POOLING AND SERVICING AGREEMENT Dated as of June 1, 2005

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 June 1, 2005

_________________________________

Mortgage Pass-Through Certificates, MLMI Series 2005-A5

 

 

 

TABLE OF CONTENTS

 

ARTICLE I

DEFINITIONS

Section 1.01	Definitions
Section 1.02	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 Assignment, Assumption and Recognition Agreement.
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 Servicer
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.

 

 

 

 

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

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.
Section 5.05	Appointment of Paying Agent.

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 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 from the Master Servicer and the Depositor
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

ARTICLE X

TERMINATION

Section 10.01

Termination.

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

Third Party Beneficiary

 

 

 

 

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	-	Servicing Agreement
Exhibit I	-	Assignment, Assumption and Recognition Agreement
Exhibit J	-	[Reserved]
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 June 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 Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Uncertificated Class A-IO-1 Component and Uncertificated Class A-IO-2 Component (each represented and beneficially owned by a holder of the Class A-IO Certificates), 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 II, and the Class R-II Certificates will be the sole class of “residual interests” therein for purposes of the REMIC Provisions (as defined herein) under federal income tax law.

REMIC I

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(1)
A-1	Variable (2)	$	250,000,000.00	June 25, 2035
A-2	Variable(2)	$	60,818,000.00	June 25, 2035
A-3	Variable(2)	$	83,361,000.00	June 25, 2035
A-4	Variable(2)	$	75,000,000.00	June 25, 2035
A-5	Variable (2)	$	30,000,000.00	June 25, 2035
A-6	Variable (2)	$	6,993,000.00	June 25, 2035
A-7	Variable (2)	$	10,307,000.00	June 25, 2035
A-8	Variable (2)	$	10,626,000.00	June 25, 2035
A-9	Variable (2)	$	172,546,000.00	June 25, 2035
M-1	Variable (2)	$	17,171,000.00	June 25, 2035

 

 

 

 

 

M-2	Variable (2)	$	5,114,000.00	June 25, 2035
M-3	Variable (2)	$	2,922,000.00	June 25, 2035
B-1	Variable (2)	$	2,557,000.00	June 25, 2035
B-2	Variable (2)	$	1,826,000.00	June 25, 2035
B-3	Variable (2)	$	1,465,296.52	June 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 I Regular Interest.

 

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

 

REMIC II

 

The following table sets forth (or describes) the Class designation, the initial Pass-Through Rate, the Initial Class Certificate Balance, and the Assumed Final Maturity Date for each Class of Certificates comprising the interests in the Trust Fund created hereunder:

Class	Original Class Certificate Balance or Notional Amount (1)		Initial Pass-Through Rate	Assumed Final Maturity Dates
A-1	$	250,000,000.00	Variable (2)	May 25, 2035
A-2	$	60,818,000.00	4.556% (2)	May 25, 2035
A-3	$	83,361,000.00	4.442% (2)	May 25, 2035
A-4	$	75,000,000.00	Variable (2)	May 25, 2035
A-5	$	30,000,000.00	Variable (2)	May 25, 2035
A-6	$	6,993,000.00	Variable (2)	May 25, 2035
A-7	$	10,307,000.00	Variable (2)	May 25, 2035
A-8	$	10,626,000.00	Variable (2)	May 25, 2035
A-9	$	172,546,000.00	Variable (2)	May 25, 2035
A-IO	$	144,179,000.00 (3)	Variable (2)	May 25, 2035
M-1	$	17,171,000.00	Variable (2)	May 25, 2035
M-2	$	5,114,000.00	Variable (2)	May 25, 2035
M-3	$	2,922,000.00	Variable (2)	May 25, 2035
B-1	$	2,557,000.00	Variable (2)	May 25, 2035
B-2	$	1,826,000.00	Variable (2)	May 25, 2035
B-3	$	1,465,296.52	Variable (2)	May 25, 2035
R-I		N/A	N/A	May 25, 2035
R-II		N/A	N/A	May 25, 2035

 

(1)	These balances are approximate and are subject to an increase or decrease of up to 5%.
(2)	Calculated in accordance with the definition of “Pass-Through Rate” herein.
(3)	Notional Amount.

 

 

 

 

ARTICLE I

DEFINITIONS

Section 1.01      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 Servicing Agreement, to the extent applicable to the 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 Servicer or Master Servicer with a payment of Compensating Interest as provided in Section 6.06), (ii) the interest portion of Excess Losses allocated to such Class 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, 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 or S&P. For any short-term deposit or security, or a rating of F-l+ in the case of Fitch or A-1+ in the case of S&P.

 

 

 

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 : With respect to any Mortgaged Property or Cooperative Unit, as applicable, the lesser of (i) the value thereof as determined by an appraisal made for the originator of the Mortgage Loan at the time of origination of the Mortgage Loan by an appraiser who met the minimum requirements of the Originator’s Underwriting Guidelines, and (ii) the purchase price paid for the related Mortgaged Property or Cooperative Unit, as applicable, by the Mortgagor with the proceeds of the Mortgage Loan, provided, however, in the case of a Refinanced Mortgage Loan, such value of the Mortgaged Property or Cooperative Unit, as applicable, is based solely upon the value determined by an appraisal made for the originator of such Refinanced Mortgage Loan at the time of origination of such Refinanced Mortgage Loan by an appraiser who met the minimum requirements under the Originator’s Underwriting Guidelines.

 

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, Assumption and Recognition Agreement : Shall mean the Assignment, Assumption and Recognition Agreement (attached hereto as Exhibit I), dated as of June 30, 2005, among the Seller, the Depositor, the Originator and Merrill Lynch Bank USA pursuant to which (i) the Mortgage Loans were sold to the Depositor and (ii) the Washington Mutual Servicing Agreement and the modifications thereto in the Warranty Bill of Sale and the rights of the Seller thereunder were assigned to the Depositor for the benefit of the Certificateholders.

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

Available Funds : With respect to any Distribution Date and the 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 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 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 Servicer or the Master Servicer for such Distribution Date, over (ii) the sum of (a) related amounts reimbursable or payable to the 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.

Average Loss Severity : With respect to any period, the fraction obtained by dividing (x) the aggregate amount of Realized Losses for the Mortgage Loans for such period by (y) the number of related Mortgage Loans which had Realized Losses for such period.

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

Bankruptcy Loss Coverage Amount : As of any date of determination prior to the first anniversary of the Cut-off Date, an amount equal to the excess, if any, of (A) $50,000 over (B) the aggregate amount of Bankruptcy Losses allocated solely to one or more specific Classes of Certificates in accordance with Section 6.02. As of any date of determination on or after the first anniversary of the Cut-off Date, an amount equal to the excess, if any, of (1) the lesser of (a) the Bankruptcy Loss Coverage Amount calculated as of the close of business on the Business Day immediately preceding the most recent anniversary of the Cut-off Date coinciding with or preceding such date of determination (or, if such date of determination is an anniversary of the Cut-off Date, the Business Day immediately preceding such date of determination) (for purposes of this definition, the “Relevant Anniversary”) and (b) the greater of

(A)       the greater of (i) 0.0006 times the aggregate principal balance of all the Mortgage Loans in the Mortgage Pool as of the Relevant Anniversary having a Loan-to-Value Ratio at origination which exceeds 75% and (ii) $50,000; and (B) the greater of (i) the product of (x) an amount equal to the largest difference in the related Monthly Payment for any Non-Primary Residence Loan remaining in the Mortgage Pool which had an original Loan-to-Value Ratio greater than 80% that would result if the Net Mortgage Rate thereof was equal to the greater of (I) 5% or (II) the weighted average (based on the principal balance of the Mortgage Loans as of the Relevant Anniversary) of the Net Mortgage Rates of all Mortgage Loans as of the Relevant Anniversary less 1.25% per annum, (y) a number equal to the weighted average remaining term to maturity, in months, of all Mortgage Loans with a Loan-to-Value Ratio of greater than 80% remaining in the Mortgage Pool as of the Relevant Anniversary, and (z) one plus the quotient of the number of all Non-Primary Residence Loans with a Loan-to-Value Ratio of greater than 80% remaining in the Mortgage Pool divided by the total number of outstanding Mortgage Loans in the Mortgage Pool as of the Relevant Anniversary, and (ii) $50,000,

 

 

 

over (2) the aggregate amount of Bankruptcy Losses allocated solely to one or more specific Classes of Certificates in accordance with Section 6.02 since the Relevant Anniversary.

The Bankruptcy Loss Coverage Amount may be further reduced by the Depositor (including accelerating the manner in which such coverage is reduced) provided that prior to any such reduction, the Depositor shall (i) obtain written confirmation from each Rating Agency that such reduction shall not reduce the rating assigned to any Class of Certificates by such Rating Agency below the lower of the then-current rating or the rating assigned to such Certificates as of the Closing Date by such Rating Agency and (ii) provide a copy of such written confirmation to the Trustee.

Bankruptcy Loss : With respect to any Mortgage Loan, any Deficient Valuation or Debt Service Reduction related to such Mortgage Loan as reported by the Servicer to the Master Servicer.

Book-Entry Certificates : Any of the Certificates that shall be registered in the name of the Depository or its nominee, the ownership of which is reflected on the books of the Depository or on the books of a Person maintaining an account with the Depository (directly, as a “Depository Participant”, or indirectly, as an indirect participant in accordance with the rules of the Depository and as described in Section 5.02 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, the 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 Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9 and Class A-IO Certificates as designated on the face

 

 

thereof substantially in the form annexed hereto as Exhibit A-1, executed by the Trustee and authenticated and delivered by the Trustee, 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 Trustee and authenticated and delivered by the Trustee, 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 a Class A-IO 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 Class A-IO 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 Trustee and authenticated and delivered by the Trustee, 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 Certificates or Class R-II Certificates executed, authenticated and delivered by the Trustee 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 : June 30, 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.

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 Project : All real property owned by a Cooperative including the land, separate dwelling units and all common elements.

Cooperative Unit : Means a specific unit in a Cooperative Project.

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., MLMI Series 2005-A5, 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.

Corresponding Class : With respect to each REMIC I 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 : June 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.

Defective Mortgage Loan : A Mortgage Loan replaced or to be replaced by one or more Substitute Mortgage Loans.

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.

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 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, MLMI Series 2005-A5 - 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 the month immediately following the month of the Closing Date, or, if such 25th day is not a Business Day, the Business Day immediately following.

DTC Custodian : Wachovia Bank, National Association, or its successors in interest as custodian for the Depository.

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 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) an account or accounts maintained with Servicer, unless and until the Servicer’s ratings for short-term unsecured debt obligations are less than A-2 by S&P or A- by Moody’s, (ii) 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, (iii) 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 (iv) 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 or Class R-II 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.

Excess Losses : (i) Special Hazard Losses in excess of the Special Hazard Loss Coverage Amount, (ii) Bankruptcy Losses in excess of the Bankruptcy Loss Coverage Amount, (iii) Fraud Losses in excess of the Fraud Loss Amount and (iv) Extraordinary Losses.

Extraordinary Loss : Any Realized Loss or portion thereof caused by or resulting from:

(i)         nuclear or chemical reaction or nuclear radiation or radioactive or chemical contamination, all whether controlled or uncontrolled and whether such loss be direct or indirect, proximate or remote or be in whole or in part caused by, contributed to or aggravated by a peril covered by the definition of the term “Special Hazard Loss”

(ii)         hostile or warlike action in time of peace or war, including action in hindering, combating or defending against an actual, impending or expected attack by any government or sovereign power, de jure or de facto, or by any authority maintaining or using military, naval or air forces, or by military, naval or air forces, or by an agent of any such government, power, authority or forces;

(iii)        any weapon of war employing atomic fission or radioactive forces whether in time of peace or war, and

(iv)         insurrection, rebellion, revolution, civil war, usurped power or action taken by governmental authority in hindering, combating or defending against such an occurrence, seizure or destruction under quarantine or customs regulations, confiscation by order of any government or public authority, or risks of contraband or illegal transactions or trade.

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.

Fitch : Fitch Ratings or its successor in interest.

Fraud Loss Amount : Initially, approximately $7,307,063. As of any date of determination after the Cut-off Date, the Fraud Loss Amount shall equal: (X) prior to the second anniversary of the Cut-off Date, (1) the lesser of (a) the Fraud Loss Amount as of the Cut-off Date and (b) 1.00% of the aggregate principal balance of all of the Mortgage Loans as of the Cut-off Date minus (2) the aggregate amounts allocated through Subordination with respect to Fraud Losses as of the Cut-off Date up to such date of determination and (Y) from the third to the fifth anniversary of the Cut-off Date, (1) the lesser of (a) the Fraud Loss Amount as of the most recent anniversary of the Cut-off Date and (b) 0.50% of the aggregate principal balance of all of the Mortgage Loans as of the most recent anniversary of the Cut-off Date minus (2) the aggregate amounts allocated through Subordination with respect to Fraud Losses since the most recent anniversary of the Cut-off Date up to such date of determination. On and after the fifth anniversary of the Cut-off Date, the Fraud Loss Amount shall be zero and Fraud Losses shall not be allocated through Subordination.

The Fraud Loss Amount may be further reduced by the Depositor (including accelerating the manner in which such coverage is reduced) provided that prior to any such reduction, the Depositor shall (i) obtain written confirmation from each Rating Agency that such reduction shall not reduce the rating assigned to any Class of Certificates by such Rating Agency below the lower of the then-current rating or the rating assigned to such Certificates as of the Closing Date by such Rating Agency and (ii) provide a copy of such written confirmation to the Trustee.

Fraud Losses : Losses sustained on a Liquidated Mortgage Loan by reason of a default arising from fraud, dishonesty or misrepresentation as reported by the Servicer to the Master Servicer.

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

Global Certificate : Any Private Certificate registered in the name of the Depository or its nominee, beneficial interests in which are reflected on the books of the Depository or on the books of a Person maintaining an account with such Depository (directly or as an indirect participant in accordance with the rules of such depository).

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.

 

 

 

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.

Individual Certificate : Any Private Certificate registered in the name of the Holder other than the Depository or its nominee.

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 Class A-IO Certificates, the amount designated “Initial Class Certificate Balance” 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: 2.35%	Class B-1: 0.35%
Class M-2: 0.70%	Class B-2: 0.25%
Class M-3: 0.40%	Class B-3: 0.20%

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, 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.

Liquidated Mortgage Loan : Any defaulted Mortgage Loan as to which the 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 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 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 : Amounts, other than Insurance Proceeds and condemnation proceeds, received in connection with the liquidation of a defaulted Mortgage Loan, whether through trustee’s sale, foreclosure sale or otherwise.

Loan-to-Value Ratio : With respect to any Mortgage Loan as of any date of determination, the ratio on such date of the Outstanding Principal Balance of the Mortgage Loan, to the Appraised Value of the Mortgaged Property.

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.

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

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

Majority Certificateholders : The Holders of Certificates evidencing at least 51% of the Voting Rights.

Master Servicer : Wells Fargo Bank, N.A. including, its respective successors in interest who meet the qualifications of 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, MLMI Series 2005-A5 - 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.

MLBUSA : Merrill Lynch Bank USA.

MLCC : Merrill Lynch Credit Corporation.

MLMLI : Merrill Lynch Mortgage Lending, Inc.

Monthly Advance : An advance of principal or interest required to be made by the Servicer pursuant to the 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 Servicer pursuant to 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 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 Servicer or the Master Servicer in accordance with the Servicing Agreement or this Agreement and (ii) unreimbursed advances by the 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).

Nonrecoverable Advance : Any Monthly Advance or Servicing Advance previously made or proposed to be made in respect of a Mortgage Loan or REO Property that, in the good faith business judgment of the Servicer, will not, or, in the case of a proposed Monthly Advance or Servicing Advance, would not be, ultimately recoverable from related late payments, condemnation proceeds, Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property as provided herein.

 

Notional Amount : With respect to the Class A-IO Certificates, an amount equal to the aggregate Class Certificate Balance of the Class A-2 Certificates and the Class A-3 Certificates. For federal income tax purposes, however, the Class A-IO Certificates will not constitute a “regular interest” in REMIC II but instead will represent ownership of Uncertificated Class A-IO-1 Component and Uncertificated Class A-IO-2 Component, each of which is a “regular interest” in REMIC II; accordingly, for federal income tax purposes the Notional Amount of the Class A-IO Certificates will be equal to the aggregate Uncertificated Notional Amount of Uncertificated Class A-IO-1 Component and Uncertificated Class A-IO-2 Component.

 

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.

Opinion of Counsel : A written opinion of counsel who is or are acceptable to the Trustee 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 Master Servicer 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 Class A-IO 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 A-IO Certificates, $144,179,000.

Original Subordinate Principal Balance : The sum of the aggregate Class Certificate Balances of each Class of Subordinate Certificates as of the Closing Date.

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.

Originator : Washington Mutual Bank (formerly known as Washington Mutual Bank, FA).

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 Class A-1, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates on each Distribution Date, a per annum rate equal to the weighted average of the Net Mortgage Rates on 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. The Pass-Through Rate with respect to the first Interest Accrual Period is expected to be approximately 4.906% per annum. For federal income tax purposes, however, each of the Class A-1, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates on each Distribution Date, will have a per annum rate equal to the weighted average of the REMIC I Pass-Through Rates on each REMIC I Regular Interest, weighted on the basis of the Uncertificated Principal Balance of each such REMIC I Regular Interest as of the beginning of the Due Period immediately preceding the related Distribution Date.

 

(ii)        For the Class A-2 Certificates on each Distribution Date on or prior to the Rate Change Date, a per annum rate equal to the lesser of (A) 4.566% per annum, and (B) the weighted average of the Net Mortgage Rates on 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. Beginning with the Interest Accrual Period following the Interest Accrual Period for the Rate Change Date and thereafter, the Pass-Through Rate on the Class A-2 Certificates will be equal to the weighted average of the Net Mortgage Rates on 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. For federal income tax purposes, however, the Class A-2 Certificates on each Distribution Date on or prior to the Rate Change Date, will have a per annum rate equal to the lesser of (A) 4.566% per annum, and (B) the weighted average of the REMIC I Pass-Through Rate on each REMIC I Regular Interest, weighted on the basis of the Uncertificated Principal Balance of such REMIC I Regular Interests as of the beginning of the Due Period immediately preceding the related Distribution Date. Beginning with the Interest Accrual Period following the Interest Accrual Period for the Rate Change Date and thereafter, the Pass-Through Rate on the Class A-2 Certificates will be equal to the weighted average of the REMIC I Pass-Through Rate on each REMIC I Regular Interest, weighted on the basis of the Uncertificated Principal Balance of such REMIC I Regular Interests as of the beginning of the Due Period immediately preceding the related Distribution Date.

 

(iii)        For the Class A-3 Certificates on each Distribution Date on or prior to the Rate Change Date, a per annum rate equal to the lesser of (A) 4.442% per annum, and (B) the weighted average of the Net Mortgage Rates on 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. Beginning with the Interest Accrual Period following the Interest Accrual Period for the Rate Change Date and thereafter, the Pass-Through Rate on the Class A-3 Certificates will be equal to the weighted average of the Net Mortgage Rates on 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. For federal income tax purposes, however, the Class A-3 Certificates on each Distribution Date on or prior to the Rate Change Date, will have a per annum rate equal to the lesser of (A) 4.442% per annum, and (B) the weighted average of the REMIC I Pass-Through Rate on each REMIC I Regular Interest, weighted on the basis of the Uncertificated Principal Balance of such REMIC I Regular Interests as of the beginning of the Due Period immediately preceding the related Distribution Date. Beginning with the Interest Accrual Period following the Interest Accrual Period for the Rate Change Date and thereafter, the Pass-Through Rate on the Class A-3 Certificates will be equal to the weighted average of the REMIC I Pass-Through Rate on each REMIC I Regular Interest, weighted on the basis of the Uncertificated Principal Balance of such REMIC I Regular Interests as of the beginning of the Due Period immediately preceding the related Distribution Date.

 

(iv)        For the Class 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 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, over (B) the weighted average of the Pass-Through Rates on the Class A-2 Certificates and Class A-3 Certificates weighted on the basis of the Class Certificate Balances thereof. The Pass-Through Rate on the Class A-IO Certificates for the first Interest Accrual Period will be approximately 0.412% per annum. For federal income tax purposes, the Class A-IO Certificates do not constitute a “regular interest” in REMIC II but represent ownership of Uncertificated Class A-IO-1 Component and Uncertificated Class A-IO-2 Component. Therefore, for federal income tax purposes, the Pass-Through Rate described above in this footnote is equal to the aggregate of the REMIC II Pass-Through Rates on the Uncertificated Class A-IO-1 Component and Uncertificated Class A-IO-2 Component as of the beginning of the Due Period immediately preceding the related Distribution Date.

 

Paying Agent : The Trustee or any successor Paying Agent appointed by the Trustee.

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 Initial 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 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 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 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 or Master Servicer or any affiliate of the Trustee 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.

Physical Certificates : The Residual Certificates and the Private Certificates.

Preliminary Servicing Period : With respect to any Mortgage Loans, the period commencing on the related Closing Date and ending on the date the Servicer enters into Reconstitution Agreements which amend or restate the servicing provisions of this Agreement.

 

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, Class B-3, Class R-I and Class R-II Certificates.

Protected Account : An account established and maintained for the benefit of Certificateholders by the Servicer with respect to the related Mortgage Loans and with respect to REO Property pursuant to the 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 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.

Rate Change Date : The Distribution Date in April 2010.

Rating Agencies : Fitch and S&P.

Rating Agency Confirmation : A written confirmation provided by the Rating Agency indicating the rating of a Certificate or stating that such transaction shall not cause the ratings of the Certificates to be reduced, suspended or withdrawn by the Rating Agency.

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.

Reconstitution Agreements : The agreement or agreements entered into by the Servicer and MLBUSA and/or certain third parties on the Reconstitution Date or Dates with respect to any or all of the Mortgage Loans serviced under the Servicing Agreement, in connection with a whole loan transfer or a pass-through transfer as provided in Section 12 thereof.

Reconstitution Date : The date or dates on which any or all of the Mortgage Loans shall be removed from the Servicing Agreement and reconstituted as part of a Whole Loan Transfer or Pass-Through Transfer pursuant to Section 12 thereof.

Record Date : With respect to each Distribution Date and each Class of Offered 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 : A Mortgage Loan the proceeds of which were not used to purchase the related Mortgaged Property.

Regular Certificates : Any of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-IO, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates.

Reinvestment Agreements : One or more reinvestment agreements, acceptable to 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 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; and (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.

REMIC I Pass-Through Rate : With respect to each REMIC I Regular Interest, 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.

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 A-1 : 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 A-2 : 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 A-3 : 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 A-4 : 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 A-5 : 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 A-6 : 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 A-7 : 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 A-8 : 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 A-9 : 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 M-1 : 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 M-2 : 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 M-3 : 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 B-1 : 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 B-2 : 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 B-3 : 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 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 Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-5 Certificates, Class A-6 Certificates, Class A-7 Certificates, Class A-8 Certificates, Class A-9 Certificates, Uncertificated Class A-IO-1 Component and Uncertificated Class A-IO-2 Component (each represented and beneficially owned by the Class A-IO Certificates), Class M-1 Certificates, Class M-2 Certificates, Class M-3 Certificates, Class B-1 Certificates, Class B-2 Certificates, Class B-3 Certificates, and Class R-II Certificates, with respect to which a separate REMIC election is to be made.

REMIC II Pass-Through Rate : With respect to Uncertificated Class A-IO-1 Component, a per annum rate equal to the excess, if any, of (i) the weighted average of the REMIC I Pass-Through Rate on REMIC I Regular Interest A-2, weighed on the basis of the Uncertificated Principal Balance of such REMIC I Regular Interest, over (ii) the Pass-Through Rate on the Class A-2 Certificates. With respect to Uncertificated Class A-IO-2 Component, a per annum rate equal to the excess, if any, of (i) the weighted average of the REMIC I Pass-Through Rate on REMIC I Regular Interest A-3, weighed on the basis of the Uncertificated Principal Balance of such REMIC I Regular Interest, over (ii) the Pass-Through Rate on the Class A-3 Certificates.

REMIC II Regular Interests : Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-5 Certificates, Class A-6 Certificates, Class A-7 Certificates, Class A-8 Certificates, Class A-9 Certificates, Class M-1 Certificates, Class M-2 Certificates, Class M-3 Certificates, Class B-1 Certificates, Class B-2 Certificates, Class B-3 Certificates, Uncertificated Class A-IO-1 Component and Uncertificated Class A-IO-2 Component.

REMIC II Certificates : Any of the Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-5 Certificates, Class A-6 Certificates, Class A-7 Certificates, Class A-8 Certificates, Class A-9 Certificates, Class A-IO Certificates (the Class A-IO Certificate is not a “regular interest” in REMIC II but represents the beneficial ownership of the Uncertificated Class A-IO-1 Component and Uncertificated Class A-IO-2 Component, each a “regular interest” in REMIC II), Class M-1 Certificates, Class M-2 Certificates, Class M-3 Certificates, Class B-1 Certificates, Class B-2 Certificates, Class B-3 Certificates and Class R-III Certificates.

REMIC Opinion : An Opinion of Counsel stating that, under the REMIC Provisions, any contemplated action will not cause the REMIC Trust 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 the REMIC Trust 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.

REMIC Trust : 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 Seller and the Originator in the Assignment, Assumption and Recognition Agreement as assigned to the Trustee pursuant to Section 2.04 hereof.

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 the Originator 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.

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 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 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.

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.

Seller : Merrill Lynch Mortgage Lending, Inc., a Delaware corporation, or any successor in interest.

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

 

 

 

 

 

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

 

provided, however, that any scheduled reduction to the Senior Accelerated Distribution Percentage described above shall not occur as of any Distribution Date unless either (a)(i)(X) the outstanding principal balance of 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 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 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 (ii) 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 Subordinate Certificates; or (b) (i) the outstanding principal balance of 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 aggregate outstanding principal balance of all Mortgage Loans averaged over the last six months, does not exceed 4%, and (ii) 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 10%, 15%, 20%, 25% or 30%, respectively, of the sum of the initial Class Certificate Balances of the Subordinate Certificates.

In addition, on any Distribution Date on or after the Distribution Date occurring in June 2008, if the Subordinate Percentage is equal to or greater than two times the initial Subordinate Percentage, 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 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 Senior Accelerated Distribution Percentage for such Distribution Date will equal the Senior Percentage.

Senior Certificates : The Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9 and Class A-IO Certificates.

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 A 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.

Senior Principal Distribution Amount : As to any Distribution Date, the lesser of (a) the balance of the Available Distribution Amount 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 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, whether or not received on or prior to the related Determination Date, minus the principal portion of any Debt Service Reduction which together with other Bankruptcy Losses exceeds the Bankruptcy Loss Coverage Amount;

(2)        the Stated Principal Balance of any Mortgage Loan repurchased during the related Prepayment Period pursuant to Section 2.02 or 2.03 hereof or pursuant to the 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 Mortgage Loan, including without limitation Insurance Proceeds, Liquidation Proceeds and REO Proceeds) received during the related Prepayment Period to the extent applied by the Servicer as recoveries of principal of the related Mortgage Loan pursuant to Servicing Agreement;

(B)        with respect to the liquidation or other disposition of a Mortgage Loan which occurred during the related Prepayment Period and did not result in any Excess Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses, an amount equal to the lesser of (a) the Senior Percentage for such Distribution Date times the Stated Principal Balance of such Mortgage Loan and (b) the 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 Servicer or the Master Servicer

 

 

as recoveries of principal of the related Mortgage Loan pursuant to the Servicing Agreement or this Agreement;

(C)       the 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 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;

Servicer : With respect to each Mortgage Loan, Washington Mutual Bank.

Servicer Remittance Date : With respect to each Mortgage Loan, the date set forth in the Servicing Agreement as the Remittance Date (as such term is defined in the Servicing Agreement).

Servicing Advances : 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 Agreement : The Master Mortgage Loan Purchase and Servicing Agreement dated as of June 1, 2001 among MLBUSA, as purchaser, Washington Mutual Bank, FA, as seller, Washington Mutual Bank fsb, as seller, Washington Mutual Bank, as seller and Washington Mutual Bank, FA, as servicer, and the modifications thereto provided in Annex A to the Warranty Bill of Sale dated April 26, 2004, among MLBUSA, as purchaser, Washington Mutual Bank, FA, as seller, Washington Mutual Bank, as seller, and Washington Mutual Bank, FA, as servicer.

Servicing Fee : With respect to each Mortgage Loan, the amount of the annual servicing fee the Purchaser shall pay to the Servicer, which shall, for each month, be equal to one-twelfth of the product of (a) the related Servicing Fee Rate and (b) the unpaid principal balance of the Mortgage Loan. Such fee shall be payable monthly, computed on the basis of the same principal amount and period respectively which any related interest payment on a Mortgage Loan is computed. The obligation of the Trust Fund to pay the Servicing Fee is limited to, and payable solely from, the interest portion (including recoveries with respect to interest from Liquidation Proceeds, Insurance Proceeds, condemnation proceeds and other proceeds, to the extent permitted by this Agreement) of related Monthly Payment collected by the Servicer, or as otherwise proved under Section 11.05. If the Preliminary Servicing Period includes any partial month, the Servicing Fee for such month shall be pro rated at a per diem rate based upon a 30-day month. If the Index and/or Gross Margin are adjusted as provided in the related Mortgage

 

 

Note, the Servicing Fee shall be the rate per annum in effect immediately prior to such adjustment.

 

Servicing Fee Rate : The per annum rate at which the Servicing Fee accrues, which rate shall be as calculated or set forth in the related final 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.

Special Hazard Loss Coverage Amount : As of any Distribution Date, an amount equal to $4,018,885 minus the sum of (i) the aggregate amount of Special Hazard Losses allocated solely to one or more specific Classes of Certificates in accordance with Section 6.02 and (ii) the Adjustment Amount (as defined below) as most recently calculated. For each anniversary of the Cut-off Date, the Adjustment Amount shall be equal to the amount, if any, by which the amount calculated in accordance with the preceding sentence (without giving effect to the deduction of the Adjustment Amount for such anniversary) exceeds the greater of (A) the greatest of (i) twice the outstanding principal balance of the Mortgage Loan in the Trust Fund which has the largest outstanding principal balance on the Distribution Date immediately preceding such anniversary, (ii) the product of 1.00% multiplied by the outstanding principal balance of all Mortgage Loans on the Distribution Date immediately preceding such anniversary and (iii) the aggregate outstanding principal balance (as of the immediately preceding Distribution Date) of the Mortgage Loans in any single five-digit California zip code area with the largest amount of Mortgage Loans by aggregate principal balance as of such anniversary and (B) the greater of (i) the product of 0.50% multiplied by the outstanding principal balance of all Mortgage Loans on the Distribution Date immediately preceding such anniversary multiplied by a fraction, the numerator of which is equal to the aggregate outstanding principal balance (as of the immediately preceding Distribution Date) of all of the Mortgage Loans secured by Mortgaged Properties located in the State of California divided by the aggregate outstanding principal balance (as of the immediately preceding Distribution Date) of all of the Mortgage Loans, expressed as a percentage, and the denominator of which is equal to 71.75% (which percentage is equal to the percentage of Mortgage Loans initially secured by Mortgaged Properties located in the State of California) and (ii) the aggregate outstanding principal balance (as of the immediately preceding Distribution Date) of the largest Mortgage Loan secured by a Mortgaged Property located in the State of California.

The Special Hazard Amount may be further reduced by the Depositor (including accelerating the manner in which coverage is reduced) provided that prior to any such reduction, the Depositor shall (i) obtain written confirmation from each Rating Agency that such reduction shall not reduce the rating assigned to any Class of Certificates by such Rating Agency below the lower of the then-current rating or the rating assigned to such Certificates as of the Closing Date by such Rating Agency and (ii) provide a copy of such written confirmation to the Trustee.

Special Hazard Losses : Realized Losses in respect of Special Hazard Mortgage Loans as reported by the Servicer to the Master Servicer.

 

 

 

Special Hazard Mortgage Loan : A Liquidated Mortgage Loan as to which the ability to recover the full amount due thereunder was substantially impaired by a hazard not insured against under a standard hazard insurance policy.

Startup Day : June 30, 2005.

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.

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 July 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, minus the principal portion of any Debt Service Reduction which together with other Bankruptcy Losses exceeds the Bankruptcy Loss Coverage Amount;

(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 Servicer as recoveries of principal of the related Mortgage Loan pursuant to the 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 and did not result in any Excess Losses, an amount equal to the related unscheduled collections (including without limitation Insurance Proceeds, Liquidation Proceeds and REO Proceeds) to the extent applied by the Servicer as recoveries of principal of the related Mortgage Loan pursuant to the 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 : A mortgage loan tendered to the Trustee pursuant to the Servicing Agreement, the Assignment, Assumption and Recognition Agreement or Section 2.04 of this Agreement, as applicable, in each case, (i) which has an Outstanding Principal Balance, after application of all scheduled payments of principal and interest due during or prior to the month of substitution, not in excess of the Stated Principal Balance of the Mortgage Loan for which it is to be substituted as of the Due Date in the calendar month during which the substitution occurs, (ii) which has a Mortgage Interest Rate not less than (and not more than one percentage point in excess of) the Mortgage Interest Rate of such Mortgage Loan, (iii) which has a Net Mortgage Rate equal to or greater than the Net Mortgage Rate of such Mortgage Loan, (iv) which has a remaining term to maturity not greater than (and not more than one year less than) that of such Mortgage Loan, (v) which has the same Due Date as the Due Date on such Mortgage Loan, (vi) which has a Loan-to-Value Ratio as of the date of substitution equal to or lower than the Loan-to-Value Ratio of such Mortgage Loan as of such date, (vii) be covered under a Primary Insurance Policy if such Substitute Mortgage Loan has a Loan-to-Value Ratio in excess of 80%, (viii) conform to each non-statistical representation and warranty set forth in Section

 

 

7.02 of the Servicing Agreement and (ix) be the same type of mortgage loan (i.e. adjustable rate with the same Gross Margin and Index as the Deleted Mortgage Loan). In the event that one or more mortgage loans are substituted for one or more Mortgage Loans, the amounts described in clause (i) hereof shall be determined on the basis of aggregate principal balances, the Mortgage Interest Rates described in clause (ii) hereof shall be determined on the basis of weighted average Mortgage Interest Rates, the Net Mortgage Rates described in clause (iii) hereof shall be determined on the basis of weighted average Net Mortgage Rates, the terms described in clause (iv) shall be determined on the basis of weighted average remaining terms to maturity, the Loan-to-Value Ratios described in clause (vi) hereof shall be satisfied as to each such mortgage loan and, except to the extent otherwise provided in this sentence, the representations and warranties described in clause (viii) hereof must be satisfied as to each Substitute Mortgage Loan or in the aggregate, as the case may be.

 

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 REMIC Trust, 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 : The REMIC I and REMIC II.

Uncertificated Class A-IO-1 Component : A “regular interest” in REMIC II and one of two components beneficially owned by the Class A-IO Certificates.

Uncertificated Class A-IO-2 Component : A “regular interest” in REMIC II and one of two components beneficially owned by the Class A-IO Certificates.

Uncertificated Notional Amount : The Uncertificated Class A-IO-1 Component shall have an Uncertificated Notional Amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest A-2. The Uncertificated Class A-IO-2 Component shall have an Uncertificated Notional Amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest A-3.

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 6.07 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 (including Excess Losses) not allocated solely to one or more specific Classes of Certificates pursuant to Section 6.02, (iii) the interest portion of Monthly Advances previously made with respect to a Mortgage Loan or REO Property which remained unreimbursed following the liquidation or other disposition of such Mortgage Loan or REO Property by the related Servicer or the Master Servicer that were made with respect to delinquencies that were ultimately determined to be Excess Losses and (iv) 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 Uncertificated Class A-IO-1 Component and Uncertificated Class A-IO-2 Component.

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

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

Underwriting Guidelines : The Underwriting Guidelines of the Originator, attached to the Servicing Agreement as Exhibit 10, as amended from time to time.

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 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 Class A-IO Certificates and Class R Certificates). 98.00% of all Voting Rights will be allocated among all holders of the Certificates (other than the Class R Certificates) in proportion to their then outstanding Class Certificate Balances, and 1.00% of all Voting Rights will be allocated among the holders of the Class A-IO Certificates and 0.50% and 0.50% of all Voting Rights will be allocated among the holders of the Class R-I Certificates and Class R-II 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.

Section 1.02

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 Servicer in Protected Accounts, the Master Servicer in the Master Servicer Collection Account and the Trustee in the Distribution Account for the benefit of the Trustee on behalf of the Regular 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 Assignment, Assumption and Recognition Agreement to the extent provided in Subsection 2.03(a), (vii) the rights with respect to the Servicing Agreement as assigned to the Depositor on behalf of the Certificateholders by the Assignment, Assumption and Recognition Agreement 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 2005-A5, 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 2005-A5.

 

 

 

(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 2005-A5, 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 clauses (b)(I)(i) and (b)(II)(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 8.02 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 its receipt thereof, 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 and the lifetime 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 Seller. In accordance with the representation made by the Seller in the Assignment, Assumption and Recognition Agreement that the Seller has delivered to the Depositor all documents required to be delivered in accordance with Section 6.03 of the Servicing Agreement, the Seller shall correct or cure any such defect within ninety (90) days from the date of notice from the Trustee or the Custodian, as its agent, of the defect and if the 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 Seller’s obligation pursuant to the representation made by the Seller in the Assignment, Assumption and Recognition Agreement, within 90 days from the Trustee’s or the Custodian’s notification, 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; provided, however, that if such defect relates solely to the inability of the 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 Seller shall not be required to purchase such Mortgage Loan if the Seller delivers such original documents or certified copy promptly upon receipt, but in no event later than 360 days after the Closing Date. The foregoing repurchase obligation shall not apply in the event that the 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 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 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 Seller. In accordance with the representation made by the Seller in the Assignment, Assumption and Recognition Agreement to deliver the mortgage loans in accordance with Section 6.03 of the Servicing Agreement, the Seller shall correct or cure any such defect within 90 days from the date of notice from the Trustee of the defect and if the 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 Seller’s obligation under the Assignment, Assumption and Recognition Agreement to purchase such Mortgage Loan at the Purchase Price, provided, however, that if such defect relates solely to the inability of the 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 Seller shall not be required to purchase such Mortgage Loan, if the Seller 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 Seller in accordance with Subsections 2.02(a) or (b) above, the Seller shall remit to the Master Servicer the Purchase Price for deposit in the Master Servicer Collection Account and the 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

 

 

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 Seller as are necessary to vest in the 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 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 Assignment, Assumption and Recognition Agreement .

(a)        The Depositor hereby assigns to the Trustee, on behalf of the Certificateholders, all of its right, title and interest in the Assignment, Assumption and Recognition Agreement, including but not limited to Depositor’s rights and obligations pursuant to the Servicing Agreement. The obligations of the Seller or the Originator pursuant to the Assignment, Assumption and Recognition Agreement or the Servicing Agreement, as applicable, to substitute or repurchase 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.

(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 Section 7.03 of the 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 Seller or the Originator pursuant to the Assignment, Assumption and Recognition Agreement or the Servicing Agreement, as applicable, 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 Assignment, Assumption and Recognition Agreement, 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. 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 such Seller or Originator, as applicable, the related Mortgage File and the Trustee shall execute and deliver all instruments of transfer or assignment furnished to it by such Seller or Originator, without recourse, as are necessary to vest in such Seller or Originator 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 Seller or Originator 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 Section 7.03 of the Servicing Agreement or Sections 2.02 or 2.03 of this Agreement, the Seller or Originator may, no later than the date by which such purchase by such Seller or Originator would otherwise be required, tender to the Trustee a Substitute Mortgage Loan; provided, however, that substitution pursuant to Section 7.03 of the Servicing 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 such Seller or Originator, 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 one Business Day of receipt, such Seller or Originator 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 Seller or the Originator of the Purchase Price for the purchase of a Mortgage Loan by such Seller or Originator. After such notification to such Seller or Originator 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 Originator. The Scheduled Principal on a Substitute Mortgage Loan due on the Due Date in the month of substitution shall be the property of such Originator 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 Originator the related Mortgage File related to any Mortgage Loan released pursuant to the Assignment, Assumption and Recognition 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 Originator title to and rights under any Mortgage Loan released pursuant to the Servicing Agreement or Section 2.04 of this Agreement, as applicable. The Originator shall deliver the documents related to the Substitute Mortgage Loan in accordance with the provisions of the 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 Servicing Agreement shall be deemed to have been made by the Originator 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 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 Certificates.

Section 2.06      Representations and Warranties Concerning the Depositor . The Depositor hereby represents and warrants to the Trustee, the Master Servicer and the Securities Administrator as follows:

(i)         the Depositor (a) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and (b) is qualified and in good standing as a foreign corporation to do business in each jurisdiction where such qualification is necessary, except where the failure so to qualify would not reasonably be expected to have a material adverse effect on the Depositor’s business as presently conducted or on the Depositor’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

 

 

 

(ii)         the Depositor has full corporate power to own its property, to carry on its business as presently conducted and to enter into and perform its obligations under this Agreement;

(iii)        the execution and delivery by the Depositor of this Agreement have been duly authorized by all necessary corporate action on the part of the Depositor; and neither the execution and delivery of this Agreement, nor the consummation of the transactions herein contemplated, nor compliance with the provisions hereof, will conflict with or result in a breach of, or constitute a default under, any of the provisions of any law, governmental rule, regulation, judgment, decree or order binding on the Depositor or its properties or the articles of incorporation or by-laws of the Depositor, except those conflicts, breaches or defaults which would not reasonably be expected to have a material adverse effect on the Depositor’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(iv)        the execution, delivery and performance by the Depositor of this Agreement and the consummation of the transactions contemplated hereby do not require the consent or approval of, the giving of notice to, the registration with, or the taking of any other action in respect of, any state, federal or other governmental authority or agency, except those consents, approvals, notices, registrations or other actions as have already been obtained, given or made;

(v)        this Agreement has been duly executed and delivered by the Depositor and, assuming due authorization, execution and delivery by the other parties hereto, constitutes a valid and binding obligation of the Depositor enforceable against it in accordance with its terms (subject to applicable bankruptcy and insolvency laws and other similar laws affecting the enforcement of the rights of creditors generally);

(vi)        there are no actions, suits or proceedings pending or, to the knowledge of the Depositor, threatened against the Depositor, before or by any court, administrative agency, arbitrator or governmental body (i) with respect to any of the transactions contemplated by this Agreement or (ii) with respect to any other matter which in the judgment of the Depositor will be determined adversely to the Depositor and will if determined adversely to the Depositor materially and adversely affect the Depositor’s ability to enter into this Agreement or perform its obligations under this Agreement; and the Depositor is not in default with respect to any order of any court, administrative agency, arbitrator or governmental body so as to materially and adversely affect the transactions contemplated by this Agreement; and

(vii)       immediately prior to the transfer and assignment to the Trustee, each Mortgage Note and each Mortgage were not subject to an assignment or pledge, and the Depositor had good and marketable title to and was the sole owner thereof and had full right to transfer and sell such Mortgage Loan to the Trustee free and clear of any encumbrance, equity, lien, pledge, charge, claim or security interest.

 

 

 

ARTICLE III

ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

Section 3.01      Master Servicer . The Master Servicer shall supervise, monitor and oversee the obligation of the Servicer to service and administer their respective Mortgage Loans in accordance with the terms of the Servicing Agreement and shall have full power and authority to do any and all things which it may deem necessary or desirable in connection with such master servicing and administration. In performing its obligations hereunder, the Master Servicer shall act in a manner consistent with Accepted Master Servicing Practices. Furthermore, the Master Servicer shall oversee and consult with the Servicer as necessary from time-to-time to carry out the Master Servicer’s obligations hereunder, shall receive, review and evaluate all reports, information and other data provided to the Master Servicer by the Servicer and shall cause the Servicer to perform and observe the covenants, obligations and conditions to be performed or observed by such Servicer under the Servicing Agreement. The Master Servicer shall independently and separately monitor the Servicer’s servicing activities with respect to each related Mortgage Loan, reconcile the results of such monitoring with such information provided in the previous sentence on a monthly basis and coordinate corrective adjustments to the Servicer’s and Master Servicer’s records, and based on such reconciled and corrected information, the Master Servicer shall provide such information to the Securities Administrator as shall be necessary in order for it to prepare the statements specified in Section 6.04, and prepare any other information and statements required to be forwarded by the Master Servicer hereunder. Neither of the Master Servicer or Securities Administrator shall have any responsibility for reviewing or reconciling the Protected Account or for any expenses or other consequences resulting from any failure of such Protected Account to be so reconciled.

The Trustee shall furnish the Servicer and the Master Servicer with any limited powers of attorney and other documents in form as provided to it necessary or appropriate to enable the Servicer and the Master Servicer to service and administer the related Mortgage Loans and REO Property. The Trustee shall have no liability with respect to the use of any such limited power of attorney.

The Trustee or the Custodian shall provide access to the records and documentation in possession of the Trustee or the Custodian regarding the related Mortgage Loans and REO Property and the servicing thereof to the Certificateholders, the FDIC, and the supervisory agents and examiners of the FDIC, such access being afforded only upon reasonable prior written request and during normal business hours at the office of the Trustee or the Custodian; provided, however, that, unless otherwise required by law, the Trustee or the Custodian shall not be required to provide access to such records and documentation if the provision thereof would violate the legal right to privacy of any Mortgagor. The Trustee or the Custodian shall allow representatives of the above entities to photocopy any of the records and documentation and shall provide equipment for that purpose at a charge that covers the Trustee’s or the Custodian’s actual costs.

The Trustee shall execute and deliver to the Servicer and the Master Servicer upon request any court pleadings, requests for trustee’s sale or other documents necessary or desirable to (i) the foreclosure or trustee’s sale with respect to a Mortgaged Property; (ii) any legal action brought to obtain judgment against any Mortgagor on the Mortgage Note or Security Instrument;

 

 

(iii) obtain a deficiency judgment against the Mortgagor; or (iv) enforce any other rights or remedies provided by the Mortgage Note or Security Instrument or otherwise available at law or equity.

Section 3.02      REMIC-Related Covenants . For as long as each REMIC shall exist, the Trustee and the Securities Administrator shall act in accordance herewith to assure continuing treatment of such REMIC as a REMIC, and the Trustee and the Securities Administrator shall comply with any directions of the Depositor, the Servicer or the Master Servicer to assure such continuing treatment. In particular, the Trustee shall not (a) sell or permit the sale of all or any portion of the Mortgage Loans or of any investment of deposits in an Account unless such sale is as a result of a repurchase of the Mortgage Loans pursuant to this Agreement or the Trustee has received a REMIC Opinion prepared at the expense of the Trust Fund; and (b) other than with respect to a substitution pursuant to the Assignment, Assumption and Recognition Agreement or Section 2.04 of this Agreement, as applicable, accept any contribution to any REMIC after the Startup Day without receipt of a REMIC Opinion.

Section 3.03      Monitoring of Servicer . (a) The Master Servicer shall be responsible for reporting to the Trustee and the Depositor the compliance by the Servicer with its duties under the Servicing Agreement. In the review of the Servicer’s activities, the Master Servicer may rely upon an officer’s certificate of the Servicer with regard to such Servicer’s compliance with the terms of its Servicing Agreement. In the event that the Master Servicer, in its judgment, determines that a Servicer should be terminated in accordance with its Servicing Agreement, or that a notice should be sent pursuant to such Servicing Agreement with respect to the occurrence of an event that, unless cured, would constitute grounds for such termination, the Master Servicer shall notify the Depositor and the Trustee thereof and the Master Servicer shall issue such notice or take such other action as it deems appropriate.

(b)        The Master Servicer, for the benefit of the Trustee and the Certificateholders, shall enforce the obligations of the Servicer under the Servicing Agreement, and shall, in the event that a Servicer fails to perform its obligations in accordance with the Servicing Agreement, subject to the preceding paragraph, terminate the rights and obligations of such Servicer thereunder and act as servicer of the related Mortgage Loans or cause the Trustee to enter into a new Servicing Agreement with a successor Servicer selected by the Master Servicer; provided, however, it is understood and acknowledged by the parties hereto that there will be a period of transition (not to exceed 90 days) before the actual servicing functions can be fully transferred to such successor Servicer. Such enforcement, including, without limitation, the legal prosecution of claims, termination of the Servicing Agreement and the pursuit of other appropriate remedies, shall be in such form and carried out to such an extent and at such time as the Master Servicer, in its good faith business judgment, would require were it the owner of the related Mortgage Loans. The Master Servicer shall pay the costs of such enforcement at its own expense subject to Section 3.03(c), provided that the Master Servicer shall not be required to prosecute or defend any legal action except to the extent that the Master Servicer shall have received reasonable indemnity for its costs and expenses in pursuing such action.

(c)        To the extent that the costs and expenses of the Master Servicer related to any termination of a Servicer, appointment of a successor Servicer or the transfer and assumption of servicing by the Master Servicer with respect to the Servicing Agreement (including, without

 

 

limitation, (i) all legal costs and expenses and all due diligence costs and expenses associated with an evaluation of the potential termination of the Servicer as a result of an event of default by such Servicer and (ii) all costs and expenses associated with the complete transfer of servicing, including all servicing files and all servicing data and the completion, correction or manipulation of such servicing data as may be required by the successor servicer to correct any errors or insufficiencies in the servicing data or otherwise to enable the successor service to service the Mortgage Loans in accordance with the Servicing Agreement) are not fully and timely reimbursed by the terminated Servicer, the Master Servicer shall be entitled to reimbursement of such costs and expenses from the Master Servicer Collection Account pursuant to Section 4.03(b).

(d)        The Master Servicer shall require the Servicer to comply with the remittance requirements and other obligations set forth in the Servicing Agreement.

(e)        If the Master Servicer acts as Servicer, it will not assume liability for the representations and warranties of the Servicer, if any, that it replaces.

Section 3.04      Fidelity Bond . The Master Servicer, at its expense, shall maintain in effect a blanket fidelity bond and an errors and omissions insurance policy, affording coverage with respect to all directors, officers, employees and other Persons acting on such Master Servicer’s behalf, and covering errors and omissions in the performance of the Master Servicer’s obligations hereunder. The errors and omissions insurance policy and the fidelity bond shall be in such form and amount generally acceptable for entities serving as master servicers or trustees.

Section 3.05      Power to Act; Procedures . The Master Servicer shall master service the Mortgage Loans and shall have full power and authority, subject to the REMIC Provisions and the provisions of Article X hereof, to do any and all things that it may deem necessary or desirable in connection with the master servicing and administration of the Mortgage Loans, including but not limited to the power and authority (i) to execute and deliver, on behalf of the Certificateholders and the Trustee, customary consents or waivers and other instruments and documents, (ii) to consent to transfers of any Mortgaged Property and assumptions of the Mortgage Notes and related Mortgages, (iii) to collect any Insurance Proceeds and Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion of the ownership of the Mortgaged Property securing any Mortgage Loan, in each case, in accordance with the provisions of this Agreement and the Servicing Agreement, as applicable; provided, however, that the Master Servicer shall not (and, consistent with its responsibilities under Section 3.03, shall not permit the Servicer to) knowingly or intentionally take any action, or fail to take (or fail to cause to be taken) any action reasonably within its control and the scope of duties more specifically set forth herein, that, under the REMIC Provisions, if taken or not taken, as the case may be, would cause REMIC I or REMIC II 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) unless the Master Servicer has received an Opinion of Counsel (but not at the expense of the Master Servicer) to the effect that the contemplated action will not would cause REMIC I or REMIC II to fail to qualify as a REMIC or result in the imposition of a tax upon REMIC I or REMIC II, as the case may be. The Trustee shall furnish the Master Servicer, upon written request from a Servicing Officer, with any limited

 

 

powers of attorney empowering the Master Servicer or the Servicer to execute and deliver instruments of satisfaction or cancellation, or of partial or full release or discharge, and to foreclose upon or otherwise liquidate Mortgaged Property, and to appeal, prosecute or defend in any court action relating to the Mortgage Loans or the Mortgaged Property, in accordance with the Servicing Agreement and this Agreement, and the Trustee shall execute and deliver such other documents, as the Master Servicer may request, to enable the Master Servicer to master service and administer the Mortgage Loans and carry out its duties hereunder, in each case in accordance with Accepted Master Servicing Practices (and the Trustee shall have no liability for misuse of any such powers of attorney by the Master Servicer or the Servicer). If the Master Servicer or the Trustee has been advised that it is likely that the laws of the state in which action is to be taken prohibit such action if taken in the name of the Trustee or that the Trustee would be adversely affected under the “doing business” or tax laws of such state if such action is taken in its name, the Master Servicer shall join with the Trustee in the appointment of a co-trustee pursuant to Section 9.11 hereof. In the performance of its duties hereunder, the Master Servicer shall be an independent contractor and shall not, except in those instances where it is taking action in the name of the Trustee, be deemed to be the agent of the Trustee.

Section 3.06      Due-on-Sale Clauses; Assumption Agreements . To the extent provided in the Servicing Agreement, and to the extent Mortgage Loans contain enforceable due-on-sale clauses, the Master Servicer shall cause the Servicer to enforce such clauses in accordance with the Servicing Agreement. If applicable law prohibits the enforcement of a due-on-sale clause or such clause is otherwise not enforced in accordance with the Servicing Agreement, and, as a consequence, a Mortgage Loan is assumed, the original Mortgagor may be released from liability in accordance with the Servicing Agreement.

Section 3.07      Release of Mortgage Files . (a) Upon becoming aware of the payment in full of any Mortgage Loan, or the receipt by the Servicer of a notification that payment in full has been escrowed in a manner customary for such purposes for payment to Certificateholders on the next Distribution Date, the Servicer or the Master Servicer will furnish to the Custodian, on behalf of the Trustee, two copies of a certification substantially in the form of Exhibit D hereto signed by a Servicing Officer or in a mutually agreeable electronic format which will, in lieu of a signature on its face, originate from a Servicing Officer (which certification shall include a statement to the effect that all amounts received in connection with such payment that are required to be deposited in the Protected Account maintained by the Servicer pursuant to Section 4.01 or by the Servicer pursuant to its Servicing Agreement have been or will be so deposited) and shall request that the Custodian, on behalf of the Trustee, deliver to the Servicer the related Mortgage File. Upon receipt of such certification and request, the Custodian, on behalf of the Trustee, shall promptly and no later than five Business Days (or, to the extent that the Servicer notifies the Seller that a document is not in the Servicer’s possession as part of the Servicing File which is needed for purposes of the Servicer complying with any applicable law, within such shorter period as may be necessary to enable the Servicer to comply with such law) release the related Mortgage File to the Servicer and the Trustee and Custodian shall have no further responsibility with regard to such Mortgage File. Upon any such payment in full, the Servicer is authorized, to give, as agent for the Trustee, as the mortgagee under the Mortgage that secured the Mortgage Loan, an instrument of satisfaction (or assignment of mortgage without recourse) regarding the Mortgaged Property subject to the Mortgage, which instrument of satisfaction or

 

 

assignment, as the case may be, shall be delivered to the Person or Persons entitled thereto against receipt therefor of such payment, it being understood and agreed that no expenses incurred in connection with such instrument of satisfaction or assignment, as the case may be, shall be chargeable to the Protected Account.

(b)        From time to time and as appropriate for the servicing or foreclosure of any Mortgage Loan and in accordance with the Servicing Agreement, the Trustee shall execute such documents as requested and as shall be prepared and furnished to the Trustee by a Servicer or the Master Servicer (in form reasonably acceptable to the Trustee) and as are necessary to the prosecution of any such proceedings. In connection with the foregoing, the Custodian, on behalf of the Trustee, shall, upon the request of a Servicer or the Master Servicer, and delivery to the Custodian, on behalf of the Trustee, of two copies of a Request for Release signed by a Servicing Officer substantially in the form of Exhibit D (or in a mutually agreeable electronic format which will, in lieu of a signature on its face, originate from a Servicing Officer), release the related Mortgage File held in its possession or control to the Servicer or the Master Servicer, as applicable. Such trust receipt shall obligate the Servicer or the Master Servicer to return the Mortgage File to the Custodian on behalf of the Trustee, when the need therefor by the Servicer or the Master Servicer no longer exists unless the Mortgage Loan shall be liquidated, in which case, upon receipt of a certificate of a Servicing Officer similar to that hereinabove specified, the Mortgage File shall be released by the Custodian, on behalf of the Trustee, to the Servicer or the Master Servicer.

Section 3.08      Documents, Records and Funds in Possession of Master Servicer To Be Held for Trustee .

(a)        The Master Servicer shall transmit and the Servicer (to the extent required by the Servicing Agreement) shall transmit to the Trustee or Custodian such documents and instruments coming into the possession of the Master Servicer or such Servicer from time to time as are required by the terms hereof, or in the case of the Servicer, the Servicing Agreement, to be delivered to the Trustee or Custodian. Any funds received by the Master Servicer or by a Servicer in respect of any Mortgage Loan or which otherwise are collected by the Master Servicer or by a Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any Mortgage Loan shall be held for the benefit of the Trustee and the Certificateholders subject to the Master Servicer’s right to retain or withdraw from the Master Servicer Collection Account the Master Servicing Compensation and other amounts provided in this Agreement, and to the right of the Servicer to retain its Servicing Fee and other amounts as provided in the Servicing Agreement. The Master Servicer shall, and (to the extent provided in the Servicing Agreement) shall cause the Servicer to, provide access to information and documentation regarding the Mortgage Loans to the Trustee, its agents and accountants at any time upon reasonable request and during normal business hours, and to Certificateholders that are savings and loan associations, banks or insurance companies, the Office of Thrift Supervision, the FDIC and the supervisory agents and examiners of such Office and Corporation or examiners of any other federal or state banking or insurance regulatory authority if so required by applicable regulations of the Office of Thrift Supervision or other regulatory authority, such access to be afforded without charge but only upon reasonable request in writing and during normal business hours at

 

 

the offices of the Master Servicer designated by it. In fulfilling such a request the Master Servicer shall not be responsible for determining the sufficiency of such information.

(b)        All Mortgage Files and funds collected or held by, or under the control of, the Master Servicer, in respect of any Mortgage Loans, whether from the collection of principal and interest payments or from Liquidation Proceeds or Insurance Proceeds, shall be held by the Master Servicer for and on behalf of the Trustee and the Certificateholders and shall be and remain the sole and exclusive property of the Trustee; provided, however, that the Master Servicer and the Servicer shall be entitled to setoff against, and deduct from, any such funds any amounts that are properly due and payable to the Master Servicer or such Servicer under this Agreement or the Servicing Agreement.

Section 3.09

Standard Hazard Insurance and Flood Insurance Policies .

(a)        For each Mortgage Loan, the Master Servicer shall enforce any obligation of the Servicer under the Servicing Agreement to maintain or cause to be maintained standard fire and casualty insurance and, where applicable, flood insurance, all in accordance with the provisions of the Servicing Agreement. It is understood and agreed that such insurance shall be with insurers meeting the eligibility requirements set forth in the Servicing Agreement and that no earthquake or other additional insurance is to be required of any Mortgagor or to be maintained on property acquired in respect of a defaulted loan, other than pursuant to such applicable laws and regulations as shall at any time be in force and as shall require such additional insurance.

(b)        Pursuant to Section 4.01 and 4.02, any amounts collected by the Servicer or the Master Servicer, or by the Servicer, under any insurance policies (other than amounts to be applied to the restoration or repair of the property subject to the related Mortgage or released to the Mortgagor in accordance with the Servicing Agreement) shall be deposited into the Master Servicer Collection Account, subject to withdrawal pursuant to Section 4.02 and 4.03 in accordance with the terms and conditions of the Servicing Agreement. Any cost incurred by the Master Servicer or the Servicer in maintaining any such insurance if the Mortgagor defaults in its obligation to do so shall be added to the amount owing under the Mortgage Loan where the terms of the Mortgage Loan so permit; provided, however, that the addition of any such cost shall not be taken into account for purposes of calculating the distributions to be made to Certificateholders and shall be recoverable by the Master Servicer or such Servicer pursuant to Section 4.02 and 4.03.

Section 3.10      Presentment of Claims and Collection of Proceeds . The Master Servicer shall (to the extent provided in the Servicing Agreement) cause the Servicer to, prepare and present on behalf of the Trustee and the Certificateholders all claims under the Insurance Policies and take such actions (including the negotiation, settlement, compromise or enforcement of the insured’s claim) as shall be necessary to realize recovery under such policies. Any proceeds disbursed to the Master Servicer (or disbursed to a Servicer and remitted to the Master Servicer) in respect of such policies, bonds or contracts shall be promptly deposited in the Master Servicer Collection Account upon receipt, except that any amounts realized that are to be applied to the repair or restoration of the related Mortgaged Property as a condition precedent to the presentation of claims on the related Mortgage Loan to the insurer under any applicable Insurance Policy need not be so deposited (or remitted).

 

 

 

Section 3.11

Maintenance of the Primary Mortgage Insurance Policies .

(a)        The Master Servicer shall not take, or permit the Servicer (to the extent such action is prohibited under the Servicing Agreement) to take, any action that would result in noncoverage under any applicable Primary Mortgage Insurance Policy of any loss which, but for the actions of such Master Servicer or Servicer, would have been covered thereunder. The Master Servicer shall use its best reasonable efforts to cause the Servicer (to the extent required under the Servicing Agreement) to keep in force and effect (to the extent that the Mortgage Loan requires the Mortgagor to maintain such insurance), primary mortgage insurance applicable to each Mortgage Loan in accordance with the provisions of this Agreement and the Servicing Agreement, as applicable. The Master Servicer shall not, and shall not permit the Servicer (to the extent required under the Servicing Agreement) to, cancel or refuse to renew any such Primary Mortgage Insurance Policy that is in effect at the date of the initial issuance of the Mortgage Note and is required to be kept in force hereunder except in accordance with the provisions of this Agreement and the Servicing Agreement, as applicable.

(b)        The Master Servicer agrees to present, or to cause the Servicer (to the extent required under the Servicing Agreement) to present, on behalf of the Trustee and the Certificateholders, claims to the insurer under any Primary Mortgage Insurance Policies and, in this regard, to take such reasonable action as shall be necessary to permit recovery under any Primary Mortgage Insurance Policies respecting defaulted Mortgage Loans. Pursuant to Section 4.01 and 4.02, any amounts collected by the Master Servicer or the Servicer under any Primary Mortgage Insurance Policies shall be deposited in the Master Servicer Collection Account, subject to withdrawal pursuant to Section 4.03.

Section 3.12      Trustee to Retain Possession of Certain Insurance Policies and Documents .

The Trustee or the Custodian shall retain possession and custody of the originals (to the extent available) of any Primary Mortgage Insurance Policies, or certificate of insurance if applicable, and any certificates of renewal as to the foregoing as may be issued from time to time as contemplated by this Agreement. Until all amounts distributable in respect of the Certificates have been distributed in full and the Master Servicer otherwise has fulfilled its obligations under this Agreement, the Trustee or its Custodian shall also retain possession and custody of each Mortgage File in accordance with and subject to the terms and conditions of this Agreement. The Master Servicer shall promptly deliver or cause to be delivered to the Trustee or the Custodian upon the execution or receipt thereof the originals of any Primary Mortgage Insurance Policies, any certificates of renewal, and such other documents or instruments that constitute portions of the Mortgage File that come into the possession of the Master Servicer from time to time.

Section 3.13      Realization Upon Defaulted Mortgage Loans . The Master Servicer shall cause the Servicer (to the extent required under the Servicing Agreement) to foreclose upon, repossess or otherwise comparably convert the ownership of Mortgaged Properties securing such of the Mortgage Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments, all in accordance with the terms and conditions of the Servicing Agreement.

 

 

 

Section 3.14

Compensation for the Master Servicer .

The Master Servicer will be entitled to all income and gain realized from any investment of funds in the Distribution Account and the Master Servicer Collection Account, pursuant to Article IV, for the performance of its activities hereunder. Servicing compensation in the form of assumption fees, if any, late payment charges, as collected, if any, or otherwise (but not including any prepayment premium or penalty) shall be retained by the Servicer and shall not be deposited in the Protected Account. The Master Servicer shall be required to pay all expenses incurred by it in connection with its activities hereunder and shall not be entitled to reimbursement therefor except as provided in this Agreement.

Section 3.15

REO Property .

(a)        In the event the Trust Fund acquires ownership of any REO Property in respect of any related Mortgage Loan, the deed or certificate of sale shall be issued to the Trustee, or to its nominee, on behalf of the related Certificateholders. The Master Servicer shall, to the extent provided in the Servicing Agreement, cause the Servicer to sell, any REO Property as expeditiously as possible and in accordance with the provisions of this Agreement and the Servicing Agreement, as applicable. Pursuant to its efforts to sell such REO Property, the Master Servicer shall cause the Servicer to protect and conserve, such REO Property in the manner and to the extent required by the Servicing Agreement, in accordance with the REMIC Provisions and in a manner that does not result in a tax on “net income from foreclosure property” or cause such REO Property to fail to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code.

(b)        The Master Servicer shall, to the extent required by the Servicing Agreement, cause the Servicer to deposit all funds collected and received in connection with the operation of any REO Property in the Protected Account.

(c)        The Master Servicer and the Servicer, upon the final disposition of any REO Property, shall be entitled to reimbursement for any related unreimbursed Monthly Advances and other unreimbursed advances as well as any unpaid Servicing Fees from Liquidation Proceeds received in connection with the final disposition of such REO Property; provided, that any such unreimbursed Monthly Advances as well as any unpaid Servicing Fees may be reimbursed or paid, as the case may be, prior to final disposition, out of any net rental income or other net amounts derived from such REO Property.

(d)        To the extent provided in the Servicing Agreement, the Liquidation Proceeds from the final disposition of the REO Property, net of any payment to the Master Servicer and the Servicer as provided above shall be deposited in the Protected Account on or prior to the Determination Date in the month following receipt thereof and be remitted by wire transfer in immediately available funds to the Master Servicer for deposit into the related Master Servicer Collection Account on the next succeeding Servicer Remittance Date.

Section 3.16

Annual Officer’s Certificate as to Compliance .

 

 

 

 

(a)        The Master Servicer shall deliver to the Trustee and the Rating Agencies on or before February 28 of each year, commencing on February 28, 2006, an Officer’s Certificate, certifying that with respect to the period ending December 31 of the prior year: (i) such Servicing Officer has reviewed the activities of such Master Servicer during the preceding calendar year or portion thereof and its performance under this Agreement, (ii) to the best of such Servicing Officer’s knowledge, based on such review, such Master Servicer has performed and fulfilled its duties, responsibilities and obligations under this Agreement in all material respects throughout such year, or, if there has been a default in the fulfillment of any such duties, responsibilities or obligations, specifying each such default known to such Servicing Officer and the nature and status thereof, (iii) nothing has come to the attention of such Servicing Officer to lead such Servicing Officer to believe that the Servicer has failed to perform any of its duties, responsibilities and obligations under its Servicing Agreement in all material respects throughout such year, or, if there has been a material default in the performance or fulfillment of any such duties, responsibilities or obligations, specifying each such default known to such Servicing Officer and the nature and status thereof.

(b)        Copies of such statements shall be provided to any Certificateholder upon request, by the Master Servicer or by the Trustee at the Master Servicer’s expense if the Master Servicer failed to provide such copies (unless (i) the Master Servicer shall have failed to provide the Trustee with such statement or (ii) the Trustee shall be unaware of the Master Servicer’s failure to provide such statement).

Section 3.17      Annual Independent Accountant’s Servicing Report . If the Master Servicer has, during the course of any fiscal year, directly serviced any of the Mortgage Loans, then the Master Servicer at its expense shall cause a nationally recognized firm of independent certified public accountants to furnish a statement to the Trustee, the Rating Agencies and the Depositor on or before February 28 of each year, commencing on February 28, 2006 to the effect that, with respect to the most recently ended fiscal year, such firm has examined certain records and documents relating to the Master Servicer’s performance of its servicing obligations under this Agreement and pooling and servicing and trust agreements in material respects similar to this Agreement and to each other and that, on the basis of such examination conducted substantially in compliance with the audit program for mortgages serviced for Freddie Mac or the Uniform Single Attestation Program for Mortgage Bankers, such firm is of the opinion that the Master Servicer’s activities have been conducted in compliance with this Agreement, or that such examination has disclosed no material items of noncompliance except for (i) such exceptions as such firm believes to be immaterial, (ii) such other exceptions as are set forth in such statement and (iii) such exceptions that the Uniform Single Attestation Program for Mortgage Bankers or the Audit Program for Mortgages Serviced by Freddie Mac requires it to report. Copies of such statements shall be provided to any Certificateholder upon request by the Master Servicer, or by the Trustee at the expense of the Master Servicer if the Master Servicer shall fail to provide such copies. If such report discloses exceptions that are material, the Master Servicer shall advise the Trustee whether such exceptions have been or are susceptible of cure, and will take prompt action to do so.

 

 

 

Section 3.18

Reports Filed with Securities and Exchange Commission .

(a)        Within 15 days after each Distribution Date, the Master Servicer shall, in accordance with industry standards, file with the Commission via the Electronic Data Gathering and Retrieval System (“EDGAR”), a Form 8-K (or other comparable form containing the same or comparable information or other information mutually agreed upon) with a copy of the statement to the Trustee who shall make available on its website a copy of the statement to the Certificateholders for such Distribution Date as an exhibit thereto. Prior to March 30, 2006 (and each year thereafter unless a Form 15D Suspension Notification has been filed pursuant to Section 3.18(d) below), the Master Servicer shall prepare and file a Form 10-K, in substance conforming to industry standards, with respect to the Trust Fund. Each such Form 10-K shall include as exhibits the Servicer’s annual statement of compliance and annual accountant’s report as described in the Servicing Agreement, in each case to the extent timely delivered to the Master Servicer. If they are not so timely delivered, the Master Servicer shall file an amended Form 10-K including such documents as exhibits reasonably promptly after they are delivered to the Master Servicer. The Form 10-K shall also include a certification in the form attached hereto as Exhibit K, in compliance with Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and any additional directives of the Commission, which shall be signed by a Servicing Officer of the Master Servicer. The Depositor hereby grants to the Master Servicer a limited power of attorney to execute and file the Form 8-K and Form 10-K on behalf of the Depositor. Such power of attorney shall continue until either the earlier of (i) receipt by the Master Servicer from the Depositor of written termination of such power of attorney and (ii) the termination of the Trust Fund. The Depositor agrees to promptly furnish to the Master Servicer, from time to time upon request, such further information, reports and financial statements within its control related to this Agreement and the Mortgage Loans as the Master Servicer reasonably deems appropriate to prepare and file all necessary reports with the Commission. Notwithstanding the foregoing sentence, the Master Servicer shall have no responsibility to file any items other than those specified in this Section 3.18; provided, however, the Master Servicer will cooperate with the Depositor in connection with any additional filings with respect to the Trust Fund as the Depositor deems necessary under the Exchange Act. Copies of all reports filed by the Master Servicer under the Exchange Act shall be sent to: the Depositor c/o Merrill Lynch & Co. Inc. Attn: Managing Director-Analysis and Control. Fees and expenses incurred by the Master Servicer in connection with this Section 3.18 shall not be reimbursable from the Trust Fund except as pursuant to Sections 7.04(c) hereof.

(b)        The Master Servicer shall indemnify and hold harmless the Trustee, the Depositor and their respective officers, directors and Affiliates from and against any losses, damages, penalties, fines, forfeitures, reasonable and necessary legal fees and related costs, judgments and other costs and expenses arising out of or based upon a breach of the Master Servicer’s obligations under this Section 3.18 or the Master Servicer’s negligence, bad faith or willful misconduct in connection therewith.

(c)        If, after the Closing Date (a) the Sarbanes-Oxley Act of 2002 is amended, (b) Rules 13a-14 and 15d-14 under the Exchange Act and any related directives of the Commission are modified or superseded by any subsequent statement, rule, directive or regulation of the Commission or any division thereof, or (c) any future releases, rules and regulations are

 

 

published by the Commission from time to time pursuant to the Sarbanes-Oxley Act of 2002, which in any such case affect the form or substance of the required certification under Rule 13a-14 and 15d-14 of the Exchange Act such that, in the reasonable judgment of the Master Servicer, the required certification is materially more onerous than the form of the requirement attached hereto as Exhibit K as of the Closing Date, the Master Servicer, the Depositor and the Mortgage Loan Seller shall negotiate in good faith to determine how to amend the certification attached hereto as Exhibit K or any of the provisions in this Section 3.18 to comply with any such new requirements. Notwithstanding any other provision of this Agreement, the provisions of this Section 3.18 may be amended by the Depositor, the Master Servicer and the Trustee without the consent of the Certificateholders.

(d)        Prior to January 30 ^th of the first year in which the Master Servicer is able to do so under applicable law, the Master Servicer shall file with the Commission a Form 15D Suspension Notification with respect to the Trust Fund.

 

 

 

ARTICLE IV

ACCOUNTS

Section 4.01      Protected Accounts . (a) The Master Servicer shall enforce the obligation of the Servicer to establish and maintain a Protected Account in accordance with the Servicing Agreement, with records to be kept with respect thereto on a Mortgage Loan by Mortgage Loan basis, into which accounts shall be deposited within 48 hours (or as of such other time specified in the Servicing Agreement) of receipt all collections of principal and interest on any Mortgage Loan and with respect to any REO Property received by a Servicer, including Principal Prepayments, Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries and advances made from the Servicer’s own funds (less servicing compensation as permitted by the Servicing Agreement in the case of the Servicer) and all other amounts to be deposited in the Protected Account. The Servicer is hereby authorized to make withdrawals from and deposits to the related Protected Account for purposes required or permitted by this Agreement. To the extent provided in the Servicing Agreement, the Protected Account shall be held in a Designated Depository Institution and segregated on the books of such institution in the name of the Trustee for the benefit of Certificateholders.

(b)        To the extent provided in the Servicing Agreement, amounts on deposit in a Protected Account may be invested in Permitted Investments in the name of the Trustee for the benefit of Certificateholders and, except as provided in the preceding paragraph, not commingled with any other funds, such Permitted Investments to mature, or to be subject to redemption or withdrawal, no later than the date on which such funds are required to be withdrawn for deposit in the Master Servicer Collection Account, and shall be held until required for such deposit. The income earned from Permitted Investments made pursuant to this Section 4.01 shall be paid to the Servicer under the Servicing Agreement, and the risk of loss of moneys required to be distributed to the Certificateholders resulting from such investments shall be borne by and be the risk of the Servicer, as set forth in the Servicing Agreement. The Servicer (to the extent provided in the Servicing Agreement) shall deposit the amount of any such loss in the Protected Account within two Business Days of receipt of notification of such loss but not later than the second Business Day prior to the Distribution Date on which the moneys so invested are required to be distributed to the Certificateholders.

(c)        To the extent provided in the Servicing Agreement and subject to this Article IV, on or before each Servicer Remittance Date, the Servicer shall withdraw or shall cause to be withdrawn from the Protected Accounts and shall immediately deposit or cause to be deposited in the Master Servicer Collection Account amounts representing the following collections and payments (other than with respect to principal of or interest on the Mortgage Loans due on or before the Cut-off Date):

(i)         Monthly Payments on the Mortgage Loans received or any related portion thereof advanced by the Servicer pursuant to the Servicing Agreement which were due on or before the related Due Date, net of the amount thereof comprising the Servicing Fees;

(ii)         Principal Prepayments in Full and any Liquidation Proceeds received by the Servicer with respect to such Mortgage Loans in the related Prepayment Period, with

 

 

interest to the date of prepayment or liquidation, net of the amount thereof comprising the Servicing Fees;

(iii)        Curtailments received by the Servicer for such Mortgage Loans in the related Prepayment Period; and

(iv)	Any amount to be used as a Monthly Advance.

(d)        Withdrawals by the Master Servicer may be made from an Account only to make remittances as provided in Section 4.01(c), 4.02 and 4.03; to reimburse the Master Servicer or a Servicer for Monthly Advances which have been recovered by subsequent collection from the related Mortgagor; to remove amounts deposited in error; to remove fees, charges or other such amounts deposited on a temporary basis; or to clear and terminate the account at the termination of this Agreement in accordance with Section 10.01. As provided in Sections 4.01(c) and 4.02(b) certain amounts otherwise due to the Servicer may be retained by them as set forth in the Servicing Agreement and need not be deposited in the Master Servicer Collection Account.

Section 4.02      Master Servicer Collection Account . (a) The Master Servicer shall establish and maintain in the name of the Trustee, for the benefit of the Certificateholders, the Master Servicer Collection Account as a segregated trust account or accounts. The Master Servicer will deposit in the Master Servicer Collection Account as identified by the Master Servicer and as received by the Master Servicer, the following amounts:

(i)         Any amounts withdrawn from a Protected Account or other permitted account;

(ii)	Any Monthly Advance and any Compensating Interest Payments;

(iii)        Any Insurance Proceeds, Liquidation Proceeds or Subsequent Recoveries received by or on behalf of the Master Servicer or which were not deposited in a Protected Account or other permitted account;

(iv)        The repurchase price with respect to any Mortgage Loans repurchased and all proceeds of any Mortgage Loans or property acquired in connection with the optional termination of the trust;

(v)        Any amounts required to be deposited with respect to losses on investments of deposits in an Account; and

(vi)        Any other amounts received by or on behalf of the Master Servicer and required to be deposited in the Master Servicer Collection Account pursuant to this Agreement.

(b)        All amounts deposited to the Master Servicer Collection Account shall be held by the Master Servicer in the name of the Trustee in trust for the benefit of the Certificateholders in accordance with the terms and provisions of this Agreement. The requirements for crediting the Master Servicer Collection Account or the Distribution Account shall be exclusive, it being understood and agreed that, without limiting the generality of the foregoing, payments in the

 

 

nature of (i) prepayment or late payment charges or assumption, tax service, statement account or payoff, substitution, satisfaction, release and other like fees and charges and (ii) the items enumerated in Subsections 4.05(a)(i), (ii), (iii), (iv), (vi), (vii), (viii), (ix), (xi) and (xii) with respect to the Securities Administrator, need not be credited by the Master Servicer or the Servicer to the Distribution Account or the Master Servicer Collection Account, as applicable. In the event that the Master Servicer shall deposit or cause to be deposited to the Distribution Account any amount not required to be credited thereto, the Trustee, upon receipt of a written request therefor signed by a Servicing Officer of the Master Servicer, shall promptly transfer such amount to the Master Servicer from the Distribution Account, any provision herein to the contrary notwithstanding.

(c)        The amount at any time credited to the Master Servicer Collection Account shall be invested, in the name of the Trustee, or its nominee, for the benefit of the Certificateholders, in Permitted Investments as directed by Master Servicer. All Permitted Investments shall mature or be subject to redemption or withdrawal on or before, and shall be held until, the next succeeding Distribution Account Deposit Date. Any and all investment earnings on amounts on deposit in the Master Servicer Collection Account from time to time shall be for the account of the Master Servicer. The Master Servicer from time to time shall be permitted to withdraw or receive distribution of any and all investment earnings from the Master Servicer Account. The risk of loss of moneys required to be distributed to the Certificateholders resulting from such investments shall be borne by and be the risk of the Master Servicer. The Master Servicer shall deposit the amount of any such loss in the Master Servicer Collection Account within two Business Days of receipt of notification of such loss but not later than the second Business Day prior to the Distribution Date on which the moneys so invested are required to be distributed to the Certificateholders.

Section 4.03      Permitted Withdrawals and Transfers from the Master Servicer Collection Account . (a) The Master Servicer will, from time to time on demand of the Master Servicer, the Trustee or the Securities Administrator, make or cause to be made such withdrawals or transfers from the Master Servicer Collection Account as the Master Servicer has designated for such transfer or withdrawal pursuant to the Servicing Agreement. The Master Servicer may clear and terminate the Master Servicer Collection Account pursuant to Section 10.01 and remove amounts from time to time deposited in error.

(b)        On an ongoing basis, the Master Servicer shall withdraw from the Master Servicer Collection Account (i) any expenses recoverable by the Trustee, the Master Servicer or the Securities Administrator pursuant to this Agreement, including but not limited to Sections 2.01(b), 3.03, 7.04 and 9.05 and (ii) any amounts payable to the Master Servicer as set forth in Section 3.14.

(c)        In addition, on or before each Distribution Account Deposit Date, the Master Servicer shall deposit in the Distribution Account (or remit to the Trustee for deposit therein) any Monthly Advances required to be made by the Master Servicer with respect to the Mortgage Loans.

(d)        No later than 3:00 p.m. New York time on each Distribution Account Deposit Date, the Master Servicer will transfer all Available Funds on deposit in the Master Servicer

 

 

Collection Account with respect to the related Distribution Date to the Trustee for deposit in the Distribution Account.

Section 4.04      Distribution Account . (a) The Trustee shall establish and maintain in the name of the Trustee, for the benefit of the Certificateholders, the Distribution Account as a segregated trust account or accounts.

(b)        All amounts deposited to the Distribution Account shall be held by the Trustee in the name of the Trustee in trust for the benefit of the Certificateholders in accordance with the terms and provisions of this Agreement.

(c)        The Distribution Account shall constitute a trust account of the Trust Fund segregated on the books of the Trustee and held by the Trustee in trust in its Corporate Trust Office, and the Distribution Account and the funds deposited therein shall not be subject to, and shall be protected to the maximum extent permitted by applicable law from, all claims, liens, and encumbrances of any creditors or depositors of the Trustee or the Master Servicer (whether made directly, or indirectly through a liquidator or receiver of the Trustee or the Master Servicer). The Distribution Account shall be an Eligible Account. The amount at any time credited to the Distribution Account shall be (i) fully insured by the FDIC to the maximum coverage provided thereby or (ii) invested in the name of the Trustee, in such Permitted Investments selected by the Master Servicer or depo