices

Section 11.08

Severability of Provisions

Section 11.09

Successors and Assigns

Section 11.10

Article and Section Headings

Section 11.11

Counterparts

Section 11.12

Notice to Rating Agencies

Section 11.13

Activities of the Issuer

 

 

 

 

EXHIBITS

 

Exhibit A-1	-	Form of Class A and Class M Certificates
Exhibit A-2	-	Form of Class B Certificates
Exhibit A-3	-	Form of Class R Certificates
Exhibit B	-	Mortgage Loan Schedule
Exhibit C	-	[Reserved]
Exhibit D	-	Request for Release of Documents
Exhibit E-1	-	Form of Transfer Affidavit pursuant to Section 860E(e)(4)
Exhibit E-2	-	Form of Transferor Certificate
Exhibit F-1	-	Form of Transferor Representation Letter
Exhibit F-2	-	Form of Investor Representation Letter
Exhibit F-3	-	Form of Rule 144A Letter
Exhibit G	-	Form of Custodial Agreement
Exhibit H-1 to H-3	-	Servicing Agreements
Exhibit I-1 to I-3	-	Assignment Agreements
Exhibit J-1 to J-3	-	Mortgage Loan Purchase Agreements and Sale and Assignment Agreement
Exhibit K	-	Form Certification to be Provided by the Master Servicer with Form 10-K

 

 

 

 

POOLING AND SERVICING AGREEMENT

This Pooling and Servicing Agreement is dated as of October 1, 2005 (the “Agreement”), among MERRILL LYNCH MORTGAGE INVESTORS, INC., as depositor (the “Depositor”), WELLS FARGO BANK, N.A., as master servicer (in such capacity, the “Master Servicer”) and as securities administrator (in such capacity, the “Securities Administrator”) and WACHOVIA BANK, NATIONAL ASSOCIATION, as trustee (the “Trustee”).

PRELIMINARY STATEMENT

The Depositor intends to sell mortgage 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 Mortgage Loans (as defined herein). As provided herein, the Trustee will make, in accordance with Section 9.12, an election to treat the entire segregated pool of assets described in the definition of REMIC I (as defined herein), and subject to this Agreement, as a real estate mortgage investment conduit (a “REMIC”) for federal income tax purposes and such segregated pool of assets will be designated as “REMIC I.” The REMIC I Regular Interests will be the “regular interests” in REMIC I and the Class R-I Certificates will be the sole class of “residual interests” in REMIC I for purposes of the REMIC Provisions (as defined herein) under the federal income tax law. A segregated pool of assets consisting of the REMIC I Regular Interests will be designated as “REMIC II,” and the Trustee will make, in accordance with Section 9.12, a separate REMIC election with respect thereto. The REMIC II Regular Interests will be “regular interests” in REMIC II and the Class R-II Certificates will be the sole Class of “residual interests” in REMIC II for purposes of the REMIC Provisions. A segregated pool of assets consisting of the REMIC II Regular Interests will be designated as “REMIC III” and the REMIC Administrator will make a separate REMIC election with respect thereto. The REMIC III I-A, REMIC III II-A, REMIC III III-A, Class I-A-IO, Class II-A-IO, Class III-A-IO, Class IV-A, Class IV-A-IO, Class V-A, Class V-A-IO, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates will be “regular interests” in REMIC III, and the Class R-III Certificates will be the sole class of “residual interests” therein for purposes of the REMIC Provisions (as defined herein) under federal income tax law.

The following table irrevocably sets forth the designation, the REMIC I Pass-Through Rate, the initial Uncertificated Principal Balance and, for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for the REMIC I Regular Interests. The REMIC I Regular Interests will not be certificated.

 

 

 

 

 

REMIC I Regular Interest Designation	REMIC I Pass-Through Rate	Initial Uncertificated Principal Balance			Latest Possible Maturity Date(1)
I-SUB	Variable (2)	$	1,304.26		October 25, 2035
I-GRP	Variable (2)	$	34,778.76		October 25, 2035
II-SUB	Variable (2)	$	736.64		October 25, 2035
II-GRP	Variable (2)	$	19,641.74		October 25, 2035
III-SUB	Variable (2)	$	1,072.10		October 25, 2035
III-GRP	Variable (2)	$	28,586.70		October 25, 2035
IV-SUB	Variable (2)	$	933.99		October 25, 2035
IV-GRP	Variable (2)	$	24,907.59		October 25, 2035
V-SUB	Variable (2)	$	374.39		October 25, 2035
V-GRP	Variable (2)	$	9,983.79		October 25, 2035
ZZZ	Variable (2)	$	1,178,863,422.64		October 25, 2035

_________________

(1)	For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution Date immediately following the latest possible maturity date for the Mortgage Loans has been designated as the “latest possible maturity date” for each REMIC I Regular Interest.

 

(2)	Calculated in accordance with the definition of “REMIC I Pass-Through Rate” herein.

The following table irrevocably sets forth the designation, the REMIC II Pass-Through Rate, the initial Uncertificated Principal Balance, and solely for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for each of the REMIC II Regular Interests. The REMIC II Regular Interests will not be certificated.

 

REMIC II Regular Interest Designation	REMIC II Pass- Through Rate	Initial Uncertificated Principal Balance		Latest Possible Maturity(1)
I-A	Variable (2)	$	334,745,000.00	October 25, 2035
II-A	Variable(2)	$	189,051,000.00	October 25, 2035
III-A	Variable(2)	$	275,146,000.00	October 25, 2035
IV-A	Variable (2)	$	239,736,000.00	October 25, 2035
V-A	Variable (2)	$	96,094,000.00	October 25, 2035
M-1	Variable (2)	$	17,095,000.00	October 25, 2035
M-2	Variable (2)	$	10,021,000.00	October 25, 2035
M-3	Variable (2)	$	6,484,000.00	October 25, 2035
B-1	Variable (2)	$	2,947,000.00	October 25, 2035
B-2	Variable (2)	$	2,357,000.00	October 25, 2035
B-3	Variable (2)	$	5,309,742.59	October 25, 2035

_________________

(1)	For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution Date immediately following the maturity date for the Mortgage Loan with the latest maturity date has been designated as the “latest possible maturity date” for each REMIC II Regular Interest.

 

(2)	Calculated in accordance with the definition of “REMIC II Pass-Through Rate” herein.

The following table sets forth the designation, type, Pass-Through Rate, aggregate Initial Certificate Principal Balance, Assumed Final Distribution Date, initial ratings and certain

 

 

features for each Class of Certificates comprising the interests in the Trust Fund created hereunder:

 

 

 

 

Class	Original Class Certificate Balance or Notional Amount		Initial Pass- Through Rate	Assumed Final Distribution Date(1)
REMIC III I-A	$	334,745,000.00	Variable (2)	October 25, 2035
I-A-IO	$	334,745,000.00	Variable (2)	October 25, 2035
REMIC III II-A	$	189,051,000.00	Variable (2)	October 25, 2035
II-A-IO	$	189,051,000.00	Variable (2)	October 25, 2035
REMIC III III-A	$	275,146,000.00	Variable (2)	October 25, 2035
III-A-IO	$	275,146,000.00	Variable (2)	October 25, 2035
IV-A	$	239,736,000.00	Variable (2)	October 25, 2035
IV-A-IO	$	239,736,000.00	Variable (2)	October 25, 2035
V-A	$	96,094,000.00	Variable (2)	October 25, 2035
V-A-IO	$	96,094,000.00	Variable (2)	October 25, 2035
M-1	$	17,095,000.00	Variable (2)	October 25, 2035
M-2	$	10,021,000.00	Variable (2)	October 25, 2035
M-3	$	6,484,000.00	Variable (2)	October 25, 2035
B-1	$	2,947,000.00	Variable (2)	October 25, 2035
B-2	$	2,357,000.00	Variable (2)	October 25, 2035
B-3	$	5,309,742.59	Variable (2)	October 25, 2035
R-I		N/A	N/A	October 25, 2035
R-II		N/A	N/A	October 25, 2035
R-III		N/A	N/A	October 25, 2035

_________________

(1)	For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution Date immediately following the maturity date for the Mortgage Loan with the latest maturity date has been designated as the “latest possible maturity date” for each Class of Certificates.

 

(2)	Calculated in accordance with the definition of “Pass-Through Rate” herein.

 

 

 

 

ARTICLE I

DEFINITIONS

Whenever used in this Agreement, the following words and phrases, unless otherwise expressly provided or unless the context otherwise requires, shall have the meanings specified in this Article.

Accepted Master Servicing Practices : With respect to any Mortgage Loan, as applicable, either (x) those customary mortgage master servicing practices of prudent mortgage servicing institutions that master service mortgage loans of the same type and quality as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located, to the extent applicable to the Trustee or the Master Servicer (except in its capacity as successor to a Servicer), or (y) as provided in the applicable Servicing Agreement, to the extent applicable to any Servicer, but in no event below the standard set forth in clause (x).

Account : The Master Servicer Collection Account, Distribution Account and any Protected Account as the context may require.

Accrued Certificate Interest : With respect to each Class of Certificates, an amount equal to the interest accrued during the related Interest Accrual Period on the Class Certificate Balance or Notional Amount thereof at the then-applicable Pass-Through Rate. Accrued Certificate Interest on any Class of Certificates will be reduced by the amount of (i) Prepayment Interest Shortfalls (to the extent not offset by the related Servicer or Master Servicer with a Compensating Interest Payment as provided in Section 6.06) and (ii) any other interest shortfalls not covered by the subordination provided by the Class M Certificates and Class B Certificates, including shortfalls as a result of the Relief Act or similar legislation or regulations, with all such reductions allocated among all of the Certificates in proportion to their respective amounts of Accrued Certificate Interest payable on such Distribution Date which would have resulted absent such reductions.

Affiliate : As to any Person, any other Person controlling, controlled by or under common control with such Person. “Control” means the power to direct the management and policies of a Person, directly or indirectly, whether through ownership of voting securities, by contract or otherwise. “Controlled” and “Controlling” have meanings correlative to the foregoing. The Trustee may conclusively presume that a Person is not an Affiliate of another Person unless a Responsible Officer of the Trustee has actual knowledge to the contrary.

Agreement : This Pooling and Servicing Agreement, including the exhibits hereto, and all amendments hereof and supplements hereto.

Applicable Credit Rating : For any long-term deposit or security, a credit rating of AAA in the case of Fitch and S&P or Aaa in the case of Moody’s. For any short-term deposit or security, a rating of F-1+ in the case of Fitch or A-l+ in the case of S&P or P-1 in the case of Moody’s.

 

 

 

Applicable Credit Support Percentage : With respect to any Class of Certificates, the sum of the related Class Subordination Percentages of such Class and all Classes of Subordinate Certificates which have a lower relative priority of payment than such Class.

Applicable State Law : For purposes of Section 9.12(d), the Applicable State Law shall be (a) the law of the State of New York and (b) such other state law whose applicability shall have been brought to the attention of the Securities Administrator and the Trustee by either (i) an Opinion of Counsel reasonably acceptable to the Securities Administrator and the Trustee delivered to it by the Master Servicer or the Depositor, or (ii) written notice from the appropriate taxing authority as to the applicability of such state law.

Appraised Value : For any Mortgaged Property related to a Mortgage Loan, the amount set forth as the appraised value of such Mortgaged Property in an appraisal made for the mortgage originator in connection with its origination of the related Mortgage Loan.

Assignment : An assignment of the Mortgage, notice of transfer or equivalent instrument, in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect of record the sale of the Mortgage Loan to the Trustee for the benefit of Certificateholders, which assignment, notice of transfer or equivalent instrument may be in the form of one or more blanket assignments covering Mortgages secured by Mortgaged Properties located in the same county, if permitted by law and accompanied by an Opinion of Counsel to that effect.

Assignment Agreements : The Wells Fargo Assignment Agreement, the First Republic Assignment Agreement and the PHH Assignment Agreement, which are attached hereto as Exhibit I.

Assumed Final Distribution Date : For all Classes of Certificates, October 25, 2035, or if such day is not a Business Day, the next succeeding Business Day.

Available Funds : For any Distribution Date, the sum of the Group I Available Funds, Group II Available Funds, Group III Available Funds, Group IV Available Funds and Group V Available Funds.

Bankruptcy Code : The United States Bankruptcy Code, as amended as codified in 11 U.S.C. §§ 101-1330.

Book-Entry Certificates : Any of the Certificates (other than the REMIC III I-A, REMIC III II-A and REMIC III III-A Certificates) that shall be registered in the name of the Depository or its nominee, the ownership of which is reflected on the books of the Depository or on the books of a Person maintaining an account with the Depository (directly, as a “Depository Participant”, or indirectly, as an indirect participant in accordance with the rules of the Depository and as described in Section 5.02 hereof). On the Closing Date, the Certificates (other than the Class R Certificates) shall be Book-Entry Certificates.

Business Day : Any day other than (i) a Saturday or a Sunday, or (ii) a day on which the New York Stock Exchange or Federal Reserve is closed or on which banking institutions in the

 

 

jurisdiction in which the Trustee, the Master Servicer, any Servicer or the Securities Administrator are authorized or obligated by law or executive order to be closed.

Certificate : Any mortgage pass-through certificate evidencing a beneficial ownership interest in the Trust Fund signed and countersigned by the Trustee.

Certificateholder or Holder : The Person in whose name a Regular Certificate is registered in the Certificate Register, except that a Disqualified Organization or non-U.S. Person shall not be a Holder of a Class R Certificate for any purpose hereof.

Certificate Owner : With respect to each Book-Entry Certificate, any beneficial owner thereof.

Certificate Register and Certificate Registrar : The register maintained and registrar appointed pursuant to Section 5.02 hereof.

Class: Collectively, Certificates which have the same priority of payment and bear the same class designation and the form of which is identical except for variation in the Percentage Interest evidenced thereby.

Class A Certificate : Any of the REMIC III I-A, Class I-A-IO, REMIC III II-A, Class II-A-IO, REMIC III III-A, Class III-A-IO, Class IV-A, Class IV-A-IO, Class V-A and Class V-A-IO Certificates as designated on the face thereof substantially in the form annexed hereto as Exhibit A-1, executed by the Securities Administrator and authenticated and delivered by the Securities Administrator, representing the right to distributions as set forth herein and therein.

Class A Certificateholder : Any Holder of a Class A Certificate.

Class B Certificate : Any one of the Class B-1, Class B-2 or Class B-3 Certificates as designated on the face thereof substantially in the form annexed hereto as Exhibit A-2, executed by the Securities Administrator and authenticated and delivered by the Securities Administrator, representing the right to distributions as set forth herein and therein.

Class B Certificateholder : Any Holder of a Class B Certificate.

Class B Percentage : The Class B-1 Percentage, Class B-2 Percentage or Class B-3 Percentage.

Class B-1 Percentage : With respect to any Distribution Date, the lesser of 100% and a fraction, expressed as a percentage, the numerator of which is the aggregate Class Certificate Balance of the Class B-1 Certificates immediately prior to such Distribution Date and the denominator of which is the aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO Properties) immediately prior to such Distribution Date.

Class B-2 Percentage : With respect to any Distribution Date, the lesser of 100% and a fraction, expressed as a percentage, the numerator of which is the aggregate Class Certificate Balance of the Class B-2 Certificates immediately prior to such Distribution Date and the

 

 

denominator of which is the aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO Properties) immediately prior to such Distribution Date.

Class B-3 Percentage : With respect to any Distribution Date, the lesser of 100% and a fraction, expressed as a percentage, the numerator of which is the aggregate Class Certificate Balance of the Class B-3 Certificates immediately prior to such Distribution Date and the denominator of which is the aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO Properties) immediately prior to such Distribution Date.

Class Certificate Balance : With respect to any Certificate (other than an Interest Only Certificate) as of any date of determination, the Class Certificate Balance of such Certificate on the Distribution Date immediately prior to such date of determination, plus, in the case of a Subordinate Certificate, any Subsequent Recoveries added to the Class Certificate Balance of such Certificate pursuant to Section 6.01, and reduced by the aggregate of (a) all distributions of principal made thereon on such immediately prior Distribution Date and (b) without duplication of amounts described in clause (a) above, reductions in the Class Certificate Balance thereof in connection with allocations thereto of Realized Losses on the Mortgage Loans and Extraordinary Trust Fund Expenses on such immediately prior Distribution Date (or, in the case of any date of determination up to and including the initial Distribution Date, the initial Class Certificate Balance of such Certificate, as stated on the face thereof); provided, however, that the Class Certificate Balance of each Subordinate Certificate of the Class of Subordinate Certificates outstanding with the highest numerical designation at any given time shall be calculated to equal the Percentage Interest evidenced by such Certificate multiplied by the excess, if any, of (A) the then aggregate Stated Principal Balance of the Mortgage Loans over (B) the then aggregate Class Certificate Balance of all other Classes of Certificates then outstanding. The Interest Only Certificates shall not have a Class Certificate Balance and shall not be entitled to any distributions of principal. The Class R Certificates shall not have Class Certificate Balances.

Class M Certificate : Any one of the Class M-1, Class M-2 or Class M-3 Certificates as designated on the face thereof substantially in the form annexed hereto as Exhibit A-1, executed by the Securities Administrator and authenticated and delivered by the Securities Administrator, representing the right to distributions as set forth herein and therein.

Class M Certificateholder : Any Holder of a Class M Certificate.

Class M Percentage : The Class M-1 Percentage, Class M-2 Percentage or Class M-3 Percentage.

Class M-1 Percentage : With respect to any Distribution Date, the lesser of 100% and a fraction, expressed as a percentage, the numerator of which is the aggregate Class Certificate Balance of the Class M-1 Certificates immediately prior to such date and the denominator of which is the aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO Properties) immediately prior to such Distribution Date.

Class M-2 Percentage : With respect to any Distribution Date, the lesser of 100% and a fraction, expressed as a percentage, the numerator of which is the aggregate Class Certificate Balance of the Class M-2 Certificates immediately prior to such date and the denominator of

 

 

which is the aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO Properties) immediately prior to such Distribution Date.

Class M-3 Percentage : With respect to any Distribution Date, the lesser of 100% and a fraction, expressed as a percentage, the numerator of which is the aggregate Class Certificate Balance of the Class M-3 Certificates immediately prior to such date and the denominator of which is the aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO Properties) immediately prior to such Distribution Date.

Class R Certificates : Any one of the Class R-I , Class R-II or Class R-III Certificates executed, authenticated and delivered by the Securities Administrator substantially in the form annexed hereto as Exhibit A-3 and evidencing the ownership of an interest designated as a Residual Interest.

Class Subordination Percentage : With respect to any Distribution Date and each Class of Subordinate Certificates, the fraction (expressed as a percentage) the numerator of which is the Class Certificate Balance of such Class of Subordinate Certificates immediately prior to such Distribution Date and the denominator of which is the aggregate of the Class Certificate Balances of all Classes of Certificates immediately prior to such Distribution Date.

Closing Date : October 31, 2005.

Code : The Internal Revenue Code of 1986, as amended.

Commission : The Securities and Exchange Commission.

Compensating Interest Payment : As defined in Section 6.06.

Controlling Class Holder : The holder of a majority of the most subordinate of the Subordinate Certificates then outstanding.

Cooperative : A corporation that has been formed for the purpose of cooperative apartment ownership.

Cooperative Assets : Shares issued by Cooperatives, the related Cooperative Lease and any other collateral securing the Cooperative Loans.

Cooperative Lease : With respect to a Cooperative Loan, the proprietary lease or occupancy agreement with respect to the cooperative apartment occupied by the Mortgagor and relating to the related Cooperative Assets, which lease or agreement confers an exclusive right to the holder of such Cooperative Assets to occupy such apartment.

Cooperative Loan : The indebtedness of a Mortgagor evidenced by a Mortgage Note which is secured by Cooperative Assets and which is being sold to the Depositor pursuant to this Agreement, the Mortgage Loans so sold being identified in the Mortgage Loan Schedule.

Cooperative Stock : With respect to a Cooperative Loan, the single outstanding class of stock, partnership interest or other ownership instrument in the related Cooperative.

 

 

 

Corporate Trust Office : The principal corporate trust office of the Trustee at which at any particular time its corporate trust business in connection with this Agreement shall be administered, which office at the date of the execution of this instrument is located at Wachovia Bank, National Association, 401 South Tryon Street, 12 ^th Floor, Charlotte, NC 28288-1179, Attention: Corporate Trust Group - Merrill Lynch Mortgage Investors, Inc., Series MLCC 2005-3, or at such other address as the Trustee may designate from time to time by notice to the Certificateholders, the Depositor and the Master Servicer. With respect to the Securities Administrator, Master Servicer and Certificate Registrar and the presentment of Certificates for registration of transfer, exchange or final payment, Wells Fargo Bank, N.A., Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479, Attention: Corporate Trust/Series MLCC 2005-3, and for all other purposes, P.O. Box 98, Columbia, Maryland 21046 (or for overnight deliveries, 9062 Old Annapolis Road, Columbia, Maryland 21045), Attention: Corporate Trust/MLCC Series 2005-3.

Corresponding Class : With respect to each REMIC II Regular Interest, the Certificate with the corresponding designation.

Curtailment : Any Principal Prepayment made by a Mortgagor which is not a Principal Prepayment in Full.

Custodial Agreement : An agreement, dated as of the Closing Date among the Depositor, the Master Servicer, the Trustee and the Custodian in substantially the form of Exhibit G hereto.

Custodian : Wells Fargo Bank, N.A., or any successor custodian appointed pursuant to the provisions hereof and of the Custodial Agreement.

Cut-off Date : October 1, 2005.

Debt Service Reduction : Any reduction of the Monthly Payments which a Mortgagor is obligated to pay with respect to a Mortgage Loan as a result of any proceeding under the Bankruptcy Code or any other similar state law or other proceeding.

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.

Depositor : Merrill Lynch Mortgage Investors, Inc., a Delaware corporation, or any successor in interest.

Depository : The Depository Trust Company, the nominee of which is Cede & Co., or any successor thereto.

Depository Participant : A broker, dealer, bank or other financial institution or other Person for whom from time to time the Depository effects book-entry transfers and pledges of securities deposited with the Depository.

 

 

 

Derivative Contract : Any ISDA Master Agreement, together with the related Schedule and Confirmation, entered into by the Trustee and a Derivative Counterparty in accordance with Section 4.06.

Derivative Counterparty : Any counterparty to a Derivative Contract as provided in Section 4.06.

Designated Depository Institution : A depository institution (commercial bank, federal savings bank, mutual savings bank or savings and loan association) or trust company (which may include the Trustee), the deposits of which are fully insured by the FDIC to the extent provided by law.

Determination Date : With respect to each Mortgage Loan, the Determination Date as defined in the related Servicing Agreement.

Disqualified Organization : 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 Freddie Mac or any successor thereto, 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 or (v) 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 any REMIC contained in the Trust or any Person having an ownership interest in the Residual Certificate (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 pursuant to Section 4.04, which shall be denominated “Wachovia Bank, National Association, as Trustee f/b/o holders of Merrill Lynch Mortgage Investors, Inc., Mortgage Pass-Through Certificates, Series MLCC 2005-3 - Distribution Account.” The Distribution Account shall be an Eligible Account.

Distribution Account Deposit Date : The Business Day prior to each Distribution Date.

Distribution Date : The 25th day of any month, beginning in November 2005, or, if such 25th day is not a Business Day, the Business Day immediately following.

Due Date : With respect to each Mortgage Loan, the date in each month on which its Monthly Payment is due if such due date is the first day of a month and otherwise is deemed to

 

 

be the first day of the following month or such other date specified in the related Servicing Agreement.

Due Period : With respect to any Distribution Date and each Mortgage Loan, the period commencing on the second day of the month preceding the month in which the Distribution Date occurs and ending at the close of business on the first day of the month in which the Distribution Date occurs.

Eligible Account : Any of (i) a segregated account maintained with a federal or state chartered depository institution (A) the short-term obligations of which are rated A-1 or better by S&P and P-1 by Moody's at the time of any deposit therein or (B) insured by the FDIC (to the limits established by such Corporation), the uninsured deposits in which account are otherwise secured such that, as evidenced by an Opinion of Counsel (obtained by the Person requesting that the account be held pursuant to this clause (i)) delivered to the Trustee prior to the establishment of such account, the Certificateholders will have a claim with respect to the funds in such account and a perfected first priority security interest against any collateral (which shall be limited to Permitted Investments, each of which shall mature not later than the Business Day immediately preceding the Distribution Date next following the date of investment in such collateral or the Distribution Date if such Permitted Investment is an obligation of the institution that maintains the Distribution Account) securing such funds that is superior to claims of any other depositors or general creditors of the depository institution with which such account is maintained, (ii) a segregated trust account or accounts maintained with a federal or state chartered depository institution or trust company with trust powers acting in its fiduciary capacity or (iii) a segregated account or accounts of a depository institution acceptable to the Rating Agencies (as evidenced in writing by the Rating Agencies that use of any such account as the Distribution Account will not have an adverse effect on the then-current ratings assigned to the Classes of the Certificates then rated by the Rating Agencies). Eligible Accounts may bear interest.

ERISA : The Employee Retirement Income Security Act of 1974, as amended.

ERISA-Restricted Certificates : Any of the Class B-1, Class B-2, Class B-3, Class R-I, Class R-II or Class R-III Certificates.

Event of Default : An event of default described in Section 8.01.

Excess Liquidation Proceeds : To the extent that such amount is not required by law to be paid to the related Mortgagor, the amount, if any, by which Liquidation Proceeds with respect to a Liquidated Mortgage Loan exceed the sum of (i) the Outstanding Principal Balance of such Mortgage Loan and accrued but unpaid interest at the related Mortgage Interest Rate through the last day of the month in which the related Liquidation Date occurs, plus (ii) related Liquidation Expenses.

Expiration Notice : The notice to be delivered by the Master Servicer to the related Servicer and the Controlling Class Holder (pursuant to the related Servicing Agreement), stating that it has received notice from the Investor that (i) all of the Classes of Subordinate Certificates

 

 

are no longer held by the Investor or an Affiliate of the Investor or (ii) the Investor has forfeited its rights set forth in the related Servicing Agreement.

Extraordinary Trust Fund Expenses : Any amounts reimbursable to the Master Servicer or the Depositor pursuant to this Agreement, including but not limited to Sections 4.03, 4.05 and 7.04, any amounts reimbursable to the Trustee and the Securities Administrator from the Trust Fund pursuant to this Agreement, including but not limited to Section 9.05, and any other costs, expenses, liabilities and losses borne by the Trust Fund (exclusive of any cost, expense, liability or loss that is specific to a particular Mortgage Loan or REO Property and is taken into account in calculating a Realized Loss in respect thereof) for which the Trust Fund has not and, in the reasonable good faith judgment of the Trustee, shall not, obtain reimbursement or indemnification from any other Person.

Fannie Mae : Federal National Mortgage Association or any successor thereto.

FDIC : Federal Deposit Insurance Corporation or any successor thereto.

Final Certification : The certification substantially in the form of Exhibit Two to the Custodial Agreement.

First Republic : First Republic Bank.

First Republic Assignment Agreement : Shall mean the Assignment, Assumption and Recognition Agreement, dated as of October 31, 2005, among KKR, the Depositor and First Republic, and acknowledged and agreed by the Master Servicer, pursuant to which the First Republic Servicing Agreement and the rights of KKR thereunder (other than the rights to enforce the representations and warranties with respect to the Countrywide Loans) were assigned to the Depositor for the benefit of the Certificateholders.

First Republic Loans : Shall mean those Mortgage Loans serviced by First Republic pursuant to the First Republic Servicing Agreement.

First Republic Servicing Agreement : Shall mean the Master Mortgage Loan Purchase and Servicing Agreement, dated as of December 1, 2004, as amended and restated as of January 31, 2005, between KKR Financial Corp. and First Republic.

Fitch : Fitch Ratings or its successor in interest.

Foreclosure Notice : The notice to be delivered by the related Servicer to the Master Servicer (pursuant to the related Servicing Agreement) no later than five Business Days prior to its commencement of foreclosure proceedings with respect to a Mortgage Loan, of its intention to commence such foreclosure proceedings.

Freddie Mac : Freddie Mac, formerly the Federal Home Loan Mortgage Corporation, or any successor thereto.

Grantor Trust : Any of the three trust funds created under the Grantor Trust Agreement.

 

 

 

Grantor Trust Agreement : Any of the three grantor trust agreements, each dated October 31, 2005, between the Depositor, the Grantor Trustee and the Securities Administrator.

Grantor Trustee : Wachovia Bank, National Association, or any successor in interest.

Gross Margin : As to each Mortgage Loan, the fixed percentage set forth in the related Mortgage Note and indicated on the Mortgage Loan Schedule which percentage is added to the related Index on each Interest Adjustment Date to determine (subject to rounding, the minimum and maximum Mortgage Interest Rate and the Periodic Rate Cap) the Mortgage Interest Rate until the next Interest Adjustment Date.

Group I Available Funds : With respect to any Distribution Date and the Group I Mortgage Loans, an amount equal to the excess of (i) the sum of (a) the aggregate of the related Monthly Payments received on or prior to the related Determination Date, (b) Liquidation Proceeds, Insurance Proceeds, Principal Prepayments, Subsequent Recoveries and other unscheduled recoveries of principal and interest in respect of the Group I Mortgage Loans during the related Prepayment Period, (c) the aggregate of any amounts received in respect of a related REO Property withdrawn from any Protected Account and deposited in the Master Servicer Collection Account for such Distribution Date, (d) the aggregate of any amounts deposited in the Master Servicer Collection Account by the related Servicer or the Master Servicer in respect of related Prepayment Interest Shortfalls for such Distribution Date and (e) the aggregate of any related Monthly Advances made by the related Servicer or the Master Servicer for such Distribution Date, over (ii) the sum of (a) related amounts reimbursable or payable to the related Servicer or the Master Servicer pursuant to Sections 4.03 and 4.05, (b) related Stayed Funds, (c) related amounts deposited in the Master Servicer Collection Account or the Distribution Account, as the case may be, in error and (d) any Extraordinary Trust Fund Expenses.

Group I Certificates : Any of the REMIC III I-A Certificates and Class I-A-IO Certificates.

Group I Mortgage Loans : The Mortgage Loans identified as such on the Mortgage Loan Schedule.

Group I Rate Change Date : The Distribution Date in October 2010.

Group I Senior Accelerated Distribution Percentage : With respect to any Distribution Date, the percentage indicated below:

Distribution Date	Group I Senior Accelerated Distribution Percentage
November 2005 through October 2012	100%
November 2012 through October 2013	Group I Senior Percentage, plus 70% of the Group I Subordinate Percentage
November 2013 through October 2014	Group I Senior Percentage, plus 60% of the Group I Subordinate Percentage

 

 

 

 

 

November 2014 through October 2015	Group I Senior Percentage, plus 40% of the Group I Subordinate Percentage
November 2015 through October 2016	Group I Senior Percentage, plus 20% of the Group I Subordinate Percentage
November 2016 and thereafter	Group I Senior Percentage

 

provided, however, (i) that any scheduled reduction to the Group I Senior Accelerated Distribution Percentage described above shall not occur as of any Distribution Date unless either (a)(1)(x) the outstanding principal balance of Mortgage Loans delinquent 60 days or more (including foreclosure and REO Property) averaged over the last six months as a percentage of the aggregate outstanding Class Certificate Balance of the Class M Certificates and the Class B Certificates, is less than 50%, or (y) the outstanding principal balance of Mortgage Loans delinquent 60 days or more (including foreclosure and REO Property) averaged over the last six months, as a percentage of the aggregate outstanding principal balance of all Mortgage Loans averaged over the last six months, does not exceed 2% and (2) Realized Losses on the Mortgage Loans to date for such Distribution Date if occurring during the eighth, ninth, tenth, eleventh or twelfth year (or any year thereafter) after the Closing Date are less than 30%, 35%, 40%, 45% or 50%, respectively, of the sum of the Initial Class Certificate Balances of the Class M Certificates and Class B Certificates or (b) (1) the aggregate outstanding principal balance of the Mortgage Loans delinquent 60 days or more (including foreclosure and REO Property) averaged over the last six months, as a percentage of the aggregate outstanding principal balance of all Mortgage Loans averaged over the last six months, does not exceed 4% and (2) Realized Losses on the Mortgage Loans on or prior to such Distribution Date if occurring during the eighth, ninth, tenth, eleventh or twelfth year (or any year thereafter) after the Closing Date are less than 10%, 15%, 20%, 25% or 30%, respectively, of the sum of the Initial Class Certificate Balances of the Class M Certificates and Class B Certificates and (ii) that for any Distribution Date on which the Group I Senior Percentage is greater than the original Group I Senior Percentage, the Group I Senior Accelerated Distribution Percentage for such Distribution Date shall be 100%. Notwithstanding the foregoing, upon the reduction of the aggregate Class Certificate Balance of the Class I-A Certificates to zero, the Group I Senior Accelerated Distribution Percentage will equal 0%.

In addition, on any Distribution Date prior to the Distribution Date occurring in November 2008, if the current weighted average of the Subordinate Percentages for the Certificates is equal to or greater than two times the initial weighted average of the Subordinate Percentages for the Certificates, and (a) the outstanding principal balance of the Mortgage Loans delinquent 60 days or more (including for this purpose any such Mortgage Loans in foreclosure or bankruptcy and such Mortgage Loans with respect to which the related Mortgaged Property has been acquired by the Trust), averaged over the last six months, as a percentage of the Subordinate Percentage for that Distribution Date times the aggregate Stated Principal Balance of the Mortgage Loans, does not exceed 50% and (b) cumulative Realized Losses on the Mortgage Loans do not exceed 20% of the initial Subordinate Percentage times the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, then, in each case, the Group I Senior Accelerated Distribution Percentage for such Distribution Date will equal the Group I Senior Percentage plus 50% of the related Subordinate Percentage.

 

 

 

On any Distribution Date on or after the Distribution Date occurring in November 2008, if the current weighted average of the Subordinate Percentages for the Certificates is equal to or greater than two times the initial weighted average of the Subordinate Percentages for the Certificates, and (a) the outstanding principal balance of the Mortgage Loans delinquent 60 days or more (including for this purpose any such Mortgage Loans in foreclosure or bankruptcy and such Mortgage Loans with respect to which the related Mortgaged Property has been acquired by the Trust), averaged over the last six months, as a percentage of the Subordinate Percentage for that Distribution Date times the aggregate Stated Principal Balance of the Mortgage Loans, does not exceed 50% and (b) cumulative Realized Losses on the Mortgage Loans do not exceed 20% of the initial Subordinate Percentage times the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, then, in each case, the Group I Senior Accelerated Distribution Percentage for such Distribution Date will equal the Group I Senior Percentage.

Group I Senior Certificates : Shall mean the Class I-A Certificates.

Group I Senior Percentage : As of any Distribution Date, the lesser of 100% and a fraction, expressed as a percentage, the numerator of which is the aggregate Class Certificate Balance of the Class I-A Certificates immediately prior to such Distribution Date and the denominator of which is the aggregate Stated Principal Balance of all of the Group I Mortgage Loans or related REO Properties immediately prior to such Distribution Date.

Group I Senior Principal Distribution Amount : As to any Distribution Date, the lesser of (a) the balance of the Group I Available Funds remaining after the distribution of all amounts required to be distributed pursuant to subclause first and second of Section 6.01(A) and (b) the sum of the following:

(A)       the Group I Senior Percentage for such Distribution Date times the sum of the following:

(1)        the principal portion of each Monthly Payment due during the related Due Period on each Outstanding Mortgage Loan in Loan Group I, whether or not received on or prior to the related Determination Date;

(2)        the Stated Principal Balance of any Group I Mortgage Loan repurchased during the related Prepayment Period pursuant to Section 2.02 or 2.03 hereof or pursuant to the related Servicing Agreement; and

(3)        the principal portion of all other unscheduled collections (other than Principal Prepayments in Full and Curtailments and amounts received in connection with the liquidation or disposition of a Group I Mortgage Loan, including without limitation Insurance Proceeds, Liquidation Proceeds and REO Proceeds) received during the related Prepayment Period to the extent applied by the related Servicer as recoveries of principal of the related Mortgage Loan pursuant to related Servicing Agreement;

(B)        with respect to the liquidation or other disposition of a Group I Mortgage Loan which occurred during the related Prepayment Period, an amount equal to

 

 

the lesser of (a) the Group I Senior Percentage for such Distribution Date times the Stated Principal Balance of such Group I Mortgage Loan and (b) the Group I Senior Accelerated Distribution Percentage for such Distribution Date times the related unscheduled collections (including without limitation Insurance Proceeds, Liquidation Proceeds and REO Proceeds) to the extent applied by the related Servicer or the Master Servicer as recoveries of principal of the related Mortgage Loan pursuant to the related Servicing Agreement or this Agreement;

(C)       the Group I Senior Accelerated Distribution Percentage for such Distribution Date times the aggregate of all Principal Prepayments in Full and Curtailments received in the related Prepayment Period with respect to the Group I Mortgage Loans;

(D)       any amounts described in clauses (A), (B) or (C) of this definition, as determined for any previous Distribution Date, which remain unpaid after application of amounts previously distributed pursuant to this clause (D) to the extent that such amounts are not attributable to Realized Losses which have been allocated to the Class M Certificates or Class B Certificates;

Group I Subordinate Amount : On any date of determination, the excess of the aggregate Stated Principal Balance of the Group I Mortgage Loans as of such date over the aggregate Class Certificate Balances of the Group I Senior Certificates then outstanding.

Group II Available Funds : With respect to any Distribution Date and the Group II Mortgage Loans, an amount equal to the excess of (i) the sum of (a) the aggregate of the related Monthly Payments received on or prior to the related Determination Date, (b) Liquidation Proceeds, Insurance Proceeds, Principal Prepayments, Subsequent Recoveries and other unscheduled recoveries of principal and interest in respect of the Group II Mortgage Loans during the related Prepayment Period, (c) the aggregate of any amounts received in respect of a related REO Property withdrawn from any Protected Account and deposited in the Master Servicer Collection Account for such Distribution Date, (d) the aggregate of any amounts deposited in the Master Servicer Collection Account by the related Servicer or the Master Servicer in respect of related Prepayment Interest Shortfalls for such Distribution Date and (e) the aggregate of any related Monthly Advances made by the related Servicer or the Master Servicer for such Distribution Date, over (ii) the sum of (a) related amounts reimbursable or payable to the related Servicer or the Master Servicer pursuant to Sections 4.03 and 4.05, (b) related Stayed Funds, (c) related amounts deposited in the Master Servicer Collection Account or the Distribution Account, as the case may be, in error and (d) any Extraordinary Trust Fund Expenses.

Group II Certificates : Any of the REMIC III II-A Certificates and Class II-A-IO Certificates.

Group II Mortgage Loans : The Mortgage Loans identified as such on the Mortgage Loan Schedule.

Group II Rate Change Date : The Distribution Date in October 2008.

 

 

 

Group II Senior Accelerated Distribution Percentage : With respect to any Distribution Date, the percentage indicated below:

Distribution Date	Group II Senior Accelerated Distribution Percentage
November 2005 through October 2012	100%
November 2012 through October 2013	Group II Senior Percentage, plus 70% of the Group II Subordinate Percentage
November 2013 through October 2014	Group II Senior Percentage, plus 60% of the Group II Subordinate Percentage
November 2014 through October 2015	Group II Senior Percentage, plus 40% of the Group II Subordinate Percentage
November 2015 through October 2016	Group II Senior Percentage, plus 20% of the Group II Subordinate Percentage
November 2016 and thereafter	Group II Senior Percentage

 

provided, however, (i) that any scheduled reduction to the Group II Senior Accelerated Distribution Percentage described above shall not occur as of any Distribution Date unless either (a)(1)(x) the outstanding principal balance of Mortgage Loans delinquent 60 days or more (including foreclosure and REO Property) averaged over the last six months as a percentage of the aggregate outstanding Class Certificate Balance of the Class M Certificates and the Class B Certificates, is less than 50%, or (y) the outstanding principal balance of Mortgage Loans delinquent 60 days or more (including foreclosure and REO Property) averaged over the last six months, as a percentage of the aggregate outstanding principal balance of all Mortgage Loans averaged over the last six months, does not exceed 2% and (2) Realized Losses on the Mortgage Loans to date for such Distribution Date if occurring during the eighth, ninth, tenth, eleventh or twelfth year (or any year thereafter) after the Closing Date are less than 30%, 35%, 40%, 45% or 50%, respectively, of the sum of the Initial Class Certificate Balances of the Class M Certificates and Class B Certificates or (b) (1) the aggregate outstanding principal balance of the Mortgage Loans delinquent 60 days or more (including foreclosure and REO Property) averaged over the last six months, as a percentage of the aggregate outstanding principal balance of all Mortgage Loans averaged over the last six months, does not exceed 4% and (2) Realized Losses on the Mortgage Loans on or prior to such Distribution Date if occurring during the eighth, ninth, tenth, eleventh or twelfth year (or any year thereafter) after the Closing Date are less than 10%, 15%, 20%, 25% or 30%, respectively, of the sum of the Initial Class Certificate Balances of the Class M Certificates and Class B Certificates and (ii) that for any Distribution Date on which the Group II Senior Percentage is greater than the original Group II Senior Percentage, the Group II Senior Accelerated Distribution Percentage for such Distribution Date shall be 100%. Notwithstanding the foregoing, upon the reduction of the aggregate Class Certificate Balance of the Class II-A Certificates to zero, the Group II Senior Accelerated Distribution Percentage will equal 0%.

In addition, on any Distribution Date prior to the Distribution Date occurring in November 2008, if the current weighted average of the Subordinate Percentages for the Certificates is equal to or greater than two times the initial weighted average of the Subordinate

 

 

Percentages for the Certificates, and (a) the outstanding principal balance of the Mortgage Loans delinquent 60 days or more (including for this purpose any such Mortgage Loans in foreclosure or bankruptcy and such Mortgage Loans with respect to which the related Mortgaged Property has been acquired by the Trust), averaged over the last six months, as a percentage of the Subordinate Percentage for that Distribution Date times the aggregate Stated Principal Balance of the Mortgage Loans, does not exceed 50% and (b) cumulative Realized Losses on the Mortgage Loans do not exceed 20% of the initial Subordinate Percentage times the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, then, in each case, the Group II Senior Accelerated Distribution Percentage for such Distribution Date will equal the Group II Senior Percentage plus 50% of the related Subordinate Percentage.

On any Distribution Date on or after the Distribution Date occurring in November 2008, if the current weighted average of the Subordinate Percentages for the Certificates is equal to or greater than two times the initial weighted average of the Subordinate Percentages for the Certificates, and (a) the outstanding principal balance of the Mortgage Loans delinquent 60 days or more (including for this purpose any such Mortgage Loans in foreclosure or bankruptcy and such Mortgage Loans with respect to which the related Mortgaged Property has been acquired by the Trust), averaged over the last six months, as a percentage of the Subordinate Percentage for that Distribution Date times the aggregate Stated Principal Balance of the Mortgage Loans, does not exceed 50% and (b) cumulative Realized Losses on the Mortgage Loans do not exceed 20% of the initial Subordinate Percentage times the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, then, in each case, the Group II Senior Accelerated Distribution Percentage for such Distribution Date will equal the Group II Senior Percentage.

Group II Senior Certificates : Shall mean the Class II-A Certificates.

Group II Senior Percentage : As of any Distribution Date, the lesser of 100% and a fraction, expressed as a percentage, the numerator of which is the aggregate Class Certificate Balance of the Class II-A Certificates immediately prior to such Distribution Date and the denominator of which is the aggregate Stated Principal Balance of all of the Group II Mortgage Loans or related REO Properties immediately prior to such Distribution Date.

Group II Senior Principal Distribution Amount : As to any Distribution Date, the lesser of (a) the balance of the Group II Available Funds remaining after the distribution of all amounts required to be distributed pursuant to Section 6.01(B) and (b) the sum of the following:

(A)       the Group II Senior Percentage for such Distribution Date times the sum of the following:

(1)        the principal portion of each Monthly Payment due during the related Due Period on each Outstanding Mortgage Loan in Loan Group II, whether or not received on or prior to the related Determination Date;

(2)        the Stated Principal Balance of any Group II Mortgage Loan repurchased during the related Prepayment Period pursuant to Section 2.02 or 2.03 hereof or the related Servicing Agreement; and

 

 

 

(3)        the principal portion of all other unscheduled collections (other than Principal Prepayments in Full and Curtailments and amounts received in connection with the liquidation or disposition of a Group II Mortgage Loan, including without limitation Insurance Proceeds, Liquidation Proceeds and REO Proceeds) received during the related Prepayment Period to the extent applied by the related Servicer as recoveries of principal of the related Mortgage Loan pursuant to related Servicing Agreement;

(B)        with respect to the liquidation or other disposition of a Group II Mortgage Loan which occurred during the related Prepayment Period, an amount equal to the lesser of (a) the Group II Senior Percentage for such Distribution Date times the Stated Principal Balance of such Group II Mortgage Loan and (b) the Group II Senior Accelerated Distribution Percentage for such Distribution Date times the related unscheduled collections (including without limitation Insurance Proceeds, Liquidation Proceeds and REO Proceeds) to the extent applied by the related Servicer or the Master Servicer as recoveries of principal of the related Mortgage Loan pursuant to the related Servicing Agreement or this Agreement;

(C)       the Group II Senior Accelerated Distribution Percentage for such Distribution Date times the aggregate of all Principal Prepayments in Full and Curtailments received in the related Prepayment Period with respect to the Group II Mortgage Loans;

(D)       any amounts described in clauses (A), (B) or (C) of this definition, as determined for any previous Distribution Date, which remain unpaid after application of amounts previously distributed pursuant to this clause (D) to the extent that such amounts are not attributable to Realized Losses which have been allocated to the Class M Certificates or Class B Certificates;

Group II Subordinate Amount : On any date of determination, the excess of the aggregate Stated Principal Balance of the Group II Mortgage Loans as of such date over the aggregate Class Certificate Balances of the Group II Senior Certificates then outstanding.

Group III Available Funds : With respect to any Distribution Date and the Group III Mortgage Loans, an amount equal to the excess of (i) the sum of (a) the aggregate of the related Monthly Payments received on or prior to the related Determination Date, (b) Liquidation Proceeds, Insurance Proceeds, Principal Prepayments, Subsequent Recoveries and other unscheduled recoveries of principal and interest in respect of the Group III Mortgage Loans during the related Prepayment Period, (c) the aggregate of any amounts received in respect of a related REO Property withdrawn from any Protected Account and deposited in the Master Servicer Collection Account for such Distribution Date, (d) the aggregate of any amounts deposited in the Master Servicer Collection Account by the related Servicer or the Master Servicer in respect of related Prepayment Interest Shortfalls for such Distribution Date and (e) the aggregate of any related Monthly Advances made by the related Servicer or the Master Servicer for such Distribution Date, over (ii) the sum of (a) related amounts reimbursable or payable to the related Servicer or the Master Servicer pursuant to Sections 4.03 and 4.05, (b) related Stayed Funds, (c) related amounts deposited in the Master Servicer Collection Account or

 

 

the Distribution Account, as the case may be, in error and (d) any Extraordinary Trust Fund Expenses.

Group III Certificates : Any of the REMIC III III-A Certificates and Class III-A-IO Certificates.

Group III Mortgage Loans : The Mortgage Loans identified as such on the Mortgage Loan Schedule.

Group III Rate Change Date : The Distribution Date in October 2010.

Group III Senior Accelerated Distribution Percentage : With respect to any Distribution Date, the percentage indicated below:

Distribution Date	Group III Senior Accelerated Distribution Percentage
November 2005 through October 2012	100%
November 2012 through October 2013	Group III Senior Percentage, plus 70% of the Group III Subordinate Percentage
November 2013 through October 2014	Group III Senior Percentage, plus 60% of the Group III Subordinate Percentage
November 2014 through October 2015	Group III Senior Percentage, plus 40% of the Group III Subordinate Percentage
November 2015 through October 2016	Group III Senior Percentage, plus 20% of the Group III Subordinate Percentage
November 2016 and thereafter	Group III Senior Percentage

 

provided, however, (i) that any scheduled reduction to the Group III Senior Accelerated Distribution Percentage described above shall not occur as of any Distribution Date unless either (a)(1)(x) the outstanding principal balance of Mortgage Loans delinquent 60 days or more (including foreclosure and REO Property) averaged over the last six months as a percentage of the aggregate outstanding Class Certificate Balance of the Class M Certificates and the Class B Certificates, is less than 50%, or (y) the outstanding principal balance of Mortgage Loans delinquent 60 days or more (including foreclosure and REO Property) averaged over the last six months, as a percentage of the aggregate outstanding principal balance of all Mortgage Loans averaged over the last six months, does not exceed 2% and (2) Realized Losses on the Mortgage Loans to date for such Distribution Date if occurring during the eighth, ninth, tenth, eleventh or twelfth year (or any year thereafter) after the Closing Date are less than 30%, 35%, 40%, 45% or 50%, respectively, of the sum of the Initial Class Certificate Balances of the Class M Certificates and Class B Certificates or (b) (1) the aggregate outstanding principal balance of the Mortgage Loans delinquent 60 days or more (including foreclosure and REO Property) averaged over the last six months, as a percentage of the aggregate outstanding principal balance of all Mortgage Loans averaged over the last six months, does not exceed 4% and (2) Realized Losses on the Mortgage Loans on or prior to such Distribution Date if occurring during the eighth, ninth, tenth, eleventh or twelfth year (or any year thereafter) after the Closing Date are less than 10%, 15%,

 

 

20%, 25% or 30%, respectively, of the sum of the Initial Class Certificate Balances of the Class M Certificates and Class B Certificates and (ii) that for any Distribution Date on which the Group III Senior Percentage is greater than the original Group III Senior Percentage, the Group III Senior Accelerated Distribution Percentage for such Distribution Date shall be 100%. Notwithstanding the foregoing, upon the reduction of the aggregate Class Certificate Balance of the Class III-A Certificates to zero, the Group III Senior Accelerated Distribution Percentage will equal 0%.

In addition, on any Distribution Date prior to the Distribution Date occurring in November 2008, if the current weighted average of the Subordinate Percentages for the Certificates is equal to or greater than two times the initial weighted average of the Subordinate Percentages for the Certificates, and (a) the outstanding principal balance of the Mortgage Loans delinquent 60 days or more (including for this purpose any such Mortgage Loans in foreclosure or bankruptcy and such Mortgage Loans with respect to which the related Mortgaged Property has been acquired by the Trust), averaged over the last six months, as a percentage of the Subordinate Percentage for that Distribution Date times the aggregate Stated Principal Balance of the Mortgage Loans, does not exceed 50% and (b) cumulative Realized Losses on the Mortgage Loans do not exceed 20% of the initial Subordinate Percentage times the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, then, in each case, the Group III Senior Accelerated Distribution Percentage for such Distribution Date will equal the Group III Senior Percentage plus 50% of the related Subordinate Percentage.

On any Distribution Date on or after the Distribution Date occurring in November 2008, if the current weighted average of the Subordinate Percentages for the Certificates is equal to or greater than two times the initial weighted average of the Subordinate Percentages for the Certificates, and (a) the outstanding principal balance of the Mortgage Loans delinquent 60 days or more (including for this purpose any such Mortgage Loans in foreclosure or bankruptcy and such Mortgage Loans with respect to which the related Mortgaged Property has been acquired by the Trust), averaged over the last six months, as a percentage of the Subordinate Percentage for that Distribution Date times the aggregate Stated Principal Balance of the Mortgage Loans, does not exceed 50% and (b) cumulative Realized Losses on the Mortgage Loans do not exceed 20% of the initial Subordinate Percentage times the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, then, in each case, the Group III Senior Accelerated Distribution Percentage for such Distribution Date will equal the Group III Senior Percentage.

Group III Senior Certificates : Shall mean the Class III-A Certificates.

Group III Senior Percentage : As of any Distribution Date, the lesser of 100% and a fraction, expressed as a percentage, the numerator of which is the aggregate Class Certificate Balance of the Class III-A Certificates immediately prior to such Distribution Date and the denominator of which is the aggregate Stated Principal Balance of all of the Group III Mortgage Loans or related REO Properties immediately prior to such Distribution Date.

Group III Senior Principal Distribution Amount : As to any Distribution Date, the lesser of (a) the balance of the Group III Available Funds remaining after the distribution of all amounts required to be distributed pursuant to Section 6.01(B) and (b) the sum of the following:

 

 

 

(A)       the Group III Senior Percentage for such Distribution Date times the sum of the following:

(1)        the principal portion of each Monthly Payment due during the related Due Period on each Outstanding Mortgage Loan in Loan Group III, whether or not received on or prior to the related Determination Date;

(2)        the Stated Principal Balance of any Group III Mortgage Loan repurchased during the related Prepayment Period pursuant to Section 2.02 or 2.03 hereof or the related Servicing Agreement; and

(3)        the principal portion of all other unscheduled collections (other than Principal Prepayments in Full and Curtailments and amounts received in connection with the liquidation or disposition of a Group III Mortgage Loan, including without limitation Insurance Proceeds, Liquidation Proceeds and REO Proceeds) received during the related Prepayment Period to the extent applied by the related Servicer as recoveries of principal of the related Mortgage Loan pursuant to related Servicing Agreement;

(B)        with respect to the liquidation or other disposition of a Group III Mortgage Loan which occurred during the related Prepayment Period, an amount equal to the lesser of (a) the Group III Senior Percentage for such Distribution Date times the Stated Principal Balance of such Group II Mortgage Loan and (b) the Group III Senior Accelerated Distribution Percentage for such Distribution Date times the related unscheduled collections (including without limitation Insurance Proceeds, Liquidation Proceeds and REO Proceeds) to the extent applied by the related Servicer or the Master Servicer as recoveries of principal of the related Mortgage Loan pursuant to the related Servicing Agreement or this Agreement;

(C)       the Group III Senior Accelerated Distribution Percentage for such Distribution Date times the aggregate of all Principal Prepayments in Full and Curtailments received in the related Prepayment Period with respect to the Group III Mortgage Loans;

(D)       any amounts described in clauses (A), (B) or (C) of this definition, as determined for any previous Distribution Date, which remain unpaid after application of amounts previously distributed pursuant to this clause (D) to the extent that such amounts are not attributable to Realized Losses which have been allocated to the Class M Certificates or Class B Certificates;

Group III Subordinate Amount : On any date of determination, the excess of the aggregate Stated Principal Balance of the Group III Mortgage Loans as of such date over the aggregate Class Certificate Balances of the Group III Senior Certificates then outstanding.

Group IV Available Funds : With respect to any Distribution Date and the Group IV Mortgage Loans, an amount equal to the excess of (i) the sum of (a) the aggregate of the related Monthly Payments received on or prior to the related Determination Date, (b) Liquidation

 

 

Proceeds, Insurance Proceeds, Principal Prepayments, Subsequent Recoveries and other unscheduled recoveries of principal and interest in respect of the Group IV Mortgage Loans during the related Prepayment Period, (c) the aggregate of any amounts received in respect of a related REO Property withdrawn from any Protected Account and deposited in the Master Servicer Collection Account for such Distribution Date, (d) the aggregate of any amounts deposited in the Master Servicer Collection Account by the related Servicer or the Master Servicer in respect of related Prepayment Interest Shortfalls for such Distribution Date and (e) the aggregate of any related Monthly Advances made by the related Servicer or the Master Servicer for such Distribution Date, over (ii) the sum of (a) related amounts reimbursable or payable to the related Servicer or the Master Servicer pursuant to Sections 4.03 and 4.05, (b) related Stayed Funds, (c) related amounts deposited in the Master Servicer Collection Account or the Distribution Account, as the case may be, in error and (d) any Extraordinary Trust Fund Expenses.

Group IV Certificates : Any of the Class IV-A Certificates and Class IV-A-IO Certificates.

Group IV Mortgage Loans : The Mortgage Loans identified as such on the Mortgage Loan Schedule.

Group IV Senior Accelerated Distribution Percentage : With respect to any Distribution Date, the percentage indicated below:

Distribution Date	Group IV Senior Accelerated Distribution Percentage
November 2005 through October 2012	100%
November 2012 through October 2013	Group IV Senior Percentage, plus 70% of the Group IV Subordinate Percentage
November 2013 through October 2014	Group IV Senior Percentage, plus 60% of the Group IV Subordinate Percentage
November 2014 through October 2015	Group IV Senior Percentage, plus 40% of the Group IV Subordinate Percentage
November 2015 through October 2016	Group IV Senior Percentage, plus 20% of the Group IV Subordinate Percentage
November 2016 and thereafter	Group IV Senior Percentage

 

provided, however, (i) that any scheduled reduction to the Group IV Senior Accelerated Distribution Percentage described above shall not occur as of any Distribution Date unless either (a)(1)(x) the outstanding principal balance of Mortgage Loans delinquent 60 days or more (including foreclosure and REO Property) averaged over the last six months as a percentage of the aggregate outstanding Class Certificate Balance of the Class M Certificates and the Class B Certificates, is less than 50%, or (y) the outstanding principal balance of Mortgage Loans delinquent 60 days or more (including foreclosure and REO Property) averaged over the last six months, as a percentage of the aggregate outstanding principal balance of all Mortgage Loans averaged over the last six months, does not exceed 2% and (2) Realized Losses on the Mortgage

 

 

Loans to date for such Distribution Date if occurring during the eighth, ninth, tenth, eleventh or twelfth year (or any year thereafter) after the Closing Date are less than 30%, 35%, 40%, 45% or 50%, respectively, of the sum of the Initial Class Certificate Balances of the Class M Certificates and Class B Certificates or (b) (1) the aggregate outstanding principal balance of the Mortgage Loans delinquent 60 days or more (including foreclosure and REO Property) averaged over the last six months, as a percentage of the aggregate outstanding principal balance of all Mortgage Loans averaged over the last six months, does not exceed 4% and (2) Realized Losses on the Mortgage Loans on or prior to such Distribution Date if occurring during the eighth, ninth, tenth, eleventh or twelfth year (or any year thereafter) after the Closing Date are less than 10%, 15%, 20%, 25% or 30%, respectively, of the sum of the Initial Class Certificate Balances of the Class M Certificates and Class B Certificates and (ii) that for any Distribution Date on which the Group IV Senior Percentage is greater than the original Group IV Senior Percentage, the Group IV Senior Accelerated Distribution Percentage for such Distribution Date shall be 100%. Notwithstanding the foregoing, upon the reduction of the aggregate Class Certificate Balance of the Class IV-A Certificates to zero, the Group IV Senior Accelerated Distribution Percentage will equal 0%.

In addition, on any Distribution Date prior to the Distribution Date occurring in November 2008, if the current weighted average of the Subordinate Percentages for the Certificates is equal to or greater than two times the initial weighted average of the Subordinate Percentages for the Certificates, and (a) the outstanding principal balance of the Mortgage Loans delinquent 60 days or more (including for this purpose any such Mortgage Loans in foreclosure or bankruptcy and such Mortgage Loans with respect to which the related Mortgaged Property has been acquired by the Trust), averaged over the last six months, as a percentage of the Subordinate Percentage for that Distribution Date times the aggregate Stated Principal Balance of the Mortgage Loans, does not exceed 50% and (b) cumulative Realized Losses on the Mortgage Loans do not exceed 20% of the initial Subordinate Percentage times the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, then, in each case, the Group IV Senior Accelerated Distribution Percentage for such Distribution Date will equal the Group IV Senior Percentage plus 50% of the related Subordinate Percentage.

On any Distribution Date on or after the Distribution Date occurring in November 2008, if the current weighted average of the Subordinate Percentages for the Certificates is equal to or greater than two times the initial weighted average of the Subordinate Percentages for the Certificates, and (a) the outstanding principal balance of the Mortgage Loans delinquent 60 days or more (including for this purpose any such Mortgage Loans in foreclosure or bankruptcy and such Mortgage Loans with respect to which the related Mortgaged Property has been acquired by the Trust), averaged over the last six months, as a percentage of the Subordinate Percentage for that Distribution Date times the aggregate Stated Principal Balance of the Mortgage Loans, does not exceed 50% and (b) cumulative Realized Losses on the Mortgage Loans do not exceed 20% of the initial Subordinate Percentage times the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, then, in each case, the Group IV Senior Accelerated Distribution Percentage for such Distribution Date will equal the Group IV Senior Percentage.

Group IV Senior Certificates : Shall mean the Class IV-A Certificates.

 

 

 

Group IV Senior Percentage : As of any Distribution Date, the lesser of 100% and a fraction, expressed as a percentage, the numerator of which is the aggregate Class Certificate Balance of the Class IV-A Certificates immediately prior to such Distribution Date and the denominator of which is the aggregate Stated Principal Balance of all of the Group IV Mortgage Loans or related REO Properties immediately prior to such Distribution Date.

Group IV Senior Principal Distribution Amount : As to any Distribution Date, the lesser of (a) the balance of the Group IV Available Funds remaining after the distribution of all amounts required to be distributed pursuant to Section 6.01(B) and (b) the sum of the following:

(A)       the Group IV Senior Percentage for such Distribution Date times the sum of the following:

(1)        the principal portion of each Monthly Payment due during the related Due Period on each Outstanding Mortgage Loan in Loan Group IV, whether or not received on or prior to the related Determination Date;

(2)        the Stated Principal Balance of any Group IV Mortgage Loan repurchased during the related Prepayment Period pursuant to Section 2.02 or 2.03 hereof or the related Servicing Agreement; and

(3)        the principal portion of all other unscheduled collections (other than Principal Prepayments in Full and Curtailments and amounts received in connection with the liquidation or disposition of a Group IV Mortgage Loan, including without limitation Insurance Proceeds, Liquidation Proceeds and REO Proceeds) received during the related Prepayment Period to the extent applied by the related Servicer as recoveries of principal of the related Mortgage Loan pursuant to related Servicing Agreement;

(B)        with respect to the liquidation or other disposition of a Group IV Mortgage Loan which occurred during the related Prepayment Period, an amount equal to the lesser of (a) the Group IV Senior Percentage for such Distribution Date times the Stated Principal Balance of such Group IV Mortgage Loan and (b) the Group IV Senior Accelerated Distribution Percentage for such Distribution Date times the related unscheduled collections (including without limitation Insurance Proceeds, Liquidation Proceeds and REO Proceeds) to the extent applied by the related Servicer or the Master Servicer as recoveries of principal of the related Mortgage Loan pursuant to the related Servicing Agreement or this Agreement;

(C)       the Group IV Senior Accelerated Distribution Percentage for such Distribution Date times the aggregate of all Principal Prepayments in Full and Curtailments received in the related Prepayment Period with respect to the Group IV Mortgage Loans;

(D)       any amounts described in clauses (A), (B) or (C) of this definition, as determined for any previous Distribution Date, which remain unpaid after application of amounts previously distributed pursuant to this clause (D) to the extent that such

 

 

amounts are not attributable to Realized Losses which have been allocated to the Class M Certificates or Class B Certificates;

Group IV Subordinate Amount : On any date of determination, the excess of the aggregate Stated Principal Balance of the Group IV Mortgage Loans as of such date over the aggregate Class Certificate Balances of the Group IV Senior Certificates then outstanding.

Group V Available Funds : With respect to any Distribution Date and the Group V Mortgage Loans, an amount equal to the excess of (i) the sum of (a) the aggregate of the related Monthly Payments received on or prior to the related Determination Date, (b) Liquidation Proceeds, Insurance Proceeds, Principal Prepayments, Subsequent Recoveries and other unscheduled recoveries of principal and interest in respect of the Group V Mortgage Loans during the related Prepayment Period, (c) the aggregate of any amounts received in respect of a related REO Property withdrawn from any Protected Account and deposited in the Master Servicer Collection Account for such Distribution Date, (d) the aggregate of any amounts deposited in the Master Servicer Collection Account by the related Servicer or the Master Servicer in respect of related Prepayment Interest Shortfalls for such Distribution Date and (e) the aggregate of any related Monthly Advances made by the related Servicer or the Master Servicer for such Distribution Date, over (ii) the sum of (a) related amounts reimbursable or payable to the related Servicer or the Master Servicer pursuant to Sections 4.03 and 4.05, (b) related Stayed Funds, (c) related amounts deposited in the Master Servicer Collection Account or the Distribution Account, as the case may be, in error and (d) any Extraordinary Trust Fund Expenses.

Group V Certificates : Any of the Class V-A Certificates and Class V-A-IO Certificates.

Group V Mortgage Loans : The Mortgage Loans identified as such on the Mortgage Loan Schedule.

Group V Senior Accelerated Distribution Percentage : With respect to any Distribution Date, the percentage indicated below:

Distribution Date	Group V Senior Accelerated Distribution Percentage
November 2005 through October 2012	100%
November 2012 through October 2013	Group V Senior Percentage, plus 70% of the Group V Subordinate Percentage
November 2013 through October 2014	Group V Senior Percentage, plus 60% of the Group V Subordinate Percentage
November 2014 through October 2015	Group V Senior Percentage, plus 40% of the Group V Subordinate Percentage
November 2015 through October 2016	Group V Senior Percentage, plus 20% of the Group V Subordinate Percentage
November 2016 and thereafter	Group V Senior Percentage

 

 

 

 

provided, however, (i) that any scheduled reduction to the Group V Senior Accelerated Distribution Percentage described above shall not occur as of any Distribution Date unless either (a)(1)(x) the outstanding principal balance of Mortgage Loans delinquent 60 days or more (including foreclosure and REO Property) averaged over the last six months as a percentage of the aggregate outstanding Class Certificate Balance of the Class M Certificates and the Class B Certificates, is less than 50%, or (y) the outstanding principal balance of Mortgage Loans delinquent 60 days or more (including foreclosure and REO Property) averaged over the last six months, as a percentage of the aggregate outstanding principal balance of all Mortgage Loans averaged over the last six months, does not exceed 2% and (2) Realized Losses on the Mortgage Loans to date for such Distribution Date if occurring during the eighth, ninth, tenth, eleventh or twelfth year (or any year thereafter) after the Closing Date are less than 30%, 35%, 40%, 45% or 50%, respectively, of the sum of the Initial Class Certificate Balances of the Class M Certificates and Class B Certificates or (b) (1) the aggregate outstanding principal balance of the Mortgage Loans delinquent 60 days or more (including foreclosure and REO Property) averaged over the last six months, as a percentage of the aggregate outstanding principal balance of all Mortgage Loans averaged over the last six months, does not exceed 4% and (2) Realized Losses on the Mortgage Loans on or prior to such Distribution Date if occurring during the eighth, ninth, tenth, eleventh or twelfth year (or any year thereafter) after the Closing Date are less than 10%, 15%, 20%, 25% or 30%, respectively, of the sum of the Initial Class Certificate Balances of the Class M Certificates and Class B Certificates and (ii) that for any Distribution Date on which the Group V Senior Percentage is greater than the original Group V Senior Percentage, the Group V Senior Accelerated Distribution Percentage for such Distribution Date shall be 100%. Notwithstanding the foregoing, upon the reduction of the aggregate Class Certificate Balance of the Class V-A Certificates to zero, the Group V Senior Accelerated Distribution Percentage will equal 0%.

In addition, on any Distribution Date prior to the Distribution Date occurring in November 2008, if the current weighted average of the Subordinate Percentages for the Certificates is equal to or greater than two times the initial weighted average of the Subordinate Percentages for the Certificates, and (a) the outstanding principal balance of the Mortgage Loans delinquent 60 days or more (including for this purpose any such Mortgage Loans in foreclosure or bankruptcy and such Mortgage Loans with respect to which the related Mortgaged Property has been acquired by the Trust), averaged over the last six months, as a percentage of the Subordinate Percentage for that Distribution Date times the aggregate Stated Principal Balance of the Mortgage Loans, does not exceed 50% and (b) cumulative Realized Losses on the Mortgage Loans do not exceed 20% of the initial Subordinate Percentage times the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, then, in each case, the Group V Senior Accelerated Distribution Percentage for such Distribution Date will equal the Group V Senior Percentage plus 50% of the related Subordinate Percentage.

On any Distribution Date on or after the Distribution Date occurring in November 2008, if the current weighted average of the Subordinate Percentages for the Certificates is equal to or greater than two times the initial weighted average of the Subordinate Percentages for the Certificates, and (a) the outstanding principal balance of the Mortgage Loans delinquent 60 days or more (including for this purpose any such Mortgage Loans in foreclosure or bankruptcy and such Mortgage Loans with respect to which the related Mortgaged Property has been acquired by the Trust), averaged over the last six months, as a percentage of the Subordinate Percentage for

 

 

that Distribution Date times the aggregate Stated Principal Balance of the Mortgage Loans, does not exceed 50% and (b) cumulative Realized Losses on the Mortgage Loans do not exceed 20% of the initial Subordinate Percentage times the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, then, in each case, the Group V Senior Accelerated Distribution Percentage for such Distribution Date will equal the Group V Senior Percentage.

Group V Senior Certificates : Shall mean the Class V-A Certificates.

Group V Senior Percentage : As of any Distribution Date, the lesser of 100% and a fraction, expressed as a percentage, the numerator of which is the aggregate Class Certificate Balance of the Class V-A Certificates immediately prior to such Distribution Date and the denominator of which is the aggregate Stated Principal Balance of all of the Group V Mortgage Loans or related REO Properties immediately prior to such Distribution Date.

Group V Senior Principal Distribution Amount : As to any Distribution Date, the lesser of (a) the balance of the Group V Available Funds remaining after the distribution of all amounts required to be distributed pursuant to Section 6.01(B) and (b) the sum of the following:

(E)        the Group V Senior Percentage for such Distribution Date times the sum of the following:

(1)        the principal portion of each Monthly Payment due during the related Due Period on each Outstanding Mortgage Loan in Loan Group V, whether or not received on or prior to the related Determination Date;

(2)        the Stated Principal Balance of any Group V Mortgage Loan repurchased during the related Prepayment Period pursuant to Section 2.02 or 2.03 hereof or the related Servicing Agreement; and

(3)        the principal portion of all other unscheduled collections (other than Principal Prepayments in Full and Curtailments and amounts received in connection with the liquidation or disposition of a Group V Mortgage Loan, including without limitation Insurance Proceeds, Liquidation Proceeds and REO Proceeds) received during the related Prepayment Period to the extent applied by the related Servicer as recoveries of principal of the related Mortgage Loan pursuant to related Servicing Agreement;

(F)        with respect to the liquidation or other disposition of a Group V Mortgage Loan which occurred during the related Prepayment Period, an amount equal to the lesser of (a) the Group V Senior Percentage for such Distribution Date times the Stated Principal Balance of such Group V Mortgage Loan and (b) the Group V Senior Accelerated Distribution Percentage for such Distribution Date times the related unscheduled collections (including without limitation Insurance Proceeds, Liquidation Proceeds and REO Proceeds) to the extent applied by the related Servicer or the Master Servicer as recoveries of principal of the related Mortgage Loan pursuant to the related Servicing Agreement or this Agreement;

 

 

 

(G)       the Group V Senior Accelerated Distribution Percentage for such Distribution Date times the aggregate of all Principal Prepayments in Full and Curtailments received in the related Prepayment Period with respect to the Group V Mortgage Loans;

(H)       any amounts described in clauses (A), (B) or (C) of this definition, as determined for any previous Distribution Date, which remain unpaid after application of amounts previously distributed pursuant to this clause (D) to the extent that such amounts are not attributable to Realized Losses which have been allocated to the Class M Certificates or Class B Certificates;

Group V Subordinate Amount : On any date of determination, the excess of the aggregate Stated Principal Balance of the Group V Mortgage Loans as of such date over the aggregate Class Certificate Balances of the Group V Senior Certificates then outstanding.

Highest Priority : As of any date of determination, the Class of Subordinate Certificates then outstanding with the earliest priority for payments pursuant to Section 6.01, in the following order: Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates.

Indemnified Persons : The Trustee, the Master Servicer, the Depositor and the Securities Administrator and their officers, directors, agents and employees and, with respect to the Trustee, any separate co-trustee and its officers, directors, agents and employees.

Independent : When used with respect to any specified Person, any such Person who (a) is in fact independent of the Depositor, the Master Servicer and their respective Affiliates, (b) does not have any direct financial interest in or any material indirect financial interest in the Depositor or the Master Servicer or any Affiliate thereof, and (c) is not connected with the Depositor or the Master Servicer or any Affiliate thereof as an officer, employee, promoter, underwriter, trustee, partner, director or Person performing similar functions; provided, however, that a Person shall not fail to be Independent of the Depositor or the Master Servicer or any Affiliate thereof merely because such Person is the beneficial owner of 1% or less of any class of securities issued by the Depositor or the Master Servicer or any Affiliate thereof, as the case may be.

Index : The index, if any, specified in a Mortgage Note by reference to which the related Mortgage Interest Rate will be adjusted from time to time.

Initial Certification : The certification substantially in the form of Exhibit One to the Custodial Agreement.

Initial Class Certificate Balance : With respect to any Regular Certificate, other than the Interest Only Certificates, the amount designated “Initial Class Certificate Balance” on the face thereof.

Initial Notional Amount : With respect to any Interest Only Certificate, the amount designated “Initial Notional Amount” on the face thereof.

Initial Subordinate Class Percentage : With respect to each Class of Subordinate Certificates, an amount which is equal to the initial aggregate Class Certificate Balance of such

 

 

Class of Subordinate Certificates divided by the aggregate Stated Principal Balance of all the Mortgage Loans as of the Cut-off Date as follows:

	Class M-1: 1.45%		Class B-1: 0.25%
	Class M-2: 0.85%		Class B-2: 0.20%
	Class M-3: 0.55%		Class B-3: 0.45%

 

Insurance Policy : With respect to any Mortgage Loan, any standard hazard insurance policy, flood insurance policy or title insurance policy.

Insurance Proceeds : Amounts paid by the insurer under any Insurance Policy covering any Mortgage Loan or Mortgaged Property other than amounts required to be paid over to the Mortgagor pursuant to law or the related Mortgage Note or Security Instrument and other than amounts used to repair or restore the Mortgaged Property or to reimburse insured expenses.

Interest Accrual Period : With respect to each Distribution Date, for each Class of Certificates (other than the Interest Only Certificates and the Class M Certificates), the period from and including the preceding Distribution Date (or from the Closing Date, in the case of the first Distribution Date) to and including the day prior to the current Distribution Date. With respect to each Distribution Date, for each Class of Interest Only Certificates and Class M Certificates, the calendar month preceding the month in which such Distribution Date occurs.

Interest Adjustment Date : With respect to a Mortgage Loan, the date, if any, specified in the related Mortgage Note on which the Mortgage Interest Rate is subject to adjustment.

Interest Determination Date : With respect to the Certificates, (i) for any Interest Accrual Period other than the first Interest Accrual Period, the second LIBOR Business Day preceding the commencement of such Interest Accrual Period and (ii) for the first Interest Accrual Period, October 25, 2005.

Interest Only Certificates : Any of the Class I-A-IO, Class II-A-IO, Class III-A-IO, Class IV-A-IO and Class V-A-IO Certificates.

Investor : KKR Financial Corp., for so long as (i) such Person or an Affiliate thereof holds all of the Classes of Subordinate Certificates and (ii) has not forfeited its rights set forth in the related Servicing Agreements.

KKR : KKR Financial Mortgage Corporation.

KKR Financial : KKR Financial Corp.

KKR Mortgage Loans : The Mortgage Loans sold pursuant to the KKR Mortgage Loan Purchase Agreement.

KKR Mortgage Loan Purchase Agreement : The Mortgage Loan Purchase Agreement dated as of October 31, 2005, between KKR, as seller, and the Depositor, as purchaser, and all amendments thereof and supplements thereto, attached as Exhibit J-1.

LIBOR Business Day : Any day on which banks in the City of London, England and New York City, U.S.A. are open and conducting transactions in foreign currency and exchange.

 

 

 

Liquidated Mortgage Loan : Any defaulted Mortgage Loan as to which the related Servicer has determined that all amounts it expects to recover from or on account of such Mortgage Loan have been recovered.

Liquidation Date : With respect to any Liquidated Mortgage Loan, the date on which the related Servicer has certified that such Mortgage Loan has become a Liquidated Mortgage Loan.

Liquidation Expenses : With respect to a Mortgage Loan in liquidation, unreimbursed expenses paid or incurred by or for the account of the Master Servicer or the related Servicer in connection with the liquidation of such Mortgage Loan and the related Mortgaged Property, such expenses including (a) property protection expenses, (b) property sales expenses, (c) foreclosure and sale costs, including court costs and reasonable attorneys' fees, and (d) similar expenses reasonably paid or incurred in connection with liquidation.

Liquidation Proceeds : With respect to any Mortgage Loan, cash received in connection with the liquidation of a defaulted Mortgage Loan, whether through trustee’s sale, foreclosure sale or otherwise, and with respect to any Mortgage Loan, amounts received through Insurance Proceeds and condemnation proceeds.

Loan-to-Value Ratio : With respect to any Mortgage Loan, the fraction, expressed as a percentage, the numerator of which is the original principal balance of the related Mortgage Loan and the denominator of which is the Original Value of the related Mortgaged Property.

Loan Group : Loan Group I, Loan Group II, Loan Group III, Loan Group IV or Group V, as applicable.

Loan Group I : The group of Mortgage Loans designated as belonging to Loan Group I on the Mortgage Loan Schedule.

Loan Group II : The group of Mortgage Loans designated as belonging to Loan Group II on the Mortgage Loan Schedule.

Loan Group III : The group of Mortgage Loans designated as belonging to Loan Group III on the Mortgage Loan Schedule.

Loan Group IV : The group of Mortgage Loans designated as belonging to Loan Group IV on the Mortgage Loan Schedule.

Loan Group V : The group of Mortgage Loans designated as belonging to Loan Group V on the Mortgage Loan Schedule.

Lower Priority : As of any date of determination and with respect to any Class of Subordinate Certificates, any other Class of Subordinate Certificates then outstanding with a later priority for payments pursuant to Section 6.01.

Lost Notes : The original Mortgage Notes that have been lost, as indicated on the Mortgage Loan Schedule.

 

 

 

Master Servicer : Wells Fargo Bank, N.A. including its respective successors in interest who meet the qualifications of the Servicing Agreements and this Agreement.

Master Servicer Collection Account : The trust account or accounts created and maintained pursuant to Section 4.02, which shall be denominated “Wachovia Bank, National Association, as Trustee f/b/o holders of Merrill Lynch Mortgage Investors, Inc., Mortgage Pass-Through Certificates, Series MLCC 2005-3 - Master Servicer Collection Account.” The Master Servicer Collection Account shall be an Eligible Account.

Master Servicing Compensation : The meaning specified in Section 3.14.

Maximum Lifetime Mortgage Rate : The maximum level to which a Mortgage Interest Rate can adjust in accordance with its terms, regardless of changes in the applicable Index.

Minimum Lifetime Mortgage Rate : The minimum level to which a Mortgage Interest Rate can adjust in accordance with its terms, regardless of changes in the applicable Index.

MLCC : Merrill Lynch Credit Corporation.

MLMCI : Merrill Lynch Mortgage Capital Inc.

MLMLI : Merrill Lynch Mortgage Lending, Inc.

MLMLI Mortgage Loans : The Mortgage Loans sold pursuant to the MLMLI Mortgage Loan Purchase Agreement.

MLMLI Mortgage Loan Purchase Agreement : The Mortgage Loan Purchase Agreement dated as of October 31, 2005, between MLMLI, as seller, and the Depositor, as purchaser, and all amendments thereof and supplements thereto, attached as Exhibit J-2.

Monthly Advance : An advance of principal or interest required to be made by the applicable Servicer pursuant to the related Servicing Agreement or the Master Servicer pursuant to Section 6.05.

Monthly Payment : With respect to any Mortgage Loan, the scheduled monthly payment of principal and interest on such Mortgage Loan which is payable by the related Mortgagor from time to time under the related Mortgage Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction in the amount of interest collectible from the related Mortgagor pursuant to the Relief Act; (b) without giving effect to any extension granted or agreed to by the related Servicer pursuant to related Servicing Agreement; and (c) on the assumption that all other amounts, if any, due under such Mortgage Loan are paid when due.

Monthly Principal : The principal portion of any Monthly Payment.

Moody's : Moody's Investors Service, Inc. or its successor in interest.

 

 

 

Mortgage : The mortgage, deed of trust or other instrument creating a first lien on, or first priority security interest in, a Mortgaged Property securing a Mortgage Note.

Mortgage File : The mortgage documents listed in Section 2.01(b) pertaining to a particular Mortgage Loan and any additional documents required to be added to the Mortgage File pursuant to this Agreement.

Mortgage Interest Rate : The annual rate at which interest accrues from time to time on any Mortgage Loan pursuant to the related Mortgage Note, which rate is equal to the “Mortgage Interest Rate” set forth with respect thereto on the Mortgage Loan Schedule.

Mortgage Loan : A mortgage loan transferred and assigned to the Trustee pursuant to Section 2.01 or Section 2.04 and held as a part of the Trust Fund, as identified in the Mortgage Loan Schedule, including a mortgage loan the property securing which has become an REO Property.

Mortgage Loan Purchase Agreements : The KKR Mortgage Loan Purchase Agreement, the Sale and Assignment Agreement and the MLMLI Mortgage Loan Purchase Agreement.

Mortgage Loan Schedule : The schedule, attached hereto as Exhibit B with respect to the Mortgage Loans and as amended from time to time to reflect the repurchase or substitution of Mortgage Loans pursuant to this Agreement.

Mortgage Note : The originally executed note or other evidence of the indebtedness of a Mortgagor under the related Mortgage Loan.

Mortgage Pool : The pool of Mortgage Loans, identified on Exhibit B from time to time, and any REO Properties acquired in respect thereof.

Mortgaged Property : Land and improvements securing the indebtedness of a Mortgagor under the related Mortgage Loan or, in the case of REO Property, such REO Property.

Mortgagor : The obligor on a Mortgage Note.

Net Liquidation Proceeds : As to any Liquidated Mortgage Loan, Liquidation Proceeds net of (i) Liquidation Expenses which are payable therefrom by the related Servicer or the Master Servicer in accordance with the related Servicing Agreement or this Agreement and (ii) unreimbursed advances by the related Servicer or the Master Servicer and Monthly Advances.

Net Mortgage Rate : With respect to each Mortgage Loan, the Mortgage Interest Rate in effect from time to time less the Servicing Fee Rate (expressed as a per annum rate).

Non-Foreclosure Notice : The notice to be delivered by the related Servicer to the Master Servicer (pursuant to the related Servicing Agreement) in the event that the related Servicer determines not to proceed with foreclosure proceedings with respect to a Mortgage Loan that becomes 60 days' or more delinquent, pursuant to which notice the related Servicer shall specify that it does not intend to proceed with such foreclosure proceedings and shall state such other action as it intends to take with respect to such Mortgage Loan.

 

 

 

Nonrecoverable Advance : With respect to any Mortgage Loan, any advance or Monthly Advance (i) which was previously made or is proposed to be made by the applicable Servicer, or the Master Servicer as successor Servicer, or the Trustee as successor Master Servicer and (ii) which, in the good faith judgment of the Master Servicer, the Trustee or applicable Servicer, will not or, in the case of a proposed advance or Monthly Advance, would not, be ultimately recoverable by the Master Servicer, the Trustee (as successor Master Servicer) or applicable Servicer from Liquidation Proceeds, Insurance Proceeds or future payments on the Mortgage Loan for which such advance or Monthly Advance was made.

Notional Amount : With respect to the Class I-A-IO as of any Distribution Date on or prior to the Group I Rate Change Date, an amount equal to the Class Certificate Balance of the Class I-A Certificates. With respect to the Class I-A-IO Certificates as of any Distribution Date following the Group I Rate Change Date, an amount equal to zero. For federal income tax purposes, however, the equivalent of the foregoing, expressed as the Uncertificated Principal Balance of REMIC II Regular Interest I-A. With respect to the Class II-A-IO Certificates as of any Distribution Date on or prior to the Group II Rate Change Date, an amount equal to the Class Certificate Balance of the Class II-A Certificates. With respect to the Class II-A-IO Certificates as of any Distribution Date following the Group II Rate Change Date, an amount equal to zero. For federal income tax purposes, however, the equivalent of the foregoing, expressed as the Uncertificated Principal Balance of REMIC II Regular Interest II-A. With respect to the Class III-A-IO Certificates as of any Distribution Date on or prior to the Group III Rate Change Date, an amount equal to the Class Certificate Balance of the Class III-A Certificates. With respect to the Class III-A-IO Certificates as of any Distribution Date following the Group III Rate Change Date, an amount equal to zero. For federal income tax purposes, however, the equivalent of the foregoing, expressed as the Uncertificated Principal Balance of REMIC II Regular Interest III-A. With respect to the Class IV-A-IO Certificates as of any Distribution Date an amount equal to the Class Certificate Balance of the Class IV-A Certificates. For federal income tax purposes, however, the equivalent of the foregoing, expressed as the Uncertificated Principal Balance of REMIC II Regular Interest IV-A. With respect to the Class V-A-IO Certificates as of any Distribution Date an amount equal to the Class Certificate Balance of the Class V-A Certificates. For federal income tax purposes, however, the equivalent of the foregoing, expressed as the Uncertificated Principal Balance of REMIC II Regular Interest V-A.

Offered Certificate : Any Senior Certificate or Offered Subordinate Certificate.

Offered Subordinate Certificates : The Class M-l, Class M-2 and Class M-3 Certificates.

Officer's Certificate : A certificate signed by the Chairman of the Board, the Vice Chairman of the Board, the President or a Vice President or Assistant Vice President or other authorized officer of the Master Servicer or the Depositor, as applicable, and delivered to the Trustee, as required by this Agreement.

One-Month LIBOR : With respect to any Interest Accrual Period, the rate determined by the Securities Administrator on the related Interest Determination Date on the basis of (a) the offered rates for one-month United States dollar deposits, as such rates appear on Telerate page 3750, as of 11:00 a.m. (London time) on such Interest Determination Date or (b) if such rate does not appear on Telerate Page 3750 as of 11:00 a.m. (London time), the offered rates of the Reference Banks for one-month United States dollar deposits, as such rates appear on the Reuters Screen LIBO Page, as of 11:00 a.m. (London time) on such Interest Determination Date. If One-Month LIBOR is determined pursuant to clause (b) above, on each Interest Determination Date, One-Month LIBOR for the related Accrual Period will be established by the Securities Administrator as follows:

(i)         If on such Interest Determination Date two or more Reference Banks provide such offered quotations, One-Month LIBOR for the related Accrual Period shall be the arithmetic mean of such offered quotations (rounded upwards if necessary to the nearest whole multiple of 0.03125%) .

(ii)         If on such Interest Determination Date fewer than two Reference Banks provide such offered quotations, One-Month LIBOR for the related Accrual Period shall be the higher of (i) One-Month LIBOR as determined on the previous Interest Determination Date and (ii) the Reserve Interest Rate.

Opinion of Counsel : A written opinion of counsel who is or are acceptable to the Trustee and the Securities Administrator and who, unless required to be Independent (an “Opinion of Independent Counsel”), may be internal counsel for the Master Servicer or the Depositor.

 

 

 

Optional Termination Date : The first Distribution Date on which the Controlling Class Holder may opt to terminate the Trust Fund pursuant to Section 10.01.

Original Class Certificate Balance : With respect to each Class of the Certificates (other than the Interest Only Certificates and the Class R Certificates), the Class Certificate Balance thereof on the Closing Date, as set forth opposite such Class above in the Preliminary Statement.

Original Notional Amount : With respect to the Class I-A-IO, $334,745,000. With respect to the Class II-A-IO, $189,051,000. With respect to the Class III-A-IO, $275,146,000. With respect to the Class IV-A-IO, $239,736,000. With respect to the Class V-A-IO, $96,094,000.

Original Value : The lesser of (i) the Appraised Value or (ii) the sales price of a Mortgaged Property at the time of origination of a Mortgage Loan, except in instances where either clauses (i) or (ii) is unavailable, the other may be used to determine the Original Value, or if both clauses (i) and (ii) are unavailable, Original Value may be determined from other sources reasonably acceptable to the Depositor.

Outstanding Mortgage Loan : With respect to any Due Date, a Mortgage Loan which, prior to such Due Date, was not the subject of a Principal Prepayment in Full, did not become a Liquidated Mortgage Loan and was not purchased or replaced.

Outstanding Principal Balance : As of the time of any determination, the principal balance of a Mortgage Loan remaining to be paid by the Mortgagor, or, in the case of an REO Property, the principal balance of the related Mortgage Loan remaining to be paid by the Mortgagor at the time such property was acquired by the Trust Fund less any Net Liquidation Proceeds with respect thereto to the extent applied to principal.

Ownership Interest : As to any Certificate, any ownership or security interest in such Certificate, including any interest in such Certificate as the Holder thereof and any other interest therein, whether direct or indirect, legal or beneficial, as owner or as pledgee.

Pass-Through Rate : With respect to the Certificates and any Distribution Date, the following:

(i)         For the REMIC III I-A Certificates on each Distribution Date on or prior to the Group I Rate Change Date, a per annum rate equal to the lesser of (i) the weighted average of the Net Mortgage Rates on each Group I Mortgage Loan, weighted on the basis of the principal balance of each such loan, and (ii) 5.055%. For federal income tax purposes, however, the forgoing shall be equivalent to the lesser of (i) the REMIC II Pass-Through Rate on REMIC II Regular Interest I-A and (ii) 5.055%. For the REMIC III I-A Certificates beginning with the Interest Accrual Period following the Interest Accrual Period for the Group I Rate Change Date and thereafter, a per annum rate equal to the weighted average of the Net Mortgage Rates on the Group I Mortgage Loans. The Pass-Through Rate with respect to the first Interest Accrual Period is expected to be approximately 5.055% per annum.

 

 

 

(ii)         For the Class I-A-IO Certificates on each Distribution Date, a per annum rate equal to the excess, if any, of (A) the weighted average of the Net Mortgage Rates on the Group I Mortgage Loans, over (B) the Pass-Through Rate on the Class I-A Certificates. For federal income tax purposes, however, the Pass-Through Rate on the Class I-A-IO Certificates shall be a per annum rate equal to the excess, if any, of (A) the REMIC II Pass-Through Rate on REMIC II Regular Interest I-A, over (B) the Pass-Through Rate on the Class I-A Certificates. The Pass-Through Rate on the Class I-A-IO Certificates for the first Interest Accrual Period will be approximately 0.8821% per annum.

(iii)        For the REMIC III II-A Certificates on each Distribution Date on or prior to the Group II Rate Change Date, a per annum rate equal to the lesser of (i) the weighted average of the Net Mortgage Rates on each Group II Mortgage Loan, weighted on the basis of the principal balance of each such loan, and (ii) 4.980%. For federal income tax purposes, however, the forgoing shall be equivalent to the lesser of (i) the REMIC II Pass-Through Rate on REMIC II Regular Interest II-A and (ii) 4.980%. For the REMIC III II-A Certificates beginning with the Interest Accrual Period following the Interest Accrual Period for the Group II Rate Change Date and thereafter, a per annum rate equal to the weighted average of the Net Mortgage Rates on the Group II Mortgage Loans. The Pass-Through Rate with respect to the first Interest Accrual Period is expected to be approximately 4.980% per annum.

(iv)        the Class II-A-IO Certificates on each Distribution Date, a per annum rate equal to the excess, if any, of (A) the weighted average of the Net Mortgage Rates on the Group II Mortgage Loans, over (B) the Pass-Through Rate on the Class II-A Certificates. For federal income tax purposes, however, the Pass-Through Rate on the Class II-A-IO Certificates shall be a per annum rate equal to the excess, if any, of (A) the REMIC II Pass-Through Rate on REMIC II Regular Interest II-A, over (B) the Pass-Through Rate on the Class II-A Certificates. The Pass-Through Rate on the Class II-A-IO Certificates for the first Interest Accrual Period will be approximately 0.8281% per annum.

(v)        For the REMIC III III-A Certificates on each Distribution Date on or prior to the Group III Rate Change Date, a per annum rate equal to the lesser of (i) the weighted average of the Net Mortgage Rates on each Group III Mortgage Loan, weighted on the basis of the principal balance of each such loan, and (ii) 5.050%. For federal income tax purposes, however, the lesser of (i) the REMIC II Pass-Through Rate on REMIC II Regular Interest III-A and (ii) 5.050%. For the REMIC III III-A Certificates beginning with the Interest Accrual Period following the Interest Accrual Period for the Group III Rate Change Date and thereafter, a per annum rate equal to the weighted average of the Net Mortgage Rates on the Group III Mortgage Loans. The Pass-Through Rate with respect to the first Interest Accrual Period is expected to be approximately 5.050% per annum.

(vi)        For the Class III-A-IO Certificates on each Distribution Date, a per annum rate equal to the excess, if any, of (A) the weighted average of the Net

 

 

Mortgage Rates on the Group III Mortgage Loans, over (B) the Pass-Through Rate on the Class III-A Certificates. For federal income tax purposes, however, the Pass-Through Rate on the Class III-A-IO Certificates shall be a per annum rate equal to the excess, if any, of (A) the REMIC II Pass-Through Rate on REMIC II Regular Interest III-A, over (B) the Pass-Through Rate on the Class III-A Certificates. The Pass-Through Rate on the Class III-A-IO Certificates for the first Interest Accrual Period will be approximately 1.0939% per annum.

(vii)       For the Class IV-A Certificates on each Distribution Date, a per annum rate equal to the lesser of (i) One-Month LIBOR plus 0.25% prior to the Optional Termination Date and 0.50% on the Optional Termination Date or thereafter and (ii) the weighted average of the Net Mortgage Rates on the Group IV Mortgage Loans. For federal income tax purposes, however, the Pass-Through Rate on the Class IV-A Certificates shall be a per annum rate equal to the lesser of (i) One-Month LIBOR plus 0.25% and (ii) the REMIC II Pass-Through Rate on REMIC II Regular Interest IV-A. The Pass-Through Rate with respect to the first Interest Accrual Period is expected to be approximately 4.33% per annum.

(viii)      For the Class IV-A-IO Certificates on each Distribution Date, a per annum rate equal to the excess, if any, of (A) the weighted average of the Net Mortgage Rates on the Group IV Mortgage Loans over (B) One-Month LIBOR plus 0.25% prior to the Optional Termination Date and 0.50% on the Optional Termination Date or thereafter. For federal income tax purposes, however, the Pass-Through Rate on the Class IV-A-IO Certificates shall be a per annum rate equal to the excess, if any, of (A) the REMIC II Pass-Through Rate on REMIC II Regular Interest IV-A over (B) the Pass-Through Rate on the Class IV-A Certificates. The Pass-Through Rate on the Class IV-A-IO Certificates for the first Interest Accrual Period will be approximately 1.2090% per annum.

(ix)        For the Class V-A Certificates on each Distribution Date, a per annum rate equal to the lesser of (i) One-Month LIBOR plus 0.25% prior to the Optional Termination Date and 0.50% on the Optional Termination Date or thereafter and (ii) the weighted average of the Net Mortgage Rates on the Group V Mortgage Loans. For federal income tax purposes, however, the Pass-Through Rate on the Class V-A Certificates shall be a per annum rate equal to the lesser of (i) One-Month LIBOR plus 0.25% and (ii) the REMIC II Pass-Through Rate on REMIC II Regular Interest V-A. The Pass-Through Rate with respect to the first Interest Accrual Period is expected to be approximately 4.33% per annum.

(x)        For the Class V-A-IO Certificates on each Distribution Date, a per annum rate equal to the excess, if any, of (A) the weighted average of the Net Mortgage Rates on the Group V Mortgage Loans over (B) One-Month LIBOR plus 0.25% prior to the Optional Termination Date and 0.50% on the Optional Termination Date or thereafter. For federal income tax purposes, however, the Pass-Through Rate on the Class V-A-IO Certificates shall be a per annum rate equal to the excess, if any, of (A) the REMIC II Pass-Through Rate on REMIC II Regular Interest V-A over (B) the Pass-Through Rate on the Class V-A

 

 

Certificates. The Pass-Through Rate on the Class V-A-IO Certificates for the first Interest Accrual Period will be approximately 0.8826% per annum.

(xi)        For each class of Class M Certificates and Class B Certificates will equal the weighted average of the weighted average of the Net Mortgage Rates of each Loan Group, weighted in proportion to the results of subtracting from the aggregate Stated Principal Balance of the Mortgage Loans of each Loan Group, the aggregate Class Certificate Balance of the related Senior Certificates (other than the Interest Only Certificates). For federal income tax purposes, however, the Class M Certificates and the Class B Certificates will have a Pass-Through Rate equal to the weighted average of the Pass-Through Rates on REMIC II Regular Interests M-1, M-2, M-3, B-1, B-2 and B-3, weighted on the basis of the Uncertificated Principal Balance of each such REMIC II Regular Interest. The Pass-Through Rate with respect to the first Interest Accrual Period is expected to be approximately 5.143% per annum.

Paying Agent : The Securities Administrator or any successor Paying Agent appointed by the Securities Administrator.

Percentage Interest : With respect to any Certificate (other than a Class R Certificate), a fraction, expressed as a percentage, the numerator of which is the Initial Class Certificate Balance or Initial Notional Amount, as the case may be, represented by such Certificate and the denominator of which is the Original Class Certificate Balance or Original Notional Amount, as the case may be, of the related Class. With respect to any Class of Class R Certificates, the portion of such Class evidenced thereby, expressed as a percentage, as stated on the face of such Certificate; provided, however, that the sum of all such percentages for each such Class totals 100%.

Periodic Rate Cap : With respect to each Mortgage Loan, the maximum adjustment that can be made to the Mortgage Interest Rate on each Interest Adjustment Date in accordance with its terms, regardless of changes in the applicable Index.

Permitted Investments : Any one or more of the following obligations or securities held in the name of the Trustee for the benefit of the Certificateholders:

(i)         direct obligations of, and obligations the timely payment of which are fully guaranteed by the United States of America or any agency or instrumentality of the United States of America the obligations of which are backed by the full faith and credit of the United States of America;

(ii)         (a) demand or time deposits, federal funds or bankers' acceptances issued by any depository institution or trust company incorporated under the laws of the United States of America or any state thereof (including the Trustee, the Securities Administrator or the Master Servicer or its Affiliates acting in its commercial banking capacity) and subject to supervision and examination by federal and/or state banking authorities, provided that the commercial paper and/or the short-term debt rating and/or the long-term unsecured debt obligations of such depository institution or trust company at the time of

 

 

such investment or contractual commitment providing for such investment have the Applicable Credit Rating or better from each Rating Agency and (b) any other demand or time deposit or certificate of deposit that is fully insured by the Federal Deposit Insurance Corporation;

(iii)        repurchase obligations with respect to (a) any security described in clause (i) above or (b) any other security issued or guaranteed by an agency or instrumentality of the United States of America, the obligations of which are backed by the full faith and credit of the United States of America, in either case entered into with a depository institution or trust company (acting as principal) described in clause (ii)(a) above where the Trustee holds the security therefor;

(iv)        securities bearing interest or sold at a discount issued by any corporation (including the Trustee, the Securities Administrator or the Master Servicer or its Affiliates) incorporated under the laws of the United States of America or any state thereof that have the Applicable Credit Rating or better from each Rating Agency at the time of such investment or contractual commitment providing for such investment; provided, however, that securities issued by any particular corporation will not be Permitted Investments to the extent that investments therein will cause the then outstanding principal amount of securities issued by such corporation and held as part of the Trust to exceed 10% of the aggregate Outstanding Principal Balances of all the Mortgage Loans and Permitted Investments held as part of the Trust;

(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 one year after the date of issuance thereof) having the Applicable Credit Rating or better from each Rating Agency at the time of such investment;

(vi)        a Reinvestment Agreement issued by any bank, insurance company or other corporation or entity;

(vii)       any other demand, money market or time deposit, obligation, security or investment as may be acceptable to either Rating Agency as evidenced in writing by each Rating Agency to the Trustee, Securities Administrator or Master Servicer;

(viii)      any money market or common trust fund having the Applicable Credit Rating or better from each Rating Agency (if such fund is rated by each Rating Agency), including any such fund for which the Trustee, Securities Administrator or Master Servicer or any affiliate of the Trustee, Securities Administrator or Master Servicer acts as a manager or an advisor; provided, however, that no instrument or security shall be a Permitted Investment if such instrument or security evidences a right to receive only interest payments with respect to the obligations underlying such instrument or if such security provides for payment of both principal and interest with a yield to maturity in excess of 120% of the yield to maturity at par or if such instrument or security is purchased at a price greater than par; and

 

 

 

(ix)        units of a taxable money-market portfolio having the highest rating assigned by each Rating Agency (except (i) if Fitch is a Rating Agency and has not rated the portfolio, the highest rating assigned by Moody’s and (ii) if S&P is a Rating Agency, “AAAm” or “AAAM-G” by S&P) and restricted to obligations issued or guaranteed by the United States of America or entities whose obligations are backed by the full faith and credit of the United States of America and repurchase agreements collateralized by such obligations.

Permitted Transferee : Any Person other than a Disqualified Organization or an “electing large partnership” (as defined by Section 775 of the Code).

Person : Any individual, corporation, partnership, joint venture, association, limited liability company, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

PHH : PHH Mortgage Corporation.

PHH Assignment Agreement : Shall mean the Assignment, Assumption and Recognition Agreement, dated as of October 31, 2005, among PHH, the Depositor and MLMLI, and acknowledged and agreed by the Master Servicer pursuant to which the PHH Servicing Agreement and the rights of MLMLI thereunder were assigned to the Depositor for the benefit of the Certificateholders.

PHH Loans : Shall mean those Mortgage Loans serviced by PHH pursuant to the PHH Servicing Agreement.

PHH Servicing Agreement : Shall mean the Mortgage Loan Flow Purchase, Sale & Servicing Agreement, dated as of March 27, 2001 among MLMCI, PHH (formerly known as Cendant Mortgage Corporation) and Bishop's Gate Residential Mortgage Trust, as assigned to MLMLI pursuant to the Assignment, Assumption and Recognition Agreement, dated as of October 31, 2005 among PHH, the Depositor and MLMLI.

Physical Certificates : The Residual Certificates and the Private Certificates.

Prepayment Distribution Trigger : With respect to any Distribution Date and any Class of Subordinate Certificates (other than the Class M-1 Certificates), a test that shall be satisfied if the fraction (expressed as a percentage) equal to the sum of the Class Certificate Balances of such Class and each Class of Subordinate Certificates with a Lower Priority than such Class immediately prior to such Distribution Date divided by the aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO Properties) immediately prior to such Distribution Date is greater than or equal to the sum of the related Initial Subordinate Class Percentages of such Classes of Subordinate Certificates.

Prepayment Interest Shortfall : As to any Distribution Date and any Mortgage Loan (other than a Mortgage Loan relating to an REO Property) that was the subject of (a) a Principal Prepayment in Full during the related Prepayment Period, an amount equal to the excess of one month's interest at the Net Mortgage Rate on the Stated Principal Balance of such Mortgage Loan over the amount of interest (adjusted to the Net Mortgage Rate) paid by the Mortgagor for

 

 

such Prepayment Period to the date of such Principal Prepayment in Full or (b) a Curtailment during the prior calendar month, an amount equal to one month's interest at the Net Mortgage Rate on the amount of such Curtailment. The obligations of the Master Servicer in respect of any Prepayment Interest Shortfall are set forth in Section 6.06.

Prepayment Period : With respect to any Mortgage Loan and any Distribution Date, the calendar month preceding the month in which such Distribution Date occurs.

Primary Mortgage Insurance Policy : Any primary mortgage guaranty insurance policy issued in connection with a Mortgage Loan which provides compensation to a Mortgage Note holder in the event of default by the obligor under such Mortgage Note or the related Security Instrument, if any or any replacement policy therefor through the related Interest Accrual Period for such Class relating to a Distribution Date.

Principal Prepayment : Any payment (whether partial or full) or other recovery of principal on a Mortgage Loan which is received in advance of its scheduled Due Date to the extent that it is not accompanied by an amount as to interest representing scheduled interest due on any date or dates in any month or months subsequent to the month of prepayment, including Insurance Proceeds and Repurchase Proceeds, but excluding the principal portion of Net Liquidation Proceeds.

Principal Prepayment in Full : Any Principal Prepayment made by a Mortgagor of the entire unpaid principal balance of the Mortgage Loan.

Private Certificates : Any of the Class B-1, Class B-2 and Class B-3 Certificates.

Protected Account : An account established and maintained for the benefit of Certificateholders by each Servicer with respect to the related Mortgage Loans and with respect to REO Property pursuant to the respective Servicing Agreement. The Protected Account shall be an Eligible Account.

Purchase Price : With respect to any Mortgage Loan or REO Property to be purchased pursuant to or as contemplated by Section 2.03 or 10.01, and as confirmed by an Officers' Certificate from the Master Servicer to the Trustee, an amount equal to the sum of (i) 100% of the Stated Principal Balance thereof as of the date of purchase (or such other price as provided in Section 10.01), (ii) accrued interest on such Stated Principal Balance at the applicable Mortgage Interest Rate in effect from time to time from the Due Date as to which interest was last covered by a payment by the Mortgagor or an advance by the related Servicer or Master Servicer, which payment or advance had as of the date of purchase been distributed to Certificateholders, through the end of the calendar month in which the purchase is to be effected less any unreimbursed Monthly Advances and any unpaid Servicing Fees payable to the purchaser of the Mortgage Loan and (iii) any costs and damages incurred by the Trust in connection with any violation by such Mortgage Loan or REO Property of any predatory or abusive-lending law.

Qualified Insurer : Any insurance company duly qualified as such under the laws of the state or states in which the related Mortgaged Property or Mortgaged Properties is or are located, duly authorized and licensed in such state or states to transact the type of insurance business in

 

 

which it is engaged and approved as an insurer by the Master Servicer, so long as the claims paying ability of which is acceptable to the Rating Agencies for pass-through certificates having the same rating as the Certificates rated by the Rating Agencies as of the Closing Date.

Rating Agencies : S&P and Moody’s.

Realized Loss : With respect to a Liquidated Mortgage Loan, the amount by which the remaining unpaid principal balance of the Mortgage Loan exceeds the amount of Liquidation Proceeds applied to the principal balance of the related Mortgage Loan. To the extent the Master Servicer receives Subsequent Recoveries with respect to any Mortgage Loan, the amount of the Realized Loss with respect to that Mortgage Loan will be reduced to the extent such recoveries are applied to reduce the Class Certificate Balance of any Class of Certificates on any Distribution Date.

Record Date : With respect to each Distribution Date and each Class of Certificates (other than the Interest Only Certificates and the Class M Certificates), the day prior to the related Distribution Date. With respect to each Distribution Date and the Interest Only Certificates and the Class M Certificates, the close of business on the last Business Day of the month immediately preceding the month in which the related Distribution Date occurs.

Refinanced Mortgage Loan : Any Mortgage Loan the proceeds of which were not used to purchase the related Mortgaged Property.

Regular Certificates : Any of the REMIC III I-A, Class I-A-IO, REMIC III II-A, Class II-A-IO, REMIC III III-A, Class III-A-IO, Class IV-A, Class IV-A-IO, Class V-A, Class V-A-IO, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 or Class B-3 Certificates.

Reinvestment Agreements : One or more reinvestment agreements, acceptable to each of the Rating Agencies, from a bank, insurance company or other corporation or entity (including the Trustee).

Relief Act : The Servicemembers Civil Relief Act, as amended.

Relief Act Mortgage Loan : Any Mortgage Loan as to which the Monthly Payment thereof has been reduced due to the application of the Relief Act.

REMIC : A “real estate mortgage investment conduit” within the meaning of Section 860D of the Code.

REMIC I : The segregated pool of assets, with respect to which a REMIC election is to be made, consisting of: (i) each Mortgage Loan (exclusive of payments of principal and interest due on or before the Cut-off Date, if any, received by the Master Servicer which shall not constitute an asset of the Trust Fund) as from time to time are subject to this Agreement and all payments under and proceeds of such Mortgage Loans (exclusive of any prepayment fees and late payment charges received on the Mortgage Loans), together with all documents included in the related Mortgage File, subject to Section 2.01; (ii) such funds or assets as from time to time are deposited in the Master Servicer Collection Account or the Distribution Account and belonging to the Trust Fund; (iii) any REO Property; (iv) the primary hazard insurance policies, if any, the

 

 

Primary Mortgage Insurance Policies, if any, and all other Insurance Policies with respect to the Mortgage Loans; and (v) the Depositor's interest in respect of the representations and warranties made by the related Seller in the Mortgage Loan Purchase Agreements as assigned to the Trustee pursuant to Section 2.04 hereof.

REMIC I Pass-Through Rate : With respect to REMIC I Regular Interests I-SUB, II-SUB, III-SUB, IV-SUB, V-SUB and ZZZ, the weighted average of the Net Mortgage Rates of the Mortgage Loans, weighted on the basis of the respective Stated Principal Balance of each such Mortgage Loan as of the beginning of the Due Period immediately preceding the related Distribution Date. With respect to REMIC I Regular Interest I-GRP, the weighted average of the Net Mortgage Rates of the Group I Mortgage Loans, weighted on the basis of the respective Stated Principal Balance of each such Mortgage Loan as of the beginning of the Due Period immediately preceding the related Distribution Date. With respect to REMIC I Regular Interest II-GRP, the weighted average of the Net Mortgage Rates of the Group II Mortgage Loans, weighted on the basis of the respective Stated Principal Balance of each such Mortgage Loan as of the beginning of the Due Period immediately preceding the related Distribution Date. With respect to REMIC I Regular Interest III-GRP, the weighted average of the Net Mortgage Rates of the Group III Mortgage Loans, weighted on the basis of the respective Stated Principal Balance of each such Mortgage Loan as of the beginning of the Due Period immediately preceding the related Distribution Date. With respect to REMIC I Regular Interest IV-GRP, the weighted average of the Net Mortgage Rates of the Group IV Mortgage Loans, weighted on the basis of the respective Stated Principal Balance of each such Mortgage Loan as of the beginning of the Due Period immediately preceding the related Distribution Date. With respect to REMIC I Regular Interest V-GRP, the weighted average of the Net Mortgage Rates of the Group V Mortgage Loans, weighted on the basis of the respective Stated Principal Balance of each such Mortgage Loan as of the beginning of the Due Period immediately preceding the related Distribution Date.

REMIC I Regular Interests : Each uncertificated partial undivided beneficial ownership interest in REMIC I as designated in the Preliminary Statement having a principal balance equal to its Uncertificated Principal Balance, and which bears interest at a rate equal to its REMIC I Pass-Through Rate.

REMIC I Regular Interest I-SUB : A regular interest in REMIC I that is held as an asset of REMIC II, that has an initial principal balance equal to the related Uncertificated Principal Balance, that bears interest at the related REMIC I Pass-Through Rate, and that has such other terms as are described herein.

REMIC I Regular Interest I-GRP : A regular interest in REMIC I that is held as an asset of REMIC II, that has an initial principal balance equal to the related Uncertificated Principal Balance, that bears interest at the related REMIC I Pass-Through Rate, and that has such other terms as are described herein.

REMIC I Regular Interest II-SUB : A regular interest in REMIC I that is held as an asset of REMIC II, that has an initial principal balance equal to the related Uncertificated Principal Balance, that bears interest at the related REMIC I Pass-Through Rate, and that has such other terms as are described herein.

 

 

 

REMIC I Regular Interest II-GRP : A regular interest in REMIC I that is held as an asset of REMIC II, that has an initial principal balance equal to the related Uncertificated Principal Balance, that bears interest at the related REMIC I Pass-Through Rate, and that has such other terms as are described herein.

REMIC I Regular Interest III-SUB : A regular interest in REMIC I that is held as an asset of REMIC II, that has an initial principal balance equal to the related Uncertificated Principal Balance, that bears interest at the related REMIC I Pass-Through Rate, and that has such other terms as are described herein.

REMIC I Regular Interest III-GRP : A regular interest in REMIC I that is held as an asset of REMIC II, that has an initial principal balance equal to the related Uncertificated Principal Balance, that bears interest at the related REMIC I Pass-Through Rate, and that has such other terms as are described herein.

REMIC I Regular Interest IV-SUB : A regular interest in REMIC I that is held as an asset of REMIC II, that has an initial principal balance equal to the related Uncertificated Principal Balance, that bears interest at the related REMIC I Pass-Through Rate, and that has such other terms as are described herein.

REMIC I Regular Interest IV-GRP : A regular interest in REMIC I that is held as an asset of REMIC II, that has an initial principal balance equal to the related Uncertificated Principal Balance, that bears interest at the related REMIC I Pass-Through Rate, and that has such other terms as are described herein.

REMIC I Regular Interest V-SUB : A regular interest in REMIC I that is held as an asset of REMIC II, that has an initial principal balance equal to the related Uncertificated Principal Balance, that bears interest at the related REMIC I Pass-Through Rate, and that has such other terms as are described herein.

REMIC I Regular Interest V-GRP : A regular interest in REMIC I that is held as an asset of REMIC II, that has an initial principal balance equal to the related Uncertificated Principal Balance, that bears interest at the related REMIC I Pass-Through Rate, and that has such other terms as are described herein.

REMIC I Regular Interest ZZZ : A regular interest in REMIC I that is held as an asset of REMIC II, that has an initial principal balance equal to the related Uncertificated Principal Balance, that bears interest at the related REMIC I Pass-Through Rate, and that has such other terms as are described herein.

REMIC I Subordinated Balance Ratio : The ratio among the Uncertificated Principal Balances of each of the REMIC I Regular Interests ending with the designation “SUB,” equal to the ratio among:

(1)        the excess of (x) the aggregate Stated Principal Balance of the Group I Mortgage Loans over (y) the Class Certificate Balance of the Class I-A Certificates;

 

 

 

(2)        the excess of (x) the aggregate Stated Principal Balance of the Group II Mortgage Loans over (y) the Class Certificate Balance of the Class II-A Certificates;

(3)        the excess of (x) the aggregate Stated Principal Balance of the Group III Mortgage Loans over (y) the Class Certificate Balance of the Class III-A Certificates;

(4)        the excess of (x) the aggregate Stated Principal Balance of the Group IV Mortgage Loans over (y) the Class Certificate Balance of the Class IV-A Certificates; and

(5)        the excess of (x) the aggregate Stated Principal Balance of the Group V Mortgage Loans over (y) the Class Certificate Balance of the Class V-A Certificates.

REMIC II : The segregated pool of assets consisting of the REMIC I Regular Interests conveyed in trust to the Trustee for the benefit of the holders of the REMIC II Regular Interests and the Class R-II Certificates, with respect to which a separate REMIC election is to be made.

REMIC II Pass-Through Rate : With respect to REMIC II Regular Interest I-A, a per annum rate equal to the weighted average of the REMIC I Pass-Through Rate for REMIC I Regular Interest I-GRP. With respect to REMIC II Regular Interests II-A, a per annum rate equal to the weighted average of the REMIC I Pass-Through Rate for REMIC I Regular Interest II-GRP. With respect to REMIC II Regular Interest III-A, a per annum rate equal to the weighted average of the REMIC I Pass-Through Rate for REMIC I Regular Interest III-GRP. With respect to REMIC II Regular Interest IV-A, a per annum rate equal to the weighted average of the REMIC I Pass-Through Rate for REMIC I Regular Interest IV-GRP. With respect to REMIC II Regular Interest V-A, a per annum rate equal to the weighted average of the REMIC I Pass-Through Rate for REMIC I Regular Interest V-GRP. With respect to each of the REMIC II Regular Interests M-1, M-2, M-3, B-1, B-2 and B-3, a per annum rate equal to the weighted average of the REMIC I Pass-Through Rates on each REMIC I Regular Interest ending with the designation “SUB,” weighted on the basis of the Uncertificated Principal Balance of each such REMIC I Regular Interest immediately preceding the related Distribution Date; provided that for purposes of such weighted average, the REMIC I Pass-Through Rate of each such REMIC I Regular Interest shall be subject to a cap and a floor equal to the REMIC I Pass-Through Rate of the REMIC I Regular Interest from the related Group ending with the designation “GRP”.

REMIC II Regular Interests : Each uncertificated partial undivided beneficial ownership interest in REMIC II as designated in the Preliminary Statement having a principal balance equal to its Uncertificated Principal Balance, and which bears interest at a rate equal to its REMIC II Pass-Through Rate.

REMIC III : The segregated pool of assets consisting of the REMIC II Regular Interests conveyed in trust to the Trustee for the benefit of the holders of the REMIC III I-A, Class I-A-IO, REMIC III II-A, Class II-A-IO, REMIC III III-A, Class III-A-IO, Class IV-A, Class IV-A-IO, Class V-A, Class V-A-IO, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2, Class B-3 and Class R-III Certificates pursuant to Section 2.06, with respect to which a separate REMIC election is to be made.

 

 

 

REMIC III Certificates : Any of the REMIC III I-A, Class I-A-IO, REMIC III II-A, Class II-A-IO, REMIC III III-A, Class III-A-IO, Class IV-A, Class IV-A-IO, Class V-A, Class V-A-IO, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 Class B-3 and Class R-III Certificates.

REMIC Opinion : An Opinion of Counsel stating that, under the REMIC Provisions, any contemplated action will not cause REMIC I , REMIC II or REMIC III to fail to qualify as a REMIC or result in the imposition of a tax upon the Trust Fund (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).

REMIC Provisions : Provisions of the federal income tax law relating to real estate mortgage investment conduits which appear at Section 860A through 860G of Subchapter M of Chapter 1 of the Code, and related provisions, and regulations and rulings promulgated thereunder, as the foregoing may be in effect from time to time.

REO Property : A Mortgaged Property acquired by the Servicer or Master Servicer on behalf of the Trust Fund through foreclosure or deed-in-lieu of foreclosure, as described in Section 3.23 in connection with a defaulted Mortgage Loan.

Repurchase Proceeds : The Repurchase Price in connection with any repurchase of a Mortgage Loan by (i) MLMLI, in the case of the MLMLI Mortgage Loans or (ii) KKR, KKR Financial or the related Underlying Seller, in the case of the KKR Mortgage Loans and any cash deposit in connection with the substitution of a Mortgage Loan.

Request for Release : A request for release in the form attached hereto as Exhibit D.

Required Insurance Policy : With respect to any Mortgage Loan, any insurance policy which is required to be maintained from time to time under this Agreement with respect to such Mortgage Loan.

Reserve Interest Rate : With respect to any Interest Determination Date, the rate per annum that the Securities Administrator determines to be (1) the arithmetic mean (rounded upwards if necessary to the nearest whole multiple of 0.03125%) of the one-month United States dollar lending rates which New York City banks selected by the Securities Administrator are quoting on the relevant Interest Determination Date to the principal London offices of leading banks in the London interbank market or (2) in the event that the Securities Administrator can determine no such arithmetic mean, the lowest one-month United States dollar lending rate which New York City banks selected by the Securities Administrator are quoting on such Interest Determination Date to leading European banks.

Residual Certificates : Any of 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 : Any officer assigned to the Corporate Trust Office (or any successor thereto), including any Vice President, Assistant Vice President, Trust Officer, any Assistant Secretary, any trust officer or any other officer of the Trustee or Securities Administrator customarily performing functions similar to those performed by any of the above designated officers and having direct responsibility for the administration of this Agreement, and any other officer of the Trustee or Securities Administrator to whom a matter arising hereunder may be referred.

Rule 144A Letter : The certificate to be furnished by each purchaser of a Private Certificate (which is also a Physical Certificate) which is a Qualified Institutional Buyer as defined under Rule 144A promulgated under the Securities Act, substantially in the form set forth as Exhibit F-3 hereto.

 

 

 

S&P : Standard and Poor's, a division of The McGraw-Hill Companies, Inc. or its successor in interest.

Sale and Assignment Agreement : The Sale and Assignment Agreement dated as of October 31, 2005, between KKR Financial, as seller, and KKR, as purchaser, and all amendments thereof and supplements thereto, attached as Exhibit J-3.

Scheduled Payment : With respect to any Mortgage Loan and any month, the scheduled payment or payments of principal and interest due during such month on such Mortgage Loan which either is payable by a Mortgagor in such month under the related Mortgage Note or, in the case of REO Property, would otherwise have been payable under the related Mortgage Note.

Scheduled Principal : The principal portion of any Scheduled Payment.

Securities Act : The Securities Act of 1933, as amended.

Securities Administrator : Wells Fargo Bank, N.A., or any successor in interest, or any successor securities administrator appointed as herein provided.

Security Agreement : With respect to a Cooperative Loan, the agreement creating a security interest in favor of the originator in the related Cooperative Stock.

Security Instrument : A written instrument creating a valid first lien on a Mortgaged Property securing a Mortgage Note, which may be any applicable form of mortgage, deed of trust, deed to secure debt or security deed, including any riders or addenda thereto.

Sellers : MLMLI, a Delaware corporation, or any successor in interest and KKR, a Maryland corporation, or any successor in interest, as applicable.

Senior Accelerated Distribution Percentage : The Group I, Group II, Group III, Group IV or Group V Senior Accelerated Distribution Percentage, as applicable.

Senior Certificates : The Class I-A, Class I-A-IO, Class II-A, Class II-A-IO, Class III-A, Class III-A-IO, Class IV-A, Class IV-A-IO, Class V-A and Class V-A-IO Certificates.

Senior Percentage : The Group I Senior Percentage, Group II Senior Percentage, Group III Senior Percentage, Group IV Senior Percentage or Group V Senior Percentage, as applicable.

Senior Principal Distribution Amount : The Group I Senior Principal Distribution Amount, Group II Senior Principal Distribution Amount, Group III Senior Principal Distribution Amount, Group IV Senior Principal Distribution Amount or Group V Senior Principal Distribution Amount, as applicable.

Servicer : With respect to each Mortgage Loan, PHH, Wells Fargo or First Republic, as applicable.

Servicer Remittance Date : With respect to each Mortgage Loan, the date set forth in the related Servicing Agreement.

 

 

 

Servicing Advances : With respect to any Mortgage Loan, all customary, reasonable and necessary “out-of-pocket” costs and expenses incurred by the Servicer in the performance of its servicing obligations, including, but not limited to, the cost of (i) preservation, restoration, protection and repair of a Mortgaged Property or Cooperative Unit, as applicable, (ii) any enforcement or judicial proceedings with respect to a Mortgage Loan, including foreclosure actions and (iii) the management and liquidation of REO Property.

Servicing Agreements : The Wells Fargo Servicing Agreement, PHH Servicing Agreement and First Republic Servicing Agreement.

Servicing Fee : As to any Mortgage Loan, and Distribution Date, an amount equal to the product of (i) the Stated Principal Balance of such Mortgage Loan as of the Due Date in the preceding calendar month and (ii) the applicable Servicing Fee Rate.

Servicing Fee Rate : As to any Mortgage Loan, a per annum rate as set forth in the Mortgage Loan Schedule.

Servicing Officer : Any officer of the Master Servicer involved in, or responsible for, the administration and servicing of the Mortgage Loans whose name and specimen signature appear on a list of servicing officers furnished to the Trustee by the Master Servicer, as such list may be amended from time to time.

Stated Principal Balance : With respect to any Mortgage Loan and Due Date, the unpaid principal balance of such Mortgage Loan as of such Due Date, as specified in the amortization schedule at the time relating thereto (before any adjustment to such amortization schedule by reason of any moratorium or similar waiver or grace period), after giving effect to any previous partial prepayments and Liquidation Proceeds received and to the payment of principal due on such Due Date and irrespective of any delinquency in payment by the related Mortgagor.

Startup Day : October 31, 2005.

Stayed Funds : If the Master Servicer is the subject of a proceeding under the federal Bankruptcy Code and the making of a remittance by the Master Servicer pursuant to this Agreement is prohibited by Section 362 of the federal Bankruptcy Code, funds which are in the custody of the Master Servicer, a trustee in bankruptcy or a federal bankruptcy court and should have been the subject of such remittance absent such prohibition.

Subordinate Certificates : The Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates.

Subordinate Percentage : For any Distribution Date, the difference between 100% and the Senior Percentage for such date.

Subordinate Prepayment Percentage : With respect to any Distribution Date and each Class of Subordinate Certificates, under the applicable circumstances set forth below, the respective percentages set forth below:

 

 

 

(i)         For any Distribution Date prior to the Distribution Date in November 2012 (unless the Class Certificate Balances of the Senior Certificates have been reduced to zero), 0%.

(ii)         For any Distribution Date for which clause (i) does not apply, and on which any Class of Subordinate Certificates are outstanding:

(a)        in the case of the Class of Subordinate Certificates then outstanding with the Highest Priority and each other Class of Subordinate Certificates for which the related Prepayment Distribution Trigger has been satisfied, a fraction, expressed as a percentage, the numerator of which is the Class Certificate Balance of such Class immediately prior to such date and the denominator of which is the sum of the Class Certificate Balances immediately prior to such date of (1) the Class of Subordinate Certificates then outstanding with the Highest Priority and (2) all other Classes of Subordinate Certificates for which the respective Prepayment Distribution Triggers have been satisfied; and

(b)        in the case of each other Class of Subordinate Certificates for which the Prepayment Distribution Triggers have not been satisfied, 0%; and

(iii)        Notwithstanding the foregoing, if the application of the foregoing percentages on any Distribution Date as provided in Section 6.01 of this Agreement (determined without regard to the proviso to the definition of “Subordinate Principal Distribution Amount”) would result in a distribution in respect of principal of any Class or Classes of Subordinate Certificates in an amount greater than the remaining Class Certificate Balance thereof (any such class, a “Maturing Class”), then: (a) the Subordinate Prepayment Percentage of each Maturing Class shall be reduced to a level that, when applied as described above, would exactly reduce the Class Certificate Balance of such Class to zero; (b) the Subordinate Prepayment Percentage of each other Class of Subordinate Certificates (any such Class, a “Non-Maturing Class”) shall be recalculated in accordance with the provisions in paragraph (ii) above, as if the Class Certificate Balance of each Maturing Class had been reduced to zero (such percentage as recalculated, the “Recalculated Percentage”); (c) the total amount of the reductions in the Subordinate Prepayment Percentages of the Maturing Class or Classes pursuant to clause (a) of this sentence, expressed as an aggregate percentage, shall be allocated among the Non-Maturing Classes in proportion to their respective Recalculated Percentages (the portion of such aggregate reduction so allocated to any Non-Maturing Class, the “Adjustment Percentage”); and (d) for purposes of such Distribution Date, the Subordinate Prepayment Percentage of each Non-Maturing Class shall be equal to the sum of (1) the Subordinate Prepayment Percentage thereof, calculated in accordance with the provisions in paragraph (ii) above as if the Class Certificate Balance of each Maturing Class had not been reduced to zero, plus (2) the related Adjustment Percentage.

Subordinate Principal Distribution Amount : With respect to any Distribution Date and each Class of Class M Certificates and Class B Certificates, the sum of the following:

 

 

 

(i)         the product of (x) the related Class M Percentage or Class B Percentage for such Class and (y) the aggregate of the following amounts:

(1)        the principal portion of each Monthly Payment due during the related Due Period on each Outstanding Mortgage Loan, whether or not received on or prior to the related Determination Date;

(2)        the Stated Principal Balance of any Mortgage Loan repurchased during the related Prepayment Period pursuant to Section 2.02 or 2.03; and

(3)        the principal portion of all other unscheduled collections (other than Principal Prepayments in Full and Curtailments and amounts received in connection with the liquidation or other disposition of a Mortgage Loan, including without limitation Insurance Proceeds, Liquidation Proceeds and REO Proceeds) received during the related Prepayment Period to the extent applied by the related Servicer as recoveries of principal of the related Mortgage Loan pursuant to the related Servicing Agreement;

(ii)         such Class's pro rata share, based on the Class Certificate Balance of each Class of Class M Certificates and Class B Certificates then outstanding, of, with respect to each Mortgage Loan for which a liquidation or other disposition occurred during the related Prepayment Period, an amount equal to the related unscheduled collections (including without limitation Insurance Proceeds, Liquidation Proceeds and REO Proceeds) to the extent applied by the related Servicer as recoveries of principal of the related Mortgage Loan pursuant to the related Servicing Agreement, to the extent such collections are not otherwise distributed to the Senior Certificates;

(iii)        the product of (x) the related Subordinate Prepayment Percentage for such Distribution Date and (y) the aggregate of all Principal Prepayments in Full and Curtailments of the Mortgage Loans received in the related Prepayment Period, to the extent not payable to the Senior Certificates; and

(iv)        any amounts described in clauses (i), (ii) and (iii) as determined for any previous Distribution Date, that remain undistributed to the extent that such amounts are not attributable to Realized Losses which have been allocated to a Class of Subordinate Certificates;

provided, however, that such amount shall in no event exceed the outstanding Class Certificate Balance of such Class of Certificates immediately prior to such date.

Subordination : As defined in Section 6.02(c).

Subsequent Recoveries : Any amount recovered by a Servicer or the Master Servicer (net of reimbursable expenses) with respect to a Liquidated Mortgage Loan with respect to which a Realized Loss was incurred after the liquidation or disposition of such Mortgage Loan.

 

 

 

Substitute Mortgage Loan : With respect to any Mortgage Loan, which is tendered to the Trustee pursuant to the related Servicing Agreement, the related Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as applicable, in each case, (i) which has an Outstanding Principal Balance not greater nor materially less than the Mortgage Loan for which it is to be substituted; (ii) which has a Mortgage Interest Rate and Net Rate not less than, and not materially greater than, such Mortgage Loan; (iii) which has a maturity date not materially earlier or later than such Mortgage Loan and not later than the latest maturity date of any Mortgage Loan; (iv) which is of the same property type and occupancy type as such Mortgage Loan; (v) which has a Loan-to-Value Ratio not greater than the Loan-to-Value Ratio of such Mortgage Loan; (vi) which is current in payment of principal and interest as of the date of substitution; (vii) as to which the payment terms do not vary in any material respect from the payment terms of the Mortgage Loan for which it is to be substituted and (viii) which has a Gross Margin, Periodic Rate Cap and Maximum Lifetime Mortgage Rate no less than those of such Mortgage Loan, has the same Index and interval between Interest Adjustment Dates as such Mortgage Loan, and a Minimum Lifetime Mortgage Rate no lower than that of such Mortgage Loan.

Swap Provider : Citibank, N.A.

Swap Termination Payment : In the event of a Swap Default, either (i) an amount may become immediately due and payable to the Swap Provider, which shall be paid to the Swap Provider from amounts otherwise payable by the Grantor Trust to the related Class of Certificates, or (ii) an amount may become immediately due and payable to the grantor trust on behalf of the related class of Certificates by the Swap Provider.

Tax Administration and Tax Matters Person : The Securities Administrator or any successor thereto or assignee thereof shall serve as tax administrator hereunder and as agent for the Tax Matters Person. The Holder of each Class of Residual Certificates shall be the Tax Matters Person for the related REMIC, as more particularly set forth in Section 9.12 hereof.

Trustee : Wachovia Bank, National Association, or its successor in interest, or any successor trustee appointed as herein provided.

Trust Fund : REMIC I, REMIC II and REMIC III.

Uncertificated Principal Balance : With respect to each Uncertificated REMIC Regular Interest on any date of determination, the amount set forth in the Preliminary Statement hereto minus the sum of (x) the aggregate of all amounts previously deemed distributed with respect to such interest and applied to reduce the Uncertificated Principal Balance thereof pursuant to

 

 

Section 6.01 and (y) the aggregate of all reductions in Class Certificate Balance deemed to have occurred in connection with Realized Losses that were previously deemed allocated to the Uncertificated Principal Balance of such Uncertificated REMIC Regular Interest pursuant to Section 6.07.

Uncertificated REMIC Accrued Interest : With respect to each Distribution Date, as to any Uncertificated REMIC Regular Interest, interest accrued during the related Interest Accrual Period at the related Uncertificated REMIC Pass-Through Rate on the Uncertificated Principal Balance thereof immediately prior to such Distribution Date. Uncertificated REMIC Accrued Interest will be calculated on the basis of a 360-day year, consisting of twelve 30-day months. In each case Uncertificated REMIC Accrued Interest on any Uncertificated REMIC Regular Interest will be reduced by the amount of: (i) Prepayment Interest Shortfalls on all Mortgage Loans (to the extent not offset by the Master Servicer with a Compensating Interest Payment as provided in Section 6.06), (ii) the interest portion (adjusted to the Net Mortgage Rate) of Realized Losses not allocated solely to one or more specific Classes of Certificates pursuant to Section 6.02 and (iii) any other interest shortfalls not covered by the subordination provided by the Class M Certificates and Class B Certificates with all such reductions allocated among all of the Uncertificated REMIC Regular Interests in proportion to their respective amounts of Uncertificated REMIC Accrued Interest payable on such Distribution Date which would have resulted absent such reductions.

Uncertificated REMIC Pass-Through Rate : Any REMIC I Pass-Through Rate or REMIC II Pass-Through Rate.

Uncertificated REMIC Regular Interests : The REMIC I Regular Interests and REMIC II Regular Interests.

Uncertificated REMIC II Regular Interest Distribution Amounts : With respect to any Distribution Date and each REMIC II Regular Interest, the sum of the amounts deemed to be distributed on such Uncertificated REMIC Regular Interest for such Distribution Date pursuant to Section 6.07.

Undercollateralized Amount : On any Distribution Date, the excess of (x) the aggregate Class Certificate Balance of any Class or Classes of Senior Certificates related to a Loan Group immediately prior to such Distribution Date over (y) the aggregate Stated Principal Balance of the Mortgage Loans in its related Loan Group as of the beginning of the related Due Period.

Undercollateralized Senior Certificates : As defined in Section 6.01(F).

Underlying Seller : With respect to each Mortgage Loan, MLCC, Wells Fargo or First Republic as indicated on the Mortgage Loan Schedule.

Uninsured Cause : Any cause of damage to a Mortgaged Property or related REO Property such that the complete restoration of such Mortgaged Property or related REO Property is not fully reimbursable by the hazard insurance policies required to be maintained pursuant the related Servicing Agreement, without regard to whether or not such policy is maintained.

 

 

 

United States Person : A citizen or resident of the United States, a corporation or partnership (including an entity treated as a corporation or partnership for federal income tax purposes) created or organized in, or under the laws of, the United States or any state thereof or the District of Columbia (except, in the case of a partnership, to the extent provided in regulations), provided that, for purposes solely of the Class R Certificates, no partnership or other entity treated as a partnership for United States federal income tax purposes shall be treated as a United States Person unless all persons that own an interest in such partnership either directly or through any entity that is not a corporation for United States federal income tax purposes are United States Persons, or an estate whose income is subject to United States federal income tax regardless of its source, or a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more such United States Persons have the authority to control all substantial decisions of the trust. To the extent prescribed in regulations by the Secretary of the Treasury, which have not yet been issued, a trust which was in existence on August 20, 1996 (other than a trust treated as owned by the grantor under subpart E of part I of subchapter J of chapter 1 of the Code), and which was treated as a United States person on August 20, 1996 may elect to continue to be treated as a United States person notwithstanding the previous sentence.

Voting Rights : The portion of the voting rights of all of the Certificates which is allocated to any Certificate. The Voting Rights allocated among Holders of such Certificates outstanding shall be the fraction, expressed as a percentage, the numerator of which is the aggregate Class Certificate Balance of all the Certificates of such Class then outstanding and the denominator of which is the aggregate Class Certificate Balance of all the Certificates then outstanding (other than the Interest Only Certificates and Class R Certificates). 93.50% of all Voting Rights will be allocated among all holders of the Certificates (other than the Interest Only Certificates and Class R Certificates) in proportion to their then outstanding Class Certificate Balances, 1.00% of all Voting Rights will be allocated among the holders of the Class I-A-IO, Class II-A-IO, Class III-A-IO, Class IV-A-IO and Class V-A-IO Certificates and 0.5%, 0.5% and 0.5% of all Voting Rights will be allocated among the holders of the Class R-I, Class R-II and Class R-III Certificates, respectively, in proportion to the Percentage Interests evidenced by their respective Certificates; provided, however, that any Certificate registered in the name of the Master Servicer, the Depositor or the Trustee or any of their respective affiliates shall not be included in the calculation of Voting Rights.

Wells Fargo : Wells Fargo Bank, N.A.

Wells Fargo Assignment Agreement : Shall mean the Assignment, Assumption and Recognition Agreement, dated as of October 31, 2005, among Wells Fargo, the Depositor and MLMLI, and acknowledged and agreed by the Master Servicer, pursuant to which the Wells Fargo Servicing Agreement and the rights of MLMLI thereunder (other than the rights to enforce the representations and warranties with respect to the Wells Fargo Loans) were assigned to the Depositor for the benefit of the Certificateholders.

Wells Fargo Loans : Shall mean those Mortgage Loans serviced by Wells Fargo pursuant to the Wells Fargo Servicing Agreement.

 

 

 

Wells Fargo Servicing Agreement : Shall mean the Seller’s Warranties and Servicing Agreement, dated as of October 1, 2005 between MLMLI and Wells Fargo.

Section 1.01

Accounting .

Unless otherwise specified herein, for the purpose of any definition or calculation, whenever amounts are required to be netted, subtracted or added or any distributions are taken into account such definition or calculation and any related definitions or calculations shall be determined without duplication of such functions.

 

 

 

ARTICLE II

CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES

Section 2.01      Conveyance of Mortgage Loans to Trustee . (a) The Depositor concurrently with the execution and delivery of this Agreement, sells, transfers and assigns to the Trust without recourse all its right, title and interest in and to (i) the Mortgage Loans identified in the Mortgage Loan Schedule, including all interest and principal due with respect to the Mortgage Loans after the Cut-off Date, but excluding any payments of principal and interest due on or prior to the Cut-off Date; (ii) such assets as shall from time to time be credited or are required by the terms of this Agreement to be credited to the Master Servicer Collection Account, (iii) such assets relating to the Mortgage Loans as from time to time may be held by the Servicers in Protected Accounts, the Master Servicer in the Master Servicer Collection Account and the Securities Administrator in the Distribution Account for the benefit of the Trustee on behalf of the Certificateholders, (iv) any REO Property, (v) the Required Insurance Policies and any amounts paid or payable by the insurer under any Insurance Policy (to the extent the mortgagee has a claim thereto), (vi) the Mortgage Loan Purchase Agreements to the extent provided in Subsection 2.03(a), (vii) the rights with respect to the Servicing Agreements as assigned to the Depositor on behalf of the Certificateholders by the Assignment Agreements and (viii) any proceeds of the foregoing. Although it is the intent of the parties to this Agreement that the conveyance of the Depositor's right, title and interest in and to the Mortgage Loans and other assets in the Trust Fund pursuant to this Agreement shall constitute a purchase and sale and not a loan, in the event that such conveyance is deemed to be a loan, it is the intent of the parties to this Agreement that the Depositor shall be deemed to have granted to the Trustee a first priority perfected security interest in all of the Depositor's right, title and interest in, to and under the Mortgage Loans and other assets in the Trust Fund, and that this Agreement shall constitute a security agreement under applicable law.

(b)        In connection with the above transfer and assignment, the Depositor hereby deposits with the Trustee or the Custodian, as its agent, the following documents or instruments (I) with respect to each Mortgage Loan, other than a Cooperative Loan:

(i)         the original Mortgage Note, endorsed in the following form: “Pay to the order of Wachovia Bank, National Association, as Trustee for the registered holders of the Merrill Lynch Mortgage Investors, Inc., Mortgage Pass-Through Certificates, Series MLCC 2005-3, without recourse,” with all prior and intervening endorsements showing a complete chain of endorsement from the originator to the Person so endorsing to the Trustee;

(ii)         the original recorded Mortgage or a copy of the Mortgage certified by the public recording office in which such Mortgage has been recorded;

(iii)        an original Assignment of the Mortgage executed in the following form: “Wachovia Bank, National Association, as Trustee for the registered holders of the Merrill Lynch Mortgage Investors, Inc., Mortgage Pass-Through Certificates, Series MLCC 2005-3.

 

 

 

(iv)        the original recorded Assignment or Assignments of the Mortgage showing a complete chain of assignment from the originator to the Person assigning the Mortgage to the Trustee as contemplated by the immediately preceding clause (iii), if applicable and only to the extent available to the Depositor with evidence of recording thereon;

(v)        the originals of all assumption, modification, consolidation or extension agreements, with evidence of recording thereon, if any;

(vi)        the original of any guarantee executed in connection with the Mortgage Note;

(vii)

the original mortgagee title insurance policy;

(viii)      the original of any security agreement, chattel mortgage or equivalent document executed in connection with the Mortgage; and

(ix)	the original power of attorney, if applicable.

and (II) with respect to each Mortgage Loan that is a Cooperative Loan:

(i)          the original Mortgage Note, endorsed in the following form: “Pay to the order of Wachovia Bank, National Association, as Trustee for the registered holders of the Merrill Lynch Mortgage Investors, Inc., Mortgage Pass-Through Certificates, Series MLCC 2005-3, 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 duly executed assignment of Security Agreement to the Trustee;

(iii)        the acknowledgment copy of the original executed Form UCC-1 (or certified copy thereof) with respect to the Security Agreement, and any required continuation statements;

(iv)        the acknowledgment copy of the original executed Form UCC-3 with respect to the Security Agreement, indicating the Trustee as the assignee of the secured party;

(v)        the stock certificate representing the Cooperative Assets allocated to the cooperative unit, with a stock power in blank attached;

(vi)        the original collateral assignment of the proprietary lease by Mortgagor to the originator;

(vii)

a copy of the recognition agreement;

 

 

 

 

(viii)      if applicable and to the extent available, the original intervening assignments, including warehousing assignments, if any, showing, to the extent available, an unbroken chain of the related Mortgage Loan to the Trustee, together with a copy of the related Form UCC-3 with evidence of filing thereon; and

(ix)        the originals of each assumption, modification or substitution agreement, if any, relating to the Mortgage Loan;

provided, however, that in lieu of the foregoing, the Depositor may deliver the following documents, under the circumstances set forth below: (w) the Depositor may deliver a Mortgage Note pursuant to (A)(i) and (B)(i) endorsed in blank, provided that the endorsement is completed within 60 days of the Closing Date; (x) in lieu of the original Mortgage, assignments to the Trustee or intervening assignments thereof which have been delivered, are being delivered or will, upon receipt of recording information relating to the Mortgage required to be included thereon, be delivered to recording offices for recording and have not been returned to the Depositor in time to permit their delivery as specified above, the Depositor may deliver a true copy thereof with a certification by the Depositor on the face of such copy, substantially as follows: “Certified to be a true and correct copy of the original, which has been transmitted for recording” and (y) in lieu of the Mortgage, assignment to the Trustee or intervening assignments thereof, if the applicable jurisdiction retains the originals of such documents (as evidenced by a certification from the Depositor or the Master Servicer, to such effect) the Depositor may deliver photocopies of such documents containing an original certification by the judicial or other governmental authority of the jurisdiction where such documents were recorded; and provided, further, however, that in the case of Mortgage Loans which have been prepaid in full after the Cut-off Date and prior to the Closing Date, the Depositor, in lieu of delivering the above documents, may deliver to the Trustee a certification to such effect and shall deposit all amounts paid in respect of such Mortgage Loans in the Distribution Account on the Closing Date. The Depositor shall deliver such original documents (including any original documents as to which certified copies had previously been delivered) to the Trustee promptly after they are received. The Depositor shall cause, at its expense, the assignment of the Mortgage to the Trustee to be recorded not later than 180 days after the Closing Date, unless such recordation is not required by the Rating Agencies or an Opinion of Counsel has been provided as set forth below in this Section 2.01. With respect to the Cooperative Loans, the Depositor will, promptly after the Closing Date, cause the related financing statements (if not yet filed) and an assignment thereof from the Depositor to the Trustee to be filed in the appropriate offices. The Depositor need not cause to be recorded any assignment in any jurisdiction under the laws of which, as evidenced by an Opinion of Counsel delivered by the Depositor to the Trustee and the Rating Agencies, the recordation of such assignment is not necessary to protect the Trustee's interest in the related Mortgage Loan; provided, however, notwithstanding the delivery of any Opinion of Counsel, each assignment shall be submitted for recording by the Depositor in the manner described above, at no expense to the Trust Fund, the Trustee or the Custodian, upon the earliest to occur of: (i) reasonable direction by the Holders of Certificates evidencing Percentage Interests aggregating not less than 25% of the Trust Fund, (ii) the occurrence of an Event of Default, (iii) the occurrence of a bankruptcy, insolvency or foreclosure relating to the Depositor, (iv) the occurrence of a servicing transfer as described in Section 7.07 hereof and (v) with respect to any one assignment, the occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor under the related Mortgage. Notwithstanding the foregoing, if the Depositor fails to

 

 

pay the cost of recording the assignments, such expense will be paid by the Trustee and the Trustee shall be reimbursed for such expenses by the Trust Fund in accordance with Section 9.05.

If any original Mortgage Note referred to in Section 2.01(b)(I)(i) or 2.01(b)(II)(i) above cannot be located, the obligations of the Depositor to deliver such documents shall be deemed to be satisfied upon delivery to the Trustee of a photocopy of such Mortgage Note, if available, with a lost note affidavit. If any of the original Mortgage Notes for which a lost note affidavit was delivered to the Trustee is subsequently located, such original Mortgage Note shall be delivered to the Trustee within three Business Days.

(c)        The parties hereto agree that it is not intended that any mortgage loan be included in the Trust that is either (i) a “High-Cost Home Loan” as defined in the New Jersey Home Ownership Act effective November 27, 2003, (ii) a “High-Cost Home Loan” as defined in the New Mexico Home Loan Protection Act effective January 1, 2004, (iii) a “High Cost Home Mortgage Loan” as defined in the Massachusetts Predatory Home Loan Practices Act effective November 7, 2004 or (iv) a “High-Cost Home Loan” as defined by the Indiana High Cost Home Loan Law effective January 1, 2005.

Section 2.02

Acceptance of Mortgage Loans by Trustee .

(a)        The Trustee acknowledges the sale, transfer and assignment of the Trust to it by the Depositor and receipt of, subject to further review and the exceptions which may be noted pursuant to the procedures described below, and declares that it, or the Custodian on its behalf, holds the documents (or certified copies thereof) delivered to it pursuant to Section 2.01, and declares that it will continue to hold those documents and any amendments, replacements or supplements thereto and all other assets of the Trust Fund delivered to it as Trustee in trust for the use and benefit of all present and future Holders of the Certificates. On or before the Closing Date (or, with respect to any Substitute Mortgage Loan, within five Business Days after the receipt by the Trustee or Custodian thereof), the Trustee agrees, for the benefit of the Certificateholders, to review or cause to be reviewed by the Custodian on its behalf (under the Custodial Agreement), each Mortgage File delivered to it and to execute and deliver, or cause to be executed and delivered, to the Depositor on the Closing Date an Initial Certification. In conducting such review, the Trustee or Custodian will certify as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan specifically identified in the exception report annexed thereto as not being covered by such certification), (i) all documents constituting part of such Mortgage File (other than such documents described in Section 2.01(b)(I)(iii)) required to be delivered to it pursuant to this Agreement are in its possession, provided that with respect to the documents described in Section 2.01(b)(I)(v), (vi), (viii) and (ix) and 2.01(b)(II)(viii) and (ix) to the extent the Trustee or the Custodian on its behalf has actual knowledge that such documents exist, (ii) such documents have been reviewed by it and are not torn, mutilated, defaced or otherwise altered (except if initialed by the obligor) and appear to relate on their face to such Mortgage Loan, (iii) based on its examination and only as to the foregoing, the information set forth in the Mortgage Loan Schedule corresponding to the loan number for the Mortgage Loan, the Mortgagor's name, including the street address but excluding the zip code, the Mortgage Interest Rate and the original principal balance of the Mortgage Loan accurately reflects information set forth in the

 

 

Mortgage File and (iv) with respect to Mortgage Loans with a Mortgage Interest Rate subject to adjustment, the gross margin, the lifetime cap and the periodic cap for such Mortgage Loan. In performing any such review, the Trustee, or the Custodian, as its agent, may conclusively rely on the purported due execution and genuineness of any such document and on the purported genuineness of any signature thereon. Notwithstanding anything to the contrary in this Agreement, it is herein acknowledged that, in conducting such review, the Trustee or the Custodian on its behalf is under no duty or obligation to inspect, review or examine any such documents, instruments, certificates or other papers to determine whether they are genuine, enforceable, or appropriate for the represented purpose or whether they have actually been recorded or that they are other than what they purport to be on their face, or to determine whether any Person executing any documents is authorized to do so or whether any signature is genuine. If the Trustee or the Custodian, as its agent, finds any document constituting part of the Mortgage File not to have been executed or received, or to be unrelated to the Mortgage Loans identified in Exhibit B or to appear to be defective on its face, the Trustee or the Custodian, as its agent, shall promptly notify the related Seller, KKR Financial or the Underlying Seller, as applicable. In accordance with the Mortgage Loan Purchase Agreements and the underlying Servicing Agreements, MLMLI in the case of the MLMLI Mortgage Loans and either KKR, KKR Financial or the related Underlying Seller in the case of the KKR Mortgage Loans (MLMLI, KKR, KKR Financial or the related Underlying Seller shall be referred to in this Section 2.02 as the related “Seller”), shall correct or cure any such defect within ninety (90) days from the date of notice (or in the case of the Underlying Seller’s obligation to cure, the number of days specified in the applicable Servicing Agreement) from the Trustee or the Custodian, as its agent, of the defect and if the related Seller fails to correct or cure the defect within such period, and such defect materially and adversely affects the interests of the Certificateholders in the related Mortgage Loan, the Trustee, shall enforce the related Seller's obligation pursuant to the related Mortgage Loan Purchase Agreement, within 90 days from the Trustee's or the Custodian's notification (or in the case of the Underlying Seller’s obligation to cure, the number of days specified in the applicable Servicing Agreement), to purchase such Mortgage Loan at the Purchase Price; provided that, if such defect would cause the Mortgage Loan to be other than a “qualified mortgage” as defined in Section 860G(a)(3) of the Code, any such cure or repurchase must occur within 90 days from the date such breach was discovered (or in the case of the Underlying Seller’s obligation to cure, the number of days specified in the applicable Servicing Agreement); provided, however, that if such defect relates solely to the inability of the related Seller or Underlying Seller to deliver the original Security Instrument or intervening assignments thereof, or a certified copy because the originals of such documents, or a certified copy have not been returned by the applicable jurisdiction, the related Seller shall not be required to purchase such Mortgage Loan if the related Seller delivers such original documents or certified copy promptly upon receipt, but in no event later than 360 days after the Closing Date (or in the case of the Underlying Seller’s obligation to cure, the number of days specified in the applicable Servicing Agreement). The foregoing repurchase obligation shall not apply in the event that the related Seller cannot deliver such original or copy of any document submitted for recording to the appropriate recording office in the applicable jurisdiction because such document has not been returned by such office; provided that the related Seller shall instead deliver a recording receipt of such recording office or, if such receipt is not available, a certificate confirming that such documents have been accepted for recording, and delivery to the Trustee or the Custodian,

 

 

as its agent, shall be effected by the related Seller within thirty days of its receipt of the original recorded document.

(b)        No later than 180 days after the Closing Date, the Trustee or the Custodian, as its agent, will review, for the benefit of the Certificateholders, the Mortgage Files delivered to it and will execute and deliver or cause to be executed and delivered to the Depositor a Final Certification. In conducting such review, the Trustee or the Custodian, as its agent, will certify as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan specifically identified in the exception report annexed thereto as not being covered by such certification), that (i) all documents constituting part of such Mortgage File (other than such documents described in Section 2.01(b)(I)(v) and (ix)) required to be delivered to it pursuant to this Agreement are in its possession, provided that with respect to the documents described in Section 2.01(b)(I)(v), (vi), (viii) and (ix) and 2.01(b)(II)(viii) and (ix) to the extent the Trustee or the Custodian on its behalf has actual knowledge that such documents exist, (ii) such documents have been reviewed by it and are not torn, mutilated, defaced or otherwise altered (except if initialed by the obligor) and appear regular on their face and relate to such Mortgage Loan, (iii) based on its examination and only as to the foregoing, the information set forth in the Mortgage Loan Schedule corresponding to the loan number for the Mortgage Loan, the Mortgagor's name, including the street address but excluding the zip code, the Mortgage Interest Rate and the original principal balance of the Mortgage Loan accurately reflects information set forth in the Mortgage File. In performing any such review, the Trustee, or the Custodian, as its agent, may conclusively rely on the purported due execution and genuineness of any such document and on the purported genuineness of any signature thereon. Notwithstanding anything to the contrary in this Agreement, it is herein acknowledged that, in conducting such review, the Trustee or the Custodian on its behalf is under no duty or obligation (i) to inspect, review or examine any such documents, instruments, certificates or other papers to determine whether they are genuine, enforceable, or appropriate for the represented purpose or whether they have actually been recorded or that they are other than what they purport to be on their face, or to determine whether any Person executing any documents is authorized to do so or whether any signature is genuine. If the Trustee or the Custodian, as its agent, finds any document constituting part of the Mortgage File not to have been executed or received, or to be unrelated to the Mortgage Loans identified in Exhibit B or to appear to be defective on its face, the Trustee or the Custodian, as its agent, shall promptly notify the related Seller. In accordance with the Mortgage Loan Purchase Agreements or related Servicing Agreement, as applicable, each Seller shall correct or cure any such defect within 90 days from the date of notice (or in the case of the Underlying Seller, the number of days specified in the related Servicing Agreement) from the Trustee of the defect and if the related Seller is unable to cure such defect within such period, and if such defect materially and adversely affects the interests of the Certificateholders in the related Mortgage Loan, the Trustee shall enforce the related Seller's obligation under the related Mortgage Loan Purchase Agreement or related Servicing Agreement, as applicable, to purchase such Mortgage Loan at the Purchase Price, provided, however, that if such defect relates solely to the inability of the related Seller to deliver the original Security Instrument or intervening assignments thereof, or a certified copy, because the originals of such documents. or a certified copy, have not been returned by the applicable jurisdiction, the related Seller shall not be required to purchase such Mortgage Loan, if the related Seller or delivers such original documents or certified copy promptly upon receipt, but in no event later than 360 days after the Closing Date.

 

 

 

(c)        In the event that a Mortgage Loan is purchased by the related Seller in accordance with Subsections 2.02(a) or (b) above, the related Seller shall remit to the Master Servicer the Purchase Price for deposit in the Master Servicer Collection Account and the related Seller shall provide to the Trustee written notification detailing the components of the Purchase Price. Upon deposit of the Purchase Price in the Master Servicer Collection Account, the Depositor shall notify the Trustee and the Custodian and the Trustee or the Custodian, as its agent (upon receipt of a Request for Release in the form of Exhibit D attached hereto with respect to such Mortgage Loan), shall release to the related Seller the related Mortgage File and the Trustee shall execute and deliver all instruments of transfer or assignment, without recourse, furnished to it by the related Seller as are necessary to vest in the related Seller title to and rights under the Mortgage Loan. Such purchase shall be deemed to have occurred on the date on which the Purchase Price in available funds is received by the Trustee. The Trustee shall amend the Mortgage Loan Schedule, which was previously delivered to it by Depositor in a form agreed to between the Depositor and the Trustee, to reflect such repurchase and shall promptly notify the Rating Agencies and the Master Servicer of such amendment. The obligation of the related Seller to repurchase any Mortgage Loan as to which such a defect in a constituent document exists shall be the sole remedy respecting such defect available to the Certificateholders or to the Trustee on their behalf.

Section 2.03

Assignment of Interest in the Mortgage Loan Purchase Agreements .

(a)        The Depositor hereby assigns to the Trustee, on behalf of the Certificateholders, all of its right, title and interest in the Mortgage Loan Purchase Agreements, including but not limited to Depositor's rights and obligations pursuant to the related Servicing Agreements (noting that the related Seller has retained the right in the event of breach of the representations, warranties and covenants, if any, with respect to the related Mortgage Loans of the related Servicer under the related Servicing Agreement to enforce the provisions thereof and to seek all or any available remedies). The obligations of MLMLI in the case of the MLMLI Mortgage Loans or the Underlying Seller, KKR or KKR Financial, in the case of the KKR Mortgage Loans, (MLMLI, the Underlying Seller, KKR or KKR Financial are each referred to in this Section 2.03 only as a “Seller”) to substitute or repurchase, as applicable, a Mortgage Loan shall be the Trustee’s and the Certificateholders’ sole remedy for any breach thereof. At the request of the Trustee, the Depositor shall take such actions as may be necessary to enforce the above right, title and interest on behalf of the Trustee and the Certificateholders or shall execute such further documents as the Trustee may reasonably require in order to enable the Trustee to carry out such enforcement. With respect to the representations and warranties described in each of the Mortgage Loan Purchase Agreements which are made to the best of the applicable Seller's knowledge, if it is discovered by any of the Depositor, the Seller or the Trustee that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan, then notwithstanding the Seller's lack of knowledge with respect to the substance of such representation and warranty, such inaccuracy shall be deemed a breach of the applicable representation or warranty.

(b)        If the Depositor, the Master Servicer, Securities Administrator or the Trustee discovers a breach of any of the representations and warranties set forth in the related Mortgage Loan Purchase Agreement or related Servicing Agreement, which breach materially and adversely affects the value of the interests of Certificateholders or the Trustee in the related

 

 

Mortgage Loan, the party discovering the breach shall give prompt written notice of the breach to the other parties. The applicable Seller, within 90 days of its discovery or receipt of notice that such breach has occurred (whichever occurs earlier), shall cure the breach in all material respects or, subject to the related Mortgage Loan Purchase Agreement, the related Servicing Agreement or Section 2.04 of this Agreement, as applicable, shall purchase the Mortgage Loan or any property acquired with respect thereto from the Trustee; provided, however, that if there is a breach of any representation set forth in the related Mortgage Loan Purchase Agreement, the related Servicing Agreement or Section 2.04 of this Agreement, as applicable, and the Mortgage Loan or the related property acquired with respect thereto has been sold, then the related Seller shall pay, in lieu of the Purchase Price, any excess of the Purchase Price over the Net Liquidation Proceeds received upon such sale. (If the Net Liquidation Proceeds exceed the Purchase Price, any excess shall be paid to the related Seller to the extent not required by law to be paid to the borrower.) Any such purchase by the applicable Seller shall be made by providing an amount equal to the Purchase Price to the Master Servicer for deposit in the Master Servicer Collection Account and written notification detailing the components of such Purchase Price. The Depositor shall notify the Trustee and submit to the Trustee or the Custodian, as its agent, a Request for Release, and the Trustee shall release, or the Trustee shall cause the Custodian to release, to the related Seller the related Mortgage File and the Trustee shall execute and deliver all instruments of transfer or assignment furnished to it by the related Seller, without recourse, as are necessary to vest in the applicable Seller title to and rights under the Mortgage Loan or any property acquired with respect thereto. Such purchase shall be deemed to have occurred on the date on which the Purchase Price in available funds is received by the Trustee. The Trustee or the Master Servicer shall amend the Mortgage Loan Schedule to reflect such repurchase and shall promptly notify the Master Servicer and the Rating Agencies of such amendment. Enforcement of the obligation of the related Seller to purchase (or substitute a Substitute Mortgage Loan for) any Mortgage Loan or any property acquired with respect thereto (or pay the Purchase Price as set forth in the above proviso) as to which a breach has occurred and is continuing shall constitute the sole remedy respecting such breach available to the Certificateholders or the Trustee on their behalf.

Section 2.04      Substitution of Mortgage Loans . Notwithstanding anything to the contrary in this Agreement, in lieu of purchasing a Mortgage Loan pursuant to the related Mortgage Loan Purchase Agreement, the related Servicing Agreement or Sections 2.02 or 2.03 of this Agreement, the Sellers, KKR Financial or the related Underlying Seller (each, for purposes of Section 2.04 only, a “Seller”) may, no later than the date by which such purchase by the related Seller would otherwise be required, tender to the Trustee a Substitute Mortgage Loan accompanied by a certificate of an authorized officer of the related Seller that such Substitute Mortgage Loan conforms to the requirements set forth in the definition of “Substitute Mortgage Loan” in the related Mortgage Loan Purchase Agreement, the related Servicing Agreement or this Agreement, as applicable; provided, however, that substitution pursuant to the related Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as applicable, in lieu of purchase shall not be permitted after the termination of the two-year period beginning on the Startup Day; provided, further, that if the breach would cause the Mortgage Loan to be other than a “qualified mortgage” as defined in Section 860G(a)(3) of the Code, any such cure or substitution must occur within 90 days from the date the breach was discovered. The Trustee or the Custodian, as its agent, shall examine the Mortgage File for any Substitute Mortgage Loan in the manner set forth in Section 2.02(a) and the Trustee or the Custodian, as its agent, shall notify

 

 

the applicable Seller, in writing, within five Business Days after receipt, whether or not the documents relating to the Substitute Mortgage Loan satisfy the requirements of the fourth sentence of Subsection 2.02(a). Within two Business Days after such notification, the related Seller shall provide to the Trustee for deposit in the Distribution Account the amount, if any, by which the Outstanding Principal Balance as of the next preceding Due Date of the Mortgage Loan for which substitution is being made, after giving effect to Scheduled Principal due on such date, exceeds the Outstanding Principal Balance as of such date of the Substitute Mortgage Loan, after giving effect to Scheduled Principal due on such date, which amount shall be treated for the purposes of this Agreement as if it were the payment by the related Seller of the Purchase Price for the purchase of a Mortgage Loan by the related Seller. After such notification to the related Seller, and, if any such excess exists, upon receipt of such deposit, the Trustee shall accept such Substitute Mortgage Loan which shall thereafter be deemed to be a Mortgage Loan hereunder. In the event of such a substitution, accrued interest on the Substitute Mortgage Loan for the month in which the substitution occurs and any Principal Prepayments made thereon during such month shall be the property of the Trust Fund and accrued interest for such month on the Mortgage Loan for which the substitution is made and any Principal Prepayments made thereon during such month shall be the property of the related Seller. The Scheduled Principal on a Substitute Mortgage Loan due on the Due Date in the month of substitution shall be the property of the related Seller, and the Scheduled Principal on the Mortgage Loan for which the substitution is made due on such Due Date shall be the property of the Trust Fund. Upon acceptance of the Substitute Mortgage Loan (and delivery to the Trustee or Custodian of a Request for Release for such Mortgage Loan), the Trustee shall release to the related Seller, the related Mortgage File related to any Mortgage Loan released pursuant to the related Mortgage Loan Purchase Agreement, the related Servicing Agreement or Section 2.04 of this Agreement, as applicable, and shall execute and deliver all instruments of transfer or assignment, without recourse, in form as provided to it as are necessary to vest in the related Seller title to and rights under any Mortgage Loan released pursuant to the related Mortgage Loan Purchase Agreement, the related Servicing Agreement or Section 2.04 of this Agreement, as applicable. The related Seller shall deliver the documents related to the Substitute Mortgage Loan in accordance with the provisions of the related Mortgage Loan Purchase Agreement, the related Servicing Agreement or Subsections 2.01(b) and 2.02(b) of this Agreement, as applicable, with the date of acceptance of the Substitute Mortgage Loan deemed to be the Closing Date for purposes of the time periods set forth in those Subsections. The representations and warranties set forth in the related Mortgage Loan Purchase Agreement and the related Servicing Agreement, as applicable, shall be deemed to have been made by the related Seller with respect to each Substitute Mortgage Loan as of the date of acceptance of such Mortgage Loan by the Trustee. The Master Servicer shall amend the Mortgage Loan Schedule to reflect such substitution and shall provide a copy of such amended Mortgage Loan Schedule to the Trustee and the Rating Agencies.

Section 2.05

Issuance of Certificates .

(a)        The Trustee acknowledges the assignment to it on behalf of the Trust Fund of the Mortgage Loans and the other assets comprising the Trust Fund and, concurrently therewith, has signed, and countersigned and delivered to the Depositor, in exchange therefor, Certificates in such authorized denominations representing such Percentage Interests as the Depositor has requested. The Trustee agrees that it will hold the Mortgage Loans and such other assets as may

 

 

from time to time be delivered to it segregated on the books of the Trustee in trust for the benefit of the Certificateholders.

(b)        The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey in trust to the Trustee without recourse all the right, title and interest of the Depositor in and to the assets of REMIC I for the benefit of the holders of the REMIC I Regular Interests. The Trustee acknowledges receipt of the assets of REMIC I and declares that it holds and will hold the same in trust for the exclusive use and benefit of the holders of the REMIC I Regular Interests.

(c)        The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey in trust to the Trustee without recourse all the right, title and interest of the Depositor in and to the REMIC I Regular Interests and the other assets of REMIC II for the benefit of the holders of the REMIC II Regular Interests and Class R-II Certificates. The Trustee acknowledges receipt of the REMIC I Regular Interests (which are uncertificated) and the other assets of REMIC II and declares that it holds and will hold the same in trust for the exclusive use and benefit of the holders of the REMIC II Regular Interests and Class R-II Certificates.

(d)        The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey in trust to the Trustee without recourse all the right, title and interest of the Depositor in and to the REMIC II Regular Interests and the other assets of REMIC III for the benefit of the holders of the REMIC III Certificates. The Trustee acknowledges receipt of the REMIC II Regular Interests (which are uncertificated) and the other assets of REMIC III and declares that it holds and will hold the same in trust for the exclusive use and benefit of the holders of the REMIC III Certificates.

Section 2.06      Represent